The Two Faces of Ronald Reagan by Murray N. = Rothbard

The Two Faces of = Ronald=20 Reagan

by Murray=20 N. Rothbard
by Murray = N.=20 Rothbard

First published in=20 Inquiry, 3, 13=20 (July 7 & 21, 1980), pp. 16=9620.

A curious thing is happening in this = extraordinary=20 election year. The liberals are beginning to adjust to = Ronald=20 Reagan. After all, they claim, he=92s getting more moderate, = he=92ll=20 have to shift to the center to win the election, and he = was a=20 moderate and "flexible" governor of California for eight = years.=20 Maybe he won=92t be that bad, certainly not as erratic as=20 Carter.

Whatever happened to = the=20 liberal fighting spirit, so evident when Barry Goldwater, = Reagan=92s=20 spiritual ancestor in the presidential race, was bitterly = savaged in=20 1964? Part of the difference is subliminal, a matter of = personality=20 and image. Goldwater=92s persona was jut-jawed, tough, Wild = West,=20 threatening to liberal intellectuals. Reagan, on the other = hand, is=20 soothing, calm, slow, almost Quaaluded. Surely this bland, = aged,=20 amiable guy =96 this "nice dope," as Garry Wills referred to = him =96=20 can=92t be a threat to anyone.

But=20 the liberals are making a bad, even catastrophic, mistake. = They are=20 captive to the knee-jerk liberal version of political soap = opera in=20 which the Good Guys are pleasant, amiable, caring sorts like = Dustin=20 Hoffman, and the reactionary Bad Guys scowl and never feel = deeply, a=20 la Clint Eastwood. Unfortunately, it doesn=92t always work = that=20 way.

Liberals are being = soft-soaped=20 into accepting or at least tolerating Reagan, but opponents = of big=20 government see him in a different light. While liberals are=20 convincing themselves that Reagan is flexible and moderate, = the=20 growing number of people fed up with government are = persuaded that=20 he remains one of them. After all, he talks like them. For = years,=20 Reagan has taken to the airwaves and the podium with his = anti-big=20 government, pro-freedom message. Surely, if he became = President,=20 federal regulations would be abolished, taxes and government = expenditures would be slashed, and the government would get = off our=20 backs and out of our pocketbooks. Right? Wrong again. For, = oddly and=20 paradoxically, each set of blind men has hold of a different = part of=20 the elephant. Both the liberals and the right-wing populists = are=20 right about Reagan, yet both are making a tragic, even = disastrous,=20 mistake. For Reagan is both flexible and fanatical =96 but = on=20 different issues. Tragically, Reagan is flexible and = moderate when=20 it comes to freedom and big government, but hard-nosed and = fanatical=20 when it comes to global conflict.

Ronald Reagan can be = understood=20 only in the context of the modern conservative movement, in = which he=20 has flourished for three decades. Reagan is a typical = conservative,=20 with all the strengths and weaknesses, all the crotchets and = prejudices, of that distinctive breed. The key to = understanding him=20 may lie in understanding his political background. Reagan = was=20 converted to conservatism in the early l950s, when he made = speeches=20 on free enterprise for General Electric. He rose to = conservative=20 political leadership after delivering his polished "The = Speech" on=20 behalf of an otherwise disastrous Goldwater campaign in = 1964. He has=20 been the perennial conservative candidate for President ever = since=20 he became governor of California in 1966. And during the = last decade=20 he has been the preeminent political spokesman of the=20 movement.

What=20 animates conservatives? The movement=92s intellectuals have = always=20 been very high on monarchy; many conservative intellectual = soirees=20 have been devoted to discussing the relative merits of the = Bourbons,=20 the Stuarts, and the Hapsburgs. But for mainstream American=20 conservatives like Reagan, the upper crust=92s devotion to = monarchy=20 has never taken hold. The Constitution and the Founding = Fathers are=20 good enough for their basic political theory.

