Oct. 17 (Bloomberg) — Forty-eight hours. That's how long it took for the ghost of Ronald Reagan to rise after some pundits declared Reaganism dead. The form the Gipper chose to take this time is that of one Ohio plumber, Joe Wurzelbacher.

You might be familiar with Joe by now, since he dominated the first part of this week's presidential campaign. Joe W. is the man who, at a routine campaign event, asked Democratic Senator Barack Obama about his tax plan and its promises to raise taxes only on the top 5 percent of earners.

As Joe pointed out, a tradesman like himself might move into that category when he buys a plumbing business. Joe's issue was pure Reagan: every American is a striver. Obama's reply ignored the universal appeal of that view.

Obama's response: "It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance." Concluded Obama: "I think when you spread the wealth around it's good for everyone."

Joe resonated so much that Republican Senator John McCain had to incorporate Joe into his own campaign. This weekend there will be more of Joe — he's scheduled to be on Mike Huckabee's show, for example. Even the Bloomberg News report that Joe is a tax deadbeat probably won't undermine him with voters. Those Americans who file quarterly, a category that includes many contractors, are having trouble pulling together their December payments.

What caused all my colleagues, mostly in the media, to declare Reagan dead in the first place? Democrats and left-leaners are depicting the current market implosion as evidence of the failure of Reagan capitalism.

European Model

The implication is that the U.S. now should follow the European model — a bigger, more stable state. In the Euro plan, government doesn't have to come out and extend deposit insurance. That's because everyone assumes the government is already guaranteeing everything anyhow.

But Republicans don't listen to non-Republican pundits very often. They listen to their own. So Reagan's true coroners are the Republican or Republican-friendly experts who have dismissed him as "yesterday."

For years now, long before the recent market debacle, party advisers have been talking about building up Theodore Roosevelt as a Reagan substitute. TR's muscular diplomacy could be cast as a precedent for the Iraq action. TR's emphasis on reform also seemed modern.

Roosevelt's greatest appeal to Republican strategists had to do with taxes. Republican advisers, sympathetic writers and lawmakers all are tired of the tax question.

Taxes and Faxes

They assume that their own failure to reform entitlements in the past decade means that Republicans will have to support tax increases, or at least no tax cuts, in the future. They don't want to lose on their own issue, so they are ignoring it. Until this week at least, Republicans have been treating tax cuts like the fax machine — something that once seemed promising, but now clearly belongs to another age.

Roosevelt fits perfectly into this logic, for he favored a "graduated income tax of the proper type." TR showed that you can be Republican and pro-tax. Overall, in fact, Roosevelt wasn't an economic guy. As the choice of Governor Sarah Palin as the vice presidential candidate shows, party leaders also wish they didn't have to be economic guys.

Small wonder, therefore, the Republican Party hasn't done too well in polls lately. What Joe the Plumber reminds us is what Republicans used to know — that the only path to true recovery for the U.S., even now, is growth. The U.S. isn't a petro-economy. It's an incentive economy.

Tax Perversion

What a tax program like Obama's does is perverse, as Joe pointed out. It gives a relative advantage to the wealthy by shutting the trapdoor behind them. It keeps down those intent on getting through that door for the first time. In the face of Obama's increases, the strivers will be locked into the working class.

Conventional wisdom holds that a declining Dow Jones Industrial Average represents a buy opportunity for stocks. What Joe is saying is that Main Street also is a buy. Businesses are cheaper than usual. That passe emphasis on marginal-tax rates suddenly sounds interesting again.

There also is the challenge of the higher interest rates that will come, no matter who is president, when the Fed starts to mop up all the water on the floor it just generated in the name of saving the banks. This year Reaganite tax issues have been subordinate. Next year they will be No. 1.

Theodore Roosevelt as party hero turns out to be a luxury that recession Republicans can't afford. It took reality to remind Republicans what they are supposed to be and do.

Not Natural Friends

McCain and Joe are not natural friends — McCain is more of a Dwight Eisenhower and TR type than a Reagan one. McCain likes to rail against wealth as much as Obama. And Joe the Plumber probably won't give McCain an election victory next month. Voters are tired of the incumbents; Obama is right that they want change.

This week there also is a sense in the country that 2008 resembles 1980. We are suddenly plunged into a recession with unemployment that seems destined to go much higher. The hero of that earlier crisis proved to be not President Jimmy Carter, not TR, not Gerald Ford nor, of course, Richard Nixon. It was Ronald Reagan.

(Amity Shlaes, a senior fellow in economic history at the Council on Foreign Relations, is a Bloomberg News columnist. The opinions expressed are her own.)

© Copyright 2008 Bloomberg