issue: Politics

Election Watch: Romney Marches On

Posted on by The Progressive Policy Institute

After a campaign often described as “boring,” a New Hampshire Republican electorate showing no great signs of excitement performed its expected duty on January 10, giving Mitt Romney a solid win and making it increasingly difficult to see a path to the nomination for anyone else.

Romney’s 39 percent of the vote in New Hampshire was about what the polls had long predicted, but some last-minute turbulence in surveys and speculation that Paul or even Huntsman could pull an upset reset expectations nicely for Mitt, making his comfortable win look formidable. Paul’s 23 percent of the vote was also pretty predictable, and now that his two best states are behind him, we can expect his campaign to focus on small caucus states where it’s easy to pack rooms. Huntsman, having staked his entire campaign on a New Hampshire breakthrough, campaigning virtually nowhere else, may talk bravely of his third-place (17 percent) finish as giving him a “Ticket to Ride” to later states, but it’s hard to see much of a constituency for his defy-the-Tea-Party campaign in more conservative parts of the country. But like everyone else persisting in this strange nomination contest, Huntsman can help prevent other candidates from consolidating the non-Romney vote, at least until the money runs out.

If there was any surprise in New Hampshire, it’s probably how poorly the “true conservative” candidates performed. Newt Gingrich, who had the coveted endorsement of the New Hampshire Union-Leader, narrowly finished fourth (with 10 percent) ahead of Iowa co-winner Rick Santorum (9 percent), who clearly did not get much of a “bounce.” Rick Perry made no pretense of campaigning in New Hampshire, but still, it’s a bit shocking to see this one-time bully-boy of the field finishing just ahead of Buddy Roemer, with less than one percent of the vote.

Now the campaign will quickly move to its crucial southern phase, with primaries in South Carolina on Saturday, January 21 and in Florida on January 31. Victories by Mitt Romney in both would pretty much wrap up the nomination for him, and the latest polls from South Carolina and Florida have shown him likely to do just that.

Indeed, at the moment the biggest threat to Romney’s candidacy isn’t so much a rival, but a line of attack by rivals that could easily carry over into the general election. A Super PAC (Winning the Future) supporting Newt Gingrich, and brandishing a $5 million contribution from casino magnate Sheldon Adelson has produced a series of ads viscerally attacking Romney’s firm, Bain Capital, for killing jobs and companies in South Carolina. Somewhat more subtly, the ads also associate Romney with Wall Street malefactors, not the most popular people in the country right now. And there’s hardly a millisecond in the ad copy released so far that could not be used against Romney by pro-Obama forces later.

Given the destruction of Newt Gingrich’s front-running candidacy in Iowa by negative ads run by a pro-Romney Super PAC, this development is not terribly surprising, though the lack of inhibition with which both Gingrich and Rick Perry are pursuing the Bain attack line is interesting coming from conservatives who systematically oppose regulation of Wall Street. But the immediate question is whether Winning the Future will have a significant impact in South Carolina, where they have already bought $1.6 million in pre-primary TV ads and could buy more than double that figure.

The Palmetto State is clearly Rick Perry’s Last Hurrah, and right-wing opinion-leader Erick Erickson (at whose RedState annual meeting in South Carolina the Texan announced his candidacy back in August) reports that Perry’s South Carolina effort looks impressive. If so, it hasn’t shown up in the polls, where Perry is running consistently in the mid-single digits in the state. Hard-core anti-Romney conservatives in South Carolina seem evenly split between Gingrich and Santorum, and only if they begin to coalesce around a single candidate could the destructive work of Winning the Future bear fruit, other than in declining favorability ratings for Romney. The poohbah who could easily resolve the indecision among South Carolina conservatives, Sen. Jim DeMint, has said he does not intend to endorse anyone this cycle, and, moreover, has predicted Romney will win his state. There’s no reason at present to doubt he is right.

But without question, the assault on Bain Capital will be watched closely by Democrats, not just because it might hurt Mitt Romney, but because it will test the latent hostility of the voting public (even its most conservative segment) to some of those “wealth creators” Republicans are forever lionizing.

Photo credit: DonkeyHotey

Romney on a Roll

Posted on by The Progressive Policy Institute

Mitt Romney’s campaign for the Republican nomination is unfolding like a well-crafted business plan. He hit his numbers in New Hampshire last night, saw his most dangerous rivals tumble, and reinforced the aura of inevitability that surrounds his candidacy.

Everything seemed to fall Romney’s way. After his dizzying ascent in Iowa, Rick Santorum fell back to earth with a fifth-place finish. Newt Gingrich, who went snarling across New Hampshire like a wounded beast, flamed out. Ron Paul came in second, which suits Romney just fine. Paul’s libertarian purism inspires cult-like fervor among his young followers, but it will never command majorities in GOP primaries.

Yes, it was a good night for John Huntsman, but probably the best he’ll have this year. He did well among independents, moderates and voters who don’t like the Tea Party, a not-so-representative sample of the GOP electorate. He has nowhere to go, and it seems unlikely Romney would put another Mormon on his ticket.

Now it’s on to South Carolina, where Romney already leads, and where Paul’s useful presence will inhibit last-ditch attempts by conservatives to form an “anybody but Mitt” coalition. If he wins in the South, the race is effectively over.

What are the implications for progressives of Romney’s emergence as President Obama’s likely opponent in November? Let me offer four:

First, don’t underestimate Romney. It’s hard not to be impressed by Romney’s methodical, disciplined march to the nomination, even if, like me, you are appalled by his willingness to change positions that get in his way.

On the other hand, Romney has a big structural advantage that is usually decisive in Republican nominating battles. No, it’s not money, it’s the fact that he’s the establishment candidate. Romney ran second to John McCain in 2008, paying his dues and learning lessons that have helped him avoid mistakes this time around. Now he’s the GOP heirarchy’s presumptive choice, even if most conservatives don’t much like or trust him.

Romney may have tepid support from the GOP base, he may be pathetically unable to connect with ordinary Americans, but he is a competent, calculating machine who knows how to map and adapt to challenging political terrain, whether it’s very liberal Massachusetts or the radically conservative Iowa caucuses.

Second, electability is trumping ideology. Nearly 60 percent of New Hampshire voters said their top priority was a candidate who could defeat President Obama. Only 14 percent said they were looking for a “true conservative.”

This of course is bad news for President Obama, who would have loved to face a Tea Party favorite like Michele Bachman, Rick Perry, or even Newt Gingrich. Then the fall campaign would have been about GOP extremism rather than the economy. That the Tea Party’s least favorite candidate appears headed toward nomination is a tacit admission that the party has veered dangerously from the political mainstream.

Third, an Obama-Romney match-up will be a fight for the political center. Newt Gingrich is right: Romney began his career as a “Massachusetts moderate.” That means he will have more “crossover appeal” to swing voters than his GOP rivals, which he’ll need to offset minimal enthusiasm from conservatives. Given his now legendary “flexibility,” it shouldn’t be hard for Romney to pivot back to the center. He might even warm to Romneycare again, to demonstrate his pragmatic acceptance of government’s role in health care, and of his willingness to work across the aisle to get things done.

In any case, neither candidate can rely on a mobilizing their base to win election. That means Obama will have to work harder to win back independent and moderate voters who deserted his party in 2010.

Fourth, the economy is the issue. Much of Romney’s “electability” stems from his cred as a successful businessman and manager who knows how the real economy works. As he made clear in his victory remarks last night, Romney intends to make the 2012 election another referendum on Obama’s economic performance.

Democrats hope to turn Romney’s success as a corporate turnaround artist against him, echoing Gingrich’s claims Bain Capital “looted” firms and cost workers their jobs. But Obama should be leery of hitting the “vulture capitalism” theme too hard.

The swing voters who will decide the election want action to fix the economy, not scapegoating. Rather than allow himself to be lured into a debate over what’s he done to fix it, Obama needs to frame the race prospectively, as a choice between competing paths to economic renewal. His top priority must be to develop a bolder, more compelling plan for reviving jobs, spurring economic innovation, and restoring U.S. competitiveness.

Photo credit: WEBN-TV

Why Obama Needs to Cut and Invest

Posted on by The Progressive Policy Institute

This article is part of a a series of international responses to Policy Network‘s discussion paper In the black Labour: Why fiscal conservatism and social justice go hand-in-hand.

To most Americans, fiscal responsibility is a question of political morality. If Democrats allow the debate to be framed as a choice between more deficit spending and debt reduction, they lose

Much to the perplexity of US liberals, the politics of debt reduction dominated Washington in 2010, despite a faltering economic recovery.

