A Certain Enthusiasm

Showdown in Jacksonville

2012-01-26T20:00:00.000-08:00

A few brief points on tonight's debate:

Gingrich built up a lot of expectations going into the debate, but he often seemed unable to counter Romney's jabs. His attempt to turn the debate on Wolf Blitzer spun back at him. These increased expectations made his uneven debate performance seem like more of a defeat.
Santorum stole some of Gingrich's thunder in his attacks on Romney. With Gingrich losing support by the day (if recent polling is to be believed), Santorum may find himself gaining in this race. It might be too early to count Santorum out.
This was a good night for Romney. He pushed at Gingrich in a focused, yet restrained, way. He didn't seem blustery (for the most part) but in command of details and facts. He often caused Gingrich to back down and swung hard at Barack Obama. This was one of Romney's sharpest debates.

Thematic Foundations

2012-01-25T10:16:00.000-08:00

Mitt Romney has promised to make a forceful argument against Newt Gingrich in order to rehabilitate his campaign, which has recently hit a South Carolina-sized pothole. Here are some thoughts on what Romney could do to revive his campaign.

Perhaps the most crucial thing that Romney can do is to unite the disparate aspects of his campaign into a focused, principled message. Romney is known as a devotee of arcane details, and that facility with information may prove useful in governing, but now might be the time to sell a more focused campaign theme. Romney's team has, I think, been moving in this direction, but it's been knocked off course a little by the Gingrich surge (especially by the tax returns issue, as even Romney advisor Stu Stevens admits).

Many sense that the sotto voce theme of Romney's campaign is his electability, but that empirical principle is not enough to win a primary, especially in a party with a base that enthusiastically replaced Mike Castle with Christine O'Donnell in Delaware in 2010. Romney's competence with complex administrative apparatuses is also a good selling point, but claims of competence immediately draw the eye to questions of principle: to what ends will this technocratic skill be put?

I've suggested before that Romney could argue persuasively on behalf of a pro-growth, pro-middle class conservatism. By fighting for a tighter labor market (through tackling trade and immigration issues), Romney could in turn encourage new growth for the middle and working classes, which have increasingly been left behind. It is possible for conservatives to be concerned about income inequality and stagnating social mobility and to make a conservative case for improving the opportunities for the poor and middle class.

Despite what the media (and some right-leaning pundits) may claim, "progressives" do not have a monopoly on those issues. Indeed, the kind of expansionist government that "progressives" often desire has only seen its power grow due to income inequality and economic stagnation. Moreover, the later Bush and Obama years have shown that those who control massive amounts of wealth can gain the most through an expansionist central government: they alone know how to manipulate the government system to make the most for themselves. There's a reason why GE paid less in corporate taxes (i.e., nothing) than the average business.

A strong case can be made for restoring economic vitality by cutting burdensome regulations, investing in infrastructure and human capital, aggressively protecting US economic interests abroad, putting the financial industry on sound footing, and incentivizing economically productive activities. And Romney could be just the man to make it. His experience in the corporate world demonstrates his utter intimacy with the tendencies of modern business---the good and the bad. His economic policies go beyond tax cuts; for Romney (unlike for some GOP candidates), every economic problem is not a nail waiting for a tax-cut hammer.

The idea would be to run on a platform of restoring economic hope. That would mean restoring economic growth and pushing for reforms that would help more of the American people benefit from the gains of growth; these two goals are complementary. With some of his speeches, Romney seems to be edging in this direction, but more emphasis could be placed on the hope of increasing opportunity. The real political topic at issue is not how much in taxes Romney has legally paid but how to reform the political-economic structure in order to give the opportunity to more Americans to make it to the higher tax brackets and to ensure that even those in lower tax brackets can have some kind of economic security.

It's probably not time for the Romney campaign to hit the panic button yet; if the media senses more blood in the water, a feeding frenzy could ensue. But now is the time to focus its argument and redirect the energies of the primary cycle.

In addition to that positive point, here are a few don'ts:

Don't go Newtclear: The auditions for the angriest anti-establishment Republican have come and gone, and Newt Gingrich seems to have won that part. Attempts to outflank Gingrich in nastiness toward Democrats/the media/Barack Obama are more likely to be taken as pandering than anything else. This doesn't mean that Romney can't hit Obama and his failures hard, but playing the politics of alienation is not a game Romney can or should try to win. Reagan was bigger than that, and it worked out for him.

Don't be knocked off message: There's going to be a real temptation for Romney to embrace the old version of the Ryan budget in order to distinguish himself from Gingrich, who dismissed it as "right-wing social engineering." The first Ryan proposal is extremely unpopular (and not exactly realistic in some of its assumptions), and Ryan himself has abandoned it. Democrats will have a hard time Mediscaring Romney (he is, after all, the man who expanded health-care coverage in Massachusetts), and Romney should not throw this advantage away to score a minor point, one that won't really help him anyways. For those concerned about Gingrich's stances on policy issues, his dismissal of Ryan's budget is one of the most minor points. Trying to pander on various faddish right-wing talking points (such as 9-9-9) is not going to win Romney the nomination. Instead, he needs to focus on building a consistent, conservative campaign theme---even if this theme sometimes runs afoul of the dogma of the moment.

Don't make attacks on Gingrich the centerpiece: Hitting Gingrich on issues of hypocrisy, his inconsistency on policy, his Washington insiderism, etc. can deliver some benefits. But Romney should be sure to use these attacks to pivot to a more affirmative case for his own campaign. A media cycle focusing on how badly Romney hurt Gingrich in a debate will be less helpful for the campaign than one focusing on Romney's proposals and campaign vision.

Florida Shifts

2012-01-23T20:37:00.000-08:00

Tonight's debate was an interesting one. Gingrich has apparently tried to go back to Newt 2.0 mode, by turning down the vitriol and righteous indignation. It's unclear how convinced voters will be by this change, however, since it comes after Newt 1.0's explosive reappearance in South Carolina.

Romney's attacks seemed to unsettle Gingrich. At one point, the former Speaker had to pause for a few moments to collect his thoughts to respond. The famously loquacious politician was at an apparent loss for words. Romney hit Gingrich hard on his connections to Freddie Mac and his record as Speaker. Though Gingrich tried, he seemed unable to beat off Romney's criticisms fully. Meanwhile, Romney kept turning the course of the debate to the failures of the Obama administration and emphasizing Romney's own conservative bona fides (for example, his strong stand on immigration enforcement).

Santorum stressed that his own record was one of consistent conservatism. He didn't pile on Gingrich, but he didn't refrain from criticizing him either.

It's clear that Gingrich got no winning soundbite moments out of this debate. His campaign in South Carolina depended upon those. The lack of fire in this debate may slow Gingrich's momentum. For the past week, the narrative of his campaign has been one of explosive growth; it's hard to see how tonight will add to that growth rate. Any slowing in his support could be a signal that momentum has begun to be reversed. And Romney was able to land some effective blows tonight, muddying Gingrich's claim that he is the true conservative. Gingrich walked into this debate with great expectations, and he didn't actually deliver. This was an attempt to sell himself as a candidate who can still win in a restrained debate. We'll have to see whether the public buys this image.

Gallup Outlier

2012-01-23T16:47:00.000-08:00

A poll that's been circulating in the rightosphere today (pushed especially hard by Bill Jacobson over at Legal Insurrection) is this Gallup tracking poll showing Gingrich lagging Obama only by 2 points (48-50). Some in Gingrichistan are pointing to this poll as evidence of the fact that that Gingrich's new style is paying dividends not only with the Republican base but with the nation as a whole.

There's one problem with this argument, however: this poll is over a month old. Though this tracking data is featured prominently on Gallup's site (and Gallup doesn't provide a date for it on the main page of its election 2012 polling), it seems to stop by December 15-18, 2011. So this polling was taken well before Newt 1.0 was unleashed. (The Gallup chart conflates the GOP nomination polling, which is currently updated, with the general election polling, which is not.)

Many polls taken since then have shown Obama with a much bigger lead over Gingrich---most polls give him around a 10-point (or greater) edge. Obama's average polling lead over Gingrich has increased over the past few weeks. Moreover, this poll was probably an outlier even then; other polls taken around the same time show Obama leading by a much larger margin.

So if you're looking for evidence that Newt Gingrich has closed the electability gap, this poll probably isn't it.

"Free" Markets in the 21st Century

2012-01-22T09:59:00.000-08:00

The New York Times has a very interesting article about the production of Apple products in the People's Republic of China. Though Apple used to make products in the United States, it has changed its manufacturing approach over the past decade.

Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”

I guess "speedy and flexible" is one way to describe that situation.

And, of course, much of what makes the PRC attractive to companies like Apple is less the free market and more government subsidies:

When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.

Clearly, another victory for "free trade"! Yves Smith has more thoughts on this.

Pyrrhic Victory?

2012-01-21T18:51:00.000-08:00

There is no doubt that Gingrich's win in South Carolina is a significant victory for him. The anti-Romney forces pulled out all the stops in the Palmetto State, and, if they couldn't stop the Mitt Train here, they wouldn't be able to stop it anywhere. Nor should it be forgotten that Gingrich's vote percentage in South Carolina is the second lowest for any winning candidate in a contested South Carolina primary since 1980; even Bob Dole got 45% of the vote in 1996. Only John McCain did worse with 33% of the vote in 2008. Still, Gingrich was able to give new life to his campaign, though the way he won may point to electoral red flags in the future.

Cunningly, Gingrich was able to change the narrative in South Carolina by making it about him. Between "King of Bain"-style attacks on Romney and his explosions of outrage against the media, Gingrich pushed narratives of Romney's momentum to the background. Eschewing policy, Gingrich ran instead on performance art. Despite his long history as a Washington insider and many positions on many issues, he made himself the avatar of "conservative" frustration, victimization, and irritation. In a Republican primary in South Carolina, that's a good tactic.

If, however, a general election between Gingrich and Obama becomes a referendum on Gingrich, the former Speaker probably loses. Obama's mixed record is a hard thing to run on; surely, the White House would much rather run against Newt Gingrich as a cultural and political figure. Gingrich has proven all too glad to make himself the center of a political race, and the Obama administration will likely oblige him.

Almost twenty years ago, another Democratic incumbent realized this dynamic. Bill Clinton was able to reconfigure the media landscape by letting the 1996 and 1998 elections be about Newt Gingrich. In both of them, Republicans lost seats in the House (coming within a few seats of losing the House itself in the latter). Furthermore, by making Gingrich a central figure of the 1996 campaign, Clinton was able to make what might have seemed a troubled reelection bid a sure thing. There's a reason why few of Gingrich's conservative House colleagues have endorsed him and why many have outright attacked him.

For a while, Gingrich had run on the narrative that this was a "kinder, gentler" Newt, an older and wiser man who had learned from his past personal and rhetorical excesses. Gingrich's nuclear (and, at times, self-contradictory) barrage against Romney and the media has shattered that narrative. We're back to Newt 1.0, the battle plans against which were already drafted by the Clinton White House.

If he wants to be viable as a general election presidential candidate, Gingrich is going to need to move beyond red-meat appeals to the conservative id and beyond the politics of personality. As Conn Carroll at the Washington Examiner has noted, Gingrich's net approval rating with the American public is around -30. He remains an exceedingly polarizing figure to the public at large. Gingrich has a few months to turn that around. But that is a steep hill to climb. In the days ahead, Republicans will have to ask themselves whether that hill is worth the ascent.

Triumph of Style

2012-01-20T12:10:00.000-08:00

Ross Douthat wonders where he can find the ideas in an "idea-oriented" campaign:

I have, for my sins, watched Gingrich make his pitch across what feels like seventeen thousand Republican primary debates, and I am at a loss to identify the “big ideas” and “big solutions” that he is supposedly campaigning on. Yes, he has an implausible supply-side tax plan, but you never hear him talk about it. He has technically signed on to some form of entitlement reform, but you never hear him talk about that, either. Instead, so far as I can tell, his “idea-oriented” campaign consists almost entirely of promising to hold Lincoln-Douglas-style debates with President Obama, grandstanding about media bias and moderator stupidity, defending his history of ideological flexibility much more smoothly than Mitt Romney, and then occasionally throwing out a wonky-sounding notion (like, say, outsourcing E-Verify to American Express) that’s more glib than genuinely significant. His last-minute momentum in South Carolina, which last night’s debate did nothing to derail, has been generated almost exclusively by the politics of ressentiment: If he wins the Palmetto State primary, it will be because conservative voters don’t much like the mainstream press, and Gingrich has mastered the art of taking tough questions and turning them into dudgeon-rich denunciations of the liberal media and all its works.

Meanwhile, the Politico explores the reasons for Gingrich's rise in South Carolina. This report also comes down to questions of style.

Gingrich's campaign has always been a very style-driven one. Even the flaws popularly imputed to Gingrich tend to focus more on questions of image than those of substance: he called Paul Ryan's budget "right-wing social engineering" or sat on the couch with Pelosi. Those public relations specters have haunted his candidacy, in some respects far more than actual policy positions (such as his plan to give local boards the ability to legalize "undocumented" immigrants or his position that the president can ignore Supreme Court rulings at will or his---past---support for cap-and-trade).

Running on style has helped Gingrich in a variety of ways. Filled with thirty-second soundbites, the debate structure of this cycle has encouraged this emphasis on style. The limitations of these fora have empowered the one-liner (though some interesting substantive points have been brought up as well). And Gingrich has mastered the ability to pour a distillation of disdain and wrath into a few sentences. For many frustrated "conservatives," this concoction is the sweetest of candies.

Much of the grassroots right has expressed a great desire for a bare-knuckles fighter and a primordial cage match between progressivism and "true conservatism," and Gingrich has blithely volunteered to be the anointed gladiator. Moreover, his aggression toward the media and the left has helped differentiate him from Romney. Gingrich has had as many "flip-flops" as Romney (if not more), but his casting of himself as the antithesis of "the establishment" has given him a brand that can ignore those petty distinctions of policy.

Early on, style almost broke Gingrich's candidacy. Then, late in 2011, style elevated him. A sustained attention to Gingrich's record interrupted this rise, leading to the ascent of Santorum in Iowa. In order to restore his position, Gingrich has embraced his role as the anti: anti-media, anti-Obama, anti-Romney, anti-establishment, anti-"vulture capitalism," anti-settling, and anti-ending the primary. By casting himself as the great NOT, Gingrich can play into the frustrations of those looking for the "perfect" candidate. This stylistic approach has given new life to his campaign. We'll have to see how much it helps him in South Carolina tomorrow night.

Limits of Standardized Testing

2012-01-20T08:36:00.000-08:00

My latest post at the Huffington Post explores a conservative critique of test-driven education "reform":

A persistent -- and, I think, powerful -- theme in conservatism is the emphasis upon limits and doubt about the wisdom of centralized actors. One of the strongest pragmatic defenses of the free market is that centralized authority is not efficient enough and wise enough to direct the economic energies of the nation; hence, a diversity of economic actors should make their own, personal economic decisions. Moreover, a mainstream of conservative philosophy from Burke onwards suggests that the richness of a given human society and culture goes beyond mere statistics -- something about the weave of human life resists quantification.

However, a great many "conservatives" ignore these teachings when the topic of education "reform" comes up. Suddenly, a technocratic mania that seems far more a trait of bureaucratic "progressivism" rules.

Splitting the Vote

2012-01-18T09:22:00.000-08:00

Much anti-Romney analysis claims that the multiple candidates running against Romney are splitting the Republican vote and allowing the "Massachusetts Moderate" (not sure if this phrase has been trademarked by Gingrich yet or not) to beat a divided field. Polling before might have backed up this claim (when various not-Romneys beat Romney in a one-on-one polling match-up), but it now tells a different story.

For example, recent YouGov polling showed Romney beating Santorum 58%-42% and beating Gingrich 66%-34% nationally. A CNN poll of Republicans nationwide released on Friday showed Romney beating Santorum 60%-37% and beating Gingrich 59%-37%. This trend also carries over into many statewide races. In South Carolina, a PPP poll shows Romney with a five-point lead against the whole field. Match-ups where Romney is pitted against a single other Republican see his margin of victory grow considerably. He leads Gingrich 48%-37%, Paul 63%-28%, Perry 56%-31%, and Santorum 48%-39%.

Many supporters of one not-Romney feel more comfortable with Romney rather than another not-Romney. So, at this point, it seems as though a full field could be hurting Romney more than helping him. A multiplicity of opponents can attack Romney (sometimes in contradictory ways) and hope to pull his polling numbers down enough to allow one of the not-Romneys to win. At this time, however, polling seems to suggest that Republicans would rally around Romney more than they would around any of his GOP rivals.

Huntsman and Audience

2012-01-16T11:29:00.000-08:00

Now that Jon Huntsman has declared that he's withdrawing from the race to be the GOP presidential nominee (and has endorsed Mitt Romney), the postmortems have begun. Many of them focus on Huntsman's seeming difficulty in finding an audience.

David Frum says that there was a disconnect between Huntsman's personality and his program:

Huntsman offered a critique of what has gone wrong in the modern Republican party: too anti-science, too socially conservative, too militarily interventionist, too hostile to expertise.

He did not however offer a unique selling proposition for his own candidacy. Even supposing a Republican primary voter agreed with every point in Huntsman's critique (and surprisingly many do agree)—what then? Huntsman's answer to the party's problems was himself: smart, sophisticated, worldly, pragmatic. But every one of those characteristics is shared with Romney. What Huntsman did not offer was a programmatic alternative. On the contrary, the Huntsman program doubled down on Norquistism: big tax cuts, Ryan plan, etc.

This program created a contrast with Romney, but in the wrong direction: the least ideological Republican candidate now offered the most ideological economic platform.

Ace instead focuses on how Huntsman seemed to treat the base:

It's difficult to like someone who clearly doesn't like you. While in the past several weeks conservatives, seeking some alternative to Romney, have started to at least entertain the possibility of backing Huntsman, it was all but impossible given Huntsman's frequent obnoxious signaling that he just doesn't like us.

It's not just an emotional thing, either. If a candidate specifically lays down the marker that he doesn't think much of our opinion but cares a great deal about what the editors of Vogue might think, that's a pretty strong sign that he'd govern in such a way to pander to their opinions and against ours.

Federal Judge Denies Perry, Gingrich et al Request for Injunction in Virginia

2012-01-13T13:58:00.000-08:00

Rick Perry, joined by Newt Gingrich, Jon Huntsman, and Rick Santorum, filed a lawsuit challenging the ballot requirements of the Republican Party of Virginia. Currently, only Mitt Romney and Ron Paul have fulfilled Virginia's requirements and will be on the March 6 primary ballot.

U.S. District Judge John Gibney (an Obama appointee) has ruled against these campaigns. The principal reason for Gibney's ruling seems to be the doctrine of laches (when a plaintiff takes an unreasonable amount of time to claim a legal defense of his or her rights).

Gibney seems to suggest that, in his opinion, Virginia's requirement that only those who are eligible to register to vote can circulate petitions for a candidate is an abridgement of the First Amendment. However, requiring 10,000 signatures with at least 400 signatures from each Congressional district is not an unconstitutional burden. If the campaigns had filed a lawsuit against this purported abridgement of First Amendment rights earlier (such as in August or September or October), Gibney probably would have ruled this requirement unconstitutional.

However, the candidates did not do that. As Gibney writes:

They plaintiffs could have challenged the Virginia law at that time. Instead, they waited until after the time to gather petitions had ended and they had lost the political battle to be on the ballot; then, on the eve of the printing of absentee ballots, they decided to challenge Virginia's laws. In essence, they played the game, lost, and then complained that the rules were unfair.

Because they waited so long, Gibney has denied their request for an injunction.

Some other interesting details come out in this. One is that the Virginia State Board of Elections does not seem to know the exact number of signatures that either Gingrich or Perry got. However, Perry's camp only admits that it submitted more than 6,000 signatures, and the Board agrees that it was less than 10,000. Gingrich's camp says it submitted 11,050 signatures, but the Board determined that fewer than 10,000 were valid. These details seem to suggest no evidence for a RINO establishment conspiracy to keep Perry and Gingrich off the ballot.

Gibney's ruling also notes that Jerry Kilgore, a former Attorney General of Virginia and the Virginia campaign chair for Perry, got over 13,000 valid signatures on a "shoestring budget" in his race for AG in 1997.

We'll have to see whether/how these campaigns appeal this ruling.

Oh, the Irony

2012-01-13T10:45:00.000-08:00

A list of the some of the ironies regarding the "King of Bain" dust-up:

The old anti-Romney claim was that Romney was too sympathetic to the middle class (for example, in offering certain tax-cuts only for those who make less than 200K/year); now, he's become the embodiment of corporate, top-1% greed.
Perry and Gingrich can make these attacks second-guessing Romney's experience in business in part because they have been career politicians.
Gingrich served on the board of a company that pioneered the leveraged buyout mechanism about which he has criticized Bain.
Perry collects plenty of donations from those who practice the very same "vulture capitalism" of which he accuses Romney.
Conservatism is supposed to be about individual responsibility, but now Romney is being blamed for the actions of Bain years after he retired from the organization; many of the events talked about in the "King of Bain" "documentary" happened after 1999, when Romney left the organization.
I thought a standard line for "True Conservative" purists was that too many regulations are strangling the national economy, but the purported excesses of Bain (from the perspective of the Gingrich and Perry camps, at least) occurred due to certain regulatory rules---which could be revised or added to. So we've moved from regulatory abolition to the idea of regulatory reform or increase (and President Obama would no doubt be glad to talk about the latter).
Many "True Conservative" purists were salivating at the prospect of Gingrich offering a full-throated defense of capitalistic profit in all its forms in the presidential debates against Barack Obama. So much for that exchange.
Some "libertarians" warned that Rick Santorum was some kind of anti-market technocrat (or something), but Santorum has actually defended the actions of private equity firms (and thereby Bain) as a worthwhile part of capitalism.
At a time when they could be working to develop and defend market-oriented policies that support the economic middle, many conservatives have chosen instead to indulge in identity politics.

Architech of AZ Immigration Law Backs Romney

2012-01-12T10:05:00.000-08:00

The Washington Times reports:

“Romney stands head and shoulders above the crowd,” Kris W. Kobach, Kansas’ secretary of state and the architect of the Arizona law, told The Washington Times, praising Mr. Romney for treading where other Republican candidates have refused to go. “Immigration is one of those issues that will appear to be a hot button — some elected officials who are afraid of offending anyone will avoid taking tough stands on immigration, and he took a tough stand.”

Other opponents of legalization for "undocumented" immigrants are also coming out for Romney.

Beating Expectations

2012-01-10T20:15:00.000-08:00

If someone had predicted a little over a month ago that Romney would have won in both Iowa and New Hampshire, more than a few people would have dismissed that notion as a little delusional. Yet here we are. With ~~nearly~~ around 40% of the vote (and a 15+-point margin), Romney cruises to victory in New Hampshire, becoming the first non-incumbent Republican to win both the Iowa and the New Hampshire primaries. I thought Romney would need at least a 10-point win to maintain his momentum, and it looks like he got it.

Exit poll data shows what a crushing victory this was for Romney. Among registered Republican voters, he got 48% of the vote, outpacing by over thirty points his nearest rival (Ron Paul at 15%). Romney's win did not come purely from a coalition of independents and moderate Republicans (though he did win registered independents as well, beating Paul 32-30). Self-described conservative and very conservative voters overwhelmingly preferred him to other candidates. Moreover, he won by eighteen points those New Hampshire voters who support the "Tea Party": Granite State "Tea Partiers" have claimed that Romney is their man. Ironically, Gingrich and Perry's hectoring attacks upon Romney's record in the private sector may help unify conservative support behind Romney.

Ron Paul's second-place finish was fueled by young people, new voters, and independents. Among registered Republicans, he didn't get above 15%, but independents and Democrats helped lift him to second place.

Jon Huntsman bet it all on New Hampshire and came in at around 17%---and could only get to 10% of registered Republican voters. Huntsman has said he's staying in, but he's hovering around 2% or 3% in South Carolina, Florida, and nationally. New Hampshire was the sort of territory most favorable to Huntsman, so those states will be a long march for him. We'll have to see over the next few days whether his numbers increase or not---if there's a bump, perhaps we could be seeing the beginning of Huntsmentum.

No doubt Team Santorum finds tonight's results a little unpleasant. But a near-tie with Gingrich for fourth place definitely keeps his campaign viable. Unlike either Gingrich or Perry, Santorum has performed very strongly in one of the first two key primary battles and respectably in the other. He goes into South Carolina with some vigor in his step. Unlike New Hampshire, South Carolina will be a key testing ground for his candidacy.

What to Look For Tonight

2012-01-10T16:44:00.000-08:00

Looking at some key numbers for tonight:

In the lead-up to the New Hampshire primary, here are a few key things to look for:
Romney's margin of victory: It's widely assumed that Romney is going to win New Hampshire tonight. If Romney had come in a distant third in Iowa, he would probably need a New Hampshire win to stay viable as a candidate. Right now, he only needs a New Hampshire win to maintain his momentum....

Clarifying the Curve

2012-01-09T11:20:00.000-08:00

In a comment at FrumForum, Chris Conover at AEI replies to my analysis of the rate of growth of per capita health-care spending in Massachusetts. Since Conover raises some worthwhile points and because FrumForum is (alas) about to go dark, it's worth quoting the comment in full:

As a practical matter, it is quite difficult to distinguish the effects of the recession from the effects of “Romneycare” in the 2007-2009 period. So in general, Fred Bauer gives more credit to Romneycare than I myself would.
That said, in assessing gubernatorial performance, it seems a little odd to ignore the fact that health spending was going up MUCH faster than the national average while Governor Romney was in office but then give him great credit for the purported slowdown in spending after he left office. If the argument is that governors really can’t do that much about health spending anyway, then it renders all these cross-state comparisons moot. One can’t (or shouldn’t) cherry-pick the data to highlight a comparison that looks favorable and ignore ones that are not.
The best analogy I can give is this. Imagine someone who is very obese getting a diet pill. Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?
Until Mr. Bauer can explain what it is about Massachusetts health care that should lead us to “expect” 27% faster-than-average growth in its spending, pointing to only 5% faster-than-average growth seems problematic. Especially since the one thing we know for certain happened between 2004-2006 and 2007-2009: Governor Romney left office! If we give Governor Romney “credit” for the ballooning of MA health spending during his administration, then his apparent ability to lower this excess to “only” 5% seems far less impressive.

There's a lot here, so I'll address it in parts.

First of all, I should clarify that the aim of my last piece was not---FrumForum headline notwithstanding (and I was not responsible for writing the headline for the FF post)---that Romneycare alone bent the spending curve down forever. I think more analysis and evidence would be needed to substantiate that argument.

Instead, my analysis grew out of a desire to test the now-standard claim that Romneycare exploded health-care spending in Massachusetts. This federal data suggests that, at least until 2009, this claim might be more than a little problematic. Now, more evidence might come out that supports the argument of exploding Massachusetts health-care spending due to Romneycare, but current federal data does not support this claim.

In his last few posts to the AEI blog, Chris Conover has been making a very different claim: that health-care spending grew rather quickly during Romney's term as governor. The CMS data certainly seems to support that claim. For example, in 2006, health-care spending grew 44% faster in Massachusetts than it did in the nation as a whole. However, Romney is not exactly an anomaly here. In 1998, during Paul Cellucci's term, health-care spending also grew 44% faster in Massachusetts than it did in the nation as a whole. Since 1991, there have been only three years---1995, 1996, and 1999---where health-care spending in Massachusetts grew slower than it did in the nation as a whole. It's also worth noting that my piece was not particularly talking about Romney's overall record of health-care spending but about the effects of Romneycare (or at least what the effects of it aren't). So I'm not sure how much I was "cherry-picking" data here as much as trying to compare the immediate period before Romneycare to the period after Romneycare.

Also, the extreme increase in spending during Romney's tenure arguably makes the case for Romneycare stronger, not weaker: an executive looking at exploding spending might feel the need for a game-changing reform. Moreover, most anti-Romney "conservatives" are not claiming that health-care spending in Massachusetts during Romney's tenure was much of a problem; for them, Romneycare's meddling with the status quo was worse than leaving things as they were.

As I said in my earlier post, I think health-care spending is due to a variety of factors, some of which are out of the hands of governors and government more broadly. So I think there are limits to how much any single political official can change the health-care curve, especially in the US health-care system, which relies on a combination of government and private spending. I also think that cost controls are not the be-all and end-all of measuring the worth of a health-care system.

