It occurred to me that during the first period in my life that I was a conservative, which was in my youth, I was motivated mainly by deficit hawkery. I was ten in the year that Nixon ran against Kennedy, and I read somewhere in the paper that Nixon and the Republicans favored sound money, and Democrats favored deficits. So I was leaning Republican for that reason. When Kennedy came out with his tax cuts, I was very worried. Republicans tended to oppose the tax cuts. Many Republicans were also opposed to the effort to reach the moon by the end of the decade; I remember US News and World Report [in those days as far to the right as Newsmax is now] declare that the moon effort was ill conceived. My father would never really speak against the 90% and 70% tax brackets of the era, though he constructed outrageous legal systems [of which I still feel the burden] to avoid paying these actual taxes.
When I was in college, I moderated – I came to sort of understand what Keynes was about, though my understanding was and is that Keynes wanted government surpluses in times of prosperity. The problem with that is political: any volunteers for a program that gets turned on and off in response to the fiscal situation of the economy as a whole? I don’t think so. I also learned a little bit about Milton Friedman and monetary theory, though there is this tricky thing called ‘velocity’ that seems to be to an economy what ‘metabolism’ is to a human being.
Of course, in the mid-1970s, the Great Inflation and the price controls hit. I remember the cover prices of news magazines going from 25 cents to $2 within a space of less than two years. And do you know how Motel 6 got its name? In the late Sixties, it meant that the cheapest rate was six dollars. Younger people cannot possibly understand, and most of my generation seems to have forgotten, how important this event was [or blame it exclusively on the oil boycott – actually the inflation had started before that, and Nixon imposed price controls and closed the gold window in 1971, two years before any oil boycott.] The Great Inflation played a major role in the rise of the New Right at that period. The so-called ‘hard money’ and ‘survivalists’ – now called ‘preppers’ – were as big a force in the resurgence as the Religious Right was. [At that time, the Rogue Valley of southern Oregon, not northern Idaho, was regarded as the Redoubt, because atomic war was taken into account. The Soviet Union, rotten on the inside, was militarily stronger than the US on the outside, and so nuclear attack was a factor. The Right believed the US would not ‘launch on warning’ and would thereby be disarmed.] The hard money advisors said not to go into debt except on productive assets, but my generation mostly learned how to borrow on credit cards and loans today and pay back in cheaper dollars tomorrow, which is why my generation is for the most part so unthrifty even now.
Reagan lifted the oil price controls, the gasoline rationing stopped, and Houston actually was rather depressed in the mid 1980s! Houston!! He hired one David Stockman to try to cut government expenses outside the military and had little success doing so. Reagan decided to gamble with high deficits [for which he could plausibly blame the Democrats, in a congressional majority until 1994, and the ‘special interests’] in the belief that a coalition of NATO, China, and Afghani Islamists, containing the Soviet Union, could bring it down. Ultimately he was proved right about this. I can’t help thinking that being from California, he knew that brush fires are ‘contained’, to keep from spreading, and that they burn themselves out; and that the Soviet system was like a brush fire consuming its own fuel.
He also reduced taxes at the highest brackets, to flatten them out. I had no problem with this. Doing away with 70% brackets might lessen the bizarre tax schemes by which I had been victimized, and when rates are being reduced from such a high level, the Laffer Curve really does work to increase government revenues. [The folly of Bush Junior was the belief that the effect would be the same if you reduce #8% to 28%; no, the Laffer Curve curves, and there is a point where lowering taxes will start to decrease government revenues rather than increase them. BTW, at the state level, our California income tax is too progressive and dependent on the wealthy, and that has been admitted by many non-conservatives.]
There was a severe ‘peace dividend’ recession around 1990 that devastated Southern California, Arizona, and other areas that had been highly dependent on aerospace and defense. It brought Reagan’s California to an end. When it was followed by a great boom under the Clinton-Gingrich constellation [even a budget surplus one year!] conservative media, being increasingly centered around the Wall Street Journal and Washington think tanks [the very part of the country that Goldwater had wanted to saw off] these sources of opinion would deny or minimize the crash of 1990, in order to be able to claim that the Clinton boom was a mere prolongation of the Reagan one. As a Southern Californian who had been in real estate until about 1990, I knew better. I knew people who had been in real estate who had a lot less money in the ‘90s than in the ‘80s.
BTW, I also had a hope that an Obama-Boehner constellation would have the same effect as the Clinton-Gingrich constellation. I assumed that with the Daddy Party in control of Congress and the purse strings, and the Mommy Party in the White House, the situation would be much better than the reverse situation which had prevailed under Nixon and Reagan. It didn’t seem to work out that way.
By the time of Bush Junior, it seemed that nobody really cared about deficits. To be concerned about them, by that time, made you a fiscal moderate, not a fiscal conservative; the definition of a ‘fiscal conservative’ was now ‘ever lower taxes regardless’. Norquist was raging, and so were his California counterparts.
Inflation seemed to be tamed in the Reagan era; it was, except for three critical areas. They are tuition, housing, and health care. As Elizabeth Warren [yes, her!] and her daughter pointed out in a book called The Two Income Trap, the reason so many families believed they ‘could not’ live on one income owed primarily to these three things, not to most consumer goods, which were benefiting in price from globalization, Walmartization, and technology. [Walmart gives back with one hand what it takes away with the other; but Walmart does not do housing, tuition, or health care.] And, while I believe in greater opportunities for women, to have an adult at home is an amenity, and all things being equal, not having an adult at home is a lower standard of living than having one. And credit cards, not religion, rapidly became the opium of the people. I saw the Wall Street Journal, in the mid ‘00s, inveighing against ‘credit snobs’ who thought that credit should be limited to those who could afford to pay it off. A long way indeed from the Republican Party as the party of thrift! I think you are all familiar with what happened at the end of that decade. If not, watch the film The Big Short and read the book.