Archive for category John Boehner

The Right Ruling

Thursday the Supreme Court ruled 5-4 that the Affordable Care Act, nicknamed “Obamacare” is indeed constitutional.   In so doing, they rejected  a judicial activism that would severely limit the democratic power of the people.

The ruling is causing confusion.   Because the individual mandate (everyone has to buy insurance) is permissible due to the ability of the government to tax, some are claiming that this amounts to a huge tax increase.    That’s false – people will be buying insurance, not paying a tax.   Those who refuse to buy insurance will pay penalties.   However for many Republicans, convinced by oral arguments that overturning the act was an almost sure thing (intrade had the likelihood at 75%), it’s an attempt to walk back the celebratory tone they’d been taking.

This also ensures that the debate in the run up to the 2012 election will be more serious than it has been.   Until now the GOP has been simply opposing the law, saying they had ‘free market’ alternatives that will ‘increase choice.’    A close look shows that they evade most of the controversial issues.   The emphasis has been on creating ire over Obamacare and hoping the Supreme Court would do the dirty work and strike down what will be very difficult for them to repeal.

House Speaker John Boehner will have to confront difficult issues in the health care debate.

With the Supreme Court saying that this is for Congress and the President to work out – Justice Roberts correctly noted that it is not the job of the Court to rule on the wisdom of the law – the politicians will ultimately have to get into the nitty gritty of the law.   The Democrats will point out all of the positive aspects of the law and force Republicans to embrace some aspects of it.   Republicans will have to confront the health care problems that face the country and offer plausible solutions.

In a perfect world, one could hope that such debate would yield good ideas from both sides of the aisle and a mutual willingness to improve the law.   In the world we have that’s unlikely.   The worst result is that a massive amount of money is spent to manipulate public opinion and drown out the serious side of the debate, saving politicians from having to deal with reality.

While that is certainly possible, this issue might defy that trend.   If President Obama is re-elected, the Republicans will have to accept that a repeal is unlikely, and shift towards trying to make it work better.  If Governor Romney is elected then his job will be more difficult.   The Senate is likely to block an all out rejection of the law, and those helped by the popular provisions will put immense pressure on the GOP not to “throw the baby out with the bathwater.”

I suspect that in either case we’ll have a similar result.   The two parties will recognize that the US now has a health care system that aspires to universal coverage and tries to contain costs.   Information about what works and what isn’t working will guide reforms to the act.    As with social security and medicare, over time it will be taken as natural to have a health care system; the biggest hurdle was the Supreme Court.

CNN’s initial coverage took a tidbit they heard early in the opinion – that the individual mandate was not allowed by the Commerce Clause – and mistakenly informed the world that the mandate was struck down, causing people to compare this with the early headline saying “Dewey defeats Truman.”

CNN’s “oops” moment pictured above was caused in part by the widespread belief that the act would be ruled unconstitutional.   Most pundits were almost certain of the result, especially after the government seemed to do very poorly in oral arguments.   But oral arguments rarely give a good glimpse of what the result will be, and on an issue like this oral arguments can be virtually irrelevant.    The Justices have intense discussions to try to get the law right.

The most important aspect of this ruling is that the Supreme Court refused to interpose itself into an important political decision that should be left to the people and their representatives.   This is the kind of issue that we as a society have to work through politically, and the Court should allow that.    I’ve often agreed with conservatives who oppose judicial activism from the left; judicial activism is also wrong from the right.

Justice Roberts sent a signal today that while he has a conservative ideology, he wants to protect the Supreme Court’s integrity and reputation.   I hope that this means that his court will refrain from judicial activism and leave most issues in the hands of the democratic institutions.    There are important exceptions, of course, involving fundamental rights and equality under the law.    But today Justice Roberts rose above politics and proved that he understands his role as Chief Justice.

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John Boehner Loses Control

The Republicans in the Senate were getting nervous.   The House had passed an extension of the payroll tax holiday for a year in a bill so overly partisan that it had no chance to pass in the Senate.   They believed the Democrats were engaging in demagoguery by saying that the Republicans refuse to raise taxes on the very wealthy but don’t mind the working middle class paying more.

Nobody liked the idea of a two month extension, but intense negotiations between both parties, which included John Boehner, yielded that compromise.  It would buy time for them to reach broader agreement on a year extension after the holidays.   The deal sailed through the Senate 89-10, with overwhelming bipartisan support.   Speaker Boehner indicated the House would vote the deal through as well, and it appeared that the two sides managed to avoid giving the middle class a higher tax bill in January.

Then the rumbling started.   Republicans in the House complained that they shouldn’t yield again to the Senate, and that a two month extension was meaningless.   Lead by the tea party freshman, the House GOP revolted against Boehner and soon he was backtracking.   The House turned down the extension and called for a Conference Committee to come together to patch up the differences between the Senate and House bills.

For Democrats, that’s a non-starter.  First, the Senate bill was a compromise, negotiated between the two parties with Boehner indicating he approved of the agreement.   Given that, a conference committee would not only be inappropriate, but if they couldn’t quickly come to agreement then both parties would share blame for not being able to extend the tax break.   Why should the Democrats risk that?   This way the onus is solely on the GOP.

If the Senate GOP hadn’t sided with the Democrats (with many Republican Senators urging the House to pass the two month extension) then the Republicans in the House would have some political wiggle room.   As it is, they are finding it impossible to spin this as a failure of both parties — it’s a failure of the House Republicans.

Republicans who supported the measure in the Senate include budget hawk Tom Coburn, tea party stalwarts Pat Toomey and Marco Rubio, and of course Mitch McConnell (who was reportedly convinced Boehner would be able to get the measure through).    Only seven Republicans voted “no.”   This was a done deal.

Perhaps the House GOP thought that they could play Russian roulette with this issue like they did with the debt ceiling earlier this year, forcing the Senate and President to cave to some of their demands so they could claim victory and make the President look weak.   Yet the debt ceiling was a serious issue.  If it hadn’t been raised there would have been global economic turmoil and havoc for the US economy.