However, if I were to defend the claim that Romneycare reduced the rate of health-care spending growth, I might make the following points. Mr. Conover is right to note that the recession does play a role in the reduction of the rate of health-care spending growth in the US and Massachusetts. However, much more analysis would need to be done to explain why the recession caused the rate of growth in per capita health-care spending to decline in Massachusetts faster than it did in many other states, including ones with higher unemployment rates.

The recession might explain the absolute fall in the rate of per capita health-care spending growth in Massachusetts, but it does not entirely explain the relative fall as well. In the recession during the early 2000s, Massachusetts was hit fairly hard (its unemployment rate more than doubled between late 2000 and the middle of 2003), but its health-care spending grew at a much more rapid rate than that of the nation as a whole: 14.7% faster in 2001, 20.5% faster in 2002, and 9.7% faster in 2003. So, in the past, an economic slow-down did not lead to a radical narrowing of the gap between US and Massachusetts health-care spending growth rates.

And to return to Mr. Conover's analogy of the pill:

Prior to taking the pill, this individual’s weight relative to the national average was rising 27% every 2 years. After the pill, their weight is still rising relative to the national average, but “only” 5% faster. The individual taking the diet pill is still gaining weight faster than those who don’t. Would you take that pill?

I think I, and most other people, would take that pill (with a couple caveats on the side).* After all, that is still a big reduction in the rate of growth. But I wouldn't stop looking for further treatment, either. Refusing to take that pill (when that pill can be taken as part of a broader health-care regime) would be somewhat like letting the perfect be the enemy of the good.

And more data here will be crucial in adjudicating this point. In 2007, per capita health-care spending in Massachusetts grew 46% faster than it did for the nation as a whole, but, in 2008 (once Romneycare went more fully into effect), it grew 6.7% faster; by 2009, it was only growing 3.8% faster. That could either be a statistical blip or it could be the start of a downward trend in the growth of health-care spending in Massachusetts; there have been times when the rate of growth in Massachusetts spending has slowed compared to the nation as a whole only to explode a few years later, so a couple years is not enough time to demonstrate sufficiently the effects of a health-care policy on spending.

But I think there is a big difference (in terms of policy and in terms of politics) between debating how much Romneycare slowed spending up through 2009 versus debating how much it skyrocketed spending up through 2009. Contemporary political discussion has focused on the latter; federal data suggests that this assumption might be a problematic one.

*Those caveats include a consideration of whether the pill would have other harmful side effects and whether it would work over the long term. The jury is probably still out on Romneycare on both those points. I do not think---and doubt even Romney himself believes---that Romneycare is the magic pill for curing all the nation's health-care concerns.

Minor Programming Update

2012-01-08T18:56:00.000-08:00

On Friday, David Frum announced that FrumForum would be closing down. As readers may know, I had been contributing to FF over the past few years. I wish David Frum and Noah Kristula-Green all the best in their move to the Daily Beast/Newsweek.

In the wake of these changes, I'll still be posting here, but I will also be contributing to the Huffington Post.

The Long Fight

2012-01-08T18:50:00.000-08:00

Moe Lane makes some fair points about the benefits of a longer primary race. I've written before about the advantages of such a stretched out primary process. Deliberation is a good thing, and Republicans have every right to engage in a months-long search for their nominee.

Bending the Curve?

2012-01-04T18:35:00.000-08:00

Via an interesting post by Chris Conover, I came across this recently released National Health Expenditure report, which has data on health-care spending up through 2009. This data includes a state-by-state breakdown of personal health-care spending (a number that includes direct expenditures on health-care but does not include administrative costs).

Digging into these numbers allows one to calculate (roughly) the growth of health-care spending in each state from 1991 to 2007. This data set tells an interesting story for Massachusetts after the passage of health-care reform there: after the passage of Romney's reforms, the rate of per capita health-care spending growth slowed in Massachusetts both in absolute terms and relative to the national average.

Here's a chart I put together looking at the cumulative growth over two periods: from 2004 to 2006 (prior to Romneycare) and from 2007 to 2009 (after the measure was applied). I've included the US national average as a whole as well as the New England average in order to situate Massachusetts in its local context. New Hampshire offers the example of a New England state which did not engage in Romney-style reforms, and Ohio offers a counterexample of a Midwestern state with relatively slower-growing health-care costs. Texas, often touted as an alternative model for the nation, also helpfully sets up a contrast with Massachusetts. This chart looks at the cumulative percentage change in per capita personal health-care spending over the 2004-2006 and 2007-2009 periods.

	Spending Growth 2004-2006	Spending Growth 2007-2009
US National Avg	11.40%	7.86%
New England	9.23%	9.15%
MA	14.51%	8.28%
NH	16.69%	10.10%
NY	10.55%	8.02%
OH	9.56%	7.89%
TX	12.14%	9.05%

Perhaps in part due to the recession, the rate of growth for health-care spending dropped for the nation as a whole (though spending did still grow). However, it's worth noting that, in the years after Romney's reforms went into effect, the rate of growth for health-care spending in Massachusetts dropped even faster than the national average did. Between 2004 and 2006, health-care spending in Massachusetts grew almost 27% faster than it did for the nation as a whole; between 2007 and 2009, it grew only 5% faster. After Romney's reforms, Massachusetts went from having a health-care spending growth rate well above the national average to one just a little bit above. For example, between 2008 and 2009, personal health-care spending increased at a rate of 3.8% in the US, while Massachusetts saw its spending increase by 3.9%. Compare that to the changes between 2005 and 2006: US spending grew at 5.3%, but Massachusetts spending grew at 7.6%. Situating Massachusetts in the context of the rest of New England makes the change in spending rates even starker: prior to Romney's reforms, Massachusetts personal health-care spending grew faster than the New England average most years. After his reforms, it grew slower than the New England average (often having one of the lowest rates of health-care spending growth in the region). These numbers suggest that Texas is doing a worse job at taming the rate of health-care spending growth than Massachusetts (though, for the moment, per capita health-care spending in Texas is lower than that of Massachusetts).

Massachusetts seems to have especially slowed down the rate of growth in hospital spending. Between 2004 and 2006, Massachusetts hospital spending jumped 16.5%; between 2007 and 2009, it only climbed 5.5% (a 67% reduction in the rate of growth). US spending on hospital care grew 12.7% between 2004 and 2006; between 2007 and 2009, it grew 8.6% (a 33% reduction in the rate of growth). Spending in Massachusetts hospitals rose much more slowly than the national average. One of the key premises of Romneycare was that bringing all of the commonwealth into the health-care system would lower the need of hospital use (especially the use of emergency room care) and thereby lower spending at the hospital level. These numbers seem to suggest that something like that may be happening.

In many areas of health-care spending, the rate of growth for spending in Massachusetts either fell more than it did for the nation as a whole or fell at roughly the same rate. This data would seem to muddy the waters for the claim that Romney's reforms caused health-care spending in Massachusetts to skyrocket. Since Romneycare, health-care spending in Massachusetts (at least until 2009) grew more slowly than it did in many other states and also grew much more slowly compared to the rate of spending growth in Massachusetts before Romneycare took effect.

Health-care spending depends upon a variety of factors (including population aging and economic growth), so this data set does not tell the whole story regarding the effect of the 2006 reforms on health-care spending. It does, however, pose a challenge to the argument that Romney's reforms uniquely inflated health-care spending in Massachusetts. In terms of raw health-care spending, Massachusetts seems to have bent slightly down the curve of growth---compared to many other states and, in many respects, the nation as a whole.

(Of course, the rate of growth in health-care spending is not the sole deciding issue for Romneycare: other questions about long-term sustainability, the role of government coercion and spending, and other topics are also very important. Nor is there a direct correlation between health-care spending and private insurance premiums, which seem to have increased in recent years. Moreover, data for years after 2009 might tell a more complicated story.)

(Crossposted at FrumForum)

UPDATE: See this post for more on health-care spending in Massachusetts.

All Tied Up

2012-01-03T18:36:00.001-08:00

In the wake of the Iowa caucuses, what matters now is not the exact order of Romney, Santorum, and Paul; the numbers are very close. What does matter is the range between the candidates. Iowa gives us basically a tie between Romney and Santorum, with both at around 25%. Ron Paul comes out a strong third at around 21%. Gingrich, Perry, Bachmann, and Huntsman, who did not even campaign in Iowa, fall far behind.

Romney did not sew up the nomination tonight, but he took a significant step down the road to the nomination. A few months ago, Romney was polling in the high teens and low twenties in Iowa. Since July, he has had relatively few days where he was in the lead. So a tie today is a not-insignificant accomplishment. It is, however, a limited one: he still remains under 26%. A big win in New Hampshire would be helpful for Romney in breaking the Romney-ceiling narrative. And Romney's people shouldn't be too depressed about the fact that Romney performed at about the same level in 2008 in Iowa: Reagan lost the Iowa caucuses to Ford in 1976 and lost them again to George HW Bush in 1980---he couldn't get above 30% in 1980. Somehow, Reagan still won the nomination, and the presidency, in 1980.

This is a hard night for Rick Perry. He spent more than any other candidate in Iowa and is stuck in fifth place. With Perry's declaration that he is going back to Texas to re-access his path to the nomination, his campaign is in critical condition. Newt Gingrich can't be too happy, either. A few weeks after boasting that he would be the nominee, he is stuck with a disappointing fourth-place showing. Moreover, the path to the nomination for Michele Bachmann now seems almost totally closed down.

Independents were responsible for Ron Paul's performance tonight. Among Republicans, the entrance poll reports the following: 28% Santorum, 27% Romney, and 14% Paul. Among independents, however, the numbers were 44% Paul, 18% Romney, and 13% Santorum. The "independent" number shows a big increase from the 2008 Republican caucuses; with the Democratic caucuses uncontested this year, many Democratic-leaners may have come out for Paul. Due to a number of reasons, it seems quite clear that many Democrats would love to run against Paul.

And, of course, this was a very good night for Rick Santorum. The outstanding question is whether Iowa is a one-off or a route to the nomination. For George W. Bush, it was the latter. For Mike Huckabee, it was the former. Look to see whether Rick Santorum's numbers rise in national polling over the next few days. If they do, those looking for a not-Romney might rally around him.

Santorum has wisely decided to contest the New Hampshire primary. Expanding his brand there will be crucial for maintaining his momentum. There's a reason why many Perry supporters and Gingrich supporters are deriding Santorum's chances of getting the nomination: he's a serious threat to them. If momentum starts to accrue to Santorum, we might see Gingrich and, possibly, Perry focus their fire on him rather than on Romney. We might also see Gingrich choose instead to focus on tearing down Romney in order to keep him from getting the nomination---whether that leads to a Gingrich victory or not. Santorum's victory speech tonight presents a less angry Santorum, one focusing on economic growth and social optimism. Like Romney, he has won in Democratic-leaning areas before.

A few points about the future:

The January 10 New Hampshire Primary: Look at Santorum's and Huntsman's performances. A decent showing in New Hampshire can keep Santorum nationally viable. Huntsman needs a strong showing to keep his campaign vital.

The January 21 South Carolina Primary: This could be a bloody, bloody battlefield. It's hard to see how both Gingrich and Perry make it out of this primary, if they both make it to that point. Perry is especially vulnerable here; Gingrich could have strong, though not winning, numbers and still limp on to Florida. A Romney win here would almost guarantee him the nomination, though he in no way needs to win in order to maintain his leading status. Santorum's numbers will also bear watching.

Premises, Premises

2012-01-03T10:27:00.000-08:00

I think this Daily Caller headline ("Romney Supports, Opposes Free Trade with China") and story assume a bit much:

One day before the all-important Iowa caucuses, former Massachusetts Gov. Mitt Romney continues refusing to clarify his position on free trade with China.

In his 2010 book “No Apology: The case for American Greatness,” Romney argued against protectionism, an ideology that favors tariffs, quotas and other restrictions placed on international trade.

“Personally, I don’t like to see America lose any good jobs,” Romney wrote. “But when I see an American company challenged by a foreign competitor, I don’t look for protectionist policies as an answer to the company’s problems. Instead, I look to see how that company can become competitive once more, drive off its foreign foe, and propel its own products into foreign markets.”

But during the 2012 presidential campaign, Romney has taken the opposite position.

During an Oct. 24 radio interview with the Fox News Channel’s Sean Hannity, for instance, Romney promised that on “day one” of his presidency he would impose new tariffs on trade with China, and classify the nation as a “currency manipulator.”

“At some point, you’ve got to stand up for your rights and say ‘these people are cheating,” Romney told Hannity. “They’re killing certain industries. This just can’t go on forever. It’s simply unacceptable.”

There's only a contradiction here if you believe that the current trade relationship with the People's Republic of China is one of market-based free trade---a contested assumption to say the least. On a related note, David Frum suggests that there may be more depth than mere pandering to Romney's position on the People's Republic of China.

VA Ballot Update

2011-12-29T10:59:00.000-08:00

Gingrich expands on why he was disqualified from the Virginia ballot:

A worker collecting signatures to get Republican GOP presidential candidate Newt Gingrich on the Virginia primary ballot turned in fraudulent signatures, Gingrich told a woman at a campaign stop in Iowa on Wednesday.

Gingrich spokesman R.C. Hammond confirmed the story, which was initially reported on CNN, and said: "We are evaluating our options."

Of the 11,100 signatures the campaign turned in, 1,500 of them turned in by the worker were false, Gingrich said. He said that the campaign needed 10,000 to be placed on the ballot.

Meanwhile, Rick Perry has filed a lawsuit to get on the ballot. Team Perry claims that requiring those who collect petitions to be in-state residents violates the First Amendment.

Pat Mullins, the chair of the Virginia GOP, responds, focusing on the procedural details of the verification process:

Despite this early notice and RPV’s exhortations to candidates, only one candidate availed himself of the 15,000 signature threshold – Governor Mitt Romney. RPV counted Governor Romney’s signatures, reviewed them for facial validity, and determined he submitted well over 15,000. Never in the party’s history has a candidate who submitted more than 15,000 signatures had 33 percent invalidated. The party is confident that Governor Romney met the statutory threshold.

Rep. Ron Paul submitted just under 15,000, and was submitted to signature-by-signature scrutiny on the same basis as the other candidates who submitted fewer than 15,000 signatures. After more than 7 hours of work, RPV determined that Rep. Paul had cleared the statutory 10,000/400 signature standard with ease.

Two other candidates did not come close to the 10,000 valid signature threshold. RPV regrets that Speaker Gingrich and Governor Perry did not meet the legal requirements established by the General Assembly. Indeed, our hope was to have a full Republican field on the ballot for Republican voters to consider on March 6.

The party will discuss the specific nature of their shortfalls if necessary. But the failure of these two candidates to meet the state requirements does not call into question the accuracy of the Party’s certification of the two candidates who are duly qualified to appear on the ballot.

Where Have All the Cowboys Gone?

2011-12-27T09:49:00.000-08:00

Ed Morrissey casts doubt on the hope of an anti-"establishment" TRUE CONSERVATIVE hero to leap in and change the direction of the GOP primary race:

Even if a candidate were to jump in at this late date, it would have to be one who could reliably raise money fast, organize effectively, have good name recognition, be well prepared on policy, and survive the kind of intense vetting that has derailed Cain, Rick Perry, Bachmann, and has deflated Gingrich’s bubble. That’s a recipe for an establishment candidate, not an outsider. We should stop fantasizing about white knights riding to the rescue and focus on the choices we have in front of us now.

Of course, by many contemporary "purist" standards, Ronald Reagan would be demeaned as part of the "establishment" in 1980.

Sunlight Necessities

2011-12-26T10:23:00.001-08:00

The Republican Party of Virginia is on the verge of the appearance of a significant scandal. Allegations, fueled by a post by Richard Winger at Ballot Access News, are swirling, suggesting that the Virginia GOP changed the rules for the validation of signatures in October 2011:

But what has not been reported is that in the only other presidential primaries in which Virginia required 10,000 signatures (2000, 2004, and 2008) the signatures were not checked. Any candidate who submitted at least 10,000 raw signatures was put on the ballot. In 2000, five Republicans qualified: George Bush, John McCain, Alan Keyes, Gary Bauer, and Steve Forbes. In 2004 there was no Republican primary in Virginia. In 2008, seven Republicans qualified: John McCain, Mike Huckabee, Mitt Romney, Ron Paul, Rudy Giuliani, Fred Thompson, and Alan Keyes [Not actually on the 2008 ballot--FB].

The only reason the Virginia Republican Party checked the signatures for validity for the current primary is that in October 2011, an independent candidate for the legislature, Michael Osborne, sued the Virginia Republican Party because it did not check petitions for its own members, when they submitted primary petitions. Osborne had no trouble getting the needed 125 valid signatures for his own independent candidacy, but he charged that his Republican opponent’s primary petition had never been checked, and that if it had been, that opponent would not have qualified. The lawsuit, Osborne v Boyles, cl 11-520-00, was filed in Bristol County Circuit Court. It was filed too late to be heard before the election, but is still pending. The effect of the lawsuit was to persuade the Republican Party to start checking petitions. If the Republican Party had not changed that policy, Newt Gingrich and Rick Perry would be on the 2012 ballot.

Obviously, sudden changes in standards for petitions to get on the ballot can raise a lot of questions.

However, in the 2008 presidential cycle, none other than Erick Erickson was actually complaining about the GOP checking the signatures on the petitions of presidential candidates:

Romney, Fred, Rudy, McCain, Huckabee, and Paul all filed over 15,000 signatures each - well above the recommended minimums.

So what did the Virginia GOP do? Well, they did absolutely nothing to help any of the candidates other than put out clipboards at their state fair booth.

Then they decided to attempt some kind of unprecedented "verification" process. Historically, forms have never been checked by either party, often they never even open the boxes. They gave no one notice of this new process. They sent all the campaigns an email notice the Friday afternoon after they'd all filed their signatures. You can see the memo below. As you can see its a ridiculous attempt to replicate Florida in 2000.

At the time, no one had any idea who the "verifiers" would be or who they supported. Likewise, everyone had questions on what did and did not constitute legitimate signatures. All the campaigns had to lawyer up against their own party. The Executive Director of the Virginia GOP had the nerve to pace the room, during the verification process, in a referee jersey. Likewise, the process for verification changed throughout the day, despite the party sending out its guidelines ahead of time in writing.

So there may have been some verification in the 2008 cycle after all.

Moreover, Richard Winger, in an email to me, admits that the signatures were put through some verification process in 2007. The 2007 checking was "to see how many signatures there were from each U.S. House district, and also how many there were statewide." Winger also believes that the signatures were checked to see if they were notarized (a key requirement for Virginia). He says that signatures were not cross-checked with voter registration forms to ensure that petition signers actually lived in their stated addresses. (I have reached out to VA GOP officials involved in the 2007 count but have not yet heard back from any.)

So there are a few outstanding facts here:

You need 10,000 verified signatures (with at least 400 signatures from each Congressional District) in order to get on the Virginia Republican primary ballot. These signatures must be notarized. This requirement has been in place for over a decade.
In 2007, most of the major GOP candidates submitted over 15,000 signatures and were on the ballot.
In 2011, Mitt Romney submitted more than 15,000 signatures and is on the ballot.
Ron Paul submitted around 15,000 signatures and is on the ballot.
Newt Gingrich and Rick Perry submitted under 12,000 signatures each (fewer than the major candidates of 2008), but were disqualified.

On the last point, the main question is why?

This is where the Republican Party of Virginia can come in and save its reputation.

If Gingrich or Perry were disqualified because they did not get 400 signatures from each Congressional District, it would seem as though the enforcement regime has not materially changed in the past few months (since the same standard was used in 2008).

If Gingrich or Perry were disqualified because enough signatures were not notarized, it would seem as though the enforcement regime has not materially changed in the past few months (since the same standard was used in 2008).

Under either circumstance, there would seem insufficient evidence to claim that any "dirty tricks" occurred.

However, there are plenty of permutations under which "dirty tricks" could have occurred. Only further information can help us sort this out.

Unless there is some legal limitation, it is imperative for the Virginia GOP to make clear exactly why Gingrich and Perry were disqualified. If it can be clearly established that Gingrich's and Perry's campaigns did not follow long-standing rules, then it seems hard (if not impossible) to claim a pro-Romney conspiracy. It seems clear the Gingrich campaign was not particularly familiar with the rules of the Virginia primary, as Gingrich's declaration that he would run as a write-in demonstrates; write-in candidacies are not allowed in the Virginia GOP primary. Moreover, I have seen a few reports suggesting that some of Perry's signatures were not properly notarized. So it's possible that they ran afoul of the rules due not to a sinister conspiracy but due to sloppiness. But I don't know, and neither do those alleging a conspiracy.

Instead of rumors, we need facts. Instead of spin, we need information.

(NB: None of this is an endorsement of the rules Virginia puts in place for getting on the primary ballot. Also, all this is very contingent on information as it comes in.)

(There is an electoral side to this as well. One might tip one's hat at the success of the Perrysphere and Gingrichsphere in shifting the conversation away from the fact that neither campaign could manage to get enough signatures in a significant Super Tuesday state to avoid this debacle---that Fred Thompson's campaign (an operation not noted for its efficiency) outmatched both Gingrich's and Perry's teams. Instead of a narrative of organizational incompetence, they have put forward one of conspiratorial victimization. Whether or not the Virginia GOP is engaged in "dirty tricks," it's quite clear that Barack Obama's team in 2012 will pull no procedural punches. A Republican candidate ill-equipped to fight back on the procedural level is not very likely to sit in the Oval Office.)

(Crossposted at FrumForum)

2011-12-24T10:24:00.000-08:00

Ed Morrissey has a fairly even-handed summary of the ballot issues for the Virginia GOP primary. As it stands, only Mitt Romney and Ron Paul have qualified to be on the ballot. No other candidate submitted enough verified signatures.

Back to 1994

2011-12-23T08:54:00.000-08:00

I appreciate Andrew Sullivan's readers' points in response to my post on the limits of the effectiveness of Wall Street attacks on Mitt Romney:

The democrats lost eight Senate seats that year. In Virginia, Oliver North would
have won a seat if an independent candidate hadn't taken 11% of the vote. The fact that Kennedy still beat Romney in 1994, and by that much, shows how weak Romney is -- as does the fact that if Romney had run for re-election as Governor, he would have lost.

However, there's a little more to that story. Let's hop in the time machine back to 1994 and look at the Republican win/loss record that year. For the seats Republicans gained, we have the following:

Arizona: Jon Kyl wins an open Senate seat (held by a retiring Democrat).
Maine: Olympia Snowe wins an open Senate seat (held by a retiring Democrat).
Michigan: Spencer Abraham wins an open Senate seat (held by a retiring
Democrat).
Ohio: Mike DeWine wins an open Senate seat (held by a retiring Democrat).
Oklahoma: Jim Inhofe wins an open Senate seat (held by a retiring Democrat).
Pennsylvania: Rick Santorum wins over Harris Wofford, who was appointed
to the Senate seat in 1991 and won by less than ten points a special election to hold the seat in late 1991.
Tennessee (1): Bill Frist defeats a 3-term Democratic incumbent.
Tennessee (2): Fred Thompson wins an open Senate seat (Al Gore's seat, held
by a Democrat appointed to it but who chose not to run for it in 1994).

Six of these eight wins occurred in open Senate seats. Santorum's win was over a not-very-established incumbent. So Bill Frist's win was the only Republican Senate victory in 1994 over an entrenched incumbent, and Tennessee was growing a lot more friendly to Republicans than Massachusetts.

Every other Democratic incumbent was able to fend off his or her Republican challenger, even in more Republican-friendly states. These results suggest that incumbency can be a significant advantage in Senate races, even in wave years. They also suggest that Romney's defeat in 1994 is not exactly an outlier.

Beyond Red Meat

2011-12-22T19:31:00.000-08:00

Ronald Reagan's speech at the 1980 Republican National Convention provides a welcome jolt amidst the atmosphere of the current Republican nominating contest. Instead of hypocritical invective and mindless tribalism, Reagan offers a fundamentally optimistic and cooperative narrative of America.

Though this speech has moments of anger, it is not, at heart, an angry speech. Consider some of these lines near the opening:

I know we have had a quarrel or two, but only as to the method of attaining a goal. There was no argument about the goal. As president, I will establish a liaison with the 50 governors to encourage them to eliminate, where it exists, discrimination against women. I will monitor federal laws to insure their implementation and to add statutes if they are needed.

More than anything else, I want my candidacy to unify our country; to renew the American spirit and sense of purpose. I want to carry our message to every American, regardless of party affiliation, who is a member of this community of shared values.

Not a single word about destroying those rotten, freedom-hating "progressives" or "liberals." Not even an invocation of "union thugs"! Instead, we see a defense of anti-discrimination laws and an advocacy for the broader purpose of bringing the country together. Rather than inveighing against enemies, Reagan reaches out to potential allies.

Though Reagan criticizes Carter throughout this speech, his criticism seems to emphasize Carter's incompetence and unfitness for the task of government. He does not claim that Carter hates freedom or despises capitalism or has bad intentions for the country.

A politician today might be denounced by certain factions as a "statist" or "collectivist" for repeating these lines by Reagan:

Isn't it once again time to renew our compact of freedom; to pledge to each other all that is best in our lives; all that gives meaning to them--for the sake of this, our beloved and blessed land?

Together, let us make this a new beginning. Let us make a commitment to care for the needy; to teach our children the values and the virtues handed down to us by our families; to have the courage to defend those values and the willingness to sacrifice for them.

Let us pledge to restore, in our time, the American spirit of voluntary service, of cooperation, of private and community initiative; a spirit that flows like a deep and mighty river through the history of our nation.

Reagan here seems to suggest that the needy should not be blamed for their poverty but helped from it. Praising "private and community" initiatives is not necessarily elevating government actions, but it does dismiss the celebration of selfishness. From this Reaganite perspective, liberty is more than the celebration of private profit; it is also the opportunity to do public good, beyond the scope of the business ledger.

Reagan goes on to embrace RINO apostasy in his defense of the social safety net and Social Security:

It is essential that we maintain both the forward momentum of economic growth and the strength of the safety net beneath those in society who need help. We also believe it is essential that the integrity of all aspects of Social Security are preserved.

This isn't winner-take-all crony capitalism. This is instead a faith in the growth of markets complemented by a compassion for human need.

In this speech, Reagan is a defender of small-government thinking. And he does make a compelling case for it, but this case does not depend upon demonizing his opponents. Reagan knew that venom was the common friend of failure. Instead, a spirit of optimistic faith in the potential of liberty motivates this address.

Reagan speaks from a time when conservatism meant more than having the right enemies, when it offered a vision of bringing together Americans in the dream of a greater freedom. This dream does not merely entail getting rich but also emphasizes building, by oneself and in cooperation with others, a fairer, juster, and happier society.

2012 could be a great opportunity for conservative and Republican politics. If they are to make the most of it, Republicans should keep in mind that Reaganite spirit of hope over despair, unity over division, and empathy over scorn. It's easy in a time of trials to settle into a complacent alienation. But, for the sake of this American republic, it is even more necessary as a matter of civic spirit to work to renew the civic compact and face our problems with temperance, reason, and, yes, some measure of good cheer.

Redistricting California-Style

2011-12-22T09:35:00.000-08:00

California voters (despite the wishes of the Democratic party) recently approved an initiative that requires that Congressional districts be drawn by a nonpartisan commission rather than the state legislature. The aim was to limit the influence of partisan politics in the drawing of districts.

ProPublica has looked into the recent redistricting process in California, and it looks like that aim was not entirely achieved:

The question facing House Democrats as they met to contemplate the state’s new realities was delicate: How could they influence an avowedly nonpartisan process? Alexis Marks, a House aide who invited members to the meeting, warned the representatives that secrecy was paramount. “Never say anything AT ALL about redistricting — no speculation, no predictions, NOTHING,” Marks wrote in an email. “Anything can come back to haunt you.”

In the weeks that followed, party leaders came up with a plan. Working with the Democratic Congressional Campaign Committee — a national arm of the party that provides money and support to Democratic candidates — members were told to begin “strategizing about potential future district lines," according to another email.

The citizens’ commission had pledged to create districts based on testimony from the communities themselves, not from parties or statewide political players. To get around that, Democrats surreptitiously enlisted local voters, elected officials, labor unions and community groups to testify in support of configurations that coincided with the party’s interests.

When they appeared before the commission, those groups identified themselves as ordinary Californians and did not disclose their ties to the party. One woman who purported to represent the Asian community of the San Gabriel Valley was actually a lobbyist who grew up in rural Idaho, and lives in Sacramento...
Statewide, Democrats had been expected to gain at most a seat or two as a result of redistricting. But an internal party projection says that the Democrats will likely pick up six or seven seats in a state where the party’s voter registrations have grown only marginally.

