March 22 (Bloomberg) — What's with the green eyeshades?
"I can't tell you how tired I am of Republicans who are green-eyeshade accountants," former House Speaker Newt Gingrich told Newsmax TV last weekend. Representative Paul Ryan's "new budget road map is more vision than green-eyeshade exercise," Larry Kudlow wrote March 15 at National Review Online, using Kudlow code to suggest that the House Budget Committee chairman has a political future.
"If Paul Ryan wanted to dispel his image as a green-eyeshade guy obsessed with deficits, he came to CPAC with the wrong speech," Howard Kurtz wrote in the Daily Beast, his way of saying that keeping Ryan will hurt the Republican Party.
The "green eyeshade" refers to the tinted celluloid visor worn by accountants and other desk men in the days of rubber cement and cigarettes, the kind of people depicted in vintage Ronald Reagan movies. It's an odd choice of image. Few young voters, even accountants, know what eyeshades are. Gingrich might as well have said: "Bring me my pica pole."
But the image's widespread use can't be a total mistake. Politicians think hard about the words they choose. The popularity of an expired metaphor among Republican leaders betrays a flaw in the party of Reagan that could prove costly to its future.
To understand, it helps to go back to the last time the Republicans were dropping the phrase a lot: the early years of Reagan's presidency. Voters elected him for his optimism and the way he moved past niggling technicians to bring about necessary changes. The Reagan idea was that the U.S. could outgrow its economic troubles if its leaders could ignore bureaucratic budget advisers.
The early years of the first Reagan term proved difficult, with less growth and more budgetary shortfalls than the party had predicted in 1980. David Stockman, the director of the Office of Management and Budget under Reagan, was claiming that budgets had to be balanced before tax rates could be cut. Republican leaders turned on Stockman as a green eyeshade who was getting in the way of the Reagan Revolution, and who was keeping the country in the dark of worry when it ought to be, as in the 1984 campaign slogan, "Morning in America."
Reagan's re-election in 1984 permitted a tax cut in 1986, and the Republicans declared victory; overall, growth under Reagan was stronger than under Jimmy Carter. Renouncing the green eyeshade became a Republican rite of passage, code for allegiance to Reaganomics.
In the 1980s and even the '90s, the disparagements of budgeting seemed warranted. The federal commitments on entitlements were smaller. Federal debt as a share of the economy was in the 40 percent to 50 percent range, and the U.S. had sustained 60 percent seemingly comfortably in the 1950s. Government debt could get in the way of growth, economists believed, but only at higher levels. As Carmen Reinhart and Kenneth Rogoff would later show, debt of more than 90 percent of the economy impedes long-term growth.
The case for de-emphasizing budgeting is harder to make today. If Reagan, or succeeding presidents, can be faulted, it is for allowing deficits to widen and debt to increase, and failing to rewrite entitlements. Now, U.S. annual deficits are large and the gross federal debt has passed that 90 percent of GDP threshold.
Entitlements seem to grow with prosperity; not only because they are indexed to inflation or GDP but also because a prosperous country tells itself it can afford more benefits. This decade, the federal government does need to budget. Even the energy sector, which is currently strengthening the U.S. economy, cannot offset the shortfalls caused by obligations such as Medicare or Medicaid. As the population ages, a narrower share of voters will be available to subsidize entitlements.
The Republicans' reflex to reach back for an old metaphor reveals their unwillingness to acknowledge the crucial distinction between Reagan's decade and this one. It also reflects political judgment: Green-eyeshade types aren't always lovable, and are known more for their independence than their warmth. They even turn on one another. Stockman, for example, recently assailed Ryan with the charge that the congressman's work was "devoid of credible math," the ultimate green-eyeshade insult. Republicans tell themselves green eyeshades cannot win elections, and hold up the loss of the Mitt Romney-Ryan ticket as evidence.
But some of us think there should have been more green eyeshade in the last election, and less cheery Reaganism. Party strategists tried so hard to humanize the ticket's eyeshade wearer, Ryan, that he ended up looking like an investment banker. That's not who he is, and it isn't attractive.
What's more, there may come a time, especially when interest rates go up, or the U.S. credit rating bumps down, when voters will seek leaders who will focus on the numbers. They will want budgeteers, metrics men or ladies. By then, however, Republicans may have moved so far from the bookkeeper image that their position will be indistinguishable from that of Democrats.
Rather than look back, the party should look ahead to examine the shortfalls in entitlements, so much more glaring than either party acknowledges. To handle this bright, terrifying sight, it may even help to don eyeshades.
(Amity Shlaes, director of the Bush Center Four Percent Growth Project, is the author of "Coolidge," published by HarperCollins, and a Bloomberg View columnist. The opinions expressed are her own.)
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