By Josh Barro
Let me be clear: I don't want a Republican Party that's just like the Democratic Party, even though some people on both the right and the left see that as the upshot of Republican critiques like mine.
Political parties should differ on normative questions. They ought to strive for agreement on positive questions -- questions such as, what policies cause gross domestic product and median incomes to rise, how unemployment insurance affects the unemployment rate, or how global temperatures are changing. Currently, Republicans make a lot more errors on these kinds of questions than Democrats.
Correcting errors on positive questions should cause conservatives to revisit some of their top policies, as Bloomberg View columnist Ramesh Ponnuru laid out this weekend in the New York Times. Conservatives say tight money and lower top tax rates would enrich middle-class families. But that's wrong, and if they figured that out, they might stop supporting tight money and lower top tax rates.
Why would a reformed, reality-based Republican Party be different from the Democrats and therefore useful? I can think of a few important reasons, which are the reasons that I remain, however reluctantly, a Republican.
1. Democrats make their own errors in evaluating the economy.The economic situation of the past five years has brought out the worst in the Republican Party. In an environment of depressed demand and a slack labor market, many of Republicans' usual concerns become irrelevant. Government borrowing doesn't crowd out private spending; unemployment insurance doesn't significantly raise the unemployment rate; cutting marginal tax rates is a weak way to grow the economy.
But under normal economic conditions, Republicans' economic worldview has more merit, and Democrats' sanguineness about incentives becomes much more problematic. There will be a time when large deficits really do crowd out private investment and giving people incentives to work will be important for growing the economy. At that time, Republicans will sound the right warnings; Democrats might not.
Admittedly, the Democrats aren't all bad on this. Policy wonks on the left tend to understand that work disincentives from unemployment benefits are unimportant now because of a special condition in today's labor market. But then you have elected officials like Senator Tom Harkin dismissing in general the idea that unemployment benefits discourage work. In the future, we'll be glad we have Republicans around to remind us that incentives matter.
2. Republicans have an often-healthy skepticism of regulation. Republicans' reflexive opposition to regulation is causing them to get a few big issues very wrong, including health care, bank reform and climate change. But Republicans' preference for market allocation over top-down rules leads them the right way on a lot of issues.
Conservatives already won a lot of the big fights against dumb regulation at the federal level in the 1970s and '80s: ending wage and price controls, deregulating airlines and shipping, allowing interstate banking. But some areas of excessive regulation remain, especially at the state and local level.
Two big problem areas are overregulation of land use and costly or anti-competitive business regulations. Conservatives tend to have the right instincts in these areas but don't treat them as important; unlocking the value of urban land and freeing small-business owners from meddlesome local bureaucrats could become signature Republican issues.
At the federal level, the biggest overregulatory error is probably in intellectual property, where patent and copyright protections have gotten far stronger than is necessary to encourage innovation. So far, neither party has been eager to reform intellectual property -- the Republican Study Committee released an excellent report on the topic and then fired its author after coming under pressure from a congresswoman with close ties to the music industry. Perhaps Republicans could be convinced to see intellectual-property reform as a way to make markets freer and stick it to liberal Hollywood.
3. When they try, Republicans can make government more efficient. When I talk about the Republican Party being in dire political shape, the retort I most often hear is that Republicans hold 30 governorships. This isn't a contradiction; in part, it reflects that Republicans are offering up much more appealing policies at the state and local levels than the federal level.
The idea that government should run like a business or a household has led Republicans dangerously astray at the federal level, but this actually isn't a terrible frame for thinking about states. A highway department is a lot more like a business than Social Security is. Although the federal government mostly moves money around, states and localities have lots of employees and direct operations, so greater efficiency really can go a long way. And state budgets really do need to be (more or less) balanced annually.
Republicans have also been more likely than Democrats to recognize that public employee benefits structures are outdated and needlessly costly, and that collective bargaining in the public sector lets unions sit on both sides of the negotiating table.
The split isn't totally partisan. Democrats in some states, like Massachusetts, weakened collective bargaining at the same time as Republican Governor Scott Walker of Wisconsin; and some Republican reforms were aimed more at reducing unions' political power than at cutting costs. The most aggressive pension reform of recent years was enacted in heavily Democratic Rhode Island. But in general, Republicans have been more willing than Democrats to look for ways to provide government services more cheaply and efficiently, including by cutting the employee compensation costs that make up about half of state and local spending.
4. Republicans aren't all out to lunch. In the states, the Republican focus on cost containment and efficiency works best when it is combined with a commitment to providing high-quality government services and an understanding that government can and should be useful. Republican governors' talk about improving their states' governments contrasts with national Republican rhetoric, which tends to cast government as an impediment to freedom and growth.
Such a balanced approach is the reason that New Jersey Governor Chris Christie has approval ratings in the 70s, or that governors like John Kasich in Ohio and Susana Martinez in New Mexico did the math and accepted Medicaid expansion funds that will benefit their constituents, instead of dying on the hill of opposition to Obamacare.
Balance doesn't prevail everywhere; Republicans in Kansas are undertaking an unwise reform that will make their state's tax code much more regressive, and some Republican-controlled state legislatures are busying themselves with sideshows like studying a return to the gold standard. But the reason Republicans are succeeding in states where their national brand is severely damaged tends to be that their state-level policy agendas are markedly better than the party's national one.