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Beware the JetBlue Election

Posted on by The Progressive Policy Institute

That the mood in this country is sour seems beyond debate. Ronald Brownstein sums up the sentiment nicely in this week’s National Journal: “If polls existed just before the French Revolution, they might have returned results such as these.” One pollster has (appropriately, I think) called this the “JetBlue Election” – a reference to our newest rebel folk hero, Steven Slater.

No doubt, campaign consultants across the country are at this very moment scheming on the ways that challenger candidates can tap into same great ur-fantasy that Steven Slater embodied: that each of us has the courage to lash out at the forces of oppression stifling our creativity and genius and, in so doing, be rewarded as heroes. (Get government off our backs! Stop the corruption in Washington!).

Still, these candidates ought to be careful: they are playing with fire.

No doubt many voters out there, feeling great personal frustration for any number of reasons, are increasingly receptive to the too-good-to-be-true secret that lashing out in anger may actually be the best way to solve things.  Hence, the great success of the Tea Party.  It offers the same seductive solution as Steven Slater: salvation through anger. (Never mind that under normal circumstances, Mr. Slater would now be facing a the rather unpleasant reality of being unemployed and unemployable, as opposed to reality of a possible reality show.)

The temptation for challenger candidates, of course, will be to stoke such sentiment in hopes that they will be the ones to profit from it. But such challengers ought to be careful what they stir up and what they promise. Those who come to Washington on the bold premise that they will be the ones to shake the place out of its alleged abominations are likely to face a sorely disappointed electorate when things don’t, in fact, change immediately (see Obama, Barack).

After all, when the challenger becomes the incumbent, the blame Washington meme isn’t so helpful anymore. (And remember, even if Republicans do manage to regain some control in Congress, it’s not like they are much beloved either. The latest WSJ/NBC poll finds positive feelings about the Republican Party at a new 21-year low: just 24 percent.)

So then, a word to candidates, especially challengers: Be careful. Take succor from the sour mood at your own peril. Teaching voters that lashing out in anger is the best way to solve problems is a lesson they will not forget as easily as you might wish.

Photo Credit: Spackletoe’s photostream

More Clarity on Uncertainty

Posted on by The Progressive Policy Institute

I wrote last week about the political rhetoric of “uncertainty,” both real and imagined.  My thinking was that Republicans should be called out for their recent talking points that attribute our continued economic woes to fears and uncertainties created by the Democrats’  agenda, but that we should be careful not to dismiss legitimate problems of uncertainty that actually do exist in the economy.

In the Times today, Tom Friedman makes a more eloquent case for the need to recognize the real uncertainties we face.  His analysis is from a higher altitude, as one might expect, and it is dead right.  Friedman attributes broad economic uncertainties to three structural problems: (1) a decade of U.S. growth fueled by deficits and borrowing rather than investment and innovation, (2) a wave of new technology that is destroying lower-skilled jobs in favor of those requiring more education and training, and (3) the “existential crisis” of the European Union as German discipline is exported to Greece and elsewhere.   But these real uncertainties are not on anyone’s political agenda:

America’s two big parties still cling to their core religious beliefs as if nothing has changed. Republicans try to undermine the president at every turn and offer their nostrum of tax-cuts-will-solve-everything — without ever specifying what services they’ll give up to pay for them. Mr. Obama gave us expanded health care before expanding the economic pie to sustain it.

Friedman does not get very deep into specifics for structural solutions, but he doesn’t need to.  As is often true of Friedman’s perspective, the real value of today’s piece lies in the diagnosis.  We are facing real economic uncertainties, and the fact that Republicans are mischaracterizing them so shamelessly does not relieve the president and Democrats from the obligation to show more leadership.  As I wrote last week, Democrats need to stop sticking their fingers in the dike and come up with a more comprehensive plan built on a long-term vision of investment and sustainable growth.  Or as Friedman puts it:

The president needs to take America’s labor, business and Congressional leadership up to Camp David and not come back without a grand bargain for taxes, trade promotion, energy, stimulus and budget cutting that offers the market some certainty that we are moving together — not just on a bailout but on an economic rebirth for the 21st century.

I couldn’t agree more.

Kabuki Conference Buys Time on Fannie and Freddie

Posted on by The Progressive Policy Institute

The GSE conference at Treasury today included plenty of big names and good thoughts about the lingering question of how to restructure Fannie and Freddie before releasing them back into the wild.  But one thing missing from the agenda was a sense of urgency.  The conference wasn’t intended to move GSEs up on the agenda right now; it was simply a bit of theater to defuse the issue for a few more months, giving the Administration more time to kick some hard choices down the road.

Everyone knows we still need to do something about Fannie and Freddie.  The problem for Geithner is that everyone keeps talking about it.  The editorial chatter about GSEs is gaining momentum (after all, there’s only so much Steven Slater coverage even August can handle).  The New York Times ran two op-eds last weekend (good and not-so-good), former Treasury Secretary Paulson weighed in on the Post’s opinion page, and think-tank proposals are popping up all over, especially from folks like Don Marron who want to shrink or privatize the role of Fannie and Freddie in lending markets.

So Secretary Geithner did what any good politician would do. He co-opted the debate to keep it from growing beyond his control.  By inviting differing voices to vent their opinions in front of the cameras, Geithner got to look like he was on top of the situation and neutralize the situation for now with a concluding pleasantry that “it’s safe to say there’s no clear consensus yet on how best to design a new system.”  Thanks for that, Tim.  I guess we shouldn’t hold our breaths for “consensus” anytime soon, huh?

With elections weeks away and the crippled housing market still relying on the dual crutches of Fannie and Freddie to move forward at all, it’s no surprise the Administration and Congress are not falling over themselves to begin the fight for a specific reform plan.  Geithner has said the Administration plans to release and administration proposal in January (well after the elections), and the tone of today’s conference was consistent with that schedule.  For anyone who bothered to tune in today (and managed to stay awake), the message from the Administration was this: we know it’s important, and we’ll get around to it eventually . . . maybe once we get back from that Gulf-coast beach trip the President wants us all to take.

Primary Day in Washington and Wyoming

Posted on by The Progressive Policy Institute

It’s a relatively quiet Tuesday on the electoral front, with just two states, Washington and Wyoming, holding primaries today, and no one expecting any dramatic results of national import.

Washington

Washington has an unusual “Top 2” primary system, in which candidates from all parties compete on a single ballot with the top two finishers advancing to the general election (this is the system recently adopted for future elections in California via a successful initiative). It’s important to note that a majority vote does not (as in Louisiana’s “jungle primary”) obviate the need for a “runoff” in the general election.

The big contest in WA is the Republican challenge to Sen. Patty Murray (D). Almost all of the scenarios for a Republican takeover of the Senate this year require a Republican upset over Murray.  And though it took a while, national Republicans were able to recruit the candidate they wanted in real estate developer Dino Rossi, who lost two close gubernatorial races to Christine Gregoire (D) in 2004 and 2008 and thus enjoys near-universal name ID.

But Rossi’s late entry, and his decision to steer clear of Tea Party gatherings, guaranteed him Republican competition in the primary.  Former Washington Redskins tight end Clint Didier is the strongest of the True Conservative pack.  Didier has drawn an endorsement from Sarah Palin, and should do well in central Washington, but barely reached double digits in a recent PPP poll showing Murray at 47 percent and Rossi at 33 percent.  The buzz tonight will likely be about the relative positioning of Murray and Rossi.

