How Bush Could Lose Part III: Economy

Posted By Elgin Hushbeck

The outlook is for strong economic growth through 2004. Unless Democrats want to base their hopes on a relapse in the economy, which is at best risky, they should count on people being pretty happy with the economy by November. Thus they will need a different approach than traditional class warfare rhetoric they have depended on since the 1930s.

Taxes are always a big problem for the Democrats. While their tax-the-rich proposals play well with the left it is pretty clearly a looser when it come to the general election. Past proposals to cut middle-class taxes have been little more than election year rhetoric, and so are not trusted. So the best thing here is to just remain silent. Closing Loopholes for “Big Business” and “Attacking Special Interests” also play well with the Left but don’t do very well in the general election as these are seen by many as simply increasing the burdens on businesses, and most realize you do not help employees, by making it harder for employers.

One possible approach here is to do something revolutionary as Jerry Brown tried, such as supporting a flat tax or a move to a consumption tax. Such a “Only Nixon could go to China” move would seriously cut into Bush’s support among independents. It is risky as Bush is likely to counter with a similar proposal to neutralize such a move. However, It could be done after Bush makes his proposal to cut taxes, and thus put him on the defensive. But either way it would probably neutralize the tax issue, which currently is a big negative for Democrats.

One of the strongest groups supporting Republicans is small business owners. In theory, this should be prime groups for the Democrats to attract. A democrat that reached out with specific proposals to encourage people to start and grow businesses and to ease the burden on small businesses could make major inroads here. This would also have the side benefit of being a realistic jobs program as small business employs the majority of workers.

Finally, a comment on the deficit. While many democrats are attempting to make a big deal of this it is really not a good issue for them. For one this issue has been called a “green eye shade” issue for good reason. Simply put, it is not that important for most voters. Voters may say they are concerned, but very few actually vote on this issue. In addition, one of the major justifications for why this issue in suppose to be important is the impact on interest rates. While it sounds good in theory, it simply does not hold up in practice. (For example over the last 10 year interest rates actually went up as the deficit decreased and peaked when we had the highest surplus. As the deficits have grown, interest rates dropped.) Finally, it is hard to take the Democrats seriously on this issue as their concerns appears only one sided for deficits seem to only be a concern when it comes to cutting taxes but never when is comes to increasing spending. As such, if anything this issue is at best a wash, and may in fact be somewhat negative for them. Best drop it.

Jan 29th, 2004

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