The Republican Party's Political and Policy Pyramid Scheme

On Saturday, Tony Lee wrote a piece at Breitbart highlighting a recent speech by Pat Caddell where he discussed the reasons behind the Republican party's defeat in the presidential election. Among the many things that Caddell noted is that the Romney campaign bowed to the "consultant-lobbyist-establishment" complex. However, this is not only the GOP's political modus operandi, it is also their policy approach. This is why, although the Democrats may seem to resonate with voters more on messaging (Caddell also mentioned that voters didn't think Governor Romney "cared about them"), the differences on policy between the two parties appears to be shrinking. Of particular note, Caddell said:

“Why are Republicans not the anti-establishment party?,” Caddell asked.  

Caddell emphasized a “narrative is a story” that comes over a period of time and “not just a single message.” 

He cited Ronald Reagan as someone who knew how to speak to Democrats and “ordinary and common” Americans and bring them over to his side because Reagan had been one of them and came from regular Americans and shared their experiences. 

“That is a quality that has been missing a long time in a search for alternative candidate," Caddell said, in reference to Reagan's ability to resonate with blue collar Americans. 

[...] 

“As long as the establishment wants to preserve the establishment and their special deals, you will lose,” Caddell said.

Caddell, of course, is correct. The Republican party's political approach has been inept attempt of self-preservation of the Establishment. They have been rudderless, inarticulate, and out-of-touch. I wrote last week about the need for the Republican party to do a better job at messaging and selling the winning product of conservatism, but the keys to victory of course, goes beyond this. One of the Republican party's failures has been that they have seen politics along a single axis--right and left--between the seemingly arbitrary boundaries of political parties. In reality, politics and policy both have a vertical component to them---top to bottom--not in the terms of political party, but of political connection and personal benefit.

As Caddell notes, "why are Republicans not the anti-establishment party?". They are not because they willfully ignore their own devotion to that "consultant-lobbyist-establishment" complex. Caddell also noted:

“No presidential campaign should be run by consultants,” Caddell said. “They should be run by people who are committed to the candidate and not into making big money.”

However, the past two losing presidential campaigns has been run by people who saw they could make money even in losing. Despite running a horrible campaign in 2008, Steve Schmidt saw he could continue to make money as a consultant and later as a political analyst at MSNBC as a "Republican" who trashes Republicans. The same can be said for Nicolle Wallace who works now at ABC and has attempted to capitalized on the notoriety of defeat by writing political fiction (which is the same genre as her political commentary). Through mid October, the Romney campaign had paid  $134+ million to political firms tied to his aides, including funding a  failed GOTV software. Karl Rove's "Crossroads" group brought in and spent more than one hundred million dollars, only to have every candidate they supported lose. The GOP establishment has turned the Republican party into a pyramid scheme--where the few at the top (the Establishment and their consultants) eat well at the expense of their own base. The political game is not simply "right vs. left"; it is a game where the establishment does not care if they win politically (and the country wins on the basis of ideology and principle) so long as they win monetarily.  They eschew their own base and ignore the entire electorate to pad their bank accounts. They do not realize the need for "free market populism", which is the solution for the "vertical" political and policy problems the GOP has.

Policy must be viewed on a vertical plane as well. Cronyism and corporatism must be rejected. Both of these "isms" allow for the politically connected at the top of food chain to benefit at the expense of the taxpayers at the bottom. This goes beyond the infamous problems with Solyndra and the other green energy companies tied to political donors. This also includes political institutions like the ExIm Bank, which provides taxpayer backed loan guarantees for American companies who sell their product overseas. The ExIm bank is supported by many Republicans, and its re-authorization was one of the few things that flew through the House and Senate with ease before being signed by President Obama. The Republican party is not distinguishing themselves from the Democrats when they choose to subsidize business on the backs of ordinary Americans.

Economic ideas must not be the "pro-government" ideas of the Democrats, nor the purported "pro-business" ideas of the Republicans. Rather, they must be "pro-market" ideas. Pro government ideas are founded in expanding government at the expense of the taxpayers' money and liberty. Pro business ideas are founded in expanding government and some businesses at the expense of both other businesses and taxpayers. Both of the ideologies empower either government or specific businesses or industries, but "pro market" ideas empower the consumer as their purchasing power, not government taxation, bailouts, or subsidies, drives the market. Take, for example, ethanol subsidies. The EPA refused to ease ethanol mandates for fuel following a year of drought which negatively affected the corn harvest. What does this do? It makes fuel more expensive, and it has even made livestock farmers resort to feeding candy to their animals because increased corn prices have made livestock feed more expensive, which continues to occur in part because corn is being used for ethanol in fuel rather than in livestock feed. What does this have to do with the Republican party? Again, ethanol subsidies have bipartisan support, and the Republican party has not distinguished themselves from Democrats.

The concept of populism is not often seen as a conservative concept, and to some, free market populism may seem like an oxy moron. However, it is not the populism of liberals who pit Americans against each other through class warfare. It is a populism that desires to wage a war of sorts against the permanent political class (and the "consultant-lobbyist-establishment" complex) through a new brand of policy and politics. It is a brand guided not by the clinched fist of socialism, nor the hand-in-hand relationships of business and government, but of the invisible hand of the free market where the individual is empowered by lower taxes and smaller government.

