By Ralph Benko
Will America start prospering again — as it has not prospered for over a decade? Likely yes. But not without a fight. Now that Jim DeMint has raided Steve Moore from the Wall Street Journal that card might be Heritage Foundation vs. the White House. Could be big. John Holdren, now Obama’s White House science advisor, 40 years ago termed America “overdeveloped.”
Holdren co-authored a 1993 book, Human Ecology: Problems and Solutions, with Anne and Paul Ehrlich reportedly saying that, “A massive campaign must be launched to restore a high-quality environment in North America and to de-develop the United States….” (Emphasis supplied.)
As Reason Magazine’s Ronald Bailey put it upon the occasion of Holdren’s nomination to White House service: “Holdren … acknowledge(s) ecological ignorance about the principles of economics, but [didn’t] express any urgency in learning about them.” Holdren seems, to this columnist, still to favor “de-development” more euphemistically stated as “sustainable prosperity.”
Who could disagree with “sustainable prosperity?” But what does it mean? This White House presents as, deeply, imbued with magical thinking regarding policies of job creation.
How to fight such ignorance? How about … deploying the protégé of a towering intellectual Julian Simon who once upon a time decisively refuted Dr. Holdren?
That’s exactly what Heritage’s president Jim DeMint now is doing. DeMint recently lured one of America’s leading advocates for policies of equitable prosperity, Steve Moore, to Heritage Foundation. Moore’s title, Chief Economist, suggests he has been given great authority.
Moore (with whom this writer long has had a collegial relationship, and, long ago, was professionally retained by Cato to publicize one of his books), might be his generation’s most influential Supply Sider. Raiding him from the editorial board of the Wall Street Journal is cognate to the New York Yankees recruiting Babe Ruth from the Boston Red Sox.
Raiding the Bambino changed baseball history forever. Almost a hundred years later, DeMint’s raid of Moore just might similarly transform American history. Here’s how.
Heritage and Moore both champion free markets. But they do so from different, complementary, perspectives. In the tone of its advocacy Heritage leans toward “righteousness,” to do the right thing.
There is a place for argument from righteousness. We voters expect righteousness from our leaders. But righteousness is a feature, not a benefit.
We also expect more: a benefit. Moore provides the “more.”
We expect our leaders also to do the thing right as well as the right thing.
“Doing the thing right” means giving us Joes and Jills a fair deal and a real shot at prospering from our work. And we want, after a dozen years of stagnation, a Big Deal.
What does that Big Deal look like in practice? Let’s look at the “Kadlec Curve,” named after Forbes.com contributor and Art Laffer protégé Charles Kadlec:
“Kadlec formulated an insight in a Forbes.com column late last year that, little by little, is beginning to rock Washington. He found it hidden inside a footnote of a Congressional Budget Office report.
“‘[T]he impact of growth on the deficits … can be found in Appendix B of The Budget and Economic Outlook: Fiscal Years 2012 to 2022: every one-tenth of one percent increase in the growth rate will reduce the federal budget deficit over the next 10 years by $314 billion.‘ [Emphasis added.] …
“$6 trillion in new federal revenues is just the byproduct of 4% economic growth. Of even greater importance: an economy generating more (and better) jobs than there are workers. That could cut the Gordian knot of immigration reform: America will be yearning for more immigrants, documented or not. 4% growth (somewhat less, actually) makes Social Security and Medicare solvent for as far as the eye can see.”
The Supply Side, from entrepreneur Ben Franklin on down, always has been tiny yet disproportionately influential. Only rarely has the Supply Side had an institutional amplifier of the magnitude of Heritage Foundation. DeMint’s making Moore Heritage’s Chief Economist was a smart, decisive, move. A Supply Sider, at long last, has been handed the largest conservative megaphone in the capital. This is potentially game changing.
How is this relevant to extracting America from the “Holdren Doldrums?” Moore and Holdren, it turns out, have something of an ancestral history. Moore is the most prominent protégé of the late Supply Side icon Prof. Julian Simon.
