Friday, October 9, 2009

Some Economic Compromises

TW: As I have said before I consider myself a Rockefeller Republican which translates to a moderate Democrat given the current day political spectrum. There are a few stragglers within the Republican party, Bruce Bartlett amongst them. Here is some ground for compromise. Or from my partisan view issues where the smart Dems (inc. hopefully our POTUS) could co-opt some good ideas and secure electoral supremacy for years whilst combining these economic policies with progressive social policies and a little libertarianism thrown in for good measure.

I am not saying I would agree literally with all of below but none of it makes me retch (unlike say supply side tax cuts for wealthy) and Obama et al. could almost as easily adopt some of the below as the "Republican Bill Clinton" mentioned below. The fact folks are talking about a "Republican Clinton" instead of the Dems talking about a "Democratic Reagan" etc. is in itself huge progress.

From Matt Bandyk at US News and World Report:
"Economist Bruce Bartlett's new book attempts to create the platform for a Republican Bill Clinton--a compromiser who can bring GOP policies out of the fringe and into workable solutions.

...Bartlett identifies three policy stances for such a candidate:
1) deemphasizing tax cuts
2) slowing or shrinking entitlement programs
3) a value-added tax to help close the deficit.
Derek Thompson of the Atlantic adds a fourth suggestion: 4) a modest tax on carbon.

Let me add five more possibilities (on economics):
1. Guest worker compromise on immigration: Any "third way" Republican candidate will need to do something about the Hispanic vote, which most of the GOP has seemed determined to lose over the last few years. Bush tried to find a compromise on immigration, and failed. A Republican Bill Clinton could perhaps improve on Bush's attempt by focusing on just one simplistic proposal: new "smart" cards that would tie temporary workers to jobs in the US. This is the "Red Card" solution as advocated by some.

2. Lessen the bailout culture: It's clear that, for better or worse, it's not politically possible for any serious politician to declare that he or she won't bail out large financial institutions when they screw up. But a Republican Bill Clinton could at least recognize the moral hazard that comes with that inevitability, and take some steps to lessen the incentives for the big financial giants to create too much risk. For example, the FDIC required big banks to pay more in premiums. More actions like that would please people on the right and the left who are sick of all the money we've spent on bailouts.
3. VAT as a replacement, not an add-on. Any politician pushing for tax increases is making a hard sell. It's even more difficult for a Republican. A "third way" Republican could make a VAT easier for his or her base to swallow by stressing that it won't just be a whole new tax on top of the existing system. Instead, couple the VAT proposal with reductions in inefficient taxes like the corporate or estate taxes, and also simplify the income tax.
4. Retake the innovation debate. Obama has talked a big game about spending billions on new technologies to reaffirm America's position as an innovation leader. As long as the innovation debate is framed in terms of number of dollars spent, Republicans can't say much. So a Republican Bill Clinton would need to change the debate and start talking about how to boost innovation by removing barriers to American entrepreneurship. Here are some starting ideas: Cut taxes for startups in their early years, and reform Sarbanes Oxley to make it less burdensome for small companies so there's an incentive for more IPOs.
5. End the tax exemption for employer-based healthcare. McCain tried to advocate this, but not in a bipartisan way. But sign onto something like the proposal in the Wyden-Bennett bill already endorsed by many Democrats (and Republicans), and the partisan arguments won't stick."

http://www.usnews.com/money/blogs/capital-commerce/2009/10/7/what-would-a-republican-bill-clinton-support.html

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