Libertine Economics and the GOP's Identity Crisis

David Paul Kuhn
Real Clear Politics

For decades the GOP framed itself as the sober response to indulgent Democrats. From crime and welfare to hawkish approaches to policy abroad and perceived moral decline at home, Republicans cast themselves as the disciplinarians of American politics. They were the daddy party by design.

Yet the Republican Party has relegated itself to absentee fatherhood on the economy. It's the one issue where conservatives call for near absolute permissiveness. The GOP became comfortable as the Dr. Spock parents of the financial industry--indulgent and light on the oversight. It's been this way since the Great Depression. But in more recent decades, the GOP pushed for more deregulation. Republicans' faith in unfettered markets blinded their prudent instincts. The conservative skepticism of unchecked institutions appears to end at Wall Street.

As the country continues to sort through the wreckage of the worst financial meltdown in decades, Republicans are experiencing an identity crisis. Conflict is brewing between the party's Main Street and Wall Street factions.

The tax day protests exposed the anger on Republican Main Street. Many activists are upset that fiscal conservatism became more oxymoron than principle in recent years. As Republican strategists Chris Lacivita said, "When a party starts losing its identity on the very issues it's founded on, you are going to have a reckoning."

That reckoning is taking place. Conservatives largely agree that when they lost their discipline on spending they lost their identity. But what truly compromised their identity was not merely spending. It was the loss of discipline itself.

The rhetorical theme beneath the rise and decline of the modern Republican Party is simple: a call for order. The GOP rose in a period of cultural and urban upheaval. Republicans' won voters with the promise to regulate. At times tough love turned to intolerance. But it was nonetheless the concept of discipline in culture, spending and cause that defined conservatism.

In time, as Saul Anuzis said, the party that claimed to stand for "responsibility, smaller deficits and ethics voted for the bridge to nowhere and had Abramoff." Anuzis is the former head of the Michigan Republican Party. He added, speaking fresh from a tea party in Lansing, that in his view "over the last 6 to 8 years we had lost our credibility to voters."

Credibility is always easier to lose than win. And Republicans have lost it. When asked which political party can do a "better job" leading the country out of the recession, according to NBC News/Wall Street Journal polling, Democrats are favored by more than a 2-to-1 ratio. The two parties were at par on the same question during the early 1990s recession.

"If you are raising taxes and pushing giant bills through and a year later you turnaround and say you are against that stuff, it's a bit disingenuous," Lacivita said. "That's why the Republicans coming into office have a bigger responsibility to be consistent."

Most Republicans believe the majority was lost when they lost their principles. The result has been near unanimous Republican opposition to Barack Obama's budget and bailout. Opposition to spending has been perhaps needlessly joined with opposition to regulation. Conservatives have come to believe that the strict hand is warranted in every place but the market place.

Few issues do expose the partisan fault line better than questions of bigger or smaller government. When Gallup asked voters their opinion on the "expansion of government's role in this economy in response to the financial crisis," 78 percent of Democrats and blue-leaning independents "approve" of it. Yet 72 percent of Republicans and red-leaning independents said they "disapprove."

Anxiety over taxes has tracked with the rise and decline of Republicans. Gallup has asked for decades whether voters consider their federal income taxes "too high, about right or too low." The gap between "too high" and "about right" was widest in 1969, with 69 percent saying "too high" and only 25 percent saying "about right." That gap remained wide until the late 90s. By the time George W. Bush was in office, there was no gap.

This is why fiscal conservatives argue that tax policy is vital to Republican success. But the saliency of the tax issues has dulled. Only twice since 1956 have more voters said their tax burden was "about right" rather than "too much," once in 2003 and again this year. The taxman lost some political punch because Republicans succeeded in lowering the tax burden. To the extent taxes remain a potent issue, it's the Democratic president now promising tax cuts for most Americans.

The economic issue today is the crisis itself. And the public trusts Democrats to bring order to that crisis. A CBS News/New York Times poll recently asked, echoing several other surveys, who is "more likely to make the right decisions about the nation's economy: Barack Obama or the Republicans in Congress?" Voters said Obama by a 3-to-1 ratio.

These are sobering days for Republicans. The recent CBS/Times poll found the least favorable public view of Republicans in a quarter century. Climbing out of that hole may call less for a reckoning with core principles than resolving conflicts within those principles, exposed by this recession.

"When you burn down your house you've got a foundation to rebuild," said Alex Castellanos, a Republican strategist.

"We are supposed to be the party of order and discipline," as Castellanos ruefully put it.
The recession has sparked a more profound public call for order, not simply for disciplined spending but a disciplined economy. This is the permissiveness conservatism does not want to confront, promiscuity not in culture but markets.

"Of all the terrors of democracy, the worst is its destruction of moral habits," Russell Kirk once wrote.

It was conservatives who understood that free love came with costs. Yet conservatism ignores the costs of unregulated free markets. The call for "law and order" that won conservatives the mandate to resolve the cultural crisis of the 1960s appears absent in the economic crisis of today.