Op-Ed: Noncompromising position

At the heart of Newt Gingrich’s recent political success is the growing belief among conservatives that he is the kind of leader who will bring the fight to the left, and who will never compromise his small-government ideals. This is entirely absurd, as Gingrich is one of the most impressively inconsistent politicians in modern American history. Yet the fact that an unwillingness to compromise is seen as a strong selling point among many conservatives is very telling.

Mitt Romney has long seen a willingness to compromise as a virtue, though he has made every effort to soft-pedal that part of his past. During his 1994 Senate campaign against liberal Democratic incumbent Ted Kennedy, Romney argued that he’d build bridges across the partisan divide. While Republican candidates across the country were rallying around Speaker Newt Gingrich’s “Contract With America,” Romney distanced himself from it. “If you want to get something done in Washington,” he said in a debate during the campaign, “you don’t end up picking teams with Republicans on one side and Democrats on the other.”

According to Romney, excessive partisanship creates a dynamic in which one party feels as though it is losing every time the other party is winning. In this regard, Romney was his father’s son. As the governor of Michigan and a leading figure among moderate Republicans, George Romney warned against European-style ideological parties, claiming that they’d lead to endless governmental crises and deadlocks.

In the wake of ferocious fights over the debt limit, the payroll tax cut and much else, one gets the strong impression that Romney has been vindicated. Ideological polarization has its virtues. Most importantly, it gives voters a clear choice between the parties. But an irrational resistance to compromise is something else entirely.
 
One can hold strong beliefs about the appropriate size and role of government while also accepting that politics in a democracy, as the scholar James P. Carse once put it, is an “infinite game.” That is, there is no final victory for one faction or another. Conservatives will never fully vanquish liberals and liberals will never fully vanquish conservatives, so we might as well learn to live with each other. The consequences of our endless governmental crises and deadlocks will only grow more severe over time.

This week, the Mercatus Center, a public policy think tank at George Mason University, and Econ Journal Watch co-sponsored a symposium on the potential for a U.S. sovereign debt crisis. The most chilling paper was written by the economist Arnold Kling, a provocative thinker in the public-choice-economics tradition who has a talent for painting grim scenarios.

In “How a Default Might Play Out,” Kling begins with a series of noncontroversial observations, including that the current level of outstanding debt isn’t America’s real challenge. Rather, the problem is the growing imbalance between the cost of Medicare (and, to a lesser extent, Social Security) and federal revenues. The obvious solution is to restructure both programs to make them sustainable and, failing that, to increase the tax burden. In Kling’s view, however, it is very easy to assemble a blocking coalition against changes, particularly in the case of Medicare. This reflects the generic opposition of retirees, who like the program as it is, and the ideological opposition of liberals and conservatives: “Republicans tend to be ideologically opposed to top-down rationing, while Democrats tend to be ideologically opposed to bottom-up choice.”

So choice-based reforms, like that championed by Republican House Budget Committee Chairman Paul Ryan and Democratic Sen. Ron Wyden of Oregon, are opposed by the left, and top-down reforms, like those championed by President Obama, are opposed by the right. If we assume that these deeply held ideological stances aren’t going to change overnight, the only alternative to reform is a massive tax increase. And it is hard to imagine a universe in which Republicans will embrace any such tax hike.

This intense resistance to compromise from both sides will continue to sap the confidence of investors in U.S. debt. At some point, we might experience a catastrophic loss of confidence that causes borrowing costs to skyrocket. If, for example, Congress comes within inches of producing a sustainable budget compromise that is suddenly deep-sixed by political opportunists of both parties, the result could be a sovereign debt crisis.

If the U.S. does experience a debt crisis, the country won’t want to default unilaterally, as that would make it all but impossible to borrow ever again. Kling argues that a more likely outcome is a negotiated default, in which U.S. creditors, through the International Monetary Fund or some other institution, impose stringent terms on the U.S. federal government.

That is, the surplus countries, like China and the oil-rich Gulf states, will make decisions regarding how much the U.S. is allowed to spend on Medicare, Social Security and the military. Suffice it to say, the thought of Chinese military officials deciding on how large a military the U.S. is allowed to retain is a sobering thought.

But that, alas, is a foreseeable outcome from the brand of rejectionist politics that has captured the imagination of a growing number of Americans on the right and the left, and which is fueling Newt Gingrich’s success in this year’s presidential campaign.