The main event in Washington congressional primaries is in the open 3rd district, where Democrat Brian Baird is retiring.  Former state legislator Denny Heck has largely cleared the field of other Democrats, and should finish first. The national GOP heart-throb for the race is state representative Jaime Herrera, a 31-year-old Latina who has shown a mild (for this year) moderate streak.  Former state legislative staffer and federal appointee David Castillo has run to the right of Herrera, and has won the FreedomWorks endorsement that signifies Tea Party backing. Herrera is favored to make the general election, but an upset is possible.

In the other Washington congressional districts, incumbents are all favored, though in the very competitive 8th district, former Microsoft executive Suzan DelBane (D) is picking up where 2006-2008 Democratic nominee Darcy Burner left off in challenging Republican Dave Riechert.  In the 9th district, two relatively viable Republicans, county commissioner Dick Muri and 2008 nominee James Postma, are battling for a spot opposite New Democrat Coalition co-chair Adam Smith, who will be pretty heavily favored in November.

Wyoming

In Wyoming, that rarest of beasts, a very popular Democratic governor in a very red state, David Freudenthal, decided relatively late this year against a legal challenge to term limits that probably would have enabled him to run for a third term.  Democrats are holding a low-key gubernatorial primary dominated by former state party chair Leslie Peterson and former University of Wyoming football star Pete Gosar, who are both campaigning as political heirs of Freudenthal (Gosar once piloted the governor’s state plane). Peterson is the modest favorite due to high name ID.

The GOP gubernatorial primary in WY has turned into a four-way brawl involving former U.S. Attorney Matt Mead, considered the “establishment” candidate; State Auditor Rita Meyer, who can boast of an elaborate military background and a late endorsement from Sarah Palin; House Speaker Colin Simpson, son of former Sen. Alan Simpson (whose old friend George H.W. Bush has given Simpson the Younger an endorsement); and hard-core conservative Ron Micheli, who’s won the endorsement of Wyoming anti-abortion activists and is challenging his opponents to take no-new-tax pledges.

A Mason-Dixon poll at the end of July showed Meyer at 27 percent, Mead at 24 percent, Simpson at 17 percent, and Micheli at 12 percent.  Simpson’s undertaken a late media blit, and Micheli seems to have the True Conservative mojo going for him, so anything could happen.

Next Week: Florida

Looking ahead a week, the extremely unstable political situation in Florida going into the August 24 primary remains unclear.  In the toxic GOP gubernatorial race, three recent polls (Mason-Dixon, Tarrance and McGlaughlin) show Attorney General Bill McCollum retaking the lead from heavy-spending Rick Scott, but an Ipsos survey shows Scott still well ahead.  But Mason-Dixon and Ipsos agree in giving Democrat Alex Sink a lead over either Republican in a three-way race involving independent Bud Chiles.

In the Democratic Senate race, Mason-Dixon and Susquehanna show congressman Kendrick Meek taking advantage of bad publicity involving billionaire Jeff Greene to retake a double-digit lead in that contest.  But again, Ipsos cuts against the grain with a survey showing Greene still up 40-32.

Since incumbent Gov. and independent Senate candidate Charlie Crist is very dependent on Democratic votes to remain viable, he has a big stake in the outcome of the Democratic primary.  But given all the dramatics of the race, it’s unclear which candidate would help Crist, and which candidate could give Crist and Marco Rubio a run for their money.

Robert Gates, Progressive Conservative

Posted on by The Progressive Policy Institute

Secretary of Defense Robert GatesDefense Secretary Robert Gates makes an unlikely progressive hero. A holdover from the Bush administration, Gates is an ex-spy and button-down conservative who keeps a portrait of President Eisenhower behind his desk. Yet he’s also warned against the “militarization” of U.S. foreign policy, forced the armed services to adapt to untraditional modes of warfare, and axed major weapons programs.

Republicans like to posture as the scourge of big government, but they’ve long been AWOL in the battle to discipline the biggest, most bloated bureaucracy of them all: the Pentagon. Not so with Gates, who has taken Ike’s farewell warning about “the military-industrial complex” to heart.

Even as he’s presided over America’s wars, Gates has sought to restrain military spending. He has canceled dozens of non-essential programs, saving taxpayers over $300 billion, and has ordered his department to find another $100 billion in administrative savings over the next five years. Going where others have feared to tread, Gates has targeted soaring military health-care cuts. And he’s promised to thin the ranks of top military commanders, whose numbers have mushroomed all out of proportion to recent increases in troop strength.

All this has drawn predictable fire from conservative hawks, for whom any cut in defense spending apparently signals an ominous weakening of national will. However, they’ve found it hard to make the usual “soft on defense” charge stick to George W. Bush’s tough-minded former Pentagon chief.

Some liberals, apprehensive over the possibility of deep cuts in domestic and entitlement programs once unemployment rates fall, want Gates to go a lot further. But until the United States is in a position to withdraw most of its troops from the Middle East and Central Asia, that’s not likely to happen. As PPI’s Jim Arkedis has documented, the truly big driver of Pentagon costs is manpower. To get the kind of military spending reductions many doves would like to see would require major changes in U.S. foreign policy – not just nips and tucks in this weapons system or that, or administrative reforms. That’s hard to do in the middle of two wars and a global counterinsurgency campaign against Salafist extremists.

But as Gates recognizes, defense will have to make a substantial contribution to America’s coming fiscal retrenchment. He’s offering credible reforms that will promote efficiency and reduce needless redundancy and waste, and, frankly, provide the administration with political cover against the GOP’s ritual claims that Democrats want to eviscerate the nation’s defenses.

All that may not win Gates many cheers at the next netroots convention. But this is a clear instance in which Obama’s “post-partisan” penchant for reaching across political divides has served him, and the nation, well.

On Gibbs v. the Professional Left

Posted on by The Progressive Policy Institute

I returned yesterday from an overseas vacation to find Washington embroiled in furious controversy over Robert Gibbs’s gibes at the “professional left.” Somehow, the shock waves from this momentous development had failed to register in Corsica, which may be a gorgeous, sun-splashed rock in the Mediterranean, but is hopelessly apathetic about U.S. politics.

Fortunately for slackers like me, Washington’s chattering class is too busy for vacations. And cable TV never rests, keeping the vital discourse of democracy going even as Americans frolic heedlessly on beaches, lakes and mountains. Well, the fun’s over for me, so I might as well wade into the fray between the frazzled White House Press Secretary and his netroots tormentors.

For starters, it’s hard not to feel some sympathy to Gibbs, for whom watching cable TV is an occupational hazard. Too much of a bad thing, is, well, bad and it’s only human for Gibbs to vent about the ideological purism of talk show anchors and lefty bloggers who imagine that most Americans are pining for a full-throated liberal avenger in the White House. Real-life politics is nothing like The West Wing.

And Democrats might as well have it out now, the summer of their economic discontent, rather than, say, in October on the eve of the midterm. One truly silly argument is that Gibb’s criticisms of the administration’s “base” could alienate them and cause them to stay home on election day. In the first place, netroots types aren’t really the Democratic Party’s base.

They are a subset of liberals, who are themselves outnumbered by moderates and conservatives in the party. And they love to be attacked, because it validates their rather inflated sense of political self-importance. The worst thing you can do to the netroots is to ignore them.

In fact, every Democratic President in recent memory has been flayed by the hard left for lapses from orthodoxy. That is especially true of Franklin Roosevelt, the President many of today’s disappointed liberals say they wish Obama would be more like.

