Bad Conservative Fiscal Policy

Rule and Ruin: The GOP's Secret Love Affair with Spending

In a review of Geoffrey Kabaservice's new book, Rule and Ruin, Reihan Salam explains why conservative politicians have not always been the best defenders of small government. He points out that conservatives have supported many leaders who have actually increased spending, and that they got away with it by irresponsibly cutting taxes and increasing subsidies for favored constituents:

And at the federal level, conservatives have generally acquiesced to increased spending while refusing to levy taxes high enough to pay for it. In effect, this has meant delivering big government while only charging for small government -- a politically attractive proposition that has proved fiscally ruinous.

Moderate Republicans have been among those most attuned to the perils of such hypocrisy. During the late 1960s, a number of moderate Republicans -- such as those associated with the Ripon Society, a think tank that served as an incubator for centrist policies -- correctly predicted that a southernized GOP, shaped by a fusion of conservatism and populism, would “have an enormous appetite for federal subsidies in the form of defense spending, oil allowances, and agricultural supports,” Kabaservice writes. Indeed, the conservative appetite for federal spending grew ever more voracious in the decades that followed. Call it redistribution for me, but not for thee.

As president, Nixon ratified the ascendance of big-government conservatism with his embrace of John Connally, a former Democratic governor of Texas whom Nixon appointed as treasury secretary in 1971. Whereas moderate and conservative Republicans alike tended to favor the decentralization of power, competitive markets, and private initiative, Connally was a different animal. He was a foreign policy hawk and a cultural conservative but also an avid defender of subsidies and tax breaks for the defense sector and energy interests, which fueled the Sunbelt boom and further enriched hundreds, if not thousands, of wealthy conservatives. Nixon saw Connally as his natural successor, a politician who could cement Nixon’s new Republican majority by bringing the southern white working class into the fold. Although Connally never lived up to Nixon’s high hopes, he did help usher into the GOP a generation of statist southern politicians keen to channel federal dollars to favored interests in their region. Connally still casts a long shadow on the party: one can see it, for example, when a conservative governor such as Perry eagerly spends millions of taxpayer dollars on Texas’ Emerging Technology Fund, a program that a more orthodox free-market advocate would reject as an unacceptable intrusion into the private sector.