The Republican Brand in Peril?

Monday, September 29, 2008

So the House just voted to kill the latest incarnation of the Wall Street bailout plan with 67% of Republicans voting no and a sizable 40% of Democrats following suit to avoid voting for what may be a necessary, but very unpopular bill.

We have also been hearing over the last week that a segment of Republicans in Congress would rather take the risk that the markets collapse and push us into the next great depression instead of propping up the financial system with a huge government intervention. Some would say this is confidence in the marketplace, others would say they are just plain insane, but the reality may be self preservation.

The way I see it, the Republicans who are willfully willing to risk a market collapse and are still resisting the bailout see the writing on the wall. They see the damage this thing will do to the Republican brand.

It is often thought that the mantra of smaller government, less regulation, and lower taxes are unbeatable positions for the Republicans to hold, but this situation might just be a political turning point not seen in 28 years. Where Democrats could not defeat the legacy of Ronald Reagan; deregulation, the ensuing collapse of Wall Street and subsequent bailout might just do it for them.

After the government bails out the banks, will another Republican be able to call for less regulation of business? Will a Republican ever be able to call for the privatization of Social Security? Will another Republican (or Clinton ) be able to triumphantly say: ” “The era of big government is over”?

What do you think?

8 comments:

B Mac 4:55 PM  

Two thoughts.

First, if you haven't seen the GOP's reason for opposing, it's a doozy. They voted no because a mean woman called them names:

"...The Republican House leadership blamed Pelosi, saying she gave a partisan speech before the vote that alienated House Republicans

'I think that we need to renew our efforts to find a solution that Congress can support. I do believe that we could have gotten there today had it not been for this partisan speech that the speaker gave on the floor of the House,' [Boehner] said."

Second, I think it hurts the Republicans mostly because it increases a desire for "change". And when your guy is wearing the windbreaker on Air Force One, you're the one that takes it on the chin when people want something different.

steves 5:26 PM  

I think there is reasoned opposition to the bailout plan. As I mentioned in a previous post, I am lacking in my knowledge of economics, so when someone like Thomas Sowell, who is very educated in economics (and very partisan), expresses misgivings at the bailout, then I will listen.

I still think some kind of bailout will be necessary, though if you read my post on the subject, there are some provisions that scare me. While some Republicans are die-hard small gov't types, most are comfortable with some level of control and regulation. I certainly accept this reality, though I think there are some Democrats that favor too much regulation or regulation that is ultimately harmful.

Where Democrats could not defeat the legacy of Ronald Reagan; deregulation, the ensuing collapse of Wall Street and subsequent bailout might just do it for them.

That is assuming that whatever bailout is signed ultimately works. If we use the Depression as an example, we see that a fair amount of the New Deal was harmful and not beneficial to most of society. It also worthwhile to consider that the regulatory scheme surrounding Fan/Fred created the environment for this current crisis and there is a ton of blame to spread around to both parties. Frankly, I have little confidence in most of the Legislature right now.

Smitty 6:58 PM  

I'm having a bit of trouble picking through the Volokh Conspiracy article you link to, steves. First and foremost, it seems heavily weighted towards anti-unionism and special interest groups. I know there's no love for special interest groups (and I, after all, am representative of an entire industry built on special interest groups!!), but again, this piece is really hard on unions as bing a culprit behind much of FDR's policies, which, as the artile contends, were never really that good to begin with.

The Teamsters were created in 1903. They would certainly have had some influence in FDR's adinistration.

The UAW was created in 1933, and was copleted in its creation in 1935. May have had some influence, but again, the years in question in the article were the formative years of this heavily-industrial union.

The AFL-CIO wasn't created until 1955 from the union of 2 different unions: the American Federation of Labor and the Congress of Industrial Organizations. The AFL part was created in 1886, so sure, it could have had some influence, and in its own history admits to supporting particular politicians. The CIO part was fored in 1938 over grumpiness over how the AFL part was managing itself.

There are folks with better union chops than mine that can argue abut the benefit of unions during the Great Depression.

That said, I'm just not sure that the Volokh's assessment of FDR's 1933 policies were as nefarious and unbeneficial as they are made out to be, especially from someone who seems to be pretty overtly anti-union.

steves 7:48 PM  

I have read many of that authors other articles and I don't think he is anti-union. I think his point was that there is a popular history built up on the New Deal that it was this highly effective social welfare program that saved us from the Depression. This article, and actual history, says that parts of the New Deal worked and other parts didn't. The author does state that some parts were beneficial. I think it is a good cautionary tale in that we need to have a healthy degree of transparency in any kind of bailout and, like the author of that article, we should be wary of any massive transfer of money.

You know that I am not anti-union. I was in a union at one time and we even went on strike (which is not a great idea in December). My wife is currently in a union and they have helped her out on several occasions. I think the union environment of the Depression era was much different than it is today. My grandfather was a mine manager during the Depression, so I got to hear about some pretty scary shit.

Smitty 8:19 PM  

Steves:

I didn't say you were anti-union. I get the impression from this guys article that the author was anti-union.

I thought I remembered hearing somewhere in my vast experiences with half-listening to lectures, that involvement in WWII actualy helped us get the rest of the way out of the Depression...

steves 9:31 PM  

I didn't say you were anti-union.

I know and didn't mean to imply that you did. I pointed that out because I wouldn't reference an article that I thought was in error or blatantly unfair.

I thought I remembered hearing somewhere in my vast experiences with half-listening to lectures, that involvement in WWII actualy helped us get the rest of the way out of the Depression...

That was my understanding, too.

Smitty 10:13 PM  

I think there is reasoned opposition to the bailout plan

I still think some kind of bailout will be necessary

I agree absolutely. I am still having trouble with a bailout plan that bails-out the corporations and such, as you indicate likewise, and I still think the people that need the bailing out are the 3,000,000 people with bad loans. Trickle UP economics.

I think it is a good cautionary tale in that we need to have a healthy degree of transparency in any kind of bailout and, like the author of that article, we should be wary of any massive transfer of money...

...to business entities. Especially the very ones who caused it through recklessness.

Bob 7:23 AM  

"That is assuming that whatever bailout is signed ultimately works."

True. If we pass a big bailout and the economy ends up over a cliff, it could have the reverse effect of my theory.

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