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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
Comment #46 was sarcasm. CandE summed up my thoughts appropriately in comment #53.
Pointing and laughing at the unemployed, saying, “Ha-ha, losers. The economy is dynamic. You should have kept up!” May be a perfectly legit economic position; but politically it’s poison. People don’t lose their votes when they lose their jobs.
Of course they do. It is the exchange of goods and services and ideas that maximize human creativity. It is the reason New York city produces more wealth per capita than Fargo – more exchange leads to more wealth.
Yes. The world has losers. We have all lost.
It is clear that socialized/communist countries that seek to maximize employment end up reducing the average net wealth. Dynamic countries that guarantee nothing end up with more wealth AND more real employment.
First, I don’t see anybody doing that.
Second, your post is titled “Six Myths that are Killing the Republican Party.” One of your “myths” is that free trade is good for the economy. That is not a myth. You’ve claimed that free trade hurts manufacturing. That is a myth. Manufacturing has been growing. You’ve claimed that free trade has led to the reduction in well-paid manufacturing jobs in the US. That is a myth. The decline in manufacturing employment is due to increases in manufacturing productivity.
You’ve now conceded that this is a “perfectly legit economic position,” and are now arguing that it is a politically unwise position to take. Fair enough, but I would suggest that you should revise the second “myth” on your list to something along the lines of “Being honest about the cause of the decline in manufacturing employment will be palatable to voters who prefer to think that foreigners took their jobs.”
You sell dynamism by promoting freedom.
Its the same thing that is affecting jobs in every industry: productivity improvements.
Didn’t read the links did you? They back up that most of the loss in employment is due to off-shoring of manufacturing capacity.
You also ignore, completely, the stagnation/decline of middle class income coinciding with NAFTA and MFN Trading Status with China.
Because in many cases that is what happened. And it’s now the official policy of the US Chamber of Commerce to import *more* cheap foreign labor to replace American workers. Expansion of this policy is reportedly part of Obamatrade.
Best of luck.
Trade isn’t creative. It’s mutually beneficial in most cases, but it is not creative. It is also not productive. It’s an exchange where both parties benefit. Nothing is produced. There aren’t any new products in an exchange, two parties simply had differing values of some set of goods or services.
Someone inventing an inexpensive teleportation technology, which renders shipping and air travel businesses obsolete; that is creative destruction.
I shouldn’t have to point this out, but correlation is not causation. The decline in manufacturing employment coincided with a huge increase in productivity. We have consistently increased manufacturing output (and it should be remembered that the actual point of manufacturing is not employment, but production) while reducing manufacturing employment by increasing productivity. Foreigners aren’t taking the jobs. Computers are.
Teleportation is merely reducing the transport costs to zero. But if absolutely cheaper transport is creative destruction, then relatively cheaper transport is also creative destruction. Just to a lesser extent.
Making things available to people is inherently good. What they do with those things may or may not be good.
I read them. The first is from the union-funded Economic Policy Institute and contains no citations. The second is from Ralph Nader’s organization. The third is a NYT article which, despite its title, really isn’t about trade at all. Rather, it is about the dysfunction of the Mexican government.
Not that it will do any good, but I repeat:
My Free Trade Agreement:
America Shall engage in fully open and free trade with other countries where we do not have active embargoes.
No, it isn’t.
The canonical definition from Schumpeter:
There’s a categorical difference between creating a zero marginal cost transportation solution, like teleportation, and a slightly lower marginal cost transportation solution. Relatively cheaper transport isn’t a new process. It’s just slightly cheaper. That’s great, especially when 1% makes all the (profitable) difference, but it’s not game breaking or paradigm shifting.
Teleportation would be a 0 to 1 solution to transportation, where reducing marginal costs of an airline, or putting more butts in seats on a flight to make the flight more cost-effective, that’s refinement.
Creative destruction is about creating new processes, and is not on the same continuum as refinements to existing processes, even those which do similar things, and even new, paradigmatically superior products and processes, need not be even actually better than other existing offerings in the same market.
For example, Google was, at first, far outstripped by AltaVista and other search solutions, but Google’s machine-driven search eventually outclassed, by orders of magnitude, the competition. Even though they did similar things, Google’s offering was, and remains, categorically superior.
Replacing expensive labor with cheap labor is not creative destruction.
It is possible to accept economic dynamism as good without pointing and laughing at those who are losing out. Pointing and laughing at them implies an additional moral judgment against those who lose out, a moral judgment boosters of dynamism and free markets are not, in fact, required to make:
Those who point and laugh are actually those who believe that the economy is – or ideally should be – so un-dynamic as to leave nothing to chance, rigidly rewarding pure virtue instead.
But an opportunity society isn’t about purely rewarding virtue, because opportunities aren’t purely about virtue.
People blinkered enough to attribute all success to virtue and all failure to vice actually make me really mad. That kind of thinking is one of my pet peeves. But that does not prevent me from believing economic dynamism is a good thing – and there’s no logical reason it should.
It’s not t he same for all industries, and loss of jobs to cheaper foreign labor is an identifiable factor too.
THIS,
In the long run free trade is good for nations. In the short run it may not be. The problem is that most of us live in the short run. We live in days, weeks, months, years of humans. Not in the years, decades and centuries of nations. If I can not feed my family because “free trade” has taken my job and any chance I have to get a job, destroyed the infrastructure of my town. Then I can care less how free trade will make my country great in a decade or three or five after the pressures even out.
Everyone forgets the other side of Free Trade: cheaper goods. This is an immediate effect that disproportionately favors people with lower and middle incomes by making them materially richer.
Huzzah! Fall to your knees and praise the almighty because you can now get canned veggies for a nickel less a can, and someone will fix your 1992 honda for a $20 less.
Their lives are so much better! Let them be merry. Your falling wages and worsening future prospects are totally not problems. Be grateful you sorry bastards.
Right?
The U.S. in general isn’t a trade restrictionist regime although we do have more than our fair share of market distorting subsidies, particularly in agriculture.
I am all for eliminating any market distortions as soon as possible. I am not just not for doing so unilaterally.
We are a $17T+ economy and there are numerous protectionist regimes in the world that would like to sell more of their production either manufactured or agricultural. I don’t think we should ever give up anything unilaterally even if we do realize a near immediate short run benefit.
Whenever we have something the other guy wants it is our patriotic duty to break it off in them before they get it. Why not realize the benefits of cheaper goods and raw materials along with lower barriers to our trade.
Yes, yes yes!
And cheaper house paint!
IN PUCE!
You must be what Tom and Sal identified in their podcast as conservative who isn’t really a classical liberal in any meaningful sense.
Twenty years ago, intellectuals were assuring us that free trade would help the Chinese people become free. Now, it seems that isn’t so important anymore. My father worked as a machinist and was lucky enough to retire before he lost his job. The younger kids in my mostly working class family have had no problem forging good careers outside of manufacturing. I would support unilateral free trade if I really believed that it would benefit everyone in the long term, but has anything like this ever really been tried before in the real world? Or is it just a really cool theory that some economists really believe in?
Not necessarily true Jamie. We had classical liberalism long before we had “free trade”.
Ed- Free trade is one of the central tenants of Classical Liberalism.
For another interpretation (one which analyzes data beyond that available two days after the election) I would suggest you read Sean Trende’s analysis of 2012 voter demographics.
A key point is, “Romney’s problem was not with the Republican base or evangelicals (who constituted a larger share of the electorate than they did in 2004).”
Are you kidding? Adam Smith literally invented the concept of modern Free Trade. Adam Smith is the founding economist of Classical Liberalism.
What evidence do you have for your assertion?