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The Political Damage of Tax Increases: Wisconsin Edition

by D.J. McGuire

When I was a Republican, nothing would get my attention quite like the political damage tax increases did to the GOP. Republicans in Virginia raised taxes three times in less than a decade (2004, 2007, and 2013), and as a Republican committee member and a blogger, I railed against them, not just as bad policy, but as terrible politics.

Well, I switched parties in 2016, so to my fellow Democrats I have one message: it’s your turn now.

Last year, Wisconsin appeared to join the rest of the country in revolting against President Trump and electing Democrats across the board. However, many of the victories were narrow – and one victor in particular (now Governor Tony Evers) promised in his winning campaign that he was “planning to raise no taxes” (Politifact).

You already know where this is going, but just in case (same link):

Evers introduced a two-year, $83 billion budget that would repeal the state’s right-to-work law, raise the minimum wage and expand the BadgerCare Plus health care program through Obamacare.

And it would raise the gas tax by $485 million and other taxes by more than $550 million.

To be fair, the Governor’s Deputy Chief of Staff tried to argue there were tax cuts elsewhere in the budget, and the governor is trying to pair the tax hike with the removal of a bizarre anti-competitive “markup” mandate on gasoline, but voters still aren’t happy.

How do we know that? They voted against a Democratic-endorsed candidate for Supreme Court this week.

Charlie Sykes has the details in The Atlantic, but the summary is ugly for Democrats: a chance to add a crucial seat on the State Supreme Court (it’s currently 5-2 rightward) fell apart – and a Republican-endorsed candidate who likened “homosexual behavior” to bestiality (admittedly in a dry, legalist sense, but it’s still an utterly abhorrent thing to say) and refused to walk it back was narrowly elected to the post. The race was close enough for a recount, which means it was close enough that every factor likely had an impact …

… including the factor in the Governor’s office who pulled a “Full Flop” (as Politifact called it) and proposed a surprise tax increase just before the vote.

How much of an impact this will have on 2020 is unclear, but Democrats in Wisconsin need to take note. Jim Florio tried the same two-step in New Jersey in 1989-90; he succeeded in delaying the Garden State realignment to his party by a decade at the state level. Tim Kaine, on his way out of the Virginia Governor’s Mansion in late 2009, proposed a massive tax increase. His party promptly lost three Congressional seats and the State Senate before Barack Obama and the aforementioned 2013 tax increase changed the channel.

I get that the Democratic Party isn’t used to making strenuous attempts to avoid tax increases by being more efficient with public spending. Truth be told, Republicans aren’t either; they just know how to talk the talk. Democrats can, however, find a rich trove of voters if they can manage to walk the walk on government delivering progressive policy ends via conservative budget means.

Or, they can keep trying surprise tax increases and wondering why voters keep recoiling in horror, but we’ve seen that movie already. We know how it ends.

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015. He is also a contributor to Bearing Drift.

In Defense of Freer Trade

by D.J. McGuire

As we careen towards another presidential election, one of the issues that has been once again shunted to the side is international trade. This is a mistake, especially for Democrats looking to expand their coalition (or hold the expansions achieved in last year’s Congressional election). Before we get to that, however, we must revisit why protectionism is wrong, and freer trade is better for Americans and for everyone else.

America has had a conflicted history when it comes to trade. One would presume that protectionism had an advantage when tariffs were our primary source of revenue. In fact, protectionists in the nineteenth century preferred tariff rates so high that revenue would fallbecause imports would so low. Indeed, it was just such an economic platform that enabled the Republicans to win the election of 1888 (despite losing the popular vote) and enact the McKinley Tariff. It is the most common historical marker Donald Trump uses in his own speeches when he defends his protectionist outlook.

Here’s what he doesn’t mention: the tariff was so unpopular that the Republicans lost half their House seats in the election of 1890 (including McKinley’s) and the Democrats took back the White House in 1892. By the time McKinley returned to national politics (as the Republican nominee for President in 1896), he had remade himself as a defender of the gold standard.

A generation later, the Republicans once again forgot the economics of freer trade – and the rest of us suffered the consequences. The Smoot-Hawley tariff of 1929 is still mentioned in Economics classes today as an example of short-sighted policy. It either caused or exacerbated the Great Depression (depending upon which economist is talking). The political effects were also acute: the Republicans were denied a Congressional majority for the over a decade and a half, and after Hoover’s defeat in 1932 they would be out of the White House for twenty years. Congress became so mired in self-doubt that it handed the presidency de facto legislative authority to reduce tariffs (before taking it back under Trade Promotion Authority in the 1970s).

