Amid all the back-and-forth over the Obama budget, Rush Limbaugh, the CPAC meeting, the Jindal meltdown, the GOP opposition in Congress, and the new leftward direction we as a nation are taking, no one has raised another consideration of political, economic, and historic importance:
What happens if, after the Obama plan is adopted and becomes law, which it will in large part with a few tweaks here and there, and then the economy starts to rebound by 2011 or early 2012?
First of all, President Obama and his crack PR/campaign team will take all the credit and proclaim him a transformational, historic president, and he most likely would be re-elected. The Democratic Congress also would be in the majority.
But equally as important — massive government spending, trillion-dollar annual deficits, a new, more interventionist federal government — soon would be seen as the key reasons the economy is recovering, even if they were not. (After all, at some point the economy will bottom out and begin to rebound and recover on its own. The Obama plan actually may hinder and delay the recovery. But we will never know the causes and effects — if it recovers during Obama’s first term).
Liberal economists would be vindicated. They and their political followers will all proclaim: “Big government works!”
Historians would proclaim Obama the second coming of FDR — and, in retrospect, the New Deal would be credited with ending the Great Depression again (an interpretation that has come under fire lately).
The Republican Party would be consigned to the back bench for a long, long time.
Conservatism — or what has come to be called conservatism lately (it hasn’t been truly conservative since the Bushes seized control of the GOP) — will be blamed for creating the Bush Depression. (Why, oh why, did Ronnie Reagan ever pick G.H.W. Bush in 1980?) We will not see a resurgence of the conservative movement for years, maybe even decades.
Western European-style socialism would be the model, with cradle-to-grave government programs the order of the day.
And all of this because the economy shows signs of a rebound — even if the stimulus and Obama budgets have nothing to do with the recovery. After all, how does anyone really know why the economy recovers?
In 1984, Reagan took credit for the recovery — Morning in America — and attributed it to his three-year, 25 percent across-the-board tax cuts. Not only was he re-elected in a huge way but also Reaganomics (supply-side tax cuts to spur economic activity) became the accepted lifeblood of the GOP and has remained so until today.
But Fed Chairman Paul Volker’s inflation-squeezing tightening might have been the real reason for the 1983/1984 recovery. We will never know for sure. All of this is what is at stake here.
Unfortunately, the Republican Party and the conservative movement — they are not necessarily one and the same — can do nothing politically to affect the outcome. We are on the sidelines now, courtesy of Bush and his acolytes, who drove the GOP right over the cliff.
If the basic tenet of conservative thought is correct — that massive government makes things worse, not better — then the Obama plan will fail. And then he will fail politically. And then all of the above will not matter.
But we have a long four years ahead of us.
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