Conservative = politicians may be=20 prepared to accept the intellectuals=92 fierce devotion to = theocracy=20 and compulsory morality, but in a moderate, watered-down = form. The=20 government, they contend, must be used as an instrument of = moral=20 enforcement which in practice means cracking down on illicit = sex,=20 upholding the family, and bringing back prayer to the public = schools. Pornography and prostitution are to be outlawed, = gays=20 forced back into the closet, and, in general, we are to = return to=20 the concept of this country as a Christian America, suitably = scrubbed, of course, to make room for = Judeo-Christians.

To=20 many liberals, the most fearsome aspect of conservatism is = its=20 alleged dedication to a free market economy and to reducing=20 government to a bare minimum. But the conservative devotion = to a=20 free economy is little more than a rhetorical bow to = tradition.=20 Modern American conservatism was after all, born as a = reaction=20 against the New Deal=92s leap into statism; its original = slant was=20 indeed in favor of the free market and hostile to government = interference in the economy. And in recent years, = conservatives have=20 tried to tap into the rising populist hostility to heavy = taxation=20 and big government.

But=20 their hearts are not in it. Has anyone ever seen a = conservative=20 rally jump to its feet to honor the free market? Certainly = not.=20 Prayers in the schools and bans on abortion are far more = likely to=20 rouse the beast. For three decades, however, there has been = one set=20 of issues, one focus, that has been closest to the = conservative=20 heart: conflict with the Soviet Union, war against "godless=20 communism," the pitting of America=92s military might = against that=20 satanic worldwide conspiracy headquartered in Moscow. Make = no=20 mistake; if we bring a mainline conservative to the Oval = Office, we=20 are, whether we know it or not, courting a nuclear = holocaust. It=20 will probably mean repeated hard-line confrontations, at = every=20 conceivable point, with the Soviet Union. In this global = game, we=20 will be caught in the grisly Catch-22 of conservative = strategic=20 thought. For if we issue an ultimatum and the Russians back = down, it=20 will simply prove that the only way to deal with them is to = push=20 continually and be prepared to fight at every turn. And if = we lose=20 just once at this game of chicken and a nuclear war results, = it will=20 only mean the Russians were every bit as monstrous and = inhuman as we=20 thought and thus it was bound to happen anyway.

Inevitably joined to = a foreign=20 policy of global crusading =96 once summed up in the = memorable=20 slogan, "Kill a Commie for Christ" =96 is the imposition of = a garrison=20 society at home. To the conservative, "freedom," useful = though it=20 may be as a counterpoise to Bolshevik slavery, is a highly=20 restricted concept. Aside from the commandments of Christian = morality, freedom must give way to the aggressive = requirements of=20 the national security state. Communists and other suspected=20 subversives must be watched, spied upon, and rounded up with = no=20 civil libertarian niceties allowed to cripple the Lord=92s = work. And=20 even the "free" economy will be bent to the sway of this = rampant=20 militarism.

Bright souls have = long divined=20 an inner contradiction that lies at the heart of the = conservative=20 movement. How can we reconcile the plea for individual = liberty, the=20 free market, and the minimizing of government with the call = for=20 global confrontation and increased power to the FBI and the=20 Pentagon? How can an economy be free of government control = when an=20 ever greater share is to be deflected to military use? How = can a=20 free market be reconciled with an aggrandized = military-industrial=20 complex?

Conservatives, = understandably=20 enough, never talk about this contradiction; it=92s = embarrassing. But=20 there is a way in which the contradiction can he reconciled, = just as=20 conservatives can be moderate and fanatical at the same = time: It is=20 a question of priorities. For most conservatives, the free = market=20 and individual liberty are primarily rhetoric. Conservatives = tend to=20 be flexible and moderate on liberty and the free market = because they=20 don=92t care much about them. But there are other subjects = about which=20 they care deeply: the criminalization of sin, the = restoration of a=20 Christian America, and above all the destruction of = international=20 communism. Here they will not falter, regardless of how = soothing or=20 laid-back the individual conservative may be. Freedom, = private=20 property, minimal government =96 all that can go, they get a = chance to=20 rattle their missiles.

