Another Poll Shows McMahon Leading in CT

Along with last week's Rasmussen poll showing a Republican lead in Connecticut, a Quinnipiace poll released today shows McMahon leading her Democratic opponent 49-46.  A strong lead with independents helps McMahon:

In today's survey, McMahon's 54 - 42 percent lead among men swamps Murphy's small 50 - 46 percent lead among women. McMahon leads 88 - 10 percent among Republicans and 55 - 40 percent among independent voters, while Murphy takes Democrats 82 - 16 percent. 

Meanwhile, this same poll shows Obama up only 7 points over Romney (52-45).  In 2008, Obama beat McCain by 23 points.

Big Cash for Kennedy

Patrick Howley writes on the fund-raising disparities in MA-04:

Republican Sean Bielat faces off against Democrat Joseph P. Kennedy III in Massachusetts’ 4th Congressional District in November. Kennedy has received an extraordinary amount of out-of-state fundraising and favorable coverage from liberal mainstream media outlets more focused on his last name than his district.
Kennedy, 31, held a fundraiser last Thursday at his family’s Hyannis Port compound. The event was co-hosted by his grandmother Ethel and the Democratic Congressional Campaign Committee (DCCC). House Minority Leader Nancy Pelosi and Massachusetts Democratic congressmen Barney Frank, Bill Keating, Ed Markey, Richard Neal, John Tierney, and Niki Tsongas were in attendance. A ticket for four to the event, with access to a photo line, cost $35,800.
The Hyannis Port fundraiser was no outlier.
“His fundraising is just ridiculous, both in quantity and by virtue of the fact that he’s started a leadership PAC. How many first-time candidates start leadership PACs because they’re raising so much money?” Bielat, a former Marine Corps officer and Barney Frank’s Republican challenger in the district in 2010, told the Free Beacon.
“If you look at his FEC report, you have to go 5 or 6 pages before you find a donation below $1,000,” said Massachusetts political consultant Brad Marston. “It’s all these family connections that have been set up over six decades.”

 According to Open Secrets, Kennedy has received just $455 in small donations (donations under $200), which Open Secrets rounds to 0% of his $3-million fundraising haul.  Bielat, on the other hand, has raised $214,000 in small contributions (out of about half a million in contributions).  So Bielat has raised about 4700% the amount of small donations that Kennedy has.

Close in Michigan

Two interesting polls from Mitchell Research in Michigan: Romney tied with Obama at 47% each, and GOP Senate nominee Pete Hoekstra leading Democratic incumbent Senator Debbie Stabenow 45-44.  Gaining ground in the Rust Belt would be an important step for Republicans forging a national coalition in November.

Scuffle in Massachusetts

An Elizabeth Warren campaign worker goes after the video camera of a Republican tracker.  Bill Jacobson reminds us that this is not the first time a worker for one of Scott Brown's Democratic rivals has gotten physical with critics.

Independence and Union

Matthew Continetti has a very interesting essay up in The Weekly Standard arguing for a Republican campaign banner that unites the classic American terms of independence and union.

Continetti offers a more capacious view of "independence":

The American Revolution was fought not only to achieve independence from the British Empire, but also to realize independence for self-governing citizens. But America and Americans have become increasingly dependent in recent years. We are dependent on the government for jobs, for benefits, for pensions, and for health care. We are dependent on overseas energy and on cheap goods from China. We are dependent on consumer debt issued by a consolidated financial system in which the largest, Too Big to Fail institutions and their agents rig the game in their favor (see Rubin, Robert). Our economy seems dependent on an erratic and unaccountable Federal Reserve.

Such dependencies threaten to spiral out of control. Budget deficits and public debt are financed by overseas powers whose interests are not our own. Health expenditures in particular threaten to crowd out other parts of the budget, such as the core government function of national defense, as well as the education, transportation, and research dollars the incumbent talks so much about. Increasing reliance on means-tested government transfers enervates the character of the people and hampers economic growth. Trade deficits send money to potential adversaries, who return the money in the form of asset bubbles. The dangers of big banks are obvious: Excessive leverage and madcap derivative trading not only increase systemic risk, but the political pull of mega-firms also promotes cronyism and inside dealing.

Some of Continetti's solutions are also interesting:

The health care system would be improved and costs lowered through competition, the freedom to purchase insurance across state lines, a tough approach to malpractice litigation, and an end to the tax penalty for individuals who do not obtain insurance through their employer. The emphasis of social policy would be on getting families off government assistance, not ensnaring more of them in a safety net that raises effective marginal tax rates.

Full exploitation of America’s domestic carbon energy resources​—​oil, coal, and natural gas​—​would lessen our dependence on foreign oil and reduce the trade deficit. The sort of retaliatory tariffs against unfair Chinese trade practices and currency manipulation for which Irwin M. -Stelzer has argued in these pages would have a similar effect. A center-right consensus has emerged to deal with Wall Street: Link bank size to increased capital requirements so that financial institutions cannot grow fat on leveraged dollars. Go ahead and audit the Fed, but also increase the pressure on it to commit to a rules-based monetary policy rather than the sort of haphazard discretionary approach it has adopted since the financial crisis began.

A point implicit in Continetti's argument is that independence and union are allies in the American system.  Our union is strengthened by being populated by prudent, independent individuals.

The Middle Class: Fuel of Economic Growth

Henry Blodget connects the decline of the middle class to sputtering economic growth over the past decade:

Over the past 30 years, a larger and larger portion of America's income growth has gone to those in the top 10% of incomes, and especially those in the top 1%. This is a major change from the prior 60 years, in which the top 10% and the bottom 90% shared in the income gains.
A stark and startling example of this trend is the fact that, adjusted for inflation, "average hourly earnings" in this country have not increased in 50 years....

The reason the decline of the middle class is important is not just about fairness. It's about the health of the economy as a whole.
Collectively, the middle class represents enormous buying and spending power, and in the past 60 years this spending power has helped the U.S. economy become the envy of the world.
But now, however, the middle class is increasingly strapped. And the resulting impact on spending is constraining the growth of companies that sell products and services to American consumers.
The causes of this middle-class decline are many, from globalization (jobs being shipped overseas), to the decline of private-sector unions, to the wholesale embrace of a "shareholder value" religion that values profit over everything else that companies produce. But the result of the trend can be seen vividly in two charts.
First, wages are now at an all-time low as a percent of the economy.
Second, corporate profits are now at an all-time high.
To truly "fix" the U.S. economy, corporations are going to have to be persuaded to invest more of their excess profits in their employees, both by hiring new employees and paying existing employees more. "Wages" to employees become spending money for those employees, and the spending produces revenue for other companies. If corporations can collectively be persuaded to reinvest more of their profits in their people, in other words, they will help restore their own revenue growth.

Romney: Innovation and Trade Reform Will be Key

In a Wall Street Journal op-ed, Mitt Romney reflects on what his experiences at Bain taught him.  Here's a passage particularly relating to manufacturing:

In the 1990s, when the "old-technology" steel industry in the U.S. was failing, Bain Capital helped build a new steel company, Steel Dynamics, which has grown into one of the largest steel producers in America today, holding its own against Chinese producers. The key to its success? State-of-the-art new technology.
Here are two lessons from the Steel Dynamics story: First, innovation is essential to the competitiveness of U.S. manufacturing. We are the most innovative, entrepreneurial nation in the world. To maintain that lead, we must give people the skills to succeed. My plan for a stronger middle class includes policies to give every family access to great schools and quality teachers, to improve access to higher education, and to attract and retain the best talent from around the world.
The second lesson is that we must have a level playing field in international trade. As president, I will challenge unfair trade practices that are harming American workers.

Romney's discussion of the second lesson is fairly short, but, throughout much of the primary, he discussed the importance of restoring US manufacturing in the face of competition that was anything other than free and fair trade.  Perhaps he will continue to develop this theme in the months ahead.

