The 2002 elections, and their aftermath, tells us a good deal about the immediate future of American politics. After their unprecedented loss in a midterm election, the Democrats developed a number of excuses — the president’s popularity, the fact that he was viewed as a wartime leader, the failure to engage him and the Republicans directly on the nation’s economic problems. Later, in the Trent Lott episode, the Democrats and their supporters in the media developed the idea that they have been gradually losing their grip on power because the Republicans have been playing the race card, particularly in the south. As annoying as this is — particularly the finger-pointing about racial politics coming from its principal practitioners — Republicans should take comfort in the fact that the Democrats are still fooling themselves. The fact is, they have not yet come to terms with what has been ailing their party since Ronald Reagan’s election in 1980, and until they do the Republicans can hope for long and successful reign.
It is always difficult to identify a single thread that runs through many complex electoral patterns, but it does appear that by the time of Ronald Reagan’s election a majority of American voters were convinced that big government was not the solution to the nation’s problems. Between 1973 and 1996, a series of polls showed that the number of Americans who agreed with the proposition that “the best government is the one that governs least” increased from 32 percent to 61 percent.
The first steps toward dismantling the New Deal bureaucracy actually took place during the Carter administration. Deregulation of air travel, trucking, and railroads were the initial political indications that faith in the efficacy of government had begun to unravel. But Carter’s mismanagement of the larger economy, and his failure to have or adopt an overall vision for limiting the size and scope of government, forfeited the first opportunity for a Democrat to get out ahead of where the country was going.
Ronald Reagan, on the other hand, got it; by 1980, he had been skeptical of government for at least 20 years and his vision was far clearer than others in his generation. In his Inaugural Address he said “The government is not the solution to our problems; the government is the problem.” To those mired in the concepts and relationships of the past — especially in the deeply conventional outlook that always prevails in Washington — this was a radical, even an irresponsible, declaration. But it accurately encapsulated the thinking of a majority of the American people, who had concluded years before that bigger government was not better government. Although Reagan cited supply-side reasons for cutting taxes, his broader purpose was to limit the growth of government.
Later politicians failed to see as clearly what Reagan saw. The first Bush presidency was undone when he agreed to a tax increase. Not only did this violate his pledge not to raise taxes, but it also portended a turn toward renewed government growth. Similarly, Bill Clinton’s presidency was weakened when he raised taxes, and it essentially ended when he endorsed a massive new government program for health care. The backlash against both — at the midterm election of 1994 — put the Republicans in control of the House of Representatives for the first time in 40 years. Even Clinton eventually had to declare “The era of big government is over.”
In the 2002 election, tax policy was again a surrogate for the big vs. small government debate. That’s why the Democrats were unable to articulate a consistent position. Although cutting taxes has now been recognized as the only effective fiscal policy when the economy is slowing, it conflicts with the traditional Democratic view — responsive to the interests of the public employee unions and others who benefit from the government purse — that favors government growth. Although the elites argue the tax issue as a matter of economics — the Republicans contending that lower taxes will stimulate economic growth and the Democrats arguing that the resulting deficits will retard recovery — the American people do not apparently see it that way. Their view seems simpler and more commonsense: lower taxes keep the size of the government under control; higher taxes will encourage government growth.
As long as the American people remain suspicious of the efficacy of government at the federal level — and, with the exception of the military and fighting terrorism, there is no sign yet that they have changed their minds about this — those who advocate tax-cutting will hold the electoral trump card. A consistent trend against government growth over more than 30 years has elevated the Republicans to the majority party in the United States, although their margin is still thin. If this trend continues, and the Democrats remain captive to the public employee unions, the Republicans could widen their advantage and dominate American politics for at least a generation.
The normal vicissitudes of politics — another terrorist attack on the United States, a foreign-policy disaster — could still save the Democrats. But barring such events, the 2002 results again suggest that the Democrats face a difficult choice if they want to remain competitive. They can continue to endorse tax and programmatic ideas that imply government growth, or they can do the hard work of developing ways to meet the needs of the American people without simply enlarging the government bureaucracy. Up to now, with their post-election rationalizations and their effort to excuse their continuing losses as a result of Republican race-baiting, it’s clear that they are not ready abandon either their unpopular policies or their illusions.
— Peter J. Wallison is a resident fellow at the American Enterprise Institute. His Book on Ronald Reagan, The Power of Conviction and the Success of His Presidency, was published in December.