Thursday, October 13, 2022

Economic Policy as Religious Dogma: Why Prove Anything When You Can Believe it as a Matter of Faith?

by Neil H. Buchanan

When did economic policy become a matter of faith?  I am not talking about fringe grifts like the "prosperity gospel," nor am I asking why White Christians in this country have long been intensely loyal to the Republican Party's extreme version of corporate capitalism (which requires them to perform impressive mental gymnastics to clear some rather imposing scriptural hurdles).

I am not, in fact, talking about organized religion at all.  My focus here is on the evidence-resistant, stubborn presumptions about economics and other secular issues that we see every day among politicians and commentators, revealing that they are in fact not engaged in reasoned debate but are instead committed to beyond-logic truths that can never be challenged.  This is the essence of religious belief: truth without reason.  (That is not a criticism, because it is what belief is all about.  See countless links here.)

One of my first scholarly publications begins with a quote from two economists who, after summarizing the weak empirical and theoretical case for a particular economic theory (that tax cuts will stimulate business investment, not that it matters to the point here), noted that many economists were sticking with that long-discredited theory. They concluded that such continued belief in the theory "must ... rest essentially on faith.  Faith is indeed sometimes rewarded.  But for our part, in this instance, we remain agnostic."

This kind of quasi-religious belief structure has become ubiquitous on the (election-denying) American right.  For example, in response to my Dorf on Law column two days ago, part of which included a critique of libertarians' hatred of central banks, one reader responded via private email: "As an economic philosophy, Libertarianism is nothing more than a cult."  He went on to note that the Rand Paul types are committed to a canon of non-falsifiable beliefs, such that (for example) they are sure that the Gold Standard was never at fault, even when it caused massive problems, and that it would have solved every problem in the decades since then, if only the nonbelievers would have brought Hard Money Heaven back to earth.  (My words, not his.)

My other writing this week deals with a topic that is just as faith-based as any of the other quasi-religious policy commitments that we see in American life: the presumed horrors of government debt.  What makes this topic especially annoying, however, is that the apostles of the faith would insist that they are not elevating belief above reason at all, assuring us (and themselves) that they are being "hard-headed realists" and are utterly non-ideological.  True-believing libertarians can at least admit that they are engaged in an ideological battle.  But the debt-haters are cultists, too, and their self-delusion continues to matter.

Railing against federal borrowing is as American as apple pie, of course, but the content-free nature of it is sometimes obscured by how relentlessly the mantra has been drummed into our heads.  We would be rightly shocked if we saw reporters who, say, opined uncritically in a news article that dirtier air is good for economic growth (which might or might not be true as an empirical matter, but it is certainly not presumptively true -- and even then, there would be good arguments against allowing more pollution).  We would be so shocked, in fact, that editors and publishers at avowedly non-ideological periodicals would never allow it to happen.  But federal debt is different.

This is an opportune moment to pull out one of my favorite quotes from a big-name pundit.  I cannot recall how many times I have included this in my writing, but today makes that number n+1, where n is large.  When he was still at The Washington Post, Ezra Klein wrote in 2013: "For reasons I've never quite understood, the rules of reportorial neutrality don't apply when it comes to the deficit [and debt]. On this one issue, reporters are permitted to openly cheer a particular set of highly controversial policy solutions."

Quite so.  It happened again last week, when two of Klein's New York Times colleagues who are non-opinion business writers published a jaw-dropper of a faith-based article inveighing against federal debt.  I responded with a two-part Verdict column that ran yesterday and today.  The article in question, by Alan Rappeport and Jim Tankersley, answers a question that no one had ever thought to ask: What happens when two enthralled believers in the conventional wisdom have nothing new or useful to say about federal debt, but they get to say it anyway in The New York Times?

I am self-aware enough to understand that my writing style can be hard-edged and sardonic.  In fact, that is my default.  Even so, Rappeport and Tankersley (to whom I refer throughout as RT) pushed me into new territory.  Indeed, Part One of my response on Verdict was almost entirely devoted to ridiculing their rhetorical and (only slightly) hidden political framing, because their piece was so far beyond anything that I had ever seen before.  As I put it at one point in Part Two: "I have been writing about federal deficit and debt issues for my entire academic career, but I had until yesterday never coined the term 'debt porn.'"

