Rick Perry Advocates the Biblical Virtues of Keynesianism

Rick Perry makes a valid point about bringing the economy back to Biblical principles.

I had hoped that I could maintain my general policy of ignoring Rick Perry, except to point out his past history of seditious statements towards the Republic. I have this policy because Rick Perry tends to just tick me off. If there is something decent, prudent and wise that an office-holder should do, such as spending money to fight wildfires when your state is plagued by wildfires, or pardoning someone from death row who, according to the best forensic investiagators in the world, is innocent of murder, you can count on Rick Perry to do the exact opposite of the wise, decent, and prudent thing. He will cut spending on fighting fires and allow an innocent man to be executed because, well, that’s how he rolls. He’s awful. But I ignore him because I don’t live in Texas, Perry doesn’t hold national office, life is short, and I don’t need to get too mad about a guy who’s unlikely to get a chance at a third term in office.

Alas, it appears that he is poised to jump into the Presidential race soon, and by all accounts would do pretty well, even though his governorship of Texas has been a disaster and the man himself is an incompetent monster. Which means I can’t ignore him.

So if Perry runs, trust me, my beloved OTB readers, you can rely on this analogy: Alex Knapp is to Rick Perry as Doug Mataconis is to Sarah Palin.

All that said, I feel like it’s only fair, after calling him a monster, to point out that he said something rather smart recently. Last month, Perry gave an interview with televangelist James Robison, in which he brought up the story of the Seven Years of Plenty and Famine from the Book of Genesis, and put it into a modern context. Here’s the quote:

I think in America from time to time we have to go through some difficult times — and I think we’re going through those difficult economic times for a purpose, to bring us back to those Biblical principles of you know, you don’t spend all the money. You work hard for those six years and you put up that seventh year in the warehouse to take you through the hard times. And not spending all of our money. Not asking for Pharaoh to give everything to everybody and to take care of folks because at the end of the day, it’s slavery. We become slaves to government.

This is, I’m assuming, Rick Perry’s attempt to interpret Joseph’s tenure as Prime Minster of Egypt in the Book of Genesis. Sure, he got the years wrong, but it’s basically a solid principle. For those of you who haven’t been to Sunday School, here’s the gist of the story: Joseph, he of Technicolor Dreamcoat fame, was a slave in Egypt. The Pharaoh had been troubled by a strange dream, and eventually Joseph was called upon to interpret it. Joseph told Pharaoh that his dream meant that there would be seven years of plenty, which would then be followed by seven years of famine.

Pharaoh was struck by this and made Joseph the Prime Minister of Egypt. Under Joseph’s tenure, for seven years the farmers of Egypt were heavily taxed — 20% of their grain was taxed and stored in warehouses. Then during the following seven years of famine, Egypt had plenty of grain to ride out the rough patch, thereby preserving the country.

This is often alluded to as a wise example of stewardship – and I agree! And in the modern world, we have a name for this: Keyesianism. During good years, we increase taxes so that government runs a surplus when times are good. That way, it can better afford to spend more and run deficits during lean years to ensure economic stability.

Of course, Perry does warn against becoming slaves to Pharaoh – which actually did happen in Genesis. According to the Bible, the government of Egypt didn’t give its surplus grain back to the farmers who raised the crops in the first place. They sold its surplus grain back to the hungry masses. So as the famine continued, and people had less and less money, they ended up selling their property, land, and even themselves to the government in exchange for grain. Which consolidated Pharaoh’s power and turned Egypt into a proto-feudal state.

And I agree that that’s a bad thing. It would have been much more decent policy for Pharaoh to have simply given the grain away, instead of building up his own power-base at the expense of the starving. So there’s another point for Perry.

So even thought I don’t like Perry, it’s comforting that there’s at least one GOP candidate who believes in a counter-cyclical fiscal policy. Because that was Perry’s point, right?

