Friday, January 09, 2009

The future for Republicans - Reasons to be glad the Democrats won

It's a tired cliche that we are in the worst economic downturn since the Great Depression. So far, we are a year into the recession and it isn't as bad as the 1981-1982 recession. This doesn't mean that things can't get worse. They probably will. Unemployment usually trails other economic indicators. If the recession miraculously ended today it would still be the end of the year or later before employment picked up. With the recession projected to last into 2010, we can expect employment to still be down by the 2010 election.

In the meantime, Obama and the Democrats are haggling about how best to stimulate the economy. Obama wants some minor but wide-spread tax cuts and a lot of long-term projects. Some Congressional Democrats have objected to the tax cuts and are pushing even more long-term projects.

In short, they are taking ownership of the recovery.

This is good for the Republicans since the bailouts in September are what really hurt the party in 2008. McCain had polling very close to Obama - usually trailing by less than the margin of error and actually in front of him until the bail-out. The Democrats blamed the meltdown on President Bush and the voters agreed.

If McCain had won the election then the Republicans would forever be the party that caused the recession and the party that couldn't fix it. It doesn't matter how many Democrats control Congress, the party in the White House is given all credit or blame for the economy.

Right now the Democrats are riding high. They are congratulating themselves that the Republicans have been marginalized as the party of rich white men with no way of attracting new voters.

The truth is that the same percentage of the country identifies itself as conservative as a decade ago. Swing voters voted against Bush and Obama had coattails that helped Democrats increase their majority in Congress.

In two years things will be very different. If, as is predicted, the economy still hasn't recovered then the swing voters will swing back. Minorities who turned out in record numbers to vote for Obama will stay home. Fiscal conservatives who stayed home rather than vote for McCain will be appalled by the deficits and turn out to vote against the free-spenders.

There is a long historic record for this. Reagan and Clinton both had coattails and both saw candidates from their party who had won by thin margins voted out.

Of course, this is a likelihood, not a guarantee. Obama has defied expectations before. He might be able to spend the next two years blaming Bush and being seen as boosting the economy. FDR did it.

That's why the current stimulus program is so important. If it is handled with a deft touch and seen to be helping everyone then Obama might keep his popularity. On the other hand, if the money is seen to be going for politicians' pet projects or if only certain portions of the economy are boosted (unionized construction) then the electorate will turn against the Democrats.

Similarly, the Democrats need to keep their noses clean. Nothing could help the Republicans more than the public seeing corrupt Democrats getting rich while the rest of the country is in recession.

Right now it looks like the Congressional Democrats are pretty tone deaf. They are enamored by people like Paul Krugman who insist that what the country needs is more taxing and spending. This gives the Republicans time to hone their message.

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