How I’d Revive the Middle Class

December 12th, 2011 at 3:43 pm David Frum | 52 Comments |

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“Easy for Me to Say” is a FrumForum feature series in which David Frum answers reader questions about political issues. Readers are invited to pose questions that take the form of: “OK – so what would you do instead of this or that politician you’ve criticized?”

Questions should be e-mailed to editor [at] frumforum.com with “Easy for Me to Say” in the subject line.

In my column for CNN, I discuss economic policies that can help the American middle class, in response to question about my column in The Week on the President’s Kansas speech:

Realistically, the president’s Kansas speech translates into a formula of higher taxes on the rich to pay for more spending on favored Democratic public-sector constituencies. But what about the much larger private-sector middle class? Does the president have anything to offer those people — aside from the promise of a bigger government that might hire somewhat more people to enjoy the superior retirement packages offered to government workers?

Short answer: No.

What would a serious plan to improve middle-class incomes and opportunities look like?

It would start by addressing the way in which middle-class income is drained off before it ever reaches the middle class.

During the last expansion, the cost of labor to employers did rise. It’s just that virtually none of that additional money flowed through to raise wages. Over this decade’s expansion, the cost of employing labor rose by an average of 25%. None of this money reached employees. Every dime was intercepted by rising health care costs. For wages to rise again, health care costs must slow. We saw that happen in the 1990s: HMOs controlled health care costs, employees got raises.

Health care is such an important part of the income story that you could almost stop there. Yet there’s a second piece: college costs. Higher education costs have been rising more than twice as fast as inflation, faster than almost any purchase except health insurance. It was often to pay those rising costs that families accepted the home equity lines of credit and second mortgages that contributed so much to inflating the housing bubble.

At the same time as reducing costs for middle-class families, actions can be taken to take to boost incomes.

Over the past two decades, the U.S. has lost global market share, especially to China. One of China’s most important tools has been the manipulation of its currency, which it has held artificially cheap compared with the dollar.

If China tried to gain global market share by subsidizing its exports direct from the Chinese treasury, such subsidies would trigger U.S. retaliation under global trade rules. However, global trade rules do not apply to subsidies created by monetary means. Through this anomaly, the U.S. has outsourced more jobs than it would have if China’s currency had moved freely, like the euro or the yen. It’s time for the U.S. to reconsider its casual attitude to monetary manipulation. A more expensive yuan would slow and possibly even reverse the flow of jobs across the Pacific. If the yuan goes up, Chinese exports decline and U.S. exports rise. More work is done in the U.S., meaning more jobs, spurring a higher demand for labor and higher wages.

Click here to read the full column.

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52 Comments so far ↓

  • Nanotek

    “How to Start Reviving the Middle Class”

    vote the Republicans, who have relentlessly waged a 16-year class war against the middle class, out of office

    “Does the president have anything to offer those people — aside from the promise of a bigger government that might hire somewhat more people to enjoy the superior retirement packages offered to government workers? Short answer: No.”

    the President’s plan to rebuild America’s failing infrastructure … bridges, highways, etc. … belies that claim

    • dittbub

      I agree. I don’t think it matters who the president is (unless Gingrich is nominated). It seems much more important to elect responsible house and senate members.

    • Reflection Ephemeral

      As does the ACA: http://www.tnr.com/blog/jonathan-chait/86447/the-affordable-care-act-did-happen

      Below this sentence, everything’s from Jon Chait, except blockquoted stuff, which is from Ezra Klein.

