Jonathan Chait

This, Too, Shall Malpass

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Bruce Bartlett reports that David Malpass is "exploring" a Senate run in New York, presumably as a Republican. Malpass is an unusual character, a die-hard supply-sider and an economic forecaster. Like most economic forecasters, Malpass is wrong a great deal of the time, though particular brand of his wrongness tends to correspond to the Republican Party agenda in general and the status of upper-bracket tax levels in particular.

Malpass writes regularly for outlets like the Wall Street Journal op-ed page and National Review Online. During the Bush years, Malpass was praising the president's general economic acumen ("George Bush has a bit of a monopoly going on leadership and initiative,") crediting the Bush tax cuts with causing a rise in tax revenue, pooh-poohing the deficit, steadfastly denying the existence of a housing bubble, and cheerleading the Bush boom ("This expansion is sticking around.")

Having studied his work and that of fellow believers for many years, I can report that the analytical method is very simple. If the economy seems to be thriving under Republican governance or struggling under Democratic governance, attribute the economy to policy changes. If the opposite is happening, attribute the economy entirely to outside factors. If there's divided government, attribute all good results to Republican efforts and bad results to Democrats.

Malpass seems to be the latest New Yorker, following Harold Ford, Lawrence Kudlow, and Mort Zuckerman, to consider a Senate run. All these characters share deep social ties to the New York financial elite and a commitment to low tax rates on the rich as the sacrosanct principle of public policy. Whether this is a fluke or some sort of collective decision by Wall Street to acquire direct rather than indirect representation in Congress, I couldn't say.

Update: Dan Gross emails to point out that I missed the most obvious thing: Malpass was chief economist for Bear Stearns. "And they wonder," he writes, "why the firm got 100%
blindsided by the housing/mortgage/credit debacle."

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