Republicans as modernizers — the path to revival

What is the key to a revival of the Republican Party? In a sense, the question is unfair because it assumes the Party is in need of revival even though it did fantastically well in 2010 and well enough at the state and U.S. House of Representatives level in 2012.

Even at the presidential level, the Republican candidate did about as well as the Democrat did in 2004. And John Kerry’s defeat didn’t lead to a significant course correction by the Dems; nor did one turn out to be necessary.

Yet Republicans correctly sense danger in the fact that it fares so poorly among younger voters. Hence the perceived imperative to alter the Party’s positions to the point where Republicans can say, “this is not your father’s GOP.”

Can Republicans accomplish this by being less strident about social issues and more pro-illegal immigrant? I doubt it. The Democrats will always be able to outflank Republicans on these matters. A change in Republican tone might help, but only marginally.

The GOP’s opportunity to show that it, not its rival, is the Party that has kept up with the times lies elsewhere. As Yuval Levin says, “if Republicans are to regain their balance and lead the country again, they will have to develop an agenda for national renewal that speaks to today’s policy challenges and to the sources of voters’ anxieties.”

Those anxieties, Levin correctly perceives, are economic, not social:

At the heart of those anxieties is a sense that America’s economic promise—the promise of growth-fueled upward mobility backed with security against the gravest misfortunes and risks—is waning. Economic growth has slowed dramatically—it averaged 3.6 percent annually from 1950 through 2000 but only 1.6 percent since then. And the cost of living in the middle class has been rising without a comparable improvement in living standards, especially because health care and higher education have gotten much more expensive without getting much better.

Democrats see income inequality as the root of the problem; Republicans often point to high marginal tax rates. But, says Levin, the real problem is the inefficiency of our economy.

Once we understand this, the opportunity for Republicans to articulate a winning critique of the status quo — one that is simultaneously conservative and modern — becomes clear:

The sectors of the private economy most dominated by government—education and health care—are burdened by outdated institutions and irrational economic arrangements. Modernizing both (by breaking union monopolies, deflating the higher-education bubble, and using competition to drive higher-value health care and reduce entitlement costs) would help train tomorrow’s workers and avoid crushing them with both public and private debt, and it would help save the safety net for the vulnerable from fiscal collapse.

Meanwhile, the sector with the most potential for fueling a near-term boom—energy—is being held back by an administration uncomfortable with newly discovered domestic fossil-fuel reserves.

Reforms in other key areas are also badly needed. A simpler, leaner tax code would reduce the government’s drag on the economy and could allow us to focus tax relief on lower-middle-class families struggling under the payroll tax.

Monetary policy focused on steady nominal growth could power a real recovery. And reinforcing the work of civil-society institutions to strengthen families and communities could help restrain the disastrous social trends that undermine mobility and hold back the poor.

Reactionary liberalism has no good answer to this conservative critique and the modernizing agenda associated with it. But this won’t matter until Republicans effectively explain the critique and present the agenda.