De­fen­sive er­rors Repub­li­cans must avoid

The Washington Times Weekly - - Commentary - Tony Blank­ley

The num­ber one is­sue (in con­trast to per­son­al­ity trait) in the pres­i­den­tial cam­paign, ac­cord­ing to ev­ery poll of voter opin­ion, is the econ­omy. More than the wars in Iraq and Afghanistan, more than the con­cerns about health care, the pub­lic’s neg­a­tive view of the econ­omy is un­am­bigu­ously driv­ing the his­tor­i­cally un­prece­dented 80 per­cent of the pub­lic who be­lieve the coun­try is on the wrong track.

As a re­sult, Barack Obama is in a pow­er­ful po­si­tion to merely state that the cur­rent econ­omy is un­ac­cept­able, and that we must change the poli­cies that have caused it. In na­tional pol­i­tics, the side that can make its point with a slo­gan usu­ally beats the side that needs two para­graphs to ra­tio­nally re­fute (or at least plau­si­bly re­but) the slo­gan. That is why, for in­stance, Pres­i­dent Clin­ton ca­pit­u­lated to Newt Gin­grich’s Repub­li­can Congress in 1996 and signed the Repub­li­can wel­fare re­form bill (af­ter ve­to­ing it twice in 1995).

As slick-talk­ing as Clin­ton was (and is), he sim­ply could not ef­fec­tively com­mu­ni­cate na­tion­ally against the slo­gan of wel­fare re­form hav­ing a work re­quire­ment. In the re­main­der of this cam­paign, the Repub­li­cans have to avoid two traps. The first trap is to de­fend the cur­rent econ­omy. Even though as of now the econ­omy is not in re­ces­sion, but in fact is grow­ing slightly, it would be elec­torally lethal for Republi- cans to deny what at least two thirds of the coun­try feels: that the econ­omy stinks and they want it fixed.

The sec­ond trap is to per­mit McCain’s and the Repub­li­can mes­sage on the econ­omy to sound like merely a con­tin­u­a­tion of Bush’s pol­icy. The ob­vi­ous prob­lem is that the con­tin­u­a­tion of Pres­i­dent Bush’s tax-cut pol­icy is a nec­es­sary part of any eco­nomic re­cov­ery pol­icy. In­deed, the sin­gle most im­por­tant step that can be taken to pro­tect Amer­i­can jobs and keep Amer­i­can-based com­pa­nies from mov­ing off shore is to sharply re­duce our cor­po­rate tax rates.

Cur­rently, the United States has the sec­ond high­est cor­po­rate tax rate of all in­dus­trial so­ci­eties, af­ter eco­nom­i­cally ane­mic Ja­pan. The U.S. fed­eral rate of tax­a­tion here is 35 per­cent, and when the av­er­age state and lo­cal cor­po­rate tax rates are added, Amer­i­can cor­po­ra­tions pay on av­er­age al­most 40 per­cent tax on in­come (39.27 per­cent to be pre­cise.) China is at 25 per­cent, Mex­ico is at 28 per­cent, so­cial­ist Swe­den is at 28 per­cent and pros­per­ous Ire­land is at a mere 12.5 per­cent.

If th­ese com­par­a­tive rates con­tinue for much longer, the U.S. econ­omy will mor­tally bleed jobs and pros­per­ity to a world — both nom­i­nally so­cial­ist and free mar­ket — that has learned the low­cor­po­rate-tax les­son from Ron­ald Rea­gan’s Amer­ica that cur­rent Wash­ing­ton has for­got­ten.

Mr. Obama’s so­lu­tion to the prob­lem of jobs and in­dus­try go­ing off shore is to lean to­wards pro­tec­tion­ist poli­cies (re-ne­go­ti­ate NAFTA, op­pose new free trade treaties.). When one com­bines Mr. Obama’s plans to tighten in­ter­na­tional trade, cre­ate car­bon trad­ing reg­u­la­tions that will be the equiv­a­lent of a fur­ther $100 bil­lion cor­po­rate tax, raise taxes gen­er­ally on busi­ness as well as his mind­numb­ingly coun­ter­pro­duc­tive “wind­fall” profit taxes on petroleum-prod­uct com­pa­nies (full dis­clo­sure: As a ra­tio­nal per­son I sup­port and pro­vide pro­fes­sional ad­vice to the petroleum in­dus­try), one has a for­mula for eco­nomic catas­tro­phe not seen since Her­bert Hoover’s sim­i­lar de­pres­sion-in­duc­ing pol­icy in 1929.

Thus, the real dan­ger to the coun­try is that vot­ers, hav­ing bought into Obama’s cri­tique of the econ­omy, will be ready to try some­thing dif­fer­ent what­ever it is that Mr. Obama is call­ing for — and Repub­li­cans will find it dif­fi­cult to ex­plain why a ra­tio­nal re­cov­ery pol­icy must in­clude part of Mr. Bush’s eco­nomic pol­icy (the tax-cut part.) The two-para­graph-long ra­tio­nal refu­ta­tion of the Obama eco­nomic pol­icy is not likely to be heard and be per­sua­sive in a mass na­tional au­di­ence - in the ab­sence of a truly mas­sive 527 ad­ver­tis­ing cam­paign to ed­u­cate the pub­lic. In its bare-bones, un­ad­ver­tised ver­sion, it will fall vic­tim to the Demo­cratic trope that Repub­li­cans are just for big busi­ness.

The fact is, that in a free-mar­ket, non-so­cial­ist econ­omy, the pros­per­ity of the em­ploy­ees re­quires the pros­per­ity of the em­ploy­ers. But Mr. Obama’s pop­ulist ar­gu­ment (for in­stance, his claim to ABC News that rais­ing cap­i­tal-gains taxes is nec­es­sary in or­der to be “fair” even if it means less to­tal rev­enues to the gov­ern­ment), may be the ap­peal­ing hand­maiden of his other ar­gu­ment that the econ­omy stinks and the po­lices that caused the stink need to be changed.

Thus the sec­ond trap the Repub­li­cans have to avoid (in the ab­sence of that mas­sive ad­ver­tis­ing cam­paign to ed­u­cate the pub­lic) is us­ing an in­ef­fec­tive slo­gan to re­but Mr. Obama’s ef­fec­tive slo­gan. The ob­vi­ous GOP slo­gan is the old stand by that the Demo­cratic can­di­date will tax and tax, spend and spend. It is true, of course. But will it ring true? With Pres­i­dent Bush hav­ing been seen to spend and spend him­self, will the slo­gans sound hyp­o­crit­i­cal? If Mr. McCain and the Repub­li­cans can­not ei­ther ed­u­cate the pub­lic through a mas­sive ad­ver­tis­ing cam­paign or come up with a truly com­pelling slo­gan — they could lose the Novem­ber elec­tion on that is­sue alone.

Tony Blank­ley is a syndicated colum­nist.

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