Republicans Upset by Economic Crisis

Republicans upset by economic crisis

Since Sarah Palin’s eruption on to the national stage, the Republicans’ enthusiasm has returned. John McCain moved back up alongside his rival Barack Obama in the polls. The Republican administration felt a shiver of excitement running through the constituencies. The party once again started to believe that it would save its position in the Senate and prevent the Democrats from winning the nine seats which would give them a runaway majority of sixty seats.

The Palin effect has peaked. The governor of Alaska, promoted to Republican running mate, continues to pull in the crowds but has failed to seduce the floating voters (in the swing states, Joe Biden, Barack Obama’s running partner, is enjoying a better image according to the polls). And even amongst the conservatives her inexperience is starting to cause concern. Slated by the press, she’s given just three television interviews, in which she’s struggled to find her words, appearing terrorized.

Above all it’s the economic crisis which has had another cold shower effect on the party which, ideologically, seems to have run its course: whether in terms of its neoconservative rhetoric faced with the reality of the situation in Iraq, or its defense of “values” which no longer mobilize more than the Christian conservatives. At five weeks from the elections, the Democratic candidate has suddenly moved ahead: the daily poll Gallup places him ahead by eight points while the average rating of those sources monitored by the website Realclearpolitics.com gives him a 4.8 point lead.

Not only has the shadow of recession played in favor of the Democrats but the solution chosen by the Bush administration has forced the Republicans into an existential dilemma: impossible to support a rescue plan that Republican Sen. Jim Bunning of Kentucky has labeled “financial socialism.” Difficult to oppose it though as they risk contributing to the bankruptcy of the system. After their recent revolt, the Republican representatives obtained some concessions in the plan and on Sunday the leadership decided to fall into line with what was, according to the weekly neo-conservative publication The Weekly Standard, “an unpleasant but necessary combination.”

How many of them will actually vote for the plan? Some elected members spoke like conscientious objectors refusing to join the army.

“Economic freedom means the freedom to succeed and the freedom to fail . Allowing the federal government to nationalize almost all debts breaks this fundamental truth of our economy,” explained Rep. Mike Pence of Indiana. “If you’re here because you believe in a restricted government and a free market then vote for these beliefs. This is our duty, the consequences are in God’s hands.”

The Paulson plan has highlighted the party’s identity crisis. Who is representing the Republicans? President Bush was defeated on Thursday, Sept. 25, within the very heart of the White House, when the elected members of the House proposed an alternative. Newt Gingrinch, former leader of the Reaganites, is campaigning against the plan. On Sunday he expressed the opinion that Henry Paulson should have resigned for having asked for 700 million in his initial plan without any verifications, an “un-American” suggestion.

The crisis has placed McCain in particular, as well as those Republicans who are “fiscally responsible”, in an awkward position. Whilst they continue to advocate tax reductions, they have found themselves faced with what is, in effect, a tax in order to save banks (which has an estimated cost of $2000 per American).

The senator has reluctantly agreed. “It’s something which is difficult for us all to swallow,” McCain said. He has not said whether he will come to vote (nor indeed has Barack Obama), giving himself the opportunity to change his mind on seeing the small print of the plan.

Whereas Obama has been able to show that he is surrounded by a heavy weight economic team, coming from the Clinton administration, McCain often appears rather lonely. He has suffered from having no real economic policies, apart from hunting down earmarks, wastage in public spending.

One of his main gurus on economic policy is Phil Gramm, a man who was, in 1999, one of the architects of deregulation, when he was president of the Senate’s banking commission. On Sunday the senator invoked a far more popular figure.

“I am a Teddy Roosevelt Republican,” McCain declared. “The State does have a role to play.”