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While there were some great moments in the latest GOP debate, and some terrific individual performances — Carly Fiorina seemed to grab all the buzz in the aftermath — one thing that barely came up was the economy. It was very much like the first debate.
The day after the candidates faced off, Fed chair Janet Yellen announced a stand-pat, no-interest-rate-liftoff policy. Now, I don’t expect presidential candidates to be Fed watchers. But Yellen did raise the issue of a still-soft economy, despite all the QE and zero-interest-rate policies. And I think Yellen was right. There will be a time to normalize Fed target rates. But not yet.
That said, it would have been a good thing if any of the candidates talked about our money. A strong and steady dollar — the world’s unit of account (in theory) — is pro-growth, as we saw in the ’60s, ’80s, and ’90s. A collapsing greenback smothers growth, as we saw in the 2000s.
I would have loved to have seen one or more of the candidates talk about a strong dollar, a rules-based Fed policy, and international monetary coordination. Alas, it was not to be. Maybe we’ll hear about the dollar at the CNBC debate on October 28. But an opportunity was missed on September 16.
Interestingly, on the day of the debate, the Census Bureau revealed another round of stagnating incomes for the middle class. But the words “middle class” and “economic growth” were mentioned by the GOP debaters only four or five times, according to AEI economist Jim Pethokoukis. He laments that Republicans have been missing great opportunities to show a modern vision about growth.
Diana Furchtgott-Roth, the director of Economics21 at the Manhattan Institute, lists a slew of important economic issues that weren’t addressed at the debate, including the minimum wage, regulatory policy, education, and alternatives to Obamacare. There were brief mentions of tax policy, with Governor Huckabee slipping in his fair-tax proposal and Senator Paul touting his 14.5 percent flat tax. But there was no room for Senator Rubio to pit his child tax credit against Jeb Bush’s 20 percent corporate tax rate. Meanwhile, Governor Christie spent his economic time on a plea for reducing Social Security benefits. Ugh.
There also was no mention of socialist senator Bernie Sanders, who may be the Democratic frontrunner right now. The Wall Street Journal estimates that Sanders’s Greece-like spending spree would come to $18 trillion over a decade. That’s pretty wild. And it gets the Democrats firmly back as the tax-and-spend party. Sanders at various times has proposed income-tax rates of 70 to 90 percent, but not one Republican blasted his tax-and-spend program at the debate.
Nor did anyone attack Hillary Clinton’s proposal to double the capital-gains tax rate if the asset holding period is not long enough. Her plan is pure anti-growth and anti-risk-taking. It’s just what we don’t need, but no GOP debater took it on.
Jeb Bush does deserve credit for a summary statement that emphasized 4 percent economic growth. He said tax, regulatory, energy, and immigration policy could generate that 4 percent and help solve bottom-fifth poverty and middle-class stagnation. He concluded Reagan-like that strong growth at home would revive American leadership around the world. Good for him.
But one of the reasons why the GOP base is angrily up in arms at the so-called political-class establishment is that nothing has gotten done, even with Republican majorities in the Senate and House.
I thought the House and Senate would pass a broad energy-reform bill that not only includes the XL pipeline, but removes limits on oil exports and drilling on federal land (that would lower gas prices at home and weaken Vladimir Putin’s European stranglehold). But no bill emerged. A bill to repeal Obamacare with an alternative vision? Never happened. A corporate-tax-cut reform that slashes the rate, provides cash tax-expensing for investment, and brings more than $2 trillion back home with a repatriation plan? Never happened. Ditto for immigration reform. Never happened.
And Godfather-like, the GOP now must “go to the mattresses” to stop the Iran deal, which will hand over $150 billion to a rogue country so that it can kill more American soldiers, try to extinguish Israel, and increase its Middle East hegemony. Will it happen? The GOP congressional track record is not encouraging.
The strategy was to put serious bills on President Obama’s desk where he could veto them if he so chose. That would have set the stage for a battle of ideas in 2016. But somehow the congressional leadership lost its way.
There’s time, however, for the GOP presidential contenders. I’d like to hear them tell us how they would solve all these problems if elected president. Doing so might rebrand the Republican party much for the better.