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Sunday, Nov. 18, 2012 | 2 a.m.
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Mitt Romney may be busy rationalizing his loss, but Republicans elsewhere are starting to come to grips with it. Some are trying to divine where the GOP went wrong and, more importantly, how to return to its once-winning ways.
But for the GOP, which has suffered stinging defeats in three of the past four election cycles, much more will be required than merely adopting a more realistic position on illegal immigration. The party needs to turn away from what Louisiana Gov. Bobby Jindal calls “dumbed-down conservatism.”
“We need to stop being simplistic ... and we need to stop insulting the intelligence of the voters,” Jindal told Politico this week.
He’s spot on. Taking conservatism up-market intellectually will mean weaning the party off the seductive anti-Obama mythomania of Fox News; off the pugnacious partisanship that personally profits commentators such as Rush Limbaugh, Laura Ingraham and Ann Coulter; and off the cross-eyed conspiracy theories of professional buffoons such as Donald Trump.
But more importantly, it will require a return to politics and policies based on fact and evidence. And perhaps nowhere is that need more acute than on economics.
Since the election of Ronald Reagan, supply-side economics — in brief, the belief that lower tax rates, particularly on upper earners, will increase incentives to produce things, resulting in economic growth that benefits everyone — has been the doctrine of the Republican Party. The Wall Street Journal editorial page has become a reflexive cheerleading squad for supply-sidism, while powerful groups such as the Club for Growth and Americans for Tax Reform have policed party ranks for deviations from the approved theology.
The adherence to supply-side theory has come despite, rather than because of, real-world results. Much of the Reagan-era prosperity attributed thereto was really the result of Keynesianism that dared not speak its name. That category includes the big, deficit-financed defense build-up and income tax cuts that boosted consumer spending.
Meanwhile, the past three decades have proved key supply-side tenets crashingly wrong. Chief among them is the assertion that lower marginal income tax rates for upper earners are an essential catalyst to growth. Another is the related warning that tax increases on the well-to-do will inevitably cause economic calamity.
Further, no credible economist still takes seriously the notion that income tax cuts will spark enough growth to pay for themselves. That idea has become so discredited that most GOP candidates no longer make the claim openly, yet its influence remains evident in the unrealistic growth assumptions that undergird GOP economic proposals — and in many conservatives’ refusal to acknowledge how much the Bush-era tax cuts have contributed to our fiscal mess.
Supply-siders once could build their conceptual castles in the air and hope the average person would be swept away by the magical mystery of it all. But voters now have two test periods for easy comparison: The Clinton years, whose impressive prosperity defied supply-side predictions, and the George W. Bush era, when the economic recovery underperformed other post-war comebacks. But rather than alter their dogma, supply-siders contort history and logic to assign Clinton’s success to Reagan or, even more risibly, Newt Gingrich.
And so the GOP regularly marches into battle defending policies that voters rightly see as helping an elite fraction of the population, without any benefit for the rest of America. The GOP’s one-time reputation as a responsible fiscal steward also has suffered serious damage in the supply-side era.
We saw all of that play out in this election. Mitt Romney and Paul Ryan issued the usual call for tax cuts and the predictable warnings about increasing rates on “job creators.”
President Barack Obama portrayed the GOP ticket as favoring a return to the failed policies of the Republican past and noted that the Romney-Ryan plans would necessitate deep cuts in social programs. Likening his own agenda to Bill Clinton’s policies, the Democratic incumbent called for making upper-earners pay more — and for a recovery led by the middle class. We all know the result.
Political recalibration is never painless, particularly when it comes to fundamental beliefs. But if Republicans are serious about their soul-searching, they’ll recognize this: It’s time for a change in the GOP’s economic doctrine.
Scot Lehigh writes for the Boston Globe.
Wrong. GOP's economic principles are spot on. It's the politics of the day that interfere and skew them in the wrong ways. My advice to John Boehner and the GOP leadership, don't give an inch. Stand firm on principles and go with the flow on the minutia. And Democrats have alot of minutia.