On this issue Democrats see themselves as having little at risk.   They’re the ones who are calling for an extension, they worked out a bipartisan compromise, President Obama was ready to sign it, and the Republicans in the House moved the goalposts.  Many Democrats see this as the first pivotal moment in the 2012 election cycle, whereby the Democrats nail home the argument that it’s GOP obstruction and extremism that is causing dysfunction in Washington politics.

Moreover the symbolism of the Republicans caring more about avoiding tax increases on the wealthy than imposing them on the middle class make this a dream issue for the Democrats going into 2012.   If class war is being waged, it looks like the Republicans in the House want to wage it on the middle class.   Exasperated Senate Republicans are furious, both at the tea party wing in the House, but also at Boehner for breaking another promise.   It’s not that Boehner wants to break promises, it’s just that his caucus won’t follow him.   The result is a Christmas gift for the Democrats.

John Boehner is proving to be a weak Speaker of the House.   He got lucky with the debt ceiling debacle because even though he had indicated to the President he wanted a grand deal that could include closing tax loopholes, the President got punished in public opinion polls when Boehner couldn’t deliver.   This time he’s not going to be that lucky.   If he can manage to pass an extension early next year and make the issue go away as soon as possible he might limit damage.  Otherwise, 2011 ends with the House GOP delivering a self-inflicted wound that could have profound ramifications for the 2012 election.

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Adieu, Tea Party?

As we go into the 2012 election season I get the sense, as I wrote last month, that the political pendulum is starting a swing to the left.    The political discourse doesn’t sound the same, rage at the Democrats and Obama has faded, and disillusionment with the GOP Congress and its refusal to even close loopholes for the wealthy is growing.  Moreover even if the public doesn’t embrace Occupy Wall Street, they’ve shifted the conversation to one about relative wealth and the power the establishment elite.    That doesn’t necessarily help Obama, as he’s an establishment Democrat, but overall it’s not the kind of mood that’s good for the Republican party.

Pew research has released some polls that might give us a glimpse at the mood of the voters.   The first is the above poll showing “Tea Party” approval and disapproval.  Almost all through 2010 more people agreed with the Tea Party than disagreed, with an election day peak of 27% agreeing while 22% disagreed (most people, obviously, were non-committal).    Now 27% disagree while only 20% agree.   In tea party districts election day agreement was 33% to only 18% disagreeing.   Now it’s almost even, 25% agreeing, 23% disagreeing.   This loss of support by the Tea Party coincides with a loss of media exposure and the lack of any big rallies or media blitzes.   The Tea Party appears at the very least dormant.

Here’s another snippet from Pew:

Around election time in 2010 the GOP was viewed negatively by 49% of the population, with 43% having a positive view. This may seem odd given the election results, but don’t forget that a lot of people see both parties in a negative light.  By last month the favorable rating for the GOP fell to 36%, while 55% had an unfavorable view.   Not a good trend for the Republicans heading into an election year.

In tea party districts the GOP was viewed favorably by 51% around election time and unfavorably by 43%.  By March 2011 that gap had grown to 55% favorable and 39% unfavorable.   Since then it has turned around.  In Tea Party districts the Republicans are now viewed favorably by only 41%, while 48% view them unfavorably.   Given that many of these districts have vulnerable first term members, this could be an ominous sign for the Republicans.   The good news in this for the GOP is that maybe they bottomed out in August — there was a slight uptick for October.

But what about the Democrats?

The Democrats don’t have rosey numbers either.  Last year before and even after the election they were viewed more favorably than they are now.  Still by 46% to 45% the general public views them more favorably.  In tea party districts the Democrats remain almost as unfavorable as ever, though their numbers are about the same as the Republicans.   Though the trend hasn’t been as pro-Democratic as it has been anti-Republican, the Democrats haven’t been hurt this last year as much as the GOP has been.

So what does all this mean?   First, there is a real chance that 2012 will turn out to be a much bigger Democratic year than most people now predict.   Not only is Obama still the odds on favorite (in part due to weakness in the GOP field), but the Republicans are almost certain to lose seats in the House despite Democratic retirements.   The possibility of the Democrats retaking the House cannot be ruled out.

But besides electoral politics, this is a sign that the Tea Party may have ran its course.  Not only is Occupy Wall Street grabbing the headlines and media attention, but anger at Republicans is muting past anger at Democrats.   Obama is hurt by a bad economy, but enough people still see it as something he’s inherited and believe the Republicans have stood in the way of compromises designed to pass measures to improve things.    People may not have warmed to the Democrats, but they’ve cooled to the Tea Party.

This suggests that the Republicans need to seriously think about compromise.   The message is clear: the American people don’t want hyper partisan ideological jihad.    Moreover when stories come out from Wisconsin that groups are collecting fake petitions on the Scott Walker recall ballot in order to try to fool voters into thinking they’ve signed — a felony offense (some are even going up and ripping them up) — it feeds into the stereotype of the Tea Party as mean spirited extremists.     The GOP has to turn this around if it wants a chance to hold on to the gains of 2010 and perhaps take the Presidency.

This creates opportunity for the Democrats.   Obama can run against Congress, and Democratic candidates can push Republicans on unpopular stances and their refusal to close loopholes on the wealthy.   However there is one thing President Obama and the Democrats need to harness if they’re to turn around their 2010 fortunes and garner a big victory: optimism.

On the campaign trail and in individual campaigns the Democratic theme has to be “a better tomorrow, starting today.”   Optimism needs to replace the hope of 2008.   The worst is behind us, we have a vision of renewal and innovation.   America isn’t done for, we’re not facing long term crisis or inevitable collapse.   We don’t all have to learn how to grow crops and prepare for calamity.   We’re neither going to war with China nor are we going to be overtaken by them.   The future is bright.

An optimistic message and a little economic good news, and the Democrats could end up looking at 2011 as a tough period that they survived.   Republicans might look back and think they peaked too soon.    All of this is speculative, it’s trying to intuit the pulse of the country, interpreting slight shifts in public mood.   Bad news, a scandal, a foreign policy disaster, economic crisis (or growth) all can push aside other factors in shaping 2012.

