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Maybe The Mayans Meant January 1

Maybe The Mayans Meant January 1

I guess we’ll know soon enough if the world comes to a screeching end on Dec. 21, the last date of the Mayan calendar, which some believe portends Earth’s demise. Similarly, we’ll have to see what Jan. 1 and the coming of the so-called “fiscal cliff” brings.

Regarding the latter, the Democrats seem to have the leverage thus far, and are winning the debate with the public over spending and taxes. That means we’ll likely see an increase in taxes for those Americans making $250,000/year or more, and some sort of mechanism that kicks down the road the implementation of any real spending reductions.

You might recall that the fiscal cliff was a compromise measure arrived at ahead of the election by a U.S. Congress unwilling to do its duty. The compromise was supposed to force real and substantive reduction in out-of-control spending, because the alternative was thought to be too severe to consider. Instead, it appears that both sides will continue to agree that addressing the problem is too politically costly – who says there isn’t bipartisanship in Washington, D.C., anymore?

I am a bona fide political junky. Today’s lame duck congress has been entirely focused on the impending fiscal disaster, so the media loved the resignation of Sen. Jim DeMint (R-SC), a favorite of the tea party movement. It’s rare that one of the most powerful senators (even in the minority party) would resign with four years remaining in his term of office.

Without a doubt, the conservative movement suffered a defeat in November more stunning than anyone had projected. I’m sure DeMint’s departure reflects frustration, and signifies a party grasping to adjust to what is seen as an increasingly changing electorate.

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Conservatives always took solace in the fact that, despite a far more effective liberal coalition, the country was predominantly a right-center country. That seems to have changed dramatically, and the shift is expected to only accelerate with current trends. Consequently, it’s now tough to envision a national election scenario in which conservatives could win. The two-party system is officially dead – we will have a majority party and a loyal minority party, until the Republican Party does something to address the problems it faces in creating some semblance of a majority coalition.

In that sense, DeMint’s departure was a recognition that Washington is run by the party in the majority, and that he would have far more power outside of government to effect the changes he wants, than within. Yes, the Republican Party has issues; fiscal conservatives (I am one) are disenchanted with the party’s lack of adherence to conservative principles. Yet, at the same time, Republicans are getting beaten up in the court of public opinion for being too far right.

The fiscal cliff as a microcosm

The fiscal cliff debate is a microcosm of the failure of the Republican Party to create a message that will resonate with a majority of the population. After all, fiscal responsibility is something the populace agrees with in principle, but not in application.

Despite all the hype, the fiscal cliff solution that will inevitably happen will do nothing to address spending; nor will it likely do anything to increase revenue. Yes, tax rates will rise on those making $250,000 or more, and nominally on others, but it won’t change income levels in any impactful way.

In fact, the statistical evidence probably is more suggestive that, in today’s competitive global environment, raising tax rates will decrease aggregate revenue for government as the economy shrinks. It’s important to understand, though, that the tax increase debate isn’t about revenue, it’s about perceived fairness. In fact, Republicans advanced the idea of creating the fiscal cliff to force the Beltway to address the debt. When the context of the debate shifted away from restoring fiscal sanity to fairness, they lost substantively and politically. 

Ironically, the polls say most Americans prefer a combination of revenue reduction and tax increases, and they want most of the deficit reduction to come from spending cuts. The Republican leadership seems to be totally perplexed that the polls continue to show that people support their proposed solutions in principle by resounding margins, but will also blame them if the country goes over the fiscal cliff.

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In fact, the polls indicate that voters feel Obama and the Democrats are more likely to negotiate in good faith, even though the Republicans have been the ones tripping over themselves to make concessions. Without question, the Democrats have already won the fiscal cliff crisis; they’ll get what they want, and Republicans will be blamed for any failures.

Republicans are out of step with the American people that believe in smaller government and fiscal sanity, but are more concerned about the system they perceive as unfair. They believe in the America that the Republicans promise, but they have little faith in Republicans’ ability to deliver it.

Without question, the Republicans lack the leadership necessary to articulate their message, but they also accept that their message is a big part of their problem. After all, if you can lose decidedly in a national election to an incumbent with a record as poor as Obama’s, the reality is that the party probably doesn’t have the ability to win any national election.

It isn't a packaging problem

It will be a grave mistake for the Republican Party to conclude that its failures are merely related to packaging problems, media bias, candidate selection or any other problem that suggests the message itself failed. The tea party movement was an attempt to address this need, but many would argue that its attempt to make the Republican Party truly the party of fiscal responsibility is counterproductive.

You’re even seeing a lot of people recommending the creation of a new party, or leaving for nominal third parties like the libertarian, constitution party, etc. They argue that the Republican Party doesn’t represent them adequately enough.

Any analysis of the demographics suggests that the Democratic Party will only strengthen its national stranglehold on the levers of power. Perhaps it’s an inevitable shift in a democracy; after all, we’ve seen the democratic socialist model take over much of Europe and no democracy has been able to stop the slippage into decline that also comes with the move towards socialism.

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Interestingly, the collapse of socialism hasn’t led to a greater embrace of capitalism. The experiences of the former Soviet Union, Greece, Spain, Iceland, etc., indicate that the promises of socialism overcome the realities of capitalism. In an almost eerily Orwellian way, people are coming to believe that government must provide the answers. And a democratic government won’t make the hard choices unless encouraged to do so by the majority of the populace.

As a conservative, I’d like to believe we can win the battle of fairness, etc., but the hard facts tell a different story. The Republican Party is like non-alcoholic champagne; it promises the fizzle, but can’t deliver the buzz that comes with the real stuff.  

Anyone who doubts that the rules of the game have changed has to look no further than the media coverage of the unemployment numbers. The media heralded another decline in the unemployment number last week, but the decline came with upward revisions of past numbers, and fell only because the number of people exiting the workforce was twice as big as the small number of people who found jobs. If we continue to take the current trends forward, we will shortly have full employment, but 60% of the people will be out of work, and the vast majority of employees will work for the government.

When one factors in holiday seasonal work, the latest numbers represented the worst employment picture since the Great Depression. Nonetheless, it was heralded as an improvement. If your message doesn’t resonate in this environment, the problem is the message. 

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