When does toeing the party line become insanity?
By: Jessica Vittorio
Tags: Policy, Republican Party, America, Economics, Politics

Before I even finished this article I could already anticipate the comments I will get— they’re criticisms I’ve received many times before from other Republicans when I ask the sometimes difficult or uncomfortable questions. Comments with vague (or explicit) references to socialism, or theories that I’m actually a democrat, or *gasp* a RINO (how ridiculous is it that we are so concerned with policing others inside of our own party that we feel the need to create derogatory terms for those aligning with us? — but a different tangent for a different article). So let me preface this by assuring you that I am none of those things; I have spent the better part of the last 15 years working in various capacities for the Republican Party, and it is work that for the most part I am very proud to have participated in. I am a firm believer that we have value to contribute politically to the country, and that we are an integral part of both America’s historical and future success. But to fully embrace that potential we have to be willing to face the difficult conversations; so it’s out of love for the party, and more importantly for the country, that I feel compelled to ask the question: why do we, as a party, keep pushing the same fundamental “trickle-down” economic narrative that data and history have shown us do not work?

Trickle-down economics, or trickle-down theory, is a niche manifestation of a broader economic theory called supply-side economics. While supply-side economics argues for lower taxes across the board, trickle-down specifically focuses on decreasing taxes for the higher end of the income/economic spectrum. The basic concept is that if you decrease taxes on the rich and powerful those tax benefits will translate into increased wages, jobs, and overall economic growth. This approach was pushed as a policy agenda most notably for conservative Demi-god Ronald Reagan during his presidency, though his budget director later publicly criticized the approach in retrospect. But it’s this period where the underlying loyalty to trickle-down messaging really began for the Republican Party.

However, after giving “trickle-down” policies a solid test run, studies conducted by David Hope of the London School of Economics and Julian Limberg of King’s College London in 2020 which retroactively assessed the efficacy of these policies as exhibited through fifty years of data, the numbers show that these policies have failed to promote jobs or economic growth, and may have actively contributed to a reduction in development and growth. In fairness to these policies the world looks very different today than it did in Reagan’s day. There are a wide array of factors that these policies did not, and could not reasonably, have accounted for; most namely, the misdirection of personal and corporate income to outside countries in order to shelter revenue from liability and taxes. But despite the many reasons why the reality created by these policies may differ significantly from the anticipated impact, the numbers are staring us straight in the eye. The data has definitively shown that this principle, as historically applied, does not work. It fails to help middle to low income individuals grow and sustain wealth, it fails to create wide spread economic development, and it fails to facilitate financial prosperity across the board. Ultimately the rich have become richer, and everyone else has remained the same; in a historical period where income inequality is at an all time high, and with economic disparity and instability being the number one historic indicator of civil unrest, this is not an issue Republicans can continue to ignore.

Yet despite fifty years of data, observation, and trial and error we continue to push the same economic narrative despite knowing how it has played out. To put it bluntly, and with as much love as I can, this is total insanity — and it’s time we talk about it.

Now if you were to look at the principles of the Republican Party, as articulated in the national platform, and the characteristics of both trickle-down economics and supply-side economics in a line, you’d probably be surprised to find that they do not align well. The first general policy point articulated in the party platform from 2016 explicitly emphasizes rebuilding the economy and creating jobs, followed closely by the articulation of party tax principles. Under the section entitled “Rebuilding the Economy and Creating Jobs” it discusses providing opportunity to learn, work, and realize the prosperity freedom makes possible. This is a great thing, and if you’ve ever read Arthur Brooks’ book entitled “The Conservative Heart” then you are likely aware of the truly compassionate underlying principles that this policy represents. However, as our domestic population increases, and jobs continue to be lost to technology and innovate production methods, the concept of driving opportunity for prosperity has become evermore illusive to middle America. While it was great in theory to believe that if we cut taxes to the rich they’d reinvest that capital into the markets through job creation, the data has shown us that is not what’s happened. Those benefitting from the system haven’t reinvested into economic development, they’ve hoarded those funds and oftentimes even moved them outside of the country.

Why do I reference the platform? Because I want those of you that identify as conservatives, those that are already itching to call me a RINO, to realize that I am not pulling this from thin air. I am a Republican just like you, and because of that identity I want the party to live up to the principles that we articulated and approved as a unified group. Trickle-down is not doing that; trickle-down is working against us, and we’ve developed such a loyalty to it that we’ve become willing to illogically forsake our own fundamental beliefs to avoid publicly denouncing this approach and moving to something that can more effectively get us what we want. We are not the party of trickle-down economics, we are the party of economic opportunity and growth for all — because history shows us that creates strong families, strong communities, and a strong nation.

So where do we go from here?

The new kid on the block, Velocity Economics, is a term coined in 2018 by Chris Draper for an economic framework that expanded upon Milton Friedman’s later work on the velocity of money. Expanding beyond Friedman’s macroeconomic frame, velocity economics. is a production focused theory that seeks to maximize the rate of production, distribution, and consumption of goods and services by removing “decelerators” that inhibit individual achievement. While supply side economics suggests that if you protect/supply the rich with more resources and money the wealth will trickle-down, velocity economics suggests that if you instead help individuals to succeed faster, the result will be sustainably equitable wealth accumulation. This modern alternative to economic policy thrives when applied to the economic portions of the Republican platform where supply side policies are currently failing. The focus of velocity economics is on encouraging policies that allow the government to remove impediments to individual productivity, which inhibit the accumulation and attainment of individual wealth and prosperity. As the Republican platform explicitly states, “Government cannot create prosperity, though government can limit or destroy it.” Velocity economics provides an alternative viable solution for fostering a robust economy while simultaneously facilitating long term economic development and growth.

After having many conversations with Chris Draper, and my friend Graham Klemme, I came to realize that velocity economics and the Republican Party and principles have the potential to be great friends. For Republicans specifically, it provides a means of escaping from the cyclical and failing narrative of trickle-down economics, and bridging the gap between our ideals as articulated in the platform and enacted in policy. From the start I was confident that this was a concept both liberals and conservatives alike could latch onto, but ultimately people like to hear it from their own. For that reason, I’m leading the charge on opening up this conversation to moderates and conservatives throughout middle America and beyond — and on January 11th, we’ll be publicly launching a nation wide collaborative policy organization called MiddleOut which will focus on supporting policy and initiatives that foster American productivity and economic growth without leaving middle America behind. Our work will be bipartisan, and seek to incorporate voices from each side of the aisle. But most importantly, it will drive economic development that is both sustainable, and effective for providing every American with individual opportunity for long term prosperity.

As the party of fiscal conservatism, Republicans have naturally imbedded ourselves in the political fabric of America as the guardians of economic growth and development. But for far too long we have denied the data-driven realities of trickle-down economics and continued to perpetuate policies that fail to protect American prosperity long term. It is time for us to break our loyalty to this ineffective economic approach, and transition to modern policies which will ensure commitment to our fundamental ideals, and foster the economic opportunity which serves as a cornerstone of the American dream continues as a reality for generations of Americans to come.

Whether you agree or disagree, the best part about this grand democratic experiment we call America is that you have the right to engage in conversation and debate. If you want to continue this conversation with me and my colleagues, I encourage you to join us at www.MiddleOut.org where you can subscribe to our mailing list, and stay up to date on the work we’re doing and get involved in the conversation yourself.