"It's the economy, stupid!" The weirdest thing about the onrushing 2016 presidential cycle is the scarcity of a GOP economic growth theme. Missing, too, is a serious growth agenda. That gap -- not demographics, nor electoral college math -- is the GOP’s most serious deficiency in its quest to regain the White House.
Democratic campaign consultant Bob Shrum wrote in his compelling political memoir No Excuses:
I was on the phone with Carville one day when he said he had to hang up; the road was calling in. He was agitated when we talked a little while later. Somewhere in the Midwest, he said, Clinton had suddenly launched into a soliloquy on nuclear nonproliferation. There wasn’t one goddamn vote in it, Carville shouted at me—a warning he had delivered, a little more respectfully, to his contrite candidate. When James put up his famous sign in the war room—“It’s the economy, stupid!”— it was not just an admonition to the strategists and to the staff, but to one very smart former Rhodes Scholar named Bill Clinton. He’d never won one of those fancy scholarships, Carville told me on vacation after the campaign, but it didn’t take a genius to know what this election was about.
As the almost eerily observant Michael Tomasky writes in the March 19 issue of the New York Review of Books in an overview of recent works by six Republican thought leaders, five of whom are presidential aspirants:
As matters are shaping up so far, the sense of many people I speak to is that the election appears destined to be about the condition of the middle class, the issue of wage stagnation, and the recognition (finally) that the American economy has been working far better for those at the top than for those in the middle or, obviously, on the bottom.
The salient basic numbers are these. Since 1979, compensation for the top 1 percent has grown 138 percent, while median wages have increased just 6.1 percent. Worker productivity has grown 63.5 percent in this time, and if wages had kept pace with productivity, the annual median wage today, instead of being around $35,300, would be $54,400.
However prematurely, Washington seems to have agreed, around the arrival of the New Year, that the recovery is on and that we have entered a new economic phase. A new phase brings a new set of questions, and the one being asked most insistently these days is: Yes, all the indicators are positive, except wages, where growth has remained sluggish. What are we going to do about that?
The extent to which Republicans accept any of this is far from clear. In six recent books by announced or likelyGOP presidential contenders—except Paul Ryan, who surely wrote his book thinking about a run but has apparently decided against it—one hardly encounters the word “wages.” In only one of them, Marco Rubio’sAmerican Dreams, is there anything resembling what you’d call a discussion of wage stagnation. This lasts for all of four paragraphs....
The 2016 election cries out to be about bringing about equitable prosperity, very much centered on restoring folks' ability to get ahead. Our economy has languished, on average, at less than 2% growth a year since Bill Clinton left office. And yet, so far, only Gov. Jeb Bush has highlighted economic growth.
Gov. Bush's advocacy of economic “growth above all,” and, don’t “settle for anything less than 4% growth” is a welcome theme. It is baffling that other candidates have not taken it up.
Still, as Gustav Flaubert once is said to have said, “God is in the detail.” The 4% growth package promised by Gov. Bush in his maiden Detroit speech sounds like it may anchored in a recipe book written under the auspices of the George W. Bush Center. America’s economic growth under President George W. Bush’s presidency was torpedoed by misguided Fed policy. The Bush years' record was terribly lackluster, as is that of Barack Obama.
Former George W. Bush Presidential Center chief James Glassman tossed out a trial balloon, in USAToday, trotting out the GOP’s "usual suspects" -- leading with proposing to cut corporate tax rates and enhance free trade. Glassman championed, too, "an increase of H1-B visas." Then he gives honorable mention to ‘improving education, cutting the fat from the bureaucracy and encouraging greater contributions to retirement accounts.’”
Nothing, not even the "Bush tax cuts," saved the George W. Bush’s presidency from being beset by an economic ice age. Nowhere in the Glassman (and, one infers, a forthcoming Jeb Bush) agenda contains an indictment of the Most Likely Suspect in fomenting sluggish growth: misguided Fed policy.
Political columnist Peter Roff recently made some deeply astute observations on the state of the presidential wing of the GOP in a recent USNews column. There Roff commented on the kickoff of the presidential race by Sen. Ted Cruz: “The Reagan coalition is in tatters, a victim of its own success.”
Those who in 1980 were animated by fears of continued Soviet aggression and who saw American hostages held for more than a year by student militants in our embassy in Iran are no longer a key demographic for the Republican Party.
Things are not much better in the area of economics, the second part of the three-legged stool that described the issues of importance to the Reagan coalition.