Thus was the “free trade” consensus established, a consensus that started fraying when the Democrats began flirting with protectionism in the late 20th century (before the Clinton era), and is now in serious trouble due to the populist takeover of the GOP. While I prefer to use the term “freer trade” (fully “free trade” is an impossible absolute), I am deeply concerned about the protectionist retaking control of the Republican Party, for reasons both economic and political.

Economically, freer trade means more options for Americans and more efficient markets for them. Please note, I did not limit those benefits to America “consumers” – and for good reason. The first tariffs Trump imposed in 2018 were on steel and aluminum, which hits firms across the country with higher production costs. Those costs led to jobs unfilled, products unmade, services not offered, and prices increased.

Those are the direct impacts of tariffs on inputs, but tariffs on goods and services also damage economies indirectly. Higher prices on these goods and services lowers both Americans’ standards of living and their savings balances. Less money saved means fewer funds available for business to invest in themselves. Once again, that leads to jobs unfilled, products unmade, and services not offered.

So why does protectionism still seem so popular among the populist right and the American left? Status quo bias is certainly a part of it. The opportunity cost of protectionism is the loss of jobs and growth not yet seen, compared to disruptions that are easily seen. Trump’s behavior on the “Carrier deal” before he took office is a class example. As I noted at the time, “saving” jobs in one area costs jobs in another (and worse), but those costs are less visible.

Or at least they wereless visible. In the social media era, with access to information much easier, we are seeing more discussion of the overall effects of tariffs. What once required the ability to follow several academic journals now requires little more than following Scott Lincicome. Meanwhile, Boeing’s recent problems have been another revelation on the advantages of freer trade: greater choice of products, services, and inputs – or, as Jane McManusput it: “Was never so relieved to see ‘Airbus’ on my upcoming booking.”

As for the politics of trade, that, too is changing. As Trump increasing rebrands the GOP as the protectionist party it once was in the 1880s and in the 1920s, supporters of freer trade are finding Democratic voters far more receptive to their ideas than certain Democratic elected officials (Pew Research). Even in 2016, a majority of Democratic voters approved of free trade agreements, despite neither of the two major contenders for their nomination openly supporting them. Indeed, the 45% of Americans who supported freer trade agreements only found one November candidate who agreed with them on that issue – and that was Gary Johnson. Democrats looking to be the nominee in 2020 should take note of what the party’s voters actually believe on trade – rather than what protectionists in the party are telling them.

First and foremost, though, those of us who know the damage protectionism can do must speak out against it and ensure the arguments for freer trade are heard – and that is why this post is here.

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015. He is also a contributor to Bearing Drift.

What the Georgia Runoff Told Us

by D.J. McGuire

Tuesday night was Election Runoff Night in Georgia. The results give some hope – and some concern – to both parties.

For the Republicans, victory was sweet for Brad Raffensperger, who held off a strong challenge from Democrat John Barrow to win the Secretary of State position. For Democrats upset at how Raffensperger’s predecessor (Governor-Elect Brian Kemp) handled the job, the defeat was bitter.

That said, it wasn’t all good news for the GOP. Republicans usually do better in runoffs than on Election Day in Georgia, and this was no exception. However, Barrow’s margin of defeat was more than a percentage point lessthan Clinton’s in 2016.

If the Democratic nominee in 2020 merely repeats that one-percent-plus improvement across the nation, then Michigan, Wisconsin, Pennsylvania, and the presidency goes to them – while Florida would be close enough for another of those hand recounts. If Republicans were hoping this election showed a post-midterm return to normal for them, they’re in for a disappointment.

For the Democrats, the loss was painful, but instructive. Barrow, a former Congressman from east Georgia, actually outdid his former running mate Stacey Abrams in rural vote share, but he underperformedin the Atlanta suburbs. Gwinnett County, which went to Abrams by more than 12 points, went for Barrow by barely more than one. Cobb County actually flipped back to the GOP (Abrams won it by nearly 10 points).

Then there was turnout, which wasn’t even 40% of what was seen on Election Day.

Now that we have Barrow’s defeat to add to the story, some things stand out.

First, Stacey Abrams was a better candidate than initially recognized.Conventional wisdom says Barrow, a white male with rural ties, should have done far better than Abrams. He didn’t – even on Election Day it was the performance of the Libertarian in his race that forced the runoff; his share of the vote was lower than Abrams’ share up-ballot. The fact that the Georgia Chamber of Commerce stayed neutral in the race should have been a clue. As it is, now we have some data behind it.

