The Democrats have already made clear what their central theme is going to be in 2014: Inequality. This theme was used heavily in 2012 and despite the failure of Obama’s first term it helped get him reelected.
Growing inequality is real. In the abstract, equality doesn’t matter. Most people are concerned about improving their own condition, not ensuring that they have the same condition as everyone else.
The reason the populist theme of inequality is sticking-and why it always sticks-is because the vast majority people are not seeing their standard of living improve. Looking for someone to blame, they lash out at people who are much better off than they are and who continue to accumulate even more wealth. Those lashing out are angry-understandably so-but anger is not conducive to rational thinking. Instead, anger demands quick, raw action. Like punishment.
Before we know it, large numbers of people are clamoring to tax the rich so that they pay “their fair share.” But these same people never stop to really think about why they are doing so poorly and why the very rich are on an exponential path to continued success.
In a free market, goods and services are distributed unequally but not an extreme scale like we seeing today. Economic exchanges benefit all parties involved, thus in a free market a rising tide lifts all boats. Extreme inequality indicates that these exchanges are failing to take place. Some of the very rich must be gaining their wealth some other way.
By what manner can people gain without giving in return? The answer is simple: Government tax-and-spend redistribution schemes backed up the force of the law.
The populist anger is not going away. We just need to channel it in the right direction. We need to steer the anger towards the rightful beneficiary: the government. Specifically the unholy alliance between big business and the federal government, also known as corporatism, crony capitalism, or fascism.
Rewind to the 2012 election. Democrats are screaming about inequality. What is the generic Republican response? To defend the inequality as earned and imply that it is the result of the free market (which we don’t have). Now, not only is that response horrible politically because it doesn’t satisfy voters as it fails to deliver blood, it is also incorrect to a large degree. Yes, many rich people, if not most, become wealthy due to their economic skills and contribution, and they should be applauded for that. But that doesn’t explain our rigid, socially immobile economy. Republicans must reject their pro-business economic position and embrace the free market position. Granted, many Republicans have always been pro-free market, but the leadership has had different ideas.
The Democrats are going to roll out some familiar policy proposals to go along with the inequality theme, such as minimum wage increases and tax increases. The Republicans need their own set of policies to combat those, at the same time articulately explaining how they reduce inequality and why Democratic proposals miss the mark.
Here are some policy proposals which will allow Republicans to win on this issue:
1: Flatten the tax code
2: Stabilize monetary policy and end bank bailouts
3: Eliminate agriculture and energy subsidies
4: Eliminate wasteful military contracts
All of these issues hit home with Americans who feel they are being treated unfairly.I could go in depth, but most understand how the opposite of these suggestions (current policy) help the big guy at the expense of the little guy.
All of these proposals are threats to sacred cows depending on the constituency. Well, the calves have been fattened long enough and it’s high time they are slaughtered.
Hopefully Republicans will hit a populist note of their own in the upcoming elections, or else risk letting inequality hysteria make Republicans look evil and result in voters forgetting about ObamaCare.