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Ed Crane is the founder and president of the Cato Institute. Under his leadership, the Cato Institute has grown to become one of the nation's most prominent public policy research[…]

The Cato Institute CEO walks us through the modern conservative movement.

Edward Crane:  I have my own theory, which undoubtedly is not correct, but it is that the New Deal was such a radical break from what America was all about.  Rexford Tugwell, one of the intellectuals of the New Deal said that it took, quote, “a tortured interpretation of a document meant to prevent it for the New Deal to be created.”  And that document that was tortured was the U.S. Constitution.  And Hayek would have said the same thing.  There’s going to be a reaction to such a radical departure from where the country had gone for its entire existence until this kind of misunderstood Great Depression, which was blamed on laissez faire capitalism and was, in fact, a function of the Smoot-Hawley tariffs and the manipulation of the money supply and credit availability by the federal government.  So you had these laws passed that created this giant federal government.  But it’s interesting that if you consider the defeat of Stevenson in ’62 as the end of the New Deal, or ’52, within 10 years, the number one political book in America was the Conscience of the Conservative by Barry Goldwater.  And that was America saying, “You know what?” because that book is just a repudiation of the New Deal.  And I think that Goldwater’s campaign led-- it got 26 million votes.  There was a bumper sticker that said, “26 million Americans can’t be wrong,” but that was-- he lost big time, but it was a major statement about what had happened in the previous years.  And then Reagan got fame because of the speech he gave on behalf of Goldwater, and he was elected in 1980, almost got the nomination of ’76.  And he certainly was governor of California as a result of the speech he gave for Goldwater.  I guess in ’68 he got elected governor of California.  And that was a movement to reestablish the limited government regime.  And it did pretty well.  Reagan did well until ’82, when he kind of backtracked on taxes and Marty Anderson left the administration.  But the worst thing that Reagan did, in my view, was in 1984 when he was enormously popular.  He had been shot and made jokes in the face of death, and people just loved him.  And the economy came back because of the tax cuts and everything.  He should have run a campaign saying look, “We’re going to privatize Social Security.  We’re going to get rid of these agencies that are not any concern of the federal government,” and he would have won.  Would he have won 49 states?  No.  But he would have won 40 states.  And instead he ran this “Morning in America” campaign, and I think that was a terrible mistake.  There was no substance to it.  He had no mandate once he was elected.  And the other mistake that Reagan made was to give the nod to George H.W. Bush.  I mean, Reagan had lunch with him once a week for eight years.  And if he couldn’t tell that that guy had not an ideological bone in his body, that was Reagan’s fault. And Bush was contemptuous of what he called the vision thing.  He fired every single Reagan appointee when he got into office, and that was the beginning of the slide downhill, I think.  And then there’s a great Nobel laureate, economist at George Mason, James Buchanan who lamented the rise of the supply side revolution.  Because he said, and I agree with him, that what they have done, the supply siders really became dominant in the people like Jude Wanniski and Jack Kemp and Art Laffer in the late ‘80s and ‘90s.  And their whole thing was growth.  They were going to shrink the government as a percentage of GDP, not by cutting government but by cutting taxes and growing the economy faster than government could grow.  And Buchanan made the point that you know, you can’t stop talking about what limited government’s about.  And these guys have replaced liberty with growth.  And I think that happened in the Republican Party, and that is this longwinded answer to your question, but I think that’s part of what happened.  And he said, “Furthermore, there’s going to be an ideological vacuum created if you don’t talk about limited government.”  And while the supply siders are well meaning and most of the ones I know believe in limited government, their explicit strategy was we’re not going to talk about spending cuts.  We’re not going to talk about the proper role of government.  We’re just going to talk about economic growth, and that is a function of lower taxes, because incentives matter.  Well, I agree that incentives matter and lower taxes are a good thing, but I also know that you have to make a principled case for limited government.  And that vacuum, I believe has been filled with the neocons, who are openly for big government, not just-- everyone says, well you know, they have this horrible approach to policing the world and telling everybody how to-- that we’re going to have the American Empire, and that’s true.  But they’re also very big on big government domestically.  I mean, Irving Crystal had an article in his son’s magazine, The Weekly Standard, in which he applauded big government and criticized Hayek, criticized Barry Goldwater, lauded FDR.  This is the neocon approach, and they are very, very influential, the No Child Left Behind in the Bush administration, which is basically a federal takeover of education.  It’s their initiative. The faith-based initiative, getting the government involved in funding religious organizations is a neocon initiative, and just the whole concept of national greatness, that we can’t be a great country just by being free.  No.  We have to have some project to go to Mars or whatever and/or build a tunnel from New York to London.  These are, to me, very un-American kinds of initiatives.  So that is my brief discussion of how we got to this mess.