| The economic outlook is likely to help the Republicans and spell defeat for Democrats. The last time that there was a significant recession between 2007 – 09, the Democrats benefited from not being perceived as the party in power. This time, any such anti-incumbency effect will work the other way, helping Republicans.
Americans tend to vote conservative not because they find conservatives cuddly, or even agreeable. They vote for conservatives because they are seen as hard-headed realists, who can come along and fix the economy. But can they?
Not being a Democrat might be enough to see some Republicans elected, but what would they then do different to address some of the underlying problems that the US economy faces?
The storm cloud that hangs over the economy is a consequence of monetary mismanagement. Oodles of cheap credit have been hosed at the economy. Businesses and households are up to their eyeballs in debt. On coming to office, the Biden administration literally sent people free money. Rampant inflation is the result.
The process of bringing inflation under control is going to be painful. Hiking up interest rates has already put a damper on the housing market. If interest rates were increased to a (still historically low) 4 percent, prices might slump.
When Reagan took office, he was prepared to tighten monetary policy, even if it caused a recession. Are today’s conservatives prepared to do something similar? Are they prepared to be as judicious in their appointments to the Fed as they have been to the Supreme Court?
The US economy has been harmed by Net Zero policies. ESG investment regimes have denied the oil and gas sector the investment it needs to increase output fast enough.
The cumulative effect has been to push up the costs of energy, which has acted as a drag on the economy.
Do conservatives have an alternative to the Net Zero agenda, and are they prepared to take on the vested interests who will fight any attempts to change direction? Reagan was prepared to take on the vested interest holding America back, but it was a tough fight and at times it looked like they might defeat him.
The failures of a Democrat President, Jimmy Carter, might have given the conservatives an opportunity in the early 1980s. It was having a clearly thought through alternative that enabled them to tackle America’s underlying economic problems.
We need something similar again today. |
