RUTHFULLY YOURS

Republicans hold a weak hand in Washington but a stronger grip in states where voters have entrusted them with power. Performances there can boost not just the Republican image but bring the party back to power in Washington. More importantly, they can show conservative principles work. The “Red State Model” can, in the Wall Street Journal’s words, “Drive Republican Revival.”

Walter Russell Meade, one of our most brilliant thinkers, has written quite perceptively about the collapse of what he calls “the blue model.” These are states that have been firmly in the hands of the Democratic Party and their allies (unions-especially public employee unions; special interest groups — environmentalists among them). Together they have created a tax, spend and borrow model of governance that is leading to fiscal chaos. Policies have been adopted that have created a hostile business climate that has cramped growth and blighted the future of the middle class.

Prospects for these states are so dim there has been not just an exodus of their “best and brightest” (blue states are heavily dependent on taxing high-income people who have options to migrate to redder pastures) out of them, but a collapse in fertility rates, as well. When the future is bleak and the cost of living in the present is too high, people don’t have children.

Liberals may caterwaul about a sustainable environment but seemingly couldn’t care less about sustainable families or a sustainable future or a sustainable state.

These are states that are collapsing under the weight of liberal policies. While the fiscal condition of the Democrat-controlled federal government and blue state governments is horrendous, many Republican-controlled states are swimming in surpluses (there is a threat blue states will use their power in Washington to extract, courtesy of red-state workers, a massive bailout).

The archetype of this model would of course be California where “Progressive Failure is on Full Display” writes Californian Steven Greenhut — but other states (Illinois, New York) are following down this disastrous path.

And therein lies an opportunity for the Republican Party.

While Barack Obama won re-election and the Senate remains in the hands of the Democrats, voters in 30 states put in power Republican governors, and 25 of those states have legislatures controlled by Republicans. The 2012 election sharpened the partisan divide in America between red states and blue states

That could be electoral gold on the national level if — a big if — the Republican Party can capitalize on the opportunity before it. They should embrace federalism not just for constitutional reasons but for practical and political reasons, as well.

The success of the policies enacted by these states can be contrasted to the failure of policies followed by blue states.

There was a reason Supreme Court Justice Louis Brandeis called states “laboratories of democracy”. States can test long-debated policy ideas.

Ari Fleischer recently noted the potential of these states:

“Our governors are America’s reformers in chief. There is a movement in America being led by our 30 Republican governors. That’s a source of inspiration and an example.”

The focus is shifting from Washington — bogged down by grandstanding and rhetorical chaff, scandals and pettiness — to states where real reform is being undertaken by Republicans.

Jonah Goldberg appreciates the potential for these efforts to revivify the GOP on a national level. He writes about the “Premature Reports of GOP Death”

In states as diverse as Wisconsin, Indiana, Ohio, Nebraska, Michigan, New Jersey, Texas and a half-dozen others, Republicans have been implementing impressive – even miraculous – reforms.

In pro-Obama Wisconsin, Gov. Scott Walker beat back a historic attack from organized labor. And Michigan – Michigan – recently became a right-to-work state, which I’m pretty sure is mentioned in the AFL-CIO’s bylaws as a sign of the end times.

There are far more examples of reform afoot. State tax reformers are multiplying almost as fast as Obama’s job-killing regulations. Oklahoma and Kansas have lowered their income-tax rates with an eye towards eliminating them. Mike Pence of Indiana, Susana Martinez of New Mexico, Pat McCrory of North Carolina — all Republicans — have focused on reducing income tax taxes. Nebraska’s GOP Governor Dave Heineman wants to eliminate the state income tax and replace it with a sales tax. Louisiana Governor Bobby Jindal wants to eliminate his state’s income and corporate income tax and replace them with a higher state sales tax.

Why the change?

Governors Jindal, McCrory and Heineman cite the growing evidence that states with low or no income taxes have done better economically in recent decades compared to states with income-tax rates of 10% or more.

A new analysis by economist Art Laffer for the American Legislative Exchange Council finds that, from 2002 to 2012, 62% of the three million net new jobs in America were created in the nine states without an income tax, though these states account for only about 20% of the national population. The no-income tax states have had more stable revenue growth, while states like New York, New Jersey and California that depend on the top 1% of earners for nearly half of their income-tax revenue suffer wide and destabilizing swings in their tax collections.

Rick Perry of Texas is exploring the option of sending tax money back to the people.

The fringe benefit from the GOP view is these changes will, as a Wall Street Journal editorial notes, “further sharpen the contrast in economic policies between GOP reform Governors and the union-dominated high-tax models of California, Illinois, New York, Massachusetts and now Minnesota, where last week Governor Mark Dayton proposed a huge tax hike. Let the policy competition begin”.

This is a battle Republicans should welcome.

Reform won’t and should not end with taxes; this will just play into the image of the GOP as merely being tax-slashers who serve the interests of the rich.

In recent history, Republicans have been the party of ideas from Jack Kemp on taxes and John Engler on welfare reform, to Tommy Thompson on crime control. Their successors are emerging now.

The Republicans need to have an agenda that advances the interests of the middle class. They need a Middle-Class Agenda — not just because it is the right thing to do but offers them the best chance of winning the White House.

Each initiative Republicans take should raise the middle-class standard of living; enhance their security and brighten the prospects of middle-class people. They should, among other things, cut the costs of energy, health care, child-caring and education (while improving the quality of teaching).