No one was more incensed by the seeming illogic of this than Paul Krugman. The influential New York Times columnist railed often against “premature austerity” and urged President Obama instead to open the spigots of federal spending. It was the standard Keynesian prescription, but it betrayed a political tin ear. To a public alarmed by large-scale public borrowing and spending, it sounded like throwing good money after bad.

After 2007, US budget deficits ballooned as the Bush and Obama administrations spent heavily to bail out the big banks (plus insurance and auto companies) and counter the worst recession since the 1930s. The federal deficit, $469 billion in 2008, zoomed to an eye-popping $1.3 trillion in 2011. Coming on top of the Bush tax cuts and two costly wars, this emergency spending pushed the US national debt over 70% of GDP.

Had this torrent of spending – reinforced by generous doses of monetary “easing” – unlocked business investment and cut the jobless rate, all might have been forgiven. But it didn’t, and public apprehension about exploding debts amid a jobless recovery rose steadily, reaching a crescendo in the 2010 elections. Republicans swept House races and, lashed on by the Tea Party, stormed into Washington determined to cut government down to size.

Thus 2011 became a year of fiscal brinkmanship. First the government was almost shut down last spring when budget talks broke down. Then came the summer showdown over raising the debt ceiling, which ended when Obama blinked and agreed to GOP demands for spending cuts rather than let America default on its debts for the first time ever. In the fall, a bipartisan “supercommittee” that was granted extraordinary powers to rein in deficits failed to reach agreement, triggering automatic domestic spending cuts in 2013.

Despite such nips and tucks, US leaders thrice failed to come to grips with the structural causes of America’s debt crisis: tax revenues well below historic norms, and the rapid growth of public health and pension costs as the baby boomers throng into retirement. This ensures that the debate over how to control the national debt – $15 trillion and growing – will be front and centre in the 2012 presidential election.

The public’s top priorities are jobs and reviving US competitiveness. But fiscal discipline also matters to most voters, especially the moderates and independents who hold the balance in close races. Only by embracing both goals can progressives forge an electoral majority in 2012. If Obama and the Democrats allow the fiscal debate to be framed as a choice between more deficit spending or debt reduction, they lose. If instead they champion fiscal restraint and focus the debate on the fairest and most growth-friendly way to achieve it, they can win.

That’s because Republicans have painted themselves in a corner by refusing to raise any new tax revenue to help solve the debt crisis. Americans don’t relish paying higher taxes, but they do want their elected leaders to work together to solve the country’s problems. House Republicans have repeatedly put their anti-tax dogma before their responsibility to govern, and have seen their public approval ratings tumble as a result.

In contrast, Obama appears eminently reasonable in calling for “shared sacrifice”, which in practice means reducing the debt with a mix of spending cuts and tax revenues. He has also put Republicans on the defensive for opposing tax hikes on the rich, even to pay for tax relief for working families.

But Obama can’t let his own party off the hook, either. If Republicans are in denial about the need for higher revenues, Democrats have yet to get serious about the other side of the fiscal equation – slowing the unsustainable cost growth of the big “entitlement” programmes: Medicare, Medicaid and Social Security. Washington has promised more to future retirees than it can afford to pay; the government recently put the funding gap at $34 trillion, many times larger than the entire US economy.

There’s nothing “progressive” about denying hard fiscal facts, yet many liberals cling to the habit of opposing any cuts in future benefits – even for wealthy Americans – as a breach of faith, if not a plot to kill social insurance in America. Not only is this stance blind to demographic and budget realities, it’s morally dubious as well.

If benefits for the elderly are deemed untouchable, then Congress will have to either raise taxes on everyone, including working families, or cut domestic spending to the bone, or both. Domestic spending (including defence) has already borne the brunt of the spending cuts agreed to last year. It is only 12% of the budget, but it includes all the key public investments progressives should be for – in infrastructure, education and workforce skills, science and technology – not to mention public health and safety and measures to alleviate poverty. To shield entitlements from cuts is, in effect, to give priority to retirees’ consumption over strategic investments in a more prosperous and equitable society.

There is little mystery over what it will take to solve America’s debt crisis. President Obama’s own Fiscal Commission says $4 trillion in debt reduction over the next decade is necessary to stabilise the national debt at around 60% of GDP. Hitting that ambitious target will require a political “grand bargain” in which Republicans accept increased tax revenues, and Democrats agree to trim benefits for affluent retirees in the future. Unfortunately, Obama’s reluctance to endorse his Commission’s blueprint has left his own party as well as the public in doubt about the depth of his commitment to fiscal stabilisation.

As the presidential race begins in earnest, Obama will come under growing pressure to offer bigger and more specific ideas for spurring economic growth and shrinking the national debt. He needs a concrete plan for restoring fiscal responsibility gradually, through a combination of tax and entitlement reform, while also boosting public investment. Properly sequenced, a “cut and invest” approach can attenuate the dilemma Krugman and others point to – the collision between the stimulative effect of public spending (and tax cuts) and the contractionary impact of fiscal retrenchment.

Adopting a 10-year framework for debt reduction will reassure nervous investors that Washington is determined to get its borrowing under control and protect the nation’s credit. By cutting debt service payments, it will redirect public spending from consumption to productive investment. It will reduce America’s dependence on foreign lenders (especially China) and rebuild the nation’s “fiscal reserve” so that it can borrow to meet future emergencies or downturns without plunging into Greek-style levels of debt.

The economic case for providing certainty about debt reduction is compelling. But most Americans don’t wear green eyeshades; for them, fiscal responsibility is a question of political morality. They see the nation’s runaway debt as emblematic of a corrupt political class that doles out slices of the public weal to privileged interests and rent-seekers in return for campaign contributions. The image of a bloated state that lives beyond its means powerfully buttresses the anti-government populism that resonates not only with Tea Partiers but also with the independent voters that progressives need to win back this year.

The good news for Obama is that the demands of economic growth and fiscal rectitude point in the same direction – away from America’s old economic model of debt-fueled consumption, towards a new progressive growth strategy based on higher levels of investment, faster innovation and expanded production.

Photo credit: Andrew.Speight

Election Watch–After Iowa: Is the Right Ready to “Settle” for Mitt?”

Posted on by The Progressive Policy Institute

So voters finally got into the act in the Republican presidential nominating contest, and the results from Iowa were about what anyone reading the late polls might have expected. With Ron Paul apparently taking a bit of a hit from bad publicity about his extremist past and attacks on his current foreign policy views by other candidates, he fell just short of Romney and Santorum, who almost literally tied. In many respects, the caucuses were a re-run of 2008: turnout was very much the same despite all the talk about a super-psyched GOP base; the composition of caucus-goers was very similar; and Mitt Romney got about the same number of votes. The main difference is that Romney spent much less time in Iowa than in 2008, and more crucially, the non-Romney vote was more divided. It’s also significant as a sign of politics to come that Mitt didn’t have to spend nearly as much of his own money in 2012, because a “Super PAC” supporting him did the dirty work of destroying Newt Gingrich’s credibility with Iowa conservatives (with some help from Ron Paul’s campaign).

The free-falling Gingrich campaign did have enough energy left to beat Rick Perry in Iowa (Newt got 13 percent of the vote, Perry 10 percent), dealing a huge blow to the candidate still generally thought to be the only enduring threat to a Romney nomination (Perry considered dropping out of the race Tuesday night, but reconsidered, probably after taking a good long look at the poor positioning of the rest of the field in South Carolina and Florida). Michele Bachmann, the winner of the Iowa GOP straw poll back in August, which croaked Tim Pawlenty’s candidacy, had the wheels fall off in the final week before the caucuses and finished a poor sixth, subsequently folding what was left of her campaign.

So technically, at least, Rick Santorum, who benefitted mightily from a last-minute consolidation of social conservative support, is the unlikely winner of the conservative-alternative-to-Romney sweepstakes that Iowa hosted for so many months. I qualify his victory because there are many doubts about his post-Iowa viability, and aside from Paul, who will be in the race to the bitter end, there remains a slim possibility that Perry or Gingrich can rise from the dead to attempt one more comeback when the calendar turns to the South after New Hampshire. Indeed, one of the grand ironies of this entire contest is that perceptions of Romney’s weakness have kept candidates in the field who are mainly keeping each other from consolidating non-Romney support.

Santorum has spent little time outside Iowa, and does not have deep pockets. More importantly, he’s a career politician with a domestic policy record that troubles some conservatives (notably pundit Erick Erickson, who has taken to attacking Santorum regularly and savagely). As a conservative Catholic, he has ties to evangelical activists via the anti-abortion movement (in which he is heavily involved, taking positions that won’t wear well with more moderate voters), but does not have the kind of natural connections to southern political culture that 2008 winner Mike Huckabee enjoyed.

