“Efforts To Reposition Themselves”: Can Republicans Create Their Own Credible Economic Populism In Time For 2016?
When Republicans trooped to Iowa over the weekend for Steve King’s “Freedom Summit,” it was as much of a dash to the right as you would have expected from an event hosted by perhaps the most fervently anti-immigrant member of Congress, in a state whose presidential caucus was won by Rick Santorum in 2012 and Mike Huckabee in 2008.
But something else was going on, even there: the search for an economic populist message that might resonate with the general electorate.
Republicans haven’t yet figured out how to present this message, or exactly what policy proposals it ought to be based on. But they’re obviously trying. Here’s part of the New York Times’ report from the event:
A few candidates advanced a concern about income inequality that is percolating within the party, discussing wage stagnation, an issue that has largely belonged to Democrats. Mr. Christie spoke of the anxiety of the middle class. He said that any Republican coalition needed to include the “proud yet underserved and underrepresented working class in this country.”
“The rich are doing just fine,” Mr. Christie said.
Rick Santorum, the winner in the 2012 Iowa caucus, noted that for years Republicans had extolled entrepreneurs and business owners, adding that it made more sense politically to “be the party of the worker.”
“What percentage of American workers own their own businesses?” he asked. “Less than 10.”
Former Gov. Mike Huckabee of Arkansas, who won the 2008 caucus here, stressed that the falling unemployment rate did not represent an economic recovery for many people. “A lot of people who used to have one good-paying job with benefits now have to work two jobs,” he said.
You may notice that none of these critiques are about Barack Obama, unless you’re arguing that he failed to make things better. That’s because when you start to talk about persistent economic anxiety, you inevitably reach back beyond this administration to problems that developed over decades. Santorum’s message is perhaps the most bracing for Republicans to hear; after years of holding up business owners as the most virtuous and admirable among us, the ones for whose benefit all government policy should be made, it would be awfully difficult for Republicans to decide that bosses aren’t the ones they should be advocating for.
And of course, Democrats are going to do what they can to make any populist turn impossible for Republicans. President Obama and his congressional allies will be releasing a steady stream of executive actions and new proposals on things like paid sick leave, boosting overtime pay, and other measures, which Republicans will inevitably oppose, leaving them arguing against benefits for workers.
Which is why it’s important for Republicans to have their own policy proposals if they’re to convince voters that they’re the ones to trust on economics. Republican arguments used to always be about growth, as though that were all that mattered: cut taxes and regulations, the economy will grow, and we’ll all live happily ever after. But with the economy growing steadily and economic anxiety persisting, they have to argue that growth is not enough.
The current Republican efforts to reposition themselves on economic questions remind me a little of how Democrats used to talk about national security before the Iraq War went south and discredited Republican wisdom on the issue. Democrats were always defensive about it, and when they tried to come up with a new message for whatever campaign was looming, the point was never to win the argument over national security. They just wanted to minimize the damage the issue could do to them, or at best, fight to a draw so that the election would hinge on issues where they were stronger.
If Republicans are to do that now on economics, it isn’t a bad start to say their focus has to shift to what people who aren’t wealthy or business owners (or both) care about. Now they just have to come up with an answer to this question: Okay, so what are you going to do about it?
Many Republicans would probably prefer to stick to a populism without economics, one that uses issues like immigration or the latest culture war flare-up to convince voters that Democrats are part of a hostile “elite,” while the GOP is the party of the common man and woman. This has certainly worked before. But the problem for them is that they are now on the wrong side of majority opinion on many of those cultural issues. Which only means that, when it comes to their new-found economic populism, there will be, if anything, more pressure to get specific.
By: Paul Waldman, Senior Writer, The American Prospect; The Plum Line, The Washington Post, January 27, 2015
“GOP Has Been Wrong For The Past Six Years”: Mitch McConnell’s “No Compromise” Strategy Is Finally Failing
In his seventh State of the Union on Tuesday night, President Barack Obama touted the low unemployment rate, low gas prices, increase in clean energy production, lower teen pregnancy rates and host of other statistics that supported his optimistic vision. “The shadow of crisis has passed,” he said. “And the state of the union is strong.”