“Very little of this is due to demographic shifts,” said Professor Doug Johnson at the Rose Institute in Los Angeles. Republican areas actually had higher growth than Democratic ones. “By the numbers, Republicans should have held at least the same number of seats, but they lost.”

ProPublica also offers some very interesting insight into the organization of the commission responsible for drawing up districts:

Back in California, the commission was getting organized. Its first task was to pick commissioners. The ballot initiative excluded virtually anyone who had any previous political experience. Run for office? Worked as a staffer or consultant to a political campaign? Given more than $2,000 to a candidate in any year? “Cohabitated” for more than 30 days in the past year with anyone in the previous categories? You’re barred.

More than 36,000 people applied. The state auditor’s office winnowed the applicants to a group of 60 finalists. Each party was allowed to strike 12 applicants without explanation. Then, the state used Bingo-style bouncing balls in a cage to pick eight commissioners — three Republicans, three Democrats and two people whose registration read “decline to state” (California-speak for independent). The randomly selected commissioners then chose six from the remaining finalists to complete the panel.

The result was a commission that included, among others, a farmer, a homemaker, a sports doctor and an architect. Previous redistrictings had been executed by political pros with intimate knowledge of California’s sprawling political geography. The commissioners had little of that expertise — and one of their first acts was to deprive themselves of the data that might have helped them spot partisan manipulation.

The law creating the commission barred it from considering incumbents’ addresses, and instructed it not to draw districts for partisan reasons.

The commissioners decided to go further, agreeing not to even look at data that would tell them how prospective maps affected the fortunes of Democrats or Republicans. This left the commissioners effectively blind to the sort of influence the Democrats were planning.

One of the mapping consultants working for the commission warned that it would be difficult to competently draft district lines without party data. She was overruled.

This lack of political experience and choice to ignore standard political data (such as party affiliation) may have made the commissioners more susceptible to political manipulation.

A question that's not addressed by ProPublica, though, and one that ought to be asked, is what were California Republicans doing during this Democratic effort? Were they simply sitting on their hands?

Limits of Wall $treet

2011-12-20T14:09:00.000-08:00

Some on the right are concerned that Obama would slam Romney as a denizen of Wall Street and that Romney's wealth would prove a hindrance in the general election. While some worries about Romney's business background are more the product of sympathy for other candidates than anything else, there is an element of real anxiety to them, and they are not completely baseless.

However, there are numerous reasons not to overestimate the potential effectiveness of White House attacks on Romney over Wall Street connections.

Perhaps foremost among them is the White House's own very deep connections to Wall Street. Cabinet figures like Tim Geithner and White House allies like Jon Corzine are the embodiment of Wall Street insiders---they make Mitt Romney look like a secretary at the Merrill Lynch branch office in Fargo, North Dakota. Many of Obama's top advisors come from the world of Wall Street. Any attacks on Romney's Street connections immediately open Obama up to the countercharge of hypocrisy: if Wall Street is so bad, why do you choose to people your administration with Streeters and have Wall Street tycoons as central fund-raisers for your presidential campaign?

Charges of hypocrisy here could be particularly damaging for Obama. Despite a lackluster (to put it mildly) administration, Obama still has a chance of winning reelection in part because of the personal affection that many Americans still have for him. The glow of Obama as a political figure who can rise above petty partisan squabbles has dimmed, but it has not entirely vanished. If Obama becomes painted as just another hypocritical political opportunist, his reelection prospects suffer a considerable blow.

Moreover, attacks upon Romney's wealth would make Obama seem more like Walter Mondale than Bill Clinton. Invective-fueled class warfare might be helpful at the margins, but America is still, despite a decade of trials, an optimistic nation. It would seem out of touch indeed for Obama, not exactly a poor man himself, to be complaining about Romney's wealth when millions of Americans are out of work. The American public would much rather see solutions for the nation's problems instead of complaints about an individual's success.

This suggests another limitation for Obama's potential attacks upon Romney's corporate history. It's true that a number of people were laid off due to the actions of Bain Capital (though many others were also hired due to Bain). The media (and maybe some Republican candidates) will be sure to emphasize the lost jobs and displaced individuals. But millions more have lost their jobs in Obama's economy. The disappointments of the stimulus bill far exceed those of Bain. A comparison of Romney's employment record in the corporate world and as governor of Massachusetts with Obama's is not one that would seem to be in the president's favor at the moment. The president's only hope for reelection is to focus on the future; looking to the past will only emphasize the shortcomings of the administration. Obama may think that his administration's accomplishments may possibly exceed those of Lincoln, but most Americans are a little more pessimistic on that point.

Some rightie activists have suggested that Ted Kennedy's anti-Romney strategy in 1994 offers a devastating blueprint for Obama's 2012 strategy against Romney. This parallel should also not be overstated. Kennedy did hit Romney hard on his record at Bain, but Barack Obama is no Ted Kennedy, and the United States is not Massachusetts. Kennedy's 17-point victory over Romney was a decisive one, but 1994 was the only time Kennedy's reelection margin fell below 20 points. Even with all his Wall Street attacks, Kennedy's margin of victory was over 10 points less than it was in 1988 or 2000. Obama lacks Kennedy's electoral cushion; a 10-point swing would end his presidency.

Moreover, in 2002, Shannon O'Brien, the Democratic nominee for Massachusetts governor, tried replicate Kennedy's tactics, but she was not able to copy his success. A close race with a slim Democratic lead according to most polls ended in a 5-point victory for Romney. It would seem likely that such attacks will be even less effective now.

There are obviously topics in Romney's business background that should be investigated more. But Romney also has a number of years of government and public service upon which to run. Obama may hope that class warfare can distract from the nation's poor economic picture, but there is no reason why Republicans should allow that triumph of rhetoric over reality.

Barone on Last Night's Debate

2011-12-11T17:50:00.000-08:00

Some interesting thoughts from Michael Barone:

The ABC commentators seemed pretty sure that Gingrich, the frontrunner in Iowa, South Carolina and Florida polls, and pressing for the lead in New Hampshire, came across ahead. Certainly Romney seemed somewhat more flustered and defensive than he has in most previous debates. Yet I think Gingrich may have sustained more damage than they suggest. Bachmann’s hard-hitting attacks may not have been ignored by Iowans who gave her the lead in polls in that state last summer. And Santorum may finally be making some headway. Any gains for either are likely, it seems, to come more out of Gingrich’s hide than Romney’s. And while Romney did not have a superb night, the spate of negative attacks from and to almost all directions insulates him from the risk which I argue in my Sunday Examiner column he has taken by launching negative attacks on Gingrich. If he were alone in going negative, we might see the dynamic of candidate A attacking candidate B which hurts both A and B and therefore helps candidate C (like John Kerry in Iowa in 2004 after Dick Gephardt attacked Howard Dean). When there’s lots of flak, incoming from all directions and headed in most directions too, the risks for the attacker are likely to be lesser. My conclusion: the plot thickens.

The DNC Really Wants to Run against Newt Gingrich

2011-12-11T17:21:00.000-08:00

Viewers might be a little surprised by the time they come to the end of this ad portraying Newt Gingrich as the "original Tea Partier": it comes not from the Gingrich campaign but from the Democratic National Committee.

Though this ad is meant to be an attack ad with the eye toward the general election, a lot of it might be music to "Tea Party" ears. Beyond identifying Gingrich with the "Tea Party," it also cites his support for weakening Medicare and privatizing Social Security and his interest in ending the Department of Education. It highlights Gingrich's support for capital-gains tax-cuts for the wealthiest (a la Herman Cain's 9-9-9 plan). For some on the "Tea Party" wing of GOP politics, those positions are not electoral problems but instead a banner to rally around.

If Newt Gingrich gets identified as a Washington insider who has made himself wealthy through trading on his political connections and a Protean political operator who can change positions at a moment's notice, he will have a hard time getting the Republican nomination. If he's identified as a "Tea Party" purist, that path to the nomination (though perhaps not the presidency) becomes a lot less daunting.

The DNC is doing what it can to cast Gingrich as that kind of purist and thereby help him win the nomination. Over the past year or so, Democrats have been very effective in shaping the Republican nominating process. After all, the leftist talking point that Romney's Massachusetts health-care reform is the same thing as Obamacare has now become "conservative" purist gospel. Perhaps Democrats will be equally effective in casting Gingrich as a "Tea Partier." According to polls, "Tea Partiers" have been coming into the Gingrich fold in many early Republican primary states, so ads like this could help solidify that tendency.

Electability: Not Yet Settled

2011-12-08T19:49:00.001-08:00

Some on the left and some on the right have been touting today's Quinnipiac poll report on Ohio, Florida, and Pennsylvania, claiming it demolishes the claim that Romney is more electable than Gingrich. As the report shows,

Florida: Romney with 45 percent to Obama's 42 percent; Obama at 46 percent to Gingrich's 44 percent.
Ohio: Romney at 43 percent to Obama's 42 percent; Gingrich with 43 percent to Obama's 42 percent.
Pennsylvania: Obama edging Romney 46 - 43 percent; Obama tops Gingrich 48 - 40 percent.

Romney still outperforms Gingrich in these polls, but not by colossal levels. Ohio and Florida seem like must-win states for any GOP candidate; Calvin Coolidge was the last Republican to win without Florida, and no Republican has won without carrying Ohio.

Yet even if the head-to-head polling doesn't show the biggest difference between Romney and Gingrich, looking at the favorability numbers tells a much different story. For FL/OH/PA, Romney has +11/+4/+4 net favorability ratings (favorability minus unfavorability), respectively. For Gingrich, the numbers are -4/-6/-14. That's a huge swing between the two candidates. In every state except Ohio (where their favorability numbers are tied), Romney has a higher favorability rating than Gingrich, and he has a much lower unfavorability rating in every state. By comparison, Obama has -1/-10/-1 net favorability ratings in these states.

Voters in these crucial swing states seem to have more built-in resistance to Gingrich than they do to Romney. These numbers suggest that Gingrich has a much more uphill battle in these states in winning over the (crucial) undecided voters.

Not Yet Inevitable

2011-12-07T08:13:00.001-08:00

Though Newt Gingrich seems to be styling himself as the inevitable nominee, a look back at the polling in during the Republican primary race in late 2007 suggests that Gingrich's camp should not get too confident yet.

In December 2007, no polls seemed to show McCain as the frontrunner. Instead, Giuliani and a fast-rising Mike Huckabee tended to dominate in polling.

A CNN poll released December 10 showed McCain at 13%, while Giuliani and Huckabee were at 24% and 22%, respectively.

A CBS poll released that same day had even worse news for McCain: 7% of the nationwide Republican primary vote. Meanwhile, Giuliani and Huckabee were cruising at 22% and 21%, respectively.

The Florida primary was a huge step for McCain toward the Republican nomination, but, in early December 2007, he was an also-ran. Polls showed him between twenty and thirty points behind frontrunner Giuliani. As December went on, Huckabee climbed, but McCain remained mired in the low teens.

The dynamic of this cycle has differed from the 2007-2008 primary race in a lot of ways, so this isn't exactly an apples-to-apples comparison. But the fact remains that neither Mike Huckabee nor Rudy Giuliani made it on to the 2008 GOP ticket. The history of presidential politics is filled with candidates who presumed to inevitability after a surge in the polls only to find themselves not quite so inevitable after all (just ask Rick Perry, who seemed on the verge of having a lock on the nomination in the early fall). The GOP primary race is still very much alive.

Conservative Moderation

2011-12-06T21:36:00.000-08:00

Nice points here by Peter Wehner:

My colleague Yuval Levin, in his dissertation comparing Edmund Burke and Thomase Paine(“The Great Law of Change”), points out that Burke believed in the complexity of human nature and the limits of human reason. He warned of the dangers of relying simply on speculative theories and mistaking politics for metaphysics. And he insisted on the importance of learning from circumstances, from the concrete and particular in human life. Burke wrote that government is “a practical thing, made for the happiness of mankind” – not “to gratify the schemes of visionary politicians.” The danger facing statesmen, he warned, is when they view self-government “as if it were an abstract question concerning metaphysical liberty and necessity and not a matter of moral prudence and natural feeling.” This created in Burke an “essential moderation,” according to Levin, a modesty in our capacity to understand the patterns of human nature and the actions of human beings. There is no unified field theory that explains everything.

This doesn’t mean Burke didn’t believe enduring principles should guide our politics; it simply means Burke believed the practical application of those principles in human affairs is difficult and often imprecise, that we have to rely on the accumulated wisdom of those who came before us, that even the wisest among us has an imperfect and incomplete understanding of things, and that radicals can become “blind disciples of their own particular presumption.”

Don't Despair, George Will

2011-12-03T08:45:00.001-08:00

In an interview with Laura Ingraham, George Will despairs of the choice between Gingrich and Romney as GOP frontrunners:

Ask yourself this: Suppose Gingrich or Romney become president and gets re-elected – suppose you had eight years of this...What would the conservative movement be? How would it understand itself after eight years? I think what would have gone away, perhaps forever, is the sense of limited government, the Tenth Amendment, Madisonian government of limited, delegated and enumerated powers — the sense conservatism is indeed tied to limitations on federal authority and the police power wielded by Congress — that would all be gone. It’s hard to know what would be left.

In a column, Will doubles down on this line of criticism. Will is no fan of Romney, but he is an even bigger opponent of Gingrich, whom he calls the least conservative candidate. Instead, Will suggests Rick Perry and Jon Huntsman (whom more and more pundits have been giving a second look) as "conservative" alternatives.

I'm not sure that Will's despair here is entirely justified, however. After all, look at some of the salient points of George W. Bush's domestic record:

Tax-cuts that were not offset by spending decreases and thereby added to the deficit (It's amusing to read a Heritage report from 2001 that predicted that the Bush tax-cuts would lead to the near-elimination of the federal debt by 2011.)
Exploding government spending
Anemic economic growth (well below the averages of past decades)
Enormous deficit spending
No Child Left Behind, which sets the stage for the federalization of public education and was probably the greatest expansion of federal power over education that the nation has ever seen
Sundry other expansions of federal power, including the ban on the traditional tungsten incandescent bulb, which currently has conservatives up in arms
A housing bubble (which the administration's policies encouraged)
A near-economic meltdown

This list is partial, and doesn't consider the cases of the almosts that the Bush administration fought hard for but failed to achieve (such as Justice Harriet Miers). Bush's whole "compassionate conservatism" was premised on expanding federal power in order to achieve certain "compassionate" ends.

Somehow, small-government conservatism survived President Bush, and I see no reason why it could not survive some of the GOP presidential contenders, some of whom have a far more conservative campaign theme than Bush ever did. For example, though Will derides Romney as a "manager" or something, Romney's proposed policies would seem to have no small potential for promoting the aims of small-government conservatism.

To return to Will's column attacking Gingrinch for a moment, there's another point I'd like to look at:

Romney’s main objection to contemporary Washington seems to be that he is not administering it. God has 10 commandments, Woodrow Wilson had 14 points, Heinz had 57 varieties, but Romney’s economic platform has 59 planks — 56 more than necessary if you have low taxes, free trade and fewer regulatory burdens.

I think this formulation is a little glib. Consider "fewer regulatory burdens." The fact is that we currently live amidst a complex of regulations. Every regulation depends upon every other regulation (as traditional conservatism would recognize). So it's not enough to get rid of regulatory burdens but to revise these burdens in the right way. Under Bush, certain regulations were gotten rid of, but the intersection of this "deregulation" and other regulations that were kept in place brought American to the brink of a financial collapse. Will may sneer at technocratic tendencies, but skill in finessing current regulatory regimes would be no small aid to small-government policies.

(Crossposted at FrumForm)

Rasmussen or PPP?

2011-12-01T19:00:00.000-08:00

Two polls, two different results.

Rasmussen released an interesting poll the other day that showed Newt Gingrich outpolling Barack Obama 45-43 in a hypothetical general election matchup. That would seem to be relatively good news for Gingrich.

However, PPP, which released a poll showing Gingrich with a huge lead in the Florida GOP primary, also has polling on the general in Florida. Those numbers tell a very different story. Based on PPP, Gingrich falls six points behind Obama, 44-50. (Mitt Romney, on the other hand, is within the margin of error against Obama, 44-45.)

It would seem that a GOP candidate that far behind Obama in Florida on election day would have a hard time winning a national majority. The last Republican to win the White House and lose Florida was Calvin Coolidge in 1924.

So which is right---PPP or Rasmussen? Time, and more polling, will tell.

A Conservative Case for Mitt Romney

2011-11-29T19:29:00.000-08:00

Many have raised various arguments for why Mitt Romney is the best candidate for Republicans. The conventional narrative goes something like this: Romney's electability outweighs his moderation, so conservatives would be better off with half a loaf with Romney than with no loaf with Obama. The claim of electability is no small advantage, but I'm interested in exploring things from a slightly different perspective: the case for Romney as the best candidate from a conservative perspective as a matter of principle and not mere electability. So here's a thought-experiment along those lines:

First of all, an identification of the problem: America has currently slipped into the Bermuda Triangle of big government, big declines for the middle class, and big deficits. As more economic power concentrates in the hands of an increasingly small minority, this minority is more able to wring benefits from a bigger centralized government. Meanwhile, the struggles of the middle and poor make a large number of voters susceptible to the claims of increasing government power (even if this power is increasingly used to benefit the few). The stagnating economy for most Americans drives down tax receipts and puts a further strain on social welfare programs, leading to deficits as far as the eye can see.

A market-based economic policy that ignites growth for most Americans could detonate this triangle. The past decade or so has witnessed the winnowing of the middle class, and a set of policies that empower the middle could pave the way for new wealth for both the top 1% and the bottom 99%. Among top-tier presidential contenders, Romney seems well-poised to promote such a set of policies. Conservatives who are serious about setting the nation's fiscal house in order must turn their attention to the economy. Economic revival will slash short-term deficits and give the nation breathing room to engage in longer-term reform as it is necessary. The defense of the middle class should be more than just a partisan talking point: it serves a key interest of principled conservatism.

One might suggest Dwight Eisenhower as Romney's closest recent Republican presidential nominee ancestor, though Romney lacks Eisenhower's impressive military record and Midwestern charm. However, like Eisenhower, Romney has been viewed with suspicion by the right wing of the Republican party. Eisenhower Republicanism has been treated with disdain by many "conservative" activists, but the nation---and conservatism---could do worse than a president in the spirit of Eisenhower. After all, look at some of the things Ike did: oversaw a period of great economic growth for all ranks of Americans, helped stabilize global affairs, invested in new technologies, vastly enriched the American infrastructure, balanced the federal budget (a feat basically unmatched by any of his Republican or "conservative" successors), cracked down on the employment of illegal immigrants, and reformed some of the excesses of the New Deal. As a lifelong soldier like Eisenhower might have best been able to warn against the dangers of a military-industrial complex, Romney, with his experience in the world of Wall Street, might best be able to divert a finance-governmental oligarchy.

As a point of practice, Eisenhower put forward policies that responded to the nation's concerns and achieved, on many points, more conservative results than can be boasted of by certain "conservative" icons. One might hope the same thing for Romney. There might be a whiff of the technocrat about Romney, but it should not be forgotten that a technocrat, in order to be successful, must bow before the reality principle.

Conservatism is not about the drum-circle therapy of glib policy axioms cited over and over again. It's about applying principles to real-world situations. Classical conservatism is an empirical enterprise. It's not enough to aver that government regulations are always the problem; particular regulations have to be examined and their implications (and the implications of their repeal) analyzed. For example, the regulatory revisions of the financial markets in the late 90s and early 2000s helped lead to the meltdown of 2008; disregulation intersected with existing government policies and entities to fuel a mortgage and financial bubble. Singing hymns to the badness of the federal government is no substitute for acknowledging that recklessly pulling blocks from the social-governmental Jenga tower can easily lead to collapse. If we are going to reform some fundamental economic institutions and practices, we would be wise to have reformers who are confident with policy arcana and show a skill in assimilating a broad range of viewpoints. Romney seems such a reformer.

Romney seems to understand that a strong middle class has been a key driver of American prosperity and republican liberty. The Union victory in the Civil War and the US triumphs in World War II and the Cold War relied upon an industrialized middle class. He also seems more aware than some of his fellow Republican candidates that production and skills provide a better foundation for long-term economic growth than does resource extraction. Economic opportunity is a complement and ally to political liberty. Economic opportunity does not always lead to political liberty, but radical economic stagnation usually places a liberal, democratic republic under great strain.

The technocrat in Romney can read the charts that amply demonstrate the weakening economic power of the vast majority of Americans. With his family heritage in car country, Romney probably remembers Henry Ford's principle that it is ultimately in the best interests of the owners of capital for labor to earn more money; further disposable income for the middle class provides the fuel for economic growth. Romney is doing more than pandering to economic anxiety when he says that he is "not worried about rich people": he is pointing to an acute and real economic problem. The fact that Romney has been attacked on the right for daring to focus on the middle class reveals how out of touch certain factions of rightist orthodoxy are at risk of becoming.

While some of his rivals are defending an endless flow of non-citizen labor and tax programs that would raise rates on the poor and middle while slashing them for the rich, Romney has been outlining policies that defend the middle class, the historical pillar of democratic republics. He has moved beyond the principle that tax cuts are the magic solution for economic growth. This fixation on tax cuts has been one of the biggest anchors around the neck of conservative renewal. On many issues, Romney challenges so-called "conservative" orthodoxy and reshapes it into something more vital and, frankly, more conservative. He supports turning off the magnet of labor for illegal immigrants by punishing employers who knowingly hire them. Rather than stuttering invocations about a digital (or electric) fence or boots on the ground at the border, he has turned his eye on the engine that drives the influx of illegal labor: jobs. More than any leading Republican presidential contender in decades, Romney is running against the United States's unilateral trade disarmament, attacking the People's Republic of China's "great wall of protectionism." Conservative thinking has increasingly come to realize over the past few years that the current trade regime is not exactly real "free trade," and Romney finds himself on the cutting edge of this trend. Romney as a 2012 GOP nominee would have a stronger stance on immigration enforcement than any GOP nominee in many an electoral cycle; many of his Republican rivals have a far weaker record on immigration enforcement.

Perhaps some of this concern for the economic interests of the middle class is just talk, but words in favor of needed reforms are probably better than blather against such reforms. There are many reasons why Barack Obama and his allies anticipate having an identity-driven attack on Romney (i.e., "He's a scary rich person!!!"): perhaps foremost among them is that the Obama White House represents in many ways a continuation of the economic policies that have perpetuated a decade of stagnation. From poor trade policies to big-business cronyism to little real reform of the financial system (we are not yet past the banking era of too-big-to-fail), Obama and his Democratic allies have left the economy just above neutral. Trillions of dollars in deficit spending have kept the nation barely treading water, while not enough has been done to offer the necessary structural change in the economy to guard against another collapse and offer the opportunity of sustainable economic growth. Based on his current economic blueprint, Romney would seem to offer an alternative to prevailing low-wage paradigm: a free-market policy emphasizing investment in human capital.

Of course, Romney, like any other candidate, is not without his flaws. But these flaws need not cripple a Romney candidacy.

In many respects, Romney's identity as a serial "flip-flopper" has about as much basis in the truth as Obama's identity as a super-genius political orator-philosopher: both are media narratives that may obscure more than they reveal. It's true that there have been some changes in Romney's public stances, but a number of his biggest "flip-flops" result from the contrast of his positions today with those of 1994, which was almost twenty years ago. Fewer than twenty years before he became the great conservative hope, Ronald Reagan was also a registered Democrat. Many of Romney's "flip-flops" are often exaggerated or distorted. The fact that a 2008 McCain campaign briefing book assails Romney's change of favorite movie from 2003 to 2007 as a "Top Romney Turnaround" demonstrates the utter triviality of some of these accusations. Some of his position changes (such as abortion) have occurred through the evolution of basic principles; others have come about as a result of changing circumstances (a tax policy recommendation in 2002 might not make as much sense as one in 2007, for example). It's often good for a politician's opinion on a policy option to adapt to new circumstances---that's called responsible government. Furthermore, I'm not quite sure how angry conservatives should be with an individual who comes to agree with them more.

And it seems as though many of Romney's "flip-flops" are no more extensive than those of many of his Republican rivals or many politicians, period. After all, Barack Obama campaigned against a health-insurance mandate, which is now central to Obamacare, and Reagan signed one of the nation's earliest laws liberalizing access to abortion. From a true conservative perspective, what ultimately matters is not whether a candidate is a member in good standing with the "movement" (a notoriously unconservative term), but whether this candidate shows some level of thoughtful integrity and can actually govern in a way that advances the principles of classical liberty. Whether Romney joined the "club" early enough or not should not captivate conservative thinking about him---this is politics after all, not the Seattle alternative music scene.

Romney's health-care reform in Massachusetts was less than perfect, to say the least. But this plan drew from mainstream, pre-Obamacare conservative thinking. It tried to cope with the fundamental problem of one of the greatest federal unfunded mandates (a Reaganite policy, by the way): the federal demand that hospitals treat patients regardless of their ability to pay or their insurance situation. The underlying assumption of Romneycare was that, since the state demands private entities (such as hospitals) provide health-care, the state will demand that consumers purchase health insurance if they can afford it; if they can't, the state will step in and provide subsidies to ensure that they can purchase this insurance. At its base, this idea has some (but only some) resemblance to Paul Ryan's Medicare reform proposal, which would give income-dependent vouchers for health insurance to the elderly. Another premise of Romneycare was that universal access would ensure a healthier population and slow the growth of health-care costs. All that Romney and his conservative allies had hoped for has not come true, and Romney's reform will itself need to be reformed. But he at least tried to solve a real issue. He took up the challenges of governing in a state dominated by Democrats, where his vetoes easily could be and were overridden. Rather than fruitlessly complaining, he tried to forge a workable compromise. Governors of many states have to compromise, and conservatives risk eliminating a big chunk of the political talent pool if they reject all governors who have have worked with Democrats (that is, governors who do not have big Republican majorities in their state legislatures).

Some on the left may find Romney more palatable because of his presumed "moderation." But conservatives should make no mistake: a Romney who lives up to his potential (a technically adept president with center-right instincts who renews the American economic architecture) could offer a national order significantly favorable to small-government classical conservatism. Technocratic skill could prove a real boon in unraveling bureaucratic dysfunction and in charting the course of reform conservatism. Reform of the financial world, medical sector, and manufacturing base could put America in the position to seize the opportunities of the twenty-first century.

Immigration Fallout

2011-11-23T09:08:00.000-08:00

Mickey Kaus deconstructs Gingrich's position on the mass legalization of illegal immigrants:

5) For recent and future illegal immigrants, the key apparent features of the Krieble Plan–the unlimited number of “red cards” and the ease of obtaining them**–effectively means something close to open borders. Millions of impoverished workers now living abroad could flood the U.S. labor market legally. Krieble’s plan is similar to the Papoon for President drug plan, which would “eliminate all illegal drugs” by simply making them all legal. Krieble similarly ends illegal immigration effectively legalizing it (“a country where there’s no more illegality,” as Gingrich put it).

And these unlimited legal “red card” workers would all return home, of course, right? And they’d be happy with second-class, non-citizenship status?

6) In embracing the Krieble plan, Gingrich fatally abandons the logic of “enforcement first,” which is that if you secure the border you can eventually have an amnesty–because the secure border will then be able to keep out future waves of wannabe illegals whom the amnesty will inevitably attract. If you really have a secure border, after all, you don’t need the unlimited Krieble red card plan, which would inevitably have a depressing effect on American wages (especially for the unskilled). Instead, the secure border would allow a numerically limited guestworker program, big enough to serve employers without having a major effect on wages, capable of being increased or decreased as market conditions changed.

Why would Gingrich want to control the border and then allow open borders–effectively unlimited unskilled future immigration–anyway? The main point of “controlling the border” is to prevent that.

Mark Krikorian piles on:

So the Gingrich Amnesty would cover illegal immigrants here when Congress passed IRCA. That is to say, it would pick up where the previous amnesty left off, legalizing precisely those people who didn’t qualify for IRCA. This just underlines what a chump you have to be to support any deal offered you by amnesty supporters.

