Strange Bedfellows?

Slogging through Phil Gramm’s The Myth of American Inequality: How Government Biases Policy Debate reminds me why I only took one statistics class.?The thesis of the book is that taxes and government transfers (e.g., Medicaid) are not included in official income statistics, but if they were inequality today would be much less than reported – in fact, it would be less than it was in the 1960s.

The book reads on the surface like a defense of Laissez-faire economic policy: low regulation, low taxes, etc., supply-side theories that have never worked except for the very few, very wealthy. But if those taxes and transfers have reduced income inequality to a (possibly) tolerable level, the very thing Laissez-faire economic orthodoxy rallies against – taxes and government supports – would seem, in fact, to create a more equitable society. Is Gramm really defending government intervention?

Recently, several Republican presidential candidates, including Ron DeSantis, Josh Hawley, and J.D. Vance, have been arguing for the important role of the public sector in creating a thriving, just economy. They have carefully avoided the word “government,” but in their policy position they are arguing for government to set new rules for markets and our economy. They have called for government actions to lift incomes, for trade restrictions with China and for a form of student debt relief.

As Ron DeSantis pointed out, “We are a nation with an economy, not the other way around.” I have seldom agreed with the Florida Governor, but on this I say, Amen!

I don’t know what Phil Gramm is ultimately arguing for or against (I haven’t finished slogging through his statistics). And I don’t know if Republican candidates will continue to argue for the critical role of government in setting the rules of our markets and economy. But if they continue in their current directions, I will cheer them on. Politics, as they say, makes strange bedfellows