Given Romney’s big lead in New Hampshire, it’s unlikely Santorum will take the time and money to seriously challenge him there, though Newt Gingrich is promising to launch a vengeful attack on Mitt in the Granite State. But the next critical (and perhaps final) phase of the campaign could well be played out behind the scenes, as conservative opinion-leaders decide whether or not to get behind Romney and end the contest before it gets truly ugly and expensive. South Carolina’s Jim DeMint, for example, could send a very big signal that the battle to deny Romney the nomination has become too dangerous for the conservative movement to sustain. A Romney win in the Palmetto State would pretty much wrap things up unless Mitt does or says something uncharacteristically stupid, though rivals (obviously Paul, probably Gingrich, and perhaps even Huntsman if he chooses to spend his family fortune) may stick around in case that happens.

It bears repeating at this point that there are few signs of a general-election “conservative revolt” against a Romney-led ticket, beyond a smattering of evangelicals who really don’t like Mormons. The best way to describe the wingnut mood about this contest is that a Romney nomination would deny them their ideal aspiration of a Goldwater-style candidacy (one, of course, that won this time) aimed at repealing the entire Great Society/New Deal legacy. But that would be considered a tactical setback other than an intolerable defeat, simply delaying the great-gittin’-up-morning they are convinced is on the horizon once those vote-buying socialists in the Democratic Party are driven from power. An early Romney nomination victory, on the other hand, might save the candidate a lot of heartburn by giving conservative activists time to heal their wounds and get used to him as the nominee, while limiting the gestures he will have to make to earn their enthusiastic support, if not their trust or affection.

Wingnut Watch: Ideology Versus Electability

Posted on by The Progressive Policy Institute

Up until now, the right-wing conquest of the Republican Party that reached critical mass immediately after Barack Obama’s election in 2008 has not involved a lot of soul-searching questions about the relative value of ideology and “electability.” Indeed, it’s been an article of faith on the right—for some dating all the way back to Phyllis Schlafly’s 1964 book A Choice Not An Echo—that insufficient ideological rigor was precisely the reason for the GOP’s electoral problems. And nothing much has happened since the beginning of 2009, when the GOP made the unusual decision to move away from the political center after two straight electoral debacles, to disabuse them of the idea that they would be rewarded at the ballot box for fully indulging their ideological appetites and thrilling the conservative activist base.

That may be about to change. The House Republicans’ rejection of a two-month stopgap agreement to preserve a payroll tax cut and extend unemployment benefits has finally earned the Tea Party Movement full blame for gridlock and dysfunction in Congress (an institution whose approval rating dropped to 11 percent last week according to Gallup). Opinion surveys indicate that the deeply satisfying sabotage game (i.e., deliberately screwing up the operations of the federal government and then benefitting from public disgruntlement with the competence of said federal government) conservatives have been playing may be coming to an end as Republicans become more firmly identified with unpopular positions on spending, taxes, and the willingness to cooperate across party lines. Even the president’s approval ratings are looking better by comparison.

In other words, Republicans are at long last having to choose between ideology and popularity—or to put it another way, between the “base” and the general electorate—and the current behavior of House Republicans indicates it’s no real contest: ideology comes first.

Many non-conservative political observers think the same choice is at the heart of the turbulent presidential nominating contest, and wonder if and when Republicans will finally “settle” on Mitt Romney as the obvious candidate with the best chance of winning in November. But polling on “electability” indicates that most actual rank-and-file Republicans think whatever candidate they happen to prefer is also the most electable (conservative opinion-leader Erick Erickson is hardly alone in arguing that regardless of the polls, Romney is actually the least electable of the viable candidates), and a steady majority appear to consider electability less important than ideology, values or “character.”

Yet less than two weeks before the Iowa caucuses, Romney’s prospects are indeed on the rise, but for reasons distinct from the ideology/electability choice. To put it simply, the long conservative search for a clear alternative to Romney seems to be terminally failing.

It’s now well-documented that the latest non-Romney to enjoy a surge in the polls, Newt Gingrich, is in deep trouble in Iowa. This is not necessarily a function of a national decline in support for the former Speaker—he continues to run ahead of or even with Romney among Republicans nationally–or (to cite one common CW theory) of some decision by the “Republican Establishment” to deep-six Gingrich on electability grounds. More prosaically, Newt is being savaged in Iowa by heavy negative advertising by Ron Paul and by a “super-PAC” supporting Romney, and he has neither the money nor the organization in the state to fight back. And far from focusing on electability, the anti-Gingrich ads aim at Gingrich’s conservative support by depicting him as an unprincipled flip-flopper and conventional Washington pol.

At the same time, Iowa conservatives appear incapable of uniting around any other candidate. Rick Perry is investing heavily in Iowa in time and money, but is showing relatively little movement in the polls. Both Michele Bachmann and Rick Santorum are moving up a bit in Iowa polls, but are aiming at largely the same evangelical conservative constituency. Two of the most prominent Iowa Christian Right leaders, Bob Vander Plaats and Chuck Hurley, have just endorsed Santorum, but could not convince the board of their own organization, FAMiLY Leader, to make an endorsement, reflecting deep ambivalence in their ranks.

At the moment, the odds are probably better than even that either Romney or Ron Paul will win Iowa. With Romney maintaining a big lead in New Hampshire polls, and also beginning to break the apparent 25 percent cap on his national support, an Iowa win, particularly if Paul finishes second and no other candidate appears to be consolidating conservative support, could give him unstoppable momentum. A Paul victory with Romney second could be nearly as good for Mitt, given Paul’s unpopularity with both rank-and-file conservatives and elites and the vast ammunition his record and radical utterances will provide for future negative ads.

A rebound by Gingrich in Iowa, or a last-minute surge by Perry or Santorum, could upset this scenario, but the fact that all three of these candidates have some grounds for optimism illustrates the problem facing conservatives determined to stop Romney.

If Romney wins, in other words, it won’t be because conservatives worried about November have chosen to elevate electability over ideology, but because the large field of candidates available to them has serially imploded, and time has run out for anything other than a desperate anybody-but-Romney rearguard action. At the same time, Romney himself has made just enough concessions to the rightward drift of his party to remain acceptable to all but bitter-enders and Mormon-haters.

Crazy things have been known to happen in Iowa in the last days before the caucuses, although the intercession of the Christmas holidays makes big changes in support levels unlikely. In any event, the invisible primary is finally coming to an end, and with it will expire the hopes of all but a very few candidates.

Photo Credit: Austen Hufford

The Credit Gap: Easing the Squeeze on the Smallest Businesses

Posted on by The Progressive Policy Institute

Among the many casualties of the 2007-2008 financial meltdown were small businesses. As the financial system virtually shut down, millions of small business owners across America found themselves unable to get the credit they desperately needed to run their businesses, let alone expand. As a result, thousands of otherwise flourishing firms were forced into bankruptcy or closure, with thousands of American jobs lost.

While this credit freeze has begun to thaw, one critical group of small businesses—firms with fewer than 50 workers—are still at risk of being left behind. These smallest of small businesses provide as much as 30 percent of all private-sector employment. Yet because of their small size, they are much less likely to benefit from government small business loan programs, and they are less likely to win loans from big commercial banks. For this group, the credit crunch is a serious impediment to their success. Many of these businesses relied on personal assets, such as home equity, for financing. But with the crash in home prices, those resources have evaporated. Instead, many smaller businesses rely almost exclusively on risky and expensive credit cards to finance their firms, if they can get credit at all.

Smaller businesses clearly need more options for getting credit, and credit unions, which already help many small borrowers finance their self-employment and small business ventures with personal loans, lines of credit, and limited business loans, could be an ideal source of credit for these underserved entrepreneurs. However, credit unions are blocked from offering as much help as they could because of an arbitrary and outdated cap on the amount of small business lending that credit unions can do. Bipartisan proposals to increase this limit—such as the ones offered by Sens. Mark Udall and Susan Collins and Reps. Ed Royce and Carolyn McCarthy—would help credit unions fill the “credit gap” that these smaller businesses face. It would also be a sensible and cost-effective way to jumpstart the job creation our country urgently needs.

Read the entire brief:12.2011-Martin_The-Credit-Gap_Easing-the-Squeeze-on-the-Small-Businesses

 

Wingnut Watch: The Race to Iowa

Posted on by The Progressive Policy Institute

Newt GingrichCongress is mired this week in a complex struggle over an omnibus appropriations bill (with the total amount dictated by the earlier deficit reduction agreement) linked to a continuation of unemployment benefits and payroll tax relief. It’s almost entirely a matter of partisan Kabuki theater at this point, and neither a collapse of negotiations (followed, presumably, by another short-term continuing resolution on appropriations) nor an agreement (within the current parameters of the fight) would produce a major wingnut meltdown. Republicans generally are trying to secure a measure forcing the administration, among other indignities, to build the controversial Keystone KL pipeline, but again, this is more of a partisan that a purely ideological concern.