Which is why “enforcement first” is the only way to go: consistent, unapologetic, across-the-board enforcement of the immigration law at our consulates overseas for visa applicants, at the borders, and inside the country, especially at the worksite — without preconditions or deals or grand bargains. Only after we’ve done that consistently — comprehensively! — for a sustained period of time and attrition has reduced the total illegal population by half or more is amnesty for some of those remaining even a legitimate topic for debate. For prudential reasons I might well be for amnesty under those conditions — I’m not an absolutist on the issue (though I don’t like second-class citizenship — if you’re going to amnesty someone, just do it and steer clear of Helen Krieble’s silly “red card” gimmick, which was the source of Mike Pence’s amnesty plan, too). But amnesty can only be the final chapter, not an opening gambit.

Accepting Reality

2011-11-21T17:47:00.000-08:00

David Frum has an incisive (and controversial) essay up about his struggles with Tea Party-style Republican orthodoxies. There's much that's on target here, though some I disagree with. This paragraph has considerable merit:

Some call this the closing of the conservative mind. Alas, the conservative mind has proved itself only too open, these past years, to all manner of intellectual pollen. Call it instead the drying up of conservative creativity. It’s clearly true that the country faces daunting economic troubles. It’s also true that the wrong answers to those problems will push the United States toward a future of too much government, too many taxes, and too much regulation. It’s the job of conservatives in this crisis to show a better way. But it’s one thing to point out (accurately) that President Obama’s stimulus plan was mostly a compilation of antique Democratic wish lists, and quite another to argue that the correct response to the worst collapse since the thirties is to wait for the economy to get better on its own. It’s one thing to worry (wisely) about the long-term trend in government spending, and another to demand big, immediate cuts when 25 million are out of full-time work and the government can borrow for ten years at 2 percent. It’s a duty to scrutinize the actions and decisions of the incumbent administration, but an abuse to use the filibuster as a routine tool of legislation or to prevent dozens of presidential appointments from even coming to a vote. It’s fine to be unconcerned that the rich are getting richer, but blind to deny that middle-class wages have stagnated or worse over the past dozen years. In the aftershock of 2008, large numbers of Americans feel exploited and abused. Rather than workable solutions, my party is offering low taxes for the currently rich and high spending for the currently old, to be followed by who-knows-what and who-the-hell-cares. This isn’t conservatism; it’s a going-out-of-business sale for the baby-boom generation.

Robert Stacy McCain thinks that some of the problems Republicans have run into have resulted from a conflation of Republican politics and conservative principles, so that many non-conservative Bush-era policies were identified with conservatism. I think one thing Frum is trying to get at is that many so-called "conservative" policies function in highly non-conservative ways.

I think there's a tension to this part of McCain's response, though:

Frum is a wonk very much concerned with the question of what legislative and policy initiatives can be feasibly enacted (and politically defended) by Republican elected officials. That’s a very different thing than declaring, broadly, what the ultimate objectives of the conservative movement should be.
For example, were it in my power to accomplish one thing in Washington, D.C., the federal Department of Education would be abolished and its employees summarily dismissed from public service. Except for funding necessary research and providing educational benefits for military veterans, we would get the federal government entirely out of the education business.
This is not how wonks talk or think, however, because nobody in Wonk World has that kind of profound loathing for federal bureaucracy. When you suggest a genuinely bold proposal like zeroing out the Department of Education, a Republican wonk immediately imagines the hue and outcry from the Democrats, the teachers unions, and the New York Times. They can’t imagine Republicans withstanding such angry criticism and, they’ll point out, Reagan never followed through on his promise to abolish the Department of Education.

But, OK, say you want to get rid of the Department of Education, and say you that desire doesn't change the fact that it very likely will not be abolished? If it is going to exist, how can you make it run in the most effective and conservative way possible? That's not an incidental question (nor do I mean to suggest that McCain thinks it is). And it is precisely that kind of question that Republicans and conservatives need to think the hardest about.

Path to Reform

2011-11-16T09:24:00.000-08:00

Rod Dreher has some interesting reflections here on the need for reform within conservatism:

The complaint I’m making here is not that any of these views are wrong (that’s another argument), but rather that the conservative movement and the Republican Party is so driven now by hidebound orthodoxies that it’s by and large unwelcoming to innovative thinking and creative challenge. This is unconservative, if conservatism is understood as the opposite of ideology, as Kirk had it. The whole idea of the RINO is what political correctness looks like when it manifests on the Right.

Executive Supremacy

2011-11-15T20:17:00.000-08:00

Though Rick Perry's plan to "reform" Washington has been getting a lot of press, I think there is something that should especially be emphasized about it, one that does not bode well for classical conservatism: Perry's plan seems a recipe for radically increasing the power of the executive branch. Here are some of the principles:

Ending the practice of giving lifetime appointments to federal judges (current judges would not be affected);
Cutting Congressional pay in half;
Cutting Congressional pay in half again if they don’t balance the budget by 2020;
Cutting Congressional office budgets in half;
Cutting the Congressional calendar by half;
Criminalizing insider trading by Congressmen;
Reducing spending to 18% of GDP;
Privatizing Fannie & Freddie;
Ending the funding of Planned Parenthood;
Eliminating the Commerce, Education, and Energy Departments;
Getting the EPA under control;
Getting the TSA under control;
Audit the government, including the Department of Defense;
Freeze incoming federal regulations, and audit all of them for the last five years;
Federal salary freeze for all non-military and non-law enforcement officials until the budget is balanced;
And cutting the Presidential salary in half until the budget is balanced

There's a lot here---some of it good, some of it not so good. Let's focus on Congress for the moment. One of the key levers of power for Roosevelt's New Deal and, more broadly, the modern presidency is its corps of bureaucrats and analysts; the Executive Office alone has at least 2000 or so staffers. The president has access to layers and layers of information. This access gives the president great influence in shaping the annual budget and the details of policy. Members of Congress may propose laws, but the substance of these laws often has considerable White House backing.

Congressional staff provide at least a partial check on the data power of the executive branch. By undermining Congressional staffs through salary cuts, one also undermines the ability of Congress to shape the information narrative and write legislation. Meanwhile, cutting Congressional pay might seem an invitation to more petty corruption.

One can say this about Rick Perry with some confidence: he knows how power works. As Governor of Texas, he has shown considerable skill in centralizing power through a cunning use of the appointment powers of the governor and through legislative maneuvering. He knows that power abhors a vacuum and that a diminution of Congress's power will give the president a further opportunity to exercise power. A few Cabinet departments may be eliminated under Perry's plan, but those agencies under the president's direct control will have plenty of room to grow.

Any talk of cutting government employment may elicit shouts of glee from many on the right. But conservatives need to ask themselves whether it advances the cause of smaller government to reform the federal government so that the centralized executive branch has even more power.

(Crossposted at FrumForum)

Unity over Division

2011-11-09T09:21:00.000-08:00

The defeat of Ohio's anti-union Senate Bill 5 will be hailed by both righties and leftists as a defeat for conservatism. Perhaps due to my skepticism about how authentically conservative that measure actually was (here I might differ a bit with Mytheos Holt), I'm not so sure about that. But it is a defeat for a certain set of political tactics and suggests that a route Republicans recently have surged down may be a bit of a dead end.

John Kasich has no small potential as a governor. However, he has fallen into an unfortunate trap: rather than focusing on selling an economic plan that brings opportunity to all, he instead chose to back a series of reforms that had the appearance of pitting Ohioan against Ohioan. In a way reminiscent of Scott Walker's policies in Wisconsin, Kasich offered a combination of tax cuts and spending cuts and then added a capacious anti-union measure on top of that.

Unlike Walker, Kasich chose not to buy off interest groups by making his anti-collective bargaining apply to all public workers---not just clerks and teachers but also firefighters and police officers (Walker exempted the last two groups). This act of principle only made the issue seem even starker and helped unite a union coalition against this measure. Moreover, certain parts of SB5 reach far beyond cost-saving measures and offer a fundamental restructuring of key parts of Ohio's public service infrastructure. For example, banning tenure for future teachers and tying teacher pay to student performance on standardized exams would have consequences that reach far beyond the government coffers.

Though hating unions has become an increasingly "in" thing for many in the conservative base, many Americans view unions, private and public, as a bulwark of the middle class, which has been subjected to such stinging attacks over the past decade. Economic anxiety about the decline of the middle has, in Ohio and other places, been translated into a defense of unions.

Analysts left and right are speculating about the importance of union spending in tipping the balance, but we should not overestimate the effects of this political spending: a majority seems to have always supported repeal. When Quinnipiac first started polling the repeal of SB5 in May 2011, 54% of respondents backed a repeal. By late October 2011, support for repeal had climbed up to 57%, a definite increase but not a game-changing one. 61% of voters eventually came out in favor of repeal. SB5 was never a popular piece of legislation. Union spending might have increased the margin of victory, but I think Republicans needed more than slick ads if they wanted to win on this issue in Ohio.

The overwhelming victory for Issue 3 (which would ban the enforcement of a federal health-care mandate) shows that conservatives can still get commanding majorities on the question of federal overreach. The defeat of SB5 shows that union-bashing may make for viscerally enjoyable talk-radio, but it may not be the best electoral tactic. Despite propaganda to the contrary, the United States can afford a vigorous public-sector employment field and can even afford public-sector unions. (There is a case to be made against public-sector unions, but fiscal sustainability may not be the strongest grounds for it.) But such expenses can best be afforded under conditions of economic health. Republicans would be far better off working toward an optimistic vision of economic opportunity for all than trying to castigate certain portions of the American public as parasites, vermin, and thugs. Faith in the American people is an ally of small-government thinking. Ronald Reagan understood this alliance and was able to forge an electoral message that combined economic growth with a sense of national fellowship. The defeat of SB5 may yet bring conservatives and Republicans to appreciate the wisdom of this Reaganite principle.

Kristol: 1980 Is Long Gone

2011-11-06T07:27:00.000-08:00

Bill Kristol suggests that conservatives should not be held hostage by the nostalgia for 1980:

For every American conservative, not once but whenever he wants it, it’s always the evening of November 4, 1980, the instant when we knew Ronald Reagan, the man who gave the speech in the lost cause of 1964, leader of the movement since 1966, derided by liberal elites and despised by the Republican establishment, the moment when we knew—he’d won, we’d won, the impossible dream was possible, the desperate gamble of modern conservatism might pay off, conservatism had a chance, America had a chance. And then, a decade later—the Cold War won, the economy revived, America led out of the abyss, we’d come so far with so much at stake—conservatism vindicated, America restored, a desperate and unbelievable victory for the cast made so many years ago against such odds.

But that was then, and this is now. Now is 2012, and it seems clear that 2012 isn’t going to be another 1980. The reality seems to be that we’re not going to have a chance to replay that election, with (at least in the hazy glow of retrospect) a compelling conservative leader of long standing but ever youthful, a man who stood tall and spoke for us and for America, riding gracefully to victory over the GOP establishment in the primaries and over decadent liberalism in the general election. Assuming the presidential field stays as it is, 2012 won’t be a repeat of 1980.

As Kristol goes on to note, the fact that the 2012 dynamic seems like it will be different from that of 1980 might not be the worst thing in the world: there are other models for successful presidential campaigns than Reagan's.

Bill Jacobson thinks that we should blame conservative "technocrats" for this difference. Instead, I tend to think that, in order for conservatism and Republicanism to grow, it cannot be held hostage to a single electoral model. Yes, Reagan did a lot of good things as president. But some of what Reagan ran on in 1980 is no longer applicable (I don't think diplomatic relations with the Soviet Union are exactly a pressing issue anymore). And there are plenty of issues where Reagan's talk didn't exactly align with his actions; the Department of Education, which he ran on abolishing, only grew during his tenure. Furthermore, there are other points where self-styled "conservative" purists would excoriate Reagan for his governance. Of the current top-tier presidential candidates, the one whose stance on Social Security is closest to Reagan's is probably Mitt Romney, a man derided by many purists as a technocrat.

History changes, leading to new issues and new policy alignments. A political coalition unable to create narratives to cope with these changes is one that is fated to wither. In an interesting post earlier this week, Ace at Ace of Spades HQ argued that the hunt for the "Great Conservative Candidate" can sometimes substitute wishful thinking for realistic reflection. Conservatives cannot afford to let nostalgia displace critical thinking. As much as he admired Calvin Coolidge, Reagan did not try to put in place a Coolidge economic program. He adapted certain small-government principles into new policies. Conservatives would be wise to follow in the spirit of this example.

Toward A Foundation-Up Economics

2011-10-25T17:32:00.001-07:00

Perhaps the greatest single threat to both conservatism in American life and the nation's economic vitality is not Ivy League professors or Hollywood elites or a sinister "progressive" conspiracy but the economic decline of the middle class. Take away hope in the churning of the free market, and you push many citizens considerably closer to the state as a provider. The turmoil of the markets in 2008 was merely the cataclysmic icing on top of the cake of a decade of lost ground for the bottom 90% of workers. Take that away, and an Obama victory would have been much less of a sure thing (and even such a victory would have been considerably moderated). If insurance premiums and coverage rates had been closer to those of 1993, Obamacare, the bette noire of conservative activists, would not have passed. The economic wasteland of the past few years has pushed more than a few public and private pension plans closer to the edge of insolvency.

The recent Congressional Budget Office report on incomes from 1979 to 2007 has depressing news for believers in egalitarian free-market capitalism. Since 1979, the after-taxes income of the bottom 80% of Americans as a share of the total national after-taxes income has dropped from 57% to 47%; every one of the first four quintiles has seen a drop in its share of the national income. Yet even the gains in economic strength for the top quintile have been unevenly shared. The 81st-99th-income-percentile range has seen its share of the national income stay the same. Meanwhile, the top 1% of earners have seen their share of the nation's after-taxes income climb from 8% in 1979 to 17% in 2007. These numbers suggest that the profits of the national economy (broadly considered) have increasingly flowed to the top.

There are broader policy reasons that explain this change. For much of the past decade and beyond, the prevailing Republican (and, frankly, bipartisan elite) orthodoxy has been as follows: lower wages, lower prices, and an empowerment of capital over labor. The CBO numbers reflect this dynamic, as they show the share of income due to labor declining since 1979, while the share of income due to the combination of capital and business income increasing. The claim made continually on behalf of statist globalization over the past twenty years has been that lower prices on various goods through cheaper labor would reward the American consumer, and that the increase in spending power on tchotchkes would exceed the decline in wages due to outsourcing. Similar claims have been made on behalf of massive amounts of illegal immigration: poor workers in the shadows enrich Americans as a whole through providing a plentiful peon class to act as babysitters, home-builders, fast food workers, and other assorted "service" positions.

This decline in labor cost provides a de facto empowerment of capital: if you earn money from investing rather than collecting a paycheck, having cheaper resources of labor allows your dollar to go much further. The "ownership society" sought by President Bush attempted to leverage this dynamic. By making as many Americans investors as possible (especially through investing in the housing market), the Bush administration tried to place hundreds of millions of Americans in the position of the victorious investor class in order to compensate for the decline of the labor class.

However, there are noticeable shortcomings to this model. First of all, not all Americans can join the investor class, so a substantial number of Americans lose out in an investor-centric model. Moreover, housing, the investment vehicle favored by the Bush administration, is a dangerous institution on which to base an investor-centered economy: an individual house is nowhere near as fluid an investment vehicle as a stock portfolio, and the fact that most people need somewhere to live complicates the role of a house as an investment commodity. Since most people need to take on a mortgage in order to buy a house, using the house as the doorway to the investor market requires Americans to take on considerable amounts of debt, and the debt needed to keep the housing-investing game going will balloon (as the 2000s proved).

And the decrease in prices due to cheaper labor is not spread equally across all sectors of the economy. Those sectors least undermined by outsourcing and domestic and international low-skilled workers, such as health-care, have seen some of the biggest price increases over the past decade. Jeans at Walmart may be less, but your health insurance premiums have doubled. With wages stagnating or declining, health-care bills and others like them eat more and more into a worker's paycheck. So the decline in wages is not fully compensated for by cheaper goods and services.

A final limit for the low wages=low prices model is that the consumer often does not feel the full price benefits of the decline in worker wages. Instead, the "savings" that many companies find through shipping work abroad or otherwise cutting labor costs are translated into bigger compensation packages for elite management and the investor class. While current "globalization" has witnessed the decline in wages for the middle and working classes, it has also seen the the pay of upper management (those who control large amounts of capital) increase. The recent history of American business is saturated with stories of companies that close down their American factories while giving upper management colossal paydays. So many of the presumed benefits of declining wages are accruing to an increasingly narrow band of the population.

With wages shrinking and the spigot of easy credit turned off, it's no wonder that public demand has withered.

What might be slightly more interesting, though, is a movement among some factions on the right and left toward a policy reversal: using higher wages and not lower wages as a stimulant for economic growth. Under this model, rising incomes for working- and middle-class workers would increase consumer demand. Rather than the cost of jeans production going down, workers would have more money to spend on jeans---and housing and cars and medical care and foreign trips. Economic growth for the bottom 90% of wage-earners would in turn provide new opportunities for the top 10%. Things weren't exactly bad for top-tax-bracketers during the egalitarian 1950s and 1960s or during the later part of the 1990s, when the income of a broader range of Americans increased in real terms (though income inequality increased in the 90s, as well). Rather than trickle-down economics, we would instead have foundation-up economics.

Nurturing this foundation in part depends upon increasing the skill level of the American workforce, so that workers can make the most of cutting-edge technologies. Education as driving future economic growth has perhaps acquired the somewhat dusty ring of tired dogma, but, like many things that may seem trite to the jaded, it has some truth to it. Reforming our immigration system, making new investments in fundamental research, and pushing back against social dysfunction (among other policies) would go a long way in the direction of improving the skills of America's workforce and would likely improve the wages of many workers.

But mere training is no panacea. With all due respect to current education "reform" movements, people are not mere containers for educational inputs; they exist in vibrant, heterogeneous communities, where all do not all have the same aptitudes. America will not and probably cannot be a nation populated solely by Facebook founders and investment bankers and political pundits. It will have maids and clerks and factory technicians and farmers and truckers, too. We can and we should have an economic system that offers advancement to all productive enterprises of worth and merit.

(And make no mistake: the People's Republic of China is witnessing great economic growth not because some of its students are doing well on international standardized math and science tests but because it has pursued an aggressive policy of protecting and developing Chinese industry. The decline of the US economy has less to do with the notion that it is graduating "insufficient" numbers of math and science majors and more to do with the fact that whole sectors of the economy have withered.)

Part of foundation-up economics also thus depends on protecting the livelihoods of so-called "lower-skill" workers (though, in reality, it does take considerable skill to build a house or run complex machinery or sundry other tasks). It may be true that the current statist flavor of globalization may increase inequality somewhat, but the extent of this inequality is in part due to other domestic policies. Our immigration and trade policies in particular have allowed those on the higher end of the ladder to leverage worker against worker in the pursuit of maximizing profits. Moreover, many of the gains for the wealthiest have been due not to the fair functioning of a free market but to the manipulations of state power.

It is possible to realize an economy that combines the exuberance of the market with a sense of popular prosperity. However they may differ in their methods of reaching this goal, many Republican and Democratic presidents have aimed for it. For a number of years now, we have empowered capital through cheapening labor; now may be the time to increase the value of labor in order to find new opportunities for capital.

From a conservative perspective, an egalitarian economy, where all may have ready hope of living a comfortable life and of advancing economically, is far better than either an economy where the vast majority of workers need government checks to survive or an economy where the super-wealthy plunder the resources of the public and leave the populace as a whole to malinger. Some extremists of the left and of the right would push the economy in one direction or the other. Neither extreme is sustainable. A happy, prosperous workforce is not only the best environment for defending the free market; it is also one of the greatest promises of the free market.

(Crossposted at FrumForum)

Perry's Immigration Attacks May Backfire

2011-10-19T07:06:00.001-07:00

In the short term at least, it seems hard to deny that yesterday's debate was good to Rick Perry. The leading un-Romney contender, Herman Cain, sank underneath withering attacks on his 9-9-9 plan; his inability to defend the details of this plan with anything other than assertions that his opponents are wrong reinforced impressions that he still has a lot of policy areas to brush up on.

And Perry's deeply personal attacks on Mitt Romney helped bring the focus of the debate back on himself. These attacks may help keep Perry as the media takeaway from the event seems to be focusing on how much he's hurt Romney---not on the Texas governor's verbal slips or policy haziness.

All this may provide a boost for Perry and keep him in the race. But his attack on Romney about immigration may eventually raise even more problems for Perry. Via Byron York, here's the substance of the exchange:

And Perry, for the first time in any GOP debate, rattled former Massachusetts Gov. Mitt Romney. He did it by bringing up a 2007 charge that Romney hired illegal immigrants to do lawn work at his Massachusetts home. Jobs are the magnet for illegal immigrants, Perry said. "And Mitt, you lose all of your standing, from my perspective, because you hired illegals in your home and you knew about it for a year. And the idea that you stand here before us and talk about that you're strong on immigration is on its face the height of hypocrisy."

Romney tried to laugh it off and to deny the story. "I don't think I've ever hired an illegal in my life," he said. Romney tried to explain, but Perry kept pushing, leaving Romney protesting that Perry was ignoring the rules -- just as Perry had planned.

"Rick, again, Rick, I'm speaking," Romney said. "I'm speaking, I'm speaking, I'm speaking. You get 30 seconds. This is the way the rules work here…Anderson?"

By the time Romney appealed to CNN moderator Anderson Cooper for help, Romney seemed flustered, almost frantic. "Would you please wait?" he said to Perry. "Are you just going to keep talking?"
When Perry finally told Romney to "have at it," Romney explained that he had hired a company to do lawn work and had no idea the company hired illegals until it was reported in the paper.

Perry has become known for his verbal imprecision in presidential debates, and his attack depends upon an indifference to the details of verbal meanings.

Romney "hired" illegal aliens, according to Perry, by paying a company that employed them to do a service. Under this definition of "employment," anyone who goes to a restaurant that employs an illegal alien is also "employing" an illegal alien. A woman purchasing a candy bar from a supermarket with an illegal alien working at the deli counter is also "hiring" an illegal alien. By Perry's definition of employment, he has probably "hired" countless illegal immigrants---at restaurants, stores, and so forth.

The point of Perry's charge of hypocrisy was not to clarify the distinction between proclaimed position and actual practice but to shut down debate by casting an impossibly wide net of guilt. This appeal to hypocrisy to avoid a debate of policy principles is all too common in politics, especially at the federal level, so it's perhaps no surprise to see Perry engaging in it here.

The point that primarily concerns American voters is not whether some individual candidate's money ended up indirectly in the pocket of some illegal immigrant. The point that ought to concern us is whether a candidate thinks it is good to have the workforce be flooded with millions and millions of illegal workers. Romney's record as governor and his rhetoric as president demonstrate that he thinks that might be a problem for this country. Rick Perry's rhetoric and record---from his opposition to E-Verify to his support for major taxpayer subsidies for illegal aliens---suggest that he doesn't think that's such a big problem, if a problem at all. Both positions are understandable, but they are quite different, and we should not blur those important policy distinctions.

Ironically, Perry's attack on Romney may leave Perry open to accusations of being a flip-flopper. Supposedly Romney hiring a company that (unknown to him, so he says) employs illegal aliens is to be a thing of outrage. But someone is also "heartless" if he doesn't support giving tens of thousands of dollars of taxpayer subsidies to illegal aliens. It's hard to square that circle. And such a Texas two-step seems more motivated by political opportunism than anything else.

One of Perry's distinguishing characteristics has been his reputation as a straight-shooter. If Perry tarnishes that reputation by contradictory attacks on his political opponents, he may find his standing further erode in the polls.

(Crossposted at FrumForum)

$ Primary between Brown, Warren Heats Up

2011-10-10T18:56:00.000-07:00

The third quarter results are in for fundraising for Elizabeth Warren and Scott Brown:

Warren pulled in $3.15 million in total for the third quarter, with more than 11,000 people in Massachusetts pitching in, her campaign announced Monday. Brown raised $1.55 million in the third quarter — almost exactly half of Warren’s total. But Brown, who wielded a hefty war chest heading into his reelection campaign, now has more than $10 million in the bank.

Fear Stalks

2011-10-07T13:04:00.000-07:00

Two bits of performance art last night suggest how panicked Democrats, progressives, and socialists (see item #2) are becoming.

One is Harry Reid's decision to muscle his caucus together and weaken the minority's ability to offer amendments to a measure after cloture has been invoked. Philip Klein has a helpful summary:

Tonight, McConnell made what's called a "motion to suspend the rules," to allow a vote on the amendments. Such motions are almost always defeated, because they require a two-thirds majority to pass. But they're another way for the minority party to force uncomfortable votes. Even though the minority party doesn't get a direct vote on the amendment, how somebody votes on the motion becomes a sort of proxy for such a vote. In this case, for instance, if Democrats had voted down a motion for a vote on Obama's jobs bill, it would have put them in an awkward spot.

Though it's been the standing practice of the Senate to allow such motions by the minority, tonight Reid broke with precedent and ruled McConnell's motion out of order, and was ultimately backed up by Democrats.
So, the end result is that by a simple majority vote, Reid was able to effectively rewrite Senate rules making it even harder than it already is for the minority party to force votes on any amendments.

And what caused Harry Reid to rewrite rules in this way? A desire to keep the Senate from having a vote on Obama's jobs bill. Is the president's plan that toxic (or that much of a pipe-dream) that his own party doesn't want to vote on it in the Senate?

Democrats seem to fear that they're on the verge of losing control of the public narrative. This attempt to shut out minority voices is a flailing attempt to provide uniformity to that narrative, to shut out any competing principles or politically embarrassing facts.

This brings us to the second piece of performance art: Lawrence O'Donnell's interview with Herman Cain. Cain is often most effective in these talking-head encounters, and the vitriol of O'Donnell's questions helped the Republican presidential contender portray himself in a good light. The interview is worth watching in full, but a few points bear particular mention.

Perhaps one of the most striking features of this interview is O'Donnell's apparent desire to jump in the timewarp machine and approach the campaign of 2012 like it's 1968.

In a time when millions suffer in long-term unemployment, the national debt is skyrocketing, and the globe's political-diplomatic order is on the verge of disintegrating, O'Donnell seems much more concerned about whether Herman Cain was sufficiently activist about Civil Rights in the 1960s: why didn't he join in the Freedom Rides? Where was he during the protest marches? It seems rather bizarre to think that Cain's viability as a presidential candidate should depend upon if he went to marches fifty years ago. The premise of O'Donnell's questions seem to suggest that there was only one route for a virtuous "black" man in 1960s America: engaged on the frontlines of political activism. While I think that the fight for Civil Rights was a virtuous activity, it was not the only one. And the totalizing narrative on race that O'Donnell was edging toward seems less than desireable.

Vietnam was another fixation of O'Donnell here. As he's done in the past, O'Donnell seemed unable to resist indulging in a little militarism (and more than a little opportunism) when he claimed he was "offended" that Cain had the temerity to run to be Commander-in-Chief without having volunteered to serve in Vietnam. Apparently working on ballistics with the Department of Defense during the war (which Cain did) does not count as a sufficient contribution to the war effort. Based on O'Donnell's premise that it's "offensive" to dare to be president without having volunteered to go on the battlefield, I presume he spits upon the picture of Franklin D. Roosevelt (that "chickenhawk" who took a cushy job in military administration instead of volunteering to fight during World War I) and looks upon the administration of Bill Clinton (no Vietnam volunteer he) as an offensive abomination in American history.

O'Donnell's rabid attempt to caricature Cain as a cowardly lackey of The Man shows a deep anxiety about the failure of Barack Obama's "progressive" dreams. And it's unfortunate that this anxiety is manifesting (and will no doubt increasingly be manifesting) in vitriol, personal enmity, and snide rhetorical questions. There are some shortcomings to Cain's economic plans, and O'Donnell was stronger when interrogating Cain about actual policy options that could affect the future of the USA---and not when playing the grand inquisitor of the 1960s.

Our nation is in great trouble, and the best route out of this danger is the well-intentioned interrogation of all possible options. Instead of the rhetoric of exclusion, the tactics of totalization, and the drug of demagoguery, the spirit of charity and rationality would much better serve our purpose.

A Path to Victory for Brown

2011-10-03T19:40:00.000-07:00

The recent UMass Lowell/Boston Herald poll of the 2012 Massachusetts Senate race has some sobering news for Scott Brown: among registered voters, he has a slim three-point (41-38) lead over Democratic frontrunner Elizabeth Warren. Other polls have also suggested that this could be a close race.

However, there is plenty of good news for Brown here. 54% of voters think that Brown met or exceeded their expectations. His favorability/unfavorability ratings remain a healthy 52%/29%, respectively. Massachusetts voters don't hate Brown, and they're willing to give him a chance. Moreover, this race is still very fluid. Over 20% of voters are undecided, giving both Warren and Brown plenty of room to grow.

