In advance of the mid-term elections, a number of readers have requested the ThePartyofCommonSense.org weigh in on its positions. There seems to be five main issues on the voter minds: taxes, debt, unemployment, immigration, and healthcare. But before dealing with these, one must address the newest member to the party: the Tea Party.

At ThePartyofCommonSense.org, we believe to understand and appreciate what the Tea Party folks are saying. There are basically two main problems with politicians of both parties:

First, politicians do whatever gets them re-elected, and therefore are unable to make the hard choices that America needs. Like a parent that coddles a child, legislators do the easy thing that may placate the child in the short term, but results in long term negative problems. For example, this article in the Washington Post details legislators who publically stated that the Stimulus was a waste of money and didn’t create jobs, but privately lobbied the administration for funds to assist their constituent's local economies and create much needed jobs (see the Washington Post article here). They talk a good game about fiscal responsibility, but do another; placating the voters wish for reduced spending while demanding their "fair share" of government resources.

Secondly, as an extension of the first problem, politicians are basically corrupt and can be bought. They need money to run a campaign and get re-elected and our feckless election allows for quid-pro-quo deals to be made between industry lobbyists and politicians. It may only be a wink and a nod, but clearly there is a relationship between the use of campaign donations, access to politicians, and the voting records of most politicians. If it were ineffective, free market principles would dictate companies would stop spending the billions of dollars to do it. For example, in this article, the authors were able to trace the Arizona Immigration Law from conception by lobbyists (The American Legislative Executive Conference and the private company the Corrections Corporation of America) through passage in the Arizona Legislature into law. The law was practically identical to the one written by lobbyists' right down to the name: "Support Our Law Enforcement and Safe Neighborhoods Act". (See the NPR story.)

So our system is broken and the people are feeling (rightfully so) ill served by those they hired to represent them. However, the real question is whether Tea Party candidates are willing to fix the broken system. The same elderly couple that shows up at a Team Party rally with a sign that reads "Don't Tread on Me" is also the same couple that says: don't even think of touching Social Security or Medicare, since they worked hard and paid into the system and it would be unfair to break that promise. Thus underscores the main problem: to balance the budget, we're going to have reduce services and increase taxes. In the 2010 budget, after the mandatory spending (Medicare, Social Security, interest on the debt, etc., etc…) there is only $300 billion for discretionary programs. We spend over $600 billion on defense. So, if you really wanted to balance the budget you'd have to cut defense in half and eliminate all other discretionary spending. Some would argue that getting rid of the Department of Education, Department of Agriculture, and the Department of Energy would be a prudent step toward fiscal sanity, but you’d also have to get rid of the Department of Justice, Homeland Security, Department of State, and Department of the Treasury among others. Yet, people want the opposite: increased services and reduced taxes. We have yet to see any concrete proposal from the Tea Party folks on how they'll go about making the tough decisions to get us on the right track. In fact, we see them running away from anything controversial, including social issues - issues that will at some point demand a vote from any elected Tea Party candidates.

There is one more element of the Tea Party that we struggle to understand: the Glenn Beck/John Birch Society movement that Woodrow Wilson and Progressivism is the enemy. Perhaps we just don't quite "get it". Progressivism gave us civil rights, women's lib, Social Security, and Medicare among others. It stopped sweatshop factories and child labor. Is Glenn Beck really advocating that we roll back Civil Rights (for example)? Is he a political Luddite that wants to disavow electricity (or Civil Rights) and other advances of a modern society and go back to living as our founding fathers did? Or is he saying, "Progressivism is OK to date, but no more?"

With a lack of a platform, ultimately, we see the Tea Party as a well intentioned movement that will be co-opted by the status quo and the GOP who, conveniently, have a platform and can "advise" any newly elected Tea Party candidate on how the system works and how to vote on certain issues. And now on to the five issues and ThePartyofCommonSense.org positions...

