Republicans Should Avoid the Temptation to Abandon Conservative Economic Values

As the 2022 midterm elections loom, Republicans appear to be in a solid position to win back the House and Senate and make gains in state legislatures across the country. But for Republicans to make the most of their opportunity, including laying the groundwork for actual, concrete legislative accomplishments and not just rhetoric, they would do well to harness genuine conservative principles, especially defense of free market values.

A key pillar of a winning conservative platform is the notion that the government should have a limited and well-defined role in regulating business. Unfortunately, we’ve seen a backslide within some corners of the GOP, particularly at the state level, regarding their commitment to enabling private businesses to choose with whom to do business.

Republican lawmakers in Texas, for example, passed a bill last June requiring financial institutions underwriting municipal bond deals in the state to confirm that they do not exclude firearm or ammunition entities. In effect, this means that any bank that makes a business decision about its ties to the firearms industry could be barred from doing business with local governments in Texas.

While I wholeheartedly agree with the need to defend our Second Amendment rights, involving the government in the business decisions of private entities in such a heavy-handed way is not only anti-free market capitalism and inherently anti-conservative, but it incentivizes and provides a framework for Democrats to impose their own social agenda on private businesses.

This has already played out at the federal level. In September, progressive Democrats in the U.S. House of Representatives introduced legislation to bar banks from lending to oil, gas, and coal companies by 2030. The bill, called the Fossil Free Finance Act, would direct the Federal Reserve to break up large banks that refuse to reduce their financing of carbon emissions. Republicans, of course, stand vehemently against this bill, rightfully so.

Similarly, many Republicans have fought against vaccine mandates for private businesses, cheering loudly and praising the virtue of private enterprise when the Supreme Court recently struck down the Biden administration’s vaccine-or-test mandate for private employers.

Yet many also cheered the opposite in Florida when Governor Ron DeSantis signed legislation that imposed large punitive fines and prevented private business from making their own decisions about vaccine requirements for their employees to score political points. One Republican legislator went to far as to justify the heavy-handed regulation because “They pass dozens and dozens and dozens of regulations on private businesses in [the Capitol] every single year.”

It is worth noting sticking with an approach more in line with conservative values like allowing the market—not government—to pick winners and losers has yielded results most Republicans would see as favorable.

When Nike released ads in 2018 featuring former San Francisco 49ers quarterback Colin Kaepernick, who gained notoriety for kneeling during the national anthem before games, customers boycotted in droves. Prominent Republicans, like radio host and Fox News commentator Clay Travis, encouraged consumers to take their money elsewhere and Nike saw its shares drop by over 3 percent in a single day thanks to their decision to “go woke.”

Following the 2020 Academy Awards ceremony, in which celebrities wearing designer clothing and jewelry worth up to hundreds of thousands of dollars spent over three and a half hours lecturing Americans on the supposed merits of progressive policies, the 2021 Oscars ratings had an astonishing 58 percent fewer viewers than the previous year, making it the least-watched Academy Awards show of all time. While not the only factor, the incessant politization was among the top reasons that Americans tuned out and many conservatives cheered the backlash.

While engaging in their own form of “cancel culture” might be hypocritical of conservatives, at least the strong arm of government was not used by politicians against either Nike or the Academy Awards. Instead, consumers used the power of the purse.

If Republicans fall into the trap of violating their own conservative principles and choose to impose laws that ride roughshod over the decisions of private business, it will be unmistakably bad for the country, even if politically advantageous in the short-term.

Abandoning or undermining the fundamental principles of limited government and free markets principle is a dangerous game that will hurt Republicans’ own ability to establish conservative policy overall, not just in 2022 but beyond.

If the result of the current culture wars in American politics is that both major political parties embrace the coercive power of government as the answer to every problem and grievance, then ironically America will be weakened in ways that conservatives have always fought against.

Anticipating on February 6 the perils of runaway inflation, bursting of our financial bubble, consequent recession and even stagflation, I wrote the following reply which concerns itself with the dilemma for Republicans who assume control of the country's destiny under these shattering circumstances.

The problem is, voters don't like to be told to accept austerity and Democrats have never been bashful about promising prosperity on the cheap. It will therefore be difficult for Republicans to remain faithful to whatever fundamental economic principles they still entertain and remain in power as they do so. Here is the reply:

Heretofore, America's position as the reserve currency of the world together with other factors meant that we could seemingly borrow without paying consequences.