Still, one thing seems clear: the Tea Party is yesterday’s news.   Even in its own distracts it’s lost popularity and has run out of gas.  Its style and methods now turn people off more than they help.   The Republicans have to recognize this, and realize that the anger of the Tea Party may have helped in 2010, but it’s not an effective long term approach.   They have the House now, anger works against them.

And if it makes the Tea Party feel any better, the same kind of collapse happened to President Obama after his election.   Movements can arise, but are hard to sustain.   OWS should take notice and learn from this as well.

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Obama Should Go to Wall Street

Pundits used to 20th Century politics are mystified by the growing “Occupy Wall Street” movement, now spreading to other cities.   Like the conservative tea party movement two years ago, its growth comes through new media, a real dissatisfaction with how things are going, and is not centered around specific demands and agendas.    Starting small and overlooked in the media, it has grown in breadth and scope and can no longer be ignored.

This creates a problem for President Obama.   Obama is a centrist establishment Democrat who despite achieving some significant reforms in health care, finance, stimulus spending and repeal of “don’t ask, don’t tell,” has tried to find common ground with the Republicans.   It appeared he was going to succeed too, until the “tea party” movement pushed John Boehner farther right then he originally wanted to go.  Fearing wrath from the right, establishment Republicans are running scared and engage in a more ideological and uncompromising rhetoric than any time in the past, including the years of hostility to President Clinton.

Establishment Democrats have responded to this by shifting right; Obama is no exception.  He embraced lowering domestic spending to that of any time since the Eisenhower administration, calling for closing of loopholes for the wealthy (like Reagan did) rather than an increase in tax rates on the wealthy, and making regulatory calls which infuriate environmentalists and the left.     While his approval rating suffered — probably 15% of the ‘disapprove’ comes from the left — it appeared that liberals had no alternative.  There simply is no pressure from the left:  no movement, no leader and no alternative.

The calculus in the Obama camp is that an intense campaign combined with fear of the GOP will bring the base home.   Republican candidates are weak and vulnerable to negative campaigning that will scare independents into grudgingly vote for Obama as the safer choice.   If there is a strong movement on the left, however, Obama might find hostility growing much like Johnson did in the Vietnam war.   The most intense protests of 1968 were at the Democratic national convention, after all.

But while the protests are dangerous for Obama, they also represent an opportunity for him to harness the emotion and anger on the street and rekindle the kind of energy that brought him to office in 2008.    It won’t be easy — many on the left have become hostile towards a man they believe has drifted to the right of even former President Bush — but it is possible.

The first thing he should do is announce that he is going to Wall Street to talk with the protesters and give a major speech.   This should be scheduled for late October, assuring that the protest movement will continue and grow — they won’t give up if the President is planning to visit.    In the meantime the President should hone his populist rhetoric to support a key argument:  “I tried to meet the Republicans half way, recognizing that we need to work together to solve the problems we face.   They refused, saying it was their way or no way.   So now I’m taking the argument to the people — I’m asking the American people to send a strong message that things need to change.”

On Wall Street, a place where the Obama campaign raised so much money in 2008, and whose banks have benefited from Obama’s reluctance to anger the business elite, he should declare a new agenda:

1) Reform of the tax code to simplify and make more fair a system that currently taxes the middle class and poor too much, and allows the wealthy to use accountants and tax lawyers to evade paying their fair share.   Yeah, he’ll be charged with class warfare, but he should counter by saying it’s not the rich who are at fault, but the politicians.   The wealthy are simply acting rationally by trying to pay the legal minimum tax they owe — that’s what almost everyone does, Republican or Democrat.   If they aren’t paying their fair share it’s the fault of Washington for making a complex, screwed up and often absurd tax system.   The tax system should be made simpler, more fair and clear.

2) A jobs program that aims at rebuilding the middle class and America’s productive capacity.   The poor and unemployed aren’t lazy — they want to work.  The system that benefited unproductive financial industries who built bubbles based on bizarre financial instruments like Collateralized Debt Obligations and Credit Default Swaps should give way to a system that benefits main street businesses and people who want to produce stuff that other people want.    A strong middle class is the determinate of a state’s economic health.   Our middle class is battered and torn, and that damages the country.

3)  Honest talk about debt.   He should tell the young people gathered that their generation will inherit a country that has to sell itself off to foreigners thanks to the massive debt the last generation has built up.   Starting in 1982 the US has embraced “borrow and spend,” ignoring increased debt.   Government has done this, so has the private sector.    For a long time the problem could be ignored because unemployment was low and the bubble economy made it appear wealth was strong.    Now we see that global debt has created a crisis as bad as the last great depression, but one that cannot be cured with more debt or dismissing this as just part of the business cycle.

The US has to rethink its approach to everything from foreign policy to domestic programs; we can’t afford the kind of budget we’ve had in the past, but we also can’t afford to just cut, since spending cuts can slow the economy.    A smart mix of revenue increases, spending cuts, and investments in jobs can turn this around, though it will require global cooperation.

Obama needs to focus on these themes and embrace a populism that can appeal to independents as well as the youth.   The fact is that those who dismiss the protests as meaningless do not understand them.   It’s just like the old hands in the Arab world who couldn’t comprehend the changes being pushed by protesters from Egypt to Yemen.   This is no longer the 2oth Century.   Political activism is changing, and the ideas and energy being generated in New York is not going to dissipate.   Energy and activism may wax and wane, but a new movement is being born.

To win re-election, Obama needs to show the protesters that despite his slow start, he understands that the country needs fundamental change.    While one can say he’s blown the chance by being so establishment in his first four years, in the campaign he won’t run against Obama of ’08 but a real Republican candidate with whom he can compare himself.  He’ll also have a lot of money to get his message out.

Moreover, this message can appeal to independents.  Most aren’t ideological — if they were, they wouldn’t be independent.   They’ve shown they can vote Democratic or Republican, depending on their mood or assessment of whether what’s being done is working.   If Obama can make a credible argument that he stands for simpler taxes, a more ambitious jobs plan, and an honest discussion of debt, then as we get into the dog days of the campaign people currently disillusioned thanks to the economy may decide Obama is their best bet.

