Saturday, March 16, 2013

The Spending Problem


A number of conclusions may be drawn from the presidential campaign. Republicans, led by Mitt Romney, lost, and Democrats, led by President Barack Obama, won. That datum you can take to the bank.

Republican Party internecine quarrels arise over the “why” questions.  Why did Mitt Romney lose? Why did Mr. Obama win? What are Republicans doing right, and what are they doing wrong?

Within the Republican Party, there are two schools of thought. The schools are as old and venerable as the modern Republican Party, which sprang, pretty much full-blown, from the brain of the late Bill Buckley.

One school holds that Republicans are not moderate enough to appeal to moderate Republicans and Democrats. This premise founders on the following datum: In Connecticut, centrist Democrats have been routed by progressives, a progressive being a liberal raised to the 10th power. There is no longer a live and effective middle to Connecticut’s state Democratic Party. Most of the Democrats enjoying power positions in their party have abandoned the liberal ship for the progressive dinghy.

Some few commentators who continue to speak reverently of “the vital center” are simply remembering with great affection a political order that has vanished in Connecticut and, perhaps more broadly, in New England.

An opposing school holds that Republicans are not conservative enough. Moderate Republicans in the Northeast, they point out, are a vanishing species. In Connecticut alone, moderate Republicans have fallen to Democratic opponents in numbers too astonishing to ignore. U.S. Representatives Nancy Johnson, Rob Simmons and Chis Shays all were defeated in office by purportedly moderate Democrats who now style themselves progressives. Indeed, Chris Shays was the last moderate Republican U.S. House member in New England.

The fallen Republican bodies seem to cinch the argument of those on the right who say that moderatism – if one may invent a word – is responsible for Republican losses in the Northeast. A robust conservatism elsewhere in the country continues to produce congressional and gubernatorial winners. In Connecticut, the entire U.S. Congressional delegation is Democratic and progressive. Both houses of the General Assembly are dominated by Democrats. And in 2011, Dannel Malloy, for many years mayor of Stamford, became the first Democratic governor in the state since former Governor William O’Neill hung up his spurs more than 20 years earlier.

Running on a “shared sacrifice” slogan, according to which everyone in the state should bear their fair share of misery, Mr. Malloy was able, by cutting Republicans out of budget negotiations, to push through the Democratic dominated General Assembly the largest tax increase in state history. Some Republicans quipped at the time that Mr. Malloy, always an aggressive political competitor, may have felt himself in competition with former Governor Lowell Weicker, a self-styled “maverick” Republican who had imposed upon Connecticut the state’s second largest tax increase. The Weicker income tax had been resisted vigorously by previous Democratic governors William O’Neill and Ella Grasso.

Mr. Malloy’s promised savings were largely amorphous, which hardly seems a fair shared sacrifice. Even after he had imposed the largest tax increase in the state’s history, Mr. Malloy has had great difficulty balancing his budgets.

Recently Mr. Malloy has been criticized by Republican state legislators – two of whom, Larry Cafero, a member of the state House for 14 years, and John McKinney, a member of the state Senate for as many years -- as having adopted discreditable budget balancing methods, a charge deployed effectively by Mr. Malloy during his first campaign against his two Republican predecessors, Governors Jodi Rell and John Rowland. Like President Barack Obama, Mr. Malloy inherited his red ink.

Both Mrs. Rell, often criticized by Connecticut’s left of center media as an indolent governor, and Mr. Rowland, were styled as Republican “firewalls” who thwarted improvident spending. In truth, neither was effective in preventing the Democratic dominated General Assembly from readjusting Republican budgets to accommodate more spending. Taxation and consequent spending have increased under a Democratic regime that regards firewalls as momentary obstacles to be overcome.

Indeed, spending is a problem Republicans, both nationally and in Connecticut, seem powerless to confront. The rhetorical ammo that might be effectively discharged in a campaign against improvident spending is simply absent. The central pillar of the Romney campaign was not improvident spending but rather over taxation and consequent economic anemia.

The last president who put a sizable dent in spending, budget reduction and taxes was Calvin Coolidge, styled by Amity Shlaes, the author of “Coolidge,” as “the Great Refrainer.”  Even the sainted Ronald Reagan spent money like a class-warfare intoxicated Democrat; the federal budget rose by over a third during his administration. Connecticut’s Yankee Institute will host Ms. Shlaes, who believes Mr. Coolidge may serve a model for a reinvigorated Republican Party, at the Stamford Sheraton on March 28. Information is available here.

