Earlier today, Gabriel Rossman sent me a smart note on the politics of QE3 and, in a somewhat related vein, the politics of national security. As Matt Yglesias recently observed, the QE3 decision can arguably be traced to the indefatigable policy entrepreneurship of the Bentley University economist Scott Sumner, who has had an outsized influence on bloggers across the political spectrum, including my colleague Ramesh Ponnuru, the prolific left-utilitarian Dylan Matthews of Wonkblog, the curmudgeonly neoliberal centrist Josh Barro of Bloomberg View, and blogging prodigy and Princeton undergraduate Evan Soltas, among others. I can attest to the fact that Sumner’s influence has been substantial in my corner of the conservative world, though of course many if not most leading lights of the right have yet to be won over. Earlier today, Ramesh replied to George Will’s sharp critique of QE3, and my sense is that Ramesh and his occasional co-author David Beckworth have been gaining the upper hand. (James Pethokoukis of the American Enterprise Institute has also become quite influential.)
Though I find Sumner and Ramesh convincing, this embrace of market monetarism makes me a little nervous. I’m reminded of Reid Hastie’s wonderful op-ed from May, “Our Gift for Good Stories Blinds Us to the Truth“:
[N]arratives give us a false sense of understanding and control, when they are really mere redescriptions of selected subparts of the events to which they refer. Once we have a good narrative summary, we have the illusion that we could have intervened and controlled outcomes, or could have predicted what in hindsight seems to be an obvious outcome. But, unlike valid causal explanations that support informative forecasts and suggest ways to change events further down the causal stream, narratives lack these basic properties of true causal explanations.
Narratives also tend to be dominated by a few major actors, and faux explanatory power is derived from simplistic interpretations of those actors’ characters and motives. And the universal human illusion that consciously accessible thoughts are in the driver’s seat and controlling our own actions means that the salient actors in a narrative we want to understand are attributed information and incentives to a greater degree than is warranted.
I don’t think that Sumner and Ramesh are the victims of narrative thinking. Indeed, Sumner often stresses that there are deeper economic problems that can’t be addressed by monetary policy alone. Yet I do wonder about the extent to which many of us have embraced market monetarism because we are facing what looks like an intractable set of political and economic problems and we are very eager to believe that there is a relatively straightforward solution to the problem of mass unemployment.
This is not to say that we shouldn’t give market monetarism a shot. We have pursued at least some of the alternatives, and the results have proven lackluster.
Regardless, my reference to fault lines is about the way in which the idea of monetary expansion seems to divide the right, with champions identifying themselves as the heirs of Milton Friedman and critics identifying themselves with the cause of sound money — indeed, at least some of the critics have openly called for the restoration of the gold standard.
There is a parallel divide on national security, in which many elite conservatives continue to embrace humanitarian intervention and nation-building and the continued expansion of the U.S. military’s global footprint while others have embraced a more “Jacksonian” sensibility, in which we eschew humanitarian intervention and nation-building and perhaps even retrench on military commitments while being ferocious in the defense of (somewhat more narrowly-defined) American interests. Both of these broad views can be characterized as hawkish and nationalistic, and both might even be associated with similarly high levels of military expenditures, though the latter view is more compatible with reduction in military expenditures. Yet the “neocons” and the “Jacksonians” can be far apart in terms of affect and on issues like what to do about Afghanistan.
Gabriel mentions that views along these dimensions don’t seem to correlate, e.g., Sen. Rand Paul (R-KY) and his father Ron can be described as “Jacksonian goldbugs” while Mitt Romney is in the hawkish on defense and hawkish on inflation Republican mainstream. And a decent number of the younger conservative thinkers of of my acquaintance are market monetarist Jacksonians.
The reason these fault lines matter, or rather the reason these fault lines matter right now, is that, as Gabriel suggests, they complicate the critique of the president. The Frumian critique of the Obama administration is that he hasn’t done enough on housing, his approach to fiscal stimulus was wrongheaded, and his coverage expansion model is too expensive to be sustainable. The Tea Party critique, in contrast, is that he favors a radical expansion of the size and power of government that threatens our constitutional order. The nationalist critique is that he has emboldened our enemies by apologizing for America, and his defense cuts will limit our ability to project power. A Jacksonian realist, on the other hand, might argue that the president hasn’t been enough of a realist. That there are tensions and contradictions between these critiques is obvious.
The conservative movement is diverse, and it is hardly surprising that there are disagreements — indeed, deep disagreements — within the conservative camp. But my concern is that these fault lines have made it difficult for the right to make a coherent and compelling case against a president I’d very much like to see replaced. Many elite conservatives hope and assume that the “public” or “outside” case against the president doesn’t map onto the “private” or “inside” case against the president, as the working assumption is that the inside case is subtler and that it draws the “right” conclusions on issues over which conservatives are divided.