But he has to go to Wall Street.   He can’t ignore a movement driven by the same emotions and ideals that brought so much energy to his campaign in 2008.

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Obama Channels Truman

President Obama put the Republican party on notice last night that while he would still talk the bi-partisan talk, he was done merely calling for unity and an end to bickering.  It was clear that was making him look weak as the Republicans rejected compromise and continued their unrelenting attack on the President.  From now on he’s going to “give ’em hell,” as evidenced by his speech before a joint session of Congress.

Besides evoking the same kind of blunt straight talk as President Truman, he also set the Congress up for the charge of being a do-nothing Congress.   The most important parts of Obama’s jobs plans — the parts that can genuinely reduce unemployment — cost money.   President Obama’s plan pays for this by closing corporate and individual tax loopholes.  It does not constitute a significant tax hike on the wealthy, and it’s easily defensible politically.

This puts the GOP in a bind.   If they reject Obama’s plan outright, labeling it just ‘the same failed policies,’ they’ll be refusing to act on the biggest problem Americans perceive in the country right now.   Obama’s approval ratings are low, but they are above those of the Republican Congress and especially the tea party!   His bit at the end about how there are 14 months before the next election so playing politics with this is wrong will resonate.   If the Congress doesn’t act, he can run against Congress and, as his speech showed, with a new kind of fire that will rally his base and bring independents sick of tea party rhetoric back.   He may not have the level of support and hope he had in 2008, but a vote is a vote.

The GOP could pass his plan pretty much as is.   While that would undercut complaints about a do-nothing Congress, it would also under-cut claims by Republicans that Obama isn’t a good leader.   Right now the GOP blocks everything Obama wants in the House, and then uses that to show that Obama can’t get anything done.   That’s a good gig — all they have to do is refuse to cooperate and he looks weak.   Obama has called them on that.   Yet passing his plan would also divide the GOP because either it would add to the deficit, or they’d have to accept closing tax loopholes.    Even if Boehner wants to do that, his party will not follow (he’s actually the weaker leader).

The GOP could decide to pass the plan, not include revenue increases, and make spending cuts elsewhere.   That would appeal to the tea party base, but force them to defend wanting to cut programs that might hurt in the coming election.   Moreover, such proposals would probably not get past the Senate and would take time to develop.   That would play into the image of a ‘do nothing Congress’ in the hands of extreme elements of the GOP.

Worse news for Republicans: the President plans to double down by offering a major deficit reduction plan.   This will undercut the argument that he wants to simply tax and spend, and again challenge them to do something other than just play politics.   No doubt this will also include tax increases on the wealthy, but those are not unpopular with the general public.    I know a myriad of average and even active Republicans who are open to some tax increases to share the burden of paying back the debt.   Again, the Republican party appears to be stymied by extreme elements in their own party.

Obama goes into the fall with a new deficit reduction plan, a new jobs plan, a firey attitude, and increased public dismay about the Republican House and the tea party movement in general.     While Obama’s approval rating has been down at about 43%, at least 15% of those are Democrats angry that he’s veered right.  If he wins back his base — which started to happen already with his speech last night — he’s still in good position even with his worst poll numbers of his first term.

While Republicans were right that this was in part a campaign speech, it also was a speech about the number one issue facing Americans and it is 14 months until the election.   Obama is framing the campaign to be about politicians in Washington acting responsible and not with partisan blinders.   He is positioning the GOP and the tea party as the villains, or at least as not being responsible and reasonable.   People may not love Obama in 2012 like they did in 2008 but they’ll find him a safer bet.

Even worse news for the GOP: the House may well be in play.   If the Republicans don’t rally around a reasonable candidate and Congress appears unable to act, tea party types that rode the anger of 2010 to victory will find that independents are disappointed by their desire to play politics rather than solve problems, and shift back.

I believe the bold and risky act of calling Congress back for a joint session will mark the point where Obama’s Presidency turned around and took on new vibrancy.   He’s now setting the terms of the argument, not the GOP.   He’s using the bully pulpit not just to plead for civility but to push for change.     He let the GOP paint themselves into a corner, and now he has the upper hand.

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Has the tea party ‘jumped the shark’?

President Obama announced last week plans to speak next Wednesday night to Congress in order to propose a bi-partisan set of steps to address the number one issue facing the country: jobs.   When such a request is made, normally the decorum is for the Congress to accept — having the President come to speak on the biggest issue facing the country, and to offer suggestions on how to move forward is a big deal.

Instead, after initially signalling acceptance (which is why the White House went public) Speaker Boehner changed his mind, and decided that he would not accept Obama coming on Wednesday and instead invited him for Thursday.   This would mean he’d have to speak earlier since at 8:30 EDT much of the country would be watching the Packers-Saints game, a rematch of the Super Bowl to open the 2011 NFL season.

The reason was totally political.  First, many Republicans are still in a tea party “take no prisoners” mood, and rather than working to solve the country’s problems their most important job is to try to defeat and humiliate Obama.   If they can make him change the date of his speech he looks weak, and they act big and tough.  It’s rather pathetic, but apparently for some this brings great satisfaction.

A less convincing reason is that a Republican primary debate was being held.   I believe a few have already been held, and primary debates in the late summer of the year before the election are hardly big events.   Viewership is limited to only the political junkies, and it’s on cable.   In terms of relative importance, the debate is meaningless — and could easily be moved if they really wanted to.

So the President again is reaching out to Republicans, set to offer a bi-partisan approach on jobs, and Boehner is again acting childish.   The GOP muffed a huge compromise that would have cut spending by $4 trillion and brought non-military domestic spending to the lowest level than anytime since Eisenhower, all because they couldn’t accept closing a few tax loopholes on the very wealthy.   Given the massive shift of wealth from the middle class to the most wealthy, the idea that the cost of getting the budget in line should be born by the working middle class and poor while those who benefited the most and have the lowest tax rates in the industrialized world should play nothing is perverse.

The left hated Obama’s compromise.   They correctly noted it was the kind of compromise you’d expect a moderate Republican to propose, with Democrats proposing an increase on actual tax rates.   Obama knew that was impossible for the Republicans to support so he offered something he thought anybody could accept.

