If you’ve taken a basic stats course, you’ll understand that probability means that even though the odds are in your favor, the long shot sometimes wins. Therefore, I’ll be out there on election day getting that vote to the polls. However, right now the odds are in favor of an Obama victory.
This means some good things for the Democratic party. Over the next four years, you’re going to see an economic recovery – although events in Europe may depress things further. In 2016, Hilary Clinton can run on good economic news and win. We might see the business cycle turn down for 2020; she should also get a second term – if the budget is in surplus, she’ll do well. By 2024, there will have to be a significant renewal of the Democratic party because being in office 16 years can breed a lot of complacency.
How can the Republicans counter this scenario? Sticking with the Tea Party is a guaranteed loss, mostly because their ideology is an inch deep and a mile wide. There just isn’t a lot of substance. However, there is a winning Republican ideology that used to be a tradition. It should be renewed for the 21st century. Here’s what it should look like:
- The free market can be a powerful force for economic growth. However, much of the economy isn’t really free. It’s not capitalism, it’s a plutocracy. The vested interests at all costs try to avoid competition and have influenced the government to limit it. No, you don’t want government interference in the market place, but it is the job of government to create the market place that’s equitable. A Republican government should level the playing field. This is a populist argument that could get them a lot of votes.
- There is a lot of hypocrisy on the part of liberals when they criticize corporations. I don’t have an exact figure, but I would estimate that over 70% of the American people have a vested interest in corporate health – the strength of their pension plans and other investments rely on that health. Some of the largest pools of investment money are held by pension organizations. Almost everyone is a capitalist with an investment in the health of market places.
- Sure, debt and deficit are sometimes bad things. However, the theory that if you reduce taxes the government will have to be smaller hasn’t worked for the last 30 years. Fiscal rectitude, another classic conservative argument, means that you don’t do what you can’t pay for. People understand that they have to balance their personal finances and they also understand that balance will require priorities and sacrifices. People also understand that it’s prudent to put away money for a rainy day. When times are good, a Republican government will run surpluses that are used to build contingency funds.
- The argument that there should be less government has triumphed over the argument for good government. Republicans should argue that they can do things more efficiently and provide services that are more satisfactory for the average citizen. Good government involves setting measurable objectives and meeting them.
- Driving cars fast is fun. Shooting an automatic weapon is fun. Riding a motorcycle without a helmet is fun. The problem with the nanny state isn’t just that it’s telling you what to do, but that it promotes a kind of New Puritanism antithetical to the much of the American character. The Republican agenda should allow for fun while limiting danger. Drive fast on roads like the Autobahn. Keep automatic weapons out of the home and only on gun ranges. Up the health insurance for riders who don’t wear helmets.
- Basic capitalist theory argues that free markets can only function if there is enough information so individuals can make logical decisions. You don’t have to regulate financial markets if those markets are truly transparent.
- The American economy is so dynamic because failure isn ‘t such a big deal for many entrepreneurs. However, their employees should have such risks minimized as much as possible: retirement plans, unemployment insurance, health care and so on have to be outside the control of the employer and part of a much larger pool of money that can equalize risk.
- Republicans are investors. The most important investments that a government can make are basic research and education – two jobs that government can do far better than the market place.
- Republicans encourage free enterprise. What would happen if those companies who move their operations overseas had to offer their abandoned plants for sale to their employees? We’ve see no encouragement of employee capitalism. These people have a vested interest in productivity and long term planning. If the free market is a good thing, then everyone should be encouraged to participate.
- Conservatives encourage rectitude and long term planning. Capital gains should be taxed on a sliding scale that recognizes a balance between long term investment and maximizing share holder value.
- Conservatives respect contracts. It is the height of hypocrisy that contracts with unions can be broken but private contracts are inviolable. Politicians were cowards when they signed those contracts – why should union membership suffer from that cowardice? Collective bargaining is by nature a substantive conflict that has consequences. Suck it up and face the conflict.
- Let the market play out. If a government goes into bankruptcy, then it should be treated like any other business. The debtors own the assets. Also, level the playing field – the outstanding dept of the employees pensions and benefits should count equally with those who bought government bonds. If this limits the ability of governments to borrow, then tough – again, politicians are cowards unwilling to face the conflict engendered by tough decisions.
- There is an argument for compassionate conservativism, but we have yet to see it in action. A Republican party would encourage it’s members involvement with those at the margins. This a basic Christian duty very clearly outlined in the New Testament. You have to respect Bill Gates and Warren Buffet, who actually try to make a difference, successful or not.
- Conservatives are pragmatists. If it works, then don’t fix it. The conservative argument for universal health care is containing costs. With 18% of GDP going to health care, there is a huge lost opportunity cost (a term from economics). What aren’t we doing that we could do if health care costs were reigned in? A conservative government would interfere on the supply side, tripling or more the number of doctors and specialists available and thus increasing competition.
- Republicans support the virtuous circle. Raising employee pay generates more demand. Increased demand increases profits. Increased profits are used to pay employees. Of course, there is an appropriate balance to this circle. Again, increased information improves functioning. If an employee knows that Costco pays their employees well rather than spend money on advertising, good employees will look for jobs at Costco.
- Conservatives use union labor for increased economic prosperity. What if a union workforce was a guarantee of quality and productivity? Unions should be responsible for educating and supervising their members so that such a guarantee is possible.
I could probably come up with more ideas, but sixteen is enough for now. I have no idea if any of the above is practical or useful. I know very little economic theory, so am open to revision.