RSS Feed MenuThe Obama strategy appears to be a blitzkrieg of policy proposals to swamp a weakened and beleaguered Republican party. This places a premium on uniting around key principles and messages to survive the onslaught. So far, they have been handed three easy opportunities, and the good news is they successfully found their voice.
In the debate surrounding the stimulus bill, Republicans found their voice effectively. Essentially, they said “stimulus, yes; waste and political payoffs in the name of stimulus, no.” In the same way, the Obama budget has provided another opportunity to make the case for pro-growth policies and small, contained government by pointing out the obvious: the Obama budget promises irresponsible, risky trillion dollar deficits as far as the eye can see with NO spending restraint whatsoever. Finally, the disgraceful, earmark-laden omnibus spending bill should be an anathema to all Republicans (and, unfortunately, is not even though the Washington Post today reported that $10 million will go to a disgraced Democratic lobbying firm that specialized in – you guessed it – earmarks) and makes hypocrisy of Obama’s promises to clean up Washington. Republicans can just say no.
But Republicans will not be successful simply saying “no” – they need a pro-active, alternative agenda. In the near-term, there are two key issues confronting the country on which the Republicans are in disarray – fixing the financial system and health care reform.
The financial crisis is the greatest threat to the U.S. economy. The right thing to do is to apply the principles of responsibility and competition, and the lessons of history to get this right. The most important lesson is that failed, insolvent banks cannot be permitted to continue to operate using taxpayer subsidies. Letting these “zombies” walk the financial system was at the heart of the savings and loan crisis and the slow Japanese recovery from its financial crisis. These institutions should be taken over, their management and shareholders made to suffer the consequences of their failure, and the assets re-sold to private sector entities as fast as is feasible. That’s good policy: discipline failure, promote real competition, and use assets effectively in the private sector. Yes, it will be costly – but not more costly than continued propping up of failed big banks. And, yes, it will raise the specter of “nationalization,” but it is really about re-allocating financial assets in the private sector. The bottom line: no more taxpayer resources without real use of discipline and effective workouts.
Going forward, the big policy issue will be health care. I write this on the day that the Obama administration holds its health care reform “summit”, highlighting the importance of having a real set of principles in this area. Here, I think the most important issue is for Republicans to be for something. Too many Americans believe that Republicans just don’t care or, even worse, actually do not want Americans to have health insurance coverage. In fact, every candidate for the most recent Republican nomination presented a health care reform during the primary season, reflecting the fact that Republican voters care about the issue and candidates have thought carefully about solutions.
Indeed, Republicans want the same thing that Democrats do – a health care system that delivers lower costs, higher quality outcomes, and covers more Americans with health insurance. The differences are on how to achieve these goals. This leads to four principles:
- Republicans should focus on the facts: the problem is cost. Health care costs too much (especially for what we get in outcomes) and is the reason that insurance is so expensive. So, costs first.
- A solid health care reform will generate cost savings, and these can then be plowed back into the system to expand coverage. Attempts at radical coverage expansion will outstrip these savings, especially at the beginning. To avoid a dangerous government expansion, it should be a requirement that any new resources raised from the private sector be devoted to expanding private insurance coverage.
- Savings will be larger, the more the reform recognizes that incentives matter. Reform should generate good economic incentives by providing portable insurance that does not interfere with the labor market, keeping hidden taxes and mandates to a minimum, and providing a business model for health care that emphasized innovation, quality and cost control.
- States have vastly different demographics, cost structures, state-level government programs, and insurance market policies. Reform should respect these state-level efforts. States understand the problems of cost and coverage, although it is very difficult for any single state to be master of its outcomes. Federal reform should support these state-level efforts wherever possible.
These are momentous times and the policies adopted will shape the economy for years to come. Republicans have the obligation and opportunity to engage vigorously in the ideas debate.
Jason Keuter // Mar 7, 2009 at 1:04 am
I disagree: Republicans should say no to government and yes to liberty and freedom. In proposing an alternative to the Democrats plans for what government will do, it is impossible to avoid proposing an alternate GOVERNMENT PLAN.
First and foremost, Republicans really need to change the debate. Since the media frames the debate around Democratic talking points, then Republicans should stop talking to the media. A policy proposal? What can Republicans say yes to regarding in the face of the Democratic Agenda? For a start, the Republicans should call for privatization of the airwaves. What would this policy proposal do? First, it would show that the media’s pro-Democratic bias comes in part from the fact that they have no right to broadcast – the government can take away that right. No wonder the media is so biased against anti-government conservatism: the media needs government apporval to broadcast. Here is a policy proposal that would bring into sharp relief the reality of media bias and the reality of the ideology of the Democrats. Both parties would be forced to defend government approved “free” expression.
