What Happens When Conservative Ideologues Get to Run Their Own States
It would be hard to blame liberal-minded Americans for feeling a sense of despair as we begin a new year. The Republican Party is ascendant and reinvigorated after its smashing victories in 2014 at nearly every level of government. The NYPD is in near open revolt against one of America's most progressive mayors while police departments around the country seem immune to basic reforms.
But in spite of conservatism's seeming upswing, there are signs at a statewide level that its ideology is coming apart at the seams. Even conservatives are starting to take notice and worry.
First and foremost is the laughingstock that extremist Republican Sam Brownback has made of Kansas. Brownback slashed social welfare spending and implemented steep regressive income tax cuts, promising that his Laffer curve-based supply-side economic experiment would bring jobs and prosperity to Kansas while increasing government revenue.
In fact, the opposite has happened. Revenue projections in Kansas are in freefall, and the economic growth benefiting the rest of the country--including economically similar areas in surrounding states--has bypassed the Sunflower State. Just in the last week Kansans received another flurry of bad news: revenue projections are even worse than the disastrous figures projected last month, forcing even deeper cuts to education and other services. But that won't be possible, as a panel of judges has ruled that Kansas is already shortchanging K-12 education. In desperation, Brownback has proposed further reductions in state funding to its already woefully underfunded public employee pension system, a move that is meeting with stiff resistance even from his fellow Republicans.
As a result, Kansas Republicans are confronting the previously unthinkable possibility that the tax cuts may need to be repealed. Brownback's own budget director has said that "everything is on the table, including the tax policy." It has been many years since a Republican-dominated state government has publicly considered the need to reverse course on low-tax economic policy.
The failure of Brownback's experiment is also being replicated in New Jersey, where governor Chris Christie slashed pensions, cut taxes for the rich, laid off public employees and gave away $2 billion of tax incentives, only to watch New Jersey rank next-to-last in job growth. Christie's obvious fiscal mismanagement in New Jersey has been a major reason for his slide in early polling of potential Republican presidential contenders.
GOP legislators in other states have taken notice. Writing at Politico, Rachael Blade captured the nervousness of conservative legislators around the country. Indiana's Senate Majority leader said, "It’s a cautionary tale on a national scale...we have to ensure the stability of a revenue stream to provide basic services that our citizens expect." Legislators and their aides from Ohio to Arizona have gone on the record with similar statements.
One remarkable result of the failed supply-side experiments is that many Republicans' belief in the Laffer curve has been severely shaken. A lobbyist for the infamous conservative policy group ALEC told GOP legislators they should admit "not all tax cuts pay for themselves." An unnamed Arizona Republican legislator was even more blunt: "We have never said decreasing taxes would increase state revenue." These are earth-shaking admissions. Conservatives have been asserting ever since Reagan's first presidential campaign that lower taxes would not only grow the economy, they would ultimately increase government revenues as well. It's difficult to campaign for tax breaks for billionaires if you're also blithely asserting that teachers will be laid off to pay for them. Retreating from the Laffer curve deception will make it much harder for Republicans to pass regressive tax cuts in the future without paying a steep political price.
The failures of Republican economics in Kansas and New Jersey also have worrying electoral implications for Republicans across the country as progressives use them as object lessons and warning signs of what could happen their own states--and the country--if conservative economic ideologues are allowed to gain too much power.
But conservatism's ship isn't just running aground on the shoals of sharp tax and budget cuts. It's also beginning to drown in a sea of cheap oil. Saudi Arabia's strategy of creating a supply glut to remove secondary players from the energy market is having cascading global effects. Vladimir Putin finds himself managing a national economic crisis caused in part by over-reliance on fossil fuel exports. Domestically, states like Texas and Alaska that have put most of their revenue eggs in the oil basket will likely see steep fiscal and employment declines as low prices punish them for failing to better diversify their economies.
Nor are other conservative states immune from the damage: natural gas prices suffered their first annual decline in several years, and many believe that low prices will continue to prevent growth in new supply. The decline in the price of oil will only serve to further undercut natural gas prices for a long time to come. That doesn't just come as good news to fracking opponents: it's also bad news for states reliant on natural gas extraction for large parts of their economy.
States with better social safety nets, more diverse economies and higher wages would be able to better withstand the oil and gas revenue shocks by making temporary, efficient cuts. But states like Texas have built their economic "miracles" much the same way Ireland did: by building on the quicksand of debased wages, slashed pensions, stripped government services, and corporate tax abatements. Once the lucrative energy money declines, legislators will have little ability to make necessary adjustments.
All of this comes at a time when the electoral college is looking like increasingly hostile territory for Republican presidential hopefuls in 2016. Republican strategist Chris Ladd noted to some fanfare that despite the GOP's strong showing in 2014, Democrats only solidified their hold on what he calls the "Blue Wall": states comprising 257 of the 270 electoral votes needed to win the presidency. Even accounting for the differences between general and midterm elections, Democratic senators were elected, on average, by larger margins than their Republican counterparts. In other words, Democrats control most of the biggest (and most economically powerful) states, and tend to win them by overwhelming margins. Meanwhile, all Republican candidates are badly lagging likely Democratic frontrunner Hillary Clinton in current horserace polling.
In order to have a shot at capturing the White House conservative hopefuls face a choice of either trying to appeal to the majority of the country, or hewing a narrow path to the nomination by winning over the conservative base. Tellingly, Republicans with actual experience in state governance are trying to walk back from the more unpalatable aspects of the Republican economic agenda. Jeb Bush has recused himself from potentially damaging corporate board associations, and Scott Walker is pushing back against the Republican legislature in Wisconsin, attempting to avoid bruising battles over income tax cuts and elimination of worker protections that would unmask him to the broader American public as a far-right ideologue.
There is no question that the American Right still feels emboldened by its success in 2014 and will attempt to make the most of its power over the next two years in Congress. But a closer look at what is happening in the states shows that conservatism is still very much on the ropes. Economic and social realities are exposing the failure of the conservative agenda on a variety of fronts, and Republicans are still being forced to confront those failures and deal with the consequences.