Romney Edges Toward Banking Reform

James Pethokoukis, Erick Erickson, and others have pondered the electoral and policy benefits of Mitt Romney's campaign taking up banking reform.  Well, now it seems as though Romney is ready to address this issue, if this interview with Time is any evidence (emphasis added):

STENGEL: Another sort of related business question, if you look at the regulatory environment for the banks now and there are basically five big banks that in terms of assets disproportionately outweigh everybody else, is there a situation of moral hazard now related to those banks? And what would you do to reform the financial sector? Would you bring something back like Glass-Steagall? How do you see it, Governor?
ROMNEY: I think Dodd-Frank has contributed to a concentration of banking assets into the hands of a small number of banks. By designating certain banks as being too big to fail, strategically important banks, it makes it more difficult for the banks not so designated to attract customers and to expand their business. What you’ve seen as a result is a concentration in the hands of a handful of banks that now has greater systemic threat that what even existed before.
The right course was not to say that this handful of banks will be protected by the government, implying therefore that all the rest of the banks are on their own, because smart depositors will all move towards the banks that are protected by government. It had the opposite effect of what was advertised. What was advertised was that we would keep the too big to fail banks from getting bigger, but the result of the legislation is just the opposite.
What we need to do is to make it easier for the community and local banks and regional banks to succeed and thrive because they, after all, are the places where small and medium-size businesses get their funding. So the whole idea of designating a handful of banks as the government-protected too big to fail banks is the wrong course.
Now, we do need to have regulation in the banking industry. Extensive regulation is appropriate in an industry that has such an impact on the overall economy. We have to look at what the causes were of the last crisis and take action to prevent those causes from reappearing. What kinds of things come to mind include capital requirements, levels of leverage which are appropriate and inappropriate, banks maintaining risk in assets which they gather. Specifically, I’m referring to the idea if a bank originates a loan or a mortgage that it should be on the hook for some portion of the loss if that loan or mortgage fails. These kinds of provisions, I think, would be directly applicable to the kind of crisis that we experienced before.

Interestingly in these comments, Romney emphasizes the critique put forward by the Dallas Fed, and echoed by many on the right and center (and some on the left), that Dodd-Frank made Too-Big-to-Fail worse---not better.

Taking on banking reform could be helpful for Romney for at least two reasons: it could sketch out regulatory foundations to help prevent a financial collapse in the future, and it would also shift the territory of the campaign.  By embracing banking reform, Romney could disrupt the leftist narrative that he and other Republicans are merely tools of financier-plutocrats.  Americans still are hurting from the financial crisis, and and many still have a lingering fear that the causes of this collapse have not been fully addressed.  Financial reform could give Romney a way of assuaging to the fears of many Americans, particularly those in the economic middle and those suspicious of both parties.

There's a conservative case to be made for financial reform, and Romney may be heading in the direction of making it.

Republican Revival in New England?

Two polls that might inspire optimism in New England Republicans:

• Massachusetts Senate: Scott Brown up 5 on Elizabeth Warren, 49-44.
• Connecticut Senate: Linda McMahon up 3 on Chris Murphy, 49-46.

Pew on the Middle Class

Pew has a helpful study up about the evolution of the middle class over the past ten years, documenting some of the ways in which it has lost ground.  Perhaps most striking is the following finding: in 1971, middle income households had 61% of the national income, but, by 2010, these households had only 45% of the national income.  Upper income households went from having 29% of the national income in 1971 to 46% of the national income in 2010.  Interestingly, most of this change in income share seems to have taken place between 1980 and 2000.  2000 also serves as the tipping point after which economic growth slowed down for most sectors of Americans.

The connection between declining fortunes of the middle and the economic slowdown is a point that could be further explored by conservatives.

Not Backing Down

Todd Akin seems to be making a play to stay in the Missouri Senate race in a just-released spot begging the people of Missouri for forgiveness:

“Rape is an evil act. I used the wrong words in the wrong way and for that I apologize. As the father of two daughters, I want tough justice for predators. I have a compassionate heart for the victims of sexual assault. I pray for them,” Akin says. “The fact is, rape can lead to pregnancy. The truth is, rape has many victims.”

 PPP has released a poll purporting to show that, while these comments have helped cause Akin's approval rating to crater, he still runs about one point ahead of McCaskill, 44-43 (which is basically the result PPP got when it polled in May).

However, as Jim Geraghty and others have noted, the PPP poll sampling swings heavily Republican.  In May, the D/R/I breakdown was 35/33/33.  For the August poll, it was 30/39/32.  So it went from slightly favoring Democrats to hugely favoring Republicans.  As Ed Morrissey reminds us, even in the Republican "wave" year of 2010, Republicans only had a three-point advantage over Democrats, so a 9-point advantage seems rather interesting, to say the least.  In contrast, SurveyUSA polled this race and used an even split between Republicans and Democrats.

I had been doing some calculations about what the results would be under a more usual partisan distribution, but CAC at Ace of Spades has beaten me to the punch, so I'll just link and quote:

Here are the real numbers:
If turnout in November matches 2008 (it won't):
McCaskill 49.25% Akin 39% (this is a D+6 turnout model)
If turnout in November is even, an incredible feat for the GOP considering heavy turnout in St Louis and Kansas City during an election year:
McCaskill 47% Akin 40%.
If turnout in November matches the best we have ever seen in the state (R+3 during 2010):
McCaskill 45% Akin 41%.

Akin Achin'

Todd Akin's comments about "legitimate rape" have ignited a media furor, particularly among the right.  Ann Coulter has demanded that he withdraw from the Senate race against incumbent Democrat Claire McCaskill.  Romney's campaign has also denounced Akin's remarks.  GOP groups are fleeing the state to protest Akin's campaign.

So will Akin drop out?  There are conflicting reports here.  This story is still developing quickly.

Education Left Behind

A new report has come out on employment by educational level.  A lot of interesting data.  Some of the key points:

• New jobs were created for the holders of college degrees during the technical recession, and these jobs have increased over the "recovery."
• About the same number of jobs exist for those with some college but without a four-year degree.
• Nearly 6 million jobs for those with a high school education or less have been lost since 2007; some of those losses occurred during the "recovery."
• The unemployment rate for new high school graduates is 24%.
• Earnings of those with a BA were nearly twice those of high school graduates.

See Kay Steiger for an interesting chart from this report.

It looks like in the Obama economy, many have still been left behind---especially those without a college degree.

No Prosecutions at MF Global

Jon Corzine's collapsed firm, MF Global, looks like it will escape any prosecutions for the actions leading up to its collapse:

A criminal investigation into the collapse of the brokerage firm MF Global and the disappearance of about $1 billion in customer money is now heading into its final stage without charges expected against any top executives.
After 10 months of stitching together evidence on the firm’s demise, criminal investigators are concluding that chaos and porous risk controls at the firm, rather than fraud, allowed the money to disappear, according to people involved in the case.
The hurdles to building a criminal case were always high with MF Global, which filed for bankruptcy in October after a huge bet on European debt unnerved the market. But a lack of charges in the largest Wall Street blowup since 2008 is likely to fuel frustration with the government’s struggle to charge financial executives. Just a few individuals — none of them top Wall Street players — have been prosecuted for the risky acts that led to recent failures and billions of dollars in losses.

There's No Business...

Dan Riehl has a good point here:

I'm not unrealistic. But if attacks are going to come and they are and will continue, the GOP has to have answers. It can't all be show business.

There's a difference between getting ratings and winning an election, and there's a difference between winning an election and actually governing.  Barack Obama had a very successful campaign; his presidency has been another story.  At some point, policy matters.

The Real Mediscare Trap

The Paul Ryan pick as Republican vice-presidential nominee may offer numerous opportunities for Mitt Romney's campaign, but it also offers both an electoral and an economic trap: the risk of transforming this election into solely a referendum on various Medicare reforms.  Some in the conservative movement may be hungry for a "choice" election on the future of government-financed medical spending, but this eagerness should not distract from needed economic reforms.  Meanwhile, there is a risk that the election becomes mired in a cycle of Democratic assaults upon the Ryan budget and Republican outrage at these assaults.  Such a dynamic might be good for blogger traffic, but it would likely damage the political prospects of Republicans and the economic prospects of Americans.

