Short-Term Thinking: The Problem With Republicans

Long- and Short-Term ThinkingThe spectacle of Republicans coming up with a new reason for not allowing the late Justice Scalia’s seat to be filled is funny in its way. Greg Sargent summed it up in an article yesterday, Republicans: The Next President Should Fill Scalia’s Seat. Correction: The Next Republican President Should. As he noted, “What’s really striking here is how effortlessly the rationale that Senate Republicans themselves offered — for months and months on end — for not acting on Garland this year has been tossed out the window.” It does show that they lack any kind of base ideology other than the gaining of power so that they can give more money to their rich backers. But more important is that it shows how focused they are on short-term thinking.

This is nothing new. Remember the last debt ceiling rise? John Boehner sacrificed his political career (not much of a sacrifice, but still) in order to get the debt ceiling raised. Paul Ryan just became Speaker of the House. So the Republicans used that as cover for doing this. But in 2017, what will the Republicans do? It’s always short-term thinking with them. They just want to get through the next term — and sometimes just the next day or two. It’s really amazing to watch.

Long History of Republican Short-Term Thinking

But we can go back much further to see the short-term thinking of the Republicans. Their entire strategy to gain power is based on white Christian resentment. And this made sense during the years of Reagan and the elder Bush. But even at that time, they should have known that they needed to start pivoting. They haven’t. It took them until after losing the 2012 election to even think about serious outreach to Latinos. But there are two important things about that. First, that was all about immigration reform — something their rich donors want. Second, they did nothing about it.

The truth is that they are unwilling to risk upsetting their rabid but declining base. Again: it’s short-term thinking. If ever they had an opportunity to sacrifice the short-term for the long-term, it was this election. But instead, they clung on to the hope that they could win the presidency. They really seem as though they think that if they can just get control of Washington for 4 years, they can enact everything they want and the future will be saved. Just four years and they can roll back all that horrible (Popular!) legislation from the last 80-odd years and finally America will be its True Self.

Do Republicans Even Have a Long-Term Plan?

It really isn’t clear what the Republicans want to do beyond rolling back the New Deal and Great Society — allowing ever more money to be funneled to the rich. I suspect that they don’t actually have any other ideas. Even conservative intellectuals seem focused on what’s supposedly wrong with liberal policy rather than what is right with conservative policy. (There might be a reason for that!)

There is something infantile about Republicans. You probably know about the Marshmallow Challenge. It’s a test given to children to see how long they are willing to put off immediate reward to get a greater one. (See Alfie Kohn on the problems with the test.) Something similar is going on with the Republicans. They aren’t willing to accept even the smallest amount of pain to look out for the long-term health of their party. It’s short-term thinking — always.

It’s an America Problem

But maybe the real fools are the Democrats. The truth is, the American people don’t seem to notice. Imagine if Donald Trump became president and tanked the economy. In 2020, the Democrats would likely regain power (assuming things hadn’t stabilized). But we would be at another (worse) normal. And if the economy went into recession in 2024, the thoughtful American voter would put the Republicans back in power. It isn’t just the Republican Party that suffers from short-term thinking.

Greg Mankiw: Lost in Theory, Counting Money

Nathan Robinson on Greg MankiwEconomist Gregory Mankiw is very pleased to have been gouged by a scalper, he informs us in a recent New York Times column. Mankiw recently went to see the Broadway musical Hamilton, and paid the going rate for a ticket: $2,500. Yet he was far from dismayed at having paid this extraordinary sum. In fact, he describes those who object to price-gouging as “pernicious.”

That’s because Mankiw adopts the standard economist’s view on exorbitant prices for goods: where the layman sees gouging, the economist sees the sublime operation of the law of supply and demand. As Mankiw says, “terms like ‘scalping’ and ‘price gouging’ are pejoratives used to demonize those who resell tickets at whatever high prices the market will bear.” …

He gives a parallel example. In 2009, Jay Leno decided that what unemployed auto workers needed the most was free tickets to a Jay Leno concert. So he gave them a bunch of tickets, which many of them promptly tried to sell on eBay for $800 each. Leno was horrified. But Mankiw thinks Leno should have been pleased…

The free market reveals what each individual values, and how much they value it. If I keep my Jay Leno ticket, rather than selling it, it is because I value the experience of seeing Jay Leno more than $800. If my coworker sells his ticket, it is because he prefers the money. Everyone gets what they want the most, as the market efficiently satisfies our preferences.

Yet when economists tell this fable, they neglect a single crucial fact: some people are wealthier than other people. The reason Mankiw loves price hikes is that they don’t affect him, because he has so much money that he doesn’t really care what price he pays for a Hamilton ticket. Wealth confers the ability to jump to the front of the line, bypassing those who may want to see the show far more but who have less money to spend on theater tickets…

The situation surely differed depending on the unemployed workers’ personal finances… In each instance, the outcome does not reflect how much the workers want their tickets, but how financially desperate they are. Thus what Mankiw sees as a measure of preference is in fact largely a measure of hardship. Economic outcomes aren’t a product of what people value, but how much money they have to throw around.

—Nathan Robinson
Do Economists Actually Know What Money Is?