When it comes to the Republican Party’s base, there isn’t “an establishment” — there are two. The Realistic Conservative Establishment (the RCE) consists of those in power (in the media and industry) who speak to and for those Republicans who embrace free market capitalism and limited government (the free movement of goods, labor and capital globally). The Extreme Populist Establishment (the EPE) consists of those in power who speak to and for those Republicans who embrace populist economics (opposition to free trade, to immigration across the board, and to companies moving operations abroad to avoid America’s corporate taxation and regulation).
The two establishments are fighting to get the Republican base to nominate their preferred candidates and pursue their preferred policies. The focus now is on the presidential primary, with the EPE generally supporting Donald Trump, with the backup position of Ted Cruz or Ben Carson. The RCE support is split among the remaining candidates (except Rand Paul, who is more the libertarian choice). But nowhere is the split between the two Republican establishments more clear than in their respective treatments of one of the unsung heroes of our time, House Speaker Paul Ryan.
You should measure the success of a negotiation not merely against what you get, but against what you get facing the opposition you have.
Ryan only recently took over after then-Speaker John Boehner resigned from a controversial tenure, a bitterly disappointing one to the populist base and the EPE. After weeks of turmoil, Ryan reluctantly agreed to become speaker. He met with deep skepticism by the EPE. Now Ryan has accomplished several things, and the EPE has attacked him furiously. As a classical liberal, I am angry at the short-sighted EPE commentators attacking what I perceive as major accomplishments.
Consider Ryan’s recently negotiated budget deal. EPE hero Rush Limbaugh was outraged at it, saying it gave Obama everything, and the conservatives nothing, and opining that “what has happened here is worse than betrayal.” Others echoed this sentiment. But I contend that the Ryan deal is in fact a good one, especially considering the fact that the Democrats still have the power to stop bills in the Senate and hold the White House. I mean, Earth to EPE pundits: you should measure the success of a negotiation not merely against what you get, but against what you get facing the opposition you have. Let’s look at some of the major provisions of the deal so condemned by the EPE.
First, Ryan secured about $700 billion in tax cuts — extending some useful deductions and making some (such as the R&D tax credit) permanent. Oh, and the tax cuts include greater expensing of small business costs, and renewable energy credits are phased out.
The second major victory the Ryan deal won was an increase of $573 billion in spending for defense, and another $163 billion for veterans’ programs. To those of us who have voted Republican as opposed to Libertarian all these years, this is huge. Realist conservatives and classical liberals view defense as the most important function of the federal government, and while the previous “sequester” deal did lower the deficit, it did so by cutting defense spending massively. Would I have preferred that this increase in defense spending not been accompanied by increases in spending for pet Democratic social programs? Sure, but defense spending has been held hostage by the Democrats, with the ransom being increased domestic spending; and that won’t change until there is a Republican in the White House. Concession on this issue was what it took to secure Obama’s signature on the compromise deal.
The third victory achieved by the deal escaped notice by the EPE commentators as much as by the mainstream media (the Progressive Liberal Establishment). The deal puts major restrictions on the highly politicized and deeply corrupt IRS. These restrictions include forbidding the use of personal email accounts for conducting IRS business (Lois Lerner’s cute little trick), as well as barring the targeting of nonprofits based upon their political or other ideological beliefs. This was a deeply satisfying victory for those of us who feel we have been politically targeted by the IRS.
This asinine prohibition was passed by a Democrat Congress and signed into law by a Republican president nearly 40 years ago, in the middle of the oil crisis.
Of course, if the Republicans can elect a president this year, I would push for that president to appoint a special prosecutor to investigate Lerner — along with the dozens of IRS creeps who worked with her to annihilate the Tea Party — for violations of the civil rights of taxpayers.
