The GOP has gone from the party of fiscal responsibility and small government to the party of big business and big government. How did the party go from one of ideals and principles to one driven by political power?

I recently picked up a copy of Jonathan Chait's

The Big Con: The True Story of How Washington Got Hoodwinked and Hijacked by Crackpot Economics

, which argues that a small cabal of supply-siders took over the Republican Party and radically transformed it.

Mr. Chait traces the GOP's change to the emergence and ready embrace of supply-side economics during the Reagan era. Republicans ate it up in the '80s, and it's only grown stronger as an ideology and election strategy.

What is supply-side economics? Arthur Laffer, an economist from the University of Chicago, believed that reducing taxes for the wealthy would give them incentive to reinvest and thus spur economic growth that benefits everyone. Furthermore, any loss in revenue would be made up in a few years by a surge in revenue from a robust economy, according to Laffer.

Sounds great, except it doesn't work. Chait points out that the closest respected economist to supporting it, Greg Mankiw, "wrote an economics textbook in which he describes supply-siders in a chapter called 'Charlatans and Cranks' and compared them to 'snake-oil salesmen.' "

Presidents Ronald Reagan and George W. Bush both tried supply-side economics and got the same results: economic growth, but also economic inequality and huge budget deficits.

But many in the Republican Party understood that cutting taxes would be popular with the public and that promising to do so had been key in electing Reagan. Thus, it has become impossible to run for president without pledging not to raise taxes. Many, in fact, blame George H.W. Bush's 1992 loss to Bill Clinton on his breaking the no-new-tax pledge (ignoring the fact that Reagan also raised taxes during his tenure). All the current presidential candidates strongly endorse cutting taxes.

When the GOP swept back into power in 1994 following the Clinton health care debacle, party members developed the K Street Project. It melded the interests of business and the GOP by empowering lobbying firms on K Street in Washington. The likes of Newt Gingrich, Tom Delay and Grover Norgquist browbeat business interests to donate only to the GOP. In return, the GOP let the lobbyists write much of the legislation in Congress.

George W. Bush made supply-side economics a major part of his platform. But he sold it as tax cuts for everyone, or as he called it, "compassionate conservatism." Chait recounts how the Bush campaign allowed certain members of the media access to his tax cut proposal only if they agreed not to have it independently reviewed. Predictably, the media opined that the proposal was great for the middle class.

We later learned the media had been duped. Chait contends that the media have become lazy and are therefore partially to blame for misconceptions about the tax plan. Many in the mainstream media prefer to discuss personalities rather than hash through policy, because personalities are cheaper and easier to sell to the public. And so elections have become as much about personalities as they are about policy.

With a GOP majority in both the House and Senate, the relationship between K Street and the Republican Party accelerated at an incredible rate. Lobbyists from K Street were brought in to help write and pass legislation.

Bills became large omnibus bills written by and for lobbyists, such as the Medicare Reform Bill and the Energy Bill of 2005. Legislators passed these bills in return for "earmarks" for their district and campaign cash from lobbyists to help their re-election bids. President Bush didn't veto a single bill.

So the Republican Party has become the party of big business and big government, much to the dismay of many party faithful and Democrats. Chait draws parallels between the post-Reagan era to the era of robber barons who dominated American politics at the turn of the 20th century.

The correction for inequality then was a depression and a couple of world wars. I would hope that we can resolve these problems with just an election where both the media and public decide that reasonable policy from our elected officials is a good thing.

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