FILED UNDER: Campaign 2012, Deficit and Debt, Economics and Business, Religion, US Politics
Alex Knapp
About Alex Knapp
Alex Knapp is Associate Editor at Forbes for science and games. He was a longtime blogger elsewhere before joining the OTB team in June 2005 and contributed some 700 posts through January 2013. Follow him on Twitter @TheAlexKnapp.

Comments

  1. James Joyner says:

    I interpret “You work hard for those six years and you put up that seventh year in the warehouse to take you through the hard times. And not spending all of our money. Not asking for Pharaoh to give everything to everybody and to take care of folks because at the end of the day, it’s slavery” as saying people should save up for a rainy day and not rely on government. Although I’m pretty sure there wasn’t much of a welfare state in Pharoah’s day.

    As for Joseph’s technicolor dreamcoat, I frequently confuse it with Dolly Parton’s coat of many colors.

  2. Alex Knapp says:

    I interpret “You work hard for those six years and you put up that seventh year in the warehouse to take you through the hard times. And not spending all of our money. Not asking for Pharaoh to give everything to everybody and to take care of folks because at the end of the day, it’s slavery” as saying people should save up for a rainy day and not rely on government.

    James, James, James – you’re not suggesting that Rick Perry got the Bible wrong, are you? In the Bible, that advice was only given to the government!

    If we go by your interpretation of Perry’s statements, then we have to assume that Perry either ignorantly or maliciously perverted the words of Bible to provide support for his ideological ideas about the economy. Come come – that can’t be possible, can it?

  3. James Joyner says:

    If we go by your interpretation of Perry’s statements, then we have to assume that Perry either ignorantly or maliciously perverted the words of Bible to provide support for his ideological ideas about the economy. Come come – that can’t be possible, can it?

    Oh, it’s certainly possible. Then again, Perry is a follower of brother John Hagee and may well be filtering scripture through that framework. Low church Protestants aren’t necessarily renowned for scholarly treatment of text; there’s a lot of parroting back what the preacher says.

  4. Tlaloc says:

    …people should save up for a rainy day …

    This is one of those pieces of economic advice so basic it applies to both individuals and the government. Yes people should save up for their personal hard times, but so too should the government save up for national hard times.

  5. Christopher Brennan says:

    To turn this around a moment…

    The high tax bracket had a couple of years of surplus, thanks the “Bush Era Tax Cuts”.
    When it came time to draw from those stored up surpluses, what did the high tax bracket do? Or, rather, what did elected representatives do for them? The analogy says they negotiated not giving out any stored up surplus in order to let the hungry masses have health care.

    Just sayin’.

  6. Increased taxes always results in more spending, except apparently once about 5,000 years ago. Exactly when in the last 40 years has the federal government actually thought about saving in the good years to prepare for the lean years? State governmens tend to do this to greater or lesser extents with rainy day funds, but the federal government?

    Oh, and I can’t wait to see who gets appointed as Czar of Dream Interpretation.

  7. reid says:

    charles: Clinton seemed to be doing a pretty good job with building up surpluses. It was Bush and the Republicans who squandered it on tax cuts, wars, and other expensive programs. I assume you’ll be voting D based on the data?

  8. Hey Norm says:

    Actually Mr. Austin taxes went up and spending went down during the Bush 41/Clinto expansion. But don’t let facts blur your ideology.

  9. john personna says:

    Although I’m pretty sure there wasn’t much of a welfare state in Pharoah’s day.

    Only because the name wasn’t invented. They certainly had public works projects.

    There was actually a sad story recently, and African country kept grain surpluses Pharoah-style. The IMF put selling them off as a condition for loans, privatization, modernization. Then there was a drought and thousands (or more) starved.

  10. Wiley Stoner says:

    So the attacks begin on monster Perry. Knapp, are you related to Markos? What evidence do you have Perry let those wildfires burn without spending state money to extinguish them? I know he got a lot of federal help. Not! It is not an Obama supporting state. Knapp, you are a bias left wing hack, who will attack anything which threatens the One who is trying to socialize our nation. You better get used ot the idea a very Conservative Republican, supported by the Tea Party is going to be our next President, inspite of the opinions of those who blog for OTB. If you Alex are so damn smart, why did you not run for office?