CarmineD
The GOP tried the used car salesman approach. Have I got a deal for you!!! They were so intent for the past 2 years to get rid of Obama they forgot about the rest of us. hen you only show the Elite people supporting you and not the common person you get the results the GOP got. People were not buying the Bull this time anymore than the last McCain Paulin ticket. The voters did not like being talked down to and the GOP did that. I still do not believe they can change they ill just try to word smith the problem away Actions speak louder than words.
I look at the real world examples of the European social welfare states, their dead economies, massive underclasses, and the political paralysis caused by an entitlement mentality and see all I need to know that that path spells doom for our country. The government currently borrows 40 cents of every dollar they spend. Obama hasn't passed a budget in four years and indicates he won't bother with one this year (though it's constitutionally required). Lastly Obama retained power by lying every step of the way about his opponent, suppressing his own record, and utilizing behavorial scientists to hone his billion dollar propaganda machine. Lastly he's done nothing to build private sector tax PAYING employment while spending trillions of our dollars propping up democrat constituencies bleeding us dry. I see nothing that will help working people. His tax increases on the so called rich (hint, $200K a year isn't rich) he says will bring in $850 billion over ten years, or $85 billion a year. Meanwhile, he's borrowing $120 billion a month. It's all class warfare and smoke and mirrors.
The GOP/Republicans have historically always been wrong on the economy.
Reagan, Bush Sr., and especially bush jr. dramatically increased the National Debt. In their 20 years in office they never balanced a budget and went on spending sprees with borrowed money.
Prior to Reagan and the Bushies the traditional Democrats and Republicans decreased the National Debt in 27 out of 25 years.
By measures of jobs created, the stock market, increase in GDP, and income increases for all income groups, the Democrats have always performed much better.
The bush/cheney mis-administration, rubber stamping approval Republican Congress, and their corrupt corporate cronies almost totally wrecked the economy with their narrow minded ideology of totally unregulated capitalism that gave the green light to unbelievable criminal greed in the Financial and Housing sectors of our economy.
We have a Pres. who doesn't even remember what the debt amount is per letterman. How can you run a country when you are too lazy to study the problems.
The problem is the spending as tax revenues have NOT decreased. If that is too difficult a concept, let's look at the increased spending. Under Obama it is up over 6%. Please look at the facts Scot.
Just how long can "progressives" successfully hold onto the meme that Republicans are for the "upper income earners" without having to point out that those "upper income earners" are businesses NOT INDIVIDUALS. I have a guess, it is when the weight of the welfare state begins to erode our defense while at the same time more people are added to the dependency class which will only hasten the downward spiral of the welfare state and then finally after the US has lost it credit rating and the dollar tanks as the worlds reserve currency....then the idiots who keep voting for "progressives" realize that all of those businesses they destroyed are no longer there and the government is telling them where they will work, for how much, for how long, and in what conditions.
People...there are no unions in socialist states and there is no government to complain to...at least none that won't put a bullet in your thick skull for not following the party line.
We can debate this ad nauseum but Reagan did bring in more revenue with lower rates. But he had a Democratic congress that did not go for any pending cuts-Though some would say Reagan did not want the spending cuts (either) (I disagree) but the fact is spending cuts did not happen -but revenue to Treasury roughly doubled.
Next, if taxes rates do NOT matter why does Obama's own deficit cutting committe (Erskine-Bowles) recommend rasing revenue with lower rates and fewer deductions.
Keep in mind when we had 70-91% rates very very few paid that. The rich will always be able to avoid a shake-down bt liberals. If they someday can't you'll see America drop like a rock. Those socialst dreams are not effective in this cometitve global economy
About one third of the stimulus package of 2009 was a payroll tax cut. This affected only those making less than about $105k/yr. If this wasn't supply side economics aimed solely at the real middle class and below, then what was it?
No, if the GOP are wrong on this, then the Democrats are, too.
(And this doesn't even take into account QE-1, -2 and -3.)
