Oberstar’s defeat may be a sign of a new economic awareness

John F. Kennedy’s 1960 inaugural speech asked voters to "Ask not what your country can do for you — ask what you can do for your country." The defeat of Rep. James Oberstar, who is famous for being able to "bring home the bacon" to Minnesota and to his district, is in my mind a clear victory of the "what you can do for your country" people over the "what can my country do for me" people.

It is ironic that this results in a Republican victory and a Democratic defeat. I will push my Republican friends to use this breach in the ramparts to put the social conservatives in our party on the run. I will argue that there are really three factors that converged to help in this upset: the Tea Party struggle; the experience of approaching (and now often delayed) retirement for the baby boomers, and voters’ coming to grips with a new economic reality.

Since the Tea Party first became a factor at the national level, the Republicans have been engaged in a struggle for the soul of their party. On the one side, we see small-government conservatives who feel that small government is not just about lower taxes, but also about less intrusion into the personal lives of the average citizen (personal liberty) and less interference in overseas affairs (opposition to war). This block, which I sometimes refer to as the "Liberty Caucus," struggles with the party’s desire to push for smaller, less intrusive government and its desire to use the power of the state to control personal issues.

Opposing this coalition are the big-government conservatives, who are more willing to use big government to support their own agenda. The small-government fiscal conservatives are engaged in this struggle to refocus the party on its fiscal roots in the presence of this very vocal big-government contingent that is all about social issues.

Meanwhile, the people, who have relied for decades on their government to manage the economy, are beginning to doubt the underlying premise that the government actually can manage the economy. Their intuition is that we, as a people, cannot continue to borrow money while planning on future income to repay the debt. The baby boomers, confronting their own retirement, are realizing that using your house like an ATM is not sustainable when you are hoping to scale back on income and perhaps enjoy some comfortable golden years. This is especially true when the underlying value of the property suddenly declines, trapping you with debt and no way to pay it off. The boomers see the government behaving the same way, both by borrowing against future growth and by promising (through entitlements) ever-increasing largess from the public treasury.

The changing demographic in most developed nations, including the United States, is affecting our ability to believe in the old economic theories. The standard Keynesian economic models, which we have relied on for decades, see excess productive capacity as justification for government to consume on behalf of the economy. Excess capacity results in unemployment, and in an effort to reduce that unemployment, the government consumes, using borrowed money.

This works reasonably well when the population demographic looks like a pyramid, with large numbers of children arriving or in the pipeline, and few people in the top age groups. The eventual growth of the economy as the young come "on-line" can make paying back those loans much less painful. But we have seen and heard a lot recently about the changing demographics of societies all over the developed world, and perhaps the old models cannot work in our new economic reality.

How do these factors work together to defeat Rep. Oberstar?

While not in the same class as the late Sen. Robert Byrd, Oberstar is greatly appreciated in Minnesota for his ability to bring federal funding to Minnesota projects. Under the old political model, this should have made him nearly unbeatable. But I believe the factors above make the championing of earmarks less of a plus than it was just a few years ago. It appears that the voters in the 8th District have unselfishly heeded these economic lessons and have shown themselves willing to let a new party see if it can deliver on a promise to rein in the spending juggernaut in Washington.

As a State Central Committee representative to the Minnesota Republican Party, I have been arguing that the key to the Republican future is liberty. The very presence of social conservatives within the party aids and comforts our opponents, who can deflect all important discussions about budgets and taxation and expenditures onto hot-button issues better discussed in the privacy of one’s own home. I hope to use the lessons of the 8th District to push for substantial changes in the national political discussion, starting first with what can be done here in Minnesota.