Giving the official Tea Party response to Obama’s address, Representative Curt Clawson painted a very different picture of the state of America. “In 2014, our economy continued sluggish growth and millions of Americans are still out of work,” he said. “We know them. We see them.” This message was echoed in every other Republican response to Obama’s speech—five in all.
These dual visions of America have been competing since the midterms, when Republicans trounced Democrats in races across the country. But every day, since then it’s become increasingly clear that Obama’s message is a much more accurate depiction of the United States than what Republicans are offering—and the GOP message will likely look more ridiculous as the 2016 presidential election approaches.
Take the Affordable Care Act. Republicans have been arguing for years that Obamacare would cripple the health care system and destroy the economy. Clawson repeated those claims in his response. “We also need to lift the economic shackles of Obamacare,” he said. “It makes us uncompetitive.” These are ridiculous arguments. The odds that Obamacare would cause a death spiral in the insurance industry, for instance, were always exaggerated. But the topline metrics now show that Obamacare is working. Millions more people now have insurance. Health care cost growth has slowed, although it’s unclear how much of that is due to the health care law. Insurers aren’t fleeing the exchanges and premiums aren’t skyrocketing. All of the fatal scenarios that the GOP predicted aren’t happening. It’s possible those trends will change dramatically in the years to come, but right now, there are no signs of that.
Or take the economy. Remember threats that Obamanomics would strangle the recovery? That hasn’t played out either. The unemployment rate is down to 5.6 percent. Growth is strong. Obama can’t take all the credit for the recovery. The Federal Reserve’s willingness to ignore inflation hawks and keep interest rates at zero is a key reason why the U.S.’s recovery is the envy of the developed world, for instance. But the fact is that the economy really has strengthened considerably over the past year. Republican arguments that Obama’s policies would stifle growth and prevent the economy from bouncing back no longer are credible.
As Senator Elizabeth Warren points out, the recovery has not been felt equally—wages are still stagnant. Obama made that point in his address. Yet, lower gas prices, even though they aren’t due to Obama’s actions, are effectively acting as a tax cut for middle class Americans across the country. In turn, optimism in the economy has ticked up considerably over the past two months—and so have Obama’s approval ratings. Americans are starting to believe in the recovery—and to give Obama credit for it.
Republican talking points largely haven’t adjusted to this new reality. “We see our neighbors agonize over stagnant wages and lost jobs,” said Senator Joni Ernst in the official Republican response to Obama’s State of the Union. “We see the hurt caused by canceled healthcare plans and higher monthly insurance bills. We see too many moms and dads put their own dreams on hold while growing more fearful about the kind of future they’ll be able to leave to their children.” Clawson even said Obama’s speech was “pretty much the same rhetoric we’ve heard for the past six years,” which is simply not true.
But some Republicans are starting to realize that this message doesn’t jibe with an improved economy. Senate Majority Leader Mitch McConnell, for instance, opened the 114th Congress by trying to take credit for the recovery. But even if more Republicans adopt new talking points, the president and his party are generally the ones who benefit, politically, from an improving economy. Given Republicans’ doomsday predictions through the first six years of Obama’s presidency, it’s hard to imagine voters crediting the GOP for the recovery over Obama.
McConnell has largely been treated as a political mastermind during Obama’s presidency. He was one of the leaders of “no compromise” strategy that the party adopted to stifle Obama’s agenda and prevent him from claiming credit for any bipartisan accomplishments. In many ways, it was a success. Republicans won landslide victories in 2010 and 2014. They soured the country on the president and have, until now, sunk his approval ratings on many issues.
