There’s a lot of talk about how Republicans need to re-brand themselves on social issues. I’m not convinced that’s more important for the GOP than shedding its image of being too closely aligned with Big Business.
There are three key ways in which Republicans lost credibility since 2000. One, as Peggy Noonan argued recently, was the 2003 Iraq invasion. Another was the increase in federal spending that took place during George W. Bush’s presidency; spending accelerated toward the end, when Democrats were in control of Congress, but it was rising too swiftly well before Nancy Pelosi became speaker of the House.
The third was the 2008 bailout of Wall Street. The party that supposedly champions free enterprise went along with using hundreds of billions of taxpayer dollars to save financial institutions that acted recklessly. Some Republicans argued then, and still argue now, that the alternative would have been worse. But the larger point is that the nexus of Big Business, particularly banks, and Big Government had allowed the situation to deteriorate so far in the first place, and Republicans certainly shared in the blame for that. (As did a number of Democrats, but we’re not trying to fix them today.)
Say what you will about social conservatism, but it doesn’t catch anyone by surprise that Republicans oppose abortion and gay marriage. They won elections while opposing abortion even when that was a far less popular position than it has been in recent years. (Although, as I have argued before, the push by right-to-life groups to move the goal posts on the abortion debate, by going for one or no exceptions instead of the standard three, is both troubling morally and fraught with danger politically.) But they are unlikely to win elections while being indistinguishable from Democrats on the size, scope and reach — meaning intervention in the marketplace — of government.
Would it have made a difference, for instance, in the 2012 presidential race if Mitt Romney had offered concrete proposals to make sure banks don’t become too big to fail — and spent a good bit of time campaigning on that idea? There would have been a Nixon-to-China air about hearing someone who knows Wall Street as well as Romney does say, “I used to work with these guys, and they’ve gotten out of control. I know what needs to be done to rein them in, and here’s how I plan to do it.” Instead, we got a recorded speech in which he talked about “the 47 percent.”
All of which is to say it is good for the GOP to see this kind of approach from a high-level congressman like Jeb Hensarling of Texas (via the Wall Street Journal):
The new chairman of the House financial services committee wants to limit taxpayers’ exposure to banking, insurance and mortgage lending by unwinding government control of institutions and programs the private sector depends on, from mortgage giants Fannie Mae and Freddie Mac to flood insurance.
Banks and other large financial institutions are particularly concerned because Mr. Hensarling plans to push legislation that could require them to hold significantly more capital and establish new barriers between their federally insured deposits and other activities, including trading and investment banking.
“A great case can be made that we need greater capital and liquidity standards,” the conservative 55-year-old Texan said in a recent interview. “Certainly, we have to do a better job ring-fencing, fire-walling—whatever metaphor you want to use—between an insured depository institution and a noninsured investment bank.” …
Mr. Hensarling inherits the chairman’s gavel as many Republicans appear to be growing cooler to big business. Prominent conservatives have called on the GOP to loosen its ties to Wall Street. Other leading Republicans, including Senate Minority Leader Mitch McConnell (R., Ky.), have vowed to root out “crony capitalism,” the practice of rewarding specific industries or companies with taxpayer-funded subsidies or safety nets.
There will have to be action on top of the talk, but beginning to make the case is a positive development.
– By Kyle Wingfield