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Six Myths That Are Killing the Republican Party
1. Tax Cuts Are a Slam-Dunk Win
There’s an old saying that “God put the Republican Party on Earth to cut taxes.” But there’s also an old saying that goes “You can’t call a frying pan a Studebaker and expect me to skip church,” which is just about as relevant to the modern voter.
Tax cuts may be good policy. But tax cuts in and of themselves are not the electoral tonic they were back in the 1980s. Why? Because 45% of Americans don’t pay income taxes and, therefore, have nothing to gain from Republican tax cut plans. When Republicans try to explain how tax cuts are good for the economy, it usually goes something like “Tax cuts are good for the economy [mic drop].”
Instead of tweaking the tax code with what Democrats can easily describe as “Tax cuts for the rich,” Republicans should embrace major tax reform and educate the public on how simplifying the tax structure will bring about economic growth. There are no shortage of examples where this has worked, but they cannot assume that voters know that tax cuts are good. Certainly, they are not going to learn that from the government-run schools or Democrat-led media.
(Exit question: how many actually believe that politicians will ever really simplify a complex tax code that they can stuff with favors for wealthy donors? Show of hands?)
2. All Foreign “Trade Deals” Must Be Supported Without Question Because Free Trade Has Absolutely No Downside for Anybody. Ever. (Except Unions. Maybe.)
When the North American Free Trade Agreement (NAFTA) was passed in 1993, the American middle class was promised that:
- More trade with Mexico would grow the economy and raise the wages of the American middle class; and
- NAFTA would reduce illegal immigration by creating more economic opportunity in Mexico.
Here’s what actually happened:
- Middle class wages have stagnated and declined since NAFTA;
- American manufacturing has declined since NAFTA; and
- Illegal immigration skyrocketed after NAFTA was passed.
Here’s a dirty little secret: economists and corporations do not want the middle class to be making more money. If middle class wages increase, that means workers are more expensive, and that means they are not “globally competitive.” They want American workers to be competitive with third-world laborers, even if that would require Americans to live like third-world laborers. (Hence their desire to import massive numbers of third-world laborers.) It’s a perspective that looks a lot nicer from the editorial offices of the Wall Street Journal and the executive suites of Goldman Sachs than it does from the working class neighborhoods of the Midwest.
Should Republicans be against free trade? Not necessarily, but Republicans should side with American workers, and only sign on to openly negotiated trade deals that clearly benefit American workers.
3. Republicans Have to Always Be the Pro-Business Party
To many voters, “pro-business” means “pro-crony capitalism,” and it’s obvious even to the casual observer that the GOP is in the pocket of corporate america and the chambers of commerce. Consider what the conservative base wants: Obamcare repealed; executive amnesty defunded; Planned Parenthood defunded. “Impossible,” sighs Mitch McConnell. “The votes just aren’t there, so there’s no point in fighting for them.”
Now, consider what the GOP was willing to fight for: letting mega-banks gamble in derivatives with taxpayer money; passing Obama’s top secret 2,000 page foreign trade agreement, funding the Export-Import Bank. All of these were priorities of big donors and the US Chamber of Commerce.
Should the GOP become anti-business, like the Democrats? No, but as long as they side with big business against the middle class, their alliance is an electoral liability. Expecially when it is clear the GOP will fight for what its big donors want, but not for what its voters want.
4. The Immigration Issue Can Be Neutralized With “Secure the Border First” Rhetoric
The GOP has decided that the rhetorical response to demands to end illegal immigration is “Secure the borders first.” But they done nothing to secure the borders. In fact, the GOP Congress passed a bill requiring 900 miles of double-layer fencing on the southwestern border in 2006, then repealed the bill the very next year. The GOP’s fecklessness (and frankly outright dishonesty) on illegal immigration opened the door for Donald Trump, whose candidacy they now regard as an existential threat to the party. Gee, maybe you should have secured the border when you had the chance.
5. The Key to Elections is Winning Over Moderates and Independents
Even John McCain and Mitt Romney’s losses have not laid this myth to rest. Obama did not win in 2012 because he won over independents. He didn’t. Obama won because he did a better job at turning out his base voters than Romney did.
6. Conservatives Will Stick with the GOP Because They Have Nowhere Else to Go
The Republican Establishment has no idea how angry the base is, and even Donald Trump’s ascendance hasn’t given them a clue. As evidenced by the recent comments of moderate Republicans like Charlie Dent and Tom Cole, the Establishment still views the conservative base as whackobirds whose place is to vote for the party and expect nothing in return.