Digging into the demographic data for this poll suggests in many ways that Warren may be more identified with the status quo than Brown is. Interestingly, having a layoff in your household makes you more likely to support Brown: he leads Warren 42-36 among those experiencing a layoff in the household, while he only leads her 40-39 among households that haven't experienced a layoff. Voters who have felt the pain of the Obama economy are more willing to back the Republican. About half the Massachusetts population thinks the economy is getting worse, and Brown has his strongest lead with them. Among those who think the nation is on the wrong track, Brown has a commanding lead over Warren (though a less commanding lead than he had over Coakley in 2010).

These trends suggest that the less happy Massachusetts voters are with the status quo, the more likely they are to support Brown. But if Massachusetts voters aren't thrilled with the Obama economy, they are even less enthusiastic about having the national "conversation" that some conservative activists want to make the 2012 election about. An overwhelming majority of Massachusetts voters want Social Security and Medicare to be untouched. Bay State voters also believe 52-40 that government should "do more to solve problems." Brown can't run on wanting to privatize Social Security or Medicare, and a Republican presidential candidate who made such a policy the centerpiece of his campaign could very well sink Brown. He has a slim lead over Warren in all age groups, but a defense of the mission of social insurance could help him win more votes from the middle-aged and elderly.

Brown has long recognized the banner of independence as crucial for his political survival as senator. By crafting his own identity apart from the Republican policy monolith (however frustrating that may be to some Tea Partiers), Brown can find space for electoral maneuvering.

The middle class is also crucial for Brown. Elizabeth Warren beats Brown among the poor (those with household incomes below $30,000) and wealthier (those with household incomes above $100,000). In fact, top income earners are the demographic most likely to support Warren (she gets 46% of their votes). Apparently, the rich of Massachusetts haven't gotten the memo that Obama and Warren are socialists who want to confiscate all their wealth or something. They don't seem too worried about taxes going up on upper-income earners, so Brown would be smart not to make tax cuts for the top 2% the core of his economic message. The rich have been the least affected by the recent recession, so they seem quite happy to let the Obama times roll.

Instead, Brown should focus on the rich electoral territory of the middle and working classes---the people whose jobs have been downsized, hours cut, and wages slashed. The great hollowing out of the middle class in the 2000s has made voters willing to listen to voices that challenge partisan orthodoxies of the right and left. Those with household incomes between $30,000 and $100,000 are the most likely to support Brown, so he should do what he can to maximize his margins here.

If Brown can offer a message that convincingly offers a rebuilding of the middle class, he might in turn increase the hopes of (and support for himself among) poorer Massachusetts residents. A convincing economic plan might also pull wealthier Warren supporters, especially those in the upper-middle class, in Brown's direction. Furthermore, a narrative of economic progress could boost Brown's numbers among the young, the demographic group hit so hard by the nation's poor employment picture.

Brown won in 2010 as a fair-minded outsider, and this poll suggests that Massachusetts voters are still willing to view Brown in that role. Though Brown looks more vulnerable now than he did six months ago, he still has a better shot of being elected to a full Senate term than any Republican has had in a long time. If the GOP wants to stay a national party with majorities capable of enacting large-scale reforms, it's going to need a diversity of Republicans. There's a case to be made in Massachusetts for independent-minded and efficient smaller-government policies, and Scott Brown seems the candidate to make this case.

Eight Steps to Renew America's Economic Architecture

2011-09-28T07:48:00.000-07:00

America is now coping with the debt binge of the past decade and stagnating incomes across the board. Trying to provide some cushion for those left economically behind may be a good short-term strategy. But policy makers also need to work toward a restructuring of America's economic architecture. Unless America's economic vitality is restored, all plans to reduce the weight of the national debt are moot. A perpetually failed American economy will lead to skyrocketing debt levels, an ever-diminished standard of living, and a weakening of the ability of the United States to project power across the globe.

To borrow a phrase from Governor Huntsman, America's "core" needs to be renewed. The economic renewal of this core would require the increase of America's skill level, the defense of American jobs, and the development of a regulatory structure that incentivizes production and innovation instead of gambling and borrowing.

In light of this project of renewal, here are some thoughts about big-picture goals to keep in mind for the restoration of America's economic architecture.

Regulate the financial system. Perhaps because it was bailed out with untold billions of dollars, Wall Street has been least hurt by the current recession. But deep structural problems remain. In the decade or so before the crash of 2008, many regulations that had been crucial to the nation's financial system had been repealed. Meanwhile, various government departments gave special privileges to numerous connected banking institutions. Our financial regulations give bankers and traders the capacity to be more reckless, and the history of bailouts and insider loans gives the appearance of a safety net, at least to the chosen few. So our financial system grows increasingly less stable. Regulations must be put in place so that, for individual banks, individual failure will not lead to the collapse of the whole banking system; too big to fail must go by the wayside. Bankers used to be renowned for their prudence and circumspection. It would be helpful to put in regulations encouraging that tradition.

Let energy multiply. Since the Industrial Revolution, cheap energy has been a bedrock of economic growth. Unlike President Obama, I do not believe that the government should aim to make energy prices skyrocket. One of the major accomplishments of probably the greatest Democratic president of the twentieth century---Franklin Delano Roosevelt---was to spread electricity across America, to the poor and rural classes, in order to improve the living standards of the nation as a whole. If Democrats want to surrender that legacy, Republicans should pick up the banner of cheap, egalitarian energy and run with it. Investment in energy infrastructure could be one of the greatest improvements in the American economic architecture---and that investment would include oil, nuclear, and alternative energies. Current proven US oil reserves will not be sufficient to meet all national demand for the long term, but the Congressional Research Service estimates that there could be over a hundred billion barrels more worth of oil that further exploration could reveal. Further exploration and innovation could discover even more resources. But drilling for more oil will not alone solve America's energy problems. Nuclear is most sustainable and massively scalable non-fossil fuel energy source we yet have in place in an expansive way, so investment in nuclear power plants would be an easy route to expand America's energy prospects. Solar, wind, and other energy sources are also worth investing in; some of these technologies are in the experimental stage, but the the normal of today was once the experimental of yesterday. Gains in efficiency are good, but the sweet spot of economic growth is found when improved efficiency meets cheaper energy.

Get a twenty-first-century trade policy. This isn't the 1990s anymore, when we could trust in a technological leap to compensate for other countries using neomercantilist strategies against us. "Tradeable jobs," often the most value-adding, have been pummeled in the US over the past decade or so. Unilateral trade disarmament in the face of other countries' neomercantilist tactics (currency manipulation, tariffs, regulations that de facto prohibit American-made products, and so forth) is not free trade. The past couple decades have shown the effects of this neomercantilism for the American workforce.

Get a twenty-first-century immigration policy. The current immigration paradigm was put in place almost fifty years ago, after a great lull in immigration and in a time of great prosperity and economic growth. This paradigm may need to be revised. Current immigration policy often rewards law-breaking and family connections. A revision of immigration policy could focus on increasing the skill level of the American workforce and improving the conditions of the the workers currently in the United States. We should work to make the US immigration system resemble Habsburgian dynastic politics less and instead push it in an egalitarian, skills-oriented direction. While prioritizing the minor children and spouses of immigrants, a revised system could move towards a basket of skills, refugees, and extended family members (with increased emphasis upon the "skills" portion).

Invest in the future. Despite propaganda to the contrary, government investment in science, technology, and distant innovations can actually work out. The nuclear age was greatly accelerated by government spending during World War II, advances in telecommunications are in part due to NASA, and early pioneers of the internet---one of the great drivers in growth over the past two decades---included government agencies and institutions backed by substantial government funding. In a time of economic turmoil, many large businesses are unlikely to invest in long-range projects that may never pay off; government investment can help redress that lack of funding for first-principles research. We cannot look for large institutions to provide all advances (much has been accomplished by a few lonely and talented individuals working on their own), but history has shown that some of that long-range spending can have dividends for decades in the future.

Revise the regulatory state. Many national regulations are economically onerous and often counterproductive. For example, many environmental laws put burdens on local manufacturers, even as our trade and tax policies encourage these very same manufacturers to ship their work out of the country (to nations with far fewer protections); it's hard to call such a result a win for the American economy or for the global environment. (I'm not here arguing against environmental regulations as such, but I am suggesting that we need to think of the broader implications of them and work to correct some of the negative results of these implications.) The 70s witnessed the acceleration of the dismantling of the New Deal regulatory state, but new layers of bureaucracy have taken its place. We must do what we can to ensure that projects (both private and public) of great vision and power can be advanced quickly.

Renew infrastructure. Regulatory reform could also streamline and make more possible broad improvements to the American infrastructure. Much of the backbone of our infrastructure (highways, bridges, etc.) is in disrepair, and much (such as America's rail system) could also take the leap into the twenty-first century. In an era of new experiments with energy sources, updating and rendering more flexible our electricity grid and other energy delivery systems could have considerable gains for the future.

Revitalize health-care. Medicare's long-term trends may eventually break the federal bank, but the cost of health-care inefficiencies are being felt throughout the whole economy today. Americans pay a lot for health-care, far more than do the citizens of other industrialized nations. More needs to be done to increase the supply of medical care and push America's health-care system in the direction of a functioning market. Health-care is perhaps the section of the economy with the most government interference; it is also one of the most inefficient. The British National Health System shows that it is possible to provide some level of national coverage at relatively low cost through socialized medicine. The US could instead go in the direction of unleashing the power of the market to provide cheaper, better health-care; the current faux-market of health-care in the US is not working as well as it might. And unleashing the power of the market means far more than putting senior citizens on Medicare vouchers. It means tackling the lack of transparency in the field of medical spending, updating the insurance-financing system, allowing doctors to focus more on giving care than defending against frivolous lawsuits, taking on health-care oligarchical structures, and opening up the ranks of medical providers.

Obviously, these thoughts are partial and open to debate; they are more posed in an experimental tone than a dogmatic one. But experiment is often the first step on the path to success. If the GOP is to offer a true competing agenda to the policies of Barack Obama, it needs to move beyond a fixation on tax cuts to a broader emphasis on growth, job creation, the defense of the middle class, and structural renewal.

Stumbles, Survivor, and Synthesis

2011-09-22T19:59:00.000-07:00

Some thoughts about tonight's debate:

Though there wasn't a massive pile-on as in the last debate, Perry continued to lose ground, and most of his wounds were self-inflicted. The shadow of George W. Bush loomed larger over Rick Perry tonight. Perry's verbal stumbles and with-me-or-you're-a-bigot tone on immigration issues might have reminded activists and conservative politicos a little too much of the former Republican occupant of the White House. If Perry seems like George W. Bush Part II, he won't be able to clinch the GOP nomination, let alone the presidency. Moreover, his attacks on Romney often fell flat or wandered. Perry needs to sharpen his approach if he wants to gain here.

Romney followed his usual strategy of survivor in this debate: he didn't let anything get to him and didn't indulge in political napalm. He just kept insisting on his message. Romney did seem to have a few moments of sputtering, though. They might have added to his sense of authenticity, but they also made him seem less steady on his rhetorical feet. Romney's survivor strategy has paid off in the past couple debates. He's blunted the rise of Rick Perry and kept the Texas governor from running away with the race this early. Time will tell if this will allow him to wrest away the primary polling lead.

Santorum stood out in this debate. He had few striking exchanges (on immigration with Perry and foreign policy with Huntsman). I don't know how much these debate performances will translate into polling benefits for him, but he's definitely keeping his place at the table.

Gingrich is still plowing along. His comity tactics seem to help give his ideas a stage at these debates---and finding that stage may be more of a priority for Gingrich at the moment than the GOP nomination.

Johnson had a good line, perhaps good enough for him to stay in the debates. Cain had some other good points. I think Huntsman still wanders sometimes, but he seems to be keeping his campaign viable. Ron Paul was himself. Bachmann struggled to find her voice again.

Another Victory for the "Free Market"

2011-09-21T09:02:00.000-07:00

Perhaps the opening line of this news story says it all:

Under pressure from the Beijing government General Motors has agreed to provide access to its proprietary electric vehicle technology to its lead Chinese partner.
The move is raising numerous concerns, critics contending that China is, for one thing, using unfair pressure to gain access to technologies that will later be used by its own domestic manufacturers to compete with foreign brands like GM.

I guess this kind of coercion is now known as "free trade."

A few more details about the merger:

But critics note that GM has also faced significant pressure from China to accept the partnership, government regulators threatening to withhold sales incentives for the Volt were GM to have rejected the technology sharing agreement.

Such a move might violate international trade agreements, critics argued. But the more serious concern is that GM may now lose control of key intellectual property. Protection of IP rights has become a critical concern with Chinese businesses routinely ignoring trademarks and copyrights on everything from pop music and movies to pharmaceuticals and automotive design.

In the short term, this move may improve GM's access to the Chinese market, thereby increasing sales and probably the income of some upper-level executives.

However, this surrender of IP may in the long term prove more damaging to GM. The partner for this venture, Shanghai Automotive Industrial Corp., is an entity owned by the PRC government and is no doubt eventually looking to expand on its role in the automotive industry. Plenty of free IP along with billions of dollars of investments from Western companies will no doubt help it in this enterprise.

It's also unclear to me how, in the long term, the empowerment of government-run corporations due to government coercion is an effective path for supporting free market capitalism.

Economic Geographies

2011-09-19T19:27:00.003-07:00

Via Tyler Cowen, I came across an interesting essay by Noah Smith discussing possible causes for the recent economic stagnation. He adapts a theory of economic geography from Paul Krugman:

The basic idea of the theory is this: It is expensive to move products around. This means that if you have a factory, you want to locate it close to where your customers are, to avoid paying a bunch of shipping costs. Now consider two factories. The workers in the first factory will be the consumers for the second factory, and vice versa. So the two factories want to locate near each other ("agglomeration"). As for the workers/consumers, they want to go where the jobs are, so they move near the factories. Result: a city. The world becomes divided into an industrial "Core" and a much poorer agricultural "Periphery" that produces food, energy, and minerals for the Core....

So this could explain why people in the rich world are getting poorer. In the 50s, America was the only industrial "Core" on the planet. But since the 60s, we have seen successive "growth miracles": Japan and Europe in the 60s/70s, then Taiwan/Korea/Singapore in the 80s, then China since then, and now even India. In a New Economic Geography world, we would expect these successive relocations of manufacturing to hold down income growth in the U.S., even if technology was advancing as usual. And now Japan and Europe are feeling the pinch as well.

Smith further expands upon the situation of the USA:

It may be that American manufacturing strength was due to a historical accident. Here is the story I'm thinking of. First, in the late 19th and early 20th centuries, our proximity to Europe - at that time the only agglomerated Core in the world - allowed us to serve as a low-cost manufacturing base. Then, after World War 2, the U.S. was the only rich capitalist economy not in ruins, so we became the new Core. But as Europe and Japan recovered, our lack of population density made our manufacturing dominance short-lived.

Now, with China finally free of its communist constraints, economic activity is reverting to where it ought to be. More and more, you hear about companies relocating to China not for the cheap labor, but because of the huge domestic market.

There are many good points here, especially the role of sudden shocks to the economy in changing events; the essay is well worth reading in full.

However, I'm somewhat skeptical of this theory of economic geography.

First of all, I think it may overvalue the cost of transporting goods. Shipping costs were a much bigger weight in 1830 than they are today, and producers are less tied to the physical territory of potential consumers now than they were. After all, the past few decades have seen many factories close down in the American market only to relocate thousands of miles away to sell to this very same market. The story of globalization over the past twenty years is in part the story of the diminution of shipping costs (broadly considered), which I think may complicate the narrative of this model.

Moreover, this theory of economic geography seems to suggest in some way that the most densely concentrated areas are likely to be destined to be the richest (I admit that this is a simplification of the model). However, often very densely concentrated countries are very poor, while there are plenty of wealthy less dense countries. I wonder whether density of population is really the most crucial variable for discussing national wealth or national capacity for wealth.

Smith's reading of the US economic path is interesting, but I think it also has some limitations. While our closeness to Europe might have allowed us to serve as a "low-cost manufacturing base" (though the US was much farther from Europe than many poorer nations), the growth of American industry in the nineteenth century was also accompanied by the increase of American living standards over those of many wealthy European nations (such as Great Britain); this combination of high wages with industrial growth differs from current low-wage trends. And the US had a huge manufacturing capacity even before the other great powers destroyed themselves during the two World Wars.

Also, I think Smith may underestimate the role of human agency in his claim that "you hear about companies relocating to China not for the cheap labor, but because of the huge domestic market." The appeal to the giant Chinese domestic market has merit, but we should not forget that the Chinese government often requires companies to invest in factories and other places of employment in the PRC in order for them to have access to the broader Chinese market. Beyond the "natural" appeals of economic geography, state coercion plays a considerable role in this narrative of Chinese expansion.

Though I'm doubtful about many of his policy suggestions, Smith is right in his recommendation that American update its transportation infrastructure. I think there's more to economic destiny than population density, and the "historical accident" of American wealth is in part the result of the deliberate choices of American policymakers in the past (even if some of these policies, such as tariffs, may run afoul of contemporary orthodoxies).

Update: Matt Yglesias has some more observations on the China market here.

Orthodoxy in the Balance

2011-09-17T10:26:00.000-07:00

I was listening to the Laura Ingraham show the other day and heard an interesting conversation between Ingraham and her guest, Larry Kudlow. Discussing the prospects of various presidential contenders, Ingraham spoke warmly of Mitt Romney's pledge to be tough on the People's Republic of China for its currency manipulations, theft of intellectual property, and other barriers it puts up to foreign products. I could almost hear Ingraham's voice thrill as she mentioned "tariffs" as a possible tool to be used to compensate for PRC manipulations.

Kudlow did not act as might be expected: rather than denouncing such policies, he seemed positively inclined toward them. Kudlow is a pundit embodiment of Republican economic orthodoxy, so his response may be indicative here of a broader Republican souring on "free trade" myths (namely, that we even live in an era of "free trade").

If the part of correcting trade imbalances in Romney's economic plan is more than talk, this plan would represent a significant attempt to change the Republican position on trade policies since NAFTA: moving past the dogma of cheap imports toward one of a level playing field (with the aim of gaining and preserving high-paying jobs).

NY-09, Medicare, and Social Security

2011-09-14T12:36:00.001-07:00

The victory of Bob Turner in heavily Democratic NY-09 is clearly not good news for Democrats. How bad the news is, though, remains to be seen: the badness of the news will in part depend on how much local issues decided this election (e.g., the Weiner scandal) versus the impact of broader trends.

In any case, Mickey Kaus has some good points here:

It’s the possibility that the Democrats favorite issue–Social Security–didn’t work to save them because Obama, too, has embraced cutting Social Security and Medicare in “some undefined ‘everything on the table’ entitlement reform,” as Weigel puts it. Could it be that the differences between Obama’s Medicare cuts and GOP Rep. Paul Ryan’s Medicare cuts–differences that seem so significant to policy analysts in Washington (and to me)–don’t have much salience in the crude argumentation of direct-mail electioneering? Now that’s scary for a Dem. After decades of pledging not to touch the two sacred programs, it’s beginning to look as if Democrats can’t just suddenly agree to pull trillions out of Social Security and Medicare and expect voters to maintain their reflexive loyalties.

However, I think it is a mistake to interpret Kaus here as saying that Mediscaring / Social Security-scaring has been proven ineffective.

If anything, this election suggests that Obamacare cuts to Medicare do provide an opportunity for Republicans to run on this issue, but running against Social Security and Medicare might not be the way to do it. Bob Turner distanced himself from the Ryan budget on Medicare and from Rick Perry (or at least the Perry of Fed Up) on Social Security. The "Issues" page on his website reads (emphasis added):

Social Security and Medicare represent solemn commitments made by the government to people who have been paying into this system their entire lives. I believe that these programs should be preserved as they are for those in or near retirement and that we should work to strengthen and preserve them for our children and future generations. I oppose efforts to privatize or bankrupt either. I would work with members of both parties to reach a solution that will meet our obligations on both of these programs.

Mediscare couldn't work against Turner because he pledged his total support for Medicare. Indeed, he has spoken strongly against the Ryan budget. This election is less a sign of victory for the Ryan budget and more a sign that Republicans can run away from this budget (at least if they haven't voted for it) and win.

Even in the far more GOP-friendly special election in Nevada, Republican victor Mark Amodei at times expressed some reservations about the Ryan budget (even as he praised Ryan for trying to solve the problem). Amodei refused to say whether he would vote for it or not.

Vowing to protect Social Security and Medicare, a Republican was able to win in a strongly Democratic district. If Turner had run on the Ryan budget and declared Social Security unconstitutional, the result might have been quite different. NY-09 is not representative of the nation as a whole (it usually favors Democrats far more), but, if Republicans hope to cast this election as representative, they might do well to note what their man did not run on.

Coasting Stops

2011-09-12T17:36:00.000-07:00

The fight between Perry and Romney continues. Perry came into this debate confident in his conservative bona fides and hoped to use the weight of that confidence to steamroll Romney. The former Massachusetts governor, for his part, responded with an array of facts, figures, and arguments.

The Social Security component was interesting. Romney ended up highlighting the distinction that many Perry partisans are trying to obscure: while Romney and many others have suggested that the financing of Social Security may be a problem, Perry in his most recent book has claimed that Social Security seems to be in some way contrary to the Constitution. Romney tried to get an answer out of Perry about whether he still thought Social Security was unconstitutional, but Perry seemed focused on avoiding answering that. If he wants to win the nomination and go on to the presidency, Perry is going to have to clarify his position on Social Security. Does he want to reform it (as he now says) or does he think it's an unconstitutional abomination? Even in a rabidly pro-Perry audience (at least in the beginning), Perry seemed to stumble at certain points in this exchange. The audiences at debates with Obama won't be so congenial.

Santorum and Bachmann have realized an electoral reality: their only path to the nomination is through Rick Perry. Bachmann knew she had a rough debate last week. So she came into this one looking for some moments, and she found them. She went beyond criticizing Perry's Gardasil executive order as an overreach; she suggested it was due to undue corporate influence. That's probably the most personal slam Perry has faced yet in the race posed by a rival. She also didn't let Perry slide on his immigration record.

Bachmann regained her stride in this debate, and Santorum found it. Between hitting Perry, going toe-to-toe with Ron Paul, and offering relatively detailed answers to policy questions, Santorum positioned himself as a solid, competent conservative who is also electable (hence his persistent emphases on his ability to win in Pennsylvania). Some pundits might find Santorum's references to events of the 1990s to be dated, but many voters (left, right, and center) look back on the 90s with fondness. Santorum may be trying to offer a path back to prosperity.

As with the last debate, Gingrich played the conciliator. As with the last debate, Ron Paul couldn't wait to attack Perry as a conservative pretender, hitting him on increasing Texas taxes and spending.

Bachmann and Santorum may have succeeded in putting a few chips in the conservative finish of Rick Perry's reputation. Perry has been greatly helped by the aura of authentic conservatism. If that sense is challenged, he could struggle more as a candidate.

In order to distract from last week's Social Security debate, many Perry supporters went on attack against Romney, accusing him of taking from the Democratic playbook (apparently defending the Constitutionality of Social Security is supposed to be the purview of Democrats now?). If those attacks are doubled down on over the next few days, we might have an indication of how concerned Perry's camp is over this debate.

I'd guess Perry lost ground tonight with the right (over immigration and Gardasil) and the center (over Social Security). Romney held his own. Bachmann and Santorum gained. I think the primary is still very fluid (as it should be). And there might still be room for other candidates to jump in.

Ten Years Later

2011-09-11T08:46:00.000-07:00

Like millions of other Americans, I remember September 11, 2001 quite clearly. I remember watching the twin towers collapse on TV. I remember wondering whether a skyscraper near me would be next. I remember the sudden panic and uncertainty, the sense of a nation hanging on the edge of chaos.

The modern liberal society depends upon a sense of order and openness: the terrorists of 9/11, like many other terrorists, sought to detonate those twin pillars. And they did cause great suffering and fear and, for many Americans, many sleepless, tear-stained nights. That terrorist attack has cast a shadow over the past decade, which has been suffused with anger, resentment, paralysis, and a haunting sense of disappointed hopes.

Yet, despite the darkness, there are still sparks. For all the wreckage, the terrorists have not yet been able to break the back of the spirit of this republic. Though the forces of violence, radicalism, and tribalism have risen across the globe, the dream of a better order has not yet fully vanished. Though hopes have been disappointed, hope itself has not been extinguished.

September 11 has become a day of mourning: for the dead, for the orphans and widows and widowers, for the injured and lost, and perhaps for what might have been had not this been a decade of terror. We remember the suffering and the dead and those serving in foreign lands. But we should also remember the heroism of that day and later days. Professionals and average citizens rose to the challenge to save lives on that September day. The passengers on United 93 broke through the frenzy of panic to save countless other lives by their own willing sacrifice. Nihilists are willing to die to kill; true heroes are willing to die to save.

Many years ago in a different age of crisis, Franklin Roosevelt told us that we have nothing to fear but fear itself. Let us not forget the place of fear, nor let it usurp the thrones due to reason, hope, and charity. The promise of this republic---the promise of life, liberty, and the pursuit of happiness---has not yet expired. Terrorists with their bigotries and fears cannot kill it. Only we can, if we surrender to an angry despair.

Now is not the time to surrender or to forget. Now is the time to continue and to dare and to try and try and try.

Debating Social Security

2011-09-09T13:26:00.000-07:00

Outside the Beltway has a few good posts up about Social Security today. Doug Mataconis has a survey of opinions here.

Meanwhile, Steven L. Taylor raises some doubts about calling Social Security a "failure":

What creates problems, however, is tossing out terms like “Ponzi Scheme” because even if one does not like SS (or welfare policies in general), likening one of the most popular programs in US history to a fraudulent, illegal venture is problematic. Beyond, there are the empirics of the situation. Perry has called SS a “failure.”
The basic problem is: that is empirically untrue. One may not like SS. One may think it is inefficient. One may have a preferred alternative. One may even think that is non sustainable in the long haul. However, to call it a failure ignores over half a century of operation. It also denies the reality of millions who currently receive monthly checks (who will be stunned, no doubt, to hear what a failure the program has been).

Immigration and Wages

2011-09-09T06:44:00.000-07:00

David Frum has some interesting points here about the role of immigration for Romney and Perry:

Perry’s views on immigration are not a “liberal” deviation from his views on the minimum wage, on Social Security, on healthcare coverage, etc. His high-immigration views are of a piece with his general preference for a low-cost, low-wage economy.

By contrast, Mitt Romney has begun to articulate a call for a high-wage economy. To get average wages rising again after a dozen years first of stagnation, then of outright decline, will not be easy. The most important step is to control healthcare costs. The rising cost of healthcare benefits devours workers’ cash pay.
But a rethink of immigration policies is also necessary. In the September 7 debate, Romney articulated something almost never said in a Republican primary: much, much, much more important than a fence or “boots on the ground” is tighter enforcement of labor laws inside the country. I’d go further: if the labor laws were effectively enforced, a border fence would be a costly redundance.

Perry v. Romney: No Knockout

2011-09-07T17:58:00.000-07:00

Some thoughts about tonight's debate:

Romney is not going to give up. Romney did not Pawlenty out in this debate: when struck at, he struck back---hard. The jobs exchange with Perry early in the debate showed some fight in Romney. Romney needs to fight Perry on this in order to defend his own claims on the economy.

Social Security and immigration are still issues. Romney's response to questions about immigration and amnesty subtly attacked Perry's support of in-state tuition for illegal immigrants and Perry's opposition to a border fence. After hitting Perry from the right, Romney also hammered Perry's claim that Social Security is a failure. Rather than abolishing it, Romney says he wants to save it. He's implicitly aligning himself with a long line of Republicans (such as Reagan and Cheney). Romney wants to challenge Perry's claim to be Super Mr. Republican.

Perry is not Obama. One of the dynamics of the 2008 Democratic race was that many Democratic candidates were willing to have Obama be the nominee if they couldn't. So they were quite willing to tear down Clinton in order to assist Obama. Going into this debate, there was a chance that other GOPers would view Perry as the preferred candidate. This debate showed that other candidates are quite willing to go after Perry. Many candidates jumped on the chance to pile on Perry regarding his executive order to mandate Gardasil vaccinations for Texas girls, for example. Perry does not seem to be getting the pass from Republicans that many non-Clinton Democrats gave to Obama during the 2008 race.