Ronald Reagan=92s = thirst for=20 confrontation is easy to document. His "solution" to the = Afghanistan=20 "crisis" =96 for the United States a crisis only because = Jimmy Carter=20 needed one =96 was the monumental and loony irrelevancy of = throwing a=20 tight blockade around=85. Cuba. As would-be President Reagan = put it:=20 "The Soviet Union owns Cuba, lock, stock, and barrel. We = blockade=20 it, now it=92s a grave logistical problem for them.... We = blockade=20 Cuba, which could not afford that blockade, and we say to = them: =91Get=20 your troops out of Afghanistan and we give up the blockade." = A=20 generous offer indeed. But Reagan is probably in favor of = blockading=20 Cuba anyway, in view of the alleged threat posed by the = phantom=20 brigade of Soviet troops stationed there.

One=20 of the few beneficial fallouts of the Vietnam War was the = Ford=20 administration=92s hesitancy about getting overtly involved = in the=20 Angolan civil war. Reagan had no such qualms. In January = 1976, he=20 was urging the United States to "eyeball" the Russians over = Angola=20 and to tell them: "Out =96 we=92ll let them fight it out = themselves, or=20 you=92re going to have us to deal with." This May, Reagan = was still at=20 it, calling for military aid to the Savimbi guerrillas in = Angola. As=20 Reagan put it, with unconscious irony, "Savimbi... [has] = never asked=20 for any kind of help, except weapons, and I don=92t see=85 = why we=20 shouldn=92t provide them. Savimbi was gracious enough not to = demand=20 American troops, so, luckily, we are spared Reagan=92s = thinking on=20 that subject.

Mindful of American = political=20 realities, every presidential candidate of either party has = been a=20 staunch supporter of Israel. But Reagan, as a conservative = leader,=20 is devoted to Israel with particular fervor. To Reagan = Israel is not=20 simply a political piety but part of the global struggle = against the=20 red menace. As he put it, Israel "serves as a vital = strategic asset=20 with its highly trained and experienced military forces, and = is a=20 deterrent to Soviet expansion in that troubled part of the = world."=20 Former Nixon special aide William Safire exulted at = Reagan=92s=20 commitment to "an undivided Jerusalem" =96 meaning simply = and=20 squarely, in Reagan=92s words, that "the sovereignty is = Israel=92s" over=20 the entire city. As for the PLO, to Reagan it is = simply a=20 "terrorist group" with which no negotiations are=20 possible.

But=20 not all terrorists are the same. "Our" terrorists and = dictators are=20 fine, so long as they are willing to take part in the global = crusade. Taiwan and South Korea are valued allies. = Predictably, the=20 Shah of Iran is a great guy; after all, he was a staunch = ally of the=20 United States for thirty years, wasn=92t he? As for the = shah=92s=20 dictatorial regime, Reagan is willing to sound like a = permissive=20 cultural relativist: "There are different parts of the world = with=20 different customs than ours." Margaret Mead = couldn=92t=20 have said it better. But the permissive Reagan fades away = quickly=20 when the enemy moves into view. His solution to the Vietnam=20 question? "We could invade the place [North Vietnam], pave = it over,=20 and be home for lunch."

Arms=20 to Afghan rebels, air force bases in the Sinai, a = naval base=20 off Saudi Arabia =96 bases, bases, everywhere are on the = Reagan=20 agenda. Military spending would increase dramatically: The = B-I=20 bomber, the neutron bomb, the Trident submarine, the MX=20 missile, all would be built and more. The New = York=20 Times=92 characterization of Reagan=92s proposed = increase in=20 military spending as "vast" scarcely exaggerates. As Reagan = himself=20 put it in March: "I think it=92s wrong to say we=92re safe = because we=92re=20 spending 5 percent more or 3 percent more or anything. No, = go by the=20 weapons. Now, I have outlined a number of weapon shortages = that we=20 have, but I don=92t have access to the high command. Just = ask these=20 men who would have to fight the war what are the essential = weapons."=20 Sure. Just ask the Pentagon.

