TAX-CUT PHOBIA
The high-tax party in Washington has had to resort to some peculiar arguments in recent weeks to fend off tax cuts. Opponents have been making confident predictions of the ruinous impact these tax cuts will have on the federal budget of 2013, never mind that the designated experts have not been able to predict next year's revenues with much accuracy. Another common argument is that the tax cuts would "overheat" the economy, forcing the Fed to raise interest rates to cool it down.

This sort of automotive metaphor for the economy, like the Keynesian thinking it reflects, is a quaint relic from the midcentury that ought by now to be seen as laughably inadequate. The same basic argument was made against the Kemp-Roth tax cut of 1981, which was also supposed to lead to huge deficits that would "overheat" the economy, i.e., increase inflation. It wasn't true then-both inflation and interest rates fell even as the deficit swelled in the '80s. It wasn't true in the '90s, when President Clinton's tax increase of 1993 was followed by an increase in interest rates. And it's not true now.

The liberal story about the effect of tax cuts manages to get every point wrong. Inflation isn't caused by people consuming too much, having too much disposable income, or getting excessive raises. It's caused by excessive growth of the money supply (although the precise definition of "excessive" here is a matter of some dispute). Tax cuts don't raise interest rates; they bring interest rates down, because lower taxes mean that a lower interest rate will yield the same after-tax return on savings.

Even if this heating-and-cooling model of the economy were right, by the way, what's the problem? Tax cuts raise the temperature, interest-rate hikes lower it, and the thermometer's left in the same place-but taxpayers have gotten back some money the government was holding. The theory must be that the Fed would overcompensate and tip the economy into a recession. Luckily, Alan Greenspan hasn't said anything about raising interest rates in response to a tax cut. He's not in the grip of liberal superstitions.

HISTORY WARS
For years, NR has been arguing that if conservative politics is to succeed, it must move beyond issues of economic freedom and moral virtue, as important as they are, to address issues of national identity and cultural cohesion. Senator Mitch McConnell, the Kentucky Republican, has been a leader on one such issue, the fight against racial preferences. Now he is turning his attention to another, the politicized traducement of American history.

In hearings yesterday, McConnell grilled Smithsonian head J. Michael Heyman on "this drift to political correctness" at the American history museum. (McConnell was apparently alerted to the trend by an article by David Brooks in the Weekly Standard.) Heyman did a fair amount of squirming. Presumably he knows that the public will reject the experts' accentuate-the-negative approach to American history-if its patriotic sentiments are given a political voice. So far McConnell and Pat Buchanan have spoken up. Anyone else?