ConservativeHome's The Republican

It's time for Republican candidates to creatively tap into the sentiments underlying OWS

Ryan Streeter
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Given the crazies that came out to launch the Occupy Wall Street movement, it was easy early on to dismiss the protests. We’ve seen protestors like this at WTO and other events disperse at the first sign of rain or cold weather, and besides, the protestors haven’t been able to say what they’re all about.

It’s also been pointed out that most Americans are paying attention to other things besides the protests. It has seemed only like a matter of time before they fizzle.

But new polling is showing that the more people pay attention to the OWS story, the more they sympathize with the protestors. This should give conservative critics of the movement some pause.

While only 22% of Americans say they are paying attention to OWS, according to Pew, that is up 5 percentage points from the previous week. When it comes to the news that Americans are following most closely, it’s the economy, but OWS follows close behind. The two stories are inter-related, obviously, and instead of turning Americans off, OWS seems rather to be attracting some sympathy.

Now, conservatives may complain that a sympathetic mainstream media is giving disproportionately favorable coverage to the movement, and that’s surely true. But it’s also irrelevant. The main thing to note is that Wall Street has been the perfect target, more than “the rich” in the abstract.

Americans are fairly divided on how they think about Wall Street. Pew’s political typology, constructed before the protests, shows that Americans think Wall Street hurts more than it helps the economy by a margin of 47-38.

 

A plurality of what Pew calls “Main Street Republicans” track with the national trend, 45-36. While conservatives generally think Wall Street helps the economy, the margins are not necessarily overwhelming. And if Pew were to do this survey again now, we would likely see even more antipathy toward the financial sector because of the coverage of the protests.

We would also see antipathy because of how things are going right now. Consider just two examples:

A new Gallup poll shows that Americans plan to spend on Christmas the same amount they spent last year. That may seem trite, but anticipated spending at Christmas is a fairly good indicator of how consumers feel about the economy and their place in it. No renewed confidence this year.

Second, as Alan Blinder writes in the Wall Street Journal today, foreclosures are keeping our economy in a slump, and yet there seems to be very little activity aimed at addressing the problem. Fannie Mae and Freddie Mac, not to mention big banks, seem to be back to the business of watching over shareholders while ordinary Americans sit amidst financial turmoil rooted in their slumping home values. Too many American voters are quietly suffering through this slump in ways that only fan the flames of resentment and anger toward Wall Street.

In terms of political leadership the only thing conservatives have going for them on this front is that Obama’s approval remains very low. He hasn’t gotten a boost from OWS. Americans have soured on his ability to lead us out of this economic mess.

So now is the time for conservatives to more vocally defend the sentiments underlying the protests and make clear connections between their tax and entitlement reform proposals and growth. They need to get ahead of public sympathy before they find themselves in a position of playing catch-up - which always makes you look desperate and insincere. Now is the time to be pointing out that the best way to handle the wealthy is to write them out of entitlements and get rid of their advantages in the tax code. And now is the time to talk about what to replace Dodd-Frank with – no one can say what the candidates think about that.

Whoever does this creatively will likely see a bigger boost in the polls than one might expect.

Who cares about upward mobility in America? Eric Cantor, that's who

Ryan Streeter
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I’ve pointed out before that upward mobility is a theme that Republicans don’t usually do a very good job promoting. Mitch Daniels and Paul Ryan are the only two Republicans who spend any time talking and thinking the topic.

The presidential candidates don’t talk about the issue, either, as I’ve also recently written. Matthew Continetti has admonished presidential candidates for their silence on the matter, especially since within their ranks there are plenty of good upward mobility stories.

Finally, today, there is another voice in the mix: Eric Cantor. The majority leader said today on Fox News Sunday that Republicans are “about income mobility and that's what we should be focused on to take care of the income disparity in this country.”  Cantor was obviously trying to show that Republicans sympathize with some cross-section of the Occupy Wall Street  protestors’ concerns. But he also went out of his way to make the important point that moving upward is something that goes hand-in-hand with America’s most basic self-perception. Others should learn from his example today.

The reason it’s important to talk about upward mobility is threefold:

Because ordinary people don’t care about GDP. Most of our discussions about “growth” terminate in chatter about that good old abstraction, per capita GDP – or just plain old GDP. But if the returns to productivity are enjoyed by a small group of people while everyone else is stuck, then what good is GDP?

