A Republican majority in the US House of Representatives come January? One consequence will be to give increased prominence to The Fiscal Times, a digital news site launched earlier this year by Peter G. (Pete) Peterson, and, especially, its principal columnist, Bruce Bartlett.
Peterson, 84, is the nation’s most insistent conservative Republican. There was a time when he routinely was described as “moderate,” but after thirty years of increasingly ideological politics, the word has lost its meaning. Today there is only the conservative center – the shortest distance between the Democrats and the Republicans – and the parties’ respective spiral arms, their radical extremities. Conservatives are those in both parties searching for a durable agreement on levels of spending, taxing and borrowing; radicals are those who have no use for compromise.
Onetime chief executive of Bell and Howell, Peterson became Commerce Secretary under Richard Nixon and, afterwards, first an investment banker (Lehman Brothers Kuhn Loeb), then a private equity baron. As co-founder and chairman emeritus of the Blackstone Group, he enjoys a personal fortune estimated at $2.8 billion.
The son of Greek immigrant parents (they operated a diner in Kearny, Nebraska), Peterson as a young man became a member of what had long been described as the (Eastern) Establishment, joining a circle of up-and-comers that included, most notably, future Federal Reserve chairman Paul Volcker. Peterson wrote the report that led to the 1969 statute requiring foundations to spend annually a certain portion of their funds. In 1985, he succeeded David Rockefeller as chairman of the centrist Council on Foreign Relations. And, in 1992, he co-founded the Concord Coalition, a bi-partisan citizens group that lobbied for Federal budget deficit reductions.
Since then, Peterson has warned in a series of books of dangers of the growing gap between various governmental promises of retirement income and health care and legislators’ willingness to vote for taxes in order to pay for them Facing Up: How to Rescue the Economy from Crushing Debt and Restore the American Dream (1993); Will America Grow up Before it Grows Old: How the Coming Social Security Crisis Threatens You, Your Family and Your Country (1996); Gray Dawn: How the Coming Age Wave Will Transform America—and the World (2000); On Borrowed Time: How the Growth in Entitlement Spending Threatens America’s Future (2004); and Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (2005). In 2008, he made and distributed a polemical documentary film, U.S.I.O.U, with limited success and little impact on the presidential campaign. Peterson had become altogether predictable.
The Fiscal Times is his most promising vehicle yet. Unlike Politico, the Washington, D.C. hybrid, Peterson’s website is not really a newspaper. It deploys no free print edition, replete with lucrative advertisements; assembling a paying audience to turn a profit is not part of the plan. (There is an agreement with The Washington Post to share some content.) Still, Peterson employs several former big league reporters and editors to do the talking, including John Berry and Dan Morgan (formerly of The Washington Post), Ann Reilly Dowd (Fortune), Merrill Goozner (Chicago Tribune) and Jackie Leo (Readers Digest), all of them with reputations of their own, and, most notably, columnist Bartlett.
Born in 1951, Bartlett has been through the fires of various economic policy debates since the 1970s. After graduating from Rutgers and Georgetown (with a Master’s thesis called “Cover-up—the Politics of Pearl Harbor”), Bartlett served as a legislative aide first to Congressmen Ron Paul, then to Jack Kemp, and deeply imbibed the tight-money-and-tax-cuts doctrine that came to be known as “supply side economics” – a radical departure from the balanced-budget Republicanism of the Eisenhower era, to which Richard Nixon had at least paid lip-service. As executive director of Congress’s Joint Economic Committee during the first Reagan administration, he promoted various “starve-the-beast” policies, then joined for a time supply-side guru Jude Wanniski at his Polyconomics consulting firm.
After becoming deputy assistant secretary of the Treasury for economic policy in the George H. W. Bush administration, Bartlett gradually began to take deficits more seriously, however. He was a witness to the bargain by which the president persuaded Congress to raise taxes and cut spending on the eve of the first Gulf War with Iraq in 1990. In the course of the bitter partisan battles of the ’90s, Bartlett gradually concluded that increases in social spending were inevitable, that massive spending cuts were politically impossible.
Convinced by 2003 that a major tax increase was desirable (it was the Republicans’ expensive-but-unfunded pharmaceutical Medicare benefit that finally changed his mind), he began to tout the value-added tax, a form of national sales tax, as a solution to chronic deficits; and, in 2006, his transformation from radical to centrist conservative Republican complete, he published Impostor: How George W. Bush Bankrupted America and Betrayed the Reagan Legacy. He was promptly fired from his job at a right-wing think tank, the Dallas-based National Center for Policy Analysis, and gradually began to make his way as an independent journalist. The New American Economy: The Failure of Reaganomics and a New Way Forward appeared last year. Peterson hired him away from Forbes last spring.
Somewhat to my surprise, Bartlett has become one of the four distinct voices that fashion the narrative to which I pay attention from week to week. The editorial page of The Wall Street Journal, along with David Brooks and Paul Krugman of The New York Times, are the others. Alas, there is no fifth voice speaking clearly and regularly for Democrats of the Obama-Pelosi-Reid stripe: The New Yorker’s Hendrik Hertzberg is too laid-back and Simon Schama, in the Financial Times, too sporadic.
(Here the same terminology applies: the president is a conservative centrist, compared to the Democrats’ “progressive” or radical wing, except that he is cast in the role of reformer as well. For all its periodic zig-zag, history must have a trajectory, after all. And federal supervision of health care is where the United States is going next, much as it tackled and met the challenge of banking regulation in the twentieth century.)
With the initiative shifted shifting to a deeply-divided Republican party, Bartlett will shine a bright light on its internecine battles. (The Times’s Brooks is mainly low-light and soft focus). Last week, for instance, Bartlett raised the question of whether a new Tea Party faction in the House of Representatives will seek to prevent further increases in the national debt limits, precipitating the sort of showdown that occurred in the mid-1990s and, conceivably, even lead to a default on Treasury debt. He pointed out that the situation today is completely different from what it was when the Republican Congress swept into office in 1994.
The economy is in the tank and the budget is clearly on an unsustainable path, in large part due to actions taken by Republicans when they were in power. They completely dismantled the deficit controls put in place by the elder Bush and Clinton so that they could cut taxes willy-nilly without paying for them, and in the process thoroughly decimated the government’s capacity to raise adequate revenue to fund its essential functions. Adding insult to injury, Republicans enacted a massive new entitlement program, Medicare Part D, without paying for a penny of it, on top of every pork barrel project any Republican ever imagined.
In ’90s, gridlock in Congress was actually just what the doctor ordered. Presidents Bush and Clinton had done the necessary work to put the Federal budget on a sustainable path. The Internet boom lay just ahead. In the ’10s, intransigence is the worst possible outcome. Growth is mediocre, the deficit has exploded, thanks to a deep recession, and, with government borrowing once again growing at an unsustainable rate, the divisions are deeper than ever.
Radical Republicans think that they can roll back the welfare state. Conservative Republicans want to find a way to pay for it that is more efficient than the revenue systems that conservative Democrats will contrive. No one is sharper on these differences than Bartlett, who keeps track of his reading, maintains a blog and writes occasionally for Tax Notes, and posts these articles on the Social Science Research Network (author search required).You can sign up here to for an email edition of his weekly column for The Fiscal Times.
Eventually these differences will resolve. The radical Republicans are going to lose the argument, along with creationists and the deniers of climate change. At some point, a rising generation of conservative Republicans will take over the party. Until then, it’s going to be a rough ride. Fasten your seatbelts, please