Newt plays the statesman. Newt Gingrich hit upon an interesting tactic in this debate: rather than feeding into intramural conflict among Republicans, he called out Obama and lashed out at the media. Both rhetorical tactics are sure to increase grassroots affection for Gingrich. By taking the battle to the president, he seems to rise above the fray while still seeming passionate. Gingrich had some strong moments tonight.

Ron hates Rick. While other candidates weren't afraid to knock on Perry, Ron Paul seemed to relish any chance to attack Rick Perry as a showman and pretender to conservative purity. Those attacks might not cripple Perry, but they could have an effect.

Bachmann struggled. Perry's entry to the race hurt Bachmann's momentum in Iowa and other states. Unlike earlier debates, Bachmann did not find a real moment to stick in viewers' minds. She's lost a lot of "Tea Party" ground to Rick Perry. If she wants to get that territory back, she'll need to shift the debate.

There were great expectations for Perry going into this debate, which seemed like it would focus on testing him. Though Perry handled himself fairly well, I don't think he landed a knockout blow. If anything, this debate perhaps strengthened Romney, as he was able to hit Perry from both the center (on Social Security) and the right (immigration). Tonight suggests that Perry is not invulnerable in the primary. Moreover, this debate also shows that other candidates are not willing to let this race become a two-man battle.

Update: Ace seems to agree with much of this analysis here.

Foundations of Government

2011-09-06T20:10:00.000-07:00

Matthew Continetti has an interesting essay up at the Weekly Standard about the evolution of the American state after the New Deal. While I think there are some pieces missing in his narrative, he has a good point here:

Only later would we come to understand that the house FDR built sits on a wobbly base. Steady economic growth is necessary to pay for all of the government’s promises. The bureaucracy functions only if experts have the confidence of the people. And government and citizenry must agree on a limiting principle that prevents national bankruptcy, a bloated state, and an irresponsible public.

Growth, confidence, and a recognition of limitation---those do seem the foundational pillars of the modern state. Those were the very things that leading Republican presidents of the post-New Deal era (such as Eisenhower and Reagan) sought to build open. I'm more optimistic about the future of many American political and social insurance institutions than Continetti, but his diagnosis of the basis of New Deal government has some merit.

A Reach Too Far

2011-09-04T09:33:00.000-07:00

With the ascent of Rick Perry in the GOP race, allies of "comprehensive immigration reform" are lining up behind the tough-talking Texas governor who has not exactly been a vociferous opponent of illegal immigration. Meanwhile, candidates like Romney and (probably) Bachmann, who want to challenge Perry's bona fides with the base, are turning their eyes to Perry's perceive softness on illegal immigration. Like the Texas governor preceding him (George W. Bush), Perry has spoken strongly against a border fence. He has also signed a bill giving in-state tuition to illegal immigrants.

This political dynamic has prompted Jennifer Rubin to observe the following:

Perhaps Perry’s stance is a bridge too far for the base of the Republican Party. It may be that not only Romney, but Rep. Michele Bachmann (R-Minn.) who can capitalize on this issue. But should Perry secure the nomination, there will be a significant opportunity for Republicans to reset their stance on illegal immigration. It took Richard Nixon to go to China; maybe it will take Rick Perry to pass comprehensive immigration reform.

I wonder really here how big of a "reset" Perry would be as a Republican candidate. Ronald Reagan passed an amnesty, George W. Bush fought very hard to pass a mass legalization, and John McCain, the nominee in 2008, was a very persistent proponent of mass legalizations throughout most of the last decade. Republican presidential candidates and presidents have often been much more anti-enforcement than the base. The Republican leadership class (to which Perry, the longest-serving Republican governor in the nation, undoubtedly belongs) is filled with individuals who range from indifferent to hostile to immigration enforcement efforts.

Nixon going to China might not be an apposite comparison. Richard Nixon had a reputation as an implacable foe against international communism, so his willingness to normalize diplomatic relations with the PRC was a very big step. Rick Perry has no such reputation in regard to illegal immigration. Indeed, his background (long-term Texas governor with close connections to business interests) would suggest that he would be most likely to support "comprehensive immigration reform." Now, a guy like Tom Tancredo supporting "comprehensive" reform would very much be a Nixon to China moment.

Picking a Battleground

2011-08-31T19:37:00.000-07:00

With the national debt skyrocketing, a faction on the right is hoping to turn the 2012 election into a debate on entitlement reform. No doubt, many Democrats are hoping the very same thing. Democrats would view that development as a chance to gain politically, while some Republicans would see it as a chance to demonstrate their purity.

Charging forth under the motto of William F. Buckley, standing "athwart history, yelling Stop," many conservatives have an affection for martyrdom. And it is not a uniquely conservative mistake to believe that, if something is hard, it is also worthwhile.

Running on entitlement reform would be very hard. Social Security, the centerpiece of American social insurance, is far more popular than tax cuts for the wealthiest Americans or other beloved positions of supposed fiscal hawks. Though many Americans recognize that Medicare is on an unsustainable course, they also want to ensure that the elderly can have sufficient medical care. And bromides about "self-reliance" apart from "socialistic" government intervention can be grating when they come from millionaires who have collected many years' worth of government paychecks. Moreover, it's hard to run a presidential campaign, a genre of the broad brush, with the mechanical pencil of policy minutia.

Yet the difficulty of running on entitlements should not obscure the fact that running on entitlements and focusing excessive energy on curbing entitlements will not solve what truly ails the economic health of the nation and drives our immediate and medium-term deficits: the poor employment picture. Hundreds of billions would be shaved off of the federal deficit with a revitalized economy, and a rotten economy is accelerating our entitlements crisis.

If you want to destroy the sustainability of Social Security and other social insurance programs, ignoring the economy is a good first step. Of course, economic stagnation also imperils the ability of the United States to project power, diminishes the standard of living, and makes it harder for Americans (and others across the globe) to have a lifestyle of comfort. Economic despair would have profound ripples throughout the American social fabric and the global order. Conversely, if the US can transcend the economic doldrums of the past decade, Social Security would require relatively little reform to become indefinitely sustainable, and even Medicare reform would become much more manageable. Solving the economy will help solve entitlement issues, but curbing the growth of Medicare, etc. will not, alas, solve our economic problems: very few businesses are refusing to hire because they fear the escalating costs of Medicare two decades down the road.

Furthermore, running on the poor economy has the additional advantage that this economy is immediately tangible. There's no need for Republicans to get caught in the weeds of arguments about projections, revenue metrics, and benchmarks for growth when they can instead simply tell voters to check the unemployment rate, to look at their diminishing paychecks, or to see how their neighbors are doing.

Republicans would have much to gain by making the economy the door to a broader critique of the Obama administration: that this economic frustration is representative of a broader failure to channel the energies of a free people; that, rather than focusing on the practical trials of American workers, this administration chose instead to use this crisis to indulge in ideology; that its rapid expansion of regulatory power has served not to level the playing field but instead to provide a vehicle for favoritism and political payback. Many of the excesses and limitations of the Obama administration can be seen in its economic policies, so Republicans can make a broader, principled case against Obama while also being anchored in the economic realities of the moment.

Republicans can say to voters, In 2008, you voted in Barack Obama and scores of Democrats in hopes of a new way forward. Disappointment has been the recompense for all your hopes. We can offer a better path. Growth built not on debt but on innovation and production. An economy based not on hollowing out and corporate raiding, where the profits go to an ever-shrinking minority, but on the productive labor of the broad range of the American workforce, where a true rising tide will lift all boats. We can offer an economy of freedom, where opportunity is not the purview of the few but the promise of the many. The world has changed over the past decade, but the thinking of many in Washington has not kept pace with that change. Well, now is the time to renew the American spirit of freedom, innovation, and prosperity---not for some Americans but for all Americans.

Such an aspirational, forward-looking message has, I think, more in it electorally and intellectually than do hectoring declarations that the Democrat party (or the RINO establishment or the federal government as a whole) is a hive of traitorous socialists who hate the United States and freedom. It also has a lot more zip than endlessly insisting, No, I really don't want to push Granny off a cliff. In fact, based on current actuarial projections, at the rate of current spending, the Social Security trust fund will be depleted by such-and-such a date, unless we start to adjust COLA standards and....

(Crossposted at FrumForum)

Rush to Primary?

2011-08-26T11:53:00.000-07:00

First Read offers the following view of possible chaos in the Republican presidential primary calendar:

According to Republicans monitoring this subject, there are two different timeline scenarios. The first is the RNC-sanctioned February start date: Iowa goes Feb. 6, New Hampshire Feb. 14, Nevada, Feb. 18, South Carolina Feb. 28, and Super Tuesday is March 6. The second is the more chaotic January (or even December) start date: States like Arizona and Florida -- risking losing half their delegates and other penalties -- set their primaries early, pushing Iowa, New Hampshire, and other states into January or earlier. Which scenario is more likely? Although this remains a fluid situation, one plugged-in Republican eyeing the calendar process for one of the campaigns says there’s a “99%” chance it begins in early January instead of February. So start making your New Year’s Eve plans in Des Moines now. Or at least buy refundable air tickets.

One can understand the desire of various states to be first and have influence earlier in the primary process, but one might also wonder about the wisdom of such a slew of early primaries---for states themselves and for the Republican party as a whole.

The primary calendar of 2008 saw a rush of states early in the year. For Democrats, the states that perhaps won the most in terms of electoral attention were those that held primaries after the rush. With its primary on April 22, Pennsylvania witnessed a much more intense level of campaigning than did California (which held its primary on Tsunami Tuesday on February 5).

And the odds are greater this cycle than in many cycles in the past that Republicans could witness a drawn-out primary process. RNC primary rules changes have placed a new priority on proportional representation for states early in the primary cycle, making the Republican primary process a little more like that of Democrats. These changes could make it less likely for competitive candidates to be knocked out of the race by losing a single state's primary. Especially if Palin gets in, we could easily see a number of closely split primaries leading to a more extended primary battle.

The extension of the primary calendar could very easily be a good thing for the eventual Republican nominee. The minute a presumptive nominee is crowned, the White House and its allies will have a single target on which to focus their vitriol. But, as long as the primary process is in play, the optics of partisan attack get more complicated, if not harder.

In a drawn-out primary process, states that come later still have an important role to play and can get more attention than those states that simply run with the pack. Moreover, an early selection of a nominee might not be a bad thing, but it is not assuredly a good thing, either. Many in Washington are probably hoping that states do not rush to have primaries in late 2011 or January 2012; many states might find it in their best interests to avoid this rush as well.

2011-08-12T21:48:00.000-07:00

FYI: For the next week or so, blogging will be close to non-existent. In the meantime, here are a few good ones (in my opinion) from the past:

How to Build a Better GOP
On Demagoguery
The Trials of the Middle Class

S&P: Dysfunctional Politics and their Price

2011-08-05T18:07:00.000-07:00

S&P has now downgraded the US government from AAA to AA+, a historic downgrade. The effects of this downgrade will no doubt echo throughout the US and global economy.

Zero Hedge posts the full text of the S&P statement. Contrary to what you might read in some quarters of the media, the statement regarding the downgrade does not merely focus on the inadequacy of the recent debt deal to reduce the long-term debt. Instead, it offers a broader critique of the structure of American fiscal politics.

The statement hammers away at what it views as political gridlock. The battle over the debt-ceiling has exacted a considerable toll, in S&P's eyes:

We lowered our long-term rating on the U.S. because we believe that the prolonged controversy over raising the statutory debt ceiling and the related fiscal policy debate indicate that further near-term progress containing the growth in public spending, especially on entitlements, or on reaching an agreement on raising revenues is less likely than we previously assumed and will remain a contentious and fitful process. We also believe that the fiscal consolidation plan that Congress and the Administration agreed to this week falls short of the amount that we believe is necessary to stabilize the general government debt burden by the middle of the decade....
The political brinksmanship of recent months highlights what we see as America's governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed. The statutory debt ceiling and the threat of default have become political bargaining chips in the debate over fiscal policy. Despite this year's wide-ranging debate, in our view, the differences between political parties have proven to be extraordinarily difficult to bridge, and, as we see it, the resulting agreement fell well short of the comprehensive fiscal consolidation program that some proponents had envisaged until quite recently. Republicans and Democrats have only been able to agree to relatively modest savings on discretionary spending while delegating to the Select Committee decisions on more comprehensive measures. It appears that for now, new revenues have dropped down on the menu of policy options. In addition, the plan envisions only minor policy changes on Medicare and little change in other entitlements, the containment of which we and most other independent observers regard as key to long-term fiscal sustainability

Many wanted a "battle" over the debt-ceiling and hoped for more "battles" in the future; S&P suggests that this might not be a good idea for the long-term fiscal situation of the United States.

Though the report does vaguely ask for reforms to various entitlements, it mentions Republican intransigence on raising taxes multiple times. Unlike earlier reports, this new one, with its projections for an accelerating amount of federal debt, assumes the extension of all Bush tax cuts "because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act." This report emphasizes tax hikes at the end, as well:

As our upside scenario highlights, if the recommendations of the Congressional Joint Select Committee on Deficit Reduction--independently or coupled with other initiatives, such as the lapsing of the 2001 and 2003 tax cuts for high earners---lead to fiscal consolidation measures beyond the minimum mandated, and we believe they are likely to slow the deterioration of the government's debt dynamics the long-term rating could stabilize at 'AA+'.

The report notes that other sovereign nations will have greater debts as a percentage of GDP for years into the future, but it still insists on downgrading the US:

When comparing the U.S. to sovereigns with 'AAA' long-term ratings that we view as relevant peers--Canada, France, Germany, and the U.K.--we also observe, based on our base case scenarios for each, that the trajectory of the U.S.'s net public debt is diverging from the others. Including the U.S., we estimate that these five sovereigns will have net general government debt to GDP ratios this year ranging from 34% (Canada) to 80% (the U.K.), with the U.S. debt burden at 74%. By 2015, we project that their net public debt to GDP ratios will range between 30% (lowest, Canada) and 83% (highest, France), with the U.S. debt burden at 79%. However, in contrast with the U.S., we project that the net public debt burdens of these other sovereigns will begin to decline, either before or by 2015.

So part of this analysis is based on long-term trends, an analytic assumption that may or may not be warranted.

Part of S&P's justification for the downgrade is premised on the fact that the economy is much weaker than was earlier thought. Ironically perhaps for some, this report may further damage the national economy by leading to an increase in various interest rates and heightening a sense of uncertainty in the nation's finances.

S&P makes the following recommendations for the United States: increase revenue, improve the economy, and ensure that government can fulfill its routine fiscal responsibilities. Those aren't exactly bad points. High-wire political knife-fights may make for riveting blogging and TV, but they do not always reflect the utmost of fiscal prudence. Perhaps the US government should not dance to the tune of (far from infallible) ratings agencies, but S&P does have a worthy point in this: in order for our government to work in the long term, it must have some kind of governable consensus. We must also have an economics anchored in reality and not in ideology, and a fiscal politics of compromise and empiricism instead of flamboyance and wrath.

PA in Play?

2011-08-02T09:03:00.000-07:00

Quinnipiac has released a new poll of Pennsylvania voters showing Obama losing ground to his potential Republican challengers. Mitt Romney now has a slight lead in that state, and other GOP candidates have also gained:

A majority of Keystone State voters now disapproves of the job Obama is doing as president. Just 43 percent of voters approve of his job performance, while 54 percent disapprove. That marks a significant decline from mid-June, when voters were split evenly on Obama.

Romney holds a 44-42 percent lead over Obama, reversing a seven-point edge for the president in June. Santorum now trails Obama, 45 percent to 43 percent; in June, he trailed by 11 points...
Obama also leads Rep. Michele Bachmann, R-Minn., 47 percent and 39 percent, and he also leads Texas Gov. Rick Perry, 45 percent to 39 percent.

In 2008, Obama won Pennsylvania by over 10 points, a margin greater than any shown in this poll.

Turnaround Techniques

2011-08-02T09:01:00.000-07:00

David Frum puts forward some ideas on how to turn around the employment picture:

1) Cheap money, a low dollar, and moderate inflation.
2) Tax relief aimed at stimulating private consumption, such as a big payroll tax holiday.

3) Income support for people in need.

4) Modest and temporary subsidies to state building projects.

5) An immigration moratorium.

6) Agreement now on a plan to balance federal budget to begin only after such time as unemployment declines below 8% or the 10-year US Treasury bond goes north of 5%.

Deal

2011-07-31T22:25:00.000-07:00

A deal may almost be brokered. AP has the details:

The plan calls for spending cuts and increased borrowing authority for the Treasury in two stages.

In the first, passage of the legislation would trigger more than $900 billion in spending cuts over a decade as well as a $900 billion increase in the government's borrowing authority.

The spending cuts would come from hundreds of federal programs across the face of government - accounts that Obama said would be left with the lowest levels of spending as a percentage of the overall economy in more than a half-century.

The increased borrowing authority includes $400 billion that would take effect immediately, and $500 billion that would be permitted after Congress had a chance to block it.

In the second stage, a newly created joint committee of Congress would be charged with recommending $1.5 trillion in deficit reductions by the end of November that would be put to a vote in Congress by year's end. The cuts could come from benefit programs such as Medicare, Social Security and Medicaid as well as from an overhaul of the tax code.

The committee proposals could trigger a debt limit increase of as much as $1.5 trillion, if approved by Congress. But if they do not materialize, automatic spending cuts would be applied across government to trim spending by $1.2 trillion.

Yuval Levin has some worthwhile reflections on the "trigger" for the committee

Compromise on the Horizon?

2011-07-30T17:15:00.000-07:00

Boehner and McConnell are talking optimistically about a compromise. Ed Morrissey suggests one possible shakeout:

My prediction is that we will see a deal structured in two installments of the debt-ceiling hike using the McConnell mechanism, which combined will hit the amount Reid wanted, and with the cuts and assumptions built into the Boehner proposal (with possibly a few changes, which should be checked), with a commitment for a balanced-budget amendment vote in the Senate included.

Reid's Proposal---A Move Against Bush Tax Cuts?

2011-07-30T08:25:00.001-07:00

Sen. Jeff Session (R-AL) lays out the case (via an interesting story on Reid's proposal in The Daily Caller):

Second, Reid’s amendment would “deem” a budget resolution for fiscal years 2012 and 2013 (through the next election). Contrary to the requirements of law, the Senate has refused to adopt a budget for 821 days. Reid’s amendment would give the Democrat majority in the Senate an excuse to not pass a budget for another two years, or 626 days. Without any hearings or debate, section 102 of Senator Reid’s amendment would deem budget allocations for all Senate committees. For most committees, the budget allocation would be set at the CBO baseline. This means none of the authorizing committees would be encouraged to look at the automatic spending increases in their areas and root out inefficiencies and ensure value for the taxpayer dollar. On the revenue side, the deemed budget resolutions would assume the tax increases associated with the expiration of the tax cuts in current law. That means that legislation to extend any of the tax cuts would be harder to enact because it would face a point of order under section 311 of the Budget Act for reducing revenues.

What Kind of Compromise?

2011-07-29T18:46:00.001-07:00

The Boehner bill has failed in the Senate. The Reid bill will fail in the House. Right now, Republicans and Democrats are negotiating to forge some kind of consensus for a bill that could pass the Senate and the House.

These, it seems to me, are the big points of contention:

How big a raise in the debt ceiling? How many steps? Boehner's committed to a two-step process, in which an immediate increase in the debt ceiling would be followed by another vote in 6 or so months that would require the passage of a Balanced Budget Amendment. Reid's bill would offer enough of an increase to carry the debt past 2012.

Role of a Balanced Budget Amendment? Boehner requires Congressional passage of one before a "second tranche"; Reid doesn't.

Where are the cuts? How frontloaded are they? This is perhaps the most flexible and opaque part of discussion (as projected saving/spending often is).

Power of appointed committee? Both proposals would have expedited review, but Boehner's proposal demands a certain threshold of savings before the passage of the "second tranche."

The exact placement of cuts is perhaps where Republicans can demand the most (because they might have to give elsewhere), especially in their insistence that they be more front-loaded and substantive.

I'm doubtful that Republican leadership (especially Boehner and McConnell) really want to see the debt-ceiling battle redux, so both Republicans and Democrats might have something to gain by avoiding a "second tranche" two-step. Both parties could split the difference perhaps by not allowing a second increase in the debt ceiling to take place without a vote on the recommendations of the savings committee; once the vote took place (yea or nay), the ceiling could be raised. Yes, that compromise would be mostly cosmetic.

A solid requirement that a BBA be passed before a second increase in the debt ceiling is likely a non-starter for a whole host of reasons. But demanding a vote on the BBA before a second debt-ceiling hike might be an appeasing gesture.

Negotiators might also find it helpful to demand concessions on issues beyond the budget in order to provide cover to various Republicans. Senate pledges to change Obamacare or light bulb bans or other conservative bette noires might help keep the support of House Republicans. Procedurally, some of those moves could be hard to execute, but they might provide a helpful avenue.

If Republicans want to reinforce the chances that an ultimate debt-ceiling reconciliation will pass, Senate Republicans might be wise to put forward a measure that gets more than the 7 or so Republican votes that would be needed to override a filibuster. A bill that comes out of the Senate as a RINO bill will have a harder time getting through the House (assuming any Senate-approved bill can avoid that stamp). Some Democratic defections in the Senate would likely make it easier for any compromise to be passed; it would increase the perception that the bill was "tough."

Update: The Hill has some specifics on one line of compromise: a two-step borrowing from the McConnell plan.

On to the Senate

2011-07-29T16:23:00.000-07:00

By a narrow margin, the Boehner bill has passed the House. Now, it's on to the Senate. The Hill gives a helpful summary of the possible schedule:

According to guidance from Reid's office, the majority leader is looking at the following possible schedule.
The House will vote on House Speaker John Boehner's debt ceiling plan on Friday evening, and it is expected to approve it. [It did approve it---FB]
The Senate is then expected to approve a motion to table the measure, as early as Friday evening. That motion only requires a majority vote for approval.
The tabling motion will allow the Senate to use Boehner's measure as a vehicle for a possible Senate compromise bill that would be worked out by Democrats and Republicans in the upper chamber.
If the two sides can reach such an agreement, Reid will file a cloture motion on the amendment to the Boehner bill on Friday night.
Reid's motion would set up a vote as early as 1 a.m. Sunday to end debate on that amended measure. Sixty votes would be required to end the debate.
If that vote succeeds, it would set up a possible final vote on passage of the new measure at 7:30 a.m. Monday, according to the guidance.
This would give the House two full days to consider that measure before the deadline at the end of the day on Aug. 2 is reached.
Technically, according to a Democrat aide, a compromise amendment could be filed Saturday and still allow a final vote on Aug. 2 but this would cut things very close.

The big question here is what compromise could pass the Senate that could also pass the House?

BBA + Boehner = ?

2011-07-29T11:37:00.000-07:00

A few thoughts on the implications of Boehner adding a "Balanced Budget Amendment" to his debt-ceiling bill (which would now require that Congress pass a BBA before a second debt-ceiling increase could take place early in 2012):

Adding the BBA makes the bill very likely to pass the House. This addition appeases Tea Partiers, who had denied Boehner the majority he needs to pass it.

The Boehner bill as it stood on Thursday night might not have been able to pass the Senate; the Boehner bill of today definitely can't. The very thing that makes the bill likely to pass the House---its Tea Party pedigree---will kill it in the Senate.

If Congress is really required to pass a BBA before a second hike in the debt ceiling, prepare for the same gridlock six or so months from now.

In order for the debt ceiling to be increased, Republicans and Democrats will have to compromise. That means especially that Tea Partiers will have to compromise. In a democratic republic, you don't control less than a quarter of the votes and get to dictate policy to everyone. And threatening to bring the house down unless a supermajority of Congress agrees to the passage of a methodologically unconservative Balanced Budget Amendment is not compromising.

Beware the "second tranche." The current battle over the debt ceiling has exacted a considerable price on Congressional Republicans and has risked an economic-fiscal-financial meltdown. Going for another round about this issue, when the players will be the same, seems like it might not be the most effective. I know the existence of a "second tranche" is one of the biggest differences between the Boehner and Reid plans (the latter would raise the debt ceiling until after the next election), but I think Sen. Bob Corker (R-TN) has some wisdom here in doubting the value of a second hike so soon after the first. The debt-ceiling debate has sucked up a lot of air that conservatives could have used to advance other small-government policies.

Perhaps the biggest advantage of adding the BBA to the Boehner bill is that it gives Republicans something more to trade away. The inclusion of the BBA will give Republicans some more negotiating room if there is to be a Boehner-Reid compromise package.

The following is one possible (perhaps, at this hour, the most probable) course of events:

House passes Boehner + BBA.
Senate passes Reid-like bill.
Some compromise measure comes out of conference. (This will very likely not have a strong BBA requirement.)

The Senate would likely pass any compromise, and Republicans will have a stronger hand in negotiations over the compromise if the caucus stays united; anything that increases the power of Nancy Pelosi in negotiations will ultimately undermine the position of conservatives, and the more votes Boehner needs from Democrats, the stronger Pelosi will be.

If the economy crashes because of a refusal to raise the debt ceiling, Republicans will be blamed. The failed vote on the Ryan plan may have damaged the ability of Republicans to attack Obamacare for its cuts to Medicare; Republicans should be wary of closing off another line of attack in 2012. Right now, Obama has increasing ownership of the economy, and Republicans have been able to creep away from the disastrous tail end of George W. Bush's economic policies. If the economy tanks and the debt ceiling is not raised, Democrats (and their allies in the media) will be pointing fingers at the "absolutists" in the Tea Party and GOP caucus who would not compromise. Those attacks will very likely work or at least muddy the waters enough to limit the effectiveness of Republican economic critique in 2012. The economy already may be slowing down; refusing to raise the debt ceiling will be a way to take partial ownership of a double-dip recession.

No matter how "virtuous" or "pure" the Tea Partiers are, an Obama victory in 2012 would very likely close the door on the kind of reforms that many conservatives would prefer. Numbers in Congress are against Tea Party-style reforms, and, in a democratic republic, numbers matter a lot. Rather than fuming or threatening or beating one's chest in self-congratulatory self-adulation, far better to engage in the hard work of rational persuasion, sober compromise, and hopeful deliberation. Will any budget "deal" be pretty bad from a conservative perspective? Probably. But we can work to make such a deal as least bad as possible. That's what conservatism---and rational governance---is about.

(Crossposted at FrumForum)

Best Option?

2011-07-27T06:49:00.000-07:00

Many in the conservative establishment are starting to rally behind the Boehner plan. Interestingly, lines of defense of this plan often suggest that opposition to this plan helps Obama.

The WSJ stresses that the debt ceiling has to be raised---and that Boehner's plan is the most fiscally conservative viable path to doing so:

But what none of these critics have is an alternative strategy for achieving anything nearly as fiscally or politically beneficial as Mr. Boehner's plan. The idea seems to be that if the House GOP refuses to raise the debt ceiling, a default crisis or gradual government shutdown will ensue, and the public will turn en masse against . . . Barack Obama. The Republican House that failed to raise the debt ceiling would somehow escape all blame. Then Democrats would have no choice but to pass a balanced-budget amendment and reform entitlements, and the tea-party Hobbits could return to Middle Earth having defeated Mordor.

This is the kind of crack political thinking that turned Sharron Angle and Christine O'Donnell into GOP Senate nominees. The reality is that the debt limit will be raised one way or another, and the only issue now is with how much fiscal reform and what political fallout.

Meanwhile, Bill Kristol takes aim at "purist" opponents of the plan:

This isn’t some bad bipartisan establishment deal of the sort conservatives have sometimes opposed in the past. Then conservatives were opposing Democrats as well as Republicans, and could plausibly explain why doing so was in conservative interests. Now, Heritage Action and the Club for Growth are siding with and strengthening Barack Obama and Nancy Pelosi and Harry Reid. They’re working to produce a policy and political defeat for John Boehner and Eric Cantor and Paul Ryan and the Republican majority in the House. This isn’t principled conservatism. This is self-indulgence masquerading as principle, sectarianism masquerading as conservatism.

Of Downgrades and Ratings Agencies

2011-07-26T17:40:00.000-07:00

The suggestion that the US needs to cut $4 trillion in projected debt over the next ten years in order to avoid a downgrade in its debt rating, posed here in an S&P report, has gained significant traction among many on the right. Erick Erickson, when he's not denying "absolution" to the falsely faithful in the GOP, has emphasized this cut of $4 trillion as crucial to avoid a downgrade.

