Anti-Woke Is Not Enough: Republicans Need a New Economic Plan

Victory has many fathers, but defeat is an orphan. However, the Republican 2022 mid-term debacle had many culprits. From Sen. Rick Scott opening the Social Security can of worms, President Trump’s terrible candidates, and incoherent messaging on abortion are just a partial list. The most critical need for Republicans is to develop a winning economic message — one that counters the progressive grab bag of subsidies, social-engineering, and indiscriminate spending.

Republicans and conservatives have no unifying positive message. The 2022 campaign was a compilation of complaints and victimhood. The Democrats hardly did better, but they did enough to humiliate the GOP — and it was a humiliation as Democrats defied over 100 years of electoral history. Instead of emerging with control of both legislative chambers and a 30-40 seat House majority (the minimum historic expectation), Republicans barely scraped together a working majority in the House.

The one thing Republicans unify over is anti-woke. But that is a shaky foundation. The public is not nearly as exercised over the potpourri of woke issues as conservatives are. To be sure, pushing back against oppressive censorship, cancellation of parental rights, and belief that violent criminals are victims is a positive thing. But it is vulnerable to Democrats who tack to the center on crime or free speech.

The other problem is there is little evidence anti-woke is at the top of the public’s agenda. Economic issues are. Two polling outfits, YouGov and Morning Consult, survey regularly on major issues, ask consistent questions, and make their crosstabs publicly available. Both polls show inflation, jobs, and the economy consistently at the top of public concerns.

YouGov has the top three issues for the public at-large as inflation, health care, and jobs/economy. For Independents, it is inflation (17 percent), health care (12 percent), and national security (10 percent) and for Republicans, inflation (25 percent), immigration (10 percent), and national security (10 percent). Crime is the top issue for only 6 percent of Republicans and 3 percent of Independents.

Morning Consult groups issues with “Economic Issues” at 38 percent overall as the top issue (42 percent for Republicans and Independents). “Security” is next at 14 percent (24 percent for Independents and 13 percent for Republicans), followed by Social Security at 13 percent.

GOP Stuck in Economic and Political Past

Republicans are caught between 1950s midwestern pro-business reflexiveness, CATO-style free-market, free-trade libertarianism, and nationalist populism. It’s like Mitch McConnell vs. Rand Paul vs. Donald Trump. Little of this mishmash of economics is working politically.

The neo-liberal economics in vogue since the 1990s has not worked for millions of Americans. From 1999 to 2020 real GDP per capita rose 24.1 percent, yet real median income only increased 12.2 percent. And those statistics include President Trump’s first term where middle-class households enjoyed a particularly good run. If you stop at the end of the Obama administration, real GDP rises 19.1 percent but real median income jumps a paltry 5.8 percent. Not surprisingly the Gini coefficient rose from 0.46 at the start of the Bush administration to 0.48 by the end of the Obama administration. (Fun Fact: The Gini coefficient rose more under Presidents Clinton and Obama than under Bush and Trump.)

Even Republican voters have responded. Big majorities of Republicans and Independents support Biden interventionist proposals. According to the Morning Consult benchmark, 73 percent of Republicans and 76 percent of Independents back a price cap on insulin, 61 percent and 69 percent of Republicans and Independents, respectively, back caps on generic drugs. Of course, it’s worth noting the pharmaceutical industry features high barriers to entry and drug patents are a government-enforced monopoly, so GOP and Independent voters are not rebelling against a truly free market.

Other Biden proposals also enjoy majority or plurality Republican backing including free school lunch (53 percent), mandated paid leave (51 percent), childcare tax credits (50 percent), maternal health care (46 percent) and even a minimum tax on the “.01 percent” wealthy (45 percent). Across-the-board Independent voter support is even higher.

For McConnell/Paul conservatives hoping to build on Trump inroads into working class voters, the news is even worse. Voters from households earning $50,000 to $100,000 back all the above Biden proposals by more than a two-to-one margin.

Attempts to push new economic policy are not working, either. YouGov polling shows emphatic opposition to Social Security and Medicare cuts (84 percent for Republicans). The “Fair Tax” proposal for a 23 percent national sales tax is another loser. Independents oppose it with 36 percent against and just 23 percent in favor. Republicans favor it by just a sliver, 36 percent to 35 percent. Middle income voters dislike it 28 percent to 47 percent.  The undecided factor is high, but it seems killing the IRS and replacing it with a 30 percent-plus mark-up at the cash register (including state sales taxes) is not going to attract many.

An Economic Wake-Up Call

Whether or not income inequality is an economic problem is really beside the point. It is definitely a political problem. The unwillingness of the McConnell and Rand Paul ideologies to address this problem has left Republicans in a position of just complaining and offering no palatable alternatives. Rick Scott’s foray into Social Security reform was an unmitigated disaster that compares unfavorably to Napoleon’s retreat from Moscow.

For all his craziness, Donald Trump recognized that focusing on a middle class that (rightly) feels squeezed by Democrats’ welfare state and Republicans’ neo-liberal economic and foreign policies. While his budget-busting deficit spending is not sustainable and his China trade deal was a rip-off, the fact is real median income jumped over 6 percent during his Presidency, more than under the Bush and Obama administrations.

One long-standing conservative activist in Pennsylvania recently expressed to me that conservatives need to return to the concept that a rising tide lifts all ships — but with a twist. Instead of starting by raising the fortunes of the highest income earners, conservatives need that tide to start with middle/working class households. This is sage advice. Republicans cannot win appealing to the highest income cohorts on economic matters while hoping to tap into the cultural conservatism of working class voters — when it is economics that still matters most.

Returning to the 1970s with its hyper-regulated economy and sky-high marginal tax rates is certainly not the answer — nor is French-style industrial policy corporatism with a heavy dose of protectionism. Instead, Republicans and conservatives need to employ some basic tenets of free-market economics mixed with direct economic aid for the working middle class.

Basic free-market concepts like full information and competition need to be embraced over grifter-friendly, zero regulation attitude currently in vogue. Allowing businesses and investment promoters to conceal information, hide conflicts of interest, impose hidden fees, and create impossible terms of service is not pro-market.

Classical conservative economics recognizes the potential for abuse of market power. Lowering barriers to entry and sensible anti-trust policy is perfectly consistent with that theory. And it’s good for investors. When the Department of Justice decided to break-up AT&T and leave IBM alone in the 1980s, AT&T shareholders ended up the real winners, not IBM investors.

The bottom-line is Republicans cannot win political power without winning on economics. And they cannot win at economics without the votes of middle-class voters. Republicans and conservatives can either wake up to this reality and forge a new economic theory or surrender to the creeping socialism they despise.

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