The GOP hasn’t had a single major piece of conservative legislation signed into law at the national level since Welform Reform was passed in 1996. How long are conservatives supposed to stand by the party, hoping for some results? Probably not as long as the party leadership thinks.
Published in General
I associate creative destruction with moving/motivating workers from less productive industries to more productive industries. E.g. buggy whip manufacturers going to work on the Model T assembly line.
With unilateral relaxation of trade barriers in the short run there isn’t always a more productive industry/opportunity available because our trading partner’s barriers remain in place.
In the long run iWe is correct. In the short run unilateral trade relaxation is problematic and surrenders our negotiating leverage.
The U.S. is the most productive per capita workforce on the planet. We are an attractive market to sell into. Those wishing to do so should bargain for the opportunity to do so same as we bargain to access theirs.
We benefit with lower barriers even without bargaining.
Consider Africa: We need that continent to thrive, as much as possible. Eliminating trade barriers would bring comparative advantage into play – it pays for Africa to grow many things that we could buy and consume, for example.
Our consumers get more variety and better prices. Africa gains in economic wealth and stability. Over time, they become more able to buy OUR goods and services.
I am referring specifically to the decline in manufacturing jobs because that is where the middle class has been hardest hit; the rest of us, too. The Government has made up for the decline in productive manufacturing jobs by 1. Expanding welfare and 2. Expanding the number of unproductive Government jobs (bureaucrats, administrators, diversity coordinators) and financing both with deficit spending. It is an unsustainable situation.
Agree with pretty much every point you brought up.
This attitude is precisely what alienates working people from the Republican Party. It sounds like you’re saying, “[expletive] your job, I just care about money.”
[Ed: Minor edit for CoC]
Yeah the ” [redacted] you and your family” vibe is pretty strong.
You are absolutely correct, but have not addressed the bold words.
Everything you are saying is correct and we are in agreement. The challenge is getting from one side of the river to the other without getting wet.
Your archetypal “working people” want stability and job security and never have to worry.
That is very nice. It is also inconsistent with the real world. People are our biggest asset – but only to the extent that they can create and grow and push themselves.
The creation of wealth is not a stupid formula of: “Hire someone to do a job, and business does well.”
So you’re not so much opposed to NAFTA as to automation? Since 1987, manufacturing employment has indeed fallen by 33% while output has risen by 146%. This is because manufacturing productivity has risen by 215%. It’s not free trade that has led to the elimination of well-paid manufacturing jobs. It is increased productivity.
Why?
The people who are rewarded for our company doing well will be effectively everyone! Yes, the shareholders will do best of all – but those shareholders include very ordinary people. But even people who are tangential to our customers will benefit from more things at lower prices.
I am talking about real wealth creation – not paper pushing. The kind of wealth creation that improves everyone’s world. This is what new technologies can do.
It is of a piece with the “American Workers Suck” attitude of the Open Borders crowd. e.g. Marco Rubio’s aide saying “American workers just can’t cut it,” while negotiating the Gang of Eight bill.
Alas, disruption involves changes. People have to learn new skills while industries rise and fall.
We may not like it, but anything that “eases transition” invariably makes the transition longer, slower, and more painful.
Nonsense.
For all that I wrote, every. single. part. of our product will be made in America – because it is the best place to manufacture these very high quality components.
I do not think it would be bad if someone else could manufacture it better – because the result would be a cheaper and better product for our customers.
Of course, I am not growing oranges. It may well make sense to make oranges in Brasil instead of Florida – and the result of free trade is cheaper OJ for the American Consumer – and Floridians learning to do things that involve more value added.
You just describe creative destruction under capitalism – there are always short term issues that we trade for long term gain. You can’t have the reorganization of labor resources without short term pain.
If the end game is equilibrium, and if we’re going to arrive at this equilibrium either way, why should we prefer a policy in the mean time of cheap imported goods and fewer substantive jobs instead of costly goods but more local jobs?
Using Africa as an example: how much time are we talking before they’re ready to start buying as much or more value from us than we buy from them?
I just want to know what killed all the farming jobs and why the GOP isn’t doing something about it.
Why should the GOP doing anything about it?
Well, I’d blame free trade, but agricultural goods are a major US export. Climate change? Income inequality?
