Saturday, September 27, 2008

Conservatism, Neoconservatism, and Economic Crisis

Last Sunday, former House Speaker Newt Gingrich offered a compelling conservative critique to Treasury Secretary Hank Paulson's Wall Street rescue plan. According to Gingrich, "this gigantic power shift to Washington and this avalanche of taxpayer money is being proposed by a Republican administration, [and] the normal conservative voices have been silent or confused."

Not all conservatives were silent nor confused, however. The day after Gingrich spoke out,
Michelle Malkin asked, "Will the real fiscal conservatives please stand up?"

In the comments here, at some of my posts on the bailout, I've seen considerable conservative skepticism and outrage at the enormity of Washington's financial rescue activities over the last few weeks. As readers may recall, I've mostly just reported on the developments, without advocating one way or the other (the exception being
my post on the left-wing protests against the administration in New York and Washington). I have, of course, been amazed with the concentration of power in the Treasury Department under Secretary Paulson, and I've entertained the idea that the $700 billion rescue may indeed work to stablilize markets and restore confidence in the economy, helping to shift the system back toward financial recovery.

There's a couple of reasons for this: One, frankly, we're in a fast-moving and complicated period of economic crisis, and I'm like many others who are sorting their way through events, trying to get a handle on things. More than that, secondly, is that I don't disagree ideologically with the direction the adminstration has taken. The scale of the banking fallout certainly is unprecedented in my lifetime. Wall Street as it's been known throughout the 20th century - one composed of big investment banks and brokerages - no longer exists; and I see the Paulson plan as providing the stability and structure that will allow American capitalism to survive the seemingly existential shakeout now at hand.

That said, what's happening now economically and politically raises fundamental questions about the direction of conservatism, a continuation of the debate we were seeing on the right before the GOP primaries commenced in January: What happened to the Reagan legacy? Can small-g conservativism make a comeback?

While we may never again see another Ronald Reagan, lots of conservatives won't be too happy to see George W. Bush take his last ride out of Washingtion on Air Force One.

Jacob Heilbrunn takes a look at the Bush administration's handling of the crisis, with an eye toward the administration's legacy for the conservative movement:

Bush’s break with traditional conservatism is not a sudden development. Some of his most far-reaching measures — the Patriot Act, the No Child Left Behind education policy and, most emphatically, the costly Medicare prescription drug benefit — cut against the grain of that orthodoxy.

To Michael D. Tanner, a senior fellow at the Cato Institute and author of “Leviathan on the Right,” Mr. Bush is not a conservative by any definition. “Anybody would be more restrained than Bush,” Mr. Tanner said. “Bill Clinton was a more conservative president than Bush” because Mr. Clinton “balanced the budget.”

Mr. Bush’s thinking, it appears, is rooted in a rival conservative vision. In this view, big government is here to stay and the job of conservatives is to convert it to the proper uses. The most articulate proponents of this idea include thinkers like Irving Kristol, who as early as the 1970s identified a new mission for conservatives — not to destroy government but rather to wrest control of it from a “new class” composed of professors, educators, environmentalists, city planners, sociologists and others trying to steer the economy toward a “system so stringently regulated in detail as to fulfill many of the traditional anticapitalist aspirations of the left.”

Mr. Kristol understood that Americans had grown accustomed to the services government provides. The conservative mission must be to transfer some of that power to private enterprise by slashing taxes while also fostering a religiously based moral vision for society.

And it is essentially this argument that has advanced throughout much of Mr. Bush’s presidency.
President Bush's vision, therefore, is a neoconservative vision that is far from hostile to the role of a large bureaucratic state in the development and administration of mass industrial policy, regulation, and social provision. As Irving Kristol once noted:

Neocons do not like the concentration of services in the welfare state and are happy to study alternative ways of delivering these services. But they are impatient with the Hayekian notion that we are on "the road to serfdom." Neocons do not feel that kind of alarm or anxiety about the growth of the state in the past century, seeing it as natural, indeed inevitable.
One doesn't have to be neoconservative to agree with this view.

The development of the modern industrialized state has been the development of bureaucratic, technocratic government power and scope. To think that the U.S. will return to some kind of early-19th century agrarian model of state-centered federalism is naïve. That's not to say we shouldn't seek to downsize the role of the state. It's simply to realize that the massive size of the federal goverment today is the result of the increase in government responsibility in all aspects of life, economic, military, and social, and the hopes to turn back the tide to an earlier era of libertarian small government are a bit wistful.

Americans expect an activist role for a substantial state sector, even conservatives. Until we are willing to peel back the entitlement culture and the regime of unchecked non-discretionary spending, much of the talk about fiscal conservativism is a ruse. The federal government is society's safety net, in most aspects of life. When things get rough, no other agent in American life has the legitimate power and resources to act to preserve basic functions and institutions, and hence to guarantee the survival of the republic.