Over the past year, the bile in the writings of left-wingers has become so extreme that even they have begun to notice. The New York Times's Nicholas Kristof, for example, devoted a recent piece (titled "Hold the Vitriol") to the intemperateness of the Left, while the New Republic's normally blithe-spirited Jonathan Chait wrote a lengthy apologia for his own hatred of Bush. If anything, the flurry of delightful economic news has increased the intensity of liberals' emotions, so much so that they are turning on one another like hungry cannibals. Witness Slate's announcement that "the long-awaited Krugman Gotcha Contest can begin. A prize, to be announced, for the reader who comes up with the gloom-and-doom opinion from the fabled Princeton economist's recent writings that now looks the most embarrassingly wrong."

Jonathan Chait's hypothesis is that Bush-hatred is attributable mostly to the president's advocacy of policies that are not liberal. But that criticism could have applied equally to any other Republican who held significant political power. No, the intensity of emotions is attributable to a different and far more interesting development: Because of President Bush's aggressive tax policies, the economic worldview adopted by the Democratic party in recent years is proving, through collective experience, to be totally and irrevocably incorrect. Their champions are now exposed to ridicule--because they have failed.

The GOP policymakers, meanwhile, have been on a roll. Tax policies designed by gifted students of economics such as Harvard's N. Gregory Mankiw and Columbia's R. Glenn Hubbard have worked exactly as intended. Accordingly, the Democrats' hatred is quite akin to that of the typical Red Sox fan for the New York Yankees. It is not just that the Republicans are winning the votes, they are winning the intellectual debate as well; they are winning everything. Think back, for example, to a stunning piece published in February 2001 in the New York Times by the Goliath of the Democrats, former Treasury secretary Robert Rubin. Rubin led with the melodramatic statement that "I had not intended to get involved in the public debate on fiscal policy, but I feel so strongly that a tax cut of the magnitude proposed is a serious error in economic policy that I felt a need to speak." He goes on to present a mantra that has been chanted by Democrats ever since: The reduction in the government surplus associated with the tax cut will bring back the high interest rates and slow growth of the late 1980s and early 1990s.

The problem with this analysis at the time was that it seemed so at odds with history. Deficits had swung around wildly for three decades, with no apparent correlation with interest rates. The analysis seems even more preposterous now. At the time that Rubin warned of high interest rates, the ten-year U.S. rate was above 5 percent. Now, with deficits as far as the eye can see, the ten-year rate is more than half a percentage point lower. And economic growth? Through the roof.

What is worse, Rubin's story was logically flawed. Economic activity depends on the after-tax cost of capital, which depends on the interest rate and taxes. If taxes go down, firms invest more. If interest rates go down, firms invest more. Rubin asserts that tax cuts will not help the economy, but higher interest rates will hurt it. Such a view reveals a shocking unfamiliarity with basic economics or even simple logic. Small wonder that his predictions turned out to be so inaccurate.

In retrospect, scholars now mostly agree that the Bush tax cuts were well-timed medicine for an ailing economy. Indeed, there was only one other time in U.S. history (1981) that the federal government was nimble enough to pass a major tax cut in the first quarter of a recession. The tax cuts saved the day: Consumption held the economy up in the dark times, and consumption was most likely strong because of timely tax refunds. At a recent economic conference that addressed the empirical question of whether the Bush tax cuts stimulated consumption as intended, Federal Reserve economist and noted consumption expert Julia Coronado (speaking for herself and not the Fed, in accord with Fed policy) stated that the results suggesting that consumption responded significantly to the Bush tax cuts were convincing and that they "reaffirm the findings of a pretty extensive prior literature."

But as the economy evolved, it became increasingly evident that businesses were not doing as well as consumers. President Bush responded by adopting two additional tax changes, a dividend tax cut and an expansion of the tax break firms receive if they purchase capital equipment. These policies were also derided by Democrats because of their deficit impact, and they too have worked exactly as planned. The dividend tax cut was, its advocates argued, designed to boost the stock market and business investment. The stock market began a significant surge as soon as the tax cut was passed, and third-quarter economic activity was so astonishing precisely because capital spending soared.

Rubin is not alone. Consider a leading entrant in Slate's Krugman Gotcha Contest. In July of this year, the first month of one of the best quarters in U.S. history, Krugman wrote that "there is very little evidence in the data for a strong recovery ready to break out. As far as I can make out, Mr. [Alan] Greenspan's optimism is entirely based on models predicting that tax cuts and low interest rates will get the economy moving." This quote is most notable in the present context because it states the Democratic case precisely and correctly. The only coherent liberal argument is that the interest rate and the tax cuts should both have little effect on the economy. Krugman, therefore, is wrong and logically consistent; Rubin is wrong and illogical as well.

Of course, the facts have confirmed Greenspan's analysis. Taxes and interest rates do matter. The economy is recovering now precisely because the Federal Reserve and top Bush economists recognized early on that economic analysis is a useful guide to policy. The problem for Democrats is that these facts invalidate their core philosophy. Republicans have been branded as the party of tax cuts. Democrats have been branded as the party that opposes tax cuts on the grounds that they do not help the economy but do undermine social justice. Democrats also pretend that this social justice is accurately measured by the myriad distribution tables so efficiently mass-produced by left-wing think tanks.

But if tax cuts lead to booms (like that in the third quarter), then the little guy benefits from them as well. Democratic policy actions undermine the very social justice that they purport to seek. If the economy is better now than it would have been absent the tax cuts, then there are surely many thousands of workers who have not lost their jobs--thanks to sound Republican tax policy. Such facts are a problem for those who oppose tax cuts in the interest of the working class.

Anticipating this line of argument back in 1931, John Maynard Keynes wrote that "the economic problem may be solved, or be within sight of a solution, within a hundred years. This means that the economic problem is not--if we look into the future--the permanent problem of the human race." While there is still much that we do not know about how economies work, there is much that we do know. The evidence of the harmful effects of high tax rates is convincing enough that even the socialist Europeans have adopted corporate tax rates below ours. When the economy booms, everyone is better off, so what is there left to fight about? Indeed the lone holdouts against this new enlightenment have been the Democrats, led on by their assertive heroes. But as knowledge replaces superstition, adherents of failed models walk off the public stage. It is noisy now for one reason: Discord lies along the path to irrelevance.

Amidst the discord, the Democrats will either find an identity that is more in tune with the modern understanding of economics or they will go the way of the Whigs. While the short-run political benefits of the chaos in the other party may be high, Republicans should take note that it is an exciting time to be a Democrat. The party's ideology has been proven wrong and leading intellectuals--such as Matthew Miller, author of the challenging new book The Two Percent Solution--are now struggling to define a new and coherent social philosophy for the Left. Just as the Red Sox are seeking a new manager, the Democrats are interviewing new champions.

This may change the future far more than Republicans now realize. Republicans have likely gained power to pursue conservative social policies in part because of the votes of religiously agnostic economic pragmatists. It may well be that the epic in which the leading Democrats spout theories that are patently absurd is almost over. A more economically reasonable opponent for social conservatives--and a tectonic shift in the political landscape--may be just around the next bend.

Kevin A. Hassett is director of economic policy studies at the American Enterprise Institute.