Like Obama, FDR was called a tool of Wall Street, a trimmer, an opportunist. He was bitterly assailed for trying to rescue and restore the free enterprise system rather than replacing it with central economic planning.

This drove leading liberal New Dealers like Rexford Tugwell and Harold Ickes to distraction. Here’s Tugwell:

 

“They [FDR’s liberal critics] are like Chinese warriors who decide battles, not by fighting, but by desertion…They rush to the aid of any liberal victor, and then proceed to stab him in the back when he fails to perform the mental impossibility of subscribing unconditionally to their dozen or more conflicting principles.” (Schlesinger, The Politics of Upheaval, 414)

And Ickes had some equally choice words for the perfectabilian demands of his fellow liberals:

“That so-called liberals spend so much time trying to expose fellow liberals to the sneering scorn of those who delight to have their attention called to clay feet…I get very tired of the smug self-satisfaction, the holier-than-thou attitude, the sneering meticulousness of men and women with whose outlook on economic and social questions I often regretfully find myself in accord. It seems to be a fact that a reformer would rather hold up to ridicule another reformer because of some newly discovered fly speck than he would to clean out Tammany Hall. Sometimes even the fly speck is imaginary.” (Schlesinger, The Politics of Upheaval, 413-414)

Gibbs has a point when he says that liberals undervalue Obama’s major political achievements. On the big matters that really count – the breakthrough on universal health care, the financial regulatory bill, getting out of Iraq on time, and placing liberal women on the Supreme Court (including the Court’s first Hispanic member) – Obama unquestionably has moved the needle in a progressive direction. But if history is any guide, it won’t matter – he’s still going to get pilloried by the congenitally insatiable left for something (For failing to close Gitmo, or embrace gay marriage, or demand amnesty for immigrants, etc.)

The fundamental problem with the left’s carping about Obama is the underlying assumption that their views are shared by a majority of the country: If only he would fight harder for structural transformations in American life, the latent progressive majority would spring into being and rally behind him!

This is sheer fantasy. If the country has moved in any direction over the past two years, it is to the center, and perhaps even the center right (excepting Republicans, who have surged lemming-like off the ideological cliff). What liberals see as overly tepid moves to restructure and stimulate the economy a healthy chunk of the increasingly cranky electorate, especially independences, see as overweening government intrusion.

The party’s leftists are obviously within their rights to criticize Obama when they think he deviates from the true path, just as centrists and conservatives are. And the dialectic between the President’s essential political pragmatism and left-wing fundamentalists is probably a healthy thing. It could force Obama to articulate more clearly the overarching philosophical framework that informs a Presidency that otherwise seems to proceed on the logic of serial pragmatism.

But ultimately, left leaning Democrats aren’t going to find a better horse to ride. And the more they flog Obama, the worse Democrats are likely to do this November.

Why Tuesday’s primaries are good news for Dems

Posted on by The Progressive Policy Institute

When you add it all up, Tuesday produced four gubernatorial general election contests—three in states currently controlled by Republicans—in which the Democratic candidate is, at the moment anyway, the front-runner. Quite a tonic for distressed donkeys everywhere.

In Colorado, The Republican gubernatorial primary was a messy affair in which the “winner” – little-known, underfinanced, and rather kooky Tea Party activist Dan Maes – will now come under sustained pressure to fold his campaign and allow the state party to pick a more suitable candidate (possibly Jane Norton), in hopes of also squeezing Constitution Party candidate Tom Tancredo out of the race.  If GOPers don’t pull off this gymnastic series of maneuvers, Democratic nominee John Hickenlooper will be a heavy favorite in November.

Meanwhile, in the Democratic senatorial primary, appointed Senator Michael Bennet survived what was beginning to look like a political death spiral. He dispatched former state House Speaker Andrew Romanoff by an eight-point margin, with especially robust performance in the Denver suburbs in what will be perceived as a victory for the White House.  He will now face district attorney and Tea Party favorite Ken Buck (R), who has shown a distinct proclivity for self-inflicted verbal wounds.  Buck defeated former Lt. Gov. Jane Norton in the Republican primary mainly by piling up large margins in his home turf near Ft. Collins.

In Connecticut, an odd role reversal occurred in the Democratic gubernatorial primary. Former netroots idol Ned Lamont ran a campaign focused on imposing fiscal discipline and improving the business climate and lost rather dramatically to former Stamford mayor Dan Malloy, who has a “centrist” background but ran as something of a populist.  Malloy will face former Ambassador to Ireland Tom Foley, a conventional conservative who held off Lt. Gov. Michele Fedele.

These two contests were also something of a test for Connecticut’s strong system of public financing of campaigns: Malloy and Fedele received public financing, while Lamont and Foley self-funded.  Unfortunately for Malloy, the portion of the Connecticut law that provided for “triggering” larger grants for candidates facing self-funders has been invalidated for the general election.  But according to the polls, Malloy will be the favorite in November.

In Minnesota, former U.S. Sen. Mark Dayton continued his political comeback by narrowly winning the gubernatorial nomination against party-endorsed State House Speaker Margaret Anderson Kelliher.  Dayton is the early favorite over Republican nominee Tom Emmer, who is probably too conservative for the state, and will also likely lose votes to Independence Party nominee Tom Horner.

And in Georgia, the vicious GOP gubernatorial runoff, in a mild upset, went to former congressman Nathan Deal, who is both a conservative ideologue and the candidate of the state’s GOP establishment. Deal defeated self-styled “conservative reformer” Karen Handel, by just an eyelash.

This contest featured a lot of national intervention, with Newt Gingrich and Mike Huckabee campaigning for Deal and Sarah Palin campaigning for Handel (Mitt Romney also did robocalls for the loser).  Handel’s quick concession and endorsement of Deal provided some hope among Republicans that the party would unite after the bitter primary and runoff, in the face of a challenge from former Gov. Roy Barnes, who’s been running more or less even with the various Republican candidates in the polls.

Next Tuesday, Washington State (with its unusual system in which the top two primary candidates regardless of party proceed to the general election) and Wyoming are holding primaries. The much-higher-profile Florida and Arizona primaries follow on August 24.

In the Florida, the initial appeal of the two hugely self-funded candidates, Democrat billionaire Bob Greene and Republican billionaire Rick Scott, seems to be fading as the primary approaches.

In the Democratic Senatorial primary, a Feldman poll taken for congressman Kendrick Meek shows him edging ahead of Greene after a week or so of very bad publicity about the billionaire’s personal life.

Meanwhile, in the Republican gubernatorial primary, both Mason-Dixon and the Tarrance Group have new polls showing previously left-for-dead Attorney General Bob McCollum moving ahead of Rick Scott, a former hospital chain executive. Mason-Dixon also shows that the savage competition between the Republicans has lifted Democrat Alex Sink into the lead in the general election.

Ed Kilgore’s PPI Political Memo runs every Tuesday and Friday.

Why Progressives Must Embrace the Robust Optimism of American Exceptionalism

Posted on by The Progressive Policy Institute
The Hacketts Gospel Singing Shed
The Shed -- Dermott, Arkansas

Alexis de Tocqueville would understand “The Hacketts Gospel Singing Shed.”

Located in Dermott, Arkansas on the edge of a small cotton farm, “The Shed,” as locals call it, is a venue for gospel singers and fans to gather for song, worship, and fellowship. In the 1830s, Tocqueville toured America and witnessed the very sort of religiosity and voluntarism that motivated the Hackett family to transform a tractor shed into what has become a local community hub. The young Frenchman’s resulting sociological masterpiece, Democracy in America, explains “The Shed” and offers some timeless lessons about America’s uniquely ambitious political culture –
lessons Democrats looking for keys to ending the Great Recession ought to consider.