Medicare may be on an unsustainable path, and the growth rate of medical expenditures may eventually break the finances of the federal government.  Debates about how to reform the federal financing of medical care are necessary and worth having, yet what is at issue is when we should have these debates and how much we should focus on such debates at the present moment. Barack Obama would very much like to fight over Medicare proposals; he would like to avoid any attention to his record over the past few years.  The president would vastly prefer to distract from the failures of the present through conjuring fears about the future.  There is no reason for Republicans to let him slide on his record.  By allowing Obama to make Medicare reforms the centerpiece of this election, Republicans would be giving him a clean slate.

By sacrificing all other issues for an exclusive focus on Medicare and other entitlement reforms, Republicans would also be making a policy mistake.  However much it may loom in the future, Medicare is not what imperils the economy right now.  Businesses are not hiring not because Medicare might go insolvent a number of years down the road.  If the economic trajectory of the past four years continues indefinitely into the future, almost no version of Medicare (including Paul Ryan's) will be affordable.  If the point is to reform Medicare to make it sustainable (as Ryan allies claim), then we had best look at more pressing issues for the sustainability of Medicare and the future of the American economy as one of dynamic growth.  Moreover, even Ryan's reforms, which many in the Beltway conservative establishment have rallied around, would do nothing to change entitlements for the next ten years at least.  Ten years is a long time, and there need to be conservative alternatives for the medium term as well as the long term.

So Romney and his fellow Republicans should not let the focus slip too much from the theme of economic restoration and renewal.  And I for one am doubtful that reducing the deficit or cutting spending alone will solve our economic problems.  Many other structural risks are posed to the American economy.  For instance, banking reform could be a key policy and political move for Romney.  We still live in an era of too-big-to-fail.  Many on the right have become increasingly aware of how TBTF endangers both economic growth and the freedom of the American economy.  It seems very likely that the president's signature financial reform initiative, Dodd-Frank, has made it worse.  Finance will need to be made a market again (rather than a government-backed syndicate) in order for the economy to take off.

Our immigration system and lack of immigration enforcement still place burdens upon the middle class---both native-born Americans and legal immigrants.  Our trade policies often incentivize the intervention of foreign governments into the American economy, mocking rather than living up to the spirit of free trade and free enterprise.  Our regulatory structures too often encourage deindustrialization and rent-seeking.  Our tax policies are larded through with loopholes for interests connected to those in power.  Debt and stagnating incomes have led to a troubled housing sector.  A lack of a smart energy policy drains our growth.  Disappointment and diminishing resources have been the story for too many Americans.  Inner-city families still struggle with urban blight and decay.  Our health-care system is in need of market reforms.

A host of challenges face our economy and our society---and not all these challenges can be met through the budget.  Entitlement reform, if it is to be advanced, may work best as part of a broader menu of needed reforms.  Denouncing the president's Mediscare tactics may rally the base, but it will not persuade the middle and it will not alone put the economy back on the path to prosperity.  One of the key traits of conservatism is facing immediate crises first.  Well, the breakdown of the economy is the immediate crisis.  Restoring economic vitality will go a long way toward advancing the causes of free markets and free people that Romney and Ryan have publicly defended.

There is a bigger choice ahead than what will happen to Medicare: it is whether the United States will take a dark road of decline, despair, and decay, or whether it will return to what is best within itself and instead take the initially more difficult but ultimately more rewarding path of renewal, national recovery, and civic restoration.

Pick-Up Opportunity in Missouri

Claire McCaskill barely beat Jim Talent in 2006 to become a US Senator for Missouri.  According to a new SurveyUSA poll, she trails her Republican challenger, Todd Akin, by 11 points: 40-51.  This could be a real pick-up opportunity for Republicans in Missouri.

Whose Cuts?

Avik Roy, a policy advisor for Romney, highlights a key difference between Romney's budget and the House-backed Ryan budget: the Ryan budget keeps Obamacare cuts to Medicare (though it would not use those cuts to fund Obamacare), while Romney would repeal the Medicare cuts as well:

And the Romney campaign has explicitly stated that it will not preserve Obamacare’s cuts to Medicare. “Mitt Romney and Paul Ryan have always been fully committed to repealing Obamacare, ending President Obama’s $716 billion raid on Medicare, and tackling the serious fiscal challenges our country faces,” said Romney policy director Lanhee Chen in a Monday statement. “A Romney-Ryan Administration will restore the funding to Medicare, ensure that no changes are made to the program for those 55 or older, and implement the reforms that they have proposed to strengthen it for future generations.”

It looks like the Romney campaign is going to start hammering Obama on the Medicare cuts used to fund Obamacare.

Whose Budget?

A Romney memo suggests that the campaign will not sign on totally to all the details of the 2012 House budget:

1)    Does this mean Mitt Romney is adopting the Paul Ryan plan?

• Gov. Romney applauds Paul Ryan for going in the right direction with his budget, and as president he will be putting together his own plan for cutting the deficit and putting the budget on a path to balance.

• Romney’s administration will go through the budget line by line and ask two questions: Can we afford it? And, if not, should we borrow money from China to pay for it?

• Mitt Romney will start with the easiest cut of all: Obamacare, a trillion-dollar entitlement we don’t want and can’t afford.

• Mitt Romney also laid out commonsense reforms that will make good on our promises to today’s seniors and save Social Security and Medicare for future generations.

Reform Details

Yuval Levin offers a sympathetic exposition of the Wyden-Ryan Medicare reform proposal.

What Might Romney Hope to Gain by a Ryan Pick?

So Paul Ryan will be the vice-presidential nominee for the Republican party in 2012.  What could be some of the advantages of a Ryan pick?

• Ryan cements the loyalty of the "conservative" establishment.  Much of this establishment, in the Weekly Standard and the Wall Street Journal and various think tanks, have been skeptical of Romney but devoted fans of Ryan.  Now, this establishment can become top cheerleaders for the Romney campaign.
• Ryan has been able to win in swing districts before.  Ryan's district, WI-01, is a paradigmatic swing district, bouncing between George W. Bush in 2004 and Barack Obama in 2008.  In both 2004 and 2008 (and many other years), Ryan was able to win with big margins.  Perhaps Romney is hoping that will translate in the general.
• Ryan is a fierce debater.  Quick on his verbal feet, Ryan seems to relish to chance to spar with top-line Democratic principals.  The vice-presidential debate in the fall could be a chance for Ryan to shine.
• It changes the narrative.  The Obama campaign has tried to make this election about Romney's prior business experience and persona as businessman.  The Ryan pick could put a roadblock in front of this strategy.  With various signature policy proposals, Ryan might help change the campaign narrative to be about policy rather than personality.

Could Federal Spending Get to 20% of GDP by 2016?

I have a new piece up at the American Thinker looking at one of the claims of the Romney economic team:

Some on the left have assailed a Wall Street Journal op-ed by top Romney economic adviser Glenn Hubbard claiming that Mitt Romney's economic plans set the goal of having federal expenditures be 20% of GDP by 2016.  They currently stand at 24% of GDP.  As John Cassidy writes:

Is this credible? As far as the immediate future goes, Romney is promising austerity. Hubbard reiterates that he would aim to reduce federal spending from roughly twenty-four per cent of G.D.P. in fiscal 2012 to twenty per cent by 2016. Romney hasn't spelled out how he would reach this target, but simple arithmetic suggests he would need to impose about five hundred billion dollars in annual spending cuts, which is equivalent to more than three per cent of G.D.P.

I think it's a little more complicated than Cassidy lets on, however.

Read the rest here.

Akin Wins in Missouri

Rep. Todd Akin wins a closely contested primary battle to face incumbent Missouri Senator Claire McCaskill.  Interestingly, Akin serves in Jim Talent's old district.  Talent narrowly won this Senate seat in 2002 only to lose it in 2006 to McCaskill.  Since 1994, this Senate seat has switched hands every time there's been an election.