Nope, the GOP is in a no-compromise, slash and burn mode, with tough talk, bravado, and anti-Obama rhetoric that reaches absurd heights not seen since the right’s attacks on Clinton in the early 90s.    Perhaps a bit drunk on the success of the 2010 election, it’s all political, all partisan, and more extreme than the Republican party at any time since the early fifties.   It’s not all Republicans, it’s just that the tea party wing has the moderates running scared.

Eisenhower once responded to a Democratic call to cut taxes by saying cutting taxes when you have budget problems is wrong — Eisenhower was trying to keep the budget under control.   Republicans always had the anti-tax wing of the party, but it was small; the tea party partisanship, often very extreme, anti-government and ideological, rarely dominates the party.    Again, only in the early 50s during the McCarthy era has the GOP drifted into such extreme territory.   Fiscal conservatism traditionally trumped anti-tax ideology for conservatives.

Most people know I was once a Republican.  I was a state officer of the South Dakota College Republicans.   I was at the Detroit convention that nominated Ronald Reagan, and I worked for a Republican Senator in the eighties.   It’s not just that the party moved away from me, though I did like Ford and Dole, but I also started to study advanced economics and political science, and realized that a lot of the free market slogans of the GOP are simply wrong.   The market is not magic, without a state to regulate and guide it the powerful elite will dominate and control — third world conditions happen without a good legal regulatory system.    Those who try to defend a total free market approach always drift into abstract theroy; it doesn’t work in the real world.   I also rejected the Jerry Falwell “moral majority” idea, which seemed to be big government at its worst — trying to implement religious ideals with the power of the state.

Yet I resisted the Democrats.  I voted third party most of the time and yearned for a perspective where community is taken seriously and ideology gives way to practical problem solving.   There is a wing of the Republican party that believes that way (Jon Huntsman is probably the best example – and I’ve voted for both my moderate Republican Senators), but right now they are being shouted down by the ideologues.   Preisdent Obama (and earlier President Clinton) are moderate/pragmatic Democrats who often angered their left wing, but yet have been villified as “socialists” and “unamerican” by the far right.    Talk radio sets the meme, and many on the right follow, egged on by partisan blogs.

John Boehner’s snub of the President is the latest example of this effort to humiliate, put roadblocks in front of, and refuse to compromise with the Democrats.   For the left wing of the Democratic party, this is fine — it proves that you can’t work with the Republicans like Obama is trying to do, so therefore it’s better to simply match their partisanship and play hardball.   Obama’s resisted that.   I believe he sees the office of the Presidency as above that — and he’s right.

I think this may be the point where the right wing of the GOP has jumped the shark.   As the rhetoric remains shrill, and Obama takes the bully pulpit to make a call for bipartisanship to solve the country’s problems, the Republican primary is going to give the Democrats oodles of material for the general election.    Given what I wrote about a few days ago on the 13 keys, Obama is in a stronger position than Republicans realize.   Moreover, his current disapproval ratings are driven up by people on the left who are disappointed with Obama’s  centrism.   Most will come home in 2012, especially in swing states during an emotional campaign.   And don’t forget the way the Republicans are making it relatively easy for Obama to get Latino votes — their stance on immigration or in some cases “English as the national language” make a group that should lend the Republicans considerable support a solid Democratic bloc.

A defeat in 2012 (especially if a significant number House seats are lost — which is very possible) would be a repudiation of the tea party rhetoric and the extremist wing of the party.     Right now the extremists know they have power in primaries and are scaring the moderates.   I suspect this is their peak.    Obama got Bin Laden, had success in Libya and may have success in Syria before the election.   As he makes a push on jobs there is some evidence that the economy is slowly moving forward.   Given how bad economic conditions have been, Obama’s personal popularity has remained surprisingly high.   If the Republicans lose, moderates like Olympia Snowe, Scott Brown (if he gets re-elected) and Jon Huntsman can offer a new vision for the party and be poised to have a couple very good election cycles.

Because if the GOP is Michelle Bachmann, Sarah Palin and Rick Perry…well, that appeals to a small segment of the population and is not the stuff of a major party.

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Lessons from the Wisconsin Recall

The recall elections in Wisconsin are almost finished — the final two Democrats up for recall are not considered in serious trouble — and overall it looks like the Democrats managed to recall two of six Republican Senators, not enough to put the State Senate in the hands of the Democrats.

Republicans are happy with the result.  They kept control of the Senate and can claim a victory despite losing two members.    Democrats can take solace in the fact that they were going against Republicans who had won their districts in 2008, a year when Obama took Wisconsin and the public was in a far more Democratic mood.   The fact that the Democrats could bat .333 in such districts — and come within two percentage points of taking a district that hasn’t gone Democrat since 1896 — should give them pause.   They didn’t get a victory so much as dodge a bullet.

Democrats privately had admitted they were only likely to win two — though they hoped for the third (and got close).  But many on the more liberal wing of the party had convinced themselves that public rage against Governor Walker and the GOP, along with voter enthusiasm on the left, would give them more — some thought a sweep possible.   For them this is disappointing, their chance to send a message failed.

The other day I had a post critical of a group Norbrook named the “Frustrati,” — progressives convinced that the only thing Democrats lack are leaders willing to take strong liberal stances and refuse to compromise.  They believe the public will reward strength and principle, and that Obama and Reid have been too willing to work with the GOP.    This election should give them pause.   Even with a very energized and hard working base fervently trying to win at least three elections voters didn’t vote that much different than they did before.   Republicans can also argue that the two who lost were in trouble for personal reasons, that stronger candidates would have won.

Put bluntly: people on both sides of the political spectrum over-estimate how much the voting public agrees with their side.    Each will cherry pick issue polls, look at particular races (e.g., the Democratic victory in a Republican district in New York earlier this year) and read into them a national mood or trend.  The fact is that the country voted overwhelmingly Democratic in 2006 and 2008, willing to elected an untested Barack Hussein Obama who was accused of being far left and somehow not truly American.   Then in 2010 an admittedly smaller electorate turned around and voted a stunning number of Democrats out of office in the House to take control.    The only reason the Democrats held the Senate was that they had few seats up for re-election.   If the 20+ seats up in 2012 had been on the line in 2010, Mitch McConnell would again be Majority leader.