While cutting taxes is always a nice idea, doing so just to do it is not a compelling argument for producing growth. It’s actually a kind of obverse Keynesianism that won’t help restart the engine of the American economy any more than another massive Obama-style stimulus will.
Ted Cruz is proposing a flat tax, one that can be handled with a post card. But so far all that post card has on it is a scrawled “Miss you, wish you were here.” As original Supply Side icon (and professional colleague of this writer) Jeff Bell writes: “His flat tax mentioned a postcard but no rate.”
The -- in many ways admirable -- U.S. Senator Marco Rubio proposes a tax reform that drops the top rate from 39.6% to … wait for it … 35%. Worth doing? Quite possibly, especially for its associated pro-family provisions. Still, this categorically is different, economic-growth-wise, from Reagan’s promise of a 30% across-the-board rate cut and, in the event, the dropping of the top rate from 70% ultimately to 28%. (Plus, very much, good monetary policy.)
Retired neurosurgeon Ben Carson is hinting at a gross income tax, a super-tithe, to be paid by the poor as well as the 1%, even by those of us struggling to survive. “If it’s good enough for God, it’s good enough for me,” says Carson. Let it be noted that Dr. Carson is not God ... although he may be suffering from an MDeity complex). Columnist Deroy Murdoch may have been floating a trial balloon for a gross income tax tax proposal at NRO. Catastrophic.
Meanwhile former Governor Mike Huckabee now attempts to resurrect, like Lazarus from the dead, the discredited idea of replacing the federal income tax with a national sales tax. Last time out Gov. Rick Perry also called for a flat tax. Both should take Roff to heart.
Meanwhile former U.S. Senator Rick Santorum, who previously campaigned on a “deficit enhancer” tax plan, seems focused on things like a federal minimum wage, a thoroughly Elizabeth Warrenish proposition. Populist, yes, if one believes in Soviet-style central planning. Central planning did not prove a recipe for equitable prosperity in the USSR. Central planning is unlikely to improve the fortunes of us workers here either.
As the King of Siam said, “Etcetera, etcetera, and so forth.” Roff, himself a seasoned veteran on the right side of the Supply Side Wars, is right: “While cutting taxes is always a nice idea, doing so just to do it is not a compelling argument for producing growth.”
An ancient Arabic proverb has it that “The dogs bark, but the caravan moves on.” Times change.
Yet what really is dreadful about the GOP field’s current offerings is the “curious incident of the dog in the night-time.” In the classic Sherlock Holmes story, Silver Blaze, Conan Doyle wrote of a conversation between a Scotland Yard detective and Sherlock Holmes:
Gregory: "Is there any other point to which you would wish to draw my attention?"
Holmes: "To the curious incident of the dog in the night-time."
Gregory: "The dog did nothing in the night-time."
Holmes: "That was the curious incident.”
The absence, except in the declaration of Jeb Bush, of an economic growth imperative, and the entire absence, thus far, of a credible economic growth agenda that goes beyond the weary GOP's Old Warhorses and, especially, the absence of a monetary policy agenda, is the dog which "did nothing in the night-time." A serious call for good monetary policy — and the optimal mechanism to derive that, the proposed Brady-Cornyn Monetary Commission — is nowhere, yet, in evidence in the GOP presidential contest.
The “lock” issue for 2016 is equitable prosperity. The key that opens that lock must include, to the fore, good money. It does not take a Rhodes Scholar, or Sherlock Holmes, to observe that America, and the world, is weary of lousy economic growth.
How to restore equitable prosperity? This is the winning issue.
The absence, except in the declaration of Jeb Bush, of an economic growth imperative, and the entire absence, thus far, of a credible economic growth agenda that goes beyond the weary GOP's Old Warhorses, and especially the absence of a monetary policy agenda, is the dog which "did nothing in the night-time." A serious call for good monetary policy — and the optimal mechanism to derive that, the proposed Brady-Cornyn Monetary Commission — is nowhere, yet, in evidence in the GOP presidential contest.
The “lock” issue for 2016 is equitable prosperity. The key that opens that lock must include, to the fore, good money. It does not take a Rhodes Scholar, or Sherlock Holmes, to observe that America, and the world, is weary of lousy economic growth.As Bea Kaufman once said (often mis-attributed to the actress and deliciously Bad Girl of her era Tallulah Bankhead, daughter of House Speaker, and Democrat, William Bankhead: Democrats take note!), “I’ve been poor and I’ve been rich, rich is better!” The electorate yearns for credible promises to bring about the conditions in which we workers can grow economically secure and comfortable.