  11. Wiley Stoner says:

    Hey Alex, did you read the Forbes issue which debunks AGW? Why is it nothing about that will ever appear on OTB? I see from your bio you are an expert in all fields. What I notice is you never seem to write about the evils of the left. Maybe that is because you think the left is not evil. James, what is it that Hagee preaches you find reprehensable?

  12. Pug says:

    Actually Mr. Austin taxes went up and spending went down during the Bush 41/Clinto expansion.

    No, no. You have to get the ideology right here, now. When taxes go up, spending goes up. When taxes go down, revenue to the government goes up.

    Got it? Even Sean Hannity know this.

  13. Pug says:

    God won’t let Rick Perry win. He doesn’t want Rick bothering him all the time.

  14. mattt says:

    Exactly when in the last 40 years has the federal government actually thought about saving in the good years to prepare for the lean years?

    Many Democrats opposed the Bush tax cuts – or at least, their magnitude – in 2001 on the grounds that more of the projected surplus should be invested in infrastructure, education, and etc.

  15. reid, to correct an oft-repeated piece of nonsense for the last time, I hope, Bill Clinton recorded a balanced budget in his last term for two reasons: A) the dot com bubble didn’t burst until he was out of office; and B) Social Security “premiums” were counted as revenue. Don’t you remember Al Gore going on about the lockbox?

    hey norm, you are just plain wrong. Federal spending has risen every year since 1987. Also, taxes did indeed go up doing G.H.W. Bush’s and Clinton’s terms, but you don’t get to arbitrarily pick your starting and ending points unless you are trying to score cheap debating points. In fact, you may recall that spending cuts were part of that whole “read my lips” breaking legislation, but they unsurprisingly never materialized. But don’t let the facts get in the way of your narrative. Note, narrative, not ideology. You’re welcome.

    pug, please provide an instance in the last 50 years were federal income taxes went up and spending went down. Go ahead, I’ll wait. And if you like, when you bring that back I’I can provide references where federal income taxes were cut and government revenue went up. The Laffer curve stuff really does hold up empirically. Much better than Keynesian stimulus results FWIW.

  16. matt, “invest in infrastructure.” What an Orwellian euphemism for spending.

  17. hey norm says:

    Chuck…
    spending has gone up…unless you look at it as a % of gdp…but that messes up your “narrative”.
    http://en.wikipedia.org/wiki/File:Revenue_and_Expense_to_GDP_Chart_1993_-_2008.png
    the laffer curve has never held up.
    sigh.

  18. An Interested Party says:

    Speaking of oft-repeated pieces of nonsense, when have conservative ideas regarding fiscal policy, other than low taxes, ever had enough support even within the GOP to be implemented?

    I’I can provide references where federal income taxes were cut and government revenue went up.

    Oh yes, please do, including proof that there was a direct connection between the lower tax rates and the higher government revenue…

  19. wr says:

    Charles — It’s “Orwellian” to call spending tax money on rebuilding bridges before they fall down investing in infrastructure? Even if the loss of that bridge will cost lots of money in tranportation — not to mention the lives/property left when the thing actually falls?

  20. Alex Knapp says:

    Charles,

    Here you go:

    Unfortunately there is no evidence that the big 1981 tax cut enacted by Reagan did anything whatsoever to restrain spending. Federal outlays rose from 21.7% of GDP in 1980 to 23.5% in 1983, before falling back to 21.3% of GDP by the time he left office.

    Rather than view this as refutation of starve the beast theory, however, Republicans concluded that Reagan’s true mistake was acquiescing to tax increases almost every year from 1982 to 1988. By the end of his presidency, Reagan signed into law tax increases that took back half the 1981 tax cut. His hand-picked successor, George H.W. Bush, compounded the error, Republicans believe, by supporting a tax increase in 1990.

    When Bill Clinton became president in 1993, one of his first acts in office was to push through Congress–with no Republican support–a big tax increase. Starve the beast theory predicted a big increase in spending as a consequence. But in fact, federal outlays fell from 22.1% of GDP in 1992 to 18.2% of GDP by the time Clinton left office.

