Tarnishing the Brand

Traditionally there are stark contrasts between the two parties. The Republicans stand for pro-business, pro-military, fiscal restraint policies. Their traditional weakness is being perceived as cruel or uncaring. The Democrats are the pro-poor, anti-business, pro-equality, anti-military party. Their weakness is "tax and spend" and being weak on defense.

George W. Bush didn't like the cruel label and invented "compassionate conservatism". As implemented, this could be characterized as "borrow and spend". He lowered taxes but increased spending on all levels. This gave the Democrats an opening to expand their brand to be the party of fiscal restraint. At early as the 2004 Superbowl, MoveOn was running ads against the Bush deficit. In 2006 and 2008, the Democrats ran as the party that would balance the budget. That this promis was based on the budget under Democrat Bill Clinton with a Republican Congress didn't matter. A Democrat had been involved in one of the nation's few budget surpluses.

By abandoning the party principle of fiscal restraint, Bush tarnished the party. He did not get any credit for his spending but he got the blame for the increasing deficit. At the same time, the public tired of his two seemingly-endless wars and the Democrats were able to position themselves as the party that would handle defense more responsibly.

Now Barack Obama is facing the same dilemma - how to keep from tarnishing the party's image. So far he has done major damage to the Democrat brand.

First, the Democrats will not be able to claim to be the party of fiscal restraint for at least a generation. After being stable throughout the administrations of Reagan, the first Bush, and Clinton, the rate of spending increased under Bush but this is nothing to how it is projected to increase under Obama. On a graph, the growth in government is around a 30 degree line until Bush when it becomes a 40 degree line. Under Obama it jumps to a 60 degree line.

Obama attracted a lot of votes from people who were tired of Bush's spending and wary of McCain's promised spending. They expected him to be a pragmatic centrist who would reign in excessive spending. Many of these people are now attending Tea Party protests and are upset with both parties.

Since 2004, the Democrats have pushed the idea that, by fighting the "wrong war in Iraq," the Republicans made us less safe and that they would take the fight to the "real" war in Afghanistan. Obama started strong with a quick commitment of troops but, when asked for more than twice that many, he balked, waiting three months to make a decision. At the same time, Nancy Pelosi made it clear that she wants troop reductions instead of increases. The Democrats' claim to be strong on defense has been eroded, possibly giving it back to the Republicans.

Fiscal restraint and defense represent issues that the Republicans traditionally dominate. A strong case can be made that these are not important to the Democrats since they were never Democrat strong points. More important to the Democrats is how they are handling their core strengths.

Traditionally Democrats were the Robin Hood party - they taxed the rich (and middle class) and gave it to the poor. Obama promised to alter that equation by only taxing the rich and giving to the poor and middle class. Performance on this has been mixed. One of his early accomplishments was expanding a program for providing medical coverage to the poor. This was paid for by taxing cigarettes, a tax that hits the poor disproportionally. Plans call for taxing "Cadillac" health plans to pay for health care reform. This will largely hit middle-class union jobs.

The stimulus included the "making work pay act" which gives a $400 credit to everyone reflected in a small change to payroll withholding rates. Again, this mainly helps the poor rather than the middle-class.

The health care proposals being debated will also help the poor at the expense of the middle class who will foot a sizable chunk of the trillion dollar bill.

So, despite promises, Democrats have not really changed. They are still the party of Robin Hood.

More important is their relationship with big business and Wall Street. The health care bills under consideration represent several important deals. Drug prices are not included as part of a deal with the drug-makers. Hospital prices and doctors' fees are also unaddressed for the same reason. The mandate for everyone to buy insurance or be fined came from a deal with insurance companies in exchange for coverage for pre-existing conditions.

More important are the bail-outs. Banks were deemed too big to fail and given amounts of money too big to comprehend, then allowed to give portions of it out in bonuses. GM and Chrysler were also bailed out. These may have been desperately needed but they left the impression of a close relationship between Wall Street and the Democrats. Its hard to soak the rich when you are propping them up. This will probably hurt the Democrats a great deal. The far left was always anti-business and would have been happy so see all of these businesses nationalized (instead of the quasi-nationalization that we have).

Put it all together and the Democrats brand name has been tarnished. It is questionable if the Republicans will have burnished their own reputations enough to take advantage of it by the 2010 election but they have an opportunity.