6 comments:

peter brush said...

spending is a problem Republicans, both nationally and in Connecticut, seem powerless to confront
-----------------------------
I believe that as of 1900, give or take, there was no conservative party. Not that Abe Lincoln gave us the modern federal welfare state, but his party's war for a "new birth of freedom" re-ordered the country under a stronger federal government dedicated to an abstract idea (equality). In the 20th century, the Republicans didn't initiate the welfare state's growth, but it did acquiesce. Eisenhower thought there was no political advantage in fighting against Roosevelt's statist achievements. Nixon and the Bushes added to them. But, what could conservatives do; vote for McGovern or Gore?
In the long run I'm pessimistic. I think the conservatives will continue to take over the Republican Party. And, I believe it stands the best chance of winning general elections with guys like Cruz, Lee, and Paul. A party in favor of the constitution's limits on federal power, and therefor in favor of, inter alia, less spending, and in favor of a strong defense but interventions more strictly related to our national interest can attract young people who are working and paying taxes. The Party doesn't have to insist on traditional marriage or the elimination of abortion. It can stand for the idea that the federal government's constitution has nothing to do with either. (Note; something has to be done about the usurpations of the Supreme Court.) But, demographics are simply working against us. The electorates in Connecticut, New York, and California are never going to be in favor of limited government. And, when Texas goes Hispanic there will be no chance for a conservative in the electoral college. Like Californians now, the entire country will be dreaming of the not entirely forgotten great country we squandered.
Just as an historical note, I think you're a bit unfair to Reagan. First, it has to be acknowledged that he never had a Republican Congress. Non-defense discretionary spending went down over his eight years in office. And, total spending, including his increases in military spending, declined as a share of gdp. Nor, did he give us any new programs or bureaucracies. (I wish he'd been able to get rid of Education and Energy, but alas...)
Slight unfairness to W. Bush as well. He did increase spending through expansion of the welfare state's education and medicare operations, but he deserves credit for making noises about social security reform and he deserves less blame for the spending increases under Pelosi/Reed 2007-08.

Don Pesci said...

You may be right about Reagan. The Democrats during his time backpedaled on a promise to cut spending by a ratio of 2 or 3 to 1.
During his address to the New York Economic Club, John Kennedy’s prescriptions -- http://donpesci.blogspot.com/2012/11/jack-kennedy-to-rescue.html#more -- were classic conservative: reduce costly regulations, cut marginal tax rates, etc. But it should be recalled that the purpose of his program was to generate money for additional social programs; after Kennedy’s assassination, President Lyndon Johnson used the increasing revenue to launch his Great Society programs.

In other words, conservatives won the economic argument – reductions in marginal taxation really do increase revenues by stimulating business activity – but they lost the ballgame, because increasing revenues are usually, the most dramatic exception having occurred during the Coolidge administration, folded into an increased spending plan.

It’s a problem: Under the pressure to use additional revenue for what some considered to be “good works” how do you reduce the upward spiral in spending?

peter brush said...

how do you reduce the upward spiral in spending?
------------------
It's my understanding that democrat socialist Canada is actually in pretty good fiscal position because it dealt with its mess in the nineties with spending cuts. Ed Koch used to call himself a liberal with sanity. As our governments in D.C. and in Hartford increasingly take on a dem socialist configuration, the best we are going to be able to hope for is that we have socialist pols with sanity.
But, again, I'm not optimistic. Our lefties insist on demagogue-ing against reforming the "entitlements." Guys like Paul Krugman seem to believe that government spending is in itself beneficial to the economy. And, the electorate in places like Detroit insist on running the ship into the ground.
But, then again, there's Texas, Indiana, Wisconsin, Oklahoma..., and their obviously superior self-government might inspire a resurgence of the John Kennedy Democrats.
-----------------------
Canada still has a large welfare state, and its provincial governments are prone to overspending. However, its experience shows that even a modest dose of public sector austerity combined with pro-market reforms can lead to substantial gains in private-sector prosperity. http://www.downsizinggovernment.org/canadas-economic-reforms

Don Pesci said...

Yes, the prime Minister in Canada is an avowed conservative, though it is true he does not fly that flag in an obstreperous manner. And Canada never had a housing problem. The country never devalued mortgage standards; Chris Dodd, primarily responsible for ridding the country of the last vestiges of Glass-Steagall http://donpesci.blogspot.com/2009/03/dodd-and-appearance-of-corruption.html, and Barney Frank were not in the Canadian Parliament. Had Obama wished, he could have made the respiration of the mortgage industry the central pillar of his presidential program; but he reached for the brass ring, Obamacare. In a democracy, you deserve the government you get. Conservatives have an evangelization problem.

peter brush said...

Canada v. U.S.A. comparison also requires some analysis of the cultures. The comparison, it seems to me, is not in our favor, if what we are looking for is patriotism and common sense. John Kennedy loved the country. Our new left establishment not so much. We don't have to be Joe McCarthys to acknowledge that the Howard Zinn interpretation of our country's history is anti-American. Canada's left has no need to flaggelate itself for Canada's role in the cold war. And, while Canada does e enforce multi-cultural political correctness (as witness its persecution of Mark Steyn for his perceived Islamophobia), it doesn't have the bitter race problems derived from our slavery/Jim Crow eras and their historical interpretation.
Canadian love of country stronger than ours, I believe, and therefor easier to get sensible, less suicidal, policies. Our new left is operating in bad faith with a goal of "fundamentally transforming" the country whether within or without the Constitution's limits and procedures. That the country didn't want Obamacare, that it had to be jammed down our throats, that it is an arrogant assumption of authority over a critical part of our economy, that it will be a complete bureaucratic disaster, and that it will cost a fortune to boot; all irrelevant to our Dem pols satisfied with mere political victory. They're running up trillion dollar annual deficits, acknowledging that Medicare is a looming disaster, but even now President Obama suggests we don't have a fiscal crisis, certainly not a spending problem.

Don Pesci said...

Good comments. I agree.