Because ordinary people don’t care about just jobs. If the only jobs around essentially promise flat wages for years to come, you’ll find a lot of societal restiveness. Mobility assumes that vocation is more than just a job. It’s a way of life, made possible by an opportunity environment. Opportunity and mobility go together. Jobs and mobility don’t always.

Because people care about more than taxes, regulations, and government spending. Given how candidates talk, you wouldn’t know this. They all have a line on taxes, regulations, and government spending. But people want to get ahead, so they have to be sure that what political leaders and candidates are saying about these other topics will help them do that. So far, our political class hasn't done a good job of connecting their policies to these concerns. How does "broadening the base" or "lowering the corporate tax rate," for instance, promise upward mobility? It's as if presidential candidates and most congressional leaders haven't even thought about this.

People feel stuck. They feel anxious. They feel as though opportunity is shrinking. They want to know that aspiration will be rewarded by a society rich in opportunity and a chance to move up life’s ladder.

It would be nice if instead of 59 point plans or 9-9-9 plans, someone would lay out a plan based on the idea that upward mobility is something for everyone America. Cantor's remarks yesterday were at least a gentle nudge in that direction. Now let's see if he and his colleagues can turn it into a common theme.

Are Americans soft? Not in the way Obama says, but if we’re honest with ourselves, we could stand to toughen up a bit

Ryan Streeter
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Obama’s claim that Americans have grown soft has received a lot of justified criticism.

Having blamed his troubles on everything from ATMs to Japanese tsunamis to the Arab Spring to FoxNews, he’s finally resorted to going after you and me. As Byron York has written, he's frustrated that Americans aren't embracing his agenda, which makes them "soft." Apparently Obama wasn't satisfied with the backlash he got by telling black Americans they are complainers, so he decided to dish on everyone.

He's ended up looking a bit silly in all of this. But we shouldn’t let our criticism of Obama prevent us – even in these economically troubling times – from reflecting on the question of whether we have the moral muscle we need to confront our nation’s biggest challenges.

Here are four areas in our public life that suggest we could toughen up:

Welfare for me, but not for thee. Voters who want to see federal spending slashed are generally reluctant to embrace entitlement reform. Social Security and Medicare – not foreign aid, not green tech programs, not anything else – are what threaten to bankrupt us, and yet there’s little citizen activism aimed at reforming them. They are, after all, big social welfare programs that benefit us all. If we’re tough enough, we’ll embrace reform

Tax cuts for me, spending cuts for thee. Related to the first point, wanting lower taxes without wanting equal shares of cuts is a sign of softness. Republican candidates in 2012 are big on tax cuts and tax reform, but much vaguer about how they would trim spending necessary to go along with those cuts. That’s because that takes them into the domain of cutting things ordinary middle class voters like. Rather than lead, they accept our collective timidity at face value and run away from the issue. Read Tyler Cowen’s NYT column yesterday for more on this topic. If we want to get the government under control, lowering taxes is a key part of it, but so is cutting spending at levels that are serious. Are we tough enough for that?

Tax fairness for me, but not for thee. Obama talks about the rich paying their fair share because class warfare sells. But the truth, of course, is different than what he says: the percentage of federal taxes already paid by the richest Americans makes us one of the most progressive tax systems around – and that’s according to the OECD, not some right-wing group. In a republic like ours, the rich should pay more than everyone else, but everyone else should also pay something, and right now nearly half of us don't pay any income taxes. We all have a stake in the republic. But you see very little activism for this kind of fairness because it ultimately means a net increase in the income taxes that lower middle class families pay. Who’s willing to take a tough stand on this kind of fairness and justice? Republicans talk about "comprehensive tax reform" but avoid saying too clearly what it means for the half of America that gets off each April tax-free.

Productivity for thee, not for me. Before the recession, the percentage of working age adults who were actually working was dropping – so much so that we fell below the European average in 2007. Young adults aren’t forming families like they used to, and now the recession has exacerbated these troubling trends in our labor force and households. The ideals of independence, self-sufficiency, and enterprise have been under attack by liberal elites for some time, and now they seem to be eroding in a big enough swath of the populace as a whole that we should be deeply worried about the future workforce's ability to keep America headed in the right direction. But who really talks about these trends? It would seem too harsh. It's much easier to find a part of the population without much of a voice - such as poor people or immigrants - and accuse them of not embodying American virtues, than to look in the mirror.