Reagan is deeply = concerned=20 about not being too lily-livered to shrink from nuclear=20 confrontation with the Soviets. In fact, he strongly implies = that we=20 should seek a confrontation in order to liberate the masses = behind=20 the Iron Curtain. As Reagan put it in his famous 1964 = speech, "We=20 are being asked to buy our safety from the threat of the = atomic bomb=20 by selling into permanent slavery our fellow human beings = enslaved=20 behind the Iron Curtain, to tell them to give up their hope = for=20 freedom because we are ready to make a deal with their slave = masters." (How the slaves of communism would be aided by = nuclear=20 incineration is difficult to say, unless, of course, we have = made=20 the decision that they are better off dead than = red.)

For=20 Reagan, recent administrations have been crippled by = persistent=20 "appeasement" of the Soviets. Kissinger was the architect of = d=E9tente. Carter=92s policy "borders on appeasement." = Carter was too=20 "weak" on Iran and Afghanistan. Carter=92s line-drawing in = the sands=20 of the Persian Gulf was not nearly sufficient; the = President, opined=20 Reagan, "is encouraging the belief that this nation will not = risk=20 war no matter what the provocation." Furthermore, Carter = should=20 deliver specific ultimatums stating what we will do if = Russia does=20 not withdraw from Afghanistan. As in virtually every other = matter,=20 the United States should be sending "strong signals" to = Russia. On=20 Saudi Arabia, for example, Reagan seems to be threatening = war with=20 Russia not only if Russia should ever invade that country, = but even=20 if the Saudi government we love so much is toppled by a = domestic=20 uprising.

As=20 Reagan puts it, we must "let it be known that we are not = going to=20 let the Saudi Arabian government fall, either from trouble = from=20 within or from pressure from without." One shudders at the = new=20 Vietnams that will be in store under President Reagan. On = the=20 Iranian hostage question, Reagan, like all the other = candidates, is=20 vague, except that he would support putting "extreme = pressure" on=20 Iran, perhaps an all-out blockade. But on one point the = laid-back,=20 compassionate Reagan is specific: The U.S. hostages in Iran = should=20 not have visits from their families. That would be "almost = as if we=20 were recognizing the right of the Iranians to hold = them."

In=20 sum, what are we to think of a man who sincerely attacks the = Carter-Brzezinski administration for generating "the same = kind of=20 atmosphere as when Neville Chamberlain went tapping his cane = on the=20 cobblestones of Munich"? To Reagan, the baleful influence of = Brzezinski and the other Trilateral Commission members in = the Carter=20 administration has meant "a softening of defense," a belief = "that=20 trade and business should transcend, perhaps, the national=20 defense."

On=20 questions of domestic policy =96 the free market and big = government =96=20 Reagan is a very different person. Here his flexibility, = moderation,=20 and pragmatism come to the fore. In the first place, = Reagan=92s record=20 as governor of California =96 where he had absolutely no = access to the=20 nuclear button =96 was all too moderate. Despite his bravado = about=20 having stopped the growth of state government, the actual = story is=20 that the California budget grew by 122 percent during his = eight=20 years as governor, not much of an improvement on the growth = rate of=20 130 percent during the preceding two terms of free-spending = liberal=20 Pat Brown. The state bureaucracy increased during Reagan=92s = administration from 158,000 to 192,000, a rise of nearly 22 = percent=20 =96 hardly squaring with Reagan=92s boast of having "stopped = the=20 bureaucracy cold."

Neither is Reagan=92s = record on=20 taxes any comfort. He started off with a bang by increasing = state=20 taxes nearly $1 billion in his first year in office =96 the = biggest=20 tax increase in California history. Income, sales, = corporate, bank,=20 liquor, and cigarette taxes were all boosted dramatically. = Two more=20 tax hikes =96 in 1971 and 1972 =96 raised revenues by = another $500=20 million and $700 million respectively.

By=20 the end of Reagan=92s eight years, state income taxes had = nearly=20 tripled, from a bite of $7.68 per $1000 of personal income = to=20 $19.48. During his administration, California rose in a = ranking of=20 the states from twentieth to thirteenth in personal income = tax=20 collection per capita, and it rose from fourth to first in = per=20 capita revenue from corporate income taxes. As John = Vickerman, chief=20 deputy in the legislative analyst=92s office in Sacramento, = concluded:=20 "Obviously, the tax bite went up under the Reagan regime. It = was a=20 significant increase even when you start considering = inflationary=20 dollars.... The rate of growth was about the same as his=20 predecessor." Reagan is now trying to take some credit for=20 Proposition 13 and the popular tax-cutting movements in = California.=20 But during his own administration things were quite = different;=20 Reagan bitterly fought against similar initiatives in 1968 = and=20 1972.