During his travels, Tocqueville recognized how republican ideals and cheap plentiful land had produced a profoundly optimistic, democratic, individualistic, entrepreneurial, and decidedly populist people. His shorthand for the differences between the U.S. and Western European political cultures – “American Exceptionalism”— remains a handy and useful concept progressives should both heed and employ.

“Exceptionalism” is not a Limbagh-esqe a priori verification of America’s supreme awesomeness. Rather, exceptionalism cuts both ways. The very populist impulses both bred the civil rights movement and spawned the Tea Party.

In the same way, American individualism is responsible for both a vibrant economic growth, a broad middle class, technological innovation, AND an anemic welfare state, concomitant high poverty and comparatively crime rates.

In sum, exceptionalism is not chest-thumpin’ We-Will-Rock-You, rah-rah USA cornpone; Tocqueville would recognize “The Hacketts Gospel Singing Shed” by echoing Denny Green’s infamous postgame rant, “They are who we thought they were!”

American Exceptionalism not only explains “The Shed.” It should also inform Democratic policy responses, both in substance and style, to the Great Recession.

Progressives understandably shy away from a term that seemingly reeks of parochialism and sounds like a potential first and middle name for one of Sarah Palin’s children. Instead of “exceptional” substitute “difference” and then wonder how and why Germans accept 8 percent unemployment as normal, middle class Danes ride bikes to work instead of drive cars, or Canadian cities are so neat-and-tidy. For better or for worse, the American “difference” is real.

Economic recoveries are like snowflakes—no two are ever the same. This should remind us that the “dismal science” is no hard science at all. To hear Paul Krugman or the Cato Institute’s certitude, however, one would hardly realize economists are making little more than highly educated guesses.

Ironically, even as partisan economists claim all-knowing prescience their field is thankfully moving away from technocratic certainty and toward ambiguity. While it is humbling (and quite a bit scary) to accept mysterious, unpredictable, and ultimately unknowable economic forces control our material fates, this is exactly why the American difference matters.

Modern progressive economic policy should combine short-term fiscal stimulus and long-term deficit reduction with rhetorical and policy faith in the American character. While sound policy matters, more and more economists realize that intangibles and emotions often spell the difference between recovery and double dip recessions.

The American difference really matters. Four hundred years of history (including the colonial era) proves that American optimism, individualism, entrepreneurial spirit, and waves of eager immigrants will eventually lead to robust economic recovery. Talk of decline, power moving east, and a new “normal” are reminiscent of the early 1990s when observers claimed Japan and Germany would overtake American economic leadership. If memory serves, the 1990s were fairly good economic times.

President Obama has provided such leadership. Time and again he has extolled the American work ethic and unique character; it is Congressional leaders and the liberal punditocracy, however, who are out of tune with the great resilience of the American tradition., Congressional leaders – who too often dwell myopically on technocratic details, medium versus big stimulus or extending unemployment benefits – fail to convey the most important ingredient for economic policy success: sunny optimism and a profound belief in an American difference.

All peoples in all lands hope, innovate, and work for a better future. Americans do so in their own unique, different, and yes even “exceptional” way. The route of this mess takes good policy but requires bold, optimistic, and a quintessentially American leadership. It is the sort of simple yet profound wisdom that a Frenchman; the folks of Dermott, Arkansas; and skinny kid with big ears and a funny name all know in their bones.

photo credit: Jeff Bloodworth

Myths and Realities of Regulatory Uncertainty

Posted on by The Progressive Policy Institute

Ezra Klein joined others this week in mocking the “uncertainty” rhetoric that Republicans and some business leaders have been parroting to argue for lower taxes and lighter regulation.  As Stan Collander, Brad DeLong, and Ezra himself have all done an excellent job of arguing, there is plenty of reason for ridicule.  Most of the talk about businesses being paralyzed by uncertainty over taxes and regulations is little more than politically-driven spin.

The problem I have with Ezra’s post this week is that he chose the wrong example to pick on.  He points to Derek Thompson’s  interview with Eric Spiegel, CEO of Siemens USA, who complains about the uncertainty his company faces in the wake of the failure to pass an energy bill in Congress.  Thompson and Klein both equate this position with the less policy-specific confusion and outrage Republicans are attributing to the business community at large.   Thompson sums it up with this broad conclusion:

It’s another piece of evidence that “government should remove uncertainty” is a euphemism for “government should enact the laws that make me profitable.” For some companies, “make me profitable” might mean simply slashing taxes on income and capital gains, cutting public spending and getting out of the way. For other companies like Siemens, it means government getting in the way. It means putting a new tax on carbon, giving tax money to companies building wind blades, and adding new regulations for renewables.

In this case, there is more to it than that.  The kind of uncertainty problems that Spiegel describes are actually legitimate, at least in part.  The energy industry has been holding its breath for years waiting for the EPA and Congress to decide what they are going to do about regulating carbon emissions.  With the energy bill now faded into legislative limbo, it looks like the industry will not get the resolution it needs anytime soon, which means billions of dollars worth of investment will be trapped in limbo as well.  The uncertainty is so real that several people in the industry have privately told me that they almost don’t care what Congress chooses to do with carbon pricing, as long as it does something, so they can stop waiting and start building.   Or as another energy CEO put it recently, “There’s a lot of capital sitting on the sidelines just waiting for more regulatory clarity.”

It’s worth differentiating the energy industry’s need for long-term clarity in climate policy from the standard fear and loathing Republicans are promoting.  Here’s why.  A lot of the decisions energy companies need to make are binary choices that change dramatically depending on the policy assumptions: whether a new plant should be coal or natural gas, whether a new wind farm is viable without tax incentives, whether a new nuclear plant could be approved and running within ten years.  It’s hard to make economically rational decisions when the outcomes are so dependent on unresolved political questions.  This is fundamentally different from arguments that companies are afraid to hire new workers this quarter due to taxes or health care regulations.

There is no shortage of unsupportable statements about uncertainty that belong to the realm of political fiction.  Rep. Boehner’s latest call for a moratorium on new regulations certainly qualifies, blaming the “uncertainty that’s being created by the Democrats’ agenda” for leaving every employer and investor in America “frozen” with fear.   That kind of rhetoric is obviously exaggerated, and it should either be refuted or ignored altogether.

However, we should not allow Republicans crying wolf to drown out the voices that have legitimate gripes about regulatory uncertainties that Congress needs to address.  And we should be careful not to confuse the two for each other when we hear them pleading their case.

The Three Little Dutch Boys

Posted on by The Progressive Policy Institute

The economic news out of Washington this week has an eerie ring of déjà vu: Congress just passed an emergency spending bill, the Fed is buying debt securities to keep the economy from sliding toward collapse, and the Administration announced it is committing billions of dollars to mortgage relief for homeowners facing foreclosure. To be sure, none of these actions has the scale or urgency of the initial responses to the financial crisis, but they are perfect examples of the policy philosophy that has dominated both economic policy since the crisis: a focus on playing defense, rather than offense.

What we saw this week were Congress, the Administration, and the Federal Reserve continuing their roles as the three little Dutch boys of the American economy, sticking fingers in the dyke to save the country from disaster. The rhetoric of stimulus is oversold and misplaced: Washington’s fiscal and monetary policies have essentially all been economic tourniquets that are better characterized as containment measures than stimulus. The Fed is shifting into quantitative easing, but only as much as necessary to fight off deflation. Congress is sending aid to the states, but only enough to keep them from having to lay off teachers. Treasury and HUD are providing assistance to the housing market, but only enough to keep people from being kicked out of their houses.