Obama, Pelosi, Reid – the left in general refuse to go on the O’Reilly Factor yet Republicans go on ABC, CBS and NBC. If conservative believe the media is biased, then BOYCOTT IT!!!! Enough Americans will want to here what Republicans have to say that they will turn to alternate media outlets. At the same time, propose legislation to privatize the airwaves. Let the Democrats defend the idea that the public needs to be protected from information and can’t think for themselves. Let the so-called internet saavy 21st century party declare that if government doesn’t regulate the TV networks, then people won’t get balanced information. Let the Democratic party declare that all Americans who watch cable (i.e. private) television are wrong in their choice of programming. Let the Democratic party have to warn against the morally insidious content of private television and thus drive a giant wedge between them and their Hollywood supporters.
InTheMiddle12 // Mar 7, 2009 at 5:11 am
Jason: Until the GOP acknowledges that supporting government AND liberty and freedom are NOT at odds, their numbers will continue to go down.
At a time when the markets have failed and the biggest names in business are running to government for help, whether you believe in bailouts or not, it seems a very odd time to constantly be attacking government and a new administration, who, for better or worse, are clearly trying to face the reality of the last 8 year mess they’ve inherited and generate ideas to, as is appropriate for government, address the issues that resulted.
Until the GOP puts down their kill government at all costs attitude, well, no offense, but they’ll continue to be irrelevant and lose seats all over the country.
InTheMiddle12 // Mar 7, 2009 at 5:20 am
jlloyd: I really like the idea of the SEC or some third party entity being an honest broker for audits, or, as my loyal friends ont he right would fear, nationalizing audit firms. I work in a consulting firm that serves nonprofits and we were closely with auditors. It’s clear they spend a lot of time generating business and in the case of large clients, work “closely” with them to maintain their fees. I have no doubt, even though 99% of auditors I’ve met are clearly ethical and want to do the right thing, that by taking the business development piece out of it, audits would be cleaner and more honest. Of course this will bring a huge backlash from the right about free markets, etc., but I believe that auditing is a function that could truly benefit from some greater regulation. It would have saved us from the mess we’re in, no doubt. And isn’t it interesting that when an audit company does a good job, eg. GM as a “going concern,” suddenly people pay attention. I think the fact the every company, from Merrill to Wachovia to all the others that are failing have never had a “going concern” tells us a whole lot about how the current auditing system is not serving any of us well, except for those that benefited from the cover ups.
Chekote // Mar 7, 2009 at 7:00 am
InTheMiddle. First of all, auditors’s effectiveness is limited by the fact that they based their audit on the information given to them by management. Most fraud enterprise keep two sets of books. What you constantly ignore is the fact that government is just as corruptible as any private enterprise. Government action or inaction is influenced by campaign contribution. Look at Freddie and Fannie. Look at all the contributions they made to politicians in key positions. You have to set up a completely independent body (a la Fed) or you will have the same results.
sinz54 // Mar 7, 2009 at 7:23 am
jlloyd: “Speculators” in short selling cannot possibly drive a stock down below its true value for very long. If a wave of speculators tried to drive down the value of Coca-Cola or Microsoft stock like the way you claim they’re driving down Citigroup, they might succeed for a couple of months. But afterward, they would not only fail, but they would incur huge losses–because every investor knows that those are solid companies and would rush to buy those stocks at cheap prices. Speculators can never drive a sound company into bankruptcy–only the company can, or the industry it represents can. The problem with Citigroup is that it deserves to be cheap, because the entire financial system is collapsing. BTW: Your attacks on anonymous “speculators” sound very much like Franklin Roosevelt’s in the 1930s. And both of you are wrong.
