Monday, August 13, 2007

Rove and Mythology

From the WSJ editorial with Paul Gigot, in which Karl Rove announced his departure from his current position as Deputy Chief of Staff at the White House:

"I'm a myth. There's the Mark of Rove," he says, with a bemused air. "I read about some of the things I'm supposed to have done, and I have to try not to laugh." He says the real target is Mr. Bush, whom many Democrats have never accepted as a legitimate president and "never will."
When I was at CEA, I was in perhaps a dozen meetings where Karl Rove was also present. I never spoke to him personally--I was more in the role of observer at those meetings. I took two things away from those meetings. First, when Rove was in the room, you had better be on mission. He would have no hesitancy at all in asking anyone the direct question, "What have you done to advance the President's agenda today?" He'd be expecting a lengthy and comprehensive reply, and you'd feel like a moron if you didn't have one for him. Second, and it's worth keeping in mind that I would only be at such a meeting if much of the content were economics (as opposed to national security or some other policy), I never heard him take the wrong side of an argument based on the economics.

That said, there is quite a bit of myth in Rove's interview. Gigot's editorial comments around the quotes from Rove are right on the money:
Mr. Rove also makes a spirited defense of this president's policy legacy, sometimes more convincingly than others. On foreign affairs, he predicts that at least two parts of the Bush Doctrine will live on: The policy that if you harbor a terrorist, you are as culpable as the terrorist; and pre-emption. "There may be a debate about degree," he says, "but it's going to be hard for any president to reverse that."

He's less persuasive on Medicare, where he insists that market reforms and health savings accounts are building a "critical mass" of popular support that will make them unrepealable. Yet Democrats are even now trying to kill Medicare Advantage, blocked only by the promise of a veto. If Mrs. Clinton wins in 2008, the Medicare drug expansion may prove to have been all spending and no reform.

He also insists that Social Security reform was worth the failed effort, and that Mr. Bush's ideas will be adopted inevitably by some future president. I ask if, given Mr. Bush's falling approval ratings in 2005 due to Iraq, he shouldn't have pushed for something less ambitious. Not a chance. "You cannot advance on the fronts you want to advance if you're playing mini-ball," he says, once again sounding like Mr. Bush.

Medicare Part D was a betrayal of conservatism. Conservatives are supposed to see fiscal responsibility as their friend, precisely because the need to pay for what the government does should constrain the overall size of that government. This Administration let go of fiscal responsibility early in its first term and has been undermined by its absence ever since. (With the current budget target, weak as it is, we are essentially in a pay-as-you-go situation, so it's not quite so bad.)

The President's attempt at Social Security reform was the first casualty. The reason to reform Social Security is its long-term fiscal imbalance. The President understood that, even if his rhetoric was at times hyperbolic or misleading. The President lost all credibility on using that as a motivation for reform when he decided that the short-term non-entitlement budget imbalances "don't matter" and when he passed a Medicare expansion whose unfunded obligations were larger than those in Social Security. That was contradiction number one. (Read more here.)

Contradiction number two came from the President's statements that he wanted to "strengthen" the system. It is reasonable to believe that strengthening an entitlement program means putting more resources into it. There was no plan put forward by the Administration, even in the form of a trial balloon, that tried to strengthen the system with new resources. That doesn't mean the proposals were bad ideas, but it does mean that the honest description of what his plans do is to pare back projected future spending so that it is balanced by projected future revenues. The President's intentions here were both conservative and (to use Rove's word) ambitious. They just weren't presented coherently, and so they got nowhere.

This notion that the President's legacy on matters of fiscal policy--which will be written by historians (and bloggers!) that Rove can't spin--will be anything but a severe and harsh critique is what I consider the Myth of Rove.


Peter said...

Rove was big man behind Bush till now from when Bush ran for Governor of Texas in 1992. Since the pair succeeded in that bid, Rove has overseen Bush's two presidential campaigns, master-minded from behind the scenes the Republican surge of 2004, watched the `perpetual majority' the Republicans boasted of dissipate in just two short years...
p shaped conservatories north east

PGL said...

Another excellent post on Bush's fiscal failures from one of our favorite conservative economist bloggers. I hope you don't mind if I give this a very favorable mention over at angrybear.

Patrick R. Sullivan said...

We were going to get a medicare drug plan no matter what. Bush/Rove just decided to lead the parade rather than get trampled by it. That's the nature of politics.

Lord said...

Ah, but who deserves the most approbation though, Bush, the Republican Congress, or both?

Anonymous said...

It would seem Bush has a defender in this Mr. Sullivan. Mr. Sullivan omits three facts: (1) Bush made the Rx bill very expensive but allowing a large amount of this subsidy to go to Big Pharma; (2) Bush should have told people that this would mean higher taxes but he cut taxes a second time in 2003; and (3) Bush runs around the nation telling seniors that he gave them this free money as he cut taxes too. Bush is being serially dishonest but this Patrick R. Sullivan defends him anyway. Go figure!

Jonah B. Gelbach said...


Well put. I always enjoy reading your take on the politics-economics nexus (even in the rare cases when I disagree, and this isn't one of them)


Anonymous said...

Great post. You should also mention that the farm bill, the energy bill, and the highway bill were all betrayals to conservatism. The highway bill patricularly grinds me after what happened in Minnesota.

After the bridge collapsed, there is a widespread call for raising the gas tax to fix bridges in disrepair. I agree there are good reasons for increasing the gas tax, but this isn't one. After all, we spent $284 billion on Bush's highway bill. That could fix a lot of bridges. Instead, it went to special interest projects like the "bridge to nowhere". If memory serves me correctly, the price tag on the bridge to nowhere was $250 million. I'm no civil engineer, but I'm guessing that would have more than paid for the necessary repairs to the I-35W bridge in Minneapolis!