One of the biggest reasons for the Right's decline in the Bush era is that we had long since completed most of the items on our to-do list. Low marginal tax rates? Check. The Soviet Union gone? Check. Welfare reform? Check.
This empty cupboard of ideas had led to progressively more minimalist Republican governing agendas and campaign platforms. If John McCain proposed any big, game-changing policy shifts in the last election, I must have missed them. It's true that Obama's ideas were not new either -- but he was able to sell them as "change" because they had been not tried in toto since the Johnson Administration, and people had forgotten how badly they had crashed on the rocks their last time out. Obama's central thesis -- that government ownership and central planning can outpace returns in the private market -- is actually very, very old. His playbook is that of FDR in 1933, Attlee in 1946, and Mitterand in 1981.
The effect on the Right even before Obama had been so corrossive that the institutional right was utterly incapable of offering any competing thesis of the economic crisis, leaving government ownership and bailouts as the only "appropriate" policy response. Even the previous Administration, made up of men of the Right, justified the bailouts -- and particularly the auto bailout that precipitated the White House putsch at GM -- as inevitable, "temporary," "emergency" measures.
Fast forward two months into the Obama era. Pro-forma denials of nationalization and socialism aside, the White House feels responsible enough for the insurance and automobile industries to dictate their management and maximum salaries -- the classic hallmarks of ownership. The Federal budget has swelled to $3.6 trillion, and revenues cover barely half the bill. To an extent probably never seen before in our history, there are no consequences for business failure, no consequences for individuals who took out loans they couldn't pay for, and no consequences for government that overspends.
The Welfare State mentality of the '60s that created the conditions for 1980 and 1994 systemically excused bad behavior at an individual level, creating millions of individual tragedies. Obamanomics systematically excuses bad behavior at the wholesale macroeconomic level, creating a vicious circle of irresponsibility with major consequences for every American.
If nothing else, the first 70 days of Obama -- with an assist from the last 4 months of Bush -- has left government economic policy so off-kilter that it may take a decade or more to fix. Remember that exhausted to-do list? Not a problem any more.
For the first time in decades, Republicans could run on a platform of cutting government by a third and not seem wild-eyed or mean-spirited. When we talk about the dangers of governments running private businesses, we will have contemporary object lessons to teach with, not bogeymen that are decades old or oceans away. When we talk about getting the government out of our lives, more people will nod their head knowing exactly what we mean, having just footed the bill for bailout after bailout, instead of yawning or dismissing it as a non-issue as they did in the prosperous, laissez-faire post-Reagan America.
The end result of this agenda, the size of government at 2007 levels, may seem minimalist in any broad sweep of history, but it is galvanizing in a way it wasn't before because of the sheer scope of what's changed in six months. The yawning gap between where we are now and where we were two years ago gives conservatives an ambitious goal to reach for and a reason for being again, even if the end result is little change over time. And if we get a mandate to actually cut government significantly -- and I think the public mood will shift there in a few years if not sooner -- it might not be that much harder to cut it to below pre-Obama or pre-Bush levels because current levels are so out of whack that people would not be able to tell the difference between that and what the status quo was in the mid-2000s -- only that it is change.
Though it has apparently triumphed, this is a dangerous moment for liberalism. Long-planned moves toward redistribution like universal health care or the repeal of the Bush tax cuts are being conflated with and to some extent elbowed aside by emergency nationalizations and Mr. Geithner's experiments. The White House is not selling the de-facto AIG and GM nationalizations as such, because they know the stigma the S-word carries. It becomes harder to sell the long-standing liberal policy agenda as urgent and necessary when the Administration is busy putting out ten different fires first. And after Year One, it becomes exponentially harder for a new President to push wants instead of needs.
Meanwhile, it becomes easy for Republicans to point to real-life consequences of government control to nullify the entire Obama agenda. Screw ups like the AIG bonuses will inevitably happen and be magnified by the fact of government investment, and this will have a chilling effect on the public's view of interventionism more broadly in areas like health care. Barack Obama standing behind your new muffler will not be looked upon with warm and fuzzies in the years to come. The best case for Obama is that this time in history is seen as sober and necessary. But that's not a rallying cry and a movement-builder. The right will be galvanized to action by the theft of the free enterprise system. What will the left be galvanized by?