Obama is wrong that people who don’t support his Leviathan strategy for America are “soft.” But we shouldn’t let our defense of ourselves prohibit us from asking the tough question: are we strong enough to deal head-on with the difficult times we're living in?

Where have the Republican reformers gone? Conservative voters haven't gotten the message about tax and entitlement reform - because candidates and politicians are too timid to talk about them

Ryan Streeter
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Conservative voters do a pretty good job of recognizing reformers when they see them. Last week, we reported that in our latest poll, voters pick Paul Ryan and Chris Christie long before they choose Rick Perry and Mitt Romney when asked who they think the best Republican reformers are.

What about the issues? We also asked them which of the following four reform proposals, which Republicans are pushing and Democrats resisting, are the most urgent. The results are as follows:

61% - Repealing ObamaCare and using market-based reforms to lower health care costs

20.5% - Imposing a moratorium on new federal regulations and repealing the worst regulations currently on the books

11.5% - Making entitlements such as Medicare and Social Security solvent

  7.5% - Lowering tax rates and removing most exemptions and deductions

 
We have consistently seen that even the most fiscally conservative voters become less conservative when asked about their appetite for reforming Medicare and Social Security. So the 11.5% figure on entitlements isn’t terribly surprising. Despite all of Paul Ryan’s charts, graphs, and videos, voters don’t feel as urgent about reforming entitlement programs as they do other programs that have a less negative effect on the deficit.

Tax reform, likewise, would have a profound effect on the economy. All evidence suggests that it would spur growth significantly. But it registers at the bottom among voters.

So why the high marks for repealing ObamaCare and, to a lesser extent, regulatory reform?

We didn’t probe respondents about motivation or intention. But I have a simple theory: ObamaCare and regulations are frequently cited on the cable shows and in the news as having a deleterious effect on jobs and businesses. And jobs are on people’s minds these day. Of course, part of ObamaCare’s negative ratings stems from the fact that people witnessed its creation amidst rancorous politics. But overall, the effects on the economy seem most likely to explain why repealing the health care law and regulations get higher marks than entitlement and tax reform.

This suggests that Republicans could do the entitlement and tax reform cause some good by making a clear economic case for doing so.

What these results also show, though, is that our candidates and political leaders have failed to make a persuasive case about deficit reduction. Entitlement and tax reform are the two pillars of deficit reduction - an unavoidable conclusion from the facts and from the recommendations of everything from Obama's deficit commission to the Paul Ryan budget.

The fact that urgency on this front is low is because our political class is too timid to be urgent about these issues. Case in point: the Social Security debate in the 2012 GOP race quickly became, and stayed, an exercise in political demagoguery. When's the last time our candidates actually debated the issue - as an issue?

Republicans need to hammer Obama's twisted view of fairness by offering a more compelling vision of their own

Ryan Streeter
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In their columns today, both Charles Krauthammer and Mike Gerson cite Obama’s claim in a 2008 debate that he would favor raising capital gains taxes, even though doing so would reduce federal revenues, out of “fairness.”

Krauthammer writes:

A most revealing window into our president’s political core: To impose a tax that actually impoverishes our communal bank account (the U.S. Treasury) is ridiculous. It is nothing but punitive. It benefits no one — not the rich, not the poor, not the government. For Obama, however, it brings fairness, which is priceless.

Obama’s record so far, Krauthammer argues, shows that the President has been fully committed to this retributional type of justice all along and has been willing to run up the deficit in its service.

Gerson writes:

Now Obama has offered his response to the fiscal crisis: maintaining unreformed entitlement commitments with a higher, more progressive tax burden in the name of fairness. This, he claims, is the only rational, disinterested choice — leaving Republicans to be mocked as unfair, irrational and self-interested. All reasonable people, it seems, are egalitarians.

Gerson writes that Obama’s Rawlsian liberal view of fairness – confiscation and redistribution for its own sake rather than its effects – has a philosophical opponent: the view embraced by leaders ranging from Lincoln to Reagan that understands justice as opportunity. This view, perhaps best articulated among Republicans by Jack Kemp over the years, holds that what is truly fair is a society in which economic mobility is open to all.

Republicans are still searching for a leader, both in the 2012 race and also in Congress, who articulates this view of the world in a compelling way.