Over and over since the crisis, policy makers in both parties have remained optimistic that the U.S. economy was inherently dynamic and resilient enough that we could rely on growth to materialize from somewhere, as long as we put a solid floor underneath to contain the damage and prevent more negative shocks to the economy. Given the huge amounts being spent and our country’s history from past recessions, this was not an unreasonable approach at the time, especially for those with any concern for fiscal responsibility.

So far, the containment strategy has proved extremely successful in keeping us from sinking into a full-blown depression. However, at this point, we still have farther to go on the path to a sustainable recovery than most economists and politicians had hoped. This morning we got the new jobless numbers, and they aren’t good.  Wall Street was hoping for better news, and the markets’ negative reaction only compounds the growing anxiety (even allowing for the low volume in August, when stocks historically are more vulnerable to bad news). The extended string of bad economic news, coupled with a lack of credible cheerleading from Washington, is creating a palpable crisis of confidence in our economy and our leadership.

While the Fed is signaling between the lines that it may be prepared for stronger action, Congress and the President seem to be headed in the other direction. Campaign politics have lawmakers talking more about contractionary fiscal discipline than taking any new actions to boost the economy. Even in the debate about extending the Bush tax cuts, the options being considered do not include anything stimulative compared to the status quo. Congress has painted itself into a corner by waiting until taxes are automatically set to go up if it fails to act, and now it will likely be forced to extend most or all of them simply to avoid a contractionary fiscal outcome. Again, playing economic defense.

It’s time we think seriously about shifting gears and talking about reasonable stimulus again, instead of waiting for the next hole to plug. As Will Marshall has argued here, keeping public spending and debt under control is critically important, and Democrats need to talk openly about how we prepare for the day of reckoning when the spending claw-backs kick in, since Republicans have lost all credibility on fiscal discipline. However, growth is still the most urgent concern; the signals from bond-market vigilantes are telling us that, as Stan Collander argues well today.

There is a still a place in the debate for looking into additional stimulus, both on the tax side and with additional cost-effective spending. For example, public investment in infrastructure can be used to leverage private capital off the sidelines as well by making the private sector an active partner in stimulus efforts. Instead of continuing to put fingers in the dyke, we need to be more proactive in finding the companies in the private sector who want to rebuild the dyke, and put people and money to work again.

Photo Credit: OliBac’s Photostream

Spur Job Growth By Making Business Registration Easier

Posted on by The Progressive Policy Institute

Americans love small businesses and admire the job-creating doggedness and independence of entrepreneurs and dreamers.  Then why aren’t we making it easier to start a business?  Aspiring business owners face a daunting amount of red tape and hassle.  With job creation at the top of the national agenda, the time has come to do better in making it easier to start a business

The OECD, which measures barriers to entrepreneurship (including administrative burdens to open a business, legal barriers to entry, bankruptcy laws, property rights protection, investor protection, and labor market regulations), ranks the U.S just 14th of 29 OECD countries.

We know that small businesses are the engine of job growth in the United States, accounting for 2/3 of new jobs over the past 15 years, according to the Small Business Administration. That’s why one way to spur desperately needed job creation in the United States would be to make the business registration process faster, more comprehensive and thoughtful about the needs of small businesses, and thoroughly integrated with the state business registration process.

We propose the Administration task the Federal CIO, Vivek Kundra, with redesigning business.gov and undertaking a strategic design review of the federal and state small business registration process, redesigning it to create an integrated business registration website encompassing both federal and state requirements and contemplating the entire lifecycle of needs for small business start-ups, thus creating a one-stop shop for business registration in the United States.

The portal would incorporate all states’ business registration requirements into an integrated one-stop system. The registrant would need to only visit a single website to register his or her business both with the Federal government and the relevant state government. (This would have to be done with federal leadership, with the federal government providing a framework and platform to let states add their requirements to it.)

The website would have interactive components, modeled along the lines of TurboTax, with wizards/dialogue boxes, and with the registration process asking questions, demonstrating intelligence, and providing constructive guidance and advice. It should be smart enough to recognize, “You’re registering an electricians business in Arkansas with 10 employees. We recommend a sole proprietorship as the corporate form of governance.” That is, it wouldn’t have just a bunch of links where one can learn more about different corporate forms. It could give advice based upon the information the registrant is entering—in part by tapping into a database with insights on how other similar businesses are structured.

The redesigned business registration process would also contemplate the entire lifecycle of needs and concerns for the small businesses. For example, it would bring information forward to the registrant about whether there are loan programs the business is eligible for, such as relevant Small Business Administration (SBA) or Economic Development Agency (EDA) loans, or information about lines of credit from local commercial lenders. (And the system should actually go in and automatically use the already-entered data to populate the information on that loan form – almost getting to the point where all the registrant needs to do is click “Submit.” Indeed, the system architecture would have a principle that the registrant never needs to enter the same information more than once.)

If the entrepreneur signals the company will be in the business of making products, the website should proactively present any export promotion programs the company might engage with through the Department of Commerce. Again, not just providing links to the Department of Commerce website, but recognizing, “You’re producing custom machine tools and the Department of Commerce has Program X to support it.” Thus, the business registration process would directly support the Administration’s goal to double U.S. exports in five years.

Also, the system should tie directly into the country’s statistical agencies so they can recognize, “We have a small business that just registered,” and that data should go directly and immediately to Bureau of Economic Analysis and the Census Bureau so that we get a much more real-time view of the state of the economy. Of course, implicit in this vision is the need to connect disparate and siloed federal and state databases and information technology systems so that they communicate with one another and bring to bear information in real time to support the small business.

Finally, the small business registration process should be made on an open application platform, in such a way that it could allow competition in the marketplace. So a Citibank or Bank of America, for example, could co-brand it as a “Small Business Starter Kit.” Thus, if an entrepreneur goes into a BofA location to apply for a line of credit, BofA could say, “We’ve got everything you need to start your business right here. Get set up online here now.” The point is the government should make the web interfaces to the registration process open and accessible, so other companies can integrate them with other value-added services they provide to small businesses.

One model is Portugal, where the new “Firm Online” program has completely digitalized the process of registering a business, streamlining the process from it taking 20 different forms and roughly 80 days to launch a business to creating a single website through which new businesses can register in as little as 45 minutes. Within months of launching the new service, more than 70,000 new businesses registered. Portugal’s system uses electronic (digital) signatures (which the U.S. system does not) when authentication is required. It is also responsive to the life cycle needs of a start-up business, providing suggestions for sources of capital, talent, etc. Portugal now ranks 2nd of the 30 OECD countries in online business sophistication. Other countries like South Korea enable entrepreneurs to create firms through their mobile devices.

The modern economy is marked by incredibly intense competition, both globally and domestically. American businesses need every single advantage they can get—and making the process of new business registration in the United States the very best in the world would be an excellent place to start.

Photo Credit: Muffet’s Photostream

How the Military is Leading the Way on Energy Security

Posted on by The Progressive Policy Institute

As a U.S. Army veteran I am used to dealing with the military, an organization that, by necessity, takes swift and decisive action when necessary, despite the fact that many see it as a conservative organization that is resistant and slow to change. In Washington, I am becoming used to dealing with another organization that is much more conservative and even more resistant and slower: the United States Senate. I am proud to say that the U.S. military is once again taking decisive action on energy independence and security, as well as addressing the military repercussions of climate change. The military is taking action where the United States Congress will not.