However, digging into the S&P report reveals some details that might be more problematic for many seeming "deficit hawks." Though this report does suggest that $4 trillion in cuts/increased revenue over the next ten years would be enough to keep an AAA rating, it also says that its baseline for savings assumes the expiration of the Bush tax cuts in 2012. Will many of these "deficit hawks" abandon those tax cuts in order to appease S&P and keep an AAA rating?

This report also makes an interesting---and perhaps unwarranted---logical jump (emphasis added):

Congress and the Administration might also settle for a smaller increase in the debt ceiling, or they might agree on a plan that, while avoiding a near-term default, might not, in our view, materially improve our base case expectation for the future path of the net general government debt-to-GDP ratio. U.S. political debate is currently more focused on the need for medium-term fiscal consolidation than it has been for a decade. Based on this, we believe that an inability to reach an agreement now could indicate that an agreement will not be reached for several more years. We view an inability to timely agree and credibly implement medium-term fiscal consolidation policy as inconsistent with a ‘AAA’ sovereign rating, given the expected government debt trajectory noted above.

Really? Right now, we have had a House filled with new members who have a radical antipathy to the sitting president, his party (which controls the Senate), and (Democratic) deficit spending. I would think now might be one of the times when a long-term agreement was least likely. Things could be radically different 2 years from now. If Obama wins reelection, the Republican majority in the House would likely be quite diminished, if not destroyed. Meanwhile, the Senate, a more consent-run institution, would likely have a narrow Democratic or Republican majority. Wouldn't that situation be more likely to have a bipartisan agreement? Likewise, a Republican victory in November 2012 could very likely lead to Republicans controlling both houses of Congress and the presidency. Surely that scenario would also be likely to pass a long-term debt-decreasing strategy---or at least more likely than the present. S&P might be guilty here of setting a false deadline. This is not the first time S&P has made mistakes in its analysis.

Moreover, it's worth noting that S&P does seem not overly concerned about the current amount of US debt as a percentage of GDP. After all, many countries (such as Germany and France) have debts that are greater fractions of their economies than the USA does by many estimates (S&P currently estimates that the US debt-to-GDP ratio is close to 75%). Moreover, US bonds constitute nearly 60% of AAA-traded government bonds. And interest rates on long-term government bonds are very low, indicating that investors feel quite safe buying US treasuries. Much of the market seems to believe that US debt is a safe investment.

What S&P is concerned about---and we should be concerned with---is the trajectory of debt as a percentage of GDP, which has shot upwards in recent years. One of the biggest drivers of our debt problems in the short term is the poor economy (Medicare is one of the biggest in the long term). And S&P warns that refusing to raise the debt ceiling could lead to a worsening of the economy and further degrade the US debt outlook. This S&P analysis suggests that raising the debt ceiling without $4 trillion in savings and the repeal of the Bush tax cuts might lead to a downgrade (nowhere does it say that it will downgrade US debt if cuts are less than $4 trillion), but refusing to raise the debt ceiling would very likely lead to a downgrade.

The miserable employment picture and resulting diminished tax revenues probably accounts for at least half (and perhaps much more) of the current deficit---over $700 billion dollars a year. Getting back to a fully functioning economy would shave trillions off the debt over the next decade. Anything that gets in the way of a real economic recovery would likely worsen, not resolve, our debt crisis.

(Crossposted at FrumForum)

Moving the Goalposts

2011-07-25T15:46:00.000-07:00

Jill Lawrence at The Daily Beast takes a hatchet to Mitt Romney's jobs record as governor. Along with quoting an ex-Dukakis staffer, Lawrence makes the following point:

Like Obama, the former Massachusetts governor took office during a severe recession, struggled to boost job growth, and spent perhaps too much time trying to solve the riddle of health care. Now his economic record is under scrutiny in an unforgiving campaign environment, and it’s as flawed as Obama’s.

Flawed as Obama's? Early in Romney's term, in June 2003, the state unemployment rate had climbed to 6%. By the end of his term in early 2007, it had sunk to 4.6%. For most of Romney's term, the Massachusetts unemployment rate was below the national average.

Compare that with Obama's record: in February 2009, the national unemployment rate was 8.2%. Unemployment jumped to over 10% later that year and has lingered above 9% for most of Obama's term.

It's true that both Romney and Obama had economic inheritances and dealt with economic contexts that they could not and cannot completely control; it would take more than a dose of partisanship to blame Obama entirely for the 10%+ unemployment rate in the fall of 2009. But Obama cannot avoid the burden of responsibility, either, especially since his party controlled Congress with overwhelming majorities for his first term (Romney, on the other hand, had to deal with veto-proof Democratic majorities in the Bay State). The stimulus measure in which the president invested so much political capital performed well below expectations, and the current national ship is only being kept afloat by massive deficit spending.

Cutting the unemployment rate by about 25% (from 6% to 4.6%) or never getting the unemployment rate near the number it was when you started? You can bet that, if Obama's record were as "flawed" as Romney's, numerous heads in the White House would be resting a lot easier.

Time Machine: The Debt Ceiling

2011-07-24T18:12:00.000-07:00

A little while ago, Joshua Green outlined how Congress dealt with the debt ceiling during the Reagan, Bush, and early Clinton years:

Gephardt realized that the easiest way to fix the problem and impose some rationality on the process, was to do away with the second vote. He consulted the parliamentarian. "I asked if there was a way that when we pass the budget [the debt ceiling] can be deemed 'raised' to accommodate the budget people are voting for," Gephardt said. "He said, 'Yeah, we think we can work that out.'"

Thus was born the "Gephardt rule." For a period thereafter, the adoption of the conference report on the budget resolution would trigger the Gephardt rule and "deem to have passed" legislation raising the debt limit to accommodate the spending and revenue levels approved in the budget. Presto! Problem solved.

A Congress dominated by resurgent Republicans scrapped this rule in 1995.

(H/T: David Frum)

What happens in 2015?

2011-07-22T15:49:00.000-07:00

Consider this scenario: President Palin (or Romney or Perry or Pawlenty or whoever) is sworn in with great jubilation among movement conservatives in January 2013. Voter distaste with Democrats also led to the crushing defeat for Democratic Congressional incumbents, leaving Republicans with hefty majorities in the House and Senate. In a paroxysm of celebration, Republicans pass the Ryan budget, slashing taxes and putting major reforms in Medicare years down the road. However, the growth promised by advocates of this budget does not materialize, and (as the budget estimates) the federal government runs huge deficits for the first two years of the new president's term. Frustrated with a series of broken economic promises, voters turn Republicans out in massive numbers in the 2014 midterms. Though Republicans cling to a narrow majority in the Senate, they are wiped out in the House, and an exultant Nancy Pelosi reclaims the title of Speaker.

In passing the Ryan budget, Congress also upped the debt ceiling by a trillion or so, but perpetual deficits mean that the ceiling is coming awfully close, and federal spending is due to break it in early August 2015. So now, in May, the president must go on bended knee to Speaker Pelosi, who demands tax increases as the price for her caucus supporting an increase in the debt ceiling. As the Speaker tells the press after the tenth of her many meeting with the president:

Since 2000, we have cut taxes for the wealthiest ten percent of Americans to record lows and have nothing to show for it but exploding deficits and a stagnating economy for the lower ninety percent. Polls show that Americans support an increase in taxes on the wealthiest, who have the most to give and who have gained the most from our economy. It would be irresponsible to increase the debt ceiling without increasing our ability to pay for our spending. I hope the president will compromise for the sake of our nation's future.

And what could Republicans say to this? Again, there is the wailing and gnashing of teeth in markets across the globe about America's ability to pay its debts. Again, the Washington summer dissolves into rancor and cut-throat battle. Welcome to the Battle of the Budget Part II (of many, many parts).

The above scenario may very well not happen, but a Republican president will, at some point in the future, face a Congress wholly controlled by Democrats. Every Republican president since Eisenhower has faced at least one Congress totally dominated by Democrats. On the other hand, Bill Clinton is the only Democrat after Truman who has dealt with a Congress totally controlled by Republicans. Jimmy Carter is the last president who never faced any house of Congress controlled by the opposing political party. And every president in the living memory has increased the debt in raw dollars, requiring increases in the debt ceiling.

If dynamic of the current debt ceiling debate continues into the future, we could easily find the country grinding into a kind of financial-political paralysis every few years that one party controls one branch (or two branches) of Congress while another controls the White House. The Founders believed in certain kinds of brakes on governmental power, but I'm not sure that this specific kind is the most helpful (or even if it would not increase government power in the long run through increasing dysfunction). Under this current dynamic, Congress votes for, and the president signs, budgets demanding certain kinds of spending only to later fight about how to pay for this spending (via borrowing, tax increases, future spending cuts, and so forth). Normal prudential politics would seem to suggest that you agree (implicitly or explicitly) to agree paying for some spending before you agree to that spending.

Republicans and Democrats, conservatives and progressives, will have to weigh the implications of the current debt-ceiling discussion tactics for future administrations and Congresses. These implications might be problematic for the functioning of government and conservative goals.

(Crossposted at FrumForum As usual, there is no endorsement of or responsibility for the headline and accompanying picture.)

The Pitfalls of a Balanced Budget Amendment

2011-07-18T21:58:00.000-07:00

Many on the right seem to believe that the balanced budget amendment, while a good idea, may face an uphill climb in terms of being enacted. I think, however, there are considerable reasons to doubt whether this amendment has merit as a policy aim. The principle of having a balanced budget is a worthy one. Fiscal prudence and discipline are important for any authentic conservatism, but the methods to achieve the end of a fiscally sustainable government also deserve some scrutiny.

As many admit, the term “balanced budget amendment” is itself a misnomer. The “balanced budget amendment” (BBA) currently endorsed by many Congressional Republicans not only requires that the budget be balanced but also stipulates, among other things, that federal spending cannot go above 18% of GDP without a 2/3 majority vote in favor, that taxes cannot be increased without a 2/3 majority vote in favor, and that a vote of 3/5 of both branches of Congress will be required to raise the debt ceiling. A 2/3 vote can also allow the budget not to be balanced. War can allow many of these majority requirements to be waived---with the notable exception of taxes, which would still require a 2/3 majority to be increased.*

An initial practical point: for conservatives interested in changing the tax system, the BBA would very likely make tax reform harder, not easier. Most forms of tax reform would require that taxes somewhere be raised (through the closing of various loopholes, say) in order to compensate for taxes being lowered elsewhere. A requirement for a 2/3 majority on tax increases would give a grand bargain on tax reform a much higher hurdle. Moreover, the BBA seems to put in place an utterly unconservative dynamic: it makes it easier to increase spending than it is to increase taxes, the instrument for paying for this spending. Even if current federal spending were to magically drop to 18% of GDP, current tax revenue is only 15% of GDP, so we would be left with over $400 billion in deficit spending. As we are under a time of military conflict (in Afghanistan, etc.), the government can ignore the “demand” that the budget be balanced.

Because GDP is a notoriously unmoored number, the requirement that spending cannot exceed 18% of GDP is built on sand. GDP for a year is often revised numerous times, so what counts as GDP for the purposes of the BBA? In a year in which spending is 18% of GDP and the GDP number is later revised downward, part of the budget based on that year's GDP might be deemed unconstitutional. Which part? This requirement could plant a bacterial trace of chaos in the budgetary system of the United States, one that could infect the whole of the federal budget.

Moreover, 18% is an entirely arbitrary number. According to the Office of Management and Budget, 1966, before Medicare really came into effect, was the last year where federal spending was below 18% of GDP. Moreover, every presidential administration since the end of World War II had years where federal spending was greater than 18% of GDP. It is unclear why this number should be set in stone.

History has another rebuke for the BBA: almost every presidential administration since 1900 would have had budgets that would have required a Constitutional override of a 2/3 vote. The only exceptions to this would be the presidencies of Harding and Coolidge, which ran surpluses for each of their years in office---though Coolidge’s presidency was also followed by the worst economic collapse in the twentieth century. The only Republican president in the postwar era whose policies led to at least one year with a balanced budget was Eisenhower. With the exception of 2001 (which was a partial carry over from Clinton-era budgets), every year of Nixon, Ford, Reagan, Bush I, and Bush II would run afoul of the BBA.

I cite history not because the past should always be the example for the future. But the past does have a significant role to play for traditional conservatism as it considers its policy aims. Federal debt has pretty much inexorably increased from 1900 to 2000, but the United States did not become poorer or radically less fiscally sound over this period. Provided they are sufficiently small, deficits do not seem likely to break the fiscal health of this nation. Moreover, the embrace of the principles of the BBA would seem to entail the rejection of the policies of every Republican and Democratic administration in the modern era, with the possible exception of Eisenhower, the only president in the modern era who ever ran a surplus and also presided over a federal government that was less than 18% of the GDP. And even Eisenhower’s administration ultimately increased the debt in raw dollars and had years when federal spending was over 18% of GDP. (There’s some irony to the fact that Eisenhower’s administration, more than any other, conforms to the principles of the BBA; many factions within the Tea Party movement, which has advocated strongly for this measure, can trace their ideological ancestors to the Birchers and Goldwaterites who rejected Eisenhower-style conciliation.) A total rejection of historical practical standards sounds less like moderating conservatism and more like an insistent radicalism.

An obvious rejoinder to these points is that the BBA gives a ready means of escape---that 2/3 majority that can override any of its requirements. Therefore, all past presidents could comply with the principles of the BBA, as long as Congress votes for overrides. However, this rejoinder implicitly weakens the case for the BBA by suggesting the ordinariness of seemingly extraordinary measures. The normalization of overrides could easily make public finances less sound and increase governmental inefficiency, as 2/3 of all members would have to be “persuaded” by subsidies, tax breaks, and pet programs. Rather than authentically restraining spending, the BBA may present another layer of political kabuki, and history has shown that the increase in those layers is closely correlated to an increase in enrichment for the connected and a decrease in real political accountability. It is unclear what would be gained---more clear is what could be lost---by having our government’s budget policies be run by 2/3 of the House and Senate.

The current incarnation of the balanced budget amendment falls into an error about which many on the right have traditionally pilloried the left: it substitutes legalism for virtue and prudence. We can balance the budget tomorrow if we want---by spending no more than we gain in taxes. Conservatives can cut spending if they want, though they seem to find this a challenging prospect when they actually take power. The Constitution already has a mechanism for a balanced budget, if our Congress and president want it. The fact that they have so rarely wanted it, and that the lack of a balanced budget has not always led to an economic or fiscal disaster, might give those sympathetic to prudential conservatism pause. This doubt might be reinforced by noting that the existence of balanced budget amendments in various states has not saved them in any way from fiscal turmoil. Indeed, California, perhaps the paragon of dysfunctional state finances, has operated under a balanced budget amendment for years. Passing constitutional requirements, in the case of California and other states, was a poor substitute for judgement in legislative and executive branches.

The fact is that some debts are worth incurring, while others are not. Sometimes deficit spending makes perfect sense; at others, it’s equivalent to a drug addict borrowing for a good time. Sometimes, some taxes will have to be raised; sometimes, some taxes will have to be lowered. Personal judgement and principled deliberation can help us realize those times---a set of paragraphs plugged into the Constitution will not.

*Other variants of this proposal are circulating, but their features, and their limitations, have much in common with the version discussed here.

(Crossposted at FrumForum)

BULB Act Scheduled For Vote

2011-07-11T10:43:00.000-07:00

The Better Use of Light Bulbs Act (HR 2417) is apparently scheduled for a vote today. The BULB Act would repeal part of a 2007 bill that bans the traditional incandescent bulb. This eventual ban (due to start taking effect next year) has been a flashpoint for many on the right and center.

However, this vote could face some troubles. As The Hill notes,

The BULB Act will be considered under a suspension of House rules, which means it will require support from two-thirds of voting members. This bill has the possibility of failing today: Republicans have already brought up a few suspension bills that have failed due to lack of support from Democrats.

If all members vote and all Republicans vote in favor of the BULB Act (a big if), BULB Act allies would probably need at least 50 Democrats in order to pass this legislation. With many Blue Dogs and somewhat moderate Democrats purged in the 2010 midterms, finding 50 might be a challenging enterprise.

UPDATE: House has adjourned: HR 2417 will be taken up later.

Partisan Optics for the "Constitutional Option"

2011-07-06T09:48:00.000-07:00

As Matt Yglesias suggests, one of the big reasons for the left bringing up the "Constitutional option," in which the president would override the debt ceiling by invoking the Fourteenth Amendment, is as a bargaining position: it gives the White House the opportunity to say to Republican negotiators that it doesn't need them and has other options if they refuse to vote to raise the debt ceiling.

It's pretty clear why the "Constitutional option" could be good partisan politics for Democrats. If the debt ceiling stands and government budgets run into it, we could enter a period of intense economic turmoil. That turmoil could sink the president's chances of reelection (that is, if he doesn't successfully deflect blame to the Republicans for the debt-ceiling fiasco). By giving the president leverage, this "option" can also allow him to parry cuts that he or his allies find unfavorable.

However, the "Constitutional option" may also be a partisan opportunity for Congressional Republicans. One of the many dirty little secrets of the current debt-ceiling talks is the fact that many Capitol Hill Republicans are quite glad to have trillions more in national debt. The GOP has voted for budgetary measures that would bust the debt ceiling. Moreover, the Ryan budget, backed by the overwhelming majority of Congressional Republicans, adds trillions to the debt and places most of the savings (some of which are premised on fantastic economic numbers) many years down the road.

But while Republican members of Congress have de facto embraced more debt, they also face a grassroots element and certain self-anointed tribunes of the conservative "movement" who increasingly believe that any vote to increase the debt ceiling is a sign of fiscal capitulation. Many Republicans thus find themselves between the rock of fiscal reality and the hard place of political positioning.

The "Constitutional option" offers the GOP an escape hatch. If Obama used this option, the GOP could keep on voting for massive deficit spending while also not making the politically hard vote about the debt ceiling. Obama's exercise of the "Constitutional option" would also give Republicans an opportunity to rail against an "out of control" executive branch while not forcing them to do anything to rein in this executive.

The leaders of both parties certainly want the debt ceiling to be raised, but they are trying to find the least politically damaging way to do it. Republicans and Democrats may find that the "Constitutional option" is the easiest way of doing so.

Of course, the use of this "option" would very likely be a ticket to a Constitutional nightmareland and could set up a further corroding of our federal institutions and national consensus. The use of this option may be good partisanship for both parties, but it seems bad politics for the nation as a whole. It would be far better for Congressional leaders to hammer out some compromise that would allow the United States to meet its fiscal obligations over the short and long terms.

Toward a Further Sunrise

2011-07-04T00:07:00.000-07:00

(An oration on the Fourth a la Edward Everett)

It has been frequently remarked that it seems to have been reserved to the people of this country, by their conduct and example, to decide the important question, whether societies of men are really capable or not of establishing good government from reflection and choice, or whether they are forever destined to depend for their political constitutions on accident and force. If there be any truth in the remark, the crisis at which we are arrived may with propriety be regarded as the era in which that decision is to be made; and a wrong election of the part we shall act may, in this view, deserve to be considered as the general misfortune of mankind.

---Alexander Hamilton, Federalist No. 1

When Alexander Hamilton wrote those words, the citizens of a fledgling republic faced great challenges: significant debts, the aftermath of a great war, internal divisions, and a seemingly crippled government. Yet the Founders chose engagement rather than alienation and laid the foundations for a great civilization.

It would have been easier for them, perhaps, to have turned on each other. Rather than doing the hard work of drafting the Constitution, they might have rested content with blaming internal political adversaries for all political problems. Instead of negotiation and compromise, they might have drunk deep of vitriol. And, even as the ship of state sunk, a few lucky partisans could have rejoiced at having the last swallow of air.

But they didn’t do so. The Founders chose toil and struggle and deliberation over the cheap narcotic of blame. Wrath over taxation may have started the Revolution, but reason, temperance, and conciliation won the republic. The Founders did not regard government as the enemy; they instead sought to recast government to fulfill a broader vision for civilization.

The legacy of their achievements has come down to us, distilled into the annual festival of the Fourth of July. Why do we celebrate this Fourth? Is it merely a time to rest upon our laurels? To clap ourselves on the back once a year with the comforting pablum that ours is the greatest nation in the history of the world? If so, it is a day of mere self-indulgence. The Founders of this nation did not spend all their time proclaiming the greatness of their land. They did great things to make this a great republic.

In part, we celebrate the Fourth to commemorate the work of our predecessors. There were many sacrifices, failures, and triumphs. We, of course, honor those who have given through military service, and we also remember the labors of great statesmen---such as the Founders, Clay, Webster, Lincoln, Roosevelt, Eisenhower, and others. We think of those who worked to change the course of this nation’s politics, such as Douglass and Anthony and King, as well as those whose enterprises have added to the vigor of our nation---from Emerson to Faulkner, Edison to Salk. Yet we celebrate more than gilt-edged names; we rejoice, too, in the millions of dreams, labors, victories, and struggles of countless private citizens. Those who came to these shores, from the Pilgrims to the present day, who reached from the Atlantic to the Pacific to settle this land, who raised families and factories and houses, who sacrificed and strove and searched---they too have woven the fabric of this nation.

But the Fourth of July is not merely a retrospective holiday. We should also use this moment to reflect on the challenges facing the current republic. Our present trials are legion, as perhaps they always seem. Yet the intensity of these days seems to suggest a nation caught with anxiety about the prospect of its decline.

The power of “reflection and choice” for which Hamilton spoke is counterposed to that of irritation and resentment. Make no mistake: Americans have much to be angry---or at least concerned---about. The new millennium has not been an easy one for this American republic. The pillars of American self-identity have been attacked, including electoral legitimacy, national security, economic success, and sense of freedom.

November of 2000 inaugurated this new era of anxiety, with the most contentious presidential election in well over a century. Whoever had triumphed after election day would have been tainted in some way. George W. Bush, the man who did win, inherited a recession that has since blossomed into a long-term economic stagnation.

The terrorist attacks of September 11, 2001 crystallized the sense of a national identity under attack. The World Trade Center---symbol of American cosmopolitanism, modernity, and economic ambition---and the Pentagon---emblem of the American military order that plays such a role in world affairs---were both attacked by that quintessentially American invention: the airplane. The enemies of Western liberalism and wealth used the very instruments of that civilization to bring it down. For a moment, it seemed as though the nation would rally in response to this challenge---that politics would find a new direction, that the civic compact would be reinforced, that a shock of this trial would rejuvenate our democratic energies. Yet soon enough, this vital force was confronted with a deluge of glib pessimism, alienation, cynicism, and despair. Missteps in the lead up and aftermath of the ousting of Saddam Hussein, continuing challenges in Afghanistan, geopolitical turmoil, and fraught debates about coping with postmodern terrorism have deepened our public disagreements and, in many cases, called into question the capacities of the governing elite. The new homeland security state has had many excesses and numerous missteps. Even as our nation has faced new challenges of terrorism, it has also faced an international order morphing into something (what remains to be determined) at an accelerating pace.

Meanwhile, the economy stumbled along throughout much of the 2000s, fed by the thin gruel of skyrocketing debt, until it nearly fell off the precipice into oblivion during the meltdown of late 2008. Our nation’s finances have not yet collapsed, but growth over the past decade has been slower than at any other period in recent memory and unemployment remains at unusually high levels. The wages of the vast majority of Americans have stagnated even as the wealth of the richest has increased. The present administration came in with great promises, many of which have been broken, discounted, or forgotten. Its economic plans in particular have fallen far short of its own expectations (though the economic plans of the Bush administration ultimately disappointed many as well). Under the prevailing economic conditions of the past few years, our government finances are headed to ruin.

Precisely where our government was supposed to be the strongest, its flaws proved most glaring. The failures of the broader governing class were evident by 2008, though this class has remained mostly untouched by the effects of this failure.

The political pendulum has swung back and forth over the past decade, with increasing ferocity: drifting to the Republicans in 2002 and 2004, hard to Democrats in 2006 and 2008, and back with a vengeance to the Republicans in 2010. As the sense of national frustration has deepened over the past decade, the sense of urgency for each newly-empowered party has heightened. Barack Obama in 2008 was supposed to right the excesses of the Bush administration and restore the sound footing of the economic order and point the way to a brighter America. The Republicans in 2010 were supposed to right the excesses of the Obama administration and restore the sound footing of the economic order and point the way to a brighter America. The similarity here is in more than syntax.

Many partisan orthodoxies have failed, and new paths need to be found. This failure of conventional wisdom has opened up a vacuum in the public space. Scapegoating has rushed to fill it. We live in a time of many scapegoats: the rich, the unions, heartland bigots, the ruling class, faux free marketeers, crypto-socialists, Christianists, atheists, Republicans, Democrats, conservatives, progressives, anarcho-capitalists, statists, and on and on and on. The brain tires at the mere thought of that endless list of endless calumnies, and the body politic is no less exhausted by them.

In a two-party country, it is easy to see why politics has a tendency to focus on assailing one’s opponents: the ballot box is a zero-sum game, and a decline in the other party means a victory for one’s own. But societies as a whole are not themselves zero-sum. The enrichment of one’s neighbors does not imply one’s own impoverishment, nor does one’s own gain in wealth consign others to poverty. The promise of capitalism is, in part, the promise of cooperative enrichment. But there is a dire flip side to this sunny proposition---just as a community can cooperatively become richer, so too can it become poorer.

America cannot afford to cannibalize itself, as citizen turns against citizen. The crucial failure of scapegoating is in its obsession with the fate of a part in order to distract from the fate of the whole. What debilitates our country is not the fact that a union worker (in the private or the public sector) gets fair pay and good benefits; far more problematic is the fact that so many jobs have decreasing pay and winnowing benefits. Honest wealth honestly acquired should be thought of as a value to this republic and not as an injustice. Those with whom we disagree need not be enemies or existential threats to the foundation of the republic.

Instead of indulging in self-destructive antagonisms, we must enter a period of renewing reform. These reforms may have their share of pain, but we ought to use our reason to ensure that this pain is as fairly and as efficiently distributed as possible.

The strength of America comes in part from its faith in its people and in its ability to renew itself. Those who chose to come to America, from whom many of us descend, were willing to embrace change. Those who founded this nation believed in the capacities of a fresh republic, one that would be in accord with the principles of liberty. The American free market is premised on the belief in the broader wisdom of American society (at least compared to that of central planners).

The power of this nation also comes from its striving after the ideal. However troubled their actual enterprise may have been, the Puritans did not rest content with the flawed nature of man but reached for some higher city. The great ideals of the Declaration and Constitution show the ambition of the Founders to use the instruments of government in order to effect a revolution in human life. The abolitionists of the nineteenth century and civil rights warriors of the twentieth often staked their lives on the principle that our nation could go forward and wash away the stains of false bigotry and institutionalized oppression. Great accomplishments have been made not by defeatism but by perseverance and flexibility.

We have inherited both a great nation and a great government. The gleam of the potential of this government, the fruit of centuries of toil, has not, to my eyes at least, dimmed with time. Let us move from thinking of government as the enemy or as a weapon against our private enemies to thinking of it instead as a tool for advancing the greater causes of this republic: life, liberty, and the pursuit of happiness. Government is not the only tool for advancing these causes, but human society is necessarily political, so any approach that would realize these causes must consider the case of government. That very faith in the American people also applies to those citizens who are servants of this American republic; we can have faith that, somehow, politics can go forward, however recalcitrantly, in the direction of virtue.

Realizing government as a tool for advancing those purposes outlined in the Declaration need not be an endorsement in an endlessly expansive government; at times, government can be the best tool by restraining its power, by not involving itself, by not intervening in the ebullience of the private life of this republic. The rights we have may not ultimately derive from government, but government often has a role in guaranteeing these rights. There is, as ever, a careful balancing act here, but many carefully laid bricks help constitute the foundation of this republic.

There comes a time in great societies when their vital force fails. Rome’s citizens chose empire over self-discipline. The German commonwealths, a European flower of learning, diversity, and literature, succumbed to the martial and recriminative temptations of the Kaiser and the Third Reich. Our own nation nearly dissolved in the cataclysm known as the Civil War.

Yet, with great perseverance, our republic survived and broke the yoke of slavery that had weighed so heavily for so many years. Great trials can recast us and renew us---if we have the will to face them. We can either accept a bitter decline or take up the challenges of the day.

Let us not be distracted and let us not despair. The faith of the Revolution was fed by the belief that our problems are tractable. Even if we cannot solve all the challenges this nation or liberal government in general faces, we can at least cope with them.

Let the United States still be, as Benjamin Franklin hoped, the republic of the rising sun. Rather than chewing over the resentments of the past, we should instead seek the triumphs of the future. Now is not the time to surrender to resentment or despair or petty hate. Now is not the time to accept deflecting blame as victory. Now is not the moment to forswear the potential of these United States.

