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Reagan Democrats and the Republican Future

How the GOP can build on recent gains.

11:44 AM, Feb 16, 2011 • By MATTHEW CONTINETTI
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The independent-minded and always-interesting thinker John D. Mueller has a fascinating post over at The Gold Standard Now. In his study of history, Mueller has noticed that before major shifts in party alignment, large numbers of voters become "detached" from their previous affiliations and identify as independents. That's roughly where we've been since the Reagan coalition fell apart for the first time with the 1990 budget deal, with independents swinging from Republican Revolutionaries to New Democrats, Compassionate Conservatives, Change You Can Believe In, and now back-to-basics Republicans.

Reagan Democrats and the Republican Future

To keep these voters, Mueller observes, successful parties develop a fiscal policy that treats income from labor (wages) and property (investments) "roughly equally." That's what Reagan achieved with his 1981 and 1986 tax bills. His successors in the GOP, however, haven't been as lucky or good. They tend to neglect the working man. Their fiscal policy is geared toward what they describe as "the investor class." For the last several years, for example, Republicans have emphasized reductions in the corporate tax rate—a policy that, despite its obvious economic merits, has relatively little to say to the independent voters who bring home a paycheck every week, two weeks, or month. At the moment, Washington is embarking on a huge and passionate debate about the public debt and the cuts in spending necessary to prevent a fiscal crisis. But that policy too has its limits: It's more about forestalling future burdens on labor than giving voters tangible rewards for electoral support.

Government has grown bloated and weak and saddled with debt. It must be restrained. But the reforms necessary to limit government require political support in 2012 and beyond. And that support may be lacking if Republican fiscal policy favors investment income over labor income.

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