Ironically, while President Obama takes credit for better jobs today, his forecast at the time of the $800 billion stimulus package was for near 6 percent unemployment at this stage in the cycle. So the stimulus didn’t work. And in terms of recovery rates, pro-growth policies following a deep recession -- as per the Reagan experience -- might be creating 6 to 8 percent economic growth rather than the 2.5 percent tepid growth of the two-year Obama recovery.
Message to Republicans? Be bold. Adopt a 5 percent growth target. Don’t settle for less. Adopt a clear pro-growth platform that emphasizes aggressive fundamental tax-and-regulatory reform for individuals and businesses. Especially make the case for the energy revolution, where blue-collar employment is vitally involved. Deregulate Obamacare to zero. Work on a sound King Dollar.
Most of all, get government out of the way. Instead, open the door for the animal spirits of risk-taking that could torque the economy. And work harder to make a case for limited government spending and deficit reduction, as Sen. Marco Rubio has just done with a tough letter to the president. As Rubio put it: “It’s a tragic reality, but on [Obama’s] watch, more and more people have come to believe that America is becoming a deadbeat nation.”
Finally, avoid special preferences for individual parts of the economy that distort economic incentives and actually slow down economic growth. As Kim Strassel writes in the Wall Street Journal, the Reagan plan years ago was an optimistic growth message for everyone, not just targeted classes or economic sectors. So don’t mimic Obama. Mimic Reagan. Clarify the goal of growth, growth, growth.
How about this? Get rid of special tax deductions, corporate welfare subsidies, and cronyism. Overthrow the political establishment in Washington.
What’s really driving today’s better economy is the resilience of America’s free-market capitalist system. In spite of the future threats from excess tax and regulatory actions coming out of Washington, the self-correcting American economy is in fact improving.
And that’s going to make defeating Obama tougher. Face it. That’s the reality.
Here’s another point: With better jobs, consumer incomes and spending power are actually rising about 5 percent annually right now. Corporate profits at 13 percent of GDP are the highest since 1950. And both companies and households have deleveraged substantially. So the economy could grow by 3 percent in 2012. And if Europe ever settles down, that could turn out to be a 4 percent growth rate with 2 percent or less inflation.
So just complaining about the economy is not a good GOP message. Better to focus more on a reelected Obama who will raise tax rates on entrepreneurs and successful earners and regulate businesses more heavily (that’s what the NLRB and Consumer Financial Protection Bureau flap is really about). Argue against redistribution, and in favor of opportunity and growth.
The GOP message has to be “We can do this better.” Growth at 2.5 percent with 8 percent unemployment should be replaced with 5 percent growth and 5 percent unemployment. Say that. And then say: Here’s how we will do it.
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