Time for Republicans to be ‘reactionary’

"Depend upon it, sir, when a man knows he is to be hanged in a fortnight, it concentrates his mind wonderfully." - Samuel Johnson, English writer Now that the misnamed "stimulus" package has passed that President Obama requested and the Congressional Democrats crafted, we have clarity about our nation’s choices and thereby its future. The poorly kept secret is out: this is not a bailout law, this $780 billion monstrosity. It includes everything Democrats have wanted for decades, from subsidies to handouts to income transfers.

The best news is that no Republicans in the House of Representatives and only three (northeastern) Republican Senators voted for the omnibus legislation, meaning that our so-called "reactionary" political party is doing the right thing and laying the basis for a comeback in the 2010 and 2012 elections.

Much has been written and said in recent years about how much better it is to be "proactive" than reactive, as if there’s something unintelligent and ill-advised about responding promptly to challenges that arise. I see a good sign in the initial GOP reaction to the opening salvo in the Democrats’ campaign to make Big Government permanent and impregnable, for precisely the reason that Dr. Johnson gives.

Reactionary has been a bad word and unwelcome label at least since self-styled "progressives"such as Theodore Roosevelt and Woodrow Wilson came upon our political scene a century ago. They favored equality of condition over equality of rights and therefore saw nothing sacred about freedom of commerce or the Constitution that provided security for it.

Not surprisingly, then, Republicans in opposition were castigated as hopelessly reactionary in the 1930s when Franklin Roosevelt’s New Deal dramatically increased the role–and the cost–of the federal government’s regulation of commerce. When FDR took office in 1933, the annual federal budget was $3 billion. Now it is $3 TRILLION dollars.

Republicans survived the New Deal by conceding the good intentions of the Democrats, promising the same advantages for less cost. They were tax collectors for the welfare state until Ronald Reagan showed that high tax rates are counterproductive and instead stimulated our "Carterized" commerce with a cut in the rates and the number of brackets in 1981.

Reagan’s "reaction" to the stagflation (high inflation, unemployment and interest rates) of the 1970s was exactly right. But he was not the first Republican president to "react" to bad Democrat policy.

Our first GOP chief executive, Abraham Lincoln, reacted to the Democrats’ policy of extending slavery into western territories and even Latin America by calling for the repeal of the Kansas-Nebraska Act and overturning of Dred Scott v. Sanford that made this possible.

When there is a fire, we expect the fire department to react. When a crime is committed, we expect the same from the police. When we were attacked by our Islamist enemies on September 11, 2001, President Bush reacted by taking the war to the enemy. In all these cases, we are better for our duly constituted authorities reacting promptly to threats to public safety.

Of course, there is nothing wrong with being "proactive" in the sense that the fire and police departments encourage prevention among the citizenry, and the U.S. government seeks peace with friendly nations and is on guard against unfriendly ones.

But when the threat to our safety, and most assuredly to our liberties, is clear and palpable, the political party that should be preferred is the one that reacts in the right way. Just as the first Republicans did not relent until they had won control of the government and reversed bad policy, so today’s party should work in earnest to sound the alarm at the Democrat majority’s assault on our freedom.

Already President Obama has rescinded the ban on government funding of abortions overseas. Next will be all abortions in this country through the utterly dishonest "Freedom of Choice" Act that will remove all legislative, judicial and funding limits on abortions for all nine months of pregnancy.

Equally menacing are the deceptive (again) Freedom of Choice Act which would permit unionization without a secret ballot; and the misnamed "Fairness Doctrine," which would force all radio stations to provide equal time to popular conservative talk shows, effectively driving them off the air.

In a year or two, socialized medicine will be proposed, probably in stages, which will drive up the cost of health care and lead to rationing as government bureaucrats decide who deserves to live or to die.

There’s plenty here for freedom-loving Americans to react to. The sooner we toss out the avatars of Big Government, the better.

What 'stimulates' American commerce?

If Republicans can modify or delay the “stimulus” package, we might be in the midst of a debate over whether our economic woes can be overcome with government policies that encourage production or consumption. That is not likely for, as “post-partisan” President Barack Obama let slip, “We [meaning Democrats] won.” There has been a major divide between parties over this question at least since the Great Depression, and especially since President Reagan led a successful charge for cuts in income tax rates that gave rise to a 25-year boom.

The two opposing views are supply-side and demand-side political economy. The first holds that prosperity is driven by business enterprise, facilitated when income and other tax rates are low. The second maintains that the cause is consumers with spending power, boosted when federal spending “primes the pump” with new government programs.