Julian Simon is remembered, among other things, for winning a bet with (the now almost forgotten but in his day famous) doomsayer, Dr. Paul Ehrlich, author of The Population Bomb. And with the young John Holdren.
Simon’s signature view, one shared by Moore (and this columnist), is that people, in a context of economic liberty and political integrity, are assets, not liabilities. In 1980 Simon, on that basis, bet Ehrlich and Holdren that prices of a basket of commodities would go down thanks to the power of human innovation, instead of up (as Ehrlich and Holdren pessimistically believed).
Prices went down, validating Simon’s views. Simon collected. And Moore is the successor to Julian Simon, Holdren’s nemesis.
The recruitment of Moore, though, was more than simply a shrewd strategic coup by DeMint against the Obama administration. Heritage also was in a serious predicament for its position on immigration. In taking a hard restrictionist line Heritage had relied, in part, on a study purporting to show that inclusionist immigration reform would be costly rather than prosperity-inducing. That study drew severe criticism, from across the ideological spectrum, as badly flawed.
Heritage highlighted in its blog announcing Moore’s hire that
‘Last year in a Wall Street Journal column, Moore took issue with Heritage Foundation President Jim DeMint’s characterization of the late Milton Friedman’s view of immigration. Moore said he discussed the issue with DeMint recently.
“’Jim DeMint and I may not agree on everything about immigration, but what Jim wants me and others to do is develop a pro-growth immigration policy for the country. I don’t want Heritage to be viewed as anti-immigration. We all know immigration is vitally important to our economy. Our goal will be to develop an immigration policy that’s in the best interest of America, our economy, and allows the United States to get the best and brightest people to come here.”
Jim DeMint’s hiring Moore thus was an act of intellectual statesmanship.
There is a third major dynamic in the Moore hire that may prove of existential importance to Heritage. Heritage Foundation has entered treacherous waters.
Heritage Foundation has a tactical alliance with a group called Heritage Action. Heritage Action last year severely and repeatedly attacked some conservative elected officials as insufficiently militant. Heritage Foundation is paying a big price for that.
The lingering rift between Heritage and the Congress may be just a lovers’ quarrel. Yet if that rift intensifies it could consign Heritage Foundation to irrelevance. Even low-information donors will not forever lavishly underwrite position papers that conservative policy officials are ignoring.
Heritage Action’s serious overreach appears founded in a blind spot of its militant young CEO, Michael Needham. Mr. Needham, in getting his MBA, apparently never learned of a certain axiom crucial to success.
In his breakthrough 1962 book The Effective Executive Peter Drucker — an icon in MBA circles — made a staggeringly perceptive observation: “In every area of effectiveness within an organization, one feeds the opportunities and starves the problem.” (Italics in the original, p. 98).
Conversely, consider what happens when one fixates on a problem rather than starving the problem and feeding the opportunities. He turns into a Captain Ahab, fatally obsessed with harpooning the Great White Whale.
Ahab, obsessed, died, in the process destroying his ship and killing his crew. Could obsession with federal overreach destroy Heritage? Call me Ishmael.
This columnist is all in for ending Obamacare and cutting profligate spending. That does not countenance criminalizing tactical differences. Obsession, even in a righteous cause, always ends badly.
There is another way, no less principled, no less conservative, no less militant. “Feed the opportunities and starve the problem.”
Policies of prosperity really can, rapidly, create jobs and obliterate the federal deficit. Policies of prosperity make possible, both economically and politically, satisfying (if less theatrically epic) solutions for many serious besetting problems.
Starve, don’t attack, the problem. Feed the opportunities. Drucker’s axiom is core Supply Side doctrine. Thanks to Jim DeMint, Steve Moore, a quintessential Supply Sider, now is positioned to help lead America to the end of the Holdren Doldrums, back to prosperity… and Heritage back to safe, and effective, sailing.
Republished with permission from Forbes.com