Giulianinomics

As usual, Jon Chait’s column on Rudy Giuliani’s economic views is biting, sharp-tongued, and plenty of fun to read. Also as usual, it has to dip deep into the well of exaggeration and overstatement to get there.

He starts by characterizing Giuliani’s views on health care as “insane” and “bizarrely punitive.” But Giuliani’s claim is merely that those with health insurance are less likely to consider the costs of medical care, including, say, tests for unlikely maladies, and that the same is true for doctors who know their patients are insulated from costs, and therefore prescribe care with little thought given to its expense. Instead of “insane,” a better word for this might be “obvious.” If your insurance covers a battery of four- or five-figure tests, you’ll take the whole bundle, right? And why wouldn’t you? On the other hand, if you’re responsible for paying for all or some of the cost, you’ll probably be a little more cautious about which ones you agree to.

Giuliani also has indicated that he believes that those who’re insulated from the costs of health care through insurance are more likely to engage in risky behaviors and therefore more likely to get sick. Chait responds that, “That’s why those of us with insurance are always borrowing handkerchiefs from people with communicable diseases or juggling steak knives barefoot.” Funny! But not really a convincing rebuttal. Again, it hardly seems objectionable to suggest that those with insurance are going to act somewhat less carefully because they have less to lose if they end up needing medical care. This in no way suggests that all or even most medical conditions are the fault of the individual. But it’s not really shocking to say that at least a few are, and that whether or not one has insurance will sometimes affect one’s decisions about engaging in high-risk behaviors.

Chait then blasts Rudy as something of a libertarian, which Chait seems to believe is a kind of slur, saying, “Giuliani has echoed the language of economic libertarianism with more frankness, and less pretense of compassion, than any recent Republican presidential candidate.” That’s also funny, but maybe not in the way Chait intended. Giuliani clearly isn’t opposed to a few broadly libertarian notions. But when Cato’s David Boaz is writing warning columns about the guy, arguing that that the former mayor has a “dangerous” view of power, it’s tough to argue that he’s really so aligned with those nutjobs from the glass cube on Massachusetts Ave.

Also strange is Chait’s view that economic conservatives somehow rule the Republican party. It’s true that social conservatives get paid a lot of lip service but tend to see minimal legislation passed in their favor. But economic conservatives, especially of the true-believing libertarian stripe, aren’t exactly getting handouts all over the place either. The Bush tax cuts made some people happy, of course, but when Cato scholars are writing books titled Leviathan on the Right that features Bush’s mug on the cover, when Dick Cheney is forced to go to the Wall Street Journal to attempt to defend the administration’s economic record (and when all he can muster is that the administration has “steadily reduced the annual rate of growth in non-security discretionary spending”), when the White House is sending Ed Gillespie around to say that Bush’s S-CHIP veto is “not about spending,” well, I just don’t think the economic wing of the party is exactly ruling with an iron fist.

No, if there’s a dominant wing to the party, it’s the foreign policy arm. As Ross persuasively argued a few months ago, the GOP is becoming more and more consumed by its obsession with the war and the threat of terrorism. (Current numbers indicate that war and terrorism are still the top concerns for Republican voters.) Giuliani’s success stems from his ability to tap into those sentiments, and the effect of his economic rhetoric is to add some domestic-policy toughness to back up the foreign policy stance on which he’s really running.