Pensions, Anyone?

If this Daily Caller story holds up, it could be bad news for the White House:

Emails obtained by The Daily Caller show that the U.S. Treasury Department, led by Timothy Geithner, was the driving force behind terminating the pensions of 20,000 salaried retirees at the Delphi auto parts manufacturing company.
The move, made in 2009 while the Obama administration implemented its auto bailout plan, appears to have been made solely because those retirees were not members of labor unions.
The internal government emails contradict sworn testimony, in federal court and before Congress, given by several Obama administration figures. They also indicate that the administration misled lawmakers and the courts about the sequence of events surrounding the termination of those non-union pensions, and that administration figures violated federal law.
Delphi, a 13-year old company that is independent of General Motors, is one of the world’s largest automotive parts manufacturers. Twenty thousand of its workers lost nearly their entire pensions when the government bailed out GM. At the same time, Delphi employees who were members of the United Auto Workers union saw their pensions topped off and made whole.

This sends a troubling message about the administration's honesty and also raises questions about the administration's treatment of the middle class and notions of economic equity.  We'll have to see how it develops, but, as Ace says, this could be a big deal.

Unemployment by Educational Attainment

The Great Recession continues to depress the employment situation, especially for workers without a college degree.  Courtesy of the BLS, here are the seasonally-adjusted unemployment rates for workers by level of schooling for July 2012:

• No high school diploma or GED: 12.7%
• High school graduate: 8.7%
• Some college: 7.1%
• College degree or higher 4.1%

The Rise of the McGovernites?

Ed Morrissey draws attention to an interview with Martin Peretz, former owner of The New Republic.  Peretz regrets the rise of the McGovernite faction in the Democratic party:

"I bought the New Republic to take back the Democratic Party from the McGovernites,” the legendary editor and publisher Martin Peretz says. Now, he fears, George McGovern’s ideas may be back in vogue within the party. …
“You know, I disagreed with Bill Clinton on some things and I didn’t disagree with him on others,” Mr. Peretz recalls. But Mr. Clinton’s administration “was in the deep tradition of the Roosevelt-Truman idea.” He concludes: “In any case, I think the Democratic Party was restored to a center role. Yes, it took a lot for the Clinton administration to rescue Bosnia. And it took a lot for the Democrats to admit to a mistake in Somalia.” But they eventually did both.
“We’re now in a new era,” Mr. Peretz warns. “I think that Obama is a child, or maybe let’s say a grandchild, of the New Left, with casual moral judgments made about very intricate ethical alternatives.” Later he thunders: “Leading by following—it’s really a sick phrase.”

I think in many respects Peretz is right to trace Obama's political lineage to the New Left and the McGovernite faction of the Democratic party.

However, one factor left unmentioned by both Morrissey and Peretz is that the rise of the McGovernites in many ways was the transition of the progressive left to the politics of the chic.  Many forces backing McGovern were often culturally hostile to the American middle class and the American worker.  This hostility was important for the Reagan Revolution of the 1980s, as union members and other middle-class workers felt increasingly estranged from their usual Democratic allies.

The unemployment rate rises to 8.3%.

Romney: Culture Matters

In the pages of the National Review, Mitt Romney makes the case that culture matters for economic prosperity:

But what exactly accounts for prosperity if not culture? In the case of the United States, it is a particular kind of culture that has made us the greatest economic power in the history of the earth. Many significant features come to mind: our work ethic, our appreciation for education, our willingness to take risks, our commitment to honor and oath, our family orientation, our devotion to a purpose greater than ourselves, our patriotism. But one feature of our culture that propels the American economy stands out above all others: freedom. The American economy is fueled by freedom. Free people and their free enterprises are what drive our economic vitality.
The Founding Fathers wrote that we are endowed by our Creator with the freedom to pursue happiness. In the America they designed, we would have economic freedom, just as we would have political and religious freedom. Here, we would not be limited by the circumstance of birth nor directed by the supposedly informed hand of government. We would be free to pursue happiness as we wish. Economic freedom is the only force that has consistently succeeded in lifting people out of poverty. It is the only principle that has ever created sustained prosperity. It is why our economy rose to rival those of the world’s leading powers — and has long since surpassed them all.

This attention to the cultural foundations of wealth is a classically conservative concern.  Culture might not be everything, but the role that culture plays in the economy should not be underestimated.

Cruz Wins

Last night, former Texas Solicitor General (and Tea Party favorite) Ted Cruz beat the Perry-backed Texas Lieutenant Governor David Dewhurst in the GOP Senate primary in Texas.  David Weigel considers some of the reasons why Cruz won; one of David Frum's correspondents offers some reasons for why Dewhurst lost.

GDP Growth Slowing

Zero Hedge analyzes today's release of GDP data:

US Q2 GDP printed at an annualized rate of 1.5%, just slightly above expectations of 1.4%, and a 25% drop from the Q1 rate of 2.0%, with personal consumption plunging as a key contributor from 1.72% to just 1.05%, and government once again being less and less a detractor from "economic growth." Inventories "added" 0.32% to GDP, a number which in Q3 GDP will subtract from economic "growth." Now whether this headline number is bad enough for the Fed to decide on more QE, is up to Hilsenrath to decide. But in a Bizarro world in which only horrible data boosts the market, today's modest beat will likely not make the market happy, nor sellers of newsletters in which the only strategy is hope and prayer. And just as important, today the BEA revised historical GDP data retroactively. Of note 2010 GDP was revised from 3.0% to 2.4%, while Q3 2011 GDP was revised from 3.0% to 4.1%, indicating that the slowdown we are experiencing is in fact far worse than previously expected.

AEI has some more thoughts on the current economy.

Medical Expenses and Doctor Compensation

In the Weekly Standard, Eli Lehrer looks at doctor compensation:

In discussions of America’s high health care costs, surprisingly little attention is paid to salaries and wages. Yet the fact that medical jobs simply pay more than those in other sectors is beyond dispute. A physician practicing in a primary care setting, according to the Bureau of Labor Statistics, earned an average of just over $200,000 in 2010, while specialists averaged over $355,000 (the highest of any professional category tracked). By comparison, lawyers average just over $110,000, airline pilots about $92,000, and chartered actuaries (who calculate risk for insurance companies and must pass complex exams longer and arguably more difficult than the medical boards) about $150,000.

The wage disparities, however, don’t stop with physicians, who do, after all, need to complete an academic curriculum that’s beyond most people’s abilities. Registered nurses and dental hygienists, who need only associate’s degrees, earn about $70,000 a year. This is about as much as degreed computer programmers. And it’s significantly more than high school teachers and forensic scientists, who need master’s degrees but earn a little less than $60,000 on average. And wage disparities exist at all levels of the health care industry: Even nonmedical professionals like janitors tend to earn more in health care settings than those working elsewhere....

And nothing about the training costs of the people who provide medical care explains their high wages, either. Because medical school takes four years of full-time study—as compared with three years for law school and two for business school (tuition is comparable)—doctors do, indeed, graduate with more debt than people pursuing other professional training. But the wages they earn afterward more than make up for this: An average year in medical school costs about $25,000 at most public schools, while doctors make, on average, $80,000 more than lawyers but spend only one year more in school. And while many students capable of doing the work can’t find an accredited medical school willing to admit them, that’s not true for all medical professions. Anyone with a high school degree can train to become a nurse, lab tech, or other health care worker.
Malpractice insurance can also be very expensive, but this isn’t so everywhere—internists in states that cap malpractice awards can get it for only a few thousand dollars a year—and, in any case, the overwhelming majority of health care professionals don’t need malpractice insurance. Even in states like Florida where insurance costs over $50,000, doctors still take home very comfortable six-figure incomes in almost all cases.
If this happy confluence of factors for medical professionals—high wages, excellent job security, below-world-average workloads, and extremely high returns on educational efforts—resulted from a free market, it could rightly be considered a triumph of capitalism. But it does not. Government provides a little less than half of the total medical spending in the United States (about 46 percent by most estimates; more if tax expenditures are included), oversees the licensing of almost everyone who comes near patients, and limits where and when hospitals get built. The system that produces these high wages is shot through with government subsidies and regulations.

