""The Jeb! tax plan confirms, if anyone had doubts, that the takeover of the Republican Party by charlatans and cranks is complete. This is what the supposedly thoughtful, wonkish candidate of the establishment can come up with? And notice that the ludicrous claim that most of the revenue effects of huge tax cuts would be offset by higher growth comes from economists who, like Jeb!, are very much establishment figures – but who evidently find that the partisan requirement that they support voodoo outweighs any fear of damage to their professional reputations.
While the intellectual implosion of the GOP is obvious, however, it’s less obvious what is driving it. Or to be more specific, stories that explain why one set of crank ideas flourish don’t seem to work well for other sets of crank ideas. At least for now, I don’t feel that I have a general theory of crankification. Instead, I have two basic stories, which seem to apply with very different force to different crank ideas.
Consider, in particular, the contrast between supply-side economics and Ron-Paul-style monetary crankdom.
Inflation paranoia — the constant assertion that we’re going to turn in Zimbabwe any day now owing to the evils of fiat currency — is a form of nonsense that’s completely immune to evidence. But why does it persist? Is it in the interests of powerful people to oppose expansionary monetary policy and promulgate crank monetary theory? It’s not at all clear why. Yes, rentiers benefit from low inflation or deflation, and are hurt by low yields, but on the other hand they benefit from higher asset prices, and overall the distributional implications of monetary policy are complicated.
So my sense is that monetary crankdom is more of a grass-roots phenomenon, driven partly by libertarians warped because they read Ayn Rand instead of Tolkien, and by the quasi-moral sense of old white men that they earned their money and printing the stuff must be destructive.
On the other hand, belief in the sovereign power of cutting taxes on rich people obviously serves the interest of rich people — and there is, not surprisingly, a lavishly financed industry aimed at promoting that belief. And that industry is what keeps the belief going, by supporting large numbers of apparatchiks employed not to produce accurate predictions but to concoct justifications for policies serving their sponsors’ interests.... "
