Ideas Triumphing Over Interests
One of my favorite writers, Josh Barro, has made the somewhat odd career transition from Bloomberg media to the internet tabloid Business Insider. Whatever, who knows what was going on there. His first article is about conservative “reformists”, who are attempting to make the Republican Party less beholden to tropes and more focused on workable policy ideas. He rightly points to the one great triumph of these policy-pushers in recent years, which was to revolutionize thinking on unconventional monetary policy (such as QE or the expectations-oriented “Evans Rule“) as a means of ending recessions.
Of course, the mainstream Republican Party will have none of it. If you’ve turned on Republican media or watched their politicians in the last few years, talk of “currency debasement” is everywhere and usually not positive. Warnings of hyperinflation, currency collapse, and what have you. There was even a fleeting vogue around the gold standard, to the extent that 2012’s Republican Convention nearly included a gold standard plank in the platform.
The Republican policy consensus on hard money is really pretty wonderful, because it’s a rare example of ideas triumphing over material interests. The constituency for loose money is huge – and primarily comprises key Republican power blocs, namely banks and rich people. The Fed’s loose money policies have pumped up the stock market and have delivered buckets of money into the business interests influential in the Republican Party. Yet the party line remains staunchly opposed to this policy that benefits the big businesses funding the party. It’s an example that should concern materialists – so rarely are ideas and interests so opposed, and especially rare to see the ideas win.
That the idea in question is so stupid makes it all the more poignant.