But it came at a major cost, and the cost seems to be getting greater by the day: Republicans lost all ability to shape policy, especially in the first two years of Obama’s presidency. Instead of compromising on issues like health care reform, financial regulation, and fiscal stimulus, Republicans sidelined themselves in lockstep opposition, determined not to leave fingerprints on the legislation. In turn, they adopted a message that each of Obama’s major legislative achievements—Obamacare, the Dodd-Frank financial regulatory law, and the stimulus—were going to crush the economy and destroy different industries. It was an appealing message when the economy was still struggling. Now it’s rapidly becoming a political liability.
That doesn’t mean McConnell’s strategy was wrong. If the GOP had compromised with Obama and pulled his policy rightward, voters almost certainly would have rewarded Democrats. The country might even be in better shape, but the Republican Party probably wouldn’t be. Ultimately, Republicans were in an impossible position. The economy was eventually going to recover, and Obama was going to get credit for it.
The president has spent the first six years of his presidency waiting for the moment he could take that credit, knowing it was coming. On Tuesday night, it came. Even with five separate responses to the president’s address, there was nothing Republicans could say to fight the growing sense that Obama’s policies are working and that the GOP has been wrong for the past six years.
By: Danny Vinik, The New Republic, January 20, 2015
“Still With Worrisome Fundamental Beliefs”: It Says A Lot That A Strong Economy Is Bad News For Mitt Romney in 2016
Nothing says democracy like a private-equity-manager-turned-governor whose dad ran for president facing off against a governor-turned-private-equity-manager whose dad was president over, you guessed it, the presidency.
That’s what we might get, though, if Mitt Romney, who’s “considering” a run in 2016, and Jeb Bush, who’s already formed a political action committee, end up duking it out over the Republican nomination. (Romney started out in private equity before becoming a governor, for those keeping score at home, while Bush was a governor before getting into private equity). But before we, well, get too far into the horserace, we should remember that Romney, at least, lost in no small way because he didn’t have anything approximating a policy agenda.
Think about that. Romney was a professional presidential candidate for almost five years by the time Election Day rolled around in 2012, and he still didn’t have a coherent strategy for the economy by then. His tax plan was a mathematical impossibility: he would have had to either abandon his tax cuts for the rich, raise taxes on the middle class, or run much bigger deficits to make it work.
And his economic plan, well, we’re still waiting for it. Romney told his donors that “if it looks like I’m going to win, the markets will be happy” and “we’ll see capital come back, and we’ll see—without actually doing anything—we’ll actually get a boost to the economy.” And that was it.
Romney really thought President Obama was scaring away a recovery, so all he had to do was win and then do nothing. Now, to be fair, doing nothing has actually worked out okay for Obama since he got re-elected, though not by choice, as the combination of more monetary stimulus, less fiscal austerity, and time have healed the economy enough that unemployment has started falling fast.
In fact, joblessness is already lower after two years, at 5.6 percent, than Romney said he’d get it in four. But, as you might have noticed, the recession put us in such a deep hole that there are still plenty of problems that need fixing. Romney, though, didn’t have a plan to take advantage of can’t-go-any-lower interest rates to rebuild our infrastructure. Or to help underwater homeowners refinance their mortgages. Or, more on this in a minute, to increase worker wages.
Romney, in other words, just ran against the economy, and hoped that would be enough. It wasn’t. And it shouldn’t even be an option in 2016, when unemployment could be as low as 4 percent. The question then won’t be how to get jobs, but rather how to get good ones with good pay.
Now, Romney is ideologically flexible. But he seems to have some worrisome fundamental beliefs that would hurt him if he runs in 2016.
After he lost the presidential race, Romney blamed his loss on Obama giving “gifts” to minorities and women, and warned that “this is really serious” since “we’re following the path of every other great nation, which is we’re following greater government, tax the rich people, promise more stuff to everybody, borrow until you go over a cliff.”