Secondly, the suburbs matter everywhere. Even GOP-leaning states saw their suburban areas pull away from them. They just had enough rural voters to make up the difference. In Georgia, though, they managed to stem some of their losses here, which was enough to counter a weaker rural presence against Barrow. Democrats clearly saw that appealing to rural voters at the expense of the suburbs has consequences – and not good ones.

Finally, African-American candidates help Democrats. One could call Georgia 2018 a microcosm of the Obama 2012 to Clinton 2016 turnout effect. African-American turnout fell from 2012 levels, enough not just to lower Clinton’s popular vote margin but also to turn the Electoral College against her. Now, we saw an African-American “progressive” (I use the quotes because what most conservatives think a “progressive” is and a candidate who doesn’t earn the opprobrium of the local Chamber of Commerce are two very different things) still do better in Georgia than a moderate white ex-Congressman.

I don’t think it’s just about turnout, though. Democrats are caught in an argument about how to rebuild their coalition. Do they attempt to win back “white working class” voters in rural areas? Or do they look to growing their already large margins about racial minorities and younger voters?

For yours truly, neither is as important as winning over center-right independents and moderate Republicans who stuck to Trump in the hope of getting a standard Republican administration and are struck with horror at the rampant trade warrior instead. Those voters are far less likely to cross over to a Democratic Party trying to outdo Trump on protectionism or isolationism – the kinds of things that obsess Democrats worried about “white working class” voters.

It might just be that African-American, Hispanic, or other non-white Democrats – who are spared the advice about “white working class” voters because (1) too many people shallowly assume they can’t win those voters over or (2) many assume that said voters also have serious racial animus behind their support for Trump – can spend more time appealing to supporters for freer trade and genuine internationalism. Whether those candidates themselves appreciate that in 2020, of course, remains to be seen.

In short, Republicans have reasons to be happy and worried, while Democrats have reasons to be frustrated just hopeful, about the elections to come over the next two years.

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015. He is also a contributor to Bearing Drift.

No, my fellow conservatives, the regulation rollbacks aren’t worth supporting Trump either

by D.J. McGuire

The standard defense a Trump supporter uses – well, the ones not wholly subsumed by racism or by authoritarian cultism – involves three political issues: the federal judiciary, the 2017 tax “reform”, and regulation rollbacks. I’ve already discussed why the 2017 tax law should bring no smile to a conservative’s face; I’ve also explained how fleeting “control” of the judicial branch really is. That leaves the regulation issue.

Theory versus Practice

In theory, fewer regulations is a standard supply-side economic policy: regulations increase costs on businesses and make it harder to smaller firms to compete with larger ones. In practice, it’s a bit less clear. None other than Charles Koch himself funded a study by Mercatus economist Alex Tabarrok that revealed the effect of regulation on American entrepreneurship to practically nil (Washington Post). Mercatus itself is of two views on the subject (others at the institute came to a different conclusion), but my point is that we’re not talking about something as cut and dried as most Republicans believe.

A Lack of Political (or any) Precision

Of course, most Republicans themselves are not fond of throwing every federal regulation ever written on a massive bonfire. The reason for the regulation also has an impact. Just as those of us who prefer limiting government’s size, scope, and cost take issue with “across the board spending cuts” – which make no accounting to necessary versus unwise expenditures – any trimming of regulations should have some form of precision or priorities. This is not the case with President Trump’s attacks on red tape. There appears to be no rhyme or reason to it whatsoever – save that Trump will go after any regulation brought to his attention. Not only is that poorly thought out, it also exacerbates the influence problem that many Republicans have with excess regulation in the first place: the politically connected game the system. Thus does an exercise in apparent government scope reduction turn into the figurative “swamp.”

The Lack of Staying Power

This fuels the same problem that the “courts” argument has – a lack of longevity. In this case, regulation rollbacks will be even more fleeting than judicial appointments. The next Democratic Administration could reinstitute much of the rollback (as there is little to no change in actual law involved). Even during this Administration, a Democratic House could insist on regulation resurrections in their budgets.

In short, Trump’s moves against regulation are too unpopular and unplanned to survive a change in the political winds (including perhaps one of gale force coming within the next two months). It is yet another false benefit to be weighed against the ever increasing cost to American political and economic health inflicted by this president.

