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For reasons that I spelled out in some detail yesterday, it once made sense for conservatives to be disheartened and even defeatist. They have been fighting a rearguard action for nearly one hundred years. But, as I argued, circumstances have changed dramatically. Barack Obama has brought us to the edge of a precipice, and a majority of Americans now recognize that things cannot go on as they have in the past. The welfare state is bankrupt. The Social Security trust fund is paying out more than it is taking in. The Medicare entitlement is unsustainable, and Obamacare threatens to hurl us into the abyss.
We must either roll back entitlements and the administrative state or raise taxes to a level that is bound to extinguish growth and kill the goose that lays the golden eggs – and Americans now recognize the fact. The speech that Barack Obama delivered at George Washington University on 13 April was a reprise of his performance when he accepted the necessity of extending the Bush tax regime in December. He was angry, petulant, and rude to the guests whom he had invited to attend, as is his wont on such occasions. But he caved.
Consider the graph that accompanied John B. Taylor’s discussion in Friday’s Wall Street Journal of the budgets proposed by Barack Obama and Paul Ryan:
As you can see, the President’s original budget envisaged sustaining federal spending at a percentage of GDP (24%) dramatically above the level it reached in the penultimate year of George W. Bush’s Presidency (ca. 19.6%). Paul Ryan’s budget is aimed at bringing it back down to the latter level, and Barack Obama’s second budget, though hardly austere, is considerably less extravagant than its predecessor.
Why did so radical a President give so much ground? The answer resembles the reasoning that explains why he gave in on the Bush tax regime back in December. He may bitterly hate the fact, but he is trapped, as he has often been trapped while President, between his own heart-felt convictions and reality. The economy is sluggish and slowing. As even The New York Times has been forced to acknowledge, Ben Bernanke’s strategy of quantitative easing has failed to generate growth and reduce unemployment. It seems to be producing inflation, instead. We are also on the verge of a fiscal crisis. PIMCO has dumped its treasury bonds, and the Chinese hint that they may throw up their hands and stop purchasing them. S&P has raised questions about the reliability of the federal government’s credit. The dollar is plunging in value, and the price of oil and other commodities is going through the roof. Can you imagine what the misery index is going to look like on the first Tuesday in November, 2012?
The truth is, as Irwin Stelzer intimates, that Barack Obama is going to have to give much more ground. He is not doing at all well in the polls; the independents who put him in the Oval Office have fled. Right now he is grudgingly, reluctantly on the run. But events are moving at a considerably faster pace; he is virtually certain to get the blame for the stagflation on the horizon; and he knows as much. He has to try to dodge responsibility, and he has no hope at all of doing that if he does not to a considerable degree acquiesce. Even then, if truth be told, he is likely to get the blame. A President who pretends to be a Messiah can run, but he cannot hide.
Abraham Lincoln once observed, “Public sentiment is everything. With public sentiment, nothing can fail; without it nothing can succeed.” Obama’s greatest problem is that he has lost the debate. Politely, calmly, steadily, patiently, and over a considerable period of time, Paul Ryan has in his gentle way explained to our fellow citizens that we cannot continue to live beyond our means – not, at least, on the scale that President Obama has in mind. In the meantime, the housing market has not cleared; unemployment has not fallen appreciably; no one wants a tax increase; and Congressman Ryan’s stock has gone steadily up.
Let me add that Obamacare has not fared well with the public. Time has passed, and sentiments have hardened. The latest Rasmussen poll suggests that, by a margin of almost three-to-one, Americans think that Obamacare will increase, not lessen, deficits and medical costs; that by a margin of two-to-one they think that it will worsen, rather than improve, the quality of medical care; and that those wanting repeal form a majority of the populace and outnumber the measure’s supporters by thirteen percent.
So, what is the upshot? Barring a major foreign policy crisis (Bomb, bomb, bomb, bomb, bomb Iran?), the election in 2012 is going to turn on two issues: the economy and Obamacare. There is very little chance that either will play to President Obama’s advantage. My judgment is that the presidential election in 2012 is the Republicans’ to lose.
If the Republicans nominate one of the living dead, as they did in 1996 and 2008, the President may eke out a victory. If, on the other hand, they nominate a woman or man capable of articulating the case for limited government on principled grounds, the case for a balanced budget on prudential grounds, and the case for repealing Obamacare and dismantling the administrative state on every conceivable ground, the Republicans could sweep in such a fashion as to usher in a new political era defined by balanced budgets, low taxes, and decentralization. All that we have to do is find the right standard-bearer.
About the identity of the appropriate standard-bearer I have a thought or two. Stay tuned.