Republicans took a beating on Election Day.
 They lost the White House and more than twenty House seats. They came within a whisker of seeing the Democrats achieve a filibuster-proof majority of sixty seats in the Senate – rescued only yesterday by the victory of Sen. Saxby Chambliss in the Georgia run-off election.
They have some work ahead of them which will set their course for the next couple of years and determine whether they can emerge from the political wilderness.
First, they must choose a party chairman from a  flock of candidates. None of the candidates has a sterling record and each presents considerable liabilities. But some are more problematic than others. Katon Dawson has been a successful state party chairman in South Carolina but his twelve-year membership in  an all-white country club would be a public relations nightmare for a party already struggling with minorities. Some are already sending up warning flares. A national committeewoman who is supportive of Dawson  concedes, “I think there are some members of the committee who would find it intolerable.” And to boot, the club has also excluded Jews, although it did extend an “honorary membership” in the 1980s to the commander at  Fort Jackson, Maj. Gen. Robert Solomon. Just what the party needs: a chairman who belonged to a club with a “whites only” deed which snubbed Jews and blacks.
Alternatively, the RNC may look to Michael Steele, a charismatic and effective spokesman but light on a record of organizational success. Then there are John Yob and Saul Anuzis, who hail from Michigan, where the Republican Party has fallen off the map, despite the opportunity to make headway against tax-and-spend liberal Democrats in the midst of a recession. And Chip Saltzman, former chair of the Arkansas state party, may be too inexperienced on the national stage and too closely identified with a potential 2012 contender, Mike Huckabee. The latter liability hobbles Jim Greer, who leads the Florida party and is allied with Charlie Crist, although Greer alone seems to have a track record of outreach and electoral success — skills the party badly needs.
In short, the RNC must choose wisely. The watchword here may be: choose the candidate least likely to embarrass Republicans.
The real action for Republicans will be in Washington, where four immediate challenges confront Republicans. Greatly reduced in numbers, they nevertheless have the opportunity to revive the base and improve their image with voters.
The most immediate issue is the auto bailout. Democrats will be pressing for billions more in taxpayer money for an industry that has failed to make needed reforms — or cars people want to buy — and has to date not demonstrated the capacity to align its cost structure with non-union domestic auto producers. Republicans would do well to hold firm and stand up for taxpayers, whose salaries and benefit packages pale in comparison to those of the auto workers. One  economics professor put it in context:
A recent study by Mark J. Perry, professor of economics and finance at the University of Michigan-Flint, shows that the hourly compensation cost, including benefits, for the Big Three automakers in Detroit for 2007-2008 is $73.20 per hour, compared with $48 at Toyota.
In goods-producing industries in the United States, reports Perry, the average hourly compensation cost, including benefits, is $31.59. For management and professional employees in the U.S., the average hourly cost, with benefits, is $47.57. For all workers, the average hourly wage/benefit cost is $28.48 per hour.
Asks Perry: “Should U.S. taxpayers really be providing billions of dollars to bailout companies (GM, Ford, and Chrysler) that compensate their workers 52.5 percent more than the market (Toyota wages and benefits), 54 percent more than management and professional workers, 132 percent more than the average manufacturing wage, and 157 percent more than the average compensation of all American workers?”
Republicans can begin to regain their reputation as guardians of the taxpayers and smart stewards of the economy by following Nancy Reagan’s advice: just say no.
Next up for the Republicans is the sure-to-be-massive Democratic stimulus plan. Based on the faulty memory that the New Deal lifted us out of the Great Depression, the Democratic spending plan will hike the deficit up over a trillion dollars. There are a couple of glaring problems.
First, it’s a game plan that  hasn’t worked in the past. As  Larry Kudlow put it, “government cannot spend our way into prosperity.”