New MA Senate Poll: Still Close

A new poll by MassInc suggests that it's still a very close race between Brown and Warren:

The race for Massachusetts Senate remains close according to the MassPulse Quarterly Poll, released today. Among registered voters, 40 percent support Elizabeth Warren, and 38 percent support Senator Scott Brown, the latest in a series of polls which have shown the two candidates essentially neck and neck. 

The partisan balance for registered voters seems fairly reasonable: 11% R / 34% D / 49% unenrolled / 6% unknown.  That percentage is fairly close to the enrollment data released earlier this year.  However, it's worth noting that this poll looks at registered voters, so Brown probably still has the edge for likely voters.

The crosstabs tell an interesting story: for Brown to pull ahead, he needs to solidify his standing with the middle.  He crushes Warren among the poor and among the rich, but he lags with the income groups making between 25K and 125K a year.  He beats Warren handily among those with a high school education or less, but falls increasingly behind her as voters go beyond a high school education: voters with a postgraduate degree choose Warren 54-32.  Brown runs strongest in the outer Boston suburbs and Southeastern Massachusetts; Western Massachusetts is his weakest area.  However, Brown needs to improve his margin in friendly areas if he hopes to win in November.  In 2010, he led Coakley by around 15-20 points in the Southeastern Mass area; MassInc puts him falling 6 points behind Warren there.

The good news for Brown is that he still has a 50% favorability rating.  Even many Democrats are not totally alienated from Brown---he even has a 40% favorability rating among them.  Brown also has a strong lead among independents, a crucial group for any Bay State Republican.  If Brown can pull together a message offering improvement for the middle class (a direction he seems to be going in), he could make gains in crucial demographics and pull off a win in November.

Big Donors Open Up Wallets for Rhode Island Democrats

Sheldon Whitehouse was swept into office in the Democratic "wave" year of 2006, defeating center-left Republican Lincoln Chafee (now Rhode Island's governor).  However, an anti-incumbent sentiment seems to be growing in that state.  RI-01 incumbent David Cicilline (D) is in real danger of losing his seat, either to a primary challenge by a fellow Democrat or to his Republican challenger.  RI-01 seems one of the seats in New England most likely to flip.

Meanwhile, Whitehouse may yet be vulnerable to his Republican challenger, Barry Hinckley.  A poll taken at the end of February (the latest poll I could find) showed Whitehouse getting 50% to 28% for Hinckley.  The size of that margin should not obscure the fact that a sitting senator was barely able to crack 50% against a relative political unknown.  Whitehouse's approval rating in that poll would be fairly grim for any incumbent: 38% approval with 53% disapproval.  Clearly, Rhode Island voters are not entirely happy with the Democratic incumbent.

Whitehouse looks to use a spending advantage to offset the state mood.  According to public campaign finance records, he has currently raised about $4.2 million, about four times the amount that Hinckley has raised (which is about $1 million).  However, much of this money comes from interest groups and large donors.  Nearly 30% of Whitehouse's contributions (about $1.2 million) come from PACs.  These PACs include leadership PACs set up by fellow Democrat office-holders, union-financed PACs, business-sector PACs, and ideological PACs.  Whitehouse has raked in millions in big-donor contributions (contributions over $200).

Where Whitehouse has lagged, however, is in small donors.  Currently, he has only raised about $168,000 in small donations from individual donors, so about 4% of his fundraising has come from small donors.  Whitehouse seems to be trying to make the most of the advantages of incumbency, collecting sums from big-ticket donors and interest groups.  But he hasn't exactly caught fire with the grassroots.

According to a Hinckley spokesman, about 60% of the Hinckley campaign's donations come from small donors.  Campaign finance records suggest that about 1% of Hinckley's total haul comes from PACs.

In 2006, Lincoln Chafee drew heavily from PAC money and other vested interests, while then-challenger Whitehouse took only about 11% of his funds from PACs.  Now that Whitehouse occupies a Senate seat, he's the one trying to insulate himself with PAC money.

For his part, Cicilline is also drawing on big money to try to make it through a rough election.  Nearly 25% of his fundraising comes from PACs, and only 7% comes from small donors.

Rhode Island Democrats seem to hope that they can paper over electoral dark clouds with ample helpings of green.

Should Romney Take on Banking Reform?

AEI's James Pethokoukis lays out the electoral benefits of Romney taking on banking reform:

But if Romney presented an aggressive, free-market, anti-crony capitalist, financial reform agenda — something beyond the fuzzy “Repeal Dodd-Frank and replace with streamlined, modern regulatory framework” pledge on his website — he could demonstrate he’s neither a creature of Big Money nor a Bush clone. Oh, and he would be putting forward some smart policy ideas, too.
Here’s a possible Romney financial reform agenda:
1) Endorse the Hoenig Plan. Thomas Hoenig, vice chairman of FDIC and former president of the Kansas City Fed, wants to bust up the big banks. He would only allow banks to engage in traditional activities that are well understood and are based on long-term customer relationships so borrowers and lenders are on the same page: Commercial banking, underwriting securities, and asset management services. Banks would be barred from broker-dealer activities, making markets in derivatives or securities, trading securities or derivatives for their own accounts or for customers, and sponsoring hedge funds or private equity funds.
 2. Go after high-frequency trading. Financial markets seem more volatile than ever, and one reason might be super-fast, or “high-frequency,” trading, where computers buy and sell bonds, stocks, and derivatives in milliseconds. As my friend Martin Hutchinson of the Asia Times puts it:

High-frequency trading is objectionable for two reasons. First, its proponents claim it provides liquidity to the market, but that’s not really the case. In periods of turbulence, the liquidity that HFT supplies is quickly withdrawn, as the institutions operating the trading systems shut them off for fear of large and destabilizing losses. Indeed, liquidity that switches off when it is most needed is of no use at all. To the contrary, it destabilizes the market rather than stabilizing it.
The second reason high-frequency trading is bad is that it uses machines to get trade information before competitors. Of course, trading based on extra-fast knowledge of the trading flow should qualify as inside information, and thus be illegal.
Unfortunately, it can’t be made illegal, because market-makers do it all the time. And what’s more is that stock exchanges make huge sums of money by renting space within feet of the exchanges’ computers to high-frequency traders.

Hutchinson recommends a 0.01%-0.02% Pigovian tax on trading stocks and bonds and a 0.05% tax on derivatives to tamp down on such speculation. The revenue could be used to lower the overall corporate tax rate.
3. Endorse the mortgage refinancing plan of his own economic adviser. Economist Glenn Hubbard, along with his colleague Christopher Mayer at Columbia University, has devised a plan where every homeowner with a GSE mortgage could refinance his or her mortgage with a new mortgage at a current fixed rate of 4.20% or less. Nearly $4 trillion of mortgages could be refinanced, helping roughly 30 million borrowers save $75 billion to $80 billion a year. As Hubbard and Mayer see it, it would be like a long-­lasting tax cut for these 25 or 30 million American families. ”The plan would have an immediate fixed cost to the government of $242 billion with half that cost split equally between the government and banks.”

As Pethokoukis notes, these specific proposals might not be ones that are ultimately worth going with, but they do suggest some directions that Romney's team could go in.

Some commenters at AEI have objected that, because Romney has a number of large Wall Street contributors, he will be unlikely to propose putting forward a lot of new regulations on world of finance.

However, I think there's another way of looking at it: rational, market-oriented regulatory reforms could ultimately be in the financial sector's best interest.  With Dodd-Frank doubling down on the era of Too Big to Fail and financial instability, we could be only a few market jolts away from yet another financial crisis.  And no one knows who will be the next Bear Stearns.  A few politically connected individuals gain power in the era of big bailouts, but a crash could tear down almost anyone.  And there is no guarantee of another bailout in the future, which makes the potential for loss that much greater.