On July 27 I attended the White House Forum on Energy Security along with a group of veterans from Operation Free, a nationwide coalition of military veterans from all eras and ranging from Privates and Airmen to Generals and Admirals – all of whom support the goal of energy independence, security, and addressing the national security repercussions of climate change.

We have collectively been touring and speaking throughout the country and in Washington, D.C. in support of breaking our dependence on largely foreign oil and pushing Congress to take real steps toward a comprehensive clean energy climate plan. We have come to support the American Power Act developed through a bipartisan effort by Senators John Kerry and Lindsey Graham with Senator Joseph Lieberman and cooperation from the White House.

July 27 was supposed to be the day that the Senate finally took real action on the issue we have all been working hard for over the past year. It didn’t happen. As we all got on airplanes throughout the country in high spirits, something was happening on Capitol Hill: nothing.

By the time we hit ground in Washington, D.C. we learned that everything had changed. The Senate didn’t have the sixty votes needed to proceed to an up-or-down vote on the bill. We went to the Hill again to meet with fence-sitting Senators and their staff. The opinion we encountered there was disappointing, but not surprising: we need to do something about the issues of energy security, energy independence, and climate change, but we’re not going to do anything now.

Some, echoing Republican sentiment, said the issue hadn’t been discussed enough yet, that the Senate process of debate and hearings needs to be completed, that it would force them to choose ‘winners and losers’ and they are not ready to do that.

Hadn’t been discussed enough? We’ve been talking about energy security and independence since the 1970s. Other countries are taking action while we are being left behind. The CIA includes repercussions of climate change and our dependence on foreign fossil energy in its assessments. The State Department does as well.

Now the U.S. military is taking serious steps to address the issue. It devoted an entire section of the 2010 Quadrennial Defense Review Report (p. 84) to responding to climate change issues.  Secretary of the Navy Ray Mabus has expressed a clear vision of a force independent of fossil fuels. The military is taking action by reducing the use of fossil fuels, researching the use of alternative sources, and increasing the efficiency of its energy use, whether on battlefield outposts in Afghanistan or home installations in Texas. Speakers from each branch of the U.S. military have discussed similar opinions, expressing that action on this issue shouldn’t be taken for political reasons, but for security reasons. The money we pay for oil goes to regimes opposed to our interests. The cost of procuring, transporting, and securing that fuel is extreme, in dollars and to the lives of our troops.

This contrasts greatly with the attitude of too many Senators, who continue to choose politics over security. The U.S. Congress trusts the military and veterans on other security issues. Energy independence, energy security, and planning for the possible consequences of climate change are national security issues. The military is taking action, even if Congress won’t. If they’ll listen on other national security issues, let’s hope they’ll trust the military when it comes to a comprehensive clean energy climate plan that makes us energy independent.

Photo Credit: DVIDSHUB’s Photostream

Do Americans Think Their Kids Will Do Better?

Posted on by The Progressive Policy Institute

Kevin Drum notes my last post and then wonders, “What I’m more curious about is what this looked like in the 50s, 60s, and 70s. Was optimism about our kids’ futures substantially higher then?”

The results I showed were mostly from a fantastic database of polling questions called “Polling the Nations”, which I recommend to everyone (though it’s not free, it’s not that expensive relative to other resources).  That’s why they only start in the mid-80s, and there’s a gap between the mid-00s and the two or three polls I cite from this year and last (my look at this question was a few years ago).

Anyway, Kevin’s query reminded me that there’s another compilation of polling questions that is also amazing—the book, What’s Wrong, by public opinion giants Everett Carll Ladd and Karlyn Bowman.  And it’s a free pdf.

So, let me add some results to those I posted before.  I’m focusing, to the extent possible, on questions that ask parents about their own children.  When people are asked about “kids today” instead of their own kids, they are much more likely to be Debbie Downers—a phenomenon that journalist David Whitman dubbed the “I’m OK, They’re Not” syndrome, which is much more general than questions about children’s future living standards.  Also, let’s be careful to distinguish between levels and trends.

First, let’s look at the confidence parents have that life for their children will be better.

Percentage of parent confidence that life for their children will be better
Year Very confident Fairly confident Not at all confident
1973 26% 36% 30%
1974 25 41 28
1975 23 39 32
1976 31 39 25
1979 25 41 29
1982 20 44 32
1983 24 38 33
1988 20 45 28
1992 17 46 31
1995 17 44 34
2000 46* N/A 48*
Source: Roper Starch Worldwide; *Washington Post/Kaiser Family Foundation/Harvard

That last one shouldn’t be directly compared with the others—not only did it only offer a yes-or-no response, it was also asked of all adults.  More on that in a sec.  What we see from the Roper surveys is a fairly steady decline in solid confidence, but not much of a trend in pessimism.

The main dynamic is that parents have moved from being “very” confident to “only fairly” confident.  It looks like there may have been a small decline in optimism from the late 1980s through the mid-1990s.  But it’s interesting that from 1973 to 1995, between 61percent and 70%percent were at least fairly confident that their kids would be better off.

The Washington Post polling result provides a nice opportunity to look at the “I’m OK, They’re Not” pattern, since all adults were asked the question, even though fewer than half had children under 18 in their household.  In a poll my employer* commissioned from Greenberg Quinlan Rosner Research and Public Opinion Strategies, we asked parents about their expectations for their children’s living standards.  We asked people who had no children under 18 at home about “kids today.”

Pooling everyone together, 47 percent of adults said kids would have higher living standards. But the parents were much more optimistic about their own children, with 62 percent saying their kids’ living standards would improve.  So the Washington Post result might have been right in the range of the Roper results had the question been asked only of parents.
Other polls have asked whether parents think their children will be better off when they are the same age:

Percentage of parents that think their children will be better off when they are the same age
Year Better off financially Not better off
1981 47 43
1982 43 41
1983 44 45
1985 62 29
1986 74 19
1991 66 25
1994 47* 39*
1995 54 39
1996 52 39
1996 51‡ N/A
1997 51‡ N/A
1999 67‡ N/A
Sources: ABC News/Washington Post;  *Newsweek; ‡Pew Research Center

So optimism declined between the mid-1980s and early-1990s, recovered starting in the mid-1990s, and generally remained above early 1980s levels (when the economy was in recession).  Except for 1983 majorities or pluralities hold the optimistic position.

Another series of polls asked parents whether their children will have a better life than they have had.  They also indicate a decline in optimism from the late 1980s to the early 1990s and a subsequent rebound:

Parents outlook on their children’s life
Year Better life About as good
1989 59% 25%
1992 34 33
1995 46 27
1996 50 26
2002 41* 29*
Sources: BusinessWeek; *Harris Poll

Strong majorities thought the children would have as good a life as them or better, and while more people thought their kids would have a better life than thought they would have a worse life, optimism failed to win a majority of parents in a number of years.  The trends appear to reveal a decline in optimism from the mid- or late-1990s to the early 2000s.  Considering all of these trends thus far, a fairly clear cyclical pattern is emerging, as Kevin observed in his post.

The early 2000s dip also shows up in Harris Poll questions asking whether parents feel good about their children’s future:

Percentage of parents that feel good about their children’s future
Year Feel good
1997 48%
1998 65
1999 60
2000 63
2001 56
2002 59
2003 59
2004 63
Source: Harris Poll

The dip is revealed to be related to the 2001 recession, as optimism rebounded thereafter, again following the business cycle. Again, solid majorities generally take the optimistic position.

