Jonathan Chait

The Mitch Is Back


A couple follow-ups on my unkind review of Mitch Daniels' stimulus plan. First, Daniels clarifies, in an interview with Ezra Klein, that he only proposes to suspend the employee share of the payroll tax, rather than the whole thing as he originally suggested. This makes his arithmetic less wildly implausible than his original proposal, while still pretty wildly implausible.

Next, National Review fiscal blogger Kevin Williamson weighs in with a slew of over-the-top insults aimed at yours truly. I wrote a bit about Williamson last spring when he interestingly challenged supply-side orthodoxy from the right. Soon it became clear that Williamson's heterodox thoughts came about not because he saw through Republican fiscal orthodoxy but because he didn't understand it at all and was approaching the position from the standpoint of a total novice. I decided to give up on engaging him when he wrote this:

Forgive me for this back-of-the-envelope stuff, but I was an English major: Taxes are, on average, what, 18 percent of GDP? Spending is now 45 percent of GDP and going up?

I was pretty astonished. The actual totals are about 15% of GDP and 24% of GDP, meaning the deficit is about 9% of GDP, not the 27% of GDP Williamson imagined. Never before had I felt embarrassed for my debating partner. Anybody can get a detail wrong, especially when we're all under pressure to publish quickly. And he has a fun writing style. But, honestly, if your back-of-the-envelope guess of such a foundational fact is this wildly wrong, and you don't even know where you can look the true information in 30 seconds before publishing something, you just shouldn't be writing about this topic at all, let alone on a specialized blog. Likewise, if you throw out a guess that George Washington was first elected president in 1472, you should probably hold off on starting that American history blog.

Anyway, I had resolved not to waste time debating this well-intentioned but totally hopeless man. But clearly my uncharacteristically dovish position has backfired, as Williamson has responded to my Daniels item by pouring all sorts of personal derision upon me. Go read the whole thing to get the flavor. I'll provide a taste of it. Daniels proposed to cut federal salaries by 10% because federal employees are "overpaid" compared with the private sector. I responded by citing a study comparing the wages of state employees and the private sector, which found that higher government pay is due to having, on average, higher-sklled jobs and higher levels of education than the average provate sector employee. You don't see a lot of burger-flippers working for the government. Williamson replies that such a comparison "tells us what is known in technical economic jargon as approximately squat."

Really? The dynamic between federal and state government employees is really that different? It's obviously not a precise comparison, but I'll venture that the same basic dynamic -- federal employees are paid more than private sector employees because their jobs require higher skills -- holds true at the federal level. In any case, Daniels' cheap demagoguery about overpaid federal workers makes zero attempt to control for the skill level of employees. It's pure magical thinking that we can slash salaries of all federal workers at no cost whatsoever. It's free money. The same holds true of Daniels' claims about presidential impoundment yielding untold billions in savings, and regulatory holidays creating explosive, revenue-creating economic growth. These are just right-wing fairy tales.

In fact, I suspect Daniels is smart enough to know that he's slinging around rubbish that sounds good to the GOP base but has no chance of producing real-world results. There's a reason that not even Republican govenrments have attempted to collect these free-money strategies. But that's the ultimate problem here: The state of the conservative movement is such that anybody attempting to appeal to it on fiscal policy is bound to descend to a rock-bottom intellectual standard.

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