Niall Ferguson: Defeat Can Be Habit-Forming

Defeat can be habit-forming. Ask any Democrat. They lost three presidential elections in a row in the 1920s and 1980s, four in a row between 1896 and 1908, and a record six in a row between 1860 and 1880. Only in one period in modern American history have Republicans suffered such a string of defeats: between 1932 and 1948, when Franklin Roosevelt won four and Harry Truman made it five.

I know what it feels like. The British Tories were out of power for 13 years between 1997 and 2010. Last night was my second defeat since I moved to the United States in 2002 and became a Republican supporter. (Actually, it was my third, since I endorsed John Kerry in 2004 in a fit of frustration about the Bush administration's mishandling of Iraq and the Republican Party's fiscal irresponsibility.)

To break the losing habit, Republicans must resist the temptation to make excuses. We should dismiss the following thoughts from our minds: it was Hurricane Sandy's fault; it was Chris Christie's fault; the mainstream media gave Obama a pass on Benghazi; a Mormon can never be president; a private-equity guy can never be president; the Tea Party went too far; the Dems' ground game was better in Ohio.

Forget all that. These are just ways of denying the deeper causes of Mitt Romney's defeat. Until we face up to these, we will keep on losing. Indeed, I predict now that we will lose in 2016, even when faced with a less ruthlessly effective campaigner than President Obama.

First, the Democrats understand the new world of Internet-savvy, data-driven marketing better than the Republicans do. My own experience of being piranha-attacked by liberal bloggers taught me that. And this was just a minuscule bit of vilification compared with the character-assassination campaign against Romney during the summer.

Second, demographic trends doom any Republican campaign that appeals more to white males than to any other voter group. According to exit polls, Romney won 60 percent of the white vote, compared with Obama's 38 percent. But Hispanics voted Democratic in even larger numbers than four years ago. The Hispanic share of the population is set to rise from 16 percent in 2010 to nearly 30 percent by 2050. Non-Hispanic whites, meanwhile—who made up two thirds of the population the last time Republicans won a presidential ­election—will be down below half by midcentury.

Third, running on the economy doesn't work if people remember your own party's role in screwing it up and think improvement is in sight. According to the latest IMF projections, U.S. growth will be higher over the next four years than that of any of the other major developed economies. Unemployment will come down faster. Driving recovery will be the bonanza of cheap energy represented by shale gas.

Finally, and most important, the Democrats have figured out what European Social Democrats long ago understood: the more entitlements you create, the more voters you can depend on. Let me put it very simply: given the choice between higher taxes on the 1 percent and cuts in entitlement for the 47 percent, voters went for the former. Surprise!

When middle-class taxes go up to balance the budget, Republicans will cry: 'Told you so!'

True, we now are in for an unpleasant bout of brinksmanship as the reelected president takes the still-Republican House to the edge of the fiscal cliff. But the Grover Norquist argument that the debt can be brought under control without any new taxes is no longer credible, if it ever was. Even staunch supporters of Paul Ryan like Devin Nunes acknowledge this.

Again, the historical trend is not the Republican Party's friend: since 1960, welfare spending (mainly Social Security, Medicare, and Medicaid) has risen inexorably from 2 percent of GDP to above 10 percent; the Congressional Budget Office sees it nearing 20 percent by 2059. With every passing year, the share of the population receiving some form of government transfer rises.

Of course, the rising cost of "benefits for the boys (and girls)" cannot be met solely by taxing the rich and cutting defense. At some point, the Democrats will be forced to admit that. And at some point, too, the geopolitical consequences of allowing the United States to proceed down this European road will become clear. Middle-class taxes will go up. And Iran will go nuclear. At which point, we Republicans will cry: "We told you so!"

But will that be an election-winning slogan? I doubt it.