This article is so asinine I don't know where to start:
1) "But more importantly, it will require a return to politics and policies based on fact and evidence. And perhaps nowhere is that need more acute than on economics." - Why don't you look at the evidence of 4 years of Obama? When does he have to take ownership of his failed economic policies? Obamacare, Dodd-Frank, War on coal, war on fracking, shutting down the gulf, EPA attacking business everywhere they can, NLRB trying to shove unions down the throats of business - all job killers. His stimulus package was a joke. Just a load of pork to pay back his donors.
2) If Bush's tax cuts were such a disaster, why is everyone, including Democrats, doing everything they can to keep them from expiring?
3) The taxes on the rich are a red herring. Bush cut taxes for everybody that pays taxes. As many have pointing out, raising the rates to 39% on those making over $250,000 will have minimal impact on closing the deficit. It makes a great campaign issue to motivate people to vote based on envy, but it does little to help our economy. The Democrats drone on about fair share. Is it fair to ask high earners to give over a third of what they've earned to the federal government to waste on boondoggles like Solyndra? Is it fair for half of the country to pay nothing in income taxes?
America is the richest country of all time due to capitalism. Why don't we try some more ?
The BLS started keeping unemployment statistics in 1948. Since 1948, the unemployment rate has gone UP during every Republican administration except Reagan's two terms. It went down 0.2% in his first term and 1.9% in his second term.
By contrast, unemployment has gone DOWN under every completed Democratic administration except Carter's, where it was unchanged. We won't know the final results for President Obama's first term until early February, but it appears he will finish somewhere around Carter and Reagan's first term in terms of the change in the unemployment rate. The unemployment rate has been trending down since October 2009. At worst, Obama's record will be better than every Republican president not named Reagan.
The author is correct that Republicans need to rethink their economic policies. They don't have a good economic track record.
Actually the supply folks are right. We need stuff more than we need jobs, that means supply. The keys are sound and limited public policy: stable money, effective education, sustainable commitments or none at all. THAT is what Reagan fought for.
Who pays and who benefits is not something worthy of discussion. Simply because opinion will never agree. An all boats theory that mostly works is the only kind of thing better than the chaos we have or the worse chaos of anarchy.
The Clinton era tax rates had absolutely no effect on the economic boom of the 1990's. The commercialization of the internet was the sole driver of the economic growth and it's ability to instantly market products to millions of consumers. In addition, it was the low capital requirements to start a website selling products that didn't have to be purchased first or find a place to store that allowed thousands of entrepreneurs start new businesses. Only that kind of large scale economic innovation can create millions of jobs.
The Democratic Party's assertion that we raise taxes on the wealthy and somehow jobs will be created is bogus. Entrepreneurs and businesses create jobs when they invest capital into asset that produces a good or completes a service and then sells the good or service to consumers. The question is how to get people to make capital investments into the into economy.
I am not of the opinion that only the wealthy make investments into new businesses. I think this country is at its best when every person feels they can take a chance on a new venture and find success. What I am saying is it is very hard to start a new business and be successful at it. If a person somehow perseveres, sacrifices, and works their butt off and makes some money, we don't want to punish them by confiscating their reward. That is a sure fire way to diminish risk taking.
That being said given our fiscal reality, it is foolish to think that we can solve our deficit and debt crisis without raising taxes. It will require tax hikes and spending cuts and it is dishonest for the President and the Democrats to say the Republicans won't compromise by raising taxes if they are unwilling compromise on reducing spending.
Yes, let's tax and regulate ourselves to prosperity.
It would be a first.
I keep seeing the word "Socialism". I often wonder how many of you truly understand the word? Also, how many of you that complain about Socialism realize how much of your lives are truly socialistic in nature.
No. Tax cuts targeted to low income is not supply-side. It's demand-side, which is not only Keynesian, but exactly what is proscribed to thwart a deflationary spiral.
And the tax cut through the Stimulus was not the payroll tax cut. The payroll tax cut was above and beyond the stimulus cut, which was in itself the largest single tax cut in history.
Again, this is not Reaganomics. It's real economics, the kind that has been proven to work.