History teaches spending less and regulating only as much as necessary best promotes growth and creates good-paying jobs.
Liberals alibi Barack Obama must take a different tact because he faces tougher problems than any president since Roosevelt. Yet, the numbers tell a different story.
Early in his first term, the financial collapse caused unemployment to peak at 10 percent but the crisis has passed. Home prices are rising again, yet growth has averaged a subpar 2.2 percent over the last 3 1/2 years. The number of jobs created and wages paid have been woefully inadequate.
Ronald Reagan faced double-digit interest rates and inflation and unemployment peaked at 10.8 percent early in his presidency. By emphasizing lower taxes and spending, lean but effective regulation, and sound money, the U.S. economy was growing at 5.2 percent at the same point in his recovery and created an abundance of good-paying jobs.
Massive spending on entitlements and easy money policies provide temporary relief for Democratic constituencies but those don't create the foundations for robust, broadly distributed economic opportunities.
Yet, Republicans face daunting challenges selling conservative prescriptions to voters, because the GOP often doesn't support genuine fairness in the tax system and policies that would promote more robust competition.
Obama wants to eliminate special tax breaks for big oil and on investment income, which permit many corporate executives and financiers like Warren Buffet to pay taxes at lower rates than his secretary, but Republicans consistently oppose those reforms.
Dodd-Frank imposes too many burdens on regional and community banks, which historically finance small businesses and much of the jobs creation. Republicans want to repeal this law but won't get behind restructuring remedies that would protect against past financial abuses and enable small banks to flourish -- for example, separating financial houses that trade securities from banks, which make loans and take government guaranteed deposits and limiting the size of the largest banks.
Republicans can't explain how their positions benefit either fairness or growth, and hence, can't complain when liberals paint them as the party of the rich and big business.
On social policy it gets worse. For example, many Americans would accept equal rights for gays and their lifestyle has few consequences for the liberties of their neighbors. Republicans by opposing gay rights seek to expand, not limit, the role of government for the purpose of imposing their private moral judgments on others -- that's a hypocrisy moderate, more-tolerant voters reject.
By opposing amnesty for immigrant adults brought to this country as children by parents who entered America illegally, Republicans behave like Old Testament Pharisees -- more bent on absolutely enforcing the law than accomplishing justice and protecting liberty. After doing so poorly among Latinos and Asians in the last election, the GOP is reversing its position and embracing broader immigration reform.
However, as with other social issues, Republicans at first sought to use government to impose their prejudices on others. As public opinion made their position politically untenable, they came around but only after alienating large segments of voters.
Likely, the GOP has permanently damaged its standing with gays, Latinos and even Asians, just as it did several generations ago with African-Americans. The country will be poorer for it.
Conservative prescriptions for freedom of enterprise and limited government do offer the best path to a robust prosperity but a majority of voters won't accept Republican protection of privilege and prejudices as part of the bargain.
(Peter Morici is an economist and professor at the Smith School of Business, University of Maryland, and widely published columnist. Twitter: @pmorici1)
(United Press International's "Outside View" commentaries are written by outside contributors who specialize in a variety of important issues. The views expressed do not necessarily reflect those of United Press International. In the interests of creating an open forum, original submissions are invited.)
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