      Ezra Klein, responding to the widespread perception that Paul Ryan has a plan to tackle medical cost inflation and Democrats don’t, points out that this is the opposite of the truth:

      The Affordable Care Act’s central hope is that Medicare can lead the health-care system to pay for value, cut down on overtreatment, and cut out treatments that simply don’t work. The law develops Accountable Care Organizations, in which Medicare pays one provider to coordinate all of your care successfully, rather than paying many doctors and providers to add to your care no matter the cost or outcome, as is the current practice. It also begins experimenting with bundled payments, in which Medicare pays one lump-sum for all care related to the successful treatment of a condition rather than paying for every piece of care separately. To help these reforms succeed, and to help all doctors make more cost-effective treatment decisions, the law accelerates research on which drugs and treatments are most effective, and creates and funds the Patient-Centered Outcomes Research Institute to disseminate the data. If those initiatives work, they head over to the Independent Payment Advisory Board (IPAB), which can implement cost-controlling reforms across Medicare without congressional approval — an effort to make continuous reform the default for Medicare, even if Congress is gridlocked or focused on other matters. And if they don’t work, then it’s up to the Center for Medicare and Medicaid Innovation, a funded body that will be continually testing payment and practice reforms, to keep searching and experimenting, and when it hits on successful ideas, handing them to the IPAB to implement throughout the system.The law also goes after bad and wasted care …

      Keep in mind that the Congressional Budget Office made the very conservative decision not to assign savings to these measures, on the assumption that since they had never been tried before, there was no way of measuring how well they would work, so it gave them no financial savings value. And the Affordable Care Act also included a limit on the tax deduction for expensive health insurance, a powerful cost-saving tool that the CBO did score.

      But to zoom out for a second, what Klein’s identifying here is part of a larger phenomenon. It’s not just that the debate about health care costs seems to take place as if the ACA never happened. The entire political debate seems to take place as if the ACA never happened. …

      The deficit hawks embrace Paul Ryan’s plan as a starting point of a debate about deficit. (David Brooks today: “Because he had the courage to take the initiative, Paul Ryan’s budget plan will be the starting point for future discussions.”) But of course the ACA was not just a starting point but an enormous stride forward. Ryan proposes to undo much of it. Yet he is the courageous leader, and his critics passive observers.

      What happened? The details of the ACA’s cost-containment are wonky, and few people paid attention to them. Staunch liberals either didn’t care about cost containment, or devoted their energy to agitating for more sweeping alternatives. Moderate liberals supported the measure, but, taking their cue from policy wonks, took the very honest posture of conceding that some parts might not work as planned, and thus contributed to a massive asymmetry of passion. Centrists simply assumed that any deficit plan that wasn’t a grand bipartisan deal could not be a real deficit plan, since their fundamental premise is that a grand bipartisan deal is the only way to address the deficit. And the whole health care issue was sucked into the vortex of an unhinged debate, so that millions of conservatives understand the whole package as nothing more than an assault on freedom, with little or no grasp of the particulars.

      The end result of all this is a debate around an issue with a peculiar backwards character.

      • valkayec

        Over the weekend – or maybe last Friday – Uwe Reinhart wrote a NY Times Economix post that I thought was terrific. First of all, he said he’d been studying and writing about health care costs and how to reduce them, but he received so many comments against ACA that he began thinking about how to fix the system to mollify those against ACA.

        What he laid out, and linked to, was the German system in which German workers can choose the government plan or a private plan which is a bit more expensive or nothing at all. However, if the worker earns less than something like $44k/yr, they have to choose to be covered. Above $60/k, they don’t have to purchase anything. But here’s the kicker, if they choose to go private or nothing at all, they’re locked out of the government plan permanently unless, of course, they’re flat broke.

        Second, if a person decided to go with the government plan, the worker got to choose from a variety of tightly regulated insurers whose premiums were based on regional demographics, kind of like how US insurance companies determine policy pricing. The company they work only acts as the collector of premiums which they then pass along to the insurance company.

        Mr Reinhart in an unusual move for bloggers chose to interact with those who commented on his blog post, responding and answering questions. One person continually repeated that government should never, ever get involved in health care; that it wasn’t in the Constitution; and that private businesses were better able to handle the costs through competition than government regulation. Well, I guess Mr. Reinhart got a bit fed up. So, he said, great, have it your way; but please wear a metal wrist bracelet saying you refuse all emergency medical care that you individually cannot pay for and that you should be allowed to die if you haven’t the money to pay for treatment. That person immediately ended all further comments.

        If you’ve a chance, I recommend reading his Economix blog post and all the comments.