Taxes. The Republicans just want tax cuts, especially for the wealthy and special interests - in spite of economic data that indicates that tax cuts simply result in an increasingly divergent spread between the wealthy and the middle class. During the years of the Bush tax cuts of 2002 to 2007 economists Thomas Piketty and Emmanuel Saez showed the average inflation-adjusted income of the top one percent of households rose 62 percent, whereas for the bottom 90 percent of households it only rose four percent¹. Overall, there seems to be no close relationship between the top tax rate and the GDP growth rate, and statistical analysis backs this up: the correlation coefficient between the two variables is 0.03, meaning that there is essentially no connection. If tax cuts were strongly related to GDP growth, we would see a coefficient close to negative one². Furthermore, see page 9 of an excellent Moody's research paper³ that shows that the Stimulus spending was five times more effective than tax cuts in terms of GDP growth. Forced to choose between counterproductive Republican Tax Cuts or Democratic Tax Increases, we'd choose the more responsible Tax Increases.

Debt. There was a bill in the Senate earlier this year which would establish a Bipartisan Task Force for Responsible Fiscal Action. This 18 member bi-partisan committee would put forth a series of recommendations on how to get our fiscal act in order. The legislation then would be fast tracked and an up-or-down vote (with no amendments) would be taken in both the House and Senate. Every legislator would have to go on record on where they stand on fiscal responsibility without an opportunity to diluting it with amendments to protect the "sacred cows" of their individual and parochial special interest agendas. This was heavily promoted by Republicans as the responsible way forward. Days before the vote President Obama, who had been against the bill, reversed his position and came out saying he would sign bill if passed. Senate Republican leader Mitch McConnell and six Republican co-sponsors (these are people who helped write the bill) immediately switched to a "no" vote and the bill died. (Later Obama created the National Commission on Fiscal Responsibility and Reform, which will be non-binding and will produce a report following the mid-term elections). This was a huge missed opportunity, which shows that the Republicans and a number of Democrats are not serious about deficit reduction. In general, we don't believe either side is serious about reducing spending.

Unemployment. The Financial Times, which is not necessarily known as a bastion of liberal thinking but is known for serious economists, recently published an article (see the article here) describing the three things that are characteristic of a recession: a decline in the market and asset prices; unemployment rises; and government debt explodes. In other recessions, real GDP (purchasing power parity) fell an average of 9.3%, but this time it only fell 5.4%; likewise, in other recessions unemployment increases an average of 7%, but this time it only increased 5.7%. So in the worst recession since the Great Depression, although the Stimulus was expensive, it worked - thereby supporting Keynesian Economic Theory. The Republican plan seems to have been to slavishly adhere to free market theory and avoid government intervention - letting our economy collapse. Rallying to the cry: "there is no such thing as too big to fail" the Republicans agree that Lehman Brothers would have just been the first a series of dominos that would have taken down Wall Street. Much like a city fire out of control, the government can get involved and try to stop it and save the city (as the government did), or we can let the city burn to the ground. If it did burn to the ground, one of two things can happen: a new city can emerge, one that uses the blank slate to rebuild the city bigger and better; or the city will wither and die. Could we afford our economic system to collapse completely? What would be the social fall-out? Would America re-emerge decades later stronger and better? Or would it be the death knell in the rise and fall of another great civilization as we get eclipsed by emerging markets like China, Russia, India, and Brazil, countries less beholden to derivatives and the rest of the modern financial alchemy. We at ThePartyofCommonSense.org don't think we wanted to find out. However, there is something to be said for the concept that "no pain leads to no gain". Only after the pain of the Great Depression did real financial reform occur, things like FDIC insurance, Glass-Steagall Act and the Securities and Exchange Commission (SEC). There is concern that the recently passed tepid and watered down financial reforms may not of have gone far enough, and that we are destined to repeat history with another financial disaster. However, on the whole on this issue, we side with the data: the Democrats, the Stimulus, and Keynesian economics.

