The Only Policy Left: Growth
The GOP needs leaders willing to do what's necessary to get it.
By DANIEL HENNINGER
SEPTEMBER 30, 2010.
With the November election just around the corner, President Obama spent the past two days hanging in middle-class folks' backyards in Albuquerque, Des Moines and Richmond to discuss the state of the economy. But it could be the American people are pretty well talked out on the economy. Rather than talk, it looks as if they are about to repudiate a formerly popular president who has disappointed them, throw over a Democratic Party they think has failed them, and hand power to a Republican Party they don't trust.
Let's see if we can offer a snapshot of the national mood just now. Fast-forward toward the end of "National Lampoon's Christmas Vacation," after Clark Griswold discovers that his holiday bonus is a subscription to the Jelly of the Month Club. Ripping the envelope to shreds, Clark describes what I would call the American people's current, bipartisan view of their political leadership: a "cheap, lying, no good, rotten, four-flushing, low-life, snake-licking, dirt-eating, inbred, overstuffed, ignorant, bloodsucking, dog-kissing, brainless, hopeless, heartless . . . worm-headed sack of monkey bleep!"
A more circumspect version of this view came recently from no less than Federal Reserve Chairman Ben Bernanke, speaking at this summer's gathering of the world's financial elites in Jackson Hole: "Central bankers alone cannot solve the world's economic problems."
Translation: Nothing the politicians have done works, and all we're left with is a worm-headed sack of monkey bleep. Now what?
Podcast: Listen to the audio of Wonder Land here. .We have an unemployment rate that is beginning to look stickily stuck above 9%. GDP growth, the official measure of economic life, keeps falling (down to 1.6% in the second quarter). The stock index blips up and down daily.
Solution No. 1 was to throw nearly $1 trillion of stimulus at the economy. But Keynes failed. Then they sprayed the economy with gallons of Chairman Ben's Quantitative Elixir, or QE. Nothing happened. They could have extended the Bush tax cuts, but instead the Pelosi Democrats punted the subject past the November election, the equivalent of kicking the ball straight up in the air.
It looks to me as if there's only one policy they haven't tried: economic growth.
Economists dispute among themselves about a lot, but not about the proven wonders of strong economic growth. It creates jobs, increases individual wealth, reduces debt, and enhances national well-being. Strong, as opposed to the middling, economic growth the U.S. has now, is so vital that a great nation should want to do whatever it takes to get it.
With it, we win. Without it, we lose. Economist Paul Romer, in an essay on economic growth, bluntly explained why: "For a nation, the choices that determine whether income doubles with every generation, or instead with every other generation, dwarf all other economic policy concerns."
Mr. Obama and his allies argue that middle-class incomes have stalled, and that economic policy needs to go in the direction he's promoted from the first days of his presidency and into this week's backyards: the Obama health-care plan, public subsidies to higher education, green technologies and forced income redistribution. This is a worthwhile debate. The problem is that the Democratic Party is no longer able to sustain real growth policies.
The United States doesn't have Eurosclerosis yet, but the Democratic Party does. That's because the party has welded itself forever to the public-sector unions, as the social-democratic parties have in Europe (see the current wave of national strikes in Spain and France). Strong growth has no meaning to the public sector, so its political foot soldiers don't waste time pushing it. Exhibit A is the Obama administration's abandonment of trade deals with Colombia, South Korea and Panama.
The growth issue has defaulted to the Republican Party. That's the pity. Hardly anyone in the party remembers how to give economic growth the starring role it deserves.
The last Republicans able to talk about growth as a crucial, creative, essential force, a driver of American prosperity and primacy (think the China threat) were Ronald Reagan, Jack Kemp and Steve Forbes. The current crop of Republican leaders and presidential contenders, about to be handed the opportunity of a generation, are in danger of reverting to the party's austerity-only obsessions. Austerity-only policies are producing Europe's riots.
Reducing spending, controlling entitlements, reforming public pensions—all of that matters. It's important. But any population being asked to "sacrifice" needs to be able to believe something better is possible. That's the challenge of political leadership.
It's hard to overstate the ridicule dumped on Ronald Reagan's 1984 campaign ad, "It's morning again in America." But Reagan was in fact talking about the opportunities created by real growth.
The Clark Griswold anger coursing through the electorate runs deeper than the mere desire for a new set of political jellies. Voters—Americans—want the chance to do what they do best: work, innovate, compete. That's the world of strong, long-term economic growth. What the Republican Party needs are leaders willing to do what's necessary to get it.
Write to henninger@wsj.com
online.wsj.com |
