Gerson and Kudlow Laud Recession as Economic Enema
The recession is good for you. At least, according to former Bush speechwriter turned Washington Post columnist Michael Gerson. Praising the "recession's hidden virtues," Gerson on Sunday reassured Americans that their financial hardships may be a boon to their physical health and personal morality, all while helping foster cultural renewal. As it turns out, Gerson is just following in the footsteps of Reagan adviser and CNBC host Larry Kudlow, who last April lauded the "cleansing" and "therapeutic" effects of recession as an enema purging the body economic.
While briefly acknowledging the human costs of economic downturns ("recessions and depressions are brutal beasts that stalk the stragglers, especially retirees and the poor"), Gerson on Friday essentially argued that adversity builds character. "Times of economic stress," he wrote, "can also be times of cultural renewal." Noting studies showing "a half-point decline in the death rate for every point of increase in the unemployment rate" and that crime and divorce rates declined during the Great Depression, Gerson extolled the upside of anguish:
"During an economic crisis, Americans return to a language of morality. Perhaps excess and recklessness are vices that deserve social stigma. Perhaps frugality and prudence are personal virtues as well as practices that prevent economic collapse. Perhaps there is a distinction between securing our needs and being dominated by our wants...
...But capitalism may be self-correcting in this area, as it is in many others. A recession causes suffering that can overwhelm hope. It can also lead to the rediscovery of virtues that make sustained prosperity possible -- and that add nonmaterial richness to our lives. Sometimes grace can arrive through an unexpected door."
In Larry Kudlow's case, that would be the back door. As the United States was rocked by the imploding housing market and subprime mortgage crisis last April, he suggested in the National Review that the deepening recession was just the economic enema the doctor ordered.
As it turns out, the suffering of more and more Americans, buffeted by job cuts, stagnant wages, home foreclosures and spiraling health and energy costs, was not only natural. It's desirable:
"Recessions are part of capitalism. They happen every so often...Recessions are therapeutic. They cleanse excess from the economy. Think about excessive risk speculation, leverage, and housing. Recessions are curative: They restore balance and create the foundation for the next recovery."
Of course, Kudlow was extremely concerned about the plight of one group of economic players:
"On the other hand, domestic corporate profits are down 20 percent from their peaks of late 2006. Since profits are the mother's milk of stocks, businesses, and the economy, we will need to see profit improvement before the recovery-turn can be called."
Kudlow, arguing that no pain is no gain for the American people, predictably calls for more tax cuts for the wealthy and slashing corporate taxes. And to be sure, under no circumstances should government intervene to help the millions of Americans at risk of losing their homes. As Kudlow declared on March 31:
"It seems like nowadays in Washington nobody is allowed to fail at anything. Of course, as Friedrich Hayek taught us years ago, free-market capitalism is about success and failure. But that view is very unpopular in this election year."
And even more unpopular now. After Phil Gramm calamitously declared the economic downturn "a mental recession" and America "a nation of whiners" last July, some of the leading mouthpieces among the Republican echo chamber apparently concluded a new message was needed. For Kudlow and Gerson, Americans' suffering is real: it just happens to be good for them. Just take your medicine (via your orifice of choice) and you'll be the stronger for it.
This update to conservatives' let-them-eat-cake laissez-faire capitalism is only the latest from the ideologues of the right. During the Reagan era, right-wing pundit, future failed stock market snake oil salesman and now creationist Discovery Institute co-founder George Gilder offered the classic statement of modern Republican social policy:
"The poor, most of all, need the spur of their own poverty."