Net Net: Promoting innovation and managing change
Net Net: Promoting innovation and managing change

The Republican war on Christmas

Black Friday wage protests were planned at 1,500 Walmarts, this one in Ontario, Calif.
Source: Warehouse Workers United | Twitter

Conservatives have long complained that a war on Christmas is being waged by enemies of Christianity and traditional America. Whatever the merits of that complaint, it's clear that this year the Republicans are taking aim at Christmas.

No, they aren't demanding that public squares be cleared of crèches or that Santa be more representative of multicultural America. And they aren't frowning at those who insist on saying "Merry Christmas" instead of "Happy Holidays."

The GOP war on Christmas comes in a very different form. This year, the Republicans have fallen into the old habit of refusing to play Santa Claus.

Way back in 1976, a journalist named Jude Wanniski published an article titled "Taxes and a Two Santa Theory" in a now forgotten weekly Dow Jones publication called The National Observer. (You can read the original here.)

He argued that a healthy economy depended on each party being a different kind of Santa Claus.

"The Democrats, the party of income redistribution, are best suited for the role of Spending Santa Claus. The Republicans, traditionally the party of income growth, should be the Santa Claus of Tax Reduction," Wanniski wrote.

He explained that Republicans' obsession through the 1950s, '60s and '70s with balanced budgets had amounted to a surrender of their role as the tax-cut Santa. This had damaged their political fortunes and the U.S. economy.

"The only thing wrong with the U.S. economy is the failure of the Republican Party to play Santa Claus," Wanniski wrote.

(Read more: Payroll taxes and the two-Santa theory)

The way to move the economy back toward full employment was for the GOP to again don the red hat and lift up the peddlers sack—to start promoting tax cuts. That would, he argued, result in a prosperity that would greatly reduce the demand for social spending that many Republicans oppose.

Looking around the political landscape this holiday season, it's hard to find any Santa Clauses at all. The Democrats acquiesced in sequester this year and are now agreeing to a budget deal that contains very little in the way of stocking stuffers. The Republicans are fighting among themselves about who is the better budget balancer: Paul Ryan or Marco Rubio.

(Read more: How the Senate could kill the budget deal)

This is a calamity for the Republicans and even worse for the economy. We've tried stimulus spending, we've tried accommodative monetary policy, we've tried sequester and austerity. Yet we're still mired in slow growth and high unemployment. Why not give tax-cutting old St. Nick another shot?

—By CNBC's John Carney. Follow him on Twitter @Carney