Moreover, Reagan = likes to talk=20 the conservative line that federal programs should, in large = part,=20 be turned over to the states, and state programs to the = localities,=20 so that government can be closer to the people. But what did = he=20 actually do as governor? A large part of his tax increases = went to=20 pay for local programs controlled by the state; Reagan = accelerated=20 the trend of collecting tax money on the state level to = spend on=20 state-controlled local programs. He created seventy-three = new state=20 government councils and commissions, with a total budget, in = his=20 last year alone, of $12 million. Included was the California = Energy=20 Commission, which put the state hip-deep into the energy = business: A=20 three-year review process is now required before any new = power plant=20 can be constructed in California.

Ronald Reagan is = proudest of=20 the welfare reforms he enacted in 1971, which removed more = than=20 510,000 from the welfare rolls by =96 among other things =96 = forcing=20 adults to support their welfare parents. He then turned = around and=20 boosted the amount of welfare paid to those remaining by 43 = percent,=20 so that total welfare costs to the taxpayer didn=92t decline = at=20 all.

So=20 much for Reagan as governor. How about as President =96 is = he about to=20 usher in a laissez-faire paradise? As Reagan=92s fellow = conservative=20 actor, Duke Wayne, used to say: not hardly. In March Reagan = came out=20 in support of the Food and Drug Administration, provided it = confine=20 its regulation to the "purity" rather than the effectiveness = of a=20 product. As for the Occupational Safety and Health = Administration, a=20 meddling outfit hated more intensely by small businessmen = across the=20 country than any other, he would expand it. Not only does = Reagan=20 favor continuing OSHA=92s picayune "safety inspections," but = he would=20 go further and "use OSHA as a government laboratory to see = if we=20 cannot find an answer to those problems and consult with = industry to=20 eliminate them." OSHA=92s pernicious compulsory powers, = according to=20 Reagan, should continue.

On=20 trucking deregulation, which even Ted Kennedy favors, Reagan = has=20 also backed off. All he will commit himself to is the = establishment=20 of an outside "task force" to "sit down with the regulations = and=20 work out between them what they thought was a fair = elimination of=20 some and keeping of others." In short, on trucking, Kennedy = is more=20 pro-free market than Reagan is. When a bewildered reporter = asked how=20 Reagan could square this view with free market principles, = the=20 candidate took refuge in real or pretended ignorance: "Well, = I just=20 have to tell you that I have been counseled by people with = contrary=20 views regarding this particular field. I could not make a = decision=20 on the information that we=92ve got as to whether one side = or the=20 other is right." This macho gunslinger who thinks nothing of = risking=20 a nuclear shootout with the Kremlin over a blockade of Cuba = is weak=20 and squishy soft on deregulation of trucking.

In=20 the macroeconomic arena, for some months a well-publicized = battle=20 has been raging for the soul of Ronald Reagan. Two groups = are in=20 bitter conflict, with Reagan trying to pick his way through = the=20 minefield. In one camp are what we may call "the = Responsibles," all=20 the economists prominent in the Nixon and Ford = administrations. They=20 comprise a coalition of monetarists, headed by Milton = Friedman and=20 including Martin Anderson, and conservative Keynesians, = including=20 George Shultz, Arthur Burns, Alan Greenspan, Charles E. = Walker,=20 Herbert Stein, and William Simon.

In=20 the area of economic theory Friedmanites and Keynesians are = at odds,=20 but in the realm of practical policy they are close enough = for a=20 cozy coalition. During an inflationary period conservative=20 Keynesians call for a balanced budget, perhaps even a = surplus; a=20 budget deficit is abhorred as propelling further inflation. = To the=20 Friedmanites, deficits per se are not inflationary, only = those=20 financed by the banking system. Since in practice any = deficit is=20 likely to be financed by the banks, both groups can unite in = calling=20 for a balanced budget to combat inflation. In that case, = however,=20 the Responsibles =96 with grave reluctance and appropriate = sobriety =96=20 have to counsel Reagan against any large tax cut unless such = a cut=20 is matched by an equivalent slash in government = spending.