    Although all of evidence of the previous 20 years clearly refuted starve the beast theory, George W. Bush was an enthusiastic supporter, using it to justify liquidation of the budget surpluses he inherited from Clinton on massive tax cuts year after year. Bush called them “a fiscal straightjacket for Congress” that would prevent an increase in spending. Of course nothing of the kind occurred. Spending rose throughout his administration to 20.7% of GDP in 2008.

    In fact, there’s only one President in the last fifty years of American history who oversaw a budget that both cut taxes compared to the previous fiscal year and cut spending compared to the previous fiscal year.

    That President? Barack Hussein Obama.

  21. hey norm says:

    interested party…
    cutting taxes can create an increase in revenue – but the fact ignored by fans of the laugher curve is that it is never enough to offset the cost of the tax cuts themselves, much less actually reduce deficit or debt.
    alex…
    it is critical to note that so-called conservatives claimed that those bush 41/clinton tax increases would crash the economy. in fact that expansion was the longest we have ever been without a recession. they were dead wrong then…but we should listen to them now – right?

  22. mattt says:

    Charles – Conservatives have been saying for many years that saving and investing are closely related. Not so? Better for the government to sit on a pile of gold ingots?

    No, probably you would say it was better, rather than repairing and upgrading our infrastructure in good times, to return that surplus via tax cuts so that when times turned tough we could face more advanced decay of our systems *and* no money to pay for repairs.

    If you want to cut taxes in good times because the government shouldn’t invest the surplus, and cut them in bad times because you believe there’s a stimulative effect…..how do you expect to ever pay for anything? Including the vast military capacity that (in another thread) you reject even considering for cuts?

    Seriously, I’d enjoy a couple of hundred words from Charles on how big the federal budget should be, what he feels it should pay for, and how that revenue should be raised.

  23. hey norm says:

    I heard a proposal a while ago that would seem to go with this – taxes indexed to the gdp algorythmically. in other words as the gdp goes up taxes go up more – thus saving while when times are good. as the gdp goes down taxes go down – thus providing stimulus. obviously this would have to be tied to spending levels at some % of gdp as well in order to work…otherwise folks like bush 43 just spend the money.
    good idea? not?

  24. Jib says:

    Hey Norm,

    We already do that. Taxes as a % of GDP are currently 15% (lowest since 1950) and spending is at 25% of GDP (I think the highest since WW2) . That makes the deficit 10% of GDP or around $1.5 trillion which is about right.

    Yes, the Bushies tax cuts made all this worse than it needed to be as well as starting wars on the credit card before the one you are fighting is done. But the biggest part of the gap is from the high unemployment.

    When unemployment rises, govt aid programs kick in.Unemployment, food stamps, etc. This is non-discretionary spending, no budget vote, you qualify, you get it. This causes govt spending to rise. At the same time, the unemployed stop paying taxes. So taxes as a % of GDP drop and spending rises. Automatically. This is by design.

    As best as I can tell, this is the breakout of what is causing the deficit. I cant vouch for the exact-amounts, I am not sure anyone really knows, but this is pretty close to where we are at.

    Automatic spending and tax cuts due to Great Recession: 33%
    Bush Tax Cuts: 24%
    Stimulus spending: 21%
    Our Wars: 14%
    Other spending / tax cuts: 8%

    So get the economy back running with 5% unemployment and we will cut the deficit in half (Great Recession spending plus stimulus). Get the economy running again, end the Bush tax cuts and stop the wars and we are balanced.

    See its simple right?

  25. Ben Wolf says:

    Hey Alex, did you read the Forbes issue which debunks AGW?

    Yes, a financial porn magazine has defeated the work of thousands of scientists over the last 115 years.

    Now try staying on topic and stop being a mean drunk.

