The rhetorical trajectories of Washington can be bemusing to behold.
In the past week, the White House had taken up the mantra, “Party of No,” and this weekend even conservative leaning Sunday talk show panels and interviewers adopted the chant.
As in, when it comes to the president’s program for reviving the economy, all the Republicans can say is “no.”
Yes, the president wants another, how many more dollars packaged as what program now. Can you imagine? The GOP says “no.” We’re going to tax all those rich people. Again, the GOP says “no.” You get the idea.
But it is all a rhetorical fog. There are real choices on the table for dealing with the impending second dip in the economy. They are not between no and yes. They are between two distinct strategies for economic revival – and each strategy has a history.
Strategy A is what Washington rhetoric calls the “no” strategy: lower tax rates, reduced and restrained regulation, and cuts in spending.
Strategy B includes the administration and Democratic Congressional majority’s higher taxes not just on the “rich” but on nearly everyone. It also includes expansive and arbitrary regulation and unimaginable (until recently) boosts in spending.
As I say, both options have been tried repeatedly in modern times and with consistent results.
Strategy A was imposed on the Truman Administration after the GOP took over Congress in 1946. A boom followed.
Building on the legacy of spending restraint in the Eisenhower years, it was tried again when the Kennedy tax cuts went into effect, producing another boom.
It was the Reagan strategy in the early ‘80s, with the longest peacetime expansion in American history the result.
In a replay of the late ‘40s, the Gingrich Congress imposed a capital gains tax cut and spending restraint on Bill Clinton, again producing a boom.
How about Strategy B?
We can debate whether spending, taxing and more regulation helped during the early Roosevelt years. But, as Amity Shlaes reminded us in her now classic history of the Great Depression, The Forgotten Man, there was a second depression, a double dip, if you will, in the late ‘30s. That was when more taxing, spending, and expansive regulation were the policies of the day.
The late ‘60s and the 1970s saw major increases in spending, regulations (until the late ‘70s), and (through the interaction of inflation and marginal rates) taxes, ultimately producing the worst economic crisis between then and the Depression.
And today, again, we have a government well into that so often toxic policy mix.
It is an enduring rule of thumb that presidents need about a year and a half in office before they can be blamed or take credit for the state of the economy. They have to have enough time to win enactment and implement their policies. Then they must wait for those policies to work their way through the economy. For example, though passed in ’81, Reagan’s tax cuts were not implemented until ‘83, and that’s when the boom of the ‘80s began. Similarly, Bush owns the initial downturn and last year’s revival. Obama owns the double dip.
In other words, Mr. Obama and his Congressional allies want to keep to a policy course that has backfired every time it has been tried, including now. When another set of programs is put on the table, all they can say is “no.”
But that isn’t the whole story.
Republicans and increasingly Washington as a whole are taking seriously the prospect of the GOP controlling both houses of the next Congress. As Michael Barone notes in a typically outstanding column in this morning’s Real Clear Politics (see here: http://tiny.cc/x59z6 ), the result is that more and more GOP lawmakers and policy pros are asking Robert Redford’s question at the end of The Candidate: “What do I do now?”
At off-the-record dinner parties, over drinks, in meetings around this town, I have heard the same concern voiced. Are we ready to take power? With just a few more votes in the Senate we will be able reliably to stop the excesses of the Obama policies. And yes, with full control of the Congress, we may be able to define more of the national agenda. But do we have the ability to unite behind an agenda? Yes, there is the Ryan plan. And Gingrich has plans, too. But can we, as a party, agree on just one? What will be our specific spending cuts, our specific tax cuts (this one is easier, continue Bush’s), our specific cuts in regulation?
So with Washington’s June-July heat wave having broken and the hottest part of the political season just getting started, Republicans are in no way the party of “no.” Their real problem may be that they are the party of all too many “yeses”, with no clear path to arriving at just one.