    • CautiousProgressive

      vote the Republicans, who have relentlessly waged a 16-year class war against the middle class, out of office

      Does this type of highly-partisan oversimplification really help?

      While Republicans have long defended an economic position that is poorly informed, they advocated it out of sincere belief. Villainizing them does no good for you or them.

      • sweatyb

        vote the Republicans, who are too stupid to realize that they have been relentlessly waging a 16-year class war against the middle class, out of office

        I don’t think that makes it sound better.

      • Reflection Ephemeral

        While Republicans have long defended an economic position that is poorly informed, they advocated it out of sincere belief. Villainizing them does no good for you or them.

        You argue that Republicans don’t care enough about America, America’s future, or Americans’ lives enough to sit down and think & learn about real life for 20 minutes before they spend their careers and lives defending a “poorly informed” economic position. In that case, shouldn’t they should be constantly rebuked from all sides for their lack of patriotism?

        Lack of effort in ascertaining whether one’s views make any sense precludes the possibility that these views are “sincere”.

        • balconesfault

          Does this type of highly-partisan oversimplification really help?

          In economic terms … it’s not a significant oversimplification. Policy after policy has been rolled out with not only the effect, but the intent, of reducing the burden of taxes paid by the wealthy (which inevitably shifts the burden either to borrowing, or to the middle class), of reducing the social safety net (which at best bleeds the middle class with a thousand little cuts … and at its worse sends the middle class wage-earner into bankruptcy if they encounter significant bad luck), of making it easier for financial institutions to prey on those with less economic leverage, and of gutting the labor unions, which were instrumental in the rise of the American middle class.

          I wish it were simply bad thinking that is the cause of GOP policies being directly harmful to the economic interests of the middle class. But I have become convinced that it is more a matter of at best a completely cavalier attitude towards middle class prosperity as the GOPs economic policy has primarily been to empower and enrich the wealthy.

      • Nanotek

        “While Republicans have long defended an economic position that is poorly informed, they advocated it out of sincere belief. Villainizing them does no good for you or them.”

        CautiousProgressive — respectfully, we differ … I don’t regard it as simplification or villainizing … but you may be right and I hope you believe that if it comforts you

        volunteer at a soup kitchen this Christmas and explain to former vets, former middle class people standing in line with a child looking up at them in confusion … tell them how sincere the Republicans are regarding them … the suffering of others is always easier to endure than one’s own

        as for sincerity … it is like greatness … it can apply to the good and the bad

  • Sinan

    David…nothing will change for us until the massive debt overhang is either paid down or forgiven. Personal debt dwarfs public debt. Professor Kean has made a career out of pointing this out to economists all across the land. The middle class is broke because their incomes did not increase to cover their expenses which were fueled by increased debt not top line income growth. The left sees this as a critical issue that needs to be addressed or we will end up going down the same path which is more personal debt to fuel more consumption. Because most of the income and wealth is concentrated in a few hands, there is no where to go to fund this retrenchment unless you increase labor costs via the W2 or you use progressive taxation to smooth out the inequalities in income distribution. The key is what is the best way to use extra tax revenue to get incomes going again for the middle class. Most economists would say that a massive infrastructure program would be a smart investment. Many also talk of education investments but I think we still miss the boat on this one by focusing on college education. We should be training folks in the trades as well. Bring back trade schools and the highly skilled laborer can compete. The final nail is to control competition by getting a handle on immigration.

  • camus32

    I must have missed something . .

    What’s the suggestion/plan/path for reducing college costs? In what direction should we look for a solution? Stating it as a goal doesn’t advance us much. Especially after we just pooh-poohed the idea of spending more on education.

    As for Chinese “currency manipulation”, sounds a lot like routine China-bashing

  • beleg

    “Realistically, the president’s Kansas speech translates into a formula of higher taxes on the rich to pay for more spending on favored Democratic public-sector constituencies. But what about the much larger private-sector middle class? Does the president have anything to offer those people — aside from the promise of a bigger government that might hire somewhat more people to enjoy the superior retirement packages offered to government workers?

    Short answer: No.”

    Drawing a stark line line between the people who will benefit from Obama’s policies and the private sector middle class is surprisingly dishonest of you.