But=20 the Responsibles feel in their hearts that cutting = government=20 spending is politically unrealistic. And so, from Friedman = to Simon,=20 they have opted for a constitutional amendment, on the state = and=20 federal levels, to limit the future growth of government = spending to=20 its current proportion of the gross national (or state) = product.=20 This is in line with the constitutional amendment proposed = by the=20 establishment-conservative National Tax Limitation = Committee, as=20 well as Proposition I, which Reagan pushed for in California = and=20 which failed to pass in 1973.

When=20 analyzed, the position of the Responsibles, sober and = responsible=20 though it may be, holds very little charm for the critic of = big=20 government, or indeed for anyone else. When you peel away = the fiery=20 free-market rhetoric of a Simon or a Friedman, the practical = political offer is simply more of the same: the current = status quo.=20 To hard-working people angry at high taxes and wild = spending, all=20 that the Responsibles can offer is to keep government at its = current=20 pace relative to the private sector. No tax cuts, no reduced = government, just fiscal rectitude. Who is going to go to the = barricades for that?

It=20 is this grave defect in the political economy of the = Responsibles=20 that has given rise to a maverick group in the Reagan = economic camp,=20 the neopopulists =96 or, as one of them cheerfully conceded, = the "Wild=20 Men." Guru of the neopopulists is Arthur Laffer, of the = University=20 of Southern California; the other key figure is Laffer=92s=20 propagandist and point man, Jude Wanniski, formerly of the = Wall=20 Street Journal. Their political leader in the Reagan = camp is=20 Representative Jack Kemp of New York and their overall = political=20 philosopher is Irving Kristol, godfather of the = neoconservative=20 movement.

The=20 Laffer group begins its analysis with the keen perception = that no=20 one is going to jump with excitement over a balanced budget = and=20 fiscal sobriety. The Republicans, they assert, should start = ladling=20 out their own goodies to the masses; why leave promises to = the=20 liberal big spenders, with conservatives offering only dour=20 hangovers for the morning after? Specifically, the = neopopulists ask=20 themselves: What do the voters want? And the answer comes to = them=20 loud and clear. They want big tax cuts; they want to keep = and even=20 add to the current spending goodies of the welfare-warfare = state;=20 and they also want a balanced budget to end inflation. = Great, say=20 the neopopulists, we=92ll give them all three. And so came = the one=20 specific Reagan proposal that has fired public support: the=20 Kemp-Roth overall income tax cut of 30 percent over a = three-year=20 period. To hell with fiscal sobriety.

But,=20 but=85 as Mary McGrory asked the Republican candidates in = the Iowa=20 debate, how can you offer the public three contradictory = things: big=20 tax cuts, balanced budgets, and maintaining government = spending and=20 services at current levels? And then came the magic answer, = the=20 panacea=97the "Laffer curve." The Laffer curve, which can be = explained=20 to any congressman on a dinner napkin, states that if tax = rates are=20 cut, productivity and investment will increase to such an = extent=20 that the supply of goods will increase and total tax = revenues will=20 actually rise. So presto, chango. The circle can be squared, = and=20 contrary to Milton Friedman, there is such a thing as a free = lunch.=20 Just call it the Laffer curve and "supply-side economics." = Not only=20 that: A tax cut will also cure the inflation problem, = because the=20 increased supply of goods will swamp any tendencies toward=20 inflation.

This=20 cheerful nose-thumbing at the economic establishment is = calculated=20 to drive all orthodox economists, including conservative = Keynesians=20 and Friedmanites, up the wall. For while tax cuts will = undoubtedly=20 raise productivity and supply, the question is, by how much? = And it=20 is downright bizarre to believe that a 30 percent cut in tax = rates=20 will at once raise tax revenues 30 percent, or that supply = increases=20 can offset the galloping expansion in the money = supply.