In order to win elections and subsequently support for policy, the Republican party must realize that the battle lies in their message and the directionality of their focus, not in the hands of establishment consultants. If they ignore the vertical plane of their political and policy battles, they will lose not only their political base, but the electorate as a whole, and their pyramid scheme will come crashing down.


Crossposted here and here.

What Both Parties Can Learn from Sheryl Crow

There is probably very little that Sheryl "one square" Crow and I agree on politically, but I've always enjoyed her music. In 1995, she wrote a song called "Leaving Las Vegas" for a film by the same name.

 

 Neither the song nor the film really have anything to do with gambling nor politics, but the song's theme of leaving Las Vegas is one that both political parties should learn from, metaphorically speaking--leave behind the practice of betting with the American taxpayers' money.

Today, President Obama launched a two day bus tour with the theme of "Betting on America" touting his support of the auto bailout and slamming Mitt Romney's business record. This is an interesting messaging approach for a man who has twice slammed people for spending time and money in Las Vegas. While President Obama tries to tout a message of supporting the American worker (betting on America), he has actually been betting with American taxpayer money throughout his presidency. He has attempted to pick winners and losers, such as in the infamous Solyndra loan where one of his donors won a more than half billion dollar green loan and the American taxpayer ultimately lost big time. He has invested millions in biofuels, again in a company with ties to one his cronies,  for the military at cost that is 4 times the average cost for the fuel in a normal market.

However, President Obama and the Democrats are not the only ones who have been involved in picking winners and losers at the taxpayer's expense. Republicans are also culpable, as a piece in the Washington Examiner notes of green energy loans:

George W. Bush and Barack Obama have also tried to boost wind and solar power with government money. The 2007 energy bill created a loan guarantee program in the Department of Energy, and Obama's 2009 stimulus expanded the program, ultimately putting Solyndra's losses and other green energy busts on the taxpayers' back.

This kind of behavior is not limited to only green energy loans. It extend to other kinds of loans--even loans to companies like Boeing. The Obama administration has demonized Boeing for wanting to build a plant in a right-to-work state and has denounced the use of corporate jets--which Boeing produces. Even still, he has allowed for the American taxpayers to be the guarantor of loans of to companies like Boeing when he signed the re-authorization, supported by both Republicans and Democrats, of the Export Import Bank. The Washington Examiner again notes:

Obama plans to use the Export-Import Bank -- a federal agency that gives taxpayer-backed loans and loan guarantees to foreign buyers who buy American goods -- to subsidize U.S. manufacturers even when they are selling to other American companies. 

This would be a significant step in the federal government's transformation into a venture capital firm and investment bank involved in all corners of the economy. It's private profit and public risk. Conservative Sen. Jim DeMint calls it "venture socialism." 

Ex-Im has been financing exports for decades. Taxpayer-backed loan guarantees push down interest rates for foreign buyers, thus greasing the wheels for U.S. manufacturers and eliminating risk for U.S. banks.

These loans are perhaps less risky than the "green" energy loans of the Department of Energy, but nonetheless, as the article states, they are " public risk". If the companies default, it's at the expense of the American taxpayer.

This is why it is important to make the distinction between big government, pro business, and pro market approaches to handling the economy. This is something that Governor Palin understands very well-- both in  how the government should handle green energy and  the economy as a whole. Regarding government investments in green energy, Governor Palin noted in an interview with Breitbart.com (emphasis mine):

Yes, for the private sector. I don’t think there is anything wrong with setting goals for alternative energy, but we have to be realistic. A truly effective alternative energy source needs to be efficient and profitable. No amount of Obama’s subsidizing his campaign donors’ bankrupt green energy companies—some with harebrained ideas that will never be economic—will get us to that efficient and profitable alternative. The free market will determine this. Sure, we can support research and development when it’s appropriate, but as scientists and venture capitalists continue to look for viable alternative energy sources, we should be encouraging the development of natural gas as a clean and plentiful bridge-fuel to a more renewable future. We have enough natural gas in America to be energy independent for many decades!

This is a pro-market approach to green energy, and it should be applied to all aspects of the economy. No more betting with the American people's money. I wrote in a previous post about Governor Palin's pro-market approach to the economy:

The big government views of the Left and the "pro business" views espoused by many in the GOP think that government exists to do things for the people or for businesses. Governor Palin is pro market. Who is empowered in a pro market economy? The consumers (the people). The people determine whether or not a business fails or succeeds by their purchasing power--not by the special loans of the big government Left or the special tax breaks of the pro-business GOPers, but of the the Galileoan pro-marketers. 

This is what makes Governor Palin's speech in Iowa late last summer so compelling. She laid out a vision of a pro market economy--no corporate taxes, but no corporate welfare, no special tax breaks or subsidies either. In other words, let the people decide what business fail or succeed by their purchasing power. Also, as Governor Palin wrote in a Wall Street Journal op-ed, echoing Peter Schweizer's book Throw Them All Out,  let there be no more crony capitalism and no more special treatment of politicians.

Both parties need to stop trying to do things for their cronies and stop doing things to the American taxpayer.    The economy is not a giant casino with green energy slots or big business roulette tables, and the taxpayers should not have to finance the government's addiction to OPM  (other people's money) and gambling. The need to leave this "Las Vegas" behavior behind. Otherwise, the voters will continue having to choose which party is their favorite mistake, rather than the party that stands with them.

Crossposted here and here.