There are many great insights in Christopher Caldwell's essay on the state of conservatism in the NYTBR today, and before engaging him on where I disagree, I should note where I concur. I like his elegant expression of the core conservative divide:
Republicans’ future electoral fortunes will depend on domestic policy and specifically on whether they can reconnect with “small-c” conservatism the conservatism whose mottoes are “Neither a borrower nor a lender be” and “Mind your own business,” and the opposite of which is not liberalism but utopianism. The Bush administration was a time of “big-C” Conservatism, ideological conservatism, which the party pursued with mixed results. As far as social issues were concerned, this ideology riveted a vast bloc of religious conservatives to the party, and continues to be an electoral asset (although that bloc, by some measures, is shrinking). Had gay marriage not been on several state ballots in 2004, John Kerry might now be sitting in the White House.
But these were only mixed results, if you take an utterly cynical view of politics. The utopianism that gave us the Iraq war and nation-building in Afghanistan led to moral, strategic and fiscal disaster. Opposition to marriage equality may have saved Iowa in 2004, but it stranded the GOP against the tide of history, and branded it as intolerant and hateful. Ideological conservatism that argued that markets can regulate themselves - as opposed to small-c conservatism that understands that vigilant government regulation is essential to making markets work properly - gave us the worst financial crash and recession since the Great Depression. The rigidity on taxation, while blithely adding unfunded entitlements, gave us the real basis for the massive debt that we now face.
This is Caldwell's response on the supply-side calamity:
Yet the case against supply-side economics can never be airtight or decisive, and Republican tax promises will probably help the party this year. That is because taxes are not just an economic benchmark, but a political one. The public should not expect more in services than it pays in taxes. But the government should not expect more in taxes than it offers in representation. And the number of Americans who feel poorly represented has risen alarmingly during the Obama administration.
It seems to me that the evidence of the last twenty years proves conclusively - in, yes, an airtight way - that cutting taxes does not increase revenue. And the notion that the unpopularity of any president at any moment in time, despite regular elections, legitimately delegitimizes the need to raise taxes to ameliorate the debt ... is peculiar in the extreme. It would have forbidden Reagan, Bush I and Clinton from raising taxes, because they were unpopular for doing so.