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July 28, 2011

The Case for the Long Game

Here is what I think the shut-it-down-now crowd is missing.

In 2012, there is a good, and rising, chance, of not merely having a united Republican government -- we had that from 2003 to 2007, and it was a failure -- but of having a united conservative government.

We have not had this since... I have no idea. As what "conservative" means shifts each decade, I think it's accurate to say we've never had that.

Milton Friedman observed you could never have better politicians. They'd always be louts, who shift according to the public mood.

Actually some would say that is a feature, not a bug, of democracy, as ultimately The People will have their say -- and sometimes The People will favor recklessness and indulgence, but that is, in a democracy, their choice, and it is hard to conceive of a democracy (or a democratic republic) in which The People are somehow precluded from being short-sighted, or stupid.

Friedman said you would have better policy not when you had better politicians -- they would tend to be mere weather vanes for whatever absurdities the public convinced themselves of this week -- but when you had better voters.

And by "better voters," he meant voters willing to take a stance and not vote on silly promises of more and costlier free lunches, but would in fact vote for the good of the nation, taking the Big Picture view of things.

When the voters would not reward politicians for stupid, freedom-eroding, wealth-diminishing pandering, but instead punish them for such, then, and only then, would we have "better politicians."

But the politicians would not be actually better in the sense of a changed heart. They would act better, however, because the public had changed the incentive system for them. Always acting in their own political self-interest, they would choose good policy only when the public rewarded them for good policy, and turned them out of office for bad policy.

Are we there? Honestly, I think we are getting there. The public seems to be in a Tea Party-ish mood. No, the public has not wrapped its head around what "cutting government spending" really means, but they at least have the impulse to do that. They favor that as a general proposition, a vague one to be sure, but they understand that's the right thing.

For those who cry the House Republicans are selling out the Tea Party: Let me remind you the House passed the Ryan Budget, one of the most controversial and politically risky documents in the history of the United States.

I'm not exaggerating. For 50 years the rule has been "do not touch entitlements, ever." Choose financial ruin for the nation before you choose that.

And the politicians followed that rule, set out for them by The People.

Bush tried a modest reform of Social Security. When political ruin did not immediately befall him, some of his aids bragged, "We touched the third rail of politics and didn't get electrocuted."

Liberal strategists said (in a cute quote): "That's only because we haven't turned the power on yet." Well, they turned it on, and The People turned against the plan, and Bush and Congress retreated.

To pretend to be addressing the deficit, Clinton made a show of lowering doctor reimbursements for Medicare.

But The People rejected this, and every year since then the "doc fix" has been passed, "suspending" the legally required cuts in doctor reimbursements.

The only way it has been politically palatable to change entitlement has been to expand them and make the system even more unsustainable.

I don't know if real reform is even possible yet -- I suspect it is becoming possible, because the crisis is on the horizon, and people are beginning to understand we have to do something.

But my point is that while previous attempts to actually cut government spending have been politically costly, with The People rising up in protest, and politicians running away in fear, lately The People's response has been somewhere between muted and mildly supportive, and politicians have not run away.

Many people want the Republicans to shut the government down over the debt ceiling to prove they are capable of actually cutting the budget. That is, they are sick of rhetoric and empty promises; they want proof that this will be translated into actual action.

So this debate is partly (largely) about the size of government, and rate of spending, but it is also partly about the Republican Party proving that it is really serious this time about cutting spending and bringing us towards solvency, and a more limited, modest, affordable government.

But from my point of view, they have proven their intent here. With a change of incentives, they are, as Milton Friendman predicting, changing their behavior.

So I am a little less worried than some that the GOP will continue to be the big spending party that it became during the Bush years.

Some question if they have the intent to cut government. I think that has been partly answered -- not completely, as no one knows what will happen in the future, but to some extent, the current crop of Tea Party Pressured Republicans have demonstrated their seriousness about cutting spending.

Not as much as I'd like. But a fair amount.

And Christie, Walker, Daniels, and Kasich all took on the public employee unions and... well, they're not the most popular guys in the world, but they won. They'll probably have enough support to be reelected. (Except for Kasich, who is in genuine danger, but he's got time.)

The question more for me (and for many others) is whether they have the power right now to translate that intent into action, and I don't think they do.

Some say they do have it: Shut the government down. Force Obama to sign anything to get his bureaucrats a paycheck.

I'm not sure it will work out for us. If we are punished politically for this -- say the economy double-dips into a fresh recession (as it seems to be heading towards), and it winds up being believed it was Republican brinksmanshp that caused that -- we could lose 2012, and thus the long game.

Now, I actually don't know if we would get "blamed." Honestly, I believe that is overstated. I do sort of agree with people who think we wouldn't get blamed.

But it is a big chance. And there is the old maxim: When your opponent is self-destructing, just stay out of his way.

Currently it looks like we can keep the House (rather easily, it is largely believed) and have a better than even chance of winning the Senate. I also think we'd probably win the White House.

If we did this, we could set economic policy in the US for two or four years, unchallenged by the left.

The only arguments we'd be having is how much to cut. We'd have to argue with the Maine Twins and Scott Brown, of course.

But the whole debate would move from "should we cut?" to "how deep can we cut?"

I also don't fear the filibuster on this issue, because of... Budget Reconciliation, the maneuver Obama used to dishonestly pass ObamaCare.

Doesn't Budget Reconciliation hold that a measure which reduces the deficit cannot be filibustered but instead may pass on a mere 50 votes (with a tie-breaking vote by the VP, if necessary)?

We currently are holding the line on spending.

That's not good enough, of course. Government doubled in size in the last decade and 30% since Obama took office.

But if holding the line can set us up for real reform in 2012...

This is what I think the Establishment is thinking. As Obama has continued to deteriorate in polls -- and the economy has deteriorated along the way, and offers little hope of improving enough to be a net positive for him in November 2012 -- I have started to think we can win in 2012, and win it all.

With actual conservatives leading the show.

Given that my prognostication for 2012 has shifted from "Obama probably wins" to "Obama probably loses," a lot of my tactical thinking has changed to.

I'm not saying you should buy into this thinking. But you may see Krauthammer, Sowell, and other talking about the long game, so I thought I'd add my arguments about it.

This is shifting to a question of tactics. I don't think I disagree with the Shut it Down Now crowd as far as endgame, but I have changed my mind about the pathway to get there.

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posted by Ace at 03:57 PM

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