Yet=20 the real argument is not in the realm of economic theory. = Corner a=20 Lafferite and he will cheerfully admit that Kemp-Roth may = well not=20 increase revenues by 30 percent, but who cares? Why can=92t=20 conservatives have a deficit for once, and let the liberals = cope=20 with it? To the arguments that the Laffer-curve approach is=20 deceitful demagogy and that the public will remember when = the curve=20 doesn=92t hold up, the neopopulists answer cheerfully: = Apr=E8s nous=20 le deluge. In any case, the public will be so happy with = the tax=20 cut that they won=92t care about the Laffer curve any more. = As Irving=20 Kristol admits: "What if the traditional conservatives are = right and=20 a Kemp-Roth tax cut, without corresponding cuts in = expenditures,=20 also leaves us with a fiscal problem? The neoconservative is = willing=20 to leave those problems to be coped with by liberal = interregnums. He=20 wants to shape the future, and will leave it to his = opponents to=20 tidy up afterwards." In the long run we are all = dead.

Both=20 groups are right, and both are wrong. The Responsibles are = correct=20 that the neopopulists are being deceitful and demagogic, = indeed=20 irresponsible in the worst sense. But the neopopulists are=20 right that=20 the Responsibles are offering the public simply more of what = it=20 doesn=92t like now. Besides, as Parkinson=92s Law dictates, = expenditures=20 rise to meet income, so expenditures may very well have to = fall if=20 taxes are cut first. In any case, we have nothing to lose, = since the=20 burden of taxes is no better or easier, at the least, than = the=20 burden of inflation.

Which way will Reagan = jump?=20 Since the beginning he has been in the Laffer camp and has = been=20 championing Kemp-Roth. But the ouster of John Sears as = campaign=20 manager eliminated a key Kemp ally, and Sears=92s successor = William=20 Casey is a close friend and ally of William Simon. We can = therefore=20 expect a steady slide toward Respectability. While sticking = formally=20 to Kemp-Roth, which after all has long been his only = specific=20 economic policy plank, Reagan has already begun to fudge on = the gold=20 standard, which Laffer had earlier persuaded him to = advocate. The=20 gold standard would help check inflation and would be a = significant=20 step toward a free market in money, but nothing is more = calculated=20 to infuriate the Friedmanites and the conservative = Keynesians, who=20 all regard gold as a barbarous relic and wish to keep total = control=20 of the money supply in the hands of the Federal Reserve = System.=20 Although he previously called for the gold standard, Reagan = today=20 says that first we have to stabilize inflation and the = economy,=20 since "gold is a kind of a wild card right now."

The=20 knowledgeable, ultra-Responsible, and very antipopulist = Business=20 Week has suggested that George Shultz=92s April = appointment as top=20 economic coordinator for Ronald Reagan presages a = Responsible=20 transformation of Kemp-Roth. In the projected new program to = be=20 offered by Shultz and Walker, Kemp-Roth tax cuts are to be = phased in=20 over five rather than three years, and to be tied to gradual = spending reductions and taken out of an expected federal = surplus.=20 And since any notion of a federal surplus is bound to be=20 pie-in-the-sky, that should kill Kemp-Roth for good and all. = So,=20 with even the tax cut riddled by the Responsibles, we wind = up with=20 Reagan fully as flexible and as moderate on economic issues = as any=20 liberal might like.

What=20 America needs right now is a President who is a militant = hawk on=20 freedom and big government and a realistic dove on war and = foreign=20 affairs. Calm and laid-back though he may be, Reagan offers = us=20 precisely the opposite. Such is the paradox of conservatism, = and=20 such is the paradox of Ronald Reagan in = 1980.

Murray N. Rothbard = (1926=961995), the founder of modern libertarianism and the = dean of=20 the Austrian School of economics, was the author of T= he=20 Ethics of Liberty and For=20 a New Liberty and many other books = and=20 articles. He was also academic vice president of the = Ludwig von=20 Mises Institute and the Center for Libertarian Studies, and = the=20 editor =96 with Lew Rockwell =96 of The=20 Rothbard-Rockwell Report.

Murray=20 Rothbard = Archives