The Elephant in the Room

~by Dennis Sanders

Within a few moments of knowing President Obama had secured the 270 electoral votes needed to win a second term, the explanations and recriminations had begun.

The two that bubbled up to the surface were demographics and social issues. People saw this victory as proof that the new minority-majority America that we have been told was coming finally arose. This meant the dawn a new Democratic era where the the GOP would be reduced to regional rump of a party.

The other issue that came to fore was the party’s views on same sex marriage and abortion rights. If only they were able to pass an immigration bill to please Latinos or support same sex marriage, well, the party would be saved.

Now, being a gay African American/Puerto Rican such talk should be music to my ears. After all, I am the mythical diverse voter that the GOP needs. But this mythical voter doesn’t think making a few changes such immigration reform or allowing my partner and I to legally wed will bring salvation to the party of Lincoln.

First off, it’s not like the GOP is openly hostile to minorities. The George W. Bush Adminstration placed not one but two African Americans in the positon of Secretary of State. The 2012 GOP convention in Tampa had the likes of Marco Rubio, Susanna Martinez and Condaleeza Rice as speakers. A racist political party would not have such people speaking in front of them. As for the gay issue, the party has been making some halting moves towards inclusion. Lost in the headlines was the fact that an openly gay Republican ran for a House seat in Massachusetts.

Diversity is important, and I do think there is room for improvement. But demographics is only the dessert to a bigger issue: the economy.

It’s easy to get more black folk up on the dais of a convention to speak; it’s a lot harder to figure out how to help people in a changing economy.

Walter Russell Mead has talked about the disintergration of the blue social model. For those who don’t know that phrase, it talks about the guiding rule of American Society from the New Deal onward. Here’s how Mead describes the model:

The blue model rested on the post-Second World War industrial and economic system. The ‘commanding heights’ of American business were controlled by a small number of monopolistic and oligopolistic firms. AT&T, for example, was the only serious telephone company in the whole country, and both the services it offered and the prices it could charge were tightly regulated by the government. The Big Three car-makers had a lock on the car market; in the halcyon days of the blue model there was no foreign competition. A handful of airlines divided up the routes and the market; airlines could not compete by offering lower prices or by opening new routes without special government permission. Banks, utilities, insurance companies, trucking companies had their rates and, essentially, their profit levels set by federal regulators.

The stable economic structure allowed a stable division of the pie. Workers (much more heavily unionized then than now) got steady raises and stable jobs. The government got a stable flow of tax revenues. Shareholders got reasonably steady dividends.

This system was all about security and stability. This was the system my mother and father encountered when the arrived in Michigan from Puerto Rico and Louisiana respectively. You got a job at one of the Big Three automakers and you were set.

But life started change in Michigan and the rest of the nation in the 70s. Mead notes:

The blue model began to decay in the seventies. Foreign producers began to erode the market share of lazy, sclerotic American firms–like the Big Three automakers. The growth of offshore financial markets forced the financial services industry to become more flexible as both borrowers and lenders were increasingly able to work around the regulations and the oligopolies of the domestic market. Demand for new communications services created an appetite for competition against Ma Bell. The consumer movement attacked regulations that were clearly designed to protect companies; Teddy Kennedy was a cosponsor of the bill to deregulate the airlines. Anti-corporate liberals rebelled at the way government power and regulation was being used to allow corporations to give their consumers the shaft.

As the old system dissolved, companies had to become more flexible. As industry became more competitive, private sector managers had to shed bureaucratic habits of thought. Lifetime employment had to go. Productive workers had to be lured with high pay. The costs of unionization grew; in the old days, government regulators simply allowed unionized firms to charge higher prices to compensate them for their higher costs. The collapse of the regulated economy (plus the rise of foreign competition from developing countries) made unions unsustainably expensive in many industries.

If you haven’t already guessed, this system was powerful during the years of Democratic party dominance. As that system started to decay, the Dems started to lose power.

As this old model is passing by, there has not been a response from the Republicans. There has been no Red Social Model. When people look to the party for answers on how to deal with the new economic uncertainty, they get an odd response about lowering taxes- an answer that seems to fit all situations.

I think that’s the reason the GOP lost so big this year. Yes. the President hasn’t done much and the economy is still in the doldrums. He hasn’t really told the public what he will do in his second term. But when people looked to the GOP for an alternative, they found…nothing. The voting public would rather go with the devil they knew.

Take for example health care. People are not crazy with Obamacare. The GOP latched on to that and used to make big gains in the 2010 midterms. Mitt Romney said one the first actions as President would be to repeal the Affordable Care Act.

But as much as people didn’t like the President’s plan, at least it was a plan compared to…..well, nothing on the Republican side.

In his weekly column, Ross Douthat explains that middle class Americans are facing economic pressures and are not finding good answers from the GOP:

What the party really needs, much more than a better identity-politics pitch, is an economic message that would appeal across demographic lines — reaching both downscale white voters turned off by Romney’s Bain Capital background and upwardly mobile Latino voters who don’t relate to the current G.O.P. fixation on upper-bracket tax cuts.

As the American Enterprise Institute’s Henry Olsen writes, it should be possible for Republicans to oppose an overweening and intrusive state while still recognizing that “government can give average people a hand up to achieve the American Dream.” It should be possible for the party to reform and streamline government while also addressing middle-class anxieties about wages, health care, education and more.

The good news is that such an agenda already exists, at least in embryonic form. Thanks to four years of intellectual ferment, Republicans seeking policy renewal have a host of thinkers and ideas to draw from: Luigi Zingales and Jim Pethokoukis on crony capitalism,R
amesh Ponnuru and Robert Stein on tax policy, Frederick Hess on education reform,James Capretta on alternatives to Obamacare, and many more.

The bad news is that unlike a pander on immigration, a new economic agenda probably wouldn’t be favorably received by the party’s big donors, who tend to be quite happy with the Republican Party’s current positioning.

In light of the disintergrating blue social model, there needs to be a red social model to come and fill its place. People want to know how they can pay for college or have some kind of health care even if they lose their job. The GOP circa 2012 couldn’t find an answer to give the people and they chose accordingly.

Becoming a bit more diverse is a good thing, but in this post-civil rights era, is not as pressing as some have made it out to be. What really matters to the middle class family in the suburbs and the single mom in the inner city is how to keep their heads above the raging economic waters.

Trying to answer these “bread and butter” issues will take some time. But I think if the GOP can find away to address the anxieties of millions of Americans, they might have a shot of having the chance to govern again.