Let us admit that supply and demand are as inseparable as the concave and convex sides of a curved line. No one can buy what is not for sale and nothing can be sold when there are no customers. But bearing in mind that commercial republics like the United States are vastly more prosperous than primitive societies largely dependent upon agriculture, we must consider that something accounts for the difference.

That “something” is the entrepreneur, who neither commands wealth nor depends upon the beneficence of others. Unlike landed aristocrats or powerful oligarchs, those in business for themselves provide a good or service which a sufficiently profitable number of people need or want, and freely choose.

The supply-side approach demonstrated its capacity for fostering national prosperity when Congress in 1981 reduced the highest income tax rate from 70 to 50 percent, and decreased the number of brackets from 14 to five. Double digit inflation, unemployment and interest rates all fell to lower levels.

In the early 1960s President Kennedy effectively made the case that the existing top tax rate of 91 percent on incomes of $200,000 yielded little revenue to the government because wealthy persons legally shielded their income in ways Congress had made possible with tax breaks.

Why is this? The explanation lies in a combination of human nature and mathematics. High tax rates are, to say the very least, burdensome. So if they can avoid it, people will find ways around them. If someone earns a million dollars and is taxed at 91 percent, that only theoretically (but not actually) nets the government $910,000 . For if he reduces his taxable income through various tax shelters to, say, $500,000, the government gets only $455,000. And even this is fanciful.

On other hand, if the income tax rates are lowered, the enterprising businessman is more likely to invest more and earn more on his money. If he then makes two million dollars under a more favorable tax regime, at 50 percent that yields a million dollars, or more than twice as much as he actually paid under the higher tax rate.

Thus, not only did this policy revive stagnant commerce, it yielded more revenue for the government than ever. Indeed, even substantial federal deficits each year during the Reagan years put no drag on our growing prosperity. We had high defense spending to face down the Soviet military threat along with increases in social welfare spending, but lowered tax rates kept commerce humming.

The demand side approach was first implemented in the administration of Franklin Roosevelt. Income tax rates, which already had risen in the previous administration, went even higher, causing the recession inherited from Herbert Hoover to expand into a Great Depression as the government added agencies and bureaus on an unprecedented scale.

Deflation and high unemployment plagued us during FDR’s first two terms, and only World War II’s demands for armaments and supplies turned the corner. Then, for the first time, income tax was withheld from pay checks to ease the pain of taxing not just the wealthy (who can’t pay it all) but everybody else with any income.

Currently, Democrats are saying that the failures of the New Deal were due to the federal government not spending enough money fast enough. But that is just so much blowing of smoke, for even the government cannot spend money fast enough to stimulate anything except a passion for the political power made possible by enlargement of government beyond its constitutional functions.

The government cannot spend us into prosperity and certainly cannot pay for it with confiscatory tax rates which free people will always find ways to avoid, if they do not move their enterprises elsewhere. Real political economy consists in restraining the government, not unleashing it.

What rule by Democrats brings

It has often been said that, as California goes, so goes the nation. And for good reason. With the largest population and so many talented and influential people, the Golden State has long set the standard, for good or for ill, in both the public and private sector. It is the public sector that concerns us now. Long before Democrats took control of our national government, they had effective control over California government, whether or not there were Republican governors. Democrat control of Congress for half a century limited what Republican could presidents do, too.

Some have likened California government to a kind of social experiment in which every political, economic, social or pseudo-scientific nostrum gets free play because of the iron lock Democrats have on the legislature. As long as redistricting has been in the hands of the legislature, district lines have been drawn to freeze the political advantage of the permanent Democrat majority and Republican minority.

Even term limits have done nothing to change this. Time will tell whether the measure enacted by California voters last year to put the redistricting power in a commission will make any difference either.

In any event, because of their dominance–and more important, because of their "progressive" (i.e., interventionist, latitudinarian) principles–Democrats now threaten to enfeeble commerce, drive away entrepreneurs, curtail government by consent and, as practically everyone knows, bankrupt the state's government.

Surely the most useless comment that is made about politics is that party labels don’t matter, that one should vote for the person and not for the party, that there’s no difference between the parties, that we can all get along if we just put aside partisan differences, ad nauseam.

California Republicans are pretty disappointed in Gov. Schwarzenegger because he wants to balance the budget with a combination of spending cuts, tax increases and borrowing (not to mention kicking the fiscal can further down the road to the "out years"), and they are right to be. A more principled man, like Tom McClintock, for instance, who also ran in the recall election that dispatched Gov. Gray Davis, would be standing firm.

