In Prospect

Winter 2011

As 2011 opens, the American economy continues to struggle to recover from the 2008 credit disaster and subsequent deep recession. Growth, though begun again, has been feeble, and unemployment hovers near double digits. The stunning November rebuke to President Obama and the Democrats, which put the House of Representatives under Republican control and almost did the same with the Senate, represents a public judgment on the president’s economic policies—and an opportunity to set the nation on a more hopeful path.

For guidance, Nicole Gelinas suggests in “Twenty-First-Century Reaganomics,” we should look to the example of our 40th president. When Ronald Reagan arrived in the White House in 1981, the economy was in shambles, suffering, like ours, from high unemployment, with racing inflation adding to the woes. Yet Reagan won reelection in a landslide four years later, plausibly heralding a “Morning in America” after his economic reforms—taming inflation with smart monetary policy and reducing the tax burden on job creators—supercharged entrepreneurialism and investment and brought years of robust expansion. Obama and Congress would need to adapt Reagan’s example to our own time, Gelinas says, but the mission remains the same: getting America growing again. And the principle that undergirded all of Reagan’s growth policies—that government should diminish, rather than intensify, economic uncertainty—is exactly what’s most needed today.

Republicans won elections in 2010 more by opposing Obama’s big-government agenda than by advancing bold ideas of their own (Wisconsin’s Paul Ryan and a few other bright thinkers aside). In “Why Not a Negative Income Tax?,” Guy Sorman argues for the Right’s adoption of a truly bold idea first proposed by economist Milton Friedman in the early sixties. A negative income tax (NIT) would replace all welfare programs with a direct cash subsidy to poor Americans, which would shrink, though not disappear entirely, as they worked and approached an agreed-upon income level. This is very different from many forms of social welfare, which the beneficiaries either receive entirely or, once they cease to qualify, lose entirely, creating the poverty traps that discourage work. The simplicity of the NIT would make it easy to administer, too, so that there would be no need for the vast array of government bureaucracies that run today’s poverty programs.

Many state governments, despite facing knee-buckling revenue shortfalls during the current economic downturn, seemingly will do anything to avoid spending cuts, as Steven Malanga’s “State Budget Bunk” observes. From pilfering money set aside for roads to grabbing unclaimed funds in personal bank accounts to calling taxes “fees” to avoid constitutional restraints on raising them, voracious states have engaged in gimmicks galore to keep spending, Malanga’s taxonomy documents. Reformers need to end these abuses before so much debt has piled up that states won’t be able to dig out.

Some of those reformers have been grabbing political headlines of late—and they’re women. In “Sarah Palin and the Battle for Feminism,” Kay S. Hymowitz—author of Manning Up, a new book on modern career paths and the growing divide between men and women that launches a City Journal imprint at Basic Books—shows how the ex-governor and the “Mama Grizzlies” whom the Tea Party movement has swept into Congress are redefining “women’s issues” to include securing America’s financial future. Needless to say, this is only enraging old-school feminists, who sense their own growing irrelevance.

Money woes aren’t why America’s urban schools continue to struggle, says Gerry Garibaldi, who teaches in one in Connecticut. As his story “‘Nobody Gets Married Any More, Mister’” describes, urban teachers face a far tougher problem: teen pregnancy among minority students. This year, all four of his most promising girls are pregnant and have narrowed their future possibilities—a tragically typical pattern in city schools. Sadly, Garibaldi observes, “Personal moral accountability is the electrified rail that no politician wants to touch.” It’s a story that people will be talking about for years to come.

—Brian C. Anderson