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015

To My Fellow Conservatives: The Judiciary is NOT Worth It

by D.J. McGuire

The behavior and policies of the president continue to shock and to dismay – especially for conservatives such as myself (yes, I still use the noun). Freer trade is tossed aside for crippling tariffs amid complaints over “bad deals.” The dynamic information technology sector has become a target for nationalization among screaming heads such as Laura Ingraham. Allies are smeared where hostile tyrants are feted. Yet through it all, a large chunk of right-wing and center-right voters are, for now, staying with the withering husk that is the Republican Party for one reason and one reason alone – “the courts.” This post is my attempt to persuade them why this argument is a profound error.

Today’s Issues v. Tomorrow’s Issues

The first problem with the assertion that control of the judiciary branch is worth the exponentially increasing damage of the Trump presidency is that such control is specious at best. The issues that divide “liberal” (or if you prefer, “progressive”) and “conservative” in 2018 are not likely to be the issues that divide them in 2030, or in 2040, or in 2050. Unlike financial investment, past performance is an excellent indicator here.

Dwight Eisenhower selected as Chief Justice one of the most conservative office holders in the Republican Party – California Governor Earl Warren. Known at the time as a strike-breaker and a firm supporter of limited government, Warren’s libertarian outlook was given an entirely different label as social issues and law enforcement matters crashed into the public realm in the 1960s. Ike’s own Vice President became one of Warren’s top political critics. Nixon replaced Earl Warren with Warren Burger, who became one of the five Republican appointees to the Court to side with the majority in Roe in 1973The author of the dissent in that case was Byron White – the lone appointee of John F. Kennedy. Thirteen years later, Berger would change his own mind on the subject (yet another sign that ideological consistency on the Court doesn’t survive the passage of time).

The intervening decades have seen similar acts of temporal confusion. Donald Trump spent his campaign praising the late Antonin Scalia – the justice who cast the fifth vote that declared burning the American flag to be constitutionally protected speech. While Bush v. Gore has become a bete-noir for much of the left in America, it’s not remembered that half of the Democratic appointees to the Court agreed to invalidate the Florida recount on which Gore’s last gasp depended (although none agreed with the smaller majority that insisted there wasn’t enough time to conduct a more proper recount there). Five years later, conservatives were thrilled when President Bush appointed John Roberts as Chief Justice. He was considered a sure-fire conservative…who cast the fifth vote to declare that the Affordable Care Act was constitutional – over the objection of “moderate” Anthony Kennedy.

What issues will drive conservatives in the 2020s and beyond? We really don’t know. As noted above, the right seems much more willing to regulate cyberspace today than even five (or two) years ago. Any attempt to nationalize Google will likely run into trouble from the very conservative court appointments that the right champions today. If the president attempts to exit trade deals without Congressional agreement (and largely in violation of the law), conservatives eager to rebuild Fortress America will find Bush and even Trump appointees in their way.

In other words, past and present “betrayals” of conservatives came not merely from judges and justices changing their minds (although that does happen), but also from electorate redefining what “conservative” means. Thus we find Reagan appointees invalidating laws against marriage equality in California and allowing charges against Paul Manafort to go forward (to conviction) in Virginia, among other things. I am all but certain Trump appointees will disappoint future conservatives, in part because they will take positions that would make present conservatives (myself included) blanche.

The one exception to this may be the abortion issue. Indeed, nearly every conservative who still calls themselves a Republican cites it as the one reason they stay in the GOP. There is a problem with that, however.

Reversing Roe/Casey is a defeat disguised as a victory

As I was a politically precocious teenager, I’m in an increasingly unique position among any American under 50 – I remember what it was like when the judicially-imposed right to an abortion appeared to be coming to an end. It was after the Webster decision of 1989 weakend Roe, but before Casey v. Planned Parenthood reaffirmed it. Keep in mind, this was less than two decades after Roe, when the status quo ante was a real memory for most Americans.

For pro-lifers, it was a disaster. Pro-life Republicans were vanquished in 1989 elections, and pro-lifers in both parties were banged up in 1990 (as an example: a pro-life Democratic Governor in Minnesota was defeated by a pro-choice Republican challenger who had only been on the ballot nine days). Conservatives ran to the safety of economic issues in 1991 (and recovered nicely in the 1989 states’ legislative elections). George Bush the Elder went from 53% of the vote in 1988 to 38% in 1992 (and his two opponents – Ross Perot and Bill Clinton – were not pro-life by any stretch).

