In Republican Civil War, Both Sides Are Hopeless

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By Josh Barro

Top Republican strategist Mike Murphy sees a split between two factions in the Republican Party:

The epic battle we Republicans face now is a choice between two definitions of conservatism. One offers steadfast opposition to emerging social trends like multiculturalism and secularization. The alternative is a more secular and modernizing conservatism that eschews most social issues to focus on creating a wide-open opportunity society that promises greater economic freedom and the reform of government institutions like schools that are vital to upward social mobility.

And Murphy sees an opening for the second group to win out in the Republican Party's internal fight and help the party win again:

The party’s biggest funders, mostly hardheaded business types, are in shock and high dudgeon after providing a virtual blank check to a GOP apparatus that promised much and delivered very little. Among this group, there is much frustration with the party’s perceived focus on divisive social issues and even some dark talk of a donor strike.

Unfortunately, this is a misdiagnosis of where the Republican Party went wrong and how it can fix itself. Murphy's proposed Republican Party that de-emphasizes social issues would probably pick up some votes in affluent suburban areas that have trended Democratic over the last few decades. But it would also lose votes from some lower- and middle-income white voters who back the Republican Party mainly because of their opposition to "multiculturalism and secularization."

The Republican Party's key electoral problem doesn't come from social conservatives or nativists. It comes from the economic policy demands of the party's wealthy donors. Murphy allows that Republicans "have lost much of our once solid connection to the middle class on kitchen-table economic issues." But his prescription won't do anything to fix that problem.

What are the "kitchen-table" economic concerns of the middle class? They're high unemployment, slow income growth, underwater mortgages, and the rising cost of health care and higher education. Democrats have an agenda that is responsive to these concerns. Republicans don't -- and they don't because the party's donor class specifically doesn't want one.

Have you spoken with a wealthy Republican donor in the last few years? By and large, they are outraged about Obamacare, easy money and stimulus spending -- that is, at policies aimed at easing middle class families' economic situations. They are often delusionally convinced that the country faces imminent economic collapse. What they believe will prevent that collapse is tight money, spending cuts and continued tax cuts for the rich. And so long as Republicans pursue those goals, they will be the party of anti-middle class economic policy.

Murphy urges Republicans to talk about "economic freedom." But Mitt Romney did talk a lot about that, and middle-class voters weren't impressed, because calls for lower taxes and less regulation are not responsive to their need for more jobs and higher wages. Murphy also urges "reform of government institutions like schools," but that's an issue for state and local officials.

In order to appeal to the broad middle-class, the party will have to adopt some economic policies that its big donors don't want. As Ross Douthat points out on Twitter, that means Murphy may have picked the wrong side of the Republican schism: Social conservatives are more likely to signal openness to pro-middle class economic policies than the "hardheaded business types" who fund the party.

But social conservative interest in non-plutocratic economic policy looks awfully soft. When you look at the 2008 and 2012 Republican presidential primaries, social conservatives threw in their lot with the candidates pushing the most regressive economic policies. Mike Huckabee sounds good rhetorical notes about middle-class economic struggles, but he's also a backer of the hugely regressive "Fair Tax." While the donor base drives the Republican Party's orthodoxy on economic policy, conservative activists are not exactly being dragged along -- they, too, are opposed to pro-middle class policies.

The upshot is that the Republican Party is screwed: It's in for a lot of infighting, but both sides of the party's internal fight are committed to economic policies that are not saleable to the broader public.

For the next few years, we're going to see a lot of articles like Murphy's, arguing that the Republican Party can rehabilitate itself by abandoning policies the author never cared about anyway. But unless these articles tell the Republicans to abandon some of their core economic policies, the prescriptions they contain will be wrong.

(Josh Barro is lead writer for the Ticker. E-mail him and follow him on Twitter.)

Read more breaking commentary from Bloomberg View at the Ticker.

-0- Nov/29/2012 20:00 GMT