There’s only one way to read that.   The voting public is neither liberal nor conservative.   People do not equate political ideology with principle.   Principles are what guide every day personal choices and ethical perspectives.   Politics is about making deals, compromising, and solving problems.   Pragmatism is the quintessential American philosophy.    People will vote one year for someone whose principles are informed by liberal or even Social Democratic values, then turn around the next time and vote for someone who embraces very conservative views.

Any party that over-estimates the appeal of its own ideology risks overreaching and causing the public to correct the situation in the next election.   Any party that refuses to compromise or show an understanding of different perspectives will be seen as intransigent and unable to govern.   And, though parties must keep their bases in line, giving their base too much power can doom them in the next election.

Right now the Republicans believe Obama is vulnerable in 2012 and the GOP can gain control of the Senate.   They see the potential of repealing the health care reform, dramatically cutting spending, and steeply downsizing government.   Many think that’s the only way to deal with the economic crisis.    If they hang around right wing blog sites and talk with like minded folk, they’ll bolster each others opinions and start to believe their view is self-evidently correct, and that compromise is therefore weakness and wrong.     But so far the more Social Democratic countries of Scandinavia are in less economic trouble than we are, their way is one way to respond, but not the only way.

Obama is vulnerable (though not dead in the water as some believe), but it’s not because Americans have done an ideological flip flop.   Rather, Americans are frustrated about the economy and if they see Obama as ineffective they’ll consider trying something else.    If the Republicans over-reach or show too much ideological stridency, they could lose the House (many tea party Congressfolk are in clear danger) or even cause people willing to vote against Obama to see him as a safer bet.

Democrats have to take from this that the energy of their base is not enough to win the hearts and minds of  voters.   President Obama isn’t having trouble because he’s weak or a bad President, anyone would be having trouble with this economy.  Moreover, you can’t just give beautiful speeches and stand firm and expect the other party to crumble.  The Republicans control the House — some on the left fall victim to groupthink and under estimate the ability of the GOP leaders in the House to play a high stakes game.   Obama can’t force them to vote for what he wants.

Rather, they have to recognize that given the current economic conditions the ideological appeal of big government is probably at a low ebb.  The public wants someone who will talk seriously about reducing debt, solving problems and making compromises.   Despite the problems Obama’s had with the economy, his approval isn’t any worse than Ronald Reagan’s was in the third year of his Presidency.   Obama’s obvious pragmatism and patience is one reason he is still favored by many to win re-election — people may be upset he hasn’t been able to fix the economy, but the 2010 image of Obama as an over-reaching liberal has given way to Obama as a conciliator.     The Democrats best bet in 2012 is to grab the center and hold it as firmly as they can, allowing the tea party rhetoric sure to be flying furiously in the primary season define the GOP.   That doesn’t guarantee victory (though if it were combined with a rebounding economy in 2012 it could come close), but it assures a competitive election.

The Republicans dodged a bullet but risk not learning their lesson.  The bravado of John Boehner saying he got 98% of what he wanted may mollify the base, but risks turning off a public not keen on ideology.    Did 98% of what he wanted guarantee a downgrade?   They have every reason to believe that 2012 will be the second part of the kind of two election cycle the Democrats enjoyoed in ’06 and ’08.   But it’s not guaranteed — and too much red meat for the base may come back to haunt them, they could be their own biggest obstacle to a successful 2012 election.

Both sides should take Wisconsin seriously.   Democrats have to realize the country isn’t mad at the GOP and willing to march boldly to the left.   Republicans shouldn’t think the US embraced tea party ideals and is swinging to the right.   Whoever occupies the center in 2012 is most likely to win.   For the Republicans that would be the safest strategy.   For the Democrats it’s essential.

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Downgrading America: Frustrati vs. Tea party

The historic downgrade of US Bonds by Standard and Poors — with a threat of a further downgrade if nothing is done to reduce debt, is a moment that should wake Americans up.   This crisis is serious and it’s real.   We can’t stimulate the economy with greater spending because bond downgrades will do more harm than the good any stimulus might do.  There are structural flaws in the US economy that need to be fixed, and the only politically possible way to do so is for both parties to find a way to compromise.

The economic imbalances are real.   Government debt to GDP is at 100%.   Private and government debt to GDP combined is near 400%, and foreign held US debt is between $14 and $15 trillion.    This is serious.   Years of debt, current account deficits and bubble economy delusions have led us into a pit from which there is no easy way out.   It’s not just “another recession,” or part of the business cycle.   It’s not something we can stimulate ourselves out of and return to growth.

President Obama should call on Congress to return and take decisive action.   Standing in the way of doing this are two groups.   The tea party folk are well known — they oppose all tax increases (and would prefer cuts) and many wouldn’t have minded if the US defaulted on its debt.  They generally believe government is bad and thus demand massive spending cuts.   Another group, called ‘the Frustrati’ by blogger Norbrook, believe that the President needs to stand up for purely progressive ideals, protect virtually all government spending, raise taxes and cut only defense.

Both the frustrati and the tea partiers think the establishment of their parties has sold out to “Washington insiders,” and by being more ideologically pure they can achieve true success.    Many on the left are furious with Obama for agreeing to spending cuts at all, and believe that if only he had been stronger and more forceful things would be different.

However, Obama has stared down the frustrati and made it clear that he isn’t giving in to their demands, no matter how much they threaten to withhold money and support.   He knows that the progressive wing of the Democratic party is no more popular than the tea party; Americans want compromise and centrism.   John Boehner, on the other hand, worried about the fragile state of Republican unity in Congress, has done everything he could to keep the tea party satsified.  Boehner has not led, he has followed.

Many on the left don’t really recognize the true scope of the crisis and tend to interpret things in partisan political terms.   They think the problems we face came from President Bush’s wars and tax cuts, and all we need to do is fix that and get back to the happy days of the late 90s when the country ran a surplus.   The problem is that the brief surplus was built on a bubble, while private debt, accumulated foreign debt, and the current account deficit continued to build.   Things weren’t all rosy and sweet in 1999.