Our position as the world superpower and possessor of the world's reserve currency, meant that we could at least temporarily escape the inflation normally associated with profligate spending. We imported cheap goods from China, we exporter our manufacturing payrolls to China, we deflated domestic wages with unrestrained legal and illegal immigration. Thus inflation was held artificially low. We were in a wonderful sugar high, we could borrow and borrow, spend and spend with no immediate consequences. Every time consequences appeared imminent, such as in 2008, we simply "eased" our way quantitatively out of the setback by printing astronomically-it is so easy now it's done with the stroke of a keyboard.

We are talking in this thread originally about savings but the real rate of return is in negative territory so savings makes no sense. Cash is trash.In the process the Fed is now tapped out. It has no dry powder with which to revivify a failing economy should a major crisis come in the wake of a bubble burst. In other words, the Fed will not be able to borrow cheaply so the expense of borrowing will simply wreck our national budget. The numbers won't work with high interest rates which are probably inevitable as risk to bondholders becomes unsupportable with inflation.

Fiscal profligacy, the coin of the realm for Democrats and too many Republicans, will not work because the treasury is empty. Our defense budget will have to be slashed, entitlements too and all the other goodies with which democrats buy elections. But if it falls to Republicans to cut the entitlements and goodies that the electorate has become addicted to, what will become of the Republicans?

So what do we do? If we can't borrow to make the government budget work, if we can't borrow simply to roll over existing debt, then must we raise taxes? On an severely declining economic base to fund increasingly expensive unemployment benefits? Will not the taxes drive the economy further down?

Raise interest rates as occurred under Ronald Reagan and wring every drop of inflation out of the system? Perhaps that is the only solution, but one that is painful indeed and one that the Democrats will demagogue to our discomfort. The economy will suffer massively perhaps it will run out of control on the downside.

Every choice is pain vs. pain.

I agree with you, productivity is vital to overcoming inflation and the first step, obviously, is to resurrect the oil patch. But then we run up against realities. It will take some years for petroleum production to be ramped back up. But the main problem will be, presumably, the inability of the government to borrow money to pay for its exponentially growing national debts, much less to subsidize productivity. Heretofore, America's position as the reserve currency of the world together with other factors meant that we could seemingly borrow without paying consequences. Our position as the world superpower and possessor of the world's reserve currency, meant that we could at least temporarily escape the inflation normally associated with profligate spending. We imported cheap goods from China, we exporter our manufacturing payrolls to China, we deflated domestic wages with unrestrained legal and illegal immigration. Thus inflation was held artificially low. We were in a wonderful sugar high, we could borrow and borrow, spend and spend with no immediate consequences. Every time consequences appeared imminent, such as in 2008, we simply "eased" our way quantitatively out of the setback by printing astronomically-it is so easy now it's done with the stroke of a keyboard. We are talking in this thread originally about savings but the real rate of return is in negative territory so savings makes no sense. Cash is trash.In the process the Fed is now tapped out. It has no dry powder with which to revivify a failing economy should a major crisis come in the wake of a bubble burst. In other words, the Fed will not be able to borrow cheaply so the expense of borrowing will simply wreck our national budget. The numbers won't work with high interest rates which are probably inevitable as risk to bondholders becomes unsupportable with inflation. Fiscal profligacy, the coin of the realm for Democrats and too many Republicans, will not work because the treasury is empty. Our defense budget will have to be slashed, entitlements too and all the other goodies with which democrats buy elections. But if it falls to Republicans to cut the entitlements and goodies that the electorate has become addicted to, what will become of the Republicans? So what do we do? If we can't borrow to make the government budget work, if we can't borrow simply to roll over existing debt, then must we raise taxes? On an severely declining economic base to fund increasingly expensive unemployment benefits? Will not the taxes drive the economy further down? Raise interest rates as occurred under Ronald Reagan and wring every drop of inflation out of the system? Perhaps that is the only solution, but one that is painful indeed and one that the Democrats will demagogue to our discomfort. The economy will suffer massively perhaps it will run out of control on the downside. Every choice is pain vs. pain.

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