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The Death Knell

Perhaps because I just finished writing a book of history, I've been thinking a lot about how historians will look at the last few weeks in 25, 50, 100 years. This isn't a very useful frame--since we don't know what will happen tomorrow, we can't know the full context of events happening today. But it has pushed me to ask what really matters in the news cycle and what is just noise.

One thing I think historians will look at is how the financial crisis has quickened the dissolution of modern conservatism. The last 40 years have seen a conservatism bent first and foremost on the erosion of the New Deal state and the promotion of free markets. In its heyday, this was a useful corrective to certain big-government excesses. But it has also become blindingly clear that in large doses under Reagan, the Bushes, and even New Democrat Clintonians, free market conservatism became a dangerous ideology that removed too many of the regulatory structures holding our economy in a healthy place since the 1930s. We are now being made to suffer as a result.

That much is obvious. But even more telling are the two responses to come out of the GOP over the last week. I personally believe the Paulson plan, in some form, is a necessary first step. But it is also an enormous, (at present) poorly constructed exercise in government hyperactivism--a strange climax to eight years of conservative rule. Not that Bush has been otherwise true to the small-government ethos. From the war in Iraq to the Medicare prescription drug plan, he has overseen a dramatic upsurge in government spending. But like the Paulson plan, Bush's other big-ticket bonanzas have been undercooked and poorly executed, in large part because they have come from a party that refuses to take seriously the need for government action. It is the ironic apotheosis of modern conservatism, having bred a federal government comparable in size to FDR's, but with none of the intellectual framework that made the New Deal state effective.

The House Republican alternative plan, proffered by Minority Leader John Boehner, holds true to modern conservatism in its reliance on free markets. But while it does contain some good ideas--allowing for the temporary suspension of bank dividend payments seems to me a good way to free up needed capital--it's mostly an affirmation of the intellectual dead end in which the GOP has found itself. One plank calls for, according to The New York Times, "removing regulatory and tax barriers that are currently blocking private capital formation." How, um, 2002 of them. It takes guts to suggest that the real problem behind today's crisis is not the lack of effective market regulations, but the presence of too many. The plan would also, predictably, provide temporary corporate tax relief--not an awful idea in itself but, again, a throwback to a now-long-gone era. And given the GOP's track record, it smells suspiciously like an effort to lock in even more tax cuts for corporate America. Indeed, taken as a whole, the plan betrays a serious lack of fresh thinking among House Republicans. They're like the dazed boxer who, late in a title fight, clumsily reverts back to his basic punches (or, say, the fazed Alaskan governor who, in a CBS interview, clumsily reverts to talking points).

It's hardly innovative to suggest that modern conservatism has run out of ideas. But my hunch is that when historians try to draw a bright line when the assertion became the fact, they will settle on the party's stumbling over the last two weeks.