But conservative activists are reaching a failsafe point in the presidential nomination contest, with less than three weeks to go (or less in actual campaign time, given the limitations in attention-span and tolerance for “comparative” messages imposed by Christmas) before the Iowa caucuses.

With Herman Cain having finally suspended his campaign, conservatives in Iowa and elsewhere are struggling to decide whether to get behind the current frontrunner, Newt Gingrich, as an alternative to the chronically disfavored Mitt Romney, or to find some way to unite behind other, previously failed candidacies like those of Perry or Bachmann (while very much a viable candidate in Iowa, Ron Paul is generally considered unacceptable as an actual nominee because of his foreign policy views, and Rick Santorum would need an Iowa miracle to become viable). Perry and Paul are spending extensively on campaign ads in Iowa, and Paul, in particular, has been pounding Gingrich for his many flip-flops, his ideological heresies, and his Washington ties. Iowa polls all show Gingrich in the lead at present, though at least one, from PPP, shows Gingrich losing ground with steadily eroding favorable/unfavorable ratios.

There’s one more Iowa debate on tap (tomorrow, sponsored by Fox), and some key endorsements still likely to come (notably from wingnut leaders Bob Vander Plaats of the Iowa FAMiLY Leader and Rep. Steve King; both could go for about anyone other than Romney). It’s anybody’s guess what will happen; Gingrich, Paul and Romney are all in a decent position to win a close split decision, though the bulk of polls still favor Gingrich, who is particularly strong among self-identified Republicans. Meanwhile, Gingrich has been gaining on Romney in New Hampshire, and has built huge leads in South Carolina and Florida. A Gingrich win in Iowa would probably mean the end for Perry, Bachmann and Santorum, and put Romney on the ropes; a Paul win would be nearly as good for Romney as a win himself, particularly if Gingrich fades notably, which could indicate that the other candidates’ attacks are having and will continue to have an effect.

At this point it’s worth noting that the nomination schedule features both an early January blitz, and then something of a lull, meaning that unless someone scores the early knockout with wins in all or nearly all the January states, then money, organization, and sheer endurance could become very large factors and the contest could extend at least to Super Tuesday in March, and perhaps into the post-April 1 period when states can award delegates on a statewide winner-take-all basis if they so choose. There’s already talk that if Gingrich wins big in January, Republican Establishment figures (alarmed by Gingrich’s very poor standing in the general electorate) could either mount a major push to force conservatives to accept Romney, or even get behind a very late candidacy for someone more acceptable than either Romney or Gingrich among Tea Party supporters, but who has less glaring weaknesses than those in the existing field.

With all these variables in play, the overriding reality is that going on three years after the outbreak of the Tea Party Movement, conservatives can’t agree on much in the GOP presidential campaign other than a general disdain for Mitt Romney. Reading major conservative opinion outlets like National Review you can find both warm reassessments of and vicious attacks on Gingrich, who is far and away the current national front-runner among conservative voters at the moment. There’s a lot of regret about how poorly Rick Perry has performed, amidst very occasional expressions of hope that the Texan’s campaign could be resurrected by a late surge in Iowa. It’s all, frankly, a mess, and the possibility of an outcome that will please Wingnut World from either an ideological or an electability point of view continues to decline as actual voting grows near.

Photo credit: Chase McAlpine

Wingnut Watch: End-of-the-Year Standoff

Posted on by The Progressive Policy Institute

The end of the calendar year always means an assortment of “temporary” policies are approaching expiration, including some (e.g., upward revision of reimbursement rates for Medicare providers, and a “patch” to avoid imposition of the Alternative Minimum Tax on new classes of taxpayers) that happen every year. And then there are other expiring provisions central to the Obama administration’s efforts to deal with the recession, most notably unemployment benefits for the long-term unemployed, and last year’s major “stimulus” measure, a temporary Social Security payroll tax cut.

With the collapse of the deficit reduction supercommittee and an uncertain future ahead for the “automatic sequestrations” of spending that are supposed to subsequently occur, leaders in both parties are especially sensitive at the moment about taking steps on either the spending or revenue side of the budget ledger that add to deficits. But some of the “fixes” mentioned above are political musts, while others are highly popular or scratch particular ideological itches. It will be interesting to see whether conservative activists wind up taking a hard line against deficit increasing measures, and indeed, against any cooperation with Democrats so long as their own demands for “entitlement reform” and high-end tax cuts are ignored.

The payroll tax cut is an especially difficult subject for conservatives. While it will be easy for them to reject Senate Democratic proposals to pay for an extension of the cut with a surtax on millionaires, it is certainly possible, as Senate Republican leader Mitch McConnell has acknowledged, to “pay for” this tax cut with spending cuts, perhaps even some that Democrats would consider supporting.

Some conservatives, however, view any deal with Democrats on this and any other fiscal issues as a deal with the devil. One of McConnell’s deputies, Sen. John Kyl, has argued that the payroll tax cut hasn’t boosted the economy (i.e., it is not targeted to “job creators,” the wealthy) and should be subordinated to tax cut ideas that supposedly do. In an argument that is getting echoed across Wingnut World, RedState regular Daniel Horowitz suggests that GOPers make any payroll tax cut extension conditional on a major restructuring of Social Security, which of course ain’t happening.

Since virtually all the end-of-year measures under discussion will boost the budget deficit, and there are limited noncontroversial “offsets” available (mainly “distribution” of new savings attributed to the drawdown of troops in Iraq and Afghanistan), the key question will be which ones conservatives choose to pick a fight over and which ones slide quietly past the furor on unrecorded voice votes and last-minute agreements. If congressional Republicans seem to be acting in too accommodating a manner, it would not be surprising to see GOP presidential candidates using them as foils for their own claims to the “true conservative” vote as the January 3 Iowa caucuses grow ever nearer.

For the umpteenth consecutive week, the presidential contest remained full of surprises and volatility. Herman Cain’s campaign, already losing steam after his poor handling of both sexual harassment/assault allegations and the most recent debates, took perhaps a terminal blow from a new, credible-sounding allegation (made, interestingly enough, via a local Fox station in Atlanta, not some precinct of the “liberal media”) of a long-term adulterous affair. While Cain is again denying he did anything wrong, conservatives are not rushing to his defense this time, and the general feeling is that his campaign is done.

If Cain actually withdraws, it has long been assumed he would endorse Mitt Romney. But as a new analysis by Public Policy Polling showed, Cain’s supporters are very, very likely to move virtually en masse to Newt Gingrich, whose star continued to rise last week. His big news was an endorsement by the New Hampshire (formerly Manchester) Union-Leader, that sturdy right-wing warhorse of GOP politics. This step immediately makes Gingrich the most formidable rival to Mitt Romney in the Granite State: the Union-Leader does not simply endorse and ignore candidates; it can now be expected to undertake a virtually-daily bombardment of front-page editorials defending its candidate and treating his intraparty opponents (particularly Romney) as godless liberal RINOs.

But the impact of the endorsement goes far beyond New Hampshire, given the Union-Leader’s reputation for the most abrasive sort of wingnuttery. It materially helps him solidify his reputation for conservative ideological regularity, which is about to be brought into serious question by all the other campaigns, which are doubtless sorting through their bulging oppo research files on the talkative former Speaker, trying to decide which lines of attack are most lethal.

So far the he’s-not-a-true-conservative attack on Gingrich has been largely limited to his new, dangerous positioning on immigration, unveiled in a recent debate. Gingrich has been quick to stress that his proposal for a “path to legalization” for some undocumented workers does not involve citizenship, and denies its beneficiaries any government benefits whatsoever. But Iowa’s highly influential nativist champion Steve King has already branded Newt’s plan with the scarlet A-word of “amnesty,” and Michele Bachmann is trying to draw a new line in the sand suggesting that true conservatives favor deportation of every single “illegal.”

At this point, the presidential contest appears to be something of a race between Gingrich and his past words and deeds. There is a small window between now and the period immediately before and after Christmas (when something of a truce is imposed) when his opponents can try to bury him as a flip-flopper, an inveterate bipartisan, and a guy whose personal life (not just his marriages and divorces, but his finances) has been less than godly. If they don’t get their act together to do so, he’s looking very strong in Iowa, and even if he loses to Romney in New Hampshire, Gingrich is currently sporting large polling leads in South Carolina and Florida. Particularly for those candidates (Perry, Bachmann, Santorum; Ron Paul is in something of a class by himself) still hoping to seize the mantle of the true-conservative-challenger-to-Romney after Iowa, it’s getting close to desperation time.