Rational reforms would be a hedge against such failure.  Good reform would benefit both the financial sector and the economy as a whole.

Proposing a serious set of reforms could also, as Pethokoukis claims, be beneficial to the Romney campaign: it changes the narrative from one of personality to one of policy.  Barack Obama had his shot at financial reform; he can defend that on the campaign trail if he wants.  By speaking about the importance of real financial reform, Romney could harness popular dissatisfaction with the economic dysfunction of the present moment while also advancing conservative principles.

Outsourcing: A Blast from the Past

Michael Kinsley offers a Clinton-era defense of outsourcing:

Obama decries Romney's practice of outsourcing as if he thinks that all outsourcing is wrong, even if it can't or shouldn't be made illegal. Obama proposes a heavy dinner of grants, subsidies and tax credits to discourage outsourcing and encourage "insourcing" — bringing jobs from abroad back to America — all of which are bad ideas. Among other reasons, one nation's insourcing is another nation's outsourcing, and retaliation can quickly lead to a trade war in which everybody loses.

Who said this — "I don't want the next generation of manufacturing jobs taking root in countries like China or Germany" —Romney or Obama? Early in the Republican primary campaign, China was the one subject Romney seemed genuinely agitated about. Imposing tariffs on Chinese goods was on the long list of things Romney said he was going to do on Day 1 of his presidency. Maybe he still is, but he doesn't play it up the way he used to.

Meanwhile, if Romney is a free trader at heart, faking a bit of protectionism, Obama seems to be a protectionist at heart, faking a belief in free trade. That quote in the previous paragraph is from Obama, and it shows a fundamental misunderstanding of how markets work. Trade is not a zero-sum game. There isn't a certain number of manufacturing jobs that will either go to China or Germany, or come to us. We want China and Germany to have lots of manufacturing jobs. The more they have, the richer they are, the better off we will be as well. Beggar-thy-neighbor policies don't work.

There's an element of truth to what Kinsley says, but he seems to miss an important context: many US trading partners often have a trace of beggar-thy-neighbor policies themselves.  We don't exactly have a "free trade" situation at the moment, with many countries discriminating against US products.

Made in USA

The fact that the uniforms for the USA Olympic Team, sponsored by Ralph Lauren, were all apparently made in the People's Republic of China has been accumulating some outrage in the blogosphere and Capitol Hill.

From the ABC News report that broke this story:

They are the pride of America — Team U.S.A. — and for the opening ceremonies of the Summer Olympics in London, they’ll be proudly wearing red, white and blue, from beret to blazer.

The classic American style — shown in an image above — was crafted by designer Ralph Lauren. But just how American is it?

When ABC News looked at the labels, it found “made in China.”

Every item in the uniforms that the U.S. athletes will be wearing at the opening ceremony in London will carry an overseas label.

Nanette Lepore, one of the top U.S. fashion designers, said she was shocked that none of the uniforms had been made in the states. Further, Lepore said that it was “absolutely” possible that the athletes could have been outfitted in U.S.-made clothing. She said U.S. manufactures could have easily made the uniforms — and for less.

 Is Lepore right?  Probably.

Here's the price list provided by ABC:

Men:
Beret – $55
Tie – $125
Belt – $85
Shirt – $425
Blazer – $795
Trousers – $295
Shoes – $165

 I don't feel up to looking for an American-made beret, but here are some products made in the USA that would replicate the designated uniform style and cost about as much, if not far less:

Brooks Brothers Tie: $79
Allen Edmonds Belt: $88
Brooks Brothers Dress Shirt: $79
Brooks Brothers Double-Breasted Blazer: $695
Anderson-Little Blazer: $175 (for an even better bargain)
J. Press Trousers: $110

Now, American-made shoes are a bit more expensive, but plenty of made-in-America shoes from companies such as Allen Edmonds and Alden can be purchased for around $300 or less.

Even with the extra cost of made-in-America shoes, the Olympic team's uniform (excepting beret) could easily cost $500 less using made-in-America substitutes.

To close with some final thoughts from Lepore:

“Why shouldn’t we have pride not only in the American athletes, but in the American manufacturers and laborers who are the backbone of our country?” Lepore said to ABC News. “Why? What’s wrong? Why was that not a consideration?”

(Note: I have no financial interest in Brooks Brothers, Allen Edmonds, J. Press, or any other company mentioned in this post.  I also have no problem with Ralph Lauren.)

A Republican Senator from Hawaii?

When Hawaii held its first Senate election in 1959, it elected one Republican and one Democrat.  That Republican, Hiram Fong, held on to that seat until 1977, when he retired.  Since then, no Republican has been elected Senator from Hawaii.

That could possibly change in 2012.  According to a recent poll, former Hawaii governor Linda Lingle, a Republican, is within the margin of error of two of her likely Democratic opponents.  The Weekly Standard reports:

Lingle, a two-term Republican governor, leads Democratic congresswoman Mazie Hirono 45 percent to 40 percent and trails former Democratic congressman Ed Case by just 1 point, 41 percent to 40 percent.

As the Standard notes, this race still leans Democratic, but those numbers are a lot closer than Senate races have been in the past.

Restoration and Renewal: A Theme for Romney?

I have a piece up today in the American Thinker that explores the idea of "Restoration and Renewal" as an organizing theme for the Romney campaign:

The technocratically-tending Romney has often defined himself less as a figure of rigid ideology and more as a data-driven competent-in-chief.  While a willingness to experiment may prove helpful in facing the nation's challenges, an organizing message may be helpful, too.  The former Massachusetts governor has a personal reputation (fostered by his experiences at Bain and the Olympic Games) as a turnaround artist, but the theme of restoration and renewal goes deeper than that.  Since at least 2000, a growing number of Americans have felt that there is something increasingly off about recent evolutions in the body politic -- a number that spiked after the economic cataclysm of 2008.  Both the Tea Party and, yes, Occupy Wall Street are responses to this feeling of unease.  The calculated amorphousness of Barack Obama's slogan of "hope and change" was meant to be an antidote to this unease; however, due to missteps and ideological choices, the Obama administration has exacerbated, not ameliorated, American dissatisfaction.  The purported great uniter has become the great polarizer, and 2012 looks to be a year in which the president aims to use this polarization as a tactic for his reelection campaign.  President Obama's campaign has struggled to articulate what exactly would be the animating end of a second Obama term.  The choice of "forward" as the campaign's new keyword is telling in its ambiguity -- forward, exactly, into what?  Further stagnation?  Further polarization?

Read the rest here.

New CBO Report on Tax Liabilities and Income

The CBO has released a new report on the tax liabilities of various income groups.  The headline the CBO runs with is the following:

The recent recession has had a substantial impact on income, the amount of taxes owed, and average tax rates. Average before-tax income for all households fell 12 percent from 2007 to 2009 in real (inflation-adjusted) terms, and the overall average federal tax rate of 17.4 percent in 2009 was the lowest in the 1979–2009 period. The changes in average income and tax rates differed markedly across the income distribution. 

 Interestingly, this data suggests that income inequality declined slightly between 2007 and 2009.  In 2007, the top 1% controlled 18.7% of the nation's before-tax income; by 2009, it controlled only 13.4% of the national income.  However, this income measure does not take into account increasing asset prices.  So, if someone's stock holdings increase $30,000 in value over a year, that increase in value is not counted as income unless that stock is sold.

Moreover, the shares of income calculations include federal transfers---including Medicaid, SNAP, unemployment payments, and other federal benefits.

Celebrating the Fourth

As I wrote last year,

...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.

Read the rest here.