Does that sound like somebody who would try to boost stagnant wages—which should be the issue of 2016—by, say, expanding the Earned Income Tax Credit (and the ranks of the “47 43 percent“) like a lot of conservative wonks want to?
By: Matt O’Brien, The Wonk Blog, The Washington Post, January 12, 2015
“Uh Oh”: With GDP Growing Strongly, Republicans’ Economic Dilemma Gets More Complicated
We got the latest quarterly economic growth numbers today, and they’re pretty striking:
The U.S. economy grew at its fastest rate in more than a decade between the months of July and October, helped by a surge in consumer spending, according to government data released Tuesday morning.
The Commerce Department said gross domestic product growth hit an annualized rate of 5 percent in the third quarter, revised upward from the previous estimate of 3.9 percent. Not since 2003 has the economy expanded so quickly.
The third quarter performance, coupled with 4.6 percent growth in the second quarter, amounts to the best sign since the Great Recession that the U.S. recovery has hit its stride.
The simple way to look at the political implications of these numbers is to say that it’s good for Democrats, since there’s a Democrat in the White House. And though it’s extremely unlikely for growth to stay over 5 percent for any length of time — it’s been 30 years since we had more than two consecutive quarters at that level — if both growth and job creation remain strong for the next two years, it’ll be somewhere between difficult and impossible for a Republican to win the White House in 2016, since the state of the economy swamps every other issue in presidential campaigns.
That’s the simple way to look at it, and it’s not wrong. But there’s another layer to the state of the country’s economy that could make things more complicated for both parties. It has to do with the difference between the two numbers that get the most attention — job creation and GDP growth — and the rest of how Americans experience their economic and working lives.
If you listen to the way President Obama talks about the economy these days, you’ll notice that he always says both that things are going well and that “we have more work to do.” It’s a way to assure people that he understands that they don’t feel secure and that many may not have gotten back to where they were before the Great Recession. On the other side, for a long time Republicans would say, “Where are the jobs, Mr. President?” But they can’t say that anymore, nor can they complain about growth being weak.
The economic debate of 2016 will start in about a year from now. While there could certainly be a downturn between now and then, let’s assume for the moment that the momentum continues. How could Republicans make a case that although growth and job creation are strong, all is still not well? Even if that’s what Americans feel, it would be a difficult case for Republicans to make, because those top-line figures are what they generally point to when they discuss the economy. What else can they build their case on? They aren’t going to talk about the stock market or corporate profits, not only because those have both performed spectacularly during the Obama presidency, but because they know that ordinary people don’t much care.
And they aren’t going to talk about the things that really make people worried. The most important fact of the American economy in the past few decades may be its failure to produce rising wages, but that’s not something Republicans are particularly concerned with. Their economic focus is usually on business owners — the taxes they pay, the regulations they have to abide by, and so on. Even if you believe that helping those owners is the best way to help the people who work for them, you’re going to have a hard time finding Republicans who want to talk about something like wage stagnation.
And the arguments Republicans always make against Democratic proposals aimed directly at workers, like increasing the minimum wage or expanding health coverage, are that the proposals will cost jobs and hinder growth. So they can’t turn around and say, “OK, so growth and job creation may look good, but the real problem is what people earn and how they’re treated on the job.” That’s just not in the Republican DNA.
If there’s an accompanying problem for Democrats, it’s that voters could look at the Obama years and say that yes, it’s now a lot easier to find a job, but the jobs don’t pay what they should or offer the same security and dignity they used to. The American economy is a much crueler place than it once was, and two terms of a Democratic administration haven’t done enough to reverse that evolution.
That could be a genuinely biting critique. But fortunately for Hillary Clinton (or whoever the 2016 Democratic nominee is), Republicans are the last ones who are going to make it.
By: Paul Waldman, Contributing Editor, The American Prospect; The Plum Line, The Washington Post, December 23, 2014
“The Show-Off Society”: In A Highly Unequal Society, The Wealthy Feel Obliged To Engage In ‘Conspicuous Consumption’
Liberals talk about circumstances; conservatives talk about character.