Second, China’s economy may be grinding to a halt and no longer be the financier for American debt. That means the  gravy train may come to an end:
The total national debt, the accumulation of all the annual federal deficits over the nation’s entire history, stood at $5.7 trillion on the day that George W. Bush took office. We’re almost double that now, adding nearly as much red ink in eight years as the nation accumulated in the previous two centuries. And that’s not counting the snowballing trillions in corporate bailouts, already at more than $7 trillion. That’s $23,000 for every man, woman, and child in America. Also uncounted in the aforementioned debt numbers are the trillions the government has collected and owes in the Social Security and Medicare “trust funds.” The government doesn’t have a dime of that money. It’s all been spent for things like that needless $500 million tunnel under the Allegheny. Unfortunately, the whole thing collapses if China doesn’t keep lending us the money.
So once again it is up to the Republicans to be the fiscal grown-ups. They would do well to focus the public on these unpleasant realities and to offer an alternative of pro-growth policies beginning with a program of domestic energy development and significant tax cuts to promote investment and job expansion.  Republican Minority Leader John Boehner has begun to suggest just such an approach.
Likewise, Governors Rick Perry and Mark Sanford sounded the alarm in an  op-ed — warning about the rising mountain of debt and cautioning against a “bailout mentality”:
To an unprecedented degree, government is currently picking winners and losers in the private marketplace, and throwing good money after bad. A prudent investor takes money from low-yield investments and puts them in those that yield better returns. Recent government intervention is doing the opposite — taking capital generated from productive activities and throwing it at enterprises that in many cases need to reorganize their business model.
Their solution: “improving ’soil conditions’ for businesses by cutting taxes, reforming our legal system, and our workers’ compensation system. We’d humbly suggest that Congress take a page from those playbooks by focusing on targeted tax relief paid for by cutting spending, not by borrowing.”
Next up on the agenda for Republicans are two political fights, ones they should welcome.
Senator Norm Coleman appears to have eked out a narrow win in Minnesota, leading with over 300 votes and more than 90% of the ballots recounted. Nevertheless, his opponent Al Franken is  threatening to go to the Senate, where the Democrats could vote to seat him, despite his electoral loss, on the notion that absentee ballots rejected by the state canvassing board should have be tallied. Republicans should pull out all the stops and shut down the Senate if needed to preserve the right of Minnesota voters to decide, however narrowly, their senator. This is a fight which Republicans should welcome and which would expose the other side as anti-democratic thugs.
The other political fight deserving of their energies is the nomination of Eric Holder.  We, along with  others, have recounted his  problematic role in not only the pardon of fugitive financier Marc Rich but of the FALN terrorists — not to mention the Elian Gonzales affair. Republicans need look no further than liberal columnist  Richard Cohen for their rationale for opposing Holder:
As noted, any person is entitled to make a mistake. But no one is entitled to be attorney general. That’s a post that ought to be reserved for a lawyer who appreciates that while he reports to the president, he serves the people. This dual obligation was beyond the ken of George W. Bush’s attorney general once removed, Alberto Gonzales, whose idea of telling truth to power came down to saying “Yes, sir. Yes, sir.” On Guantanamo, domestic spying, and Bush’s “l’État c’est moi” view of the presidency, Gonzales was a cipher, and the damage of his tenure still needs to be repaired.
Holder was involved, passively or not, in just the sort of inside-the-Beltway influence peddling that Barack Obama was elected to end. He is not one of Obama’s loathed lobbyists; he was merely their instrument — a good man, certainly, who just as certainly did a bad thing. Maybe he deserves an administration job, just not the one he’s getting.
Even if they are not successful, it does Republicans good to stand up for the rule of law — rather than rule by cronies — and force the Democrats to defend one of the worst players from the Clinton era.
All of this should be plenty to occupy Republicans’ time. It is not easy, but it is essential to find competent leaders, defend sound economic principles, and engage in some hand-to-hand political combat. These are the first and altogether necessary steps back from political oblivion. If they demur from these fights their political troubles will only worsen.