The tea party, however, is even more off base.  During the last thirty years we’ve also seen a hollowing out of the middle class, a vast shift of wealth to the wealthiest, and a consumer base that survived on debt and cheap Chinese products at Walmart.    One chart that demonstrates how the growth we did have was misdirected is here:

Note growing productivity since 1989 — that produces more wealth and value.    But middle class and working wages stayed low, both public employees and private sector workers barely kept up with inflation.   This is not what happened in most other countries; in Germany working class wages have gone up significantly since 1985.    I’ve posted other charts that show the same thing: the gap between the rich and the poor has been growing dramatically, during the recent boom most of the country’s income hasn’t even kept up with inflation.

This state of affairs is very bad for the economy.   The wealth imbalance fed the bubble economy, but didn’t grow the economy at home.    A huge chunk of that wealth goes to consumption of  foreign produced goods; even the argument that it gets invested back in the economy is misguided — in our global age most investments do not stay in our borders.   If that wealth was being spent by a viable middle class consumer base it would do far more to stimulate growth and create a sustainable economy.   This shifting of wealth to the elite resembles third world economic relations, and has led to a fundamentally dysfunctional economy.

This is where the tea party is way off base.   We need to address this imbalance in part by taxing the wealthy in order to create incentives for job creation and increased wages for the middle class.   To cut government spending in a way that hurts the poor and elderly while protecting the wealth gains of those who have made off so well in the last twenty years is utterly insane.   The tea party’s core ideals are based on a complete fantasy — it’s ideology on steroids, resistant to facts, evidence and reality.

The President needs to address the nation again and lay out the seriousness of the challenge.   He has to tell Congress that they must undo the damage done by the downgrade by agreeing to his $4 trillion deal and accepting tax increases.  He has to make it a priority to not just create jobs, but to assure that the working and middle class get paid fairly.   Relying on the market to do it alone doesn’t work; markets are not magic.    The frustrati have to accept entitlement reform, cuts to programs they believe are valuable, and a downsizing of federal government.    The tea party has to accept higher taxes, more regulation of the financial sector, and cuts to military spending.

That’s not easy.  If a couple has been living beyond their means, how do they adapt?   At first each one might want to keep doing what they’ve been doing and have the other cut back.  Ultimately, that doesn’t work.    Politically there is no other alternative then a compromise than neither side finds acceptable — but one that actually works to address the problem rather than put it off.

Restructuring the economy will take time.   As I noted in January, power may shift from the federal government to state and local control.    It may be years before we get back to unemployment levels back at 5 or 6%.   It may be a decade before we see the economy described as “healthy.”   This is real and the longer we wait to do something significant, the harder it will be to pull ourselves out of the hole we’ve been digging.

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Mood Shift?

President Obama’s handling of the debt ceiling crisis may ultimately turn out to be seen as political mastery, a symbolic point where the country shifted from a dissatisfaction with the Democrats to frustration with the way the tea party prevents the Republicans from pursuing the rational policies voters thought they’d get.

Right now Obama isn’t getting a lot of credit for how he handled this.  Many Democrats compare Obama to past leaders and say he could have pushed the GOP harder.   I do not share that assessment.  Too much was on line, especially the nascent recovery that Obama will rely on to bolster his chances at re-election.   A default, a shut down of much of the government to avoid default would do tremendous damage to the economy.   Misuse of the 14th amendment would have started a constitutional crisis, severely damaging the economy and leading many to believe Obama was abusing power.  Any of those scenarios would have destroyed the Obama Presidency.

If Obama were to have played this differently, he would have had to have done it starting last year.   Perhaps even as late as May he could have framed the issue differently and forced an earlier decision.  Even that might not have worked.      Still, criticism of Obama has been rather muted compared to the anger at the tea party.   That is the narrative coming out of this drama, not one of a weak Obama.

When the public and especially independents shifted to the right to vote in a Republican House, they did it for one reason: to force the two sides to compromise and work out solutions together.   The country is moderate and pragmatic, even if the political activists are ideological and partisan.   They thought the 111th Congress pushed too hard to secure the Democratic agenda, over reaching their mandate.    But as the President said, people wanted divided government, not dysfunctional government.

President Obama comes out of this looking Presidential.   He called for a balanced compromise on national TV.  He then stayed aloof from the final negotiations once it was clear the “grand deal” of a $4 trillion mix of cuts and new revenues — a deal that would have been good for the economy — was rejected because the tea party cannot abide ANY tax increase.

He let Reid, Pelosi, McConnell and Boehner do most of the dirty work.   He was criticized for not leading when he spent four days outside the public view making phone calls and having private meetings.    Those saying he wasn’t leading have fallen victim to the idea that media presence = leadership.     It appeared at one point Reid and Boehner were close to a deal that would have been worse for the Democrats, and a private meeting with Obama stiffened Reid’s spine.   Boehner complained, but it was clear that Obama had set down markers that the Republicans could not pass.    As blame grew on the GOP for turning down an historic compromise, Boehner realized he’d gotten all he could get.

The result — a compromise that does nothing, and doesn’t even start making cuts until 2013 — simply pushes the debate down the road.   That is a victory for Obama.   Moreover, it does not harm the economy going into 2012.   The year the cuts could damage the recovery is 2013 — setting up a huge debate for the election.   Not agreeing to any cuts would have assured bond downgrades and loss of investor confidence in the dollar, doing considerably more harm to the economy than spending cuts or tax increases would.

Congress is getting approval ratings lower than any time in history.   Those on the right who were pointing to low approvals of the Pelosi House have gone silent; the GOP is no more popular.   GOP candidates walk gingerly among the tea party brigades.   Some like Mitt Romney and Jon Huntsman realize they’ll never win over the far right, they have to neutralize their strength.  I suspect this fight has improved their chances.   Moderate Republicans don’t oppose tax increases as part of the mix for debt reduction, and they certainly don’t approve of risking default over a principle.   Many have been horrified by this spectacle and worry about the direction their party has taken.