However, since Californians have who they have, and especially since there are lopsided Democrat majorities in both the Assembly and the Senate, a "solution" will ultimately be found that is fiscally irresponsible. What is needed is not only need a staunch Republican governor, but also a Republican legislature.

Democrats on principle oppose tax cuts and spending cuts because they want a big, intrusive government that overrides free citizens in a free marketplace. They believe that markets are incapable of allocating resources fairly, because they believe "fair" means equal conditions rather than equal rights. They are oblivious to the fact that unrestrained government spending, with its corollary of high taxes on incomes, sales and properties, is lowering the standard of living and diminishing economic opportunities.

The flip side of government micro managing commerce is moral latitudinarianism for the populace. Sexuality freed from moral or legal constraints is consistent with the short-sighted, present-oriented perspective that the government has aided and abetted via the credit crisis in which many people, rich and poor and in between, have gotten in way over their heads.

Consistent with this pernicious policy is the virtual conspiracy by all three branches of state government to challenge the right of the people to determine what their constitution shall protect or secure. Together Democrat Attorney General Jerry Brown, Democrats in the legislature and, of course, a majority of the State Supreme Court seek to set aside the clear decision of Californians last fall to define marriage as the union of one man and one woman.

The Court’s ruling last May that homosexual and lesbian couples have a "right" to marriage, which not only the current common sense limitation but even civil unions evidently cannot adequately satisfy, might have provoked a constitutional crisis from an attorney general who is required to uphold the law in court or a state legislature which is authorized to legislate, but in fact all three branches are in cahoots.

The shocking thing about the California government’s movement to shut down Proposition 8 is that it’s no secret and therefore it is not, strictly speaking, a conspiracy. Considering the fact that it is aimed at the right of self government, the foundation for our republic, it is deserving of the massive public outrage that an offense of this magnitude should generate. It must not be allowed to stand. Only Republicans can be counted upon to perform this necessary work.

Recipe for Republican renewal

How could the GOP could become the Grand Old Party once again? Their chances in 2010 aren't very good right now, even if the Democrats go hog wild with more pork-barrel spending, and big-government programs. The past eight years of George W. Bush and his administration don't inspire a lot of confidence for most Americans in the Republican party. Now, it's still possible the party could regain relevance in the next few years. It's not an easy process, and will require attributes that a lot of politicians don't have – or if they do, they're in short supply. Such as common sense. Economic and financial literacy. Remembering and governing by the founding principles of the Republican party and the United States.

Vince Lombardi told his Green Bay Packer team back in the 1960s, “Gentlemen, this is a football.” It was his way of stressing the fundamentals to his players. That's exactly what Republicans must remember (and put into governance) if the party wants a chance in hell of staying relevant – or even in existence. It's the Constitutional, limited-goverment principles our country was founded on.

Simple things like cutting (or at least freezing) spending... balancing our budgets... and making sure new programs are necessary before approving them. And utilizing our military for national defense – not international offense into foreign lands, with no clear enemy, goals or exit strategy.

It's definitely not the “neo-conservative” bill of goods that was sold to the GOP and our country. And it's not blindly supporting a leader regardless of how they govern, because they have an “R” behind their name.

That's the reason Republicans lost en masse in 2006 and 2008. Average Americans looked at supporters of the party and the President as loyal Kool-Aid drinkers who acted like Seargeant Schultz from Hogan's Heroes (“I know no-thing... I see no-thing!”), and saw nothing wrong with anything President Bush did. It was “Hallelujah, Hail Bush, Pass the Ammunition.”

Republicans and some “conservatives” who looked at everything President Clinton did with a critical eye, turned a blind eye to the Bush Administration's policies that increased our country's debt, and decreased our liberties – all in the name of the “War on Terror.” Never mind that terror is a tactic, not an enemy – and makes about as much sense as a “War on Frontal Assaults.” The WOT rings hollow when our southern border with Mexico is an absolute sieve, and it's obvious the Administration was never serious about border security, or discouraging illegal immigration.

Americans saw borrowing and spending skyrocket to new all-time highs... and “staying the course” in two military conflicts, because we hadn't “finished the job” yet – whatever the hell it was. Even though back in 2003 the President declared, “Mission Accomplished.” Combine this with the biggest stock market crash since the Dirty 30's, and most folks on Election Day were ready for “change.” They didn't care about the details – as long as it wasn't the policies or party of George W. Bush.