Photo credit: FNS/cc

Wingnut Watch: End-of-the-Year Standoff

Posted on by The Progressive Policy Institute

Senator KylThe end of the calendar year always means an assortment of “temporary” policies are approaching expiration, including some (e.g., upward revision of reimbursement rates for Medicare providers, and a “patch” to avoid imposition of the Alternative Minimum Tax on new classes of taxpayers) that happen every year. And then there are other expiring provisions central to the Obama administration’s efforts to deal with the recession, most notably unemployment benefits for the long-term unemployed, and last year’s major “stimulus” measure, a temporary Social Security payroll tax cut.

With the collapse of the deficit reduction supercommittee and an uncertain future ahead for the “automatic sequestrations” of spending that are supposed to subsequently occur, leaders in both parties are especially sensitive at the moment about taking steps on either the spending or revenue side of the budget ledger that add to deficits. But some of the “fixes” mentioned above are political musts, while others are highly popular or scratch particular ideological itches. It will be interesting to see whether conservative activists wind up taking a hard line against deficit increasing measures, and indeed, against any cooperation with Democrats so long as their own demands for “entitlement reform” and high-end tax cuts are ignored.

The payroll tax cut is an especially difficult subject for conservatives. While it will be easy for them to reject Senate Democratic proposals to pay for an extension of the cut with a surtax on millionaires, it is certainly possible, as Senate Republican leader Mitch McConnell has acknowledged, to “pay for” this tax cut with spending cuts, perhaps even some that Democrats would consider supporting.

Some conservatives, however, view any deal with Democrats on this and any other fiscal issues as a deal with the devil. One of McConnell’s deputies, Sen. John Kyl, has argued that the payroll tax cut hasn’t boosted the economy (i.e., it is not targeted to “job creators,” the wealthy) and should be subordinated to tax cut ideas that supposedly do. In an argument that is getting echoed across Wingnut World, RedState regular Daniel Horowitz suggests that GOPers make any payroll tax cut extension conditional on a major restructuring of Social Security, which of course ain’t happening.

Since virtually all the end-of-year measures under discussion will boost the budget deficit, and there are limited noncontroversial “offsets” available (mainly “distribution” of new savings attributed to the drawdown of troops in Iraq and Afghanistan), the key question will be which ones conservatives choose to pick a fight over and which ones slide quietly past the furor on unrecorded voice votes and last-minute agreements. If congressional Republicans seem to be acting in too accommodating a manner, it would not be surprising to see GOP presidential candidates using them as foils for their own claims to the “true conservative” vote as the January 3 Iowa caucuses grow ever nearer.

For the umpteenth consecutive week, the presidential contest remained full of surprises and volatility. Herman Cain’s campaign, already losing steam after his poor handling of both sexual harassment/assault allegations and the most recent debates, took perhaps a terminal blow from a new, credible-sounding allegation (made, interestingly enough, via a local Fox station in Atlanta, not some precinct of the “liberal media”) of a long-term adulterous affair. While Cain is again denying he did anything wrong, conservatives are not rushing to his defense this time, and the general feeling is that his campaign is done.

If Cain actually withdraws, it has long been assumed he would endorse Mitt Romney. But as a new analysis by Public Policy Polling showed, Cain’s supporters are very, very likely to move virtually en masse to Newt Gingrich, whose star continued to rise last week. His big news was an endorsement by the New Hampshire (formerly Manchester) Union-Leader, that sturdy right-wing warhorse of GOP politics. This step immediately makes Gingrich the most formidable rival to Mitt Romney in the Granite State: the Union-Leader does not simply endorse and ignore candidates; it can now be expected to undertake a virtually-daily bombardment of front-page editorials defending its candidate and treating his intraparty opponents (particularly Romney) as godless liberal RINOs.

But the impact of the endorsement goes far beyond New Hampshire, given the Union-Leader’s reputation for the most abrasive sort of wingnuttery. It materially helps him solidify his reputation for conservative ideological regularity, which is about to be brought into serious question by all the other campaigns, which are doubtless sorting through their bulging oppo research files on the talkative former Speaker, trying to decide which lines of attack are most lethal.

So far the he’s-not-a-true-conservative attack on Gingrich has been largely limited to his new, dangerous positioning on immigration, unveiled in a recent debate. Gingrich has been quick to stress that his proposal for a “path to legalization” for some undocumented workers does not involve citizenship, and denies its beneficiaries any government benefits whatsoever. But Iowa’s highly influential nativist champion Steve King has already branded Newt’s plan with the scarlet A-word of “amnesty,” and Michele Bachmann is trying to draw a new line in the sand suggesting that true conservatives favor deportation of every single “illegal.”

At this point, the presidential contest appears to be something of a race between Gingrich and his past words and deeds. There is a small window between now and the period immediately before and after Christmas (when something of a truce is imposed) when his opponents can try to bury him as a flip-flopper, an inveterate bipartisan, and a guy whose personal life (not just his marriages and divorces, but his finances) has been less than godly. If they don’t get their act together to do so, he’s looking very strong in Iowa, and even if he loses to Romney in New Hampshire, Gingrich is currently sporting large polling leads in South Carolina and Florida. Particularly for those candidates (Perry, Bachmann, Santorum; Ron Paul is in something of a class by himself) still hoping to seize the mantle of the true-conservative-challenger-to-Romney after Iowa, it’s getting close to desperation time.

Photo credit: FNS/cc

Wingnut Watch: Supercommittee Failure and the Gingrich Surge

Posted on by The Progressive Policy Institute

The official failure of the congressional “supercommittee” came and went without much hand-wringing in Wingnut World; indeed, the prevailing sentiment was quiet satisfaction that Republicans had not “caved” by accepting tax increases as part of any deficit reduction package. It was all a reminder that most conservative activists are not, as advertised, obsessed with reducing deficits or debts, but only with deficits and debts as a lever to obtain a vast reduction in the size and scope of the federal government, and the elimination of progressive taxation. For the most part, the very same people wearing tricorner hats and wailing about the terrible burden we are placing on our grandchildren were just a few years ago agreeing with Dick Cheney’s casual assertion that deficits did not actually matter at all.

It is interesting that throughout the Kabuki Theater of the supercommittee’s “negotiations,” the GOP’s congressional leadership came to largely accept the Tea Party fundamental rejection of any compromise between the two parties’ very different concepts of the deficit problem. From the get-go, Democrats were offering both non-defense-discretionary and entitlement cuts in exchange for restoring tax rates for the very wealthy to levels a bit closer to (though still lower than) their historic position. The maximum Republican offer was to engage in some small-change loophole closing accompanied by an actual lowering of the top rates in incomes, plus extension of the Bush tax cuts to infinity. Conservatives are perfectly happy to let an on-paper “sequestration” of spending take place, with the expectation that a Republican victory in 2012 will put them in a position to brush aside the defense cuts so authorized and then go after their federal spending targets with a real vengeance.

The GOP presidential candidates have offered two opportunities during the last week for wingnuts of a particular flavor to assess their views and character. The much-awaited Thanksgiving Family Forum in Des Moines was perhaps the first candidate forum of the cycle in which no one even pretended to set aside cultural issues in favor of an obsessive focus on the economy or the federal budget. The format, involving not a debate but a serial interrogation of candidates by focus group master Frank Luntz, was explicitly aimed at getting to each contender’s “worldview,” the classic Christian Right buzzword for one’s willingness to subordinate any and all secular considerations and choose positions on the issues of the day via a conservative-literalist interpretation of the Bible (i.e., one in which phantom references to abortion are somehow found everywhere, and Jesus’ many injunctions to social activism are treated as demands for private charity rather than redistributive efforts by government).

According to The Iowa Republican’s Craig Robinson in his assessment of the event, Rick Santorum, Michele Bachmann and Rick Perry were the only candidates who succeeded in articulating a “biblical worldview” under Luntz’s questioning. Newt Gingrich got secular media attention for his Archie Bunkerish “take a bath and get a job” shot at the dirty hippies of OWS, but inside the megachurch where the event was held, the star was probably Santorum, whose slim presidential hopes strictly depend on Iowa social conservatives adopting him as their candidate much as they united around Mike Huckabee in 2008.

It is interesting that immediately after the event, Rick Perry joined Santorum and Bachmann as the only candidates willing to sign the radical “marriage vow” pledge document released back in July by the FAMiLY Leader organization, the primary sponsor of the Thanksgiving Family Forum. This makes him eligible for an endorsement by FL and its would-be kingmaking founder, Bob Vander Plaats. It appears a battle has been going on for some time in Iowa’s influential social conservative circles between those wanting to get behind a “true believer” like Santorum or Bachmann and those preferring to give a crucial boost to acceptable if less fervent candidates like Perry or Gingrich. The outcome of this internal debate, which was apparently discussed in a private “summit” meeting on Monday, will play a very important role in shaping the endgame of the Iowa caucus contest—as will the decision by Mitt Romney as to whether or not he will fully commit to an Iowa campaign (he is opening a shiny new HQ in Des Moines, which some observers are interpreting as an “all-in” gesture).

