Photo Credit: U.S. Army Corps of Engineers
It would be hard to blame liberal-minded Americans for feeling a
sense of despair as we begin a new year. The Republican Party is
ascendant and reinvigorated after its smashing victories in 2014 at
nearly every level of government. The NYPD is in near open revolt
against one of America's most progressive mayors while police
departments around the country seem immune to basic reforms.
But
in spite of conservatism's seeming upswing, there are signs at a
statewide level that its ideology is coming apart at the seams. Even
conservatives are starting to take notice and worry.
First and
foremost is the laughingstock that extremist Republican Sam Brownback
has made of Kansas. Brownback slashed social welfare spending and
implemented steep regressive income tax cuts, promising that his
Laffer curve-based supply-side economic experiment would bring jobs and prosperity to Kansas while increasing government revenue.
In
fact, the opposite has happened. Revenue projections in Kansas are in
freefall, and the economic growth benefiting the rest of the
country--including economically similar areas in surrounding
states--has
bypassed the Sunflower State. Just in the last week Kansans received
another flurry of bad news:
revenue projections are even worse than the disastrous figures
projected last month, forcing even deeper cuts to education and other
services. But that won't be possible, as a panel of judges
has ruled that Kansas is already shortchanging K-12 education. In desperation, Brownback
has proposed further
reductions in state funding to its already woefully underfunded public
employee pension system, a move that is meeting with stiff resistance
even from his fellow Republicans.
As a result, Kansas Republicans are confronting the previously unthinkable possibility that the
tax cuts may need to be repealed.
Brownback's own budget director has said that "everything is on the
table, including the tax policy." It has been many years since a
Republican-dominated state government has publicly considered the need
to reverse course on low-tax economic policy.
The failure of Brownback's experiment is also being replicated in New Jersey, where governor Chris Christie slashed pensions,
cut taxes for the rich, laid off public employees and
gave away $2 billion of tax incentives, only to watch New Jersey rank
next-to-last in job growth. Christie's obvious fiscal mismanagement in New Jersey has been a major reason for his
slide in early polling of potential Republican presidential contenders.
GOP legislators in other states have taken notice. Writing at Politico, Rachael Blade
captured the
nervousness of conservative legislators around the country. Indiana's
Senate Majority leader said, "It’s a cautionary tale on a national
scale...we have to ensure the stability of a revenue stream to provide
basic services that our citizens expect." Legislators and their aides
from Ohio to Arizona have gone on the record with similar statements.
One
remarkable result of the failed supply-side experiments is that many
Republicans' belief in the Laffer curve has been severely shaken. A
lobbyist for the infamous conservative policy group ALEC told GOP
legislators they should admit "not all tax cuts pay for themselves." An
unnamed Arizona Republican legislator was even more blunt: "We have
never said decreasing taxes would increase state revenue." These are
earth-shaking admissions. Conservatives have been asserting ever since
Reagan's first presidential campaign that lower taxes would not only
grow the economy, they would ultimately increase government revenues as
well. It's difficult to campaign for tax breaks for billionaires if
you're also blithely asserting that teachers will be laid off to pay for
them. Retreating from the Laffer curve deception will make it much
harder for Republicans to pass regressive tax cuts in the future without
paying a steep political price.
The failures of Republican
economics in Kansas and New Jersey also have worrying electoral
implications for Republicans across the country as progressives use them
as object lessons and warning signs of what could happen their own
states--and the country--if conservative economic ideologues are allowed
to gain too much power.
But conservatism's ship isn't just
running aground on the shoals of sharp tax and budget cuts. It's also
beginning to drown in a sea of cheap oil. Saudi Arabia's strategy of
creating a supply glut to remove secondary players from the energy
market is having cascading global effects. Vladimir Putin finds himself
managing a national economic crisis caused in part by over-reliance on
fossil fuel exports. Domestically, states like Texas and Alaska that
have put most of their revenue eggs in the oil basket
will likely see steep fiscal and employment declines as low prices punish them for failing to better diversify their economies.
Nor are other conservative states immune from the damage: natural gas prices
suffered their first annual decline in several years, and many believe that low prices will
continue to prevent growth in new supply. The decline in the price of oil will only
serve to further undercut natural gas prices for
a long time to come. That doesn't just come as good news to fracking
opponents: it's also bad news for states reliant on natural gas
extraction for large parts of their economy.
States with better
social safety nets, more diverse economies and higher wages would be
able to better withstand the oil and gas revenue shocks by making
temporary, efficient cuts. But states like Texas have built their
economic "miracles"
much the same way Ireland did:
by building on the quicksand of debased wages, slashed pensions,
stripped government services, and corporate tax abatements. Once the
lucrative energy money declines, legislators will have little ability to
make necessary adjustments.
All of this comes at a time when the
electoral college is looking like increasingly hostile territory for
Republican presidential hopefuls in 2016. Republican strategist Chris
Ladd
noted to some fanfare that
despite the GOP's strong showing in 2014, Democrats only solidified
their hold on what he calls the "Blue Wall": states comprising 257 of
the 270 electoral votes needed to win the presidency. Even accounting
for the differences between general and midterm elections, Democratic
senators were elected, on average, by
larger margins than their Republican counterparts.
In other words, Democrats control most of the biggest (and most
economically powerful) states, and tend to win them by overwhelming
margins. Meanwhile,
all Republican candidates are badly lagging likely Democratic frontrunner Hillary Clinton in current horserace polling.
In
order to have a shot at capturing the White House conservative hopefuls
face a choice of either trying to appeal to the majority of the
country, or hewing a narrow path to the nomination by winning over the
conservative base. Tellingly, Republicans with actual experience in
state governance are trying to walk back from the more unpalatable
aspects of the Republican economic agenda. Jeb Bush has
recused himself from potentially damaging corporate board associations, and Scott Walker is pushing back against the Republican legislature in Wisconsin, attempting to
avoid bruising battles over income tax cuts and elimination of worker protections that would unmask him to the broader American public as a far-right ideologue.
There
is no question that the American Right still feels emboldened by its
success in 2014 and will attempt to make the most of its power over the
next two years in Congress. But a closer look at what is happening in
the states shows that conservatism is still very much on the ropes.
Economic and social realities are exposing the failure of the
conservative agenda on a variety of fronts, and Republicans are still
being forced to confront those failures and deal with the consequences.
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