Immigration. One of America's prime assets is its spirit. Waves of immigration, the Chinese, the Italians, the Irish, and so on, have continued to reinvigorate this American Dream. These immigrants are the people that are willing to take a risk, leave the safety and comfort of their families and homes, and set out to create a better future for themselves and their families. They have always been looked down upon and started at the lowest economic rung; however it is these hardworking people and their offspring that will be the next generation of innovators and entrepreneurs. The work ethic of immigrants, like a new kid on a sports team, puts pressure on the veterans to work harder. This is what we need to continue to maintain economic dominance into the next century. Unfortunately the Republicans are using the uncertainty of tough economic times and xenophobia to create scapegoats and as a wedge between voters. Republicans are simultaneously portraying Hispanic immigrants as lazy welfare cheats, and as job-stealing hard workers (without seeming to grasp the inherent contradiction). Meanwhile, they use security as a wedge issue, attempting to parlay their perceived strength on national defense by portraying all Muslims as being dedicated to the destruction of America. The silliness that invades the Republican blogs including a boycott of Campbell's soup for marketing a Halal soup and the Ground Zero Mosque, whose primary purpose seem to be to make sure America is an inhospitable place for Muslims. I don't doubt the immigration system is broken - more should be allowed legally, with paths to citizenship - but strongly disagree that making America inhospitable to others is either good for America or American.

Healthcare. As has been well documented (see ThePartyofCommonSense.org article here), the US is not number one in any healthcare category except cost. Spending almost double per capita over other nations, our healthcare costs consume almost a fifth of the GDP and the number is rising fast. Three things need to be done: Coverage, Care and Cost. The US is alone among the other 30 OECD nations in failing to provide universal healthcare to its citizens. And since hospitals and healthcare workers are required by law to stabilize all patients, regardless of healthcare coverage before releasing them, we do have catastrophic coverage. Fellow compassion for other human beings and common decency won't allow America to let the uninsured die in the streets, so why shouldn't we require that everyone pay for their fair share? Universal coverage seems to have slipped into our society, so why not simple accept it and deal with it as a necessity of life, not a luxury? On the second item, any tinkering with Healthcare needs to ensure our quality of care doesn't decline, and ideally would increase. Finally, we need to stop the meteoritic rise of costs, and ultimately reduce the overall cost (as a percentage of GPD) of healthcare. The solution seems to lie with changing the financial incentives from the quantity of healthcare provided, to the quality of healthcare provided. Healthcare was a difficult subject and we applaud the Democrats from taking on this difficult issue (just as we applauded Bush for trying to deal with Social Security reform). However, ThePartyforCommonSense.org rejects the Republican's cry of "repeal and rewrite", knowing that they are hoping to revert to the old status-quo, repealing but not rewriting. They had an opportunity during the healthcare bill creation to weigh in with serious proposals and almost to a legislator, they simply said, "no". Far from perfect, especially around reducing costs, we see Healthcare as a step in the right direction.

One final plug is for something not on the minds of voters, but critical to the wellbeing of America: international relations. With a war in Afghanistan and an occupation in Iraq, we are still facing Al Qaeda and Islamic extremists. We feel this is one issue that President Obama has done a good job steering a course through difficult land mines, but to no one's real satisfaction. Knowing that complete and immediate withdraw from Afghanistan and Iraq is worse than a lingering presence; he has kept troops in the ground upsetting the isolationists on the Left, while garnering no credit from the hawks on the Right. The real issue here is redefining the mission, from installing a Jeffersonian Democracy, to acceptance that a pro-Western government, even a Theocracy such as that in Indonesia, would be acceptable to the West. This, too, is a tricky course to run: trying not to be seen as propping up corrupt dictators, while trying to ensure that Western interests are protected by preventing Islamic Extremists from using these countries as bases for future attacks.

We are hopeful that the Tea Party folks will put pressure on all politicians to start doing the right thing and not selling out to voter and lobbyist whims. We’d love to see real fiscal sanity in our government, but find it unlikely. At ThePartyofCommonSense.org, we believe our best shot to achieve this would be term limits. If America was able to take the pressure off of politicians having to buy our electoral votes with wasteful spending programs, and the politicians need to raise money from corporate interests to pay for ever increasingly expensive campaigns, maybe we'd see politicians do what's right for America.

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Sources

¹ http://www.cbpp.org/cms/index.cfm?id=2908&fa=view
² http://desertbeacon.blogspot.com/2010/07/reality-check-tax-cuts-and-economic.html
³ http://www.economy.com/mark-zandi/documents/Economic_Stimulus