  • Holmes

    It’s the Frum two-step again. Step one: falsely characterize Obama’s proposals. Step two: proffer simplistic nonsense in its place. If this is any indication, Republicans steadfastly refuse to come to terms with the damage caused to the middle class and cynically imagine they can bamboozle us with this sophistry. Pitiful.

    • ottovbvs

      ++1…it is double talk. He completely mischaracterised what Obama proposed.

      • Baron Siegfried

        It’s sad to see the depths to which an alert and agile mind will descend to defend the indefensible. David, I am sorry to say, must begin a journey to Damascus ( please contact the State Dept for clearance) to achieve enlightenment, receive a revelation, or suffer sunstroke (any of the above will work).

    • nuser

      @Holmes
      It is the Frum-two step again.So many have posted here , how Frum is really a Democrat in
      republican clothing. He is not and never will be.

  • esmoore

    Sounds great, very insightful. Lower healthcare costs, lower education costs, get the Chinese to do something we’ve been trying to get them to do for years. Who knew it would be that easy?

  • Oldskool

    “This is what we all want — Republicans as well as Democrats”

    If actions speak louder than words, an impartial observer would have to disagree after seeing how close to disaster Rs have been willing to push the country this year.

    I didn’t see the housing market mentioned which has probably decimated the middle class more than anything else.

  • balconesfault

    From the article:

    The U.S. already spends more on high school education than any advanced society except Switzerland and Norway, and considerably more than such egalitarian societies as Austria and Denmark.

    This is what happens when one is unable to hold two thoughts in their head simultaneously.

    Worse yet … when those two thoughts are even included in the same article.

    In one place in the article David notes that healthcare costs are increasing the cost of labor in the US by around 25%. In another place, he compares how much we spend on educating secondary school students with a bunch of countries.

    If you look to the chart he links to in the article, you’ll note that a lot of those systems we “outspend on education” have national healthcare systems which pick up the tab for healthcare instead of leaving it to the education dollars to do so.

    Hmm … perhaps the fastest step to becoming competitive globally is just moving to a single payer system, and dropping our labor costs by 25%, and raising taxes on the hyperwealthy to help pay for the national healthcare system?

    • Primrose

      It seems to me a single payer system is the way to go, though I don’t see it ever happening. My husband was recently downsized and when we have to pay for healthcare again it will be 1500 hundred dollars (possibly 1800) This is more than our mortgage (though not including taxes and insurance). Plenty of families don’t make this much monthly. It is a major, major drain.

      • ScienceChick

        The federal health insurance programs are capped at $500 a month, and they pay 80% of your costs, with preventative care completely covered. There’s also some assistance available – check out

        http://www.irs.gov/individuals/article/0,,id=109960,00.html

        For crying out loud , for all the talk about the ACA around here, doesn’t anyone know that it actually helps people?

  • Frumplestiltskin

    esmoor, lol. As to China’s exchange rate, it has already gone from 8.26 to 1 to 6.36 in just a few years, I have no idea what David imagines would be equitable. China has to pay higher for oil, if they revalued their yuan then oil would be much cheaper for them as oil is priced in dollars. The reason why China doesn’t let their currency float is because they have a ton of dollars and would get killed and they also believe, rightly or wrongly, in price stability whenever possible. As to the true value of the yuan, there is no way in hell David knows because their financial system is so opaque. How much debt do the SOE’s have? What is their true employment situation? If China truly opened up then their currency could very well devalue, not that the Chinese would ever let us know their true financial situation.

  • armstp

    that is an old photo. before the hair plugs.

  • valkayec

    Mr. Frum, again I will point out that you previously have advocated for increased investment in education and infrastructure. Now, you wish to say these investments would only increase public sector employment while ignoring all the people who would be employed by these investments as well as all the people who would be employed in allied and surrounding businesses. Besides, we need the work done!