Without question, it became abundantly clear during the last week that the “Gingrich surge” in the nomination contest is real, or at least as real as earlier booms for Bachmann, Perry and Cain. The last five big national polls of Republicans (PPP, Fox, USAToday/Gallup, Quinnipiac and CNN) have all showed Gingrich in the lead. The big question is whether and when his rivals choose to unleash a massive attack on the former Speaker based on their bulging oppo research files featuring whole decades of flip-flops, gaffes, failures and personal “issues.”

Interestingly, though, Gingrich may have already opened the door to suspicious wingnut scrutiny without any overt encouragement from his rivals. During the last week’s second major multi-candidate event, the CNN/AEI/Heritage “national security” debate last night, Gingrich may have ignored the lessons of the Perry campaign by risking his own moment of heresy on the hot-button issue of immigration, calling for a Selective Service model whereby some undocumented workers with exemplary records could obtain legal permanent status if not citizenship. He was immediately rapped by Romney and Bachmann for supporting “amnesty.” We’ll soon see if Newt’s long identification with the conservative movement and his more recent savagery towards “secular socialists” will give him protection from such attacks, or if his signature vice of hubris is once again about to smite him now that he’s finally become a viable candidate for president.

Wingnut Watch: GOP Revenue Rejection Goes Beyond Intransigence

Posted on by The Progressive Policy Institute

It was a relatively quiet week in Wingnut World, with the loudest mouths probably conserving energy for cries of “betrayal” in the unlikely case that the congressional “super-committee” actually reaches a deficit reduction agreement in time to meet its November 23 deadline.

Believe it or not, there have already been “sellout” charges aimed at super-committee conservatives based on their dubious offer to accept $300 billion in loophole-closing revenue enhancements in exchange for reductions in the top marginal income tax rate and permanent extension of the Bush tax cuts (an offer Democrats summarily rejected as “unserious”). But beyond rejecting anything that remotely looks like a tax increase, conservative activists do not seem to have a very clear party line about what their congressional allies ought to do, with some welcoming a “sequestration” of domestic and defense funds as harmless, others demanding a “back-to-the-drawing-board” cold war against domestic appropriations (with specific venom being spewed at a pending appropriations bill boosting FHA funding), and still others following Newt Gingrich’s lead in treating the entire exercise as meaningless since any defense spending “sequestrations” could be quickly reversed after a presumed GOP landslide next November. Indeed, Gingrich favors dropping the sequestration trigger altogether.

On a less murky topic, predictably enough, municipal police actions against Occupy protests around the country have been greeted with much satisfaction in Wingnut World. Some conservative commentators, like Michelle Malkin, have been liveblogging the clashes in New York with something of the air of Romans watching the Christians versus the lions. Others, like Washington Times commentator Charles Hurt, took a less playful view of the protesters:

[R]ight about when their parents were sick and tired of them stinking up their basement playing video games all day, they realized there was an economic crisis going on.

So they gathered up their tents and sleeping bags, drifted to government property, took it over as if it were their own and gave themselves a name that perfectly reflects their ideology. “Occupiers.” As in Occupied Europe when it was being defiled by the Nazi Empire. The rampant anti-Semitism at their rallies has been shocking to behold, especially since these protesters profess to be the “open-minded” liberal types.

And ever since, they have been advancing their syphilitic cause, spreading disease, stealing, allegedly raping young women, leaving their trash around. And always quick to snap up any free services such as the chow line or testing for venereal diseases.

All righty, then!

Meanwhile, out on the 2012 presidential campaign trail, the much-predicted slowdown of the Cain Train has finally begun showing up in polls, alongside an equally-predictable rise in the fortunes of Newt Gingrich, who is now actually in the national lead according to at least one new survey (by PPP). And despite an ever-growing chorus of pundits deeming Mitt Romney the certain nominee, Romney continues to show little or no direct benefit from the serial collapses of his rivals.

Since actual voting will begin in Iowa in less than seven weeks, that is where the strange dynamics of this strange nominating contest will first begin to sort themselves out. At the moment, it’s anybody’s game: a new Bloomberg survey of likely caucus-goers showed a virtual four-way tie among Cain, Gingrich, Romney and Ron Paul (who has been running TV ads in the state for quite some time). Gingrich has pledged to spend 30 of the next 50 days in Iowa. But the big question remains what Romney does in that state; just yesterday, Gov. Terry Branstad warned him that he’d better start spending quality time in Iowa, or caucus-goers will punish him with a humiliating low finish. And that shot may in part be attributable to Romney’s decision to skip the next big Iowa event, this weekend’s “Thanksgiving Family Forum” sponsored by a trio of hard-core social conservative organizations (Iowa’s own FAMiLY Leader, the anti-gay marriage group the National Organization for Marriage, and CitizenLink, a Focus on the Family affiliate). Moderated by message-meister Frank Luntz (who will follow up the forum with a focus group of “Iowa moms”), the event will not be a traditional debate, but instead an interrogation of the candidates aimed at divining their “worldviews,” a buzz-word in Christian Right circles indicating their willingness to adopt of a rigorous “biblically-based” approach to every issue.

The “Thanksgiving Family Forum,” which will be held in a Des Moines megachurch, is transparently designed to provide a focal point for a consolidation of social conservative support around a single candidate of the kind that lifted Mike Huckabee to an unlikely victory in 2008. Since only two candidates, Rick Santorum and Michelle Bachmann, agreed to sign the FAMiLY Leader’s controversial “Marriage Vow” pledge document earlier this year, the odds are good that one of them will get the nod, though Gingrich has long-standing ties to Iowa social conservatives as well.

The candidate who not that long ago was thought to represent the best conservative option for denying Mitt Romney the nomination, Rick Perry, has adopted an interesting tactic to regain his own mojo. He’s made a large ad buy on Fox TV, apparently aimed at convincing a national conservative audience that he hasn’t been beaten down by his latest debate disaster. And he’s also released a new package of proposals to radically change all three branches of the federal government, including a shutdown of three major cabinet agencies (the subject, of course, of his debate “brainfreeze”) and elimination of lifetime appointments for federal judges (a very old wingnut hardy perennial). Perry’s campaign also made it clear he supported “personhood” constitutional amendments (banning all abortions and some types of contraception) like the one just overwhelmingly defeated by Mississippi voters. Clearly, Perry thinks the only way to get back into this turbulent race is to re-establish himself as the favorite candidate of Wingnut World.

 

Photo Credit: Kynan Tait

Italy Boots Berlusconi

Posted on by The Progressive Policy Institute

BerlusconiA funny thing happened on my way to an international forum on democracy and human rights in Rome last week: the Italian government fell. It was hard to concentrate on the business at hand with crowds gathering in piazzas to demand the head, figuratively speaking, of the man who has dominated Italian politics since 1994—Silvio Berlusconi.

What sparked the crisis was a sharp spike last week in Italian bond yields, which raised doubts about Italy’s ability to service its $2.6 trillion debt. The prospect of a default by Europe’s fourth-largest economy sent tremors throughout the euro zone. Forget about Greece: If big countries like Italy and Spain can’t pay their debts, European banks that hold all that sovereign debt will fail. Then someone—most likely Germany—will have to finance a massive bank bailout just like the United States did in 2007. Otherwise, a financial collapse would likely throw Europe, and probably the United States, into a bona fide depression.

Fortunately, this prospect seems to have concentrated minds in Italy. Arriving in Rome on Thursday, I found its usually fractious political class galvanized by the crisis and resolved to put a new government in place before the markets open today.

On Friday, the Italian Senate passed a budget with an initial set of reforms (including a hike in the retirement age) tailored to European Union specifications. On Saturday, Berulsconi resigned, as gleeful crowds chanted “Bye Bye Silvio” and sang the “Hallelujah” chorus outside the Quirinal palace. And on Sunday, Mario Monti, a widely respected technocrat, agreed to form a unity government.

As our own Congress dithers endlessly over debt reduction, it was nice to see democratic politicians somewhere acting purposefully and with dispatch. How long the Monti government will last, however, is anyone’s guess, especially since it must pass painful reforms aimed at paring down bloated state bureaucracies and stimulating private enterprise. But Rome’s tumultuous weekend seems to have made several things clear.

First, Italy’s sovereign debt crisis probably has driven a stake through the political heart of Berlusconi. In recent years, he has presided more than governed as Italy’s once-vibrant economy slowed down and its borrowing soared. Like a latter-day Nero, the 75-year-old Berlusconi, Italy’s richest man, seemed more interested in fiddling with underage girls in “bunga-bunga” parties than tackling structural reform of Italy’s economy.