Mountains and Molehills

National Journal runs with the following headline: "Romney Campaign Declares Cease Fire on Health-Care."  The central paragraph in that story suggests a key topic that's been gaining some circulation in the blogosphere:

His senior adviser, Eric Fehrnstrom, went on MSNBC Monday and ended up agreeing with the Obama campaign's spin that, even though the Supreme Court declared the individual mandate a tax, it really still is a penalty. Significantly, his campaign appears to want to take the most potent argument against the president on the health care subject off the table, likely out of fear the Romney himself is vulnerable when it comes to his health care record. He, after all, supported a mandate as governor of Massachusetts, and doesn't want that to be considered a tax, either.

First of all, it's interesting to note that many rightie critics of the Roberts decision on health-care (such as Jeff Goldstein) have faulted the Court for finding that the mandate was a tax---yet now Romney's camp, for also denying that the mandate is a tax, is being interpreted as capitulating to the left.

But there's another salient point beyond the semantics of "mandate" and "tax": there are plenty of other areas to criticize Obamacare about beyond just the mandate.  The mandate was the focus of conservatives' arguments that Obama was unconstitutional; there are plenty of reasons why it's a problematic law.  As Ann Coulter put it,

If Obamacare were a one-page bill that did nothing but mandate that every American buy health insurance, it would still be unconstitutional, but it wouldn't be the godawful train wreck that it is. It wouldn't even be the godawful train wreck that high-speed rail is.

It would not be a 2,000-page, trillion-dollar federal program micromanaging every aspect of health care in America with enormous, unresponsive federal bureaucracies manned by no-show public-sector union members enforcing a mountain of regulations that will bankrupt the country and destroy medical care, as liberals scratch their heads and wonder why Obamacare is costing 20 times more than they expected and doctors are leaving the profession in droves for more lucrative careers, such as video store clerk. 

Nor is the fact that Romney is not screaming about health-care 24/7 in any way a sign that the campaign has given up talking about it.  Certainly, many Republicans and conservatives are hammering Obama on health-care, and these attacks are being felt in the media dynamic.  As a matter of electoral politics, Romney probably can't match the venom of some of these comments.  He has criticized Obamacare and has pledged to work to repeal it.  There's no need for Romney to fall into the media spin cycle and chase after headlines.  Rather than trying to react to Obama, Romney can focus on asserting his own vision.

UPDATE: Ace has some related points:

But here's the thing: If ObamaTax is in fact a tax, then doesn't that mean... Justice Roberts got it right?
There's a lot of games-playing going on with politics, obviously. We're in campaign season, after all. The candidates do it, we do it.
I think a little too much is being pushed on to this point. On one hand, we're trying to recover some win from Roberts' disastrous decision by saying, "Well, at least he said it was a tax; that's politically useful."
On the other hand, we're insisting he got it wrong.
Well, if it got it wrong, it's not a tax. (Or I suppose there is a way to thread this needle: It's a tax, but an illegal tax, because it is not imposed for purposes of general revenues, but to force people into compliance with a federal law in an area the federal government has no authority... which actually winds up being a penalty, not a tax, so I guess that doesn't work.)
There's a lot of having-it-both-ways going on from all corners. Including from activists and pundits. I'm not sure how you can, in a single breath, declare Roberts' opinion in great error, and then castigate Romney for not embracing the erroneous opinion.

Obamacare Stands

On a 5-4 ruling, the Supreme Court holds that the mandate to have health insurance is upheld as a tax.  As the WSJ notes,

Though the challengers mostly lost on Thursday, the court did affirm one of their basic arguments: that Congress can't use its powers to regulate interstate commerce to require people to buy insurance. Chief Justice Roberts said the government's arguments on this point would fundamentally change "the relation between the citizen and the federal government."
The majority upheld the insurance mandate on other grounds. The chief justice wrote that the penalty's "practical characteristics pass muster as a tax under our narrowest interpretations of the taxing power." He said a person who does not wish to carry health insurance is left with a "lawful choice to do or not do a certain act, so long as he is willing to pay a tax levied on that choice."
Chief Justice Roberts added: "It is well established that if a statute has two possible meanings, one of which violates the Constitution, courts should adopt the meaning that does not do so."

...
The ruling may give more leeway to states that don't want to cooperate with the law by letting them avoid punishment for refusing to expand Medicaid.

Chief Justice Roberts wrote that the Medicaid portion "violates the Constitution by threatening existing Medicaid funding." He said the remedy for the violation was to preclude the federal government from imposing a sanction on states that decline to accept an expansion of Medicaid under the law's provisions. But he said that remedy "does not require striking down other portions" of the law.
Twenty-six states filed suit the day Mr. Obama signed the Patient Protection and Affordable Care Act in March 2010, and a cloud of uncertainty had hung over the law ever since. Lower courts issued conflicting rulings on whether the law's insurance mandate was constitutional.

Ace reminds Republicans that there is another way to undo Obamacare.

Fiat Fraud?

David North looks into some of the possibilities for fraud in President Obama's immigration legalization by fiat:

In any such program the devil is both in the inevitable fraud, and in the governmental definitions, as I learned a quarter of a century ago when the Ford Foundation assigned me the task of evaluating the massive legalization program that came out of the Immigration Reform and Control Act of 1986 (IRCA).
Let's review the threat scenario in the Dream Scheme. In addition to those who genuinely meet the program's generous outline, there will be applicants who will try to beat the system. These are some of the inevitable problems:

• Aliens claiming that they arrived prior to their 16th birthdays when, in fact, they came later.
  
• Aliens claiming to be under 30 when they are older than that.
  
• Aliens who are otherwise eligible, but who have not been here for five years.
  
• Aliens who, in fact, have not graduated from high school, are not in school, and who do not have a GED, but who make such claims.
  
• Aliens, otherwise eligible, who were not in the nation on June 15, 2012.

Another general problem — that an alien would lie about his police record — is less pressing because the government keeps pretty good records on whom it arrests, as opposed to those who entered the nation without inspection (EWI).
My basic worry is that an already overworked DHS staff will not press very hard to uncover fraud on such difficult areas as age at entry and that it will grant short-term legal status to some early fraudulent applicants, who will then tell their peers how easy it is to fool the government on issues such as age at entry and then the peers, in large numbers, will apply for status.
I am concerned about the flood of plausible-looking "documents" purporting to be diplomas, report cards, General Education Development (GED) certificates, and the like that will be submitted to the government; also, overseas birth certificates showing ages under 30.

David Frum on the Obama immigration order:

The decision to grant residency and work rights to young illegal aliens who meet certain conditions is an amnesty in all but name. A conditional amnesty, yes, but amnesty. The trouble with amnesty has always been the incentive effects. It's possible that amnesty may be a necessary final stage in immigration reform, but to put amnesty in place before effective enforcement measures are in place—and before authorities are certain that as many illegals as possible have voluntarily repatriated—is to invite another wave of illegal migration just as soon as business conditions improve.

Frum also argues that the middle class could suffer the most from this:

In a time of very high unemployment, it seems simply reckless to invite future waves of migration—and especially of the low-skill, low-wage migration that America has mostly attracted over the past four decades.
Every serious economic study of immigration has found that the net benefits of present policy are exceedingly small. But that small net is an aggregate of very large effects that cancel each other out. The immigrants get higher wages than they would have earned in their former country. The affluent gain lower prices for in-person services. Lower-skilled native-born Americans face downward wage pressure. In any other policy area, people who consider themselves progressive might be expected to revile a policy whose benefits went to foreigners and the rich, and whose costs were born by the American poor. Immigration policy baffles that expectation.

John Yoo addresses some of the Constitutional questions of the Obama immigration order: "President Obama’s claim that he can refuse to deport 800,000 aliens here in the country illegally illustrates the unprecedented stretching of the Constitution and the rule of law."

Is the Supreme Court Watching?

Today, the White House offered a de facto amnesty of an unknown number of illegal immigrants.  The AP has some details:

The policy change, announced Friday by Homeland Security Secretary Janet Napolitano, will affect as many as 800,000 immigrants [though it could be far more---FB] who have lived in fear of deportation. It also bypasses Congress and partially achieves the goals of the so-called DREAM Act, a long-sought but never enacted plan to establish a path toward citizenship for young people who came to the United States illegally but who have attended college or served in the military....