This intellectual divide is most obvious when the subject is the persistence of poverty in a wealthy nation. Liberals focus on the stagnation of real wages and the disappearance of jobs offering middle-class incomes, as well as the constant insecurity that comes with not having reliable jobs or assets. For conservatives, however, it’s all about not trying hard enough. The House speaker, John Boehner, says that people have gotten the idea that they “really don’t have to work.” Mitt Romney chides lower-income Americans as being unwilling to “take personal responsibility.” Even as he declares that he really does care about the poor, Representative Paul Ryan attributes persistent poverty to lack of “productive habits.”
Let us, however, be fair: some conservatives are willing to censure the rich, too. Running through much recent conservative writing is the theme that America’s elite has also fallen down on the job, that it has lost the seriousness and restraint of an earlier era. Peggy Noonan writes about our “decadent elites,” who make jokes about how they are profiting at the expense of the little people. Charles Murray, whose book “Coming Apart” is mainly about the alleged decay of values among the white working class, also denounces the “unseemliness” of the very rich, with their lavish lifestyles and gigantic houses.
But has there really been an explosion of elite ostentation? And, if there has, does it reflect moral decline, or a change in circumstances?
I’ve just reread a remarkable article titled “How top executives live,” originally published in Fortune in 1955 and reprinted a couple of years ago. It’s a portrait of America’s business elite two generations ago, and it turns out that the lives of an earlier generation’s elite were, indeed, far more restrained, more seemly if you like, than those of today’s Masters of the Universe.
“The executive’s home today,” the article tells us, “is likely to be unpretentious and relatively small — perhaps seven rooms and two and a half baths.” The top executive owns two cars and “gets along with one or two servants.” Life is restrained in other ways, too: “Extramarital relations in the top American business world are not important enough to discuss.” Actually, I’m sure there was plenty of hanky-panky, but people didn’t flaunt it. The elite of 1955 at least pretended to set a good example of responsible behavior.
But before you lament the decline in standards, there’s something you should know: In celebrating America’s sober, modest business elite, Fortune described this sobriety and modesty as something new. It contrasted the modest houses and motorboats of 1955 with the mansions and yachts of an earlier generation. And why had the elite moved away from the ostentation of the past? Because it could no longer afford to live that way. The large yacht, Fortune tells us, “has foundered in the sea of progressive taxation.”
But that sea has since receded. Giant yachts and enormous houses have made a comeback. In fact, in places like Greenwich, Conn., some of the “outsize mansions” Fortune described as relics of the past have been replaced with even bigger mansions.
And there’s no mystery about what happened to the good-old days of elite restraint. Just follow the money. Extreme income inequality and low taxes at the top are back. For example, in 1955 the 400 highest-earning Americans paid more than half their incomes in federal taxes, but these days that figure is less than a fifth. And the return of lightly taxed great wealth has, inevitably, brought a return to Gilded Age ostentation.
Is there any chance that moral exhortations, appeals to set a better example, might induce the wealthy to stop showing off so much? No.
It’s not just that people who can afford to live large tend to do just that. As Thorstein Veblen told us long ago, in a highly unequal society the wealthy feel obliged to engage in “conspicuous consumption,” spending in highly visible ways to demonstrate their wealth. And modern social science confirms his insight. For example, researchers at the Federal Reserve have shown that people living in highly unequal neighborhoods are more likely to buy luxury cars than those living in more homogeneous settings. Pretty clearly, high inequality brings a perceived need to spend money in ways that signal status.
The point is that while chiding the rich for their vulgarity may not be as offensive as lecturing the poor on their moral failings, it’s just as futile. Human nature being what it is, it’s silly to expect humility from a highly privileged elite. So if you think our society needs more humility, you should support policies that would reduce the elite’s privileges.
By: Paul Krugman, Op-Ed Columnist, The New York Times, September 25, 2014
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