    As to your points on health care and college education costs and how they have negatively affected American workers, you’re correct. But you failed to offer any policy prescriptions, i.e. how to reduce those costs. If we follow the GOP plan, nothing will be done. They’ve all made that abundantly clear because there is a general misconception amongst the GOP that the health care market functions according to free market rules. Yet, anyone with any health care policy expertise says this market does not all function as a normal market. It’s not transparent enough; consumers aren’t able to rely upon comparison shopping, especially during emergencies; and lack of information on best practices.

    Yet, one can reasonably assume that until unemployment is significantly reduced (to say 4 or 5%), wages will not increase regardless of any savings in health care costs. Too much employee supply; not enough demand. Since the Wall St collapse, middle income wages have decreased several percentage points, from nearly $50K/yr down to $44K/yr. Surely, health care costs to companies have not increased per employee by $6K/yr since the start of the recession?

    On education, the cost of a college education may be the greatest factor in why the US has gone from having the highest number of college graduates post WWII (ranking at #1) to 11th now in the number of college graduates. Moreover, we’re not graduating enough students in STEM categories even to meet current domestic demand. So, instead of less money in education, we actually need a great deal more in part to decrease the drop out rate at the college level – and too we have to start figuring out what to do about the rising education costs and why those costs are rising several times faster than inflation.

    As for the yuan, it’s estimated that it will rise much faster than in the past as China will be forced to depend more on domestic consumption as the world economy slows as a result of the Euro mess. Moreover, a rising yuan does not automatically translate into more domestic jobs. Already many Chinese-American factories are closing as employment costs in China rise, sending American companies to other poorer SE Asia countries.

    If you really want to increase domestic manufacturing and employment, you could start by changing tax policy. You know, that little known exemption that provides tax credits to foreign investments and makes it pay to export jobs.

    While you have some good thoughts on the reasons why the problem of middle income worker decimation, I don’t believe you’ve thought it through far enough. I suspect your vision needs to widen enough to allow you to imagine what the country should look like in 25 or 50 years, not just politically or economically but also physically. JFK laid down a vision for America with his inaugural speech that enabled Americans to see a physical future for the country. Look at all the accomplishments since that day; they’re literally mind-boggling. So, perhaps you too should let your imagination expand to envision a new physical future for the country you’ve adopted.

  • SpartacusIsNotDead

    Frum wrote: “[A] serious plan to improve middle-class incomes and opportunities . . . would start by:

    * health care cost containment
    * college cost containment
    * a push back against Chinese currency manipulation
    * reduction in payroll taxes to be recouped by taxes on consumption or carbon pollution, preferably the latter.

    I think the proper response to this is, “No sh*t, Sherlock.” Being able to identify the problem is not the same thing as being able to address the problem.

    The problem that Frum and, before him, Noah Kristula-Green, have is that it’s impossible for them to come up with rational, effective policy prescriptions to address these problems that aren’t already being advocated by Democrats. But since their devout tribalism prevents them from supporting Democratic proposals they can do no more than agree that the problems Democrats are working on are the right problems.

    If Frum really wanted to help solve these problems he would acknowledge that Democrats have much better plans and he would then encourage his fellow Republicans to try to improve upon those plans and then pass them.

    • balconesfault

      If Frum really wanted to help solve these problems he would acknowledge that Democrats have much better plans and he would then encourage his fellow Republicans to try to improve upon those plans and then pass them

      I think that in some ways, that’s the point of this site. The problem is that his “fellow” Republicans are innoculated to the point that anyone who supports a Democratic plan … even a Democratic plan that was formerly a Republican plan … gets evicted from the farm.

      • Reflection Ephemeral

        It’s actually worse than that.

        Frum was kicked off the farm after disagreeing with the (longtime Republican ideas in) ACA, but doing so in a manner that suggested that Republicans should have chosen different tactics in order to achieve a more congenial policy result. See: http://www.frumforum.com/waterloo He was fired from AEI, the Republican PR firm where he’d worked for 7 years, within about 72 hours, because Republican affiliation involves an emotional state, not a political philosophy. Frum didn’t emote about fascism and death panels, so he was excommunicated from conservatism.