Under the administration plan, illegal immigrants will be immune from deportation if they were brought to the United States before they turned 16 and are younger than 30, have been in the country for at least five continuous years, have no criminal history, graduated from a U.S. high school or earned a GED, or served in the military. They also can apply for a work permit that will be good for two years with no limits on how many times it can be renewed.

The policy will not lead toward citizenship but will remove the threat of deportation and grant the ability to work legally, leaving eligible immigrants able to remain in the United States for extended periods.

 A key point raised by Daniel Horowitz: no law by Congress has been passed enabling this immunity from deportation or the granting of work permits.  Whether one agrees with the result of a selective amnesty that creates a class of permanent non-citizen workers or not (especially in a time of high unemployment), we should pay attention to the implications of process here.

If the president can claim the ability not only to selectively halt the prosecution of various laws but also to create new legislative mechanisms for work permits for immigrants, what limits are there to the president's power?  Could the president just choose to stop enforcing civil rights laws and create new standards for voting instead?  Could the president choose to avoid collecting taxes at the legally specified rate and instead create new tax rates?  Could the president set separate new rates for Republicans or Democrats or women or men?  (After all, the administration's new immigration rule treats one age group differently from another.)

President Obama's move could have radical implications for executive power.  It could also have implications for the pending Supreme Court case about Arizona's recent immigration law.  The federal government's brief there suggests that the executive branch has a broad latitude in deciding what laws to enforce and how to enforce them.  In this move, the Obama administration has taken that principle to a new level, not only choosing not to enforce certain laws but also creating new measures.  If the Supreme Court endorses the administration's position for Arizona outright, some on the court may feel that they are giving the administration a green light to extend its executive reach even further.

Romney Edges away from Bush Legacy in Education

The New York Times reports on the dissatisfaction of some Bush education advisors with Mitt Romney's seeming opposition to a federal top-down approach to education "reform":

One notable skeptic is Margaret Spellings, a former education secretary under Mr. Bush, who this year was an informal adviser to Mr. Romney. She said she withdrew once the candidate rejected strong federal accountability measures.

“I have long supported and defended and believe in a muscular federal role on school accountability,” Ms. Spellings said. “Vouchers and choice as the drivers of accountability — obviously that’s untried and untested.” 

Romney seems to be emphasizing vouchers rather than federal standards.

Romney Challenges Obama's Priorities

Hot Air draws attention to a potentially effective line of attack that Romney's been trotting out: with the economy in turmoil, why did Obama not focus on that instead of pushing through transformational "change"?

What makes this attack bruising, of course, is not only that it ties Obama’s two biggest political liabilities together, it blows a hole in the idea that he’s some centrist pragmatist who’s working around the clock to generate jobs for the unemployed. On the contrary: When faced with the biggest economic crisis in decades, he passed a stimulus and then spent the better part of a year obsessing over the mega-boondoggle atop his Great Society II wishlist. It makes him look grossly negligent on the key issue of the election, in service to a program that a huge chunk of the public hates and which may end up being cashiered by the Supreme Court before the month is out.

CBO: Income Inequality Depresses Social Security Revenue

The long-term budget outlook released by the CBO today has plenty of dire news if the US continues along its present path.  A number of others are chronicling some of the bad news, so I'll just make a quick observation about this report's comments on Social Security.

Since there is a cap on the income that is taxable for Social Security, an economic cycle in which most economic gains go to people whose income is already above the cap would seem to harm Social Security collections, causing them to not keep pace with the growing economy.  The CBO seems to agree that this dynamic is taking place:

When earnings inequality increases, as it has in recent decades, the taxable share of earnings declines because a greater share of income is above the taxable maximum.

The CBO projects increasing earnings inequality over the next few decades, which would cause the share of earnings subject to the payroll tax to fall from above 85% to around 83%.

It's also worth noting that, according to the CBO, the Boomer generation and Gen X will on average be paying more in taxes into Social Security than they receive in benefits.  It says that, taken all in all, Americans born between the 1940s and 1980s will pay on average about as much into Social Security as they will receive in benefits.  The long-term imbalances, it says, are in part caused by the benefits collected by Americans who were born prior to 1940.  Reagan's Social Security reforms in the 1980s helped correct the imbalance between benefits and taxes.  (However, the report does begin to suggest a rising imbalance for later generations; taken by itself the generation born in the 1980s will collect a little more in benefits than it pays in taxes, according to the CBO.)

More Breakage

Over at Hot Air, Mike Rathbone further develops the conservative argument that the era Too Big to Fail---made worse in many ways by the Obama administration---should end.  He also suggests the political advantages accruing to Romney if he makes this argument:

If he announces (at the Convention wouldn’t be bad, I’m only afraid Obama would beat him to the punch) that he intends to break up the big banks, he would do a lot to dispel the notion that he is a tool of Wall Street. It’s an issue that would put him to the “left” so to speak of Obama. A lot of liberals, who would never vote for Romney, would further be disgusted with Obama if he fought against this and maybe sit out for November. A lot of tea-party types would be for it because they’re sick of bailouts and too-big to fail. If Obama agreed with Romney, it wouldn’t change the fact that the economy is in rough shape and that Obama had a full term to push for this, but he’s failed to deliver. Either way, Romney comes out on top.

Does Obama Lose Either Way in Wisconsin?

As Wisconsin heads off to vote tomorrow in the recall election of Scott Walker, many pundits are looking at the results of that recall as a bellwether for the general election in 2012: a Walker victory would be good for Romney's presidential chances, while a victory by Tom Barrett, the Democratic challenger, would be good for Obama's presidential chances.  I'm personally rather skeptical of the idea that the fate of conservatism rests in Wisconsin's hands, but there's something interesting about the Wisconsin recall dynamic: whatever the result, Obama might lose face.

A strong Walker win in Wisconsin might signal that Wisconsin is getting closer on the presidential level for November.  (However, numerous Wisconsin polls that have shown Walker leading Barrett have also shown Obama leading Romney, so a Walker win in no way guarantees a Romney win in November.)  Moreover, the failure to recall Walker might depress union enthusiasm for Democrats in Wisconsin and elsewhere; the White House has kept its distance from the Barrett campaign.  If union rights are so important to the White House, why isn't it putting any skin in the game?  And if these rights are not that important, why should union members rally around the president?

That dynamic is only marginally changed if Barrett wins tomorrow.*  Should Barrett beat Walker, he can come into the governor's office knowing that he did it without the president.  Indeed, it would seem as though Barrett would owe his gubernatorial win much more to Bill Clinton, who has actively campaigned for Barrett, than to Barack Obama, who has not.  When Barrett appeared weakened, the White House let him twist in the wind.  Would a Governor Barrett really be that motivated, then, to work devotedly to ensure that Obama wins Wisconsin in November?  A union win in Wisconsin without Obama might also fracture the alliance of the White House with many big unions---if unions can win despite the White House's indifference, maybe they don't need the president as much as he needs them.

The White House likely wanted to keep a distance between itself and the Barrett campaign in order to avoid being embarrassed by a Barrett loss.  But the current dynamic might lead to a White House embarrassment no matter what.

*A Barrett win is a distinct possibility; most of the polls showing a Walker lead depend upon a partisan turnout model that is very favorable to Republicans---even more favorable than the 2010 exit polls, in many cases.  If turnout numbers are closer to 2008 than 2010, there is a real chance that Barrett can win, especially as this race appears to be tightening.  Turnout will be key for this race.

May Jobs Report: Unemployment Up

The May jobs report notes that the US added only 87,000 jobs in May, falling well below earlier estimates.  CNBC surveys areas of job growth:

The bulk of the employment gains came from the service sector, which added 84,000 jobs, while manufacturing grew 12,000. Government shaved 13,000 jobs, including 5,000 at the federal level. Private payrolls rose 82,000.

The unemployment rate climbs to 8.2% as economic growth appears to be stalling.