But the fourth victory is one that is a profound gamechanger. It will transform not just the American economy but the politico-economic order of the whole world. Again, this victory escaped the notice of the EPE pundits no less than the mainstream media. Ryan’s deal amazingly succeeds in repealing one of the most idiotic laws ever passed — the law prohibiting American oil companies from exporting domestically produced oil. This asinine prohibition was passed by a Democrat Congress and signed into law by a Republican president nearly 40 years ago, in the middle of the oil crisis. Really, how stupid is it to attempt to get the country’s oil companies to drill for more oil — by walling them off from the world market? The policy guaranteed that the major oil companies would focus on oil exploration abroad. So it sent more American jobs abroad, made us even more dependent on foreign oil, and sent vast billions of dollars out of the country, to enrich our enemies. The ill-considered law no doubt delayed our oil fracking revolution by decades. Ryan’s compromise not only suspends this law, but permanently repeals it.
The elimination of the export ban is massive. We can now compete head-to-head with the Middle Eastern and Latin American oil states, along with Russia. We can help Europe become completely free from dependence on Russian energy, thereby dramatically weakening Putin’s power to cause mischief. By keeping world prices low, we starve Putin of petro-dollars with which to build up his military. In fact, the continuing low price of oil has drained Russia’s reserve fund by 30%, and it is projected to be empty by the end of the year. We can become Asia’s number one supplier of fossil fuels, keeping our friends (Japan, Taiwan, and South Korea) close and our enemy (China) closer. Moreover, by selling them oil and natural gas, we can lower our trade deficit enormously. Finally, we can cut the Venezuelan socialist regime off at the knees.
Indeed, just a few days after the deal was signed, the first two tankers carrying American domestic crude for ports abroad. The first ship left Corpus Christi, Texas, bound for Trieste, Italy, loaded with oil drilled from the Eagle Ford Shale field by ConocoPhillips. The second ship left Houston carrying oil to Marseilles, France. The shipping should ramp up rapidly: the Corpus Christi terminal alone is capable of sending out 400,000 barrels a day (BPD) as is, and developments under way will boost that to 575,000 BPD in the near future. The CEO of ConocoPhillips suggests that the demand from foreigners for our oil will hit 2,000,000 BPD by 2020. If the price of oil recovers and moves into the $50 range, exportation should just explode. So much for “peak oil” and eternal dependence on the OPEC thieves.
We can now compete head-to-head with the Middle Eastern and Latin American oil states, along with Russia.
This is a success that was way beyond the dreams of us who believe that our fracking revolution will make us energy independent. But the only way to get anti-fossil-fuel Democrats in Congress and our global-warming-obsessed president to agree was to offer them all a lot of useless spending — such as renewing subsidies temporarily for unproductive forms of energy such as wind and solar power.
Of course, should the Republicans win the White House in 2016 and hold both chambers of Congress, these subsidies can be easily ended. But should the Democrats keep the presidency and take back the Senate — which they will surely do if Trump gets the nomination — it would be almost impossible for them to reinstitute the ban on exporting oil.
In fine, Ryan outfoxed the Democrats magisterially — amazing for someone who just stepped into the job.
What peeves the EPE commentators about the deal? Their stated objections are obviously weak. They complain that in the bill Ryan negotiated, ObamaCare was not eliminated, the taxes intended to pay for it (such as the steep tax on “Cadillac” health care plans) were deferred for two years, funding for Planned Parenthood was not ended, and the budget deficit increased. The replies are simple. If Ryan had put the elimination of ObamaCare in the bill, it would not have passed, or if it did, Obama would not have signed it.
Should the Democrats keep the presidency and take back the Senate — which they will surely do if Trump gets the nomination — it would be almost impossible for them to reinstitute the ban on exporting oil.
Ironically, soon after getting this bill done, the ever-clever Ryan was able to put through Congress bills repealing ObamaCare outright and ending funding of Planned Parenthood and place them on the desk of the president, who of course immediately vetoed them. Ryan thus kept his promise to force Democrats to vote publically on the issues, and put them on the desk of the president to veto. But for this, the long-time EPE pundit Lou Dobbs bashed Ryan, saying that getting those bills through Congress was mere theater.
What really angered the EPE crowd is that Ryan dared to cut a deal at all. The EPE crowd would rather be right than be president. And that’s the way they will continue to play it.