And finding such a leader is important. Repeatedly defending lower taxes for high earners won’t work. Public opinion is on Obama’s side on this issue. “Fairness” is an a priori principle for most people, something Obama knows. Republicans need to change the debate, and it takes leadership to do that. They need to talk about how Obama favors an environment that is unfair for young workers. They need to talk about a just society as an opportunity society. They need to point out that Obama’s tax policy, however good it sounds, reduces resources for the safety net that those who can’t pursue opportunity depend on. In short, they need to show that Obama doesn’t really care about people. He only cares about sticking it to a class that’s easy to hate, even if everyone else doesn’t benefit.

In his speech today, Boehner puts his finger on what is keeping growth sluggish

Ryan Streeter
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John Boehner gave a very good speech this afternoon to the Economic Club of Washington, DC.

The best line:

Job creators in America are essentially on strike.

There’s a lot to this statement. People have been talking for awhile (myself included) about how “uncertainty” keeps capital “on the sidelines” and entrepreneurs “on the bench.”

Sometimes the talk about uncertainty isn’t specific enough. The problem isn’t uncertainty per se. Rather, it’s uncertainty that stems from the fact that government doesn’t just issue countless regulations (though it’s certainly been doing that) or that it’s unclear what kinds of taxes and health care costs we’ll be shouldering in a few years (though it certainly is that, too), but that government is becoming more and more intrusive. And that intrusiveness is especially bad on smaller companies. When government intrudes on big companies, it’s usually to save them from their own foibles and mistakes.

In what should be Economics 101, but probably strikes the Obama Democrats like some kind of Zen puzzle, Boehner takes an obvious swipe at one of Obama’s jobs proposals and says:

Businesses are not going to hire someone for a $4000 tax credit if government mandates impose long-term costs on them that significantly exceed the temporary credit.  In recent years, such mandates have been overwhelming.

He then goes on to say that small business have:

• been hurt by a government that offers short-term gimmicks rather than fundamental reforms that will encourage long-term economic growth.
• been hampered by a government that offers confusion to entrepreneurs and job creators when there needs to be clarity.
• been undercut by a government that favors crony capitalism and businesses deemed ‘too big to fail,’ over the small banks and small businesses that make our economy go.
• been antagonized by a government that favors bureaucrats over market-based solutions.
• been demoralized by a government that causes despair when we need it to provide reassurance and inspire confidence.

He then concludes:

My worry is that for American job creators, all the uncertainty is turning to fear that this toxic environment for job creation is a permanent state.

Unfortunately, there aren’t too many Democrats anymore who understand the psychology of enterprise in this way. Businesses don’t just “do business and make money.” They make decisions about whether and how to invest in people, new products, new ventures. If governments constantly signal that productive activity might (just “might,” not even “will”) be called into question and considered punitive, they’ll sit out new opportunity.

It’s happening every day, all around us. A few hours in the heartland talking to people at a Starbucks will drive the point home. I’ve done that. Others in Washington should give it a try, too.

Ten records Obama has set on his watch

Ryan Streeter
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The graphic in Michael Boskin’s Wall Street Journal op-ed today is worth dwelling on:

A few observations:

• It’s probably time to drop the World War II phrases and compare the present to periods of time when we weren’t coming out of a war that had a defined end. The budget and deficit, etc., are really worse than since before the war – or maybe ever.
• The lower homeownership rate probably doesn’t belong in there. Yes, it’s a disquieting data point on its own, but considering that we had too many people buying homes who, frankly, shouldn’t have done so means the downward adjustment may actually be a good thing.
• That said, just about everything else hangs around Obama’s neck. His policies, not the recession he inherited, are directly implicated.
• The final two points are more troubling than most people think. Together, they paint a picture of America’s growing inequality and class divide: between makers and takers, as Paul Ryan likes to say.

Stand still long enough, and you’re likely to get hit by a jobs plan: here are two more worth a read this morning

Ryan Streeter
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For a thoughtful take on why we're in a mess and what will work, read Richard Epstein today:

So, returning to our original question, what should be done to improve our economic situation? There are only two approaches that will work. The first is to lower marginal tax rates at the top, which might induce investments from those who have money. Second, and more importantly for the short run, is to put fiscal and monetary policy on the backburner while proactively removing the senseless blockages in the labor markets.

His article is at Hoover here.

