Rupert Cornwell: Lessons of history spell trouble for the Republicans

[Demeter]

http://www.independent.co.uk/opinion/commentators/rupert-cornwell/rupert-cornwell-lessons-of-history-spell-trouble-for-the-republicans-772325.html

Each economic downturn is different, but whether deep or shallow, they have one common political thread. They usually presage a change of party in the White House.

It happened most famously in 1932, when the onset of the Great Depression propelled the Democrat Franklin Roosevelt to power, replacing the indolent Herbert Hoover. In retrospect, that election ushered in 36 years of Democratic dominance that ended only in the tumult of 1968, when Richard Nixon defeated Hubert Humphrey to launch a new Republican era...In 1980, the story was similar. Economic crisis, and the perceived inability of the Democrat Jimmy Carter to cope was a major factor in the victory of Ronald Reagan. Like 1932, that year has gone down as a "transformational" election, setting the country – as even Barack Obama rashly noted the other day – on "a new trajectory"...A recession, albeit a very shallow one, is also credited with sealing the defeat of the incumbent Republican George H W Bush in 1992. "It's the economy, stupid," was the now-famous slogan of the Bill Clinton campaign war room in Little Rock, Arkansas. The elder Bush still blames the Fed – under its previous chairman Alan Greenspan – for not cutting rates quickly enough in the year before the election.

And now 2008, which, even before the sub-prime implosion, was being hailed as a potentially "transformational" year. After yesterday, Ben Bernanke, Greenspan's successor, can hardly be accused of dragging his heels with rate cuts. But the peril for Republicans remains.

No one can blame George Bush Jr for this downturn (though many doubtless will) – presidents have far less influence on the economy, in both good times and bad, than they like to claim when things are booming. But Republicans stand for superfree markets and deregulation, and if one factor is responsible for today's troubles, it is overlax regulation of the financial markets. If anything, this crisis stems from an excess, not a lack, of free enterprise. Government is traditionally reviled by Republicans as part of the problem, but it is to government that Americans now largely look for a way out of the mess.

The three Democrats still in the race – Hillary Clinton, John Edwards and Mr Obama – have all set out detailed economic stimulus packages. Republicans, however, have mostly been silent, preferring to rely on the old nostrum of tax cuts. The populist Mike Huckabee even wants to abolish income tax and replace it with a sales tax. Mitt Romney, a former successful business executive, speaks vaguely of hi-tech riding to the rescue, while Rudolph Giuliani until recently was mocking any federal economic stimulus as "nanny government".