Effective leadership today will require a lot of courage and candor from elected officials to citizens, bordering on brutal honesty. Especially when it comes to financial and economic matters, and how they affect policy decisions across the board.

The starting point for all decisions must be made with this premise: The United States of America is bankrupt, along with at least a dozen states. The state of California is Exhibit A. We can no longer afford to be the world's policeman, or show other countries the American way of life, whether they want it or not. The bailouts and stimulus programs (whether from Bush or Obama) are probably being funded by printed – and not borrowed – money, which is debasing the currency, and will cause high (if not hyper-) inflation in the next year or two.

We're the world's largest debtor nation, owing a good chunk of that debt to foreigners. The Fannie Mae and Freddie Mac bailouts last September were done to appease these foreign investors, who could have put in “sell” orders, and really wreaked havoc with our bond and real estate markets. The more important international battles in the short to medium-term will be financial and economic, and not military.

In the coming years, there will major paradigm shifts in the US. There will be a reduction – if not an elimination – of guaranteed pensions from corporations, state and federal governments. Fewer benefits, an increase in retirement age, and means testing will probably all be in place. Wall Street will no longer be a major financial center or sphere of influence, because of the arrogance, corruption and excessive greed of investment bankers – and that includes Hank Paulson.

For you “true believers” who think Paulson is a hero deserving Man of the Year honors, I'll sell you ocean-front property in Wyoming. Paulson made a ton of money shorting the mortgage-backed securities that he helped create – which means when the value of these “assets” went down (and he knew they would, because they were dogs from the get-go), he cleaned up. The $850 billion Banker Bailout Bill he railroaded through Congress was a scam as well. Banks have hoarded the money, and it hasn't gone to buy up troubled assets as Paulson said it would.

Wall Street and the stock market are a huge Ponzi scheme, and 401(k) plans will go down in history as one of the biggest scams ever foisted on American employees/investors. Warren Buffett says it best: “If you're at a poker table for awhile, and you don't see the sucker – you're it.”

Americans are starting to realize they've been played for suckers by Wall Street with the help of Democrats and Republicans, and they're none too happy about it. I've got a hunch that the Madoff scandal is only the tip of the proverbial iceberg, and we'll see more stories like this in the future.

Foreign leaders, central banks and investors are looking at our country and leaders like we've smoked large quantities of crack cocaine. They don't believe in or trust American leadership like they used to – and neither do a growing number of citizens.

I realize that some of you may disagree with what I'm saying, and think none of these events could ever happen in the US. Or you think that I'm not being a loyal Republican. Frankly, I don't care. I call it like I see it, and my predictions in the past have been pretty accurate. I knew that John McCain was a no-hoper back in July, and if you didn't figure it out by Labor Day, you were truly drinking the red-state Kool-Aid. Think about this: If the new-fangled, neo-conservative Republican way was so great, then what caused the electoral a**-kicking the last two elections?

The only way the GOP can regain prominence is to totally reject the foreign and domestic policies of George W. Bush, and get back governing by the limited-government, Constitutional principles that made this country great. And not just giving it lip service – but actually putting it into practice. Voters today are increasingly angry about what's going on; and their patience for nice platitudes, speeches, or general BS is quickly running out.

A lot of Obama supporters engaged in the cult of personality, but too many Republicans did as well. Either the party gets back to the fundamentals of our country's Founders, or it's doomed to irrelevance and a footnote in history.

Ken Blackwell for RNC Chairman

The Republican Party's vitality as we enter 2009 is attested by six strong candidates vying to be chairman. Ken Blackwell of Ohio, a longtime personal friend and ally, is my pick for the choice that will be made by 168 members of the Republican National Committee at the end of January. Blackwell is a time-tested Reagan-Kemp conservative and a natural leader.

As Ohio Secretary of State, his tough supervision helped an honest process for the 2004 election that saw President Bush gain the decisive electoral votes for reelection.

With better timing, Ken might have been Governor of Ohio today; he stormed to the 2006 nomination but lost in the Democrat tide that November.

That he also happens to be African-American is not a big deal, but it doesn't hurt. Nor does the fact that his wife is a reform-minded inner city school superintendent in Cincinnati.

His bid for the RNC chairmanship is detailed at KenBlackwell.com.

Early last month, Politico had a full rundown on the six contenders.

This week, The Hill updated the race, including a note that Blackwell has picked up the endorsement of Mark Hillman, Republican national committeeman for Colorado.