Except people don’t necessarily re-tool or can’t for whatever reason be it lack of money, talent or job availability. The job market can be tough for people who are older especially for really competitive and increasingly creative jobs or people who are young and have little job experience. Often we just plain don’t need as many people in higher-up, high value-added positions.
“People” in the aggregate can re-tool and re-specialize but that’s not the same as individuals. I don’t know the overall numbers but I have a few anecdotes. The macroeconomy may be agnostic over the long run but in the long run we’re all dead. I don’t understand what you mean by more painful. For whom?
Because the end game is NOT equilibrium. Dynamic conditions allow for a virtually-homeostatic adaptability. Protectionism slows down the ability to adapt, but it does not make water go uphill. Anti-trade policies will, over time, always hurt more than they help.
You are correct and I have no issue with that. My point is that unilaterally relaxing trade restrictions tends to make short-term much longer.
Also, can we really end the analysis at cheap goods for consumption? By giving away productive capability isn’t that a permanent cost? Doesn’t that cost erode our purchasing power over time if the benefit of the increase in productivity accrues to ever fewer people?
Are we so sure that the labor force can still transition the way the buggy whip guys transitioned to be Model T guys? What are the opportunities for the vast majority of people who are never going to be entrepreneurs, engineers, or any other STEM trained or skilled worker?
I think MBF is employing a bit of sarcasm. Farming jobs used to be demagoged much the same way that manufacturing jobs are now. Consequently, we have enjoyed 80+ years of agricultural subsidy and protectionism, not to mention every single republican candidate in the last few decades kow-towing to the corn industry.
-E
We are not giving away productive capability. We are producing more than ever; just with fewer people.
This is not the fault of dynamism – it is the fault of all the overheads that make it hard and expensive to hire people. All the tools that smooth the transition also, in turn, make it harder to re-tool people.
Artificially creating markets to ensure that people have manufacturing jobs that are, in the end, unsupportable without regulations and taxpayer dollars, is not doing anyone any favors.
Fail early. Fail fast. Stay on your feet and keep moving. A worker would much rather retrain at 50, then have their business somehow stay afloat thanks to protectionism until they are 55 or 60, when it will be much harder to retrain and find work.
Sal, I am delighted and pleased that I finally found something to agree with you about.
Ricochet: where the impossible happens.
Next up: Zafar!
I imagine some executive at Disney was saying something similar when they laid off their IT workers and replaced them with cheaper H1-B workers.
Just because the water levels in the locks on a river adapt to the current needs of a barge doesn’t mean that the purpose of the lock is not leveling of water level to allow for movement from one elevation to another. In your Africa example, in order for that to be worth our while they have a lot of development to do before that can even be a market for our goods and before we don’t need their goods as much anymore. That the leveling is not static doesn’t mean it’s not about leveling.
If the only thing that were happening to manufacturing jobs was creative destruction, as in productivity boosts, the negative effects wouldn’t be so bad, and the benefits would still be present.
It would be one thing if manufacturing sector labor diminished due to boosts in productivity, as what happened to agriculture in this country not so long ago. That was the paradigm example of creative destruction. But it’s also true that the benefits of agriculture productivity are broad. Everyone eats, so everyone benefits. This isn’t generally the case, and isn’t in the case of manufacturing.
Regulation costs also cut into the gains of productivity boosts. Not that regulation is necessarily bad, but it should be trivial to comply with. Employees wind up paying for their own regulatory burdens as well, thus stagnant or limp wage growth, even with boosts in productivity by an employee, which would generally cause higher wages.
Lowering labor costs is not really a boost to productivity, neither is importing cheap labor, nor exporting jobs to keep production costs down, creative destruction.
Free Trade Agreements have nothing to do with creativity or creative destruction, and little to do with increasing American access to foreign markets.
Events of creative destruction have nothing, at all, to do with globalism and trade. It’s an entirely vertical phenomena where some great mind figures out something categorically superior to the competition.
People who can’t find work as a result of creative destruction is precisely the fault of dynamism. The economy may be dynamic but people aren’t infinitely malleable and they do come with a shelf life. A minority of people are really enterprising and dynamic and a huge majority are not. A person retraining at 50 to a completely new industry is likely going to take a huge standard of living hit.
Which is fine, if we want to say vae victis and leave people where they fall that’s a trade-off we can choose. I’m all for low regulation and dynamic markets but just because the economy is growing doesn’t mean there aren’t a lot of losers caught in the wake.