      • SpartacusIsNotDead

        I agree that Frum’s intent with this site is, in part, to encourage GOPers to improve upon Democratic ideas, but at the end of the day a choice has to be made. Do you endorse legislation that is a dramatic improvement over the status quo or do you remain silent (or oppose) the legislation merely because it’s from the Democrats?

        Frum chose not to endorse the ACA, but I firmly believe that had the exact same plan been advocated by the GOP he would have soundly endorsed it. That is why I think Frum is actually worse than many of the other GOPers who happen to be too stupid to do the right thing. Frum knows the right course, but he refuses to take it simply because of tribalism. Incidentally, that is no doubt why he didn’t become openly critical of the GOP until after McCain lost the election. Had McCain won, Frum would have kept his criticisms to himself and allowed the GOP to continue down its woeful path.

  • SpartacusIsNotDead

    Frum also argued that increasing infrastructure spending won’t help the middle class because such spending has the effect of increasing productivity and productivity already went up from 2002-2007 and yet the middle class suffered during that time.

    This is the kind of argument one expects from a dummy. It’s true that infrastructure spending increases productivity and all increases in productivity do not result in benefits to the middle class. But, it’s also true that infrastructure spending puts people to work building that infrastructure and that the increased employment will benefit the middle class, irrespective of what happens to the productivity rate.

  • weiwentg

    Frum’s core analysis, that middle class income is siphoned off by health care and education, is spot on. However, it’s odd that he criticizes Obama for not coming up with a good solution, and then he fails to offer one himself – unless of course, he was planning on discussing specifics in another article.

    As another poster here pointed out, the Affordable Care Act takes a significant first stab at reducing healthcare costs in the long run (or at least slowing their growth). I think that as experience develops with integrated care models, government and industry can both work towards slowing cost growth by maximizing efficiency. It’s going to be a challenge, but this was a significant step up from the status quo. If you read the CBO score, we essentially covered the majority of the uninsured at the cost of some additional taxes and various provider payment cuts – and any gains from increased efficiency in the system will be gravy. CBO declined to score most of the delivery system reforms because they don’t have precedent to assign a savings estimate, but experts generally agree that at least some of the reforms will save money.

    Many conservatives won’t think that that’s enough, but I would say work with us on this – this is one area where you need government to set the rules of the playing field and to oversee them. If you simply gave beneficiaries the money and told them to work it out, insurers and providers would simply focus on their own bottom lines and they would underinvest in the public goods, like comparative effectiveness research and interoperable HIT, that the health system needs to become more efficient.

    As to education, OK, the administration hasn’t offered anything substantive and I’m stumped too.

    Like SpartacusIsNotDead, I agree that Frum is underestimating the positive impacts of infrastructure spending. It will create jobs for actual folks, and you usually won’t need an overpriced college degree to do those jobs. I actually thought Frum would agree in principle with infrastructure spending.

    • balconesfault

      Many conservatives won’t think that that’s enough, but I would say work with us on this

      I have no question that the ACA could have been a better bill had the GOP been willing to work with the Democrats in crafting it, with a real committment to delivering GOP votes if GOP ideas were incorporated.

      Instead, the GOP decided to act in the worst possible way, demonizing the basic premise, spreading misinformation, and providing leverage to the Liebermans and Bayhs and Nelsons who wanted to serve narrow constitutencies and threatened to support a GOP filibuster if their consitutencies didn’t get preferential treatment.

      Without a question, the GOP put politics over country during the ACA debate.

  • zaybu

    OOPS, trying to get the Chinese to do your bidding is a no go. They have a 1+ billion population to take care of.

    Here’s a simpler solution: increase the tax rate on the rich — historically, it’s never been that low — and then use that money to give tax cuts to the middle class so they can keep up with rising costs in health and education.

    I know, sometimes, simple things escape our attention.

    Oh wait, Norquist won’t approve. We’re doomed.

  • Holmes

    The general — not perfect — consensus here is that Frum is a pimp in a pin-striped suit. He’s yet to learn that you can’t be both immoral — a spokesman for the robber barons — and a moralist — “Guys, let’s not be too rapacious” — without getting your ass kicked to the curb … by everyone.