  26. Hey Norm says:

    Jib…
    Here’s a graph of what you are talking about.
    http://www.cbpp.org/cms/index.cfm?fa=view&id=3490
    Taxes are low now but they were lowered by Bush when we were in good shape. What I’m talking about – and not sure it’s a good idea – is keeping taxes higher during those times. Yes we are at historic lows for effective tax rates. Going any lower as the Ryan plan does is probably counterproductive, as is all the current talk about slashing spending immediately.

  27. Jib says:

    Hey Norm,

    I think it would be a good idea to have kept taxes higher when times are good and lower them during hard times. But I think you need to make it automatic, which is pretty much is now.

    When ever you get congress voting on tax cuts they will always over do it. Especially when they know that spending will increase no matter what. This is why Reagan had to raise taxes every year after his big tax cut, congress over did it. But Reagan’s bunch actually had some governing skills, so unlike the Bushies they did the reasonable thing and raised taxes gradually as the economy recovered.

  28. hey norm, well if we ever get that economic recovery, your qualifiications won’t hold water.

    wr, spending on bridges and infrastructure is such a small part of federal spending as to not merit a response. The bulk of federal spending is the redistribution of wealth, foolowed by defense and interest payments.

    Alex, maybe anyone else doesn’t noticve how tightly you have to word that, but I did. The idea that spending is under control is to ignore the reality that we are staring into an abyss of debt.

    matt, federal spending chugged along at 19% of GDP for about 60 years, then all of a sudden lept up to 25% the last two years. How so many people can ignore this is beyond me. Just beyond me.

    I’m sure it upsets the narrative, but some of us were bitching about spending under Bush, not just under Obama. Spending has been, is, and remains the primary problem, not a lack of revenue. Yes, revenue is down right now, but where was all that saving during the fat years to get us through the lean years?

    It seems like I hit a nerve.

  29. mattt says:

    Yes, revenue is down right now, but where was all that saving during the fat years to get us through the lean years?

    The GOP gave it to the top few % of earners as tax cuts.

  30. matt, and the Democrats did the same thing. The narrative dies hard.

  31. MBunge says:

    “matt, federal spending chugged along at 19% of GDP for about 60 years, then all of a sudden lept up to 25% the last two years. How so many people can ignore this is beyond me. Just beyond me.”

    Yeah! It’s not like anything happened the last two years that might possibly explain that! You know, like the worst economic downturn since the Great Depression shrinking GDP while simultaneously provoking an increase in government spending to try and pull the economy out of the gutter!

    Do you get the sense a whole lot of things are beyond charles?

    Mike

  32. wr says:

    Charles — You specifically called “investing in infrastructure” Orwellian. Not Social Security. Not Medicare. Not any kind of transfer payments. Investing in infrastructure. Are you backing away from that now? That’s fine, but don’t pretend you didn’t say it in the first place…

  33. An Interested Party says:

    matt, and the Democrats did the same thing.

    Yes, they did so because of GOP threats to let all the tax cuts expire unless the top few percent of earners kept their tax cuts…

  34. mattt says:

    matt, and the Democrats did the same thing.

    Charles, if by this you mean that the “Bush” tax cuts were a bipartisan effort, that’s just not true.

    House roll call vote 149, on the Economic Growth and Tax Relief Reconciliation Act
    of 2001: GOP 211 yea, 0 nay; Dems 28 yea, 153 nay.
    http://clerk.house.gov/evs/2001/roll149.xml

    The Dems’ recent votes to extend the cuts came in an entirely different economic environment, irrelevant to this discussion of saving in good times. Likewise, the recent spike in federal spending. We *should* be spending now.

  35. Rob in CT says:

    The laffer curve makes no sense in the USA – we’re a relatively low-tax environment. In a country with much higher taxes (1970s Sweden or somesuch), maybe.

    I think the appropriate method for tracking government spending is % of GDP*, not absolute dollars. If spending stays flat in absolute dollars, over time the amount of stuff you can do/buy with that money declines.

    * – though it’s probably best not to cherry-pick any one given year, because a nasty recession or the peak of a boom can distort this. Better to look at longer blocks of time.