Discussion: (26 comments)
Comments are closed.
The public policy blog of the American Enterprise Institute
View related content: Pethokoukis
David Frum wonders what GOP messaging will be if the next four years doesn’t see another recession or a debt crisis. “As the economy improves, that doom-saying will seem even more out of touch than ever,” Frum writes over at CNN. And by “improves,” I will assume Frum means 2% GDP growth the next two years, closer to 3% after. Unemployment in the 6% range by 2016. Frum sees two things happening:
1) President Obama will begin to claim more credit. In 2012, the word “stimulus” went unmentioned by Democrats. It was Republicans who tried to make political use of the $800 billion spent on job creation in 2009-2011. In 2013-2014, however, the shoe may suddenly rematerialize on the other foot.
2) Republicans will discover that their old “Obama isn’t working” theme has become obsolete. By 2014, again assuming that Congress does not leap off the fiscal cliff, it will likely look as if Obama is working. What then? If negative messaging failed in 2012, it will fail bigger in 2014.
Republican political chances will depend on the Republican ability to devise a positive program to address the country’s fiscal problems in ways that improve people’s lives.
I think the economic scenario is entirely possible, as I explored recently. Now this would hardly be a boom. Indeed, employment and output would still be way below their pre-Great Recession trend lines. Income growth would be no great shakes. Indeed, Ben Bernanke said recently that U.S. GDP potential growth pre-recession was 2.5% vs. the 3.4% average since WWII.
So message #!1 would be “We can do a lot better” with specific pro-growth ideas from taxes to immigration to basic research. A focus on competitiveness and productivity with a goal of returning to 3-4% growth.
Message #2 would be “We care about middle-class families” with pro-parent policy tilt. One example: A great expanded child credit. And a specific healthcare reform plan would be helpful.
Now even under the Frum scenario, publicly held debt as a share of GDP would be around 80%, with entitlements still ready to take it stratospheric levels. So that issue isn’t going away. Indeed, that level of debt makes the weak expansion look unsustainable. Will Democrats still not have a plan?
Voters in 2014 and 2016 could be looking back at an economy that has not performed well, at minimum, since 2006. Lots more talk about a Lost Decade turning into a Lost Century – especially if China becomes the world’s largest economy during Obama’s second term. I don’t think Democrats will be able to run again on a “stay the course” message when that course looks like one of stagnating living standards and geopolitical decline. Seems like plenty of room for the GOP to make their case — even without an economic apocalypse.
Comments are closed.
1150 17th Street, N.W. Washington, D.C. 20036
© 2014 American Enterprise Institute for Public Policy Research