I’m not predicting certain re-election for Obama, but the chance that it will be either Obama or a moderate Republican like Romney or Huntsman is greater than before.    People like Bachmann will still rile up the party faithful.   The Democrats may not take back the House, but strident tea partiers in unsafe districts face a good chance of losing — even Michelle Bachmann could lose.

In short, public disgust at this whole spectacle — not so much the result but the way in which it played itself out — is going to have political ramifications.   The tea party has, as the saying goes, “jumped the shark.”   They’ve peaked and over reached.    In essence, Americans are becoming sick of the ‘politics of emotion.’    People are tired of angry rants, demonization, refusal to compromise, and mistaking rigidity for principle.    We’ve got real problems, they want people to solve them.   We’ve got real disagreements, they want people to compromise.

Whichever party can appear more adult, level with the American people, and show a capacity to compromise and reach out to the middle, will have the upper hand in 2012.   President Obama played that role in this last crisis, making him the only one of the principles who could truly condemn the ‘manufactured crisis’ with credibility.   John Boehner’s image was tarnished by both outbursts and bravado — bragging the Senate will “fold like cheap suit” while the country is heading to catastrophe doesn’t make him look very dignified.

Democrats may hope that this continues, and that the tea party divides and exerts undue control over the GOP.   That would help the Democrats in 2012.   But that would not be good for the country.   Best for the country would be if the majority of Republicans who do not agree with the tea party stand up and reassert their power.    I’d much rather the face of the GOP be Senator Olympia Snowe than Representative Michelle Bachmann!   This country needs real debate and engagement of diverse ideas, not partisan war.  With the public no longer as entertained by or fooled by the emotion-laden spectacle of Glenn Beck’s rants and tea party calls for revolution, it’s time to settle down and take a pragmatic approach to the problems facing the country.

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Obama’s Big Mistake

In May President Obama should have made a forceful, definitive statement:

“There is some talk about making an increase in the debt ceiling a partisan fight.    That is unacceptable.   The debt ceiling is not about authorizing new spending, but about paying for what Congress already authorized.   If Congress doesn’t want the money spent, they should not put it in their budget — they cannot have their cake and eat it too.     The debt ceiling has been routinely raised whenever we need to borrow more to pay the bills run up by Congress.   President George W. Bush raised it seven times; President Reagan raised it 17 times.

So let me be clear.   I will only accept a clean increase in the debt ceiling.  I will not negotiate on this point, and I will veto any bill that attempts to connect the debt ceiling to other issues.   That would be playing Russian roulette with the American economy, allowing partisan bickering to put at risk our low interest rates, good credit rating and economic recovery.   However, this summer I call on Republicans to join me for a serious discussion on the future of the budget, with the goal of serious deficit reduction as soon as possible.   However, I will not tie that to the debt ceiling, or accept any legislation which does.”

Such a statement, clear and forthright early on in the process could have altered the way in which this discussion has played itself out.   First, real talk on budget cuts could be proceeding without an arbitrary deadline that does not leave time to really think about the implications of perhaps trillions of dollars of cuts in coming years.  Second, America’s economy would be safe from the severe consequences of default.   Finally, the US would not be in a position where the party in the majority in one of the chambers of Congress could use the potential for economic crisis as a way to ram its narrow agenda through.    The Republicans in the House are literally holding the US economy hostage.  It should never have come to this.

President Obama, by deciding he could negotiate and perhaps use this issue to pressure Democrats into accepting cuts, walked into a trap.   It is a trap that goes beyond him personally.   This sets the precedent for a party that does not have the votes to get something done through the usual process to find a way to use threat of real disaster to dictate their agenda to the rest of government.   Rather than trying to win in 2012 (both the Presidency and the Senate will be in play), they want to put a gun to the nation’s head and dare the Senate and President not to give in to their demands.

I’d expect that in a third world state or an emerging democracy in the former Soviet Union, but not in the US.  If politics sinks to this level, then the US is truly in severe decline.    Former Presidential standard barrier for the GOP John McCain lashed out at the House “tea party” Republicans, claiming they were irresponsible and in his words “bizarro.”  Other Republicans have also expressed horror at the events unfolding.   As Senate Majority Leader Harry Reid said, the GOP needs to go back to being the party of Ronald Reagan.   Reagan was an optimist who worked with people to convince them to go along with him.   The current gang in the House are bitter and angry, and want to use threats to get their way.

Speaker Boehner is an enigma.    The most friendly read on his tactics is he simply wants to strengthen his hand and show the tea party brigade that he’s fighting to get the most he can get.   Then when a compromise comes, enough Republicans will join with Democrats to pass it, even if the tea party folk demur.    But to do so in this manner and with this level of incompetence (you don’t announce a plan on national TV when you aren’t sure you have the votes) not only damages the country but hurts his own party — and his chance at keeping his majority.    He may really think he can ram this through, in which case he’s putting the dreams of the American people on the line.

It would be irresponsible for President Obama to give in on this, even if it means default.   The President simply cannot allow the House to dictate policy under threat of disaster.   If he gives in, then the political game sinks to a new low and could get much uglier down the line.   He should have never let it get to this point.

It’s probably too late to demand a “clean” debt ceiling vote.   He’s publicly urged compromise and it would seem erratic to shift now.   But it’s not too late to draw a new line in the sand and mean it.   Compromise that is bi-partisan means something that gets significant support from both parties.   That can happen, and I suspect will — though one gets the sense that process is getting a bit out of control and the principles aren’t really sure where its going.

When a compromise is finally reached, on signing President Obama must harshly condemn the whole spectacle as being an embarrassment to the American people.    He must take his share of the blame, and state that never again will he be party to some negotiation tied to an issue like the debt ceiling.   He must say in late July or early August what he should have said in May.    The US economy cannot be held hostage so that one group can get its way.    That is a threat to the very foundation of our democracy.   They should go through the normal legislative process, including making it an issue in the next election.

President Obama made a mistake opening the door to allow the issue to be used this way.  He must slam it shut, and refuse to open it again, not even a crack.

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