Also, it's always good to read a thoughtful candidate for public office on this theme. Ted Cruz is a sincere, talented, and promising candidate in Texas for U.S. Sentate. While his ideas can be found in some of the plans floating around out there, his piece at NRO today is worth reading, in which he lays out his own 12 point plan. It's a good gauge for how Tea Party-friendly candidates are looking at the issues:

1. Repeal Obamacare
2. Kill cap and trade
3. Protect right-to-work states from NLRB
4. End off shore drilling moratorium
5. Curb EPA's authority
6. Repeal Dodd-Frank
7. Take corporate tax rates all the way down to 15%
8. Flat tax or fair tax
9. Entitlement reform and overall decreases in spending
10. Rein in the Fed
11. Allow SMEs to opt out of Sarbanes Oxley
12. Balanced budget amendment

Jon Huntsman 1, Mitt Romney 0: The unelectable former governor of Utah has a better economic plan than the electable former governor of Massachusetts

Ryan Streeter
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Mitt Romney’s plan for the economy reads like a boardroom presentation at a weekend-long board retreat in Aspen. There are 59 aspects to the plan, it’s comprehensive, it leaves no corner of the economy behind. It’s got Glenn Hubbard behind it. It’s 160 pages with 5 pages of footnotes.

Jon Huntsman laid out his plan in 12 pages. No renowned economists, no footnotes.

Romney and Huntsman each hawked their plans on the op-ed pages of national dailies yesterday: Romney in USA Today, Huntsman in the Wall Street Journal.

So Romney’s op-ed was sitting at the door of most mid-range hotels around the country, while Huntsman’s was on the credenza with the potted flowers near the concierge in the nicer hotels.

The irony is that most of the entrepreneurs and medium-sized business owners who scooped up the USA Today copy outside their doors in the Hampton Inn yesterday morning would do better under Huntsman’s plan. The corporate executives who picked up their Wall Street Journals on the way out of the Four Seasons could be forgiven for having missed Romey’s plan, which was written for them.

Here are the main differences between Huntsman and Romney:

• Huntsman leads his plan with a cut in the individual tax rate to 8%, 14%, and 23%, which helps entrepreneurs and young firm owners who don’t pay the corporate tax rate.
• Romney keeps individual marginal rates the same. He says the tax rates President Bush fought for are “just as important today as they were a decade ago.” Romney prefers instead to cut the corporate rate to 25% (so does Huntsman).
• Huntsman says kill all the loopholes and exemptions in the tax code. All of them. Every single one. They generally benefit the affluent and have nothing to do with fairness.
• Romney’s plan says “In the long run, Mitt Romney will pursue a conservative overhaul of the tax system that includes lower and flatter rates on a broader tax base.” That’s political-class-speak for “I believe broadly in these principles and have absolutely no intention of acting on them.”
• Huntsman makes a priority of patent reform.
• Romney ignores patent reform.
• Huntsman abolishes capital gains taxes once and for all, under the principle that such taxes are double taxation.
• Romney keeps capital gains where they are, but promises as President to get rid of them with an adjusted gross income of under $200,000. Many entrepreneurs will fall above this threshold but not be anywhere close to “rich.”

One thing neither plan had, however, was more stimulus spending or class warfare-based tax policy that one can expect to see in President Obama’s job speech tomorrow. The likelihood of Obama putting forward a pro-growth jobs agenda is about as likely as the Blue Dog Democrats doubling their numbers in Congress in next year’s election. The Huntsman and Romney plans would both be better than whatever our President will propose.

The most detested industry in America - the federal government

Natalie Gonnella
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With plunging consumer confidence and unemployment resting comfortably around 9%, it's no surprise that Americans are more than a little frustrated with the federal government lately.

And with just 17% of voters holding a positive perception of Washington's recent performance, according to Gallup's 2011 industry approval poll (surveying Americans' views across 25 business sectors), the federal government officially takes the title this year for the most negatively viewed industry in America.  

Displacing the oil and gas industry for the lowest position on the list, overall, Gallup notes that:

The images of the federal government and the real estate industry have dropped the most over the past decade. The percentage of Americans rating the government positively has declined 24 points since 2003, and the real estate industry's positive ratings have fallen 23 points since 2001. Other sectors with double-digit drops include the banking sector, education, accounting, and healthcare.

The full analysis from Gallup's 2011 industry survey is available to view here.