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Election Winners and Losers
by Andrew Roth
TheIronFistofCapitalism.com
8 November 2002

A look at who won and who lost in this fall's elections.


The results from the mid-term elections on Tuesday were clear and decisive. Republicans picked up seats in the House and gained control of the Senate. While a mandate to lead was questionable after the 2000 elections, the President has finally been given authorization by the electorate to further his agenda.

That being said, who were the winners and losers on election night? Let's forget about the individual politicians who experienced victory or defeat and instead focus on various groups.

WINNER: Taxpayers
One of the first priorities of the new GOP Congress will be to make permanent the Bush tax cuts of 2001. Indeed, the prescribed tax cuts expected in the coming years might even be brought forward in order to stimulate our economy. In addition to that, we can expect the final nail to be driven into the coffin of the death tax (no pun intended) and the marriage penalty. Good riddance. Also, Treasury Secretary Paul O'Neill wants to lead an immediate charge to reform the tax code. No more Alternative Minimum Tax, and more optimistically (to the point of hopelessness), perhaps no more corporate taxes and capital gains taxes.

Above all else, voters recognized on Tuesday that we are an overtaxed nation. We know that tax cuts are investments in our future. They allow us to do what we do best - create and accumulate wealth through innovative and entrepreneurial commerce.

LOSER: Unions
Unions have lost an enormous amount of strength over the last half-century. Loss of control can be directly attributable to the natural tendency of companies to increase productivity through technology. Stubbornly, unions continue to operate using an obsolete business model which pits itself against management.

In our capitalistic society, more and more workers are becoming owners. As part of their compensation, workers receive shares in their respective companies. Also, dependency is replaced by responsibility as 401(k)s replace pensions. Going into the 21st century, workers and management will increasingly be on the same side of the fence. These are market, not union, trends.

Unions need to recognize this and adjust accordingly.

They lost last night when their voice in Washington, the Democratic Party, lost control of Congress. The death blow was when unions challenged Bush on Homeland Security. They didn't stand a chance when voters had to make a choice between the two.

Ultimately and ironically, union members should recognize this as a good thing. Now's the time for change. They need to make themselves marketable and they need to align their interests with management.

WINNER: Social Security reform
Everyone will benefit from Social Security reform which will undoubtedly be pushed by the GOP. Remarkably, it's a partisan issue when it shouldn't be. Democrats took a position on this issue that was clearly against the popular view of the electorate. They also took a position that crossed common sense. The Left believes that the government should be in charge of the country's retirees. On the other hand, advocates of reform want retirees to be in charge of themselves.

As it stands now, Social Security is the largest mechanism in the world where income is transferred from one group of people to another group of people. It destroys wealth and hinders growth. Privatization of the program will reduce the amount of money that is taken from Peter to pay Paul. Instead, with a reformed system, Peter and Paul will both have the opportunity to keep their money and invest it in our amazing capital markets. They will be able to invest it as they see fit...in stocks, bonds, or a combination of both. A wonderful by-product of reform is that it will create new owners of capital and fewer dependents of government. This will strengthen our national character and solidify our economic leadership in the world.

LOSER: The Democratic Party
As noted above, the Left currently subscribes to antiquated beliefs. No group can morally represent union rights over national security. No group living in a democracy can maintain that the government should be responsible for the livelihood of our senior citizens. As more and more Americans become shareholders in our publicly-traded companies, no group can realistically attack "big corporations" yet stump for the causes of the working class (many of whom are also owners of the same big corporations).

If this sounds like a nasty, partisan attack on Democrats, let me calm your nerves by making some historical references. The GOP has, on more than one occasion, changed its stripes for the better. In the early 1930s it was the Republican Party that initiated and supported the destructive Smoot-Hawley Tariff Act. Yet currently, the GOP is largely the party of free trade. It was a Republican administration that took the country off the gold standard and enacted nasty price controls in the 1970s. Nowadays, the Right wouldn't even consider doing something so calamitous.

That being said, the Democratic Party needs to establish a set of beliefs that will follow sound economics. High taxes, strong uncompromising union support, and a desire to create dependency on government is a toxic cocktail that will induce political suicide.

To end on a positive note, despite your political affiliation, last night's GOP victory will be to the benefit of everyone. The only caveat is the hope that they don't screw it up.

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