Matthew Continetti / October 2, 2021

The Next Supply Side Agenda

Give the public more tools to restore normalcy.

Does an opposition party need a policy agenda to win elections? Not really. Congressional majorities lose all by themselves. They interpret campaign victories as ideological mandates. They become mired in process, they fight among one another, they trudge through muddy puddles of bad news. They overstay their welcome. Voters turn them out. Not necessarily because the opposition has better ideas, but because it’s the alternative to the present course. Voters don’t expect or want “structural change” from either the left or right. They want the economy to grow and society to be stable so they can work out their destinies in peace.

This was something President Joe Biden understood for about six months. Since July, however, Democrats have been unable to guarantee stability in coronavirus numbers, in foreign policy, in consumer prices, in personal safety, and on the border. They’ve become trapped in a Möbius strip of negotiations over the bipartisan infrastructure package and the (unwritten) Build Back Better reconciliation bill. America may or may not have lost the thread, but the Democrats certainly have. The result is falling approval numbers for Biden. Expectations that Republicans will capture either one or both chambers of Congress next year are rising.

Not that the GOP has done anything to deserve it. Yes, Republicans have resisted the Democrats. That’s what opposition parties do. But they haven’t put forward anything more than stinging criticisms. They haven’t grappled with the possibility that the Democratic majority will collapse under its own weight. They need to think harder, starting now, about what to offer voters. Performance art isn’t enough. And catering to the anti-vax minority is wrong and self-defeating.

There’s a way for conservatives to answer public concern over the pandemic, crime, and the economy. That way is the supply side. Just as an earlier generation of conservatives and Republicans addressed economic stagflation through increasing the supply of capital, the present generation of conservatives ought to advocate measures to increase the supply of resources that individuals can bring to bear on the present crisis. Rather than inadvertently backing into the corner of conflictual austerity politics, and replaying the fights of the Obama years, conservatives and Republicans can tell voters how they will provide the tools to restore normalcy.

Operation Warp Speed, for example, was a triumph of supply-side thinking. Its vaccines are remarkably successful at preventing hospitalization and death. Private-sector mandates, booster shots, and jabs for elementary school students will strengthen immunity against the coronavirus. The next step is to boost supplies of at-home rapid tests. Contrast the success of Operation Warp Speed with the bureaucratic intransigence that has limited access to speedy testing and given public health authorities an excuse not to lift masking and social-distancing rules. And look at Europe, where in many places schools have been open throughout the pandemic, and without masks, because of widespread rapid testing. Having plenty of such tests would pressure school districts to abandon their draconian quarantine policies and move to “test to stay” — an issue of particular concern in suburban districts essential to any GOP comeback.

Crime is another problem with a supply-side solution. Since 1961, when Jane Jacobs wrote The Death and Life of Great American Cities, we’ve known that “eyes on the street” reduce crime. Especially when the eyes belong to police officers. “More cops mean less crime,” writes Charles Fain Lehman of the Manhattan Institute. “This is one of the most robust findings of empirical criminology, supported by study after study since at least the late 1990s.” Today’s voters fear crime, and for good reason: The United States just experienced a record spike in the murder rate. Hiring more police, paying them better, and reducing 911 response times is the closest thing to a sure bet in public policy. Republicans should be writing a crime bill that does exactly that.

While the economy faces different challenges than it did in the late 1970s, supply-side thinking remains a useful guide. The basic problem today is that prices are rising faster than wages. Both supply and demand fuel this inflation. The coronavirus led to a worker shortage that worsened bottlenecks in the global supply chain. Consumers accumulated a remarkable level of savings and transfer payments during the downturn and are eager to spend it on imported goods. When high demand meets limited supply, prices rise. Voters are worried.

What to do? Expand supply-chain capacity. Spend money to reduce blockages of goods in transit, hire more longshoremen and truck drivers at better wages, and advocate deploying the National Guard to unload cargo. Defend and expand oil and gas exploration to put downward pressure on energy prices. Promote land use and development. At the same time, maintain work requirements that encourage entry into the labor market. Focus on vaccinations in industries such as meatpacking, where reduced manpower has contributed to the rise in hamburger prices.

Increasing the supply of labor in the right industries would ease shortages on one end while relieving wage pressures on the other. Hence, the truly adventurous congressman might think creatively about legal immigration policy — at least until the inflation subsides. The alternative is a prolonged inflation that helps no one.

Most people associate supply-side with tax reform. Lowering barriers to investment and saving, however, is just one way to increase the supply of resources and improve economic and social life. In some cases, you might spend more now to boost long-term capacity. In other cases, you might spend less on benefits and regulations that discourage work (and thus limit the supply of labor). The underlying idea is that more is better — more investment, saving, vaccines, tests, police, dockworkers, truck drivers, fuel, food, and educational options, for starters.

Time spent on frivolities is wasted. The next supply side agenda requires conservatives and Republicans to abandon cultural despair and reflexive opposition for a self-confident attitude and a willingness to address the aspirations and anxieties of the entire electorate. Not just a slice of it.

I recognize that might be too much to ask. But a boy can dream, can’t he?

Matthew Continetti is a resident fellow at the American Enterprise Institute and the founding editor of The Washington Free Beacon. For more from the Free Beacon, sign up free of charge for the Morning Beacon email.

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