The longest time series available asks parents whether their children’s standard of living will be higher than theirs.  Unfortunately, it appears that most of these polls ask the question of adults without children too:

Percentage of parents that believe their children will achieve a higher standard of living
Year Higher standard of living Lower standard of living
1989 52% 12%
1992 47 15
1993 49 17
1994 43 22
1994 45* 20*
1995 46 17
1996 47* N/A
1998 55* N/A
2000 59* N/A
2002 61* N/A
2004 53* N/A
2006 57* N/A
2008 53* N/A
2009 47/62† N/A
2010 45‡ 26‡
Sources: Cambridge Reports/Research International; *General Social Survey; †Economic Mobility Project; ‡Pew Research Center

Once again the cyclical pattern emerges, though it is not quite as clear in the mid-2000s.  Optimism is far more prevalent than pessimism in every year, reaching majorities from the late 1990s until the current recession.  Even today, optimism is no lower than in the mid-1990s, and the EMP poll implies that when looking just at parents with children under 18 living at home, solid majorities continue to believe their kids will have a higher living standard.

Taken together, there is very little evidence that a supposed stagnation in living standards is reflected in Americans’ concerns about how their children will do.  The survey patterns show that parental optimism follows a cyclical pattern, generally is more prevalent than pessimism, and did not decline over time.  In fact, we can compare beliefs in 1946 to 1997 for one question—whether “opportunities to succeed” (1946) or the “chance of succeeding” (1997) will be higher or lower than a same-sex parent’s has been:

·       Roper Starch Worldwide (1946)—64 percent of men said their sons’ opportunities to succeed will be better than theirs (vs. 13 percent worse); 61 percent of women said their daughters’ opportunities to succeed will be better than theirs (vs. 20 percent worse)
·       Princeton Religion Research Center (1997)—62 percent of men said their sons will have a better chance of succeeding than they did (vs. 21 percent worse); 85 percent of women said their daughters will have a better chance (vs. 7 percent worse)

As one would expect, mothers in 1946 believed their daughters would have more opportunity, but surprisingly that view was even more prominent in 1997.  And among men, there was very little change.  Notably, unemployment was slightly lower in 1946 than in 1997, so this isn’t a matter of apples to oranges.

Or even more strikingly, consider two polls asking the following question: Do you think your children’s opportunities to succeed will be better than, or not as good as, those you have? (If no children:) Assume that you did have children.
·       Roper Starch Worldwide (1939)—61 percent better vs. 20 percent not as good vs. 10 percent same (question asked about opportunities of sons compared with fathers)
·       Roper Starch Worldwide (1990)—61 percent better vs. 21 percent not as good vs. 12 percent same

While the 1939 question only refers to males, given the relatively low labor force participation of women at the time, it is perhaps still comparable to the 1990 question.  However, the unemployment rate was 17.2 percent in 1939 compared with 5.6 percent in 1990.  Still, the two are remarkably close.

OK, can we put this question to bed?  Americans believe their children will do as well or better than they have done, and this belief hasn’t weakened over time.  Now let’s get back to arguing about objective living standards rather than subjective fears about them.

* For the love of God, nothing you’ll ever read on my blog has anything to do with my job—there are people at Pew whose ulcers flare at employees’ side hustles like mine.

This item is cross-posted at ScottWinshipWeb.

Photo Credit: fiskfisk’s Photostream

The Fed Can Not Only Lead A Horse To Water, It Can Also Turn On The Hose

Posted on by The Progressive Policy Institute

The Federal Reserve’s outlook on the economic recovery continues to get gloomier.  In its statement released following the FOMC meeting today, the Federal Reserve acknowledged that “the pace of recovery in output and employment has slowed in recent months,” and “economic recovery is likely to be more modest in the near term than had been anticipated.”  Not good news, especially when interest rates are already about as low as they can go.  With today’s announcement that it is committed to keeping rates at rock-bottom levels ”for an extended period” going forward, the Fed also signaled that it is ready to go beyond rate setting to strengthen the economy.

After keeping the federal funds at historic lows for so long, with only disappointment to show for it, the Fed has decided that it’s no longer enough to lead the U.S. economy to water and wait for it to drink.  So as part of its announcement today, the Fed signaled that it will once more resort to quantitative easing to pump money directly into the economy.  Because there are risks to this strategy (see Krugman), the Fed couched this move in modest terms, explaining that it will be buying long-term Treasury notes to “keep constant” the level of assets on its balance sheet, which currently includes a large portfolio of mortgage securities it purchased to stabilize markets during the financial crisis.

The Fed will simply be rolling over its portfolio into Treasuries as the mortgage securities retire, which is actually not putting new money into the economy, as much as it is preventing the money supply from shrinking if the Fed’s portfolio were allowed to get smaller.  But there are signals here for those who have been anticipating a new push for quantitative easing from the Fed.

The First Signal: The Fed is clearly ready to buy market securities to inject money into the economy as needed.  This baby step toward quantitative easing is likely a preview of more dramatic asset purchases if the Fed sees real evidence of deflation or a double-dip recession.  Be prepared for more.

The Second Signal: The Fed is not necessarily interested in using mortgage securities as an asset vehicle for expanding the money supply.  Doing so would keep mortgage rates low, which would help prop up an ailing housing market.  But mortgage rates are already the lowest on record, and that hasn’t helped sales much, so the Fed doesn’t need to waste time trying to lead another horse to water in housing markets.

The overall signal from today’s FOMC statement is not good news for the economy.  The Fed is becoming less optimistic and less certain about the future.  Bernanke and company are apparently convinced that stronger actions may still be needed for sustained stimulus.  The fact that they are coming around to that view may do some good for restoring confidence in Fed policy.  And the Fed needs all the help it can get these days, because it’s running out of useful monetary tools to boost the economy.

Hopefully the signals from today’s statement will be heard in Congress, where lawmakers still have a lot of steps they can take before the end of the year to bring better stimulus and more confidence to the economy.

Photo Credit: Ken_Mayer’s Photostream

The United Nations Plot to Take Over Denver (and other nasty dramas from today’s big primaries)

Posted on by The Progressive Policy Institute

This is the busiest primary day since the June 8 blockbuster, with three states (CO, CT and MN) holding primaries and a fourth (GA) holding a runoff.  So there’s a lot of ground to cover.

Colorado

A factor in all the Colorado races is that most counties in the state went to an all-mail-ballot system this year, which could boost overall turnout but will definitely affect the timing of votes (though Colorado’s had heavy early voting for a while now).

Colorado’s Senate races have become very competitive in both parties coming down the stretch.  Appointed Sen. Michael Bennet (D) got hit with a controversial (in its timing) New York Times piece about his involvement in an unsuccessful investment by the Denver public schools, which immediately generated an attack ad by his opponent, former state House Speaker Andrew Romanoff (D), who has been pounding Bennet for weeks as someone too close to Wall Street.  Late polls show a very close race, with Survey USA indicating Romanoff has moved ahead while PPP shows Bennet hanging onto a small lead.

On the Republican side, polls also differ as to whether district attorney Ken Buck has maintained his lead over former Lt. Gov. Jane Norton, despite his recent gaff-a-thon.  Norton surprised a lot of observers by inviting John McCain into the state to campaign with her at the very end; we’ll see if she knew what she was doing.  While both candidates are quite conservative, Buck’s the preferred candidate of the Tea Party folk and the national conservative chattering classes, so if he wins they will claim another Establishment scalp.

