Daily Archives: 30 November 2012

Republicans and Talking to Folks

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Neil King and Victoria McGrane have some thoughts.  They cite various conservatives, for instance:

[A]ctivists—including tea-party activists but also some mainline Republicans—say the party should adopt a more populist tone, one that places more emphasis on ways Republican policies would help the middle class.

And

The critique from these Republicans suggests that the party should change some policies—such as adopting a more skeptical posture toward big banks—as well as the way it talks about economic issues.

And

Mr. Romney’s lopsided loss among the country’s expanding universe of minority voters has fanned fears within the party that its main challenge is demographic, though others dismiss that worry as secondary.

But these are short-sighted and outright wrong.  The “others” are right; the problem is Republicans’ and conservatives’ general failure to talk to all Americans, regardless of ethnicity.  Republicans and conservative need to get out and talk to people in the neighborhoods in which they live—all of those neighborhoods—as I pointed out here and here.

Ex-Mississippi Governor and erstwhile GOP Chairman Haley Barbour has the right of it.  He understands that conservative policies aren’t the problem.

We do very well when our policies for economic growth and job creation are put in place.  But we often don’t talk about those policies in ways that the middle class and working class see as in their interest.

And they don’t talk at all about those policies where Americans physically live.

The other critiquers, though (the ones who are concerned with the content of the message as well as where it’s delivered), also have a point—apart from attempts to change those policies.

The Republicans’ approach to dealing with the nation’s largest financial firms illustrates the tension.  GOP leaders oppose the Dodd-Frank financial-overhaul law as regulatory overreach and want it scrapped, partly because they say it codifies certain institutions as being too big to fail.  But so far, they haven’t rallied around an alternative means to reining in the big banks.

Or establishing the need for government to “rein in” the big banks.  Which points up another aspect of message content.  In addition to their failure clearly to articulate what they would do differently vis-à-vis Dodd-Frank, their mantra concerning Obamacare is woefully inadequate:  “Repeal and replace.”  Replace with what?

Apocalypse Now

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…or is it?

Here are some interesting graphs published by Spiegel Online International that show some estimated effects of a departure from the eurozone by Greece, Greece plus Portugal, those two plus Spain, and those three plus Italy.  Frankly I think the latter two departing is unlikely; they’re not is as poor shape, yet, as they’re made out to be.

This is chump change for the seven year period, even including Portugal: it compares to Germany’s 2012 GDP of €2.5 trillion ($3.2 trillion).  Even losing all four would “only” hurt badly, not inflict debilitating damage—and only relatively briefly, at that.  See a graph below for expansion on this point.  Notice, also, that the red bars are losses in growth, not loss of growth.

Here’s that “graph below:”

Look at  that.  A burble in 2014 until we look at all four nations departing.  Then Germany gets a sharp recession.  However, notice that in the most likely scenarios—Greece only and Greece plus Portugal leave—growth goes back positive by 2015, and by 2017 if we throw Spain into the mix.

What do things look like for the rest of the EU, not just Germany, and for the US?

The UK and the US—not members of the eurozone, interestingly—hardly notice the losses.  Germany feels the sting, but as can be seen from the earlier graphs, not so much compared to its overall economy.

In short, a departure of these nations from the eurozone will hurt the remaining, and other nations, a little.  But against this must be balanced both the pain for those nations of continuing the present charade of bailouts and the benefits to Greece (and Portugal, Spain, and Italy) of stopping the bailouts, letting them go bankrupt, and letting them depart the eurozone.  And the affected nations can, with this much warning, mitigate the effects by reducing their holdings of Greek (and Portuguese, Spanish, and Italian) sovereign debt.