The Importance of Reading

Two articles caught my attention this morning.  One was a blog on the NY Times by a Republican consultant.

http://economix.blogs.nytimes.com/2011/09/06/should-democrats-play-by-republican-rules/

It does a wonderful job of explaining the role of political party membership and the role that political parties  need to play.  Political parties funnel information to the electorate in a manner that allows the electorate to focus their time on their daily needs and not have to delve deeply into details to form an opinion.  The political parties therefore need to keep their message simple and keep repeating it while not getting caught in any inconsistency.

Of course, reality is more complicated than that and reality changes, so the political message should change to reflect reality gradually to avoid being accused of inconsistency (or it needs to be changed suddenly with a lot of explanation and then the new position needs to be held onto with consistency).

The second article is on Bloomberg.

http://www.bloomberg.com/news/2011-09-06/osama-bin-laden-fulfilled-his-one-true-ambition-noah-feldman.html

Osama Bin Ladan wanted to being down the U.S. as far as he could.  He thought he could do it with violence and trigger a revolution in the Middle East overthrowing our friends there.  However, he was much more successful than that.  He got the Bush Administration to combine its zeal for tax cuts with an overriding desire to conduct wars with the aim of establishing democracy to replace autocracy in Iraq and Afghanistan.  Thus, we borrowed 100% of the funding for the War on Terror in combination with a massive fiscal stimulus (combined with a lack of regulation - another Bush administration priority) and created the housing bubble.  When the housing bubble burst in a systemic manner it crushed both the allocation of credit and the primary savings vehicle for most of the population.

The only solution to this environment was massive government intervention to save the banking system and an effort to prevent a depression with fiscal stimulus.  If we hadn't borrowed the War on Terror, this would have been easily affordable and probably not even likely because the fiscal stimulus in the mid 2000's would have been much smaller.

Why did Osama Bin Ladan win?  Because the U.S. economy is now into its 4th year of economic turmoil and this is likely to continue for at least another 2 to 3 years.  Neither party has a coherent message on how to fix this because both are caught up in their historic simple messages.

Republicans:  Cutting taxes and reducing regulation will create employment.  Balance the budget.

Democrats:  Stimulate with fiscal policy and protect the social safety net.

Well we need to do what each party (Republicans and Democrats) wants but the only way to get there is to have the country build a political consensus around all these things.  That is not a easy message to simplify into a political campaign theme.  But that is the President's reelection challenge.

It also the obligation of every Democrat to somehow incorporate into their message because the Republicans are stuck on their consensus that less regulation and lower taxes will create jobs while privatizing the social safety net will balance the budget. I have commented repeatedly about why I do not  believe eliminating the social safety net is good for society.  Universal healthcare is what the country needs to create a competitive work place for our employers vs other countries.  The U.S. does need tax reform.  Eliminating tax subsidies is preferable to raising tax rates, but some combination is needed to raise revenues to aid balancing the budget without destroying the social safety net.  And as for the Republican desire to reduce regulation, it was a failure to regulate that created this crisis and helped Osama bin Ladan achieve his goal beyond his wildest imagination.

Now the Republicans did not knowingly aid Osama bin Ladan's achievement of his goal.  Rather, their adherence to their policy message with no adjustment for changes in reality created the synergy.  Their campaign is heading down that same path and the Democrats need to challenge that message with a coherent middle ground message of their own.