A quarter-century later, there are far fewer voters who remember the pre-Roe era, let alone look forward to it. Even if the Supremes reverse Casey, far fewer states will attempt to ban abortion than people realize. If anything, pro-choicers vocalizing their worst fears (albeit understandably so) are providing pro-lifers with their most perverse hopes. Odds are, both are wrong. For too long, abortion opponents have focused on changing a Supreme Court decision instead of saving children. The rest of the country has noticed, and is not happy.

The Benefits of “winning the courts” are ephemeral, but the cost is sure to be permanent.

Is this truly worth the damage Trump has wrought, my fellow conservatives? Is the chance to be disappointed by judges who change their minds (or by those who don’t when you do) truly worth the rupturing of our alliances? Is the erection of damaging barriers to trade really an acceptable price for the opportunity to be caught completely flat-footed due to forty years of political atrophy and neglect on the one issue that you claim is so important?

Before you answer, consider one more piece of historical evidence. The most politically charged Court decision of the 19th century was Dred Scott v. Sanford.

How well did that turn out for the victors?

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015

John McCain is no longer with us. We are different country today.

by D.J. McGuire

Yesterday afternoon, Senator John McCain passed away. Personal tributes are pouring in, as one would expect from his record of service and sacrifice for his country. Many Americans admired him. For some of us, however, it was much more than that. I am among those who voted for John McCain; in fact, I voted for him three times (2000 Republican primaries, 2008 Republican primaries, 2008 general election). I am convinced that it would have been a better nation had he won in 2000 or in 2008. As such, I am more focused on the exit of John McCain, the political force.

Many of McCain’s admirers disagreed with him, strongly, on foreign policy. I was not among them. With McCain’s passing, the number of us who believe liberating Iraq was the right thing to do has likely fallen from six to five (I still think we few are right). McCain was always more willing to see America – and the American military – as a potential force for good in the world. For those of us who recognized “neoconservative” as an actual set of beliefs rather than a convenient anti-Semitic dog whistle, John McCain may have been the last, and was certainly one of the most vocal.

As such, his passing will have political consequences. Contrary to what the president and his sycophants would have us believes, there are still millions of Republicans for whom John McCain is far more the model than Donald Trump. I left the Republican Party earlier than most of them – and I think I joined the Democratic Party sooner than any others – but with McCain’s passing, I won’t be the last. The next time Trump undermines NATO, or attacks our allies, or cozies up to dictators, John McCain will no longer be there to remind those voters what their Republican Party was – but is no more.

So, we can expect the Republican Party to get smaller and more devoted to Trump, but the Democrats may experience some growing pains, as their coalition expands to include – well, to include more voters like me.

John McCain never assumed America was perfect. He was an active and avid reformer at home, but he knew that even as America strove to make itself better it could also make the world better. For those of us who agree with him, he will not only be mourned, but deeply missed.

D.J. McGuire – a self-described progressive conservative – has been part of the More Perfect Union Podcast since 2015

On the Republican Tax Deform

by D.J. McGuire

Taxes: the one issue where – as an economic conservative – I would be more sympathetic to my old party (the Republicans) than my new one (the Democrats). As I awaited the Republican tax reform plan, I even recommended Democrats find a way to work with the GOP to improve it.

Well, the plan was at last revealed today, and about the only link this fiasco has to actual tax reform was Congressman Brady quoted Ronald Reagan from 1986 (CNN).

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Lindsey Graham’s Economic Illiteracy and Why It Dooms His Health Care Policy

by D.J. McGuire

As of this morning (the 25th), the Senior Senator from South Carolina is still pushing  for the woeful health care bill that bears his name. In his latest attempt to win over conservative critics, he exposes himself as being largely illiterate on the microeconomic reality behind health insurance and health care, providing yet another reason for Senators to vote down his bill.

From Rinse and Repeat to Reshuffle and Redeal: The Problems with Graham-Cassidy

by D.J. McGuire

Republicans keep telling me that being a conservative Democrat will be difficult, and yet they continue to make it easier. The latest example of this is the Graham-Cassidy bill, which is ostensibly the latest Obamacare “repeal and replace” effort coming from the GOP.

Will the Democrats Continue to Go the Wrong Way on Economics?

by D.J. McGuire

The events of this week in Washington do not bode well for the Democratic Party. The combination of Democratic senators openly endorsing government monopoly health insurance and the Republican president making a move toward immigration reform, however small, puts the GOP in a better position to hold the Free Marketeers in 2018 and 2020.