When the facts change

Extreme, often cult-like, devotion to free market ideology and supply-side economics is one of the hallmarks of modern Republican philosophy. It is used to justify wrongheaded policies such as budget-busting tax cuts and deregulation efforts that enrich companies at the expense of consumers. This blind and unwavering faith in unfettered markets is the rock onto which most conservative economics is anchored and deviation from which, in their eyes, equates to heresy.

Unfortunately for those true believers (and collaterally, the rest of us), this belief is mistaken. As the recent series of government interventions in the financial markets has proven, sometimes only governments are capable of stabilizing a market when things turn sour and despite the evidence supporting that idea, it is completely antithetical to the free market crowd. So, unable to square the circle and reconcile their beliefs with reality, Bush, McCain, and their fellow travelers cling to the failed ideology because they have no place to go. That is not the platform one wants to run on in a tanking economy. Harold Meyerson explains the GOP’s conundrum quite well in his Post column today.

An even deeper problem is that standard-issue Republican economic policy has run out of plausible mantras. The ritual extolling of markets and denigration of government make no sense at a moment when a conservative Republican administration is rushing to save the markets through governmental intervention.

Or, to use Reagan's construction: Republican economics is not the solution to our problem; Republican economics is the problem -- for our nation, surely, and also for candidate McCain.

In so much if the GOP base, free market orthodoxy, no matter how discredited, is still the coin of the realm and after a couple of decades of harping on the virtues of laissez-faire economics and a flatter tax code, Republican candidates are going to find it damn difficult to simply reverse course and embrace a more practical and less ideological approach. John Maynard Keynes famously once asked,”When the facts change, I change my mind. What do you do, sir?” Faced with the prospect of running on a firmly believed but ultimately failed ideology, Republicans in general, and McCain in particular, have no idea what to do.