After Iowa: 8 Quick Thoughts on the 2008 Race

1) I have feeling we are going to start hearing a lot more from Hillary Clinton about Barack Obama's "trillion dollar" increase—as she described it in a debate—in Social Security taxes.

2) Today's lousy jobs numbers will increase the likelihood that economic growth will be a huge 2008 issue. (As Global Insight put it: "The real shocker in today's report was the sharp jump in the unemployment rate to 5.0% from 4.7%. We haven't seen a [0.3 percentage point] jump in the unemployment rate since the 2001 recession.") The issue will be not how to slice the economic pie but how to grow the economic pie. Fiscal stimulus packages will abound. Let the tax-cut bidding war begin! What's more, the jobs numbers plus Mike Huckabee's stunning populist win will make the rest of the GOP field realize that a "Morning in America" campaign (or as Sam Brownback put it: "America rocks!") is not going to work, nor is blaming the media for all the pessimism out there.

3) Trade with China will be as big an issue as the war in Iraq, with all the candidates sounding ever more populist on the issue. There may be more talk about the dollar and trade than in any election since McKinley-Bryan in 1896.

4) As an insurgent candidate, Huckabee didn't have the dough to hire economists to create an economic plan. So he went with the off-the-shelf FairTax. Not only does it call for abolishing the IRS—a nice populist touch—but it has the added benefit of a built-in constituency. With Huckabee needing to flesh out his policy agenda, don't be surprised if the sweeping FairTax recedes a bit from sight and becomes more of a policy end goal, as when opponents of abortion talk about banning it after first creating a stronger "culture of life."

In the interim, Huckabee could advocate pursuing a more family-friendly tax code, such as dramatically expanding the child tax credit or, as Ramesh Ponnuru of the National Review has suggested, combining the existing child credit, the child-care credit, and the adoption credit into a new, enlarged child credit of $2,500 per child—available, in full, to all households with children , to be applied against income taxes. Expect supply-siders like the Club for Growth to scream.

5) If Mitt Romney doesn't win the nomination (and right now the betting markets put the odds at John McCain 31 percent, Rudy Giuliani 29 percent, and Romney and Huckabee tied at 16 percent), one of the other candidates should swipe his elegantly simple tax plan—essentially a progressive consumption tax—and elegantly simple budget plan, which would limit the growth of discretionary, nondefense spending to the rate of inflation minus 1 percent. He never pushed them very hard in the debates. Maybe Huckabee could call it the New FairTax.

6) In a recent New York Times column, David Brooks basically declared the end of the Reagan coalition and low-tax, small-government Reaganomics:

That coalition had its day, but it is shrinking now. The Republican Party is more unpopular than at any point in the past 40 years. Democrats have a 50 to 36 party identification advantage, the widest in a generation. The general public prefers Democratic approaches on health care, corruption, the economy and Iraq by double-digit margins. Republicans' losses have come across the board, but the G.O.P. has been hemorrhaging support among independent voters. If any Republican candidate is going to win this year, he will have to offer a new brand of Republicanism.

I look at the polls too, and what I see is a public that still thinks it is taxed too much and the government spends too much—as well as being concerned about healthcare and education. But the larger point is this: Most people don't realize that there are market-based approaches to issues like healthcare and education. And free-market-oriented politicians like ex-governor Jeb Bush of Florida and Gov. Mark Sanford of South Carolina have shown that it is possible to govern from the right with an agenda that's about more than just cutting taxes. I would love a wonky Democrat-GOP debate that focused on those issues.

7) FYI: Here are some key features of Obamanomics: Raise income taxes on wealthier Americans, raise Social Security taxes on wealthier Americans, increase government healthcare spending by $65 billion a year while trying to find $100 billion a year in savings, spend an additional $15 billion a year on climate change investment. Here is his whole plan.

8) One more thing about today's weak employment report: There has been only one presidential election since 1900 with no incumbent president or vice president running and with a recession during the election year. That was 1920, and the out-of-power party, the GOP, won in the biggest landslide in presidential election history.