Chekote // Mar 7, 2009 at 7:32 am
At this point, the Dems have done a great job convincing people that the markets have failed. It may be better for the GOP to just get off the stage and let the Dems hang themselves on the rehashed, liberal 60s, retro policy prescriptions.
sinz54 // Mar 7, 2009 at 7:37 am
Chekote: There are some good *reasons* why the media–and let’s face it, most of the public too–have tuned us out. The election is OVER, remember? The voters made their choice in November already; they picked Obama. Obama is still in his honeymoon phase–he was inaugurated less than 2 months ago–and the public is sticking with him for now, according to the public opinion polls. Beyond that, the GOP lost the public’s trust on a number of issues, over a number of years. The public won’t start listening to the GOP again, until the GOP takes substantive actions to regain that trust. I proposed one dramatic way the GOP could do that, in the upcoming debate over health care. But the GOP, and many conservatives, seem to have forgotten that just four months ago, the voters already rejected them and the proposals they made. The voters clearly wanted something different. So far, the GOP hasn’t shown it can do anything different.
sinz54 // Mar 7, 2009 at 7:47 am
Jason Keuter sez: ‘For a start, the Republicans should call for privatization of the airwaves.” Evidently you are unaware that social conservatives *within the GOP* have been calling for *more* regulation of the broadcast networks. Specifically, they want the FCC to reinstitute the “Family Hour,” which would ban programming from 8 to 9 PM that involves adult themes. Surf over to the website of Brent Bozell’s “Parents’ Television Council,” or read his columns on Townhall.com. The Parents’ Television Council has been issuing one petition after another to the FCC and the courts, to urge them to crack down on nudity and other adult material on the broadcast networks. Your libertarian ideas not only won’t fix the economic crisis we’re in now, but they also conflict with the social conservatives’ drive to regulate the media to promote “family values.”
fact based // Mar 7, 2009 at 9:30 am
Jason I agree with unemployment+ underemployment at 15% headed to 20% the repubs should concentrate on rules concerning “the media” because the left wing bias doesnt let the views of the right (like sean, rush, beck ,levin etc etc etc etc) get out to the public.
Go for it I am sure every family in america going over their budgets and bills on the kitchen table after dinner is asking why govt cant fix the “bias of the msm”.
the more you stay in the bubble the more you will be in the wilderness
enjoy it, I will
oh and btw check the ratings for desperate housewives,mtv and other racy fare in the bible belt
sinz54 // Mar 7, 2009 at 9:42 am
InTheMiddle12 & Jlloyd: An example of what you’re talking about is the Defense Contract Audit Agency (DCAA). These are the “guys with green eyeshades” who oversee auditing of defense contracts, and perform accounting services to all government agencies doing defense-related procurement. In the defense industry, known for pork and questionable practices, DCAA has kept its nose clean. Every project manager treats DCAA auditors with a healthy respect–DCAA can shut down even the largest defense projects if they discovered accounting or contract fraud. And by law, DCAA is required to make its own internal audits publicly accessible for peer review (you can download them yourself from DCAA’s website). So there is an example of a long-standing successful government auditing function.
sinz54 // Mar 7, 2009 at 10:03 am
fact based: Where these “zombie” banks are concerned, both Bush and Obama are proceeding down the same path as Japan did in the 1990s: Outright nationalization is politically incorrect, so let’s just take an equity stake in the banks instead, and let them continue to zombie around. That failed in Japan, and contributed to their long economic malaise. The banking crisis won’t be solved until the zombies are either killed off, merged into successful banks, or nationalized. If I remember correctly, that’s how the S&L crisis was handled–and that was successful.
fact based // Mar 7, 2009 at 2:38 pm
sinz54 you are totally correct now listen to newt rush sean and cantor and the rest of their puppets rant about “socialism” and you tell me how much bipartisan support he will get to do the nationalization
Let lindsey graham, greenspan, newt , cantor and a bunch of other repubs get on a podium with obama and the dem leadership and declare that no matter how unpleasant nationalization seems the alternatives are far worse
unfortunately till the above happens we wont move forward
Go Dog Go! // Mar 8, 2009 at 1:35 am
The notion that Republicans should wait until Dems hang themselves is just as dumb as hoping the President fails. Our nation could fail — actually FAIL — if we (all of us) don’t get it right. Nothing could be more cynical than hoping our country falls into disaster just so conservatism can play white knight and take over again. I think being “the party of no” is the functional equivalent of waiting for failure and it’s an untenable position for our country. To me, the real “Anti-Americans” are those who would see us fail for their own power. Is this what the GOP wants to be? A lot of conservatives are wondering…
dmt3 // Mar 8, 2009 at 3:07 am
sinz54: Actually, DCAA has had their own troubles lately (http://www.gao.gov/products/GAO-08-993T). Those issues notwithstanding, you are correct DCAA is generally respected by industry because of the due diligence manner in which they perform their job. I know my company sits up and takes notice even just for a DCAA desk audit.