    • valkayec

      With all due respect, I’d say that assessment is a bit too harsh. My assessment is that Frum sincerely wants the GOP to be better -more rational, logical and intellectual – in its policy arguments. I suspect he’s as frustrated as the rest of us, but he’s having a difficult time thoroughly abandoning the GOP. One of the things I like about Bruce Bartlett is his ability to trounce bad policy from whatever side it derives…as well as praise good ideas from either side of the aisle. (Plus, I happen to love his history lessons.) Bartlett is no big government type; he actually considers himself a practical, realistic libertarian. I’m hoping Frum will follow Bartlett’s lead.

  • nhthinker

    To restore the middle class will require restoring the balance of trade- it took us 40 years of overspending on imports to get in this hole and it will likely take at least 20 years to work our way out of it.

    A large portion of the trade deficit is energy. The other portion is too much consumption of items that Americans paying their own way: can’t afford, don’t really need, but buy anyway.

    The real ball to keep an eye on is the trade deficit- focusing only on the federal deficit is not the only critical problem to solve.

    Greece’s trade deficit charts look a lot like the US ones.
    ———

    Clearly the answer is not larger government:
    http://www.gallup.com/poll/151490/Fear-Big-Government-Near-Record-Level.aspx
    Two in three Americans (64%) say big government will be the biggest threat to the country, one percentage point lower than the record high, and more than twice the number who say the same about big business (26%). Democrats have led the recent increase in concerns about big government.

    • valkayec

      But how much of that response is the direct result of political spin as opposed to actual research and knowledge?

      I agree that the trade deficit is a huge issue that needs to be addressed and precious few are even mentioning it. But as I wrote above, changing tax policy to close a loophole that allows companies a tax credit on foreign investments, and thus offshoring could help to change that dynamic. Plus, we have to start looking at whether or not trade policies are actually beneficial to the American public at large. When you look at China’s trade policies or Germany’s, one of the first thing you notice is that put their country first. I’m not yet convinced US trade policies do that, regardless of whichever party dominates the discussions. I attribute this dysfunction to the fact that too much money in politics perverts good policy.

      So, join the growing numbers demanding a Constitutional Amendment that prohibits lobbying money, eliminates corporate spending on elections, and requires all Congressional employees and representatives, after leaving their Congressional jobs, from working for a lobbying firm or selling their influence for at least 10 years.

      • Ogemaniac

        “But how much of that response is the direct result of political spin as opposed to actual research and knowledge?”

        Virtually all of it. We actually have one of the smaller governments in the industrial world, as measured by spending as a fraction of GDP.

        Seriously, how often do the feds actually prevent you from doing something that you honestly think you should be able to do? Unless you are a real jerk, or a young invincible that doesn’t know jack, the answer should be “ummm, not all that often, really”.

      • zaybu

        The proponent of reducing the government are making one big logical fallacy: bad government in their thinking is the root cause, when in reality, it is the effect, and the real cause is the rich who used their money to make it bad. Even if one would reduce the state to its minimum, whatever that is, 50% or 10% of what it is now, but if in the end it is still controlled by the rich, then nothing will have been gained, as the rich will manipulate this reduced government to protect their own interest, and not the population’s. In fact, it would make things worse. It’s a lot easier to control 100 politicians than to control 1000.

    • armstp

      The U.S. is not an export driven economy. Never has been and never will be. U.S. exports only represent 11% of the economy (versus U.K. 28%, Germany 41%). Sure it would be nice to fix the balance of trade, but there are bigger fish to fry in improving this largely domestic driven economy.

      ****

      That is kind of a meaningless generic poll. What exactly is meant by the generic term “big government” and how exactly is it a threat to the country? Are we talking warrantless wiretapping here? People seem to like their “big government” medicare, roads, etc.

      Interesting that almost no one thinks “big labor” is a threat, but listening to the GOP you would think “big labor” was the biggest problem in this country.

      • nhthinker

        But if you add “big government” and government “labor unions” that encourage government life guards to retire at 50 with $80K per year pensions- and the NLRB stopping thousands of jobs in South Carolina, at least until the machinist union understood that they would lose in court- its not good for unions.