Second, Berlusconi’s fall and Monti’s government of national unity have the potential to rescramble Italian politics in useful ways. Beneath a top layer of supposedly apolitical technocrats, Monti is expected to fill key sub-cabinet level posts with leaders from the center and center-left, shutting out the right-wing Northern League as well as the left’s unreconstructed Communists and Socialists. This could spur the emergence of a new coalition of the progressive center dedicated to reviving Italy’s global competitiveness rather than rehearsing old ideological arguments. Such a coalition might include pragmatic progressives like Rome’s former Mayor, Francesco Rutelli and Gianni Vernetti, whose Alliance of Democrats organized a fascinating, if overshadowed, conference featuring democracy activists from the Middle East, North Africa, China, and elsewhere.

Third, the imbalance between the power of global markets and the weakness of European governance has reached a sort of tipping point. The markets are now punishing spendthrift governments like Greece and Italy that have borrowed massively to cover the growing gap between public spending and anemic private sector growth. For these and other European countries, joining the euro-zone in 2002 was an opportunity to relax fiscal constraints, because such profligacy would no longer lead to currency devaluations. It turns out, however, that a common monetary union also requires common fiscal policies, and the 17 members of the euro-zone have no institutions for setting or enforcing such policies.

At its heart, then, the euro crisis is really a political crisis. I heard many Italian political leaders over the weekend argue that the salvation of the euro lies in “more Europe.” This means a resumption of the stalled march toward more comprehensive economic and political integration, which of course means EU members must surrender more sovereignty. This won’t be easy, especially if to average Europeans it means the pain and sacrifice of a thorough-going fiscal retrenchment, or bailouts for countries that have evaded the consequences of irresponsible policies by free-riding on the euro.

Italians, nonetheless, seem ready to cast their lot with Europe, even as they search for more effective political leadership to revitalize their economy.

Photo credit: Downing Street

Wingnut Watch: Ballot Initiatives Reject GOP Ideology

Posted on by The Progressive Policy Institute

Yesterday was Election Day in scattered parts of the country, and it was not a terribly successful election night in Wingnut World. Two ballot initiatives of special importance to hard-core conservative activists—Ohio’s Issue 2, an effort to overturn the state’s anti-public-union legislation, and Mississippi’s ballot item #26, an initiative to define legally protected human “personhood” as arising at the moment of conception—both went pretty solidly the wrong way from their perspective. Another less-visible initiative, in Maine, aimed at restoring same-day voter registration, which conservatives invariably oppose, passed easily, though Mississippi voters did approve a new voter ID law.

Statewide elections went as expected. Democratic KY Governor Steve Beshear was comfortably re-elected despite last minute charges by his Republican opponent that his presence at a Hindu ceremony connected to an Indian company plant opening indicated he didn’t love Jesus. In Mississippi, Republican Lt. Gov. Phil Bryant, a strong supporter of the Personhood initiative and a wingnut in good standing, nonetheless easily won the governorship over Hattiesburg mayor Johnny DuPree, the state’s first African-American gubernatorial nominee.

Downballot, Democrats easily won an Iowa special election to hold onto control of the state Senate (Republicans control the House and the governorship), but in Virginia, lost enough Senate seats to throw control of that chamber into a deadlock (there, too, GOPers control the governorship and the House), probably compelling a power-sharing arrangement.

But the big national news of the night involved the ballot initiatives in OH and MS. Repealing Gov. John Kasich’s S.B. 5, which radically limited collective bargaining rights for public employee unions, was a major national priority for labor, and also attracted a high-dollar pushback from out-of-state business and conservative groups, especially in the last few days before the vote. The margin of victory for the “No on 2” forces, 61-39, exceeded most expectations, and could affect anti-labor initiatives in other states. Given Ohio’s pivotal position in presidential elections, the vote will also be viewed by some as a trial heat for GOTV efforts in 2012, and as a reminder that the GOP’s success in 2010 was not necessarily part of a multi-cycle trend.

Mississippi’s Personhood ballot initiative also had considerable national implications, representing the most audacious goals envisioned in the anti-choice movement’s ongoing drive to undermine abortion rights at the state level. Aimed at defining human life as beginning at the moment of fertilization, Personhood initiatives are broadly understood as aimed not only at a total, no-exceptions abortion ban, but at an ultimate ban on birth control methods (the day-after pill, IUDs, and arguably oral contraceptives) that act after fertilization. A Personhood ballot initiative in Colorado failed dismally in 2010, but its proponents figured a state like Mississippi would be (if you will excuse the expression) more fertile ground, and succeeded in obtaining overwhelming support from GOP elected officials in the state, and even some Democrats. The 58-42 margin of defeat for the initiative on what was otherwise a fine day for Mississippi conservatives showed significant defections by GOP voters. In Harrison County (Biloxi), for example, a county where John McCain won 63 percent of the vote in 2008, and where voters yesterday gave a conservative voter ID initiative 64 percent, only 35 percent voted for the Personhood initiative.

While Personhood initiatives may continue to pop up, the Mississippi results will probably convince anti-choice activists to refocus on the more incremental strategy of “fetal pain” legislation and other restrictions based on the timing and nature of abortions, which are still in a constitutional limbo until court challenges are heard, along with an intensified effort to elect a Republican president in 2012.

The interest in yesterday’s elections provided a small and probably insignificant respite for presidential candidate Herman Cain, whose political condition has worsened dramatically thanks to the emergence of one of his two original sexual harassment accusers, and the appearance of a third woman who claims Cain committed what amounts to sexual assault. The Cain campaign’s poor handling of the allegations has continued, with the candidate holding a widely derided press conference yesterday to issue a series of wild conspiracy accusations, and a potentially self-destructive offer to take a polygraph exam. The saga shows no signs of ending soon, and although Cain has maintained his national and early-state first- or second-place standing in most of the scattered polling conducted after the allegations first emerged last week, there are signs it’s beginning to take a toll. Just as importantly, Cain’s erratic handling of the mess is beginning to embolden conservative opinion-leaders to break ranks and either challenge his account of his behavior, or simply write him off as too politically inept to be taken seriously as a presidential candidate.

Assuming Cain either weakens or crashes, the big question is whether that development will (a) cause Republicans to begin to unite around Mitt Romney as the safest choice in an exceptionally unstable field, (b) fuel a comeback by Rick Perry, from who Cain harvested the bulk of his October polling surge, or (c) lead to a late pre-Iowa surge by some other candidate with Tea Party appeal, such as Newt Gingrich or even Rick Santorum (whose monomaniacal grassroots campaign in Iowa is drawing some positive attention).

The only candidate who seems to have been gaining in the polls during Cain’s unraveling is Gingrich; a battery of new PPP polls in Mississippi, Ohio, and the Iowa state senate district holding a special election yesterday, all showed something of a Gingrich surge (he’s actually leading the field in MS).

The prospect of what he called “The Newtening” was so shocking to shrewd political analyst Jonathan Chait that he concluded: “It is probably time for me to stop making predictions of any kind about this race.” At a minimum, the pre-election candidacy crisis in Wingnut World should deter us all from betting the farm on any specific outcome.

Photo Credit: bjmccray

Can Unions Open Burma?

Posted on by The Progressive Policy Institute

PPI Special Report

The following is a guest column from PPI friend and sometime contributor Earl Brown, Labor and Employment Law Counsel for the American Center for International Labor Solidarity.

BurmaIf you want to see what a society without law or civic space looks like, go to Burma. A half century of military misrule has devastated this once fertile center of Asian science, scholarship, law, commerce and civic debate. But in this desert, Burmese activists are preparing to seize the potential democratic space recently opened up by the new regime. Last month, it issued a new labor law, the Labor Organization Law, which appears to allow independent unions to register and function legally for the first time in memory.

The new law allows the creation of new unions, with a minimum of 30 members. Burmese trade union activists are now using this new labor law and filing papers to establish free trade unions. In the past few weeks, groups of woodworkers, garment workers, hatters, shoemakers, seafarers and other trades, including agricultural workers, have registered openly as trade unions. After decades of unceasing international pressure and sanctions to little discernable effect, outside watchers of Burma are eager to see positive movement and are praising this new law. They see the new labor law as part of other highly publicized initiatives by the regime to open up Burmese society. For example, Burma’s new president has recently received the leader of the Burmese democracy movement, Daw Aung San Suu Kyi, in a highly publicized audience. The Burmese regime released 200 political prisoners in October and has also cancelled a huge dam project with Chinese construction firms that was fiercely opposed by villagers.