The ongoing meltdown known as the Colorado Republican gubernatorial contest is also ending with no clear leader; one poll has Tea Party activist Dan Maes narrowly leading; the other shows former congressman Scott McInnis narrowly regaining the lead.  As you may have heard, McInnis’ campaign imploded in July when the Denver Post revealed that a wonky series of columns he “wrote” as part of a lucrative think tank contract were heavily plagiarized.  But Maes has been hounded by campaign finance violations and poor fundraising, and also earned heavy derision by claiming a popular bike-sharing program in which Democratic gubernatorial candidate John Hickenlooper was involved is in fact part of a United Nations plot to take over Denver.  You really can’t make this stuff up.

The “winner” of this primary will immediately be under heavy pressure to drop out and allow the state party to choose a more electable candidate, and also to beg former congressman Tom Tancredo to close down his campaign on the far-right, theocratic Constitution Party ticket, which polls indicate would split the GOP vote in half and guarantee a Hickenlooper victory.

Georgia

Rivaling Colorado in inter-Republican drama has been the gubernatorial runoff in Georgia, which polls show as coming down to a real nail-biter between primary first-place finisher Karen Handel and former congressman Nathan Deal.  Continuing her effort to cast herself as a “conservative reformer” taking on the corrupt “good ol’ boys” of the Republican establishment, Handel has continued to attack Deal’s ethics record and Washington associations. Deal, probably hoping for a very low turnout dominated by ideologues, has pounded Handel for alleged “liberal” heresy on abortion and gay rights.  Both campaigns are in danger of being overshadowed by their supporters, with Sarah Palin making a very conspicuous last-day appearance alongside Handel in Atlanta (Mitt Romney is also doing robocalls for Handel), while Newt Gingrich and Mike Huckabee have campaigned for Deal.  Deal also has a massive endorsement list of Republican state legislators owing to Handel’s many attacks on their integrity as a group.

The runoff has become so nasty that Republicans are already planning “unity” events; Democrat Roy Barnes waits in the wings, raising money.

There are two Republican congressional runoffs that will affect turnout patterns; one is for Deal’s old seat in North Georgia, where special election runoff winner Tom Graves will face former state legislator Lee Hawkins for the fourth time in three months.  The other is in Handel’s base area, in north metro Atlanta, where longtime conservative congressman John Linder (R) is retiring.  His former chief of staff, Rob Woodall, is expected to defeat Jody Hice, a Southern Baptist minister and radio gabber whose billboards feature a reference to the president with a hammer-and-sickle replacing the “c” in the word “change.”  Nice.

Connecticut

In Connecticut, both parties have competitive gubernatorial primaries involving self-funded candidates facing challengers who are receiving pretty generous public financing under the state’s Clean Elections system (which is under attack in the courts in the aftermath of the Citizens United decision).  Among Democrats, wealthy cable station owner Ned Lamont, famous for his left-bent challenge to Joe Lieberman in 2006, has run a surprisingly “centrist” campaign focused on the state’s many fiscal and economic problems.  His challenger, former Stamford mayor Dan Malloy, who narrowly lost the gubernatorial nomination four years ago, has been pounding him in a populist vein, while fending off allegations that he helped give a company that did work on his home a no-bid contract as mayor (not something you’d want to do in this state, since that’s what brought down former Gov. John Rowland). Malloy has closed the gap with Lamont in the stretch run, and either candidate could win.

The Republican self-funder is former Ambassador to Ireland Tom Foley, and the publicly-financed challenger is Lt. Gov. Michael Fedele.  This race has also featured personal attacks, mainly involving Foley’s ownership interest in a Georgia textile plant that closed, throwing workers out of jobs.  Late polls show exceptional instability in this race, but indicate that Fedele is rapidly gaining on Foley.

Meanwhile, former wrestling exec Linda McMahon, who beat former congressman Rob Simmons at the state GOP convention for the official party endorsement, will face Simmons (who reentered the race after dropping out for a while) and Tea Party activist Peter Schiff, but isn’t expected to have much trouble winning.

Minnesota

In Minnesota, the DFL (Minnesota’s unique version of the Democratic Party) gubernatorial primary features the official party candidate (as selected in a state convention that some candidates skipped), state House Speaker Mary Anderson Kelliher, and two wealthy self-funders, former U.S. Senator Mark Dayton and former state legislator Matt Entenza, both of whom have put about $3 million into the race.  Dayton has held a steady if not spectacular lead over Kelliher, who hopes to pull a ground-game-driven upset in what could be a very low turnout election.  All three Democrats lead certain Republican nominee Tom Emmer in general election polls, partly because the likely candidate of the Independence Party (still around more than a decade after Jesse Ventura’s election), Tom Horner, is pulling a lot of Republican votes. The DFL hasn’t won a governor’s race since 1986, but this could be the year the drought ends.

If you want more details, I’ve done previews of Colorado, Georgia and Connecticut/Minnesota over at FiveThirtyEight.

Ed Kilgore’s PPI Political Memo runs every Tuesday and Friday.

Is the Google-Verizon Proposal a Killer App in the Broadband Debate?

Posted on by The Progressive Policy Institute

Google and Verizon have finally released the details of the policy proposal they have been negotiating for nearly a year now, and the news has generated enormous chatter around Washington and across the blogosphere, with bloggers panning it andwatchdog groups warning of the end of the internet as we know it.

Obviously, advocacy groups on both sides are focused on the substance of the agreement. But I am more interested in what this means for the policy process, and how effective it will be in nudging Congress and the FCC to clarify the rules of the game for broadband internet service.What these two companies have provided is helpful: a concrete policy proposal that Congress and the FCC can consider, and that imposes a framework for targeted comments from the industry and watchdog groups.

In fact, given the weight of these two companies and the collapse last week of the FCC’s attempts at talks, the roll-out for this proposal may make it a “killer app” in the broadband debate (and not simply an internet killer, as some are calling it).Now that Google and Verizon have put a policy proposal on paper, it becomes the baseline that everyone else has to support or oppose to some degree, including FCC commissioners and members of Congress.Pressuring leaders to make decisions is an appropriate goal, and that’s what this proposal does.

As for the proposal itself, it should be judged as a work in progress.Many of the principles themselves are worthy goals: giving consumers freedom to choose content, applications, and devices; requiring more product transparency from service providers, and prohibiting paid fast lanes for internet traffic. The recommendation that the FCC have real teeth to enforce violations of the proposed rules on a case-by-case basis is a good one.

If the kind of self-regulation proposed for the broadband internet industry is going to be successful, there also needs to be enough competition in the market to empower consumers to punish service providers for violating the principles that Google and Verizon have laid out.That means that in addition to policing the market for bad apples, the FCC needs to be vigilant in monitoring the health and competitiveness of the market for broadband internet access.If there are enough companies offering similar services, and the FCC and watchdog groups hold companies publicly accountable for their behavior by informing consumers of violations, consumers can play a valuable role in policing the market by switching providers when they feel their content or services are being unfairly restricted.

Both CEOs acknowledge that “no two companies should be so presumptuous as to think they can solve this challenge alone,” and no one should see this as an end to the debate.Verizon and Google have given everyone involved a chance to speed up the process by narrowing the conversation to actual yes-or-no decision making.I commend these companies for at least trying to move the ball forward with a good-faith proposal.

Photo Credit:  Peter Huys’s Photostream