        Americans blame the government more than than unions or big business, because unions an big business are expected to act in self-interest and the government is reviled for acting in self-interest.

  • anniemargret

    With all due respect to Mr. Frum, why should we listen to his advice? Unless he decides to run as an Independent, all this analysis and possible outcomes to his suggestions is just mental gymnastics.

    One of those odious Republican candidates will win the primary…at this point either Romney or Gringrich. Will they heed any advice other than to bait and carry water for the red-meat right wing? Even if they moderate to a minimum, they are card-carrying pro-wealth, hang the middle class ideologues.

    There is still only one adult left in the room…and that’s Barack Obama.

  • rbottoms

    “This is what we all want — Republicans as well as Democrats”

    Bullsh*t.

  • Ogemaniac

    Ok, we need to cut health care costs. Here is my radical and fool-proof (but not idiot Republican proof, alas) plan.

    1: Write the names of every OECD nation except the US on individual slips of paper
    2: Put the slips of paper in a hat
    3: Have some celebrity choose a slip by reaching into the hat with their eyes closed, and then read the name aloud
    4: Copy that nation’s health care system EXACTLY.

    Wow! That’s a guaranteed 30% cost reduction, up to half if we are lucky.

    It’s simple, folks. The answer to our health care problems is VA for All. I’d give “Medicare for All” a passing grade as a response as well. These two systems are the cheapest and most effective we have, and are consistent with what is cheap and effective abroad. It is time to scrap our ridiculous, expensive, unfair and ineffective public-private hybrid and do what should have been done nearly a century ago – single payer.

  • Carney

    Frum neglects to mention oil. We import about 5 billion barrels a year. From 1999 to 2008 OPEC raised the price of oil from $10 a barrel to $140 a barrel, a foreign government imposed “tax” increase of $650 billion (going from $50 billion to $700 billion). In a nation of 300 million that’s over $2,000 per person, working or not. $8,000 per family of 4. The average income is $45,000, $35,000 after taxes. That’s a BRUTAL tax increase and goes a long way to explaining why major purchases like homes and cars dried up.

    We have to get off oil, and the easiest way is methanol which is made from resources we have in abundance including natural gas, coal, and biomass. Making cars methanol compatible is trivial but automakers refuse to do it or warrant for it. It’s time to make this happen, to require methanol compatibility as a standard feature like seat belts.

    http://www.openfuelstandard.org/

    • ottovbvs

      Wow…more from the methanol monomaniac.

      • Carney

        Name calling in response to facts and numbers simply makes you look bad, and persuades no one.

        Both McCain and Obama backed a flex fuel mandate as part of their 2008 campaign energy platforms. In the last few Congresses the OFSA has been backed by liberals (Nadler, McDermott), conservatives (West, Kingston), and moderates alike. “Energy Victory” author Robert Zubrin has appeared in National Review and the Daily Kos advocating this. The real possibility exists for a trans-ideological consensus to break free of the brutally regressive, economy-crashing, terror-funding OPEC tax.

    • LFC

      Republicans and big business fought against seat belts too.

    • nhthinker

      Oil is the root cause for a significant amount of the trade imbalance. The other portion is goods we cannot afford and remain viable as a sovereign entity.

  • tctribune

    David – Wow, you really are struggling to remain a Republican regardless of the cotradictions. I mean you say Obama’s economic speech is a call for more big government and yet no clear eyed person could say that from what they heard. Obama’s speech was about fundamental fairness and the difference between his vision and that of the GOP. I say this as someone who has supported the GOP all my life: Obama is right and the Republicans are dead wrong. It’s time to correct. As you said, the GOP is wrong on the biggest issue of the day: the recovery from the great recession. I agree. What’s the Republican’s answer? You know it well. A return to status quo economic policies. To more tax cuts for the rich, more irresponsible deregulation, all while cutting healthcare, pensions and programs for the middle class and those at the bottom. Let’s face it, the GOP has lost it’s way, not just on economic issues, but in so many other ways too. Just like you I still shake my head and say “What happen to the Republican Party?”