Advances are being made in these areas under Republican governors.

Texas, North Dakota, Louisiana are all leading energy-producing states not just because they are geologically-blessed but have adopted policies that encourage the tapping of their carbon bounty. Pennsylvania has led the way in encouraging the fracking revolution that has enriched its citizens, lowering the costs of energy, providing high-paying jobs, and boosting industries that benefit from the low costs of energy. Meanwhile, in stark contrast, the blue state on its border, New York, is throttling the same development within its borders. California environmentalists have caused the cost of energy to skyrocket.

Talk about contrast.

Republicans are pushing for more charter schools and vouchers to encourage more competition among schools and a better education for children. They face stiff opposition from teachers’ unions allied to the Democrats but are forging ahead.

State-level education reform is crucial to children’s’ futures. State lawmakers can look to the example set by Louisiana, a pioneer in education reform for the 21st century. The reform package passed by the state legislature and signed into law by Gov. Bobby Jindal last year creates an aggressive school voucher program, expands charter school opportunities and ties teacher tenure to effectiveness in the classroom. Under this new law, Louisiana parents have more control over how their tax dollars are spent, and can choose whichever type of school best suits their child’s individual needs: public, charter, private, parochial or virtual. Texas and Tennessee are trying to do the same.

“Choice” — a concept embraced by liberals — should be available to parents seeking the best education for their children.

At the college level, Florida’s Republican Governor Rick Scott is seeking a way to reduce tuition for select majors (science among them). Rick Perry of Texas is even more ambitious: he is pushing for a $10,000 degree at a time when high student debt loads imperil the futures of many college students and their families and people begin to question the value of college education given the higher education bubble that has already beginning to burst.

Health care reform has not stopped with the Supreme Court decision on ObamaCare,

Kansas Governor Sam Brownback, for example, has turned over delivery of Medicaid services to private health insurers- a step he says will hold down costs.

Republican governors are trying to avoid the worst aspects of ObamaCare by refusing to open state health-care exchanges. This will be a boon for them and their citizens. Rick Manning notes in The Hill the real-world impact that this refusal to implement Obama’s agenda may have:

The practical effect is that businesses in non-state exchange states will operate under a different set of federal healthcare rules than their counterparts in states like California, Massachusetts and New York. The current competitive advantages that many of these states currently enjoy due to low tax, less regulatory environments over high-tax, bad-business-environment hard-blue states will grow almost exponentially (italics mine).

Employers who can will shed the Obama mandates simply by picking up stakes and moving to states where they cannot be enforced.

Tort reform in Texas has led to an influx of doctors while the threat of abusive malpractice suits has dramatically reduced the number of doctors on other states where OB-GYNs, for example, have become an endangered species.

Republicans are also following the lead of Scott Walker in Wisconsin in trying to end collective bargaining with public employees (even Franklin Roosevelt thought this was a bad idea). This breaks the grip that public unions have over the public purse. Collective bargaining has been the tool that unions have used to extract unaffordable salary and benefit packages for their members and has led to the bankruptcy of various cities and massive debts in blue states such as California and Illinois (credit rating equal to Botswana’s). Pension reform for public workers is also part of the game plan for Republicans.

Republicans greatly benefit their citizens when they take on public unions (as well as private unions).

Michigan’s Governor shocked the nation when he and his GOP-controlled legislature passed “right to work” legislation that barred unions form requiring workers to pay dues or representation fees even if they are covered by union contracts. When various states have passed this type of legislation, members often opt out of paying dues and weakening the power of unions -and boosting the growth and job-producing prospects of those states (“right-to-work” states have lower unemployment and higher income levels

The poster child for collapsing blue states is California; for red states, it is Texas, that can become a model state for dynamic job and economic growth.

Wendell Cox writes about “The Texas Growth Machine” in City Journal:

A pro-business climate has unquestionably been a substantial advantage. In its annual ranking of business environments, Chief Executive has named Texas the most growth-friendly state for eight years in a row (California has been last for the same eight years). The reasons include low taxes and sensible regulations; a high quality workforce (Texas ranked second only to Utah in that category in 2012).

Texas has a low cost of living-far lower than California’s. Adjusted for cost of living, Texas’s per-capita income is higher than California’s and nearly as high as New York’s. Factor in state and local taxes, and Texas trumps NY.

More than three quarters of the cost of living difference between Texas and California can be explained by housing costs. Texas lacks the draconian land-use restrictions that drive Californian housing prices into the stratosphere.

Viva la difference!

Red states, many in the South, are growing stronger and wealthier because they are adopting pro-growth policies, breaking the power of unions, creating a business-friendly climate, and passing sensible regulations. Indeed they have become magnets for people fleeing blue states in the north.

Widening the competitive advantages healthy red states have over dying blue states is another way of allowing all Americans to compare and contrast the impact of conservative versus liberal policies.

How can this be communicated to the rest of America? That will be a challenge given the huge number of “low information” voters but certainly in the next few years Republicans will have good stories to tell regarding the success of their policies. “Low information” voters may gloss over abstract theories and claims but might be receptive to “show and tell” lessons and “comparing and contrasting” challenges.

Republicans should be able to make the case that conservative policies writ large across America can improve the lives of all Americans.

Will they succeed?

Game on! Don’t blow it, GOP.