Monday, July 19, 2010

The Unemployment Trap

The recent jump in Democratic support in Gallup's generic Congressional poll may just be statistical noise or a random fluke. However, as Allahpundit and other commentators have suggested, this jump may reflect public unhappiness with Republican maneuvering on the debate over extending unemployment benefits. In any case, the debate about unemployment points to a broader danger for Republicans.

In the current economic condition, unemployment benefits are a new third rail in American politics (sorry; couldn't resist that Beltwayism). Republicans have to be very careful about the way they tactically handle this issue. They cannot afford to be cast by the Obama White House as fanatics for tax cuts while America burns. The fight over unemployment benefits is a fight Obama wants; Republicans should not fight him on his terms.

While Americans are certainly concerned by the increase of deficits, they are even more immediately concerned by the plight of the chronically unemployed. Republicans should use a little messaging jujitsu and turn around this concern. Here are some talking points that could spring the trap back on Obama and the Democrats:
  • This debate about unemployment benefits is another way for the Democrats to dodge the fundamental issue of this economy: anemic job growth. While we all want to help out the unemployed, the best way to do that is to get the economy moving again. The massive deficits of the Obama administration have radically underperformed by the administration's own standards. We need a free market way forward.
  • The kinds of deficits we're seeing right now do not merely undermine the financial security of our children and grandchildren: they undermine our own financial security, right now. These huge deficits risk threatening the credit status of the US government and, by extension, all of those dependent upon federal credit. At a certain point, deficits do not stimulate but bleed the economy.
  • Why is Obama talking about George W. Bush's tax cuts? Posturing recriminations about the past will not put food on anybody's table (other than a few spinmeisters).
  • Congressional Democrats and the Obama administration are the ones holding the extension of unemployment benefits hostage. If they wanted to, they could certainly find enough waste and inefficiency to cut to pay for this extension.
  • Again (repetition warning), Democratic posturing over unemployment is just a distraction. It's easy to play the class warrior and Monday morning quarterback. But looking forward, the fact remains that the best way of dealing with the unemployment problem is to lower unemployment. The command-control vision of the stimulus has failed. It's time for a set of decentralized, pro-growth policies.
One of the main strategic points that Republicans need to emphasize is the importance of an authentic, sustainable pro-growth business model. The growth of the Bush years came, in part, at a considerable price, a price only compounded during the Obama administration so far.

Republicans need to be able to articulate or at least to suggest a hopeful way forward (whatever its merits, Paul Ryan's "roadmap" at least moves in this direction). They can turn the debate about unemployment benefits into a debate about economic policies for the future, and push beyond a (quite understandable) concern with the deficit into a more wide-ranging portfolio of economic and financial reforms.

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