We can still engage in enterprises of reason and merit. However old or frail our hands, we can still reach. Rather than being dirges or complacent ditties, the songs of the Fourth of July can still call us to our higher purposes of fellowship, happiness, liberty, and virtue.

Limits of Tax Cuts

2011-06-27T20:56:00.000-07:00

Harry Graver looks at some state-by-state unemployment numbers and finds that low taxes are not the only factor for economic growth:

For example, Nevada, leading the nation in unemployment, has the fourth best tax environment, according to the Tax Foundation. Of the states without an income tax (nine in total), six have lower unemployment than the national average (Alaska, New Hampshire, South Dakota, Texas, Wyoming), two are roughly keeping the national average (Tennessee and Washington) and two are above (Florida and Nevada). Of the seven states with a flat income tax, three are at the national average, three are below, and one (Michigan) is above.

As Graver rightly notes, economic growth depends upon a vast range of factors---including human capital, natural resources, infrastructure, and regulatory policies. Pro-growth tax policies can be helpful but they are not sufficient for economic growth.

Diminished Expectations

2011-06-21T09:03:00.001-07:00

Many political analysts are focusing on the consequences of the poor economy for Barack Obama's re-election chances. High unemployment rates and an economy limping along (with a few spurts from massive deficit spending) are hardly propitious circumstances.

Yet these troubles have much deeper roots. According to government calculations, we have been mired in an anomalously extended period of poor economic growth since 2001. Many writers have focused on stagnating middle-class incomes, but looking at GDP numbers tells a similarly disappointing story. Since 2000, GDP growth has lagged well below historical averages. Based on Bret Swanson's calculations, GDP growth from 2001 to 2010 averaged only 1.6%; GDP growth averaged 3.5% from 1947 to 2000. No decade since the 1930s has shown worse average economic growth.

The fact that the economy suffered a huge setback in 2008 and 2009 might skew the averages for the 2000s down, but not by that much. Even before the most recent recession, economic growth still lagged far behind historical precedent. The boom times of the 2000s would be seen as hum-drum in earlier decades.

Here's an overall view of the growth of the American economy since 1930, with numbers drawn from the federal Bureau of Economic Analysis:

Now, to close up on the past three decades:

During the Bush years, 2004 was the only year when GDP growth exceeded the average growth rate of 1947 to 2000, and that was only by a fraction of a percent (3.6% vs. the average 3.5%). With 3.1% growth, 2005 was the only other year where economic growth exceeded 3%.

By way of contrast, there were only 2 years during the Clinton presidency when growth was less than 3% (2.9% in 1993 and 2.5% in 1995). After 1982, Reagan's presidency never witnessed any economic growth rate less than 3%. One-termer George HW Bush had as many years when the economy grew over 3% as his two-term son.

Perhaps an even starker piece of economic spin: until 2000, almost every president since Franklin D. Roosevelt saw multiple years when the economy grew faster than 4% (Bush 41 being the only exception). We have not witnessed that kind of growth in almost twelve years.

Under an extended era of the lowest top marginal tax rates since 1932 (with the exception of the brief period between 1988 and 1992),* we have also seen the most protracted period of economic stagnation since the Great Depression. Whatever the other implications of this fact, it does suggest that tax cuts alone will not be enough to restore the health of the American economy. Tax cuts could be part of a plan for economic renewal, but not the plan itself.

Nor is cutting spending an easy panacea. Federal spending as a percentage of GDP was higher during the Reagan administration than it was during the quiet stagnation of 2001-2007. Again, spending cuts may be part of the solution for our economic travails (government spending as a percentage of GDP was lower in the 1950s and 1960s), but they are not the solution itself.

The implications of this diminished growth are significant for the national body politic. The modern American state, as understood by presidents from Roosevelt to Reagan, is based on the marriage of strong economic growth and generous social insurance. Social Security, Medicare, unemployment insurance, and so forth are the privileges of a wealthy society, and, properly calibrated, they can contribute to this wealth. The ability of the United States to project martial force across the globe and to take a prominent role in the community of nations is also predicated upon national wealth.

Our national finances especially show the strain of this slow growth. At least half of our current deficit is due in some way to the poor economy, and economic stagnation imperils many of our leading social insurance programs. Moreover, many deficit reduction plans on both the left and the right assume economic growth that well outpaces that of the past decade: if growth doesn't improve, we'll need an army of chainsaws to begin to approach fiscal sustainability.

If the next twenty years see the same kind of anemic economic growth as the past ten, any reforms to "save" Social Security and Medicare will have a huge portion of pain. Those programs will become shadows of themselves, as the American economy is crippled with stagnation. A strengthened economy, on the other hand, would likely make the reforms of these programs much less painful. For example, while the trustees of Social Security estimate that the retirement program will exhaust its trust fund some time around 2030 under (comparatively) slow growth expectations; if average GDP growth reaches close to 2.9% per year, Social Security trustees estimate that the program's trust fund will be in the black for the foreseeable future. Reforms might need to be made eventually (especially for Medicare), but increased growth would provide a cushion for them.

This current turmoil provides an opportunity. Societies can gain new vitality by recognizing the limitations of the current status quo and by adapting to changes in the broader political-economic environment. Some might suggest that the United States must or should accept diminished growth. But it seems to me that, after all the storms this nation has weathered, there is no reason to give up on the American project's hope for popular enrichment. After all, Americans in the late 1970s faced an economic paradigm that had outlived its usefulness and an increasingly fractured geopolitical order. But, as Jim Manzi has explored, Ronald Reagan, working with Democrats and fellow Republicans, was able to forge a new consensus that helped lead to a renewed nation. We can cope with our troubles, if we have the imagination to challenge old assumptions and the daring to take new paths.

The Democratic stimulus has failed to meet expectations, and even a return to the conditions and policies of 2001-2007 would be a surrendering of the tradition of American economic growth. There is both an opportunity and need for Republican and conservative leaders to rethink contemporary orthodoxies. Reaganomics, extended past its time, becomes a zombie: rather being a set of policies of vital engagement, it degenerates into dogma and rigid ideology. The world and nation are not the same as they were in 1981. Conservative economic policy needs to recognize that fact.

*Moreover, federal revenue as a percentage of GDP was higher during much of the Reagan, Bush I, and Clinton administrations than during the period since 2000. This lowered revenue may be partly correlated with post-2000 economic stagnation.

Globalism, Neo-Mercantilism, and the US

2011-06-08T20:11:00.000-07:00

Polemical assertions in a contrarian key

The American economy has entered a period of turmoil unlike any it has seen in decades. The solutions, to me at least, do not seem radically easy or clear, but the first step in finding a solution is to clarify our language in talking/thinking about the problem. If we are serious about finding ways of addressing some of the serious structural problems of the economy, we must be willing to offer a thoroughgoing analysis of the whole economic order.

The trends of "globalization" have had a huge impact on the American economy in the past twenty years. Yet I think there have been some confusions in our contemporary discussions of globalization, so here are a few* (mildly polemical) challenges to contemporary assumptions, focusing on trade and manufacturing policies.

The decline of manufacturing is not like the decline of agriculture. The shrinking manufacturing sector is often mistakenly analogized to the drastic drop in the number of Americans working in agriculture from 1870 to 1950. The current trade deficit, driven by manufactured goods, disproves that analogy. The story of the Industrial Revolution in America is not the replacement of agriculture by manufacturing but the incorporation of agriculture into a new, broader economy. Throughout industrialization, Americans still produced enough food to feed themselves and those in other nations. For the most part, we still do produce enough food to do so. The number of Americans working in agriculture has declined drastically, but, due to increases in productivity, the output has only increased. While it is true that productivity has increased in manufacturing and that automation has cut down on the number of needed factory jobs (the US still does produce a lot), such an increase in efficiency does not tell the whole story of the decline of American industry: if it did, we would still be producing huge quantities of shoes, computers, tools, and countless other items. The fact that factories are closing down while our trade deficit has skyrocketed over the past twenty years is a sign of how different the fates of manufacturing and agriculture have been.

We do not live in an era of free trade. (Or: Cheap imports do not equal free trade.) Some of those who criticize the reigning trade hegemony counterpose "fair trade" to the dominant "free trade." This criticism is mis-aimed. We may not have "fair trade," but we certainly don't have "free trade," either. The current global trade order is not free trade but actually a species of neo-mercantilism. Many developed nations have opened up their economies to an influx of goods from poorer, often autocratic, mercantilist countries. Most importantly for the case of "free trade," there is often a great disparity in openness between trading partners. These disparities are especially stark for the United States. US policymakers have in a variety of ways unilaterally opened up the American market while allowing other countries to stack the deck against US businesses and workers. We are told that this flood of imports is "free trade" when, in fact, numerous barriers are put up against American products.

Consider our relationship with the People's Republic of China, our second-largest trading partner. It would be a stretch to declare that this relationship is "free trade." The PRC manipulates its currency as a de facto tariff against US goods and piles further outright tariffs on US goods. The price of entry into the Chinese market is often, in part, a joint-venture agreement, in which a foreign company provides intellectual property and other advanced technologies while local Chinese contacts supply workers and land for factories. Mandating that businesses open up factories in a nation in order to have access to it is not exactly classical free trade.

These agreements are very often deleterious to US workers and US companies. The office-supply manufacturer Fellowes, for example, opened up a joint-venture manufacturing facility in the PRC. For a few years, this factory led to some considerable profits for Fellowes. In August 2010, this stream of profit came to a sudden end, when Fellowes's Chinese partner moved to take possession of the facility:

The dramatic moment was in early August 2010, when Zhou, under the aegis of Shinri, blocked the gates of the joint venture facility with security guards and trucks, preventing people from going in and goods going out, effectively shutting down production. Shinri expelled and confined the managers, moved funds from the joint venture to a Shinri-controlled bank account, sent packing the 1,600 joint venture employees, and at night, drove a truck into the facility and stole Fellowes-owned injection molding tools, some of them weighing several tons.

Fellowes's former partner now has taken possession of millions of dollars of equipment and technological know-how---all without paying a cent (or a yuan) for it. The Chinese government appears to be giving cover to what many would consider theft. Fellowes is but one of many companies that have had their investments and technologies confiscated by the politically connected of the PRC. Without a basic respect for property rights, there can be no capitalistic free trade.

Trade policy does not happen in a vacuum. In part to cope with the throes of industrialization, the United States passed various worker and consumer protections in the twentieth century: regulations for environmental protections, worker safety, wages, and other areas. When the US economy was bounded by tariffs, these regulations helped ensure that an increase in industrial production went along with an increase in the standards of society. However, in our new era of neo-mercantilist globalism, the role of these standards has become considerably more troubled for US workers.

Consider the case of environmental standards. As the decades have gone on, our environmental standards have become increasingly invasive and onerous. Government more and more regulates chemical usage, energy sources, waste disposal, land use, and other aspects of environmental production that affect industrial policy. The presumed beneficiary of these regulations is the public at large through the protection of the environment. Our laws tell companies that, if you manufacture in the USA, you must face numerous obligations and pay increased costs due to all these regulations. Our trade policies, however, tell those very same companies that, if they manufacture their products abroad, they need not worry about any US environmental or worker regulations. One might wonder how the environment is helped when US policies incentivize heavy industry leaving a country with some environmental regulations (such as the USA or many European countries) and going to a country with far fewer (such as the PRC or India).

I recognize that economic prosperity is often correlated with an increase in environmental protections, so a wealthier India may eventually introduce further environmental protections. But there seems to be an often radical disproportion between how politicians talk about environmental policies and what our trade policies actually encourage. The debate over "global warming" reveals this disproportion at the height of its absurdity. In the name of "global warming," the federal government has banned the classical incandescent lightbulb in order to cut down on carbon emissions; meanwhile, through trade policies, it has encouraged a gross increase in carbon emissions through encouraging manufacturing to move to nations with radically less efficient and more polluting forms of industrial production. "Global warming" advocates often stress that the world is at a tipping point for carbon emissions and forecast the deaths of potentially hundreds of millions of people if carbon patterns do not change right now. Many of these same advocates, however, seem to see no problem with the continued destruction of American manufacturing. A "cap-and-trade" scheme or carbon tax, without any attention to broader global industrial questions, would do little for American employment or lower carbon emissions. If environmentalism is more than NIMBYism and self-righteousness, we need to consider the effects of our current trade policies upon domestic policies.

-----
To acknowledge (or to wonder about) the limits of neo-mercantilist globalism is not to embrace isolationism; on the contrary, this kind of critique opens up further ways of engaging with the broader community of nations. It would be foolish to turn our economic or political backs on the world, and a tariff war would very likely create more problems than it would solve. But it would equally foolish to allow our thinking to be frozen by hazy myths and knee-jerk assumptions.

The theory of free trade does have much of value to it. Under the right conditions, trade between nations does lead to a rising tide for all boats. There have also been many benefits to the current neo-mercantilist order, though some of the implicit tensions of this order have risen to the surface during the last few years of economic turmoil. Yet, living within this order, the United States must find ways to renew its competitive edge and successfully compete with mercantilist powers. It might also, with its allies, consider how best to revise this order so that it better advances the ideals of freedom and prosperity.

*UPDATE: A few points have been moved to a forthcoming discussion.

Precedents

2011-06-03T08:59:00.000-07:00

Wilson, Roosevelt, Carter, Reagan, Clinton

In the twentieth century, those were the five men who defeated a sitting president on election day in November.

One immediate fact worth noting: they were almost all two-term presidents (or, in Roosevelt's case, over two terms). Jimmy Carter is the only exception, and he has the unique distinction of defeating a sitting president (Ford) who was never elected to either the office of the presidency of the vice presidency---and even that victory was very marginal. So in some ways he's the exception that proves the rule.

All five were governors, and Reagan and Carter were the only non-sitting governors at the time of their electoral victories.

At least three of these men had pivotal presidencies. Riding the high tide of Progressivism, Woodrow Wilson expanded federal powers and charted the nation's entry into World War I and the resulting peace. Franklin Delano Roosevelt in many ways created the modern regulatory state and the imperial presidency; after recasting the federal government during the Great Depression, his administration laid the groundwork for the new global order in the aftermath of World War II. Ronald Reagan drew on simmering resentments against this modern regulatory state in order to revise it, and his foreign policies helped break a Cold War that had dominated global politics for decades. It is perhaps too close in time to evaluate the ultimate significance of Bill Clinton's presidency.

These facts would suggest that, if a Republican is victorious against Barack Obama in November 2012, he or she could have a chance at playing a historic role.

Having the presidency adds a kind of grandeur to a candidate, so a candidate who defeats a sitting president often demonstrates a kind of broad appeal to the public. Most of those men who have beaten a sitting president have powerful visions for reforming government and the capacity to accomplish at least some part of these visions. For the most part, these men were also able to articulate a compelling narrative for a way forward.

The political pendulum has swung very wildly over the past few cycles, and the dynamics of the past have, obviously, only a limited application for the dynamics of the future. But sometimes precedent can have its wisdom.

Romneycare: A Shield from Mediscare?

2011-06-01T08:26:00.000-07:00

Democrats seem to have latched onto an electoral strategy for the 2012 campaign. With an economic slump the worst in many a decade, ballooning deficits, the Obamacare debacle, a foreign policy that has not exactly met campaign promises, and a restless populace, Obama and his allies have hit on a three-syllable campaign slogan: Medicare.

The Congressional special election in NY-26, a rout for Republicans in a GOP-heavy district, has only fueled Democratic speculation that they can ride Mediscare tactics to victory in 2012. (Yes, a faux-Tea Partier in the race may have influenced the results, but Republican Jane Corwin was leading in polling before Democrat Kathy Hochul went full Mediscare.)

In a striking turn of events, Mitt Romney may find Romneycare more of an electoral advantage than a headache: this legislation could insulate him from Mediscare tactics. Many other Republican candidates (such as Michele Bachmann) voted in favor of Paul Ryan's budget or have endorsed it; Tim Pawlenty has quibbled with the budget but has said he would sign it under certain conditions. While Romney has said that he is "on the same page" as Ryan, he has not endorsed Ryan's budget and has said that he will propose his own plan for Medicare reform.

The fact that, under Romney's watch, Massachusetts implemented a set of health-care policies that gives coverage to over 98% of state residents can protect him from the charge that he wants to finance more tax cuts by leaving seniors out in the cold. By not having endorsed Ryan's plan, Romney can agree with it in the spirit of market reforms without having to defend its particulars.

This combination could blunt one of the Democrats' biggest knives. Imagine the following exchange from a presidential debate in the fall of 2012:

BO: The Ryan budget, overwhelmingly backed by Congressional Republicans, would end Medicare as we know it for all those under 55, who would be left with vouchers to purchase insurance from private companies. These vouchers would only rise in value at the rate of inflation, and health-care costs have risen faster than inflation for decades. Governor Romney and the Republicans want to end our nation's decades-long commitment to care for the elderly. They would hold our seniors hostage to the whims of private insurance companies.

MR: Mr. President, while I have my differences with the Ryan budget, let's face the facts. When I was governor of Massachusetts, I crafted legislation that ensured health-care coverage for over 98% of state residents. I worked across the aisle with Republicans and Democrats to forge a compromise to expand health-care to all citizens of the Commonwealth. While this compromise was not perfect and cannot be completely adapted to the federal level, it was a step in the right direction of accountability and fairness. Rather then putting health-care under central government control, it unleashed the power of the market to expand health-care access.

Under your health-care proposal, Mr. President, over $500 billion will be cut from Medicare over the next decade. Under your plan, Mr. President, a fifteen-member panel will set price controls for Medicare. Your plan forces a one-size-fits-all mandate model on all fifty states. You're already cutting Medicare. My record shows that I have not and I will not expand health-care coverage by taking away from our seniors. I believe that market-oriented reforms can eliminate waste and cut soaring costs while also improving care.

Romneycare can give Romney cover to push for market-oriented reforms. If he is a crypto-socialist, as some of his detractors allege, he can't also be an anarcho-capitalist ready to kill off grannie. Romney can attack Obamacare's cuts to Medicare while also deflecting the charge that he is a heartless Medicare-cutter himself. Moreover, Romney can distinguish between Obamacare and his own health-care reforms: on Medicare cuts, the federal mandate, centralized government control, and other features.

As only Nixon could go to China, perhaps Romney is uniquely positioned to advance market reforms of Medicare.

(Disclaimer: the debate over entitlement reforms is quickly evolving, so the dynamic noted here might not be found even a few months from now.)

(Crossposted at FrumForum)

Circular Firing Squad

2011-05-25T09:44:00.000-07:00

(NB: This is not addressed to any specific individuals. I also believe that supporters of the Ryan budget have every right to make their case as strongly as they can. This more addresses a particular mood.)

Maybe it's me, but some of the intra-right debate about the Ryan budget is sounding increasingly like the debate over Christine O'Donnell in 2010: focusing more on sending a message than on advancing conservative goals.

A couple preliminary facts: the Ryan budget has NO chance of passing until 2013, and, at the moment, it is not very popular.

Knowing both of those facts, the House Republican caucus decided to vote overwhelmingly in favor of this measure. Fair enough. Leadership had its reasons. Many House members walked the plank on this vote, and that gamble may prove to be helpful for conservatives shaping the debate in the future. That die is already cast.

House Republicans and the Republican establishment may feel the need to circle the wagons to defend that vote. That is also fair or at least understandable.

But what is dangerous is a crusade against any Republican who dares to criticize the Ryan budget. That budget is not perfect, to say the least. The Republican and conservative causes are not strengthened by an attempt to enforce a petty ideological orthodoxy (the Bush years suffered from this tendency toward uniformity).

Republicans derided Democrats for forcing through Obamacare, an ambitious, radical measure with weak popular support. Democrats and progressives twisted countless arms to impose their vision on an unenthusiastic America. The backlash from this measure helped sink Democrats across the country. Republicans should not fall into the same trap, especially for a measure that will never become law until, potentially, after the next election.

The number one electoral goal for Republicans at the moment should be putting forward the most credible, competent, and electable conservative candidates possible---not (forgive me, Mr. Chairman) fighting and dying on the hill of the Ryan "roadmap." Passing the Ryan budget may be part of the victory for free-market conservatives, but we should not fetishize a single piece of legislation to the detriment of all else.

For those who believe that there is an entitlements crisis---no, a national emergency---that needs to be stopped RIGHT NOW!!!!---forget about the Ryan budget. It would add trillions of dollars to the debt* in the next few years. Its major reforms for Medicare would not be substantially felt for well over a decade; Medicare as we know it would continue for everyone who is over 55 by the time it passes, and, for a while after that, the majority of people on Medicare would have the old-school variant.

If we are at fiscal/entitlements Armageddon, the Ryan budget is a failure. If we are not at that point, this budget may be more helpful. Under either circumstance, there is no need for such strident denunciations of those who would dare to criticize it.

Scott Brown voting in favor of the Ryan budget on the Senate floor in 2011 will do absolutely nothing to advance the cause of fiscal conservatism; indeed, voting for it may hurt that cause, since such a vote could very well hurt Brown's chances of reelection. Though Newt Gingrich may have used inopportune language in criticizing Ryan's "roadmap," he is well within his rights to suggest the limitations of this plan.

Any Republican presidential candidate (or any Republican candidate at all) who wishes to distance himself or herself from the Ryan budget and propose entitlement reforms of his or her own has every right to do so. And this critique should not be necessarily confused with a forfeiture of all conservative principles. If the Ryan budget is so important for a GOP presidential candidate, then Ryan himself should run for the White House.

Sending a message to show that you're "serious" about fiscal reform is the mere hysteria of Washington kabuki. Reducing unhelpful spending and cutting the deficit and reforming derelict programs---those are the things that really advance fiscal conservatism.

Oh, and back to Christine O'Donnell: she lost big, and Senator Chris Coons is highly unlikely ever to vote for anything closely resembling the Ryan budget. The emphasis should be less on attacking Republicans for daring to dissent and more on persuading those dissenters and the public at large why the Ryan budget is a good idea (as Ryan aims to do here). Turning one's back on RINO traitors may be a cathartic move, but it does little to advance real conservatism. When conservatism becomes the politics of rage and exclusion, it loses; when it becomes the politics of hope and engagement, it wins.

*CORRECTION: An earlier version of this post had "deficit" instead.

(Crossposted at FrumForum)

Trouble for Democrats in RI-01

2011-05-22T09:19:00.001-07:00

WPRI in Providence, Rhode Island has released a poll about first-term Democratic congressman David Cicilline. The former mayor of Providence had a six-point win over Republican John Loughlin in 2010, but this new poll suggests that, if the election were held today, the results would be quite different:

The new survey of 300 registered voters in Rhode Island's 1st Congressional District shows Cicilline's 2010 opponent, former state Rep. John Loughlin, would defeat him 47 percent to 35 percent, with 17 percent undecided.

Another Republican, former State Police Col. Brendan Doherty, would beat Cicilline 46 percent to 33 percent, with 20 percent undecided, the poll reveals.

Loughlin wins big with Republicans and Independents in this poll. Cicilline's approval rating is stuck in the low 30s; over 57% of those polled have somewhat or very negative feelings for him. Cicilline's poll numbers have in part suffered due to the current fiscal state of Providence, for which a number of voters blame him.

Those over 60 have the most negative feelings toward Cicilline, and it looks like he may attempt to try to win some of them over by emphasizing his support of Medicare and Social Security.

In 2010, Cicilline barely broke the 50% mark, indicating limits to his support. In a district where only a little over 40% of voters think that Barack Obama is doing a good or excellent job, this could be one Democrat in trouble for 2012.

Daniels, Pawlenty Supported More H-1B Visas

2011-05-19T19:03:00.000-07:00

In 2007, thirteen governors, eight Democrats and five Republicans, sent a letter to Congress asking for an increase in H-1B visas and green cards. The signers of this letter include two possible Republican candidates for president: Tim Pawlenty and Mitch Daniels. Texas Governor Rick Perry, another possible GOP candidate, also signed this letter. The other two Republican signers were Arnold Schwarzenegger of California and Jim Gibbons of Nevada.

This letter states that more high-skilled temporary workers were important for the nation's economic success, claiming a shortage of high-skilled domestic workers for math and science professions.

Democratic governors who signed off on this letter include two future members of the Obama administration: Janet Napolitano of Arizona and Kathleen Sebelius of Kansas. The other Democratic signers are Deval Patrick of Massachusetts, Chris Gregoire of Washington, Eliot Spitzer of New York, Jim Doyle of Wisconsin, Bill Ritter of Colorado, and Dave Freudenthal of Wyoming.

Pawlenty has had some tough talk on illegal immigration, while Daniels has been on the record supporting some of the mass legalizations of "undocumented immigrants" proposed under President Bush; he demanded major reforms for an Arizona-style immigration bill that passed the Indiana Senate but ended up signing a measure mandating more checks to ensure the legality of potential employees.

It remains to be seen how much immigration will be an issue for the 2012 Republican primary. Illegal immigration is an issue the grassroots and many independents have passionate feelings about, but the Republican nominee of 2008 was perhaps the Republican most strongly identified with attempts to pass mass legalizations. John McCain was able to step away from his history with a few vague declarations about how he supported enforcement first, even though he continued to emphasize the need for some kind of "comprehensive immigration reform."

What Was the Bush Economy?

2011-05-19T08:31:00.001-07:00

Conflicts on the right are still simmering over what course to chart for the economy for the years ahead. Though many Republicans ran on economic issues in 2010, many of those economic issues have taken a back-seat to fiscal ones in 2011. Our fiscal health definitely affects our economic health (a collapse in the US bond rating would, for example, be very economically traumatic), but our economy also affects the nation's fiscal sustainability.

Arguments over how much government stimulus spending could be effective for rebooting the economy have been in the forefront of left and right discussions of the economy. Yet I think another (often unspoken) issue for many Republican debates about economic policy is the meaning of the Bush economy. Was it a time of great prosperity---an economic model to look back on with esteem---or was it much more mixed?

For one faction, the Bush years were fundamentally an economic success. There was a near-meltdown at the end, but the economic growth throughout that period can be isolated from the 2008 collapse. While there were problems with a housing bubble and excess spending, the economic policies of 2001-2009 on the whole led to real growth and prosperity. This faction has considerable power on the right. One sees, for example, commentators on the right often point to the Bush tax cuts (of 2001 and 2003) as kicking off huge economic growth, and use that claimed growth in order to argue for more tax cuts, especially for the wealthy, in the future.

Another faction on the right has a more pessimistic view of the Bush economic record. While this faction acknowledges the benefits of some of the tax cuts and other aspects of the Bush record, it also suggests that much of the growth of the Bush years was fueled by debt and the financialization of this debt. The housing bubble, inflated by federally-encouraged easy access to credit, allowed for a glut of money to flood the economy and pay for jobs in realty, construction, landscaping, retail, and so forth. This borrowed money was in turn leveraged by would-be financial wizards in various hedge funds and banks. While the fit of borrowing did create the illusion of growth, it was the equivalent of a middle-class family remortgaging its house to go on European vacations and buy a Bentley and gain a world of short-term luxury: it came from borrowing against the future, perhaps an amount that could never be paid back. The realization of the scope of this debt hit in 2008, and the story of 2009, 2010, and 2011 has been the transfer of this indebtedness from the private market to the government. TARP and other bailouts cycled through the debt of private banks, and now Americans, rather than flipping houses, collect multi-year unemployment benefits. Before, private borrowing fed the economy; now, public borrowing does.

For those of the first faction, the economic path ahead is fairly clear: get a Democrat out of office, keep cutting taxes for upper-income earners, cut government spending (or not), and we're back to Bush prosperity circa 2004.

The path is less clear for those of the second. For them, the real economic growth of the past decade has been anemic at best, and they are less sure that tax cuts for the wealthiest 1% should be the foundation for Republican economics. Such tax cuts may have a role to play, but they are not enough, especially in light of the spiraling inequality and economic stagnation in the American economy. But apostasy from tax cut monomania leads to a host of questions. Following this path may lead to the challenging of numerous elite orthodoxies---on regulatory, trade, and financial policies, among other areas.

The factions outlined above are not exclusive, nor are they totally comprehensive, but I think the difference between these two points is an important one for Republican economic discussions. A vision for the way forward is often shaped by a view of the road before. At a time when Obama's stimulus has failed by its own standards and the conventional wisdom of Democratic and Republican elites has fallen so sorely short, many conservatives are pondering a free-market way to renewed prosperity. How much of this way forward will involve Bush economics remains to be seen and debated.