Just lost an opportunity to "re-brand"

Republicans were right, based on political considerations, not to vote for the stimulus package. It was predicatble (especially since Rahm Emmanuel called attention to it) that Democrats would use the fiscal stimulus to promote their policy preferences - a crisis should not be wasted. Neither should the Republicans though have wasted the opportunity. No, they wouldn't have gotten anything passed but that's not the point. In the popular imagination the choice is between borrowing an enormous sum of money to stimulate the economy and doing nothing or perhaps cutting taxes. There was that $15,000 tax credit for new homebuyers. Hard to get charged up about something that would have distorted the market for housing just after such distortions led to a bubble in housing that led to the current downturn.

Instead the Republicans should have used the downturn to offer a comprehensive alternative. Having lost nearly all their credibility over the past decade with respect to the promotion of sound fiscal management this was an opportunity to begin to re-establish their identity. In 1994 the Contract with America served to provide clarity just before the mid-term elections that saw huge Republican gains. Some characterize it as having served to nationalize the congressional election. You didn't need to be a policy wonk or political junkie to look and ascertain what the Republicans stood for. The Contract made it easy.

Now Newt is back with 12 American Solutions jobs and prosperity. Of course the mere mention of Newt Gingrich causes many to scoff but there is just no denying that he is a brilliant communicator. You try getting elected in late seventies Georgia with a professorial demeanor and a name like Newt. Then go on to emerge as the leader of a demoralized party and become House Speaker.

And, what of the substance of the 12 American Solutions?

a. Reduce the payroll tax by 50% - That reduces the cost of hiring and puts more money in consumers' hands. Even though most government revenue comes from the income tax, more Americans pay more in payroll taxes then they do in income taxes.

b. More American Energy now - This has a short term component - get more oil and gas from our reserves - and a long term component - investing in alternative energy. That has broad appeal. Energy price spikes - like the one we recently experienced - are de-stabilizing.

c. Protect the right of American workers to have a secret ballot - The presence of unions tend to increase unemployment. We need look no further than the American automakers to see how unions have tended to kill the proverbial goose that lays the golden eggs. Even those who identify with unions tend to admit that having a secret ballot is a fundamental right.

d. Invest in energy and transportation infrastructure - Enhancing our electrical grid and improving our ability to move people and goods increases productivity.

Suppose citizens were faced with these choices in the current downturn, an enormous amount of deficit spending that includes such things as funding for the arts, a $15,000 tax credit for new homebuyers, or a comprehensive effort that includes adjustments to the tax code to stimulate hiring, a move to increase domestic energy production, and infrastructure investments where there is broad agreement with respect to enhancing productivity.