How silly was RT's piece?  Its news hook was that the US Treasury had "revealed" that the gross federal debt had passed $31 trillion on October 3.  Why would anyone think that this is news?  As I noted, this is not even a round number, which politicians and pundits exploit to make hay when the debt hits, for example, $20 or $30 trillion.  But 31?  I concede again that I am often quite acerbic, but this is where I went in Part One: "Is it that this happened in October, and October has 31 days—and three of the four letters in the word debt are used to spell October? Are RT fans of a certain ice cream shop?"  Even by my standards ... yikes.

As a matter of substance, I also pointed out that "gross federal debt" means nothing, because it includes money that the federal government owes to itself (not kidding), whereas "net debt" on October 3 was $24.3 trillion, which is hardly a trivial difference.  On the other hand, given their determination to make a big deal out of nothing, I suppose that RT could have claimed that there was some reason why 24.3 is an important (and "grim," in their view) threshold.  Who knows?  Maybe the numbers 24 and 3 mean something to someone.  Did something happen on the 24th of March in some year?

Snark aside, however, the religiosity of RT's pronouncements became clearer and clearer as I tried to process their piece.  I started to go in that direction in a sentence that I deleted from the final draft: "A front-page New York Times piece frames a matter of civic religion – debt is bad, bad, bad – as important news, because an arbitrary number has been 'breached.'"  The next (also deleted) sentence: "Sarcasm is not necessarily unfairness."

Part Two of my Verdict column was my attempt to give a fair hearing to the closest thing to an argument in RT's piece; but as I pointed out, almost all of their non-religious statements boiled down to: Interest rates have gone up, which makes federal borrowing harmful.  Why is it harmful?  Because interest rates have gone up!

And when they finally said something non-repetitive, RT lapsed into relying on one of the favorite non-arguments from fiscal hawks: the Confidence Fairy.  They cited the reliably hawkish CBO as saying that bond vigilantes (yes, metaphors are being mixed here) "could lose confidence," which "could cause 'interest rates to increase abruptly and inflation to spiral upward.'"  So at bottom, a purportedly non-opinion piece by business reporters in The Times amounted to saying that the change in interest rates (not the $31 trillion gross debt balance itself) could lead to terrible things.

As I point out at the end of Part Two, however, even that is not enough to support the substantive assertion on which RT ultimately rested their case.  Again, their argument was that interest rates have gone up, which makes federal borrowing harmful.  That can only be true, I wrote, if interest rates on government debt "are going to stay up, and indeed they are going to stay up so high and for so long that the financial markets will freak out and create hyperinflation while the bond market melts down."  RT do not in any way support those additional assumptions, because they are apparently not even aware that their argument rests upon them.

Again, however, what strikes me about this most recent example of anti-deficit propaganda is that it reads more like religious fundamentalism than policy analysis.  In fact, I suspect that RT's response to my claim that there is nothing newsworthy about their piece would be something along these lines: "But that is exactly why our piece is so important!  People need to be talking about this, even when it's not obviously newsworthy."  Religious obligations are always a big deal to believers, both when something is happening and when it is not.

I have been especially harsh in assessing RT's work precisely because they had not previously (as far as I know) revealed themselves to be in the anti-debt cult.  Upon checking to see whether any of my Dorf on Law columns had cited either of them, I found one from 2019 that cited Tankersley on an unrelated topic and another from 2017 that cited Rappeport casually using the phrase "piling on debt."  I did write this in a 2021 column (discussing a TV interview of Tankersley regarding tax policy): "[T]he most charitable way to describe his performance is that he was so busy trying to be fair and balanced that he was simply repeating Republican talking points uncritically.  The interviewer's look of incredulity was priceless."

Even so, neither of these reporters has ever come across as a fire-breathing anti-debt fanatic, which is why I decided to spend serious time this week critiquing their nonsense.  They have joined the church without seeming even to realize that they have done so.

A former friend once told me about a guy in one of his classes who was incensed by the very suggestion that there might not be a god.  The poor kid had sputtered: "It's obvious.  Look at the trees!  Look at the sky!!  Of course God exists.  How is it not obvious?"  And to far too many people -- not only Rappeport and Tankersley but their editors and publishers, along with the countless editors and publishers at other major news outlets that pump out anti-debt sermons on an ongoing basis -- this is no longer a matter of reason but of belief.  Heaven help us.