Whether these apparent openings—including the new labor law—are real is a matter of debate by those following events in Burma. All are watching to see the reaction of the Burmese regime to the efforts by Burmese industrial workers as they organize under the Labor Organization Law. Will the regime actually allow free unions?

Autonomous unions were once among the pillars of the robust civil society in Burma that had grown up in the face of British rule, fueled by a fierce desire for independence and democracy. Unions helped build this vibrant and diverse civil society by giving voice to industrial workers. Alongside associations of scholars, students, professionals in various disciplines, including lawyers, religious folks in temples and churches, ethnic and political parties, unions laid the basis for Burmese democracy. So did the Burmese bar.

True, many of Burma’s laws were repressive imports from colonial India. But the independent and anti-colonial Burmese bar was populated by talented advocates and drafters, employing both Burmese and British traditions and languages. In this bar, a skilled group of labor lawyers waged vigorous advocacy for both sides of the industrial relations equation, for unions and employers.

When General Ne Win seized power in the 1960s, however, he launched an attack on the diversity and vigor of Burmese civil society. Using the slogans of socialism, General Ne Win sought to replace peaceful debate about and advocacy of divergent interests with the dreary and artificial “harmony” of military rule. The honest articulation of any interests beyond those of the military was suppressed in the name of order. In this imposed order, unions, and lawyers as vehicles of advocacy and debate became targets. After 50 years of suppression, these once proud traditions of democratic trade unionism, of legal advocacy, and of civil debate eroded and eventually disappeared.

The demise of a vigorous civil society and civic debate did not steal the impulse for democracy. But it did eliminate robust traditions of independent trade unionism and law. Unions and legal institutions, such as independent lawyers, could have helped check the repressive hand of Burma’s military junta. That is why they, and most other independent civil society organizations, became targets of the military.

In her 2010 speech to the Community of Democracies on civil society, Secretary of State Hilary Clinton explained why dictators are impelled to suppress unions, lawyers and the other building blocks of that civic pluralism and robust advocacy so essential to sustaining democracy beyond elections:

Our democracies do not and should not look the same. Governments by the people, for the people, and of the people will look like the people they represent. But we all recognize the reality and importance of these differences. Pluralism flows from these differences. And because crackdowns [to civil society] are a direct threat to pluralism, they also endanger democracy.[1]

Freedom of association and expression is the air that union movements and lawyers must have to breath. Guaranteeing those rights is thus one first step to rebuilding the pluralistic Burmese civil society so necessary to democracy and economic development. Unions and lawyers are clearly key to recreating the vigorous democratic civic world and discourse that have been suppressed and degraded for so long inside Burma, and so necessary to any Burmese revival.

If you worry, like so many Americans, about excessive regulation, just check out recent Burmese history—where military officers can get a piece of your enterprise or endeavor at their whim. Talk to the Burmese entrepreneurs who without consent, compensation or process acquired new and rapacious military “partners” in their businesses. That’s what a world without rules and regulations looks like. A world without law, process, or lawyers does not have the diversity of interests needed to insure governmental accountability.

The International Confederation of Trade Unions (ITUC) has just completed an analysis of the new labor law, pointing out its many defects. It allows for the complete suppression of strike activity for wages, hours and working conditions. This important economic law was issued without any consultation with unions, independent scholars or employers. It is poorly drafted, and not harmonized with other Burmese laws or the new Burmese Constitution. It lacks clarity and important detail, and sadly reflects the deterioration of Burmese legal traditions such as draftsmanship. But, despite all these negative features, this new law seems to allow for registration of autonomous trade unions. The woodworkers and other workers who are registering under the Labor Organization Law will give the outside world, and Burma itself, a real test of whether this initiative in the direction of a freer civil society is genuine.

We, on the outside, will not only be able to see if the apparent opening of civil society is real, we may also see the recreation of a robust civil society with unions and other civic associations as new soil for the growth of democracy and the rule of law inside Burma. All concerned with the rule of law and democracy in Burma and Asia should keep their eyes on the efforts of the Burmese woodworkers, garment workers, seafarers and others to register free unions. Their efforts will tell us all if the openings are cosmetic for outside consumption or real for use by Burmese civil society.

[1] Clinton, H. (2010, July). Civil Society: Supporting Democracy in the 21st Century. Speech presented at the Community of Democracies, Krakow, Poland.

Wingnut Watch: Cain’s Latest Problem

Posted on by The Progressive Policy Institute

Herman CainAs the November 23 deadline for congressional action on a “supercommittee” package to reduce budget deficits by $1.2 trillion and avoid automatic domestic and defense cuts approaches, conservative activists have been steadily ramping up the pressure on supercommittee Republicans to hold a hard line against any tax increases. This missive from Heritage Action for America is pretty representative of the drumbeat:

Unfortunately, the “super committee” is veering off course and the odds are growing that massive tax hikes will be part of a final deal. Even worse, not all Republicans are willing to take massive tax hikes off the table. According to news reports, more than 100 House members–Republicans and Democrats alike–sent a letter to the “super committee” urging a “big, grand bargain–taking nothing off the table.” In Washington, that is code for a tax increase.

A few anti-supercommittee conservatives are willing to come right out and say that allowing across-the-board defense cuts to be enacted is an acceptable price to pay for avoiding tax increases. The most common rationalization is that these “sequesters” would not take effect until 2013, and a newly triumphant Republican president and Congress could fix the problem after the 2012 elections. Using the same kind of arguments, many activists have long claimed that a “grand bargain” that included major changes in federal retirement programs in exchange for tax increases would be unacceptable on grounds that Democrats would never keep their promises on spending in the future.

At an earlier point in the process, it appeared conservatives might allow some “wiggle room” for the supercommittee on taxes by considering the idea of a package that includes base-broadening “tax reforms” without raising actual rates on the wealthy or any major category of corporations. But the renewed popularity of sweeping, radical tax system overhauls, as reflected in the adoption of variations on the regressive “flat tax” idea by presidential candidates Herman Cain, Newt Gingrich and Rick Perry, has undermined what little support existed on the Right for revenue-raising elimination of “loopholes” under the general framework of the current tax code.

The same wingnuts who are having little trouble sticking to their no-compromise guns on deficit reduction are having a bit more trouble settling on a presidential candidate. A week ago, the big debate in Republican political circles was whether presidential polling front-runner Herman Cain would transform himself into a serious if unconventional candidate with a real organization and a consistent presence on the campaign trail, or instead would fade in the wake of either a comeback by Rick Perry or a sort of resigned acceptance, first by conservative elites and then by the rank-and-file, of Mitt Romney as the nominee. The betting line was not in Cain’s favor.

Then came Politico’s October 30 bombshell story revealing that the National Restaurant Association had settled two claims of sexual harassment against Cain during his presidency of the trade group in the last 1990s, and a couple of days of shifting stories from Cain and his campaign in reaction to the allegations.

Although the mainstream media has concluded from almost the very beginning that the Politico story means curtains for an already implausible Cain candidacy, it looks very different from Wingnut World. Though a few conservative opinion-leaders (mostly those thought to be friendly to Mitt Romney) have either kept their mouths shut or suggested Cain should come clean, the general reaction has been to defend him, with varying degrees of heat. The most common conservative media meme, one that Cain himself has encouraged, is to compare him to Supreme Court Justice Clarence Thomas as an outspoken African-American conservative who is being smeared by the “liberal media” and “the Left” generally, who are fearful that he will liberate his people from the “plantation” of subservience to Big Government and the Democratic Party.

Beyond the chattering classes, the very initial evidence is that rank-and-file conservatives are inclined to give Cain the presumption of innocence, and perhaps of innocence persecuted. Politico itself posted a headline today reading: “Iowa yawns at Herman Cain allegations.” The story attached to it had this very revealing passage:

Gregg Cummings, the Tea Party Patriots’ Iowa state coordinator, said among tea partiers the story of Cain’s sexual harassment allegations pales in comparison to the desire to have a conservative—“not Romney”—win the caucuses and the nomination.

“Hardly anybody is talking about it,” he said. “It’s not a big issue, in other words. I think the urgency of making sure that we get a conservative candidate to win the primaries is of greater concern to most of the tea party folks right now.”

More tangibly, the first poll taken entirely after the original Politico story broke, by Rasmussen in South Carolina, showed Cain with a ten-point lead over Mitt Romney and the rest of the field, his best showing to date in any South Carolina poll.

Sometimes damaging information about candidates just takes a while to build up steam in an array of media outlets and then penetrate the public’s consciousness. So Cain is hardly out of the woods, aside from the fact that more graphic details of his behavior, or indications of a cover-up, could soon emerge. But given the impulsive reaction in Wingnut World, it’s also possible, ironically, that this is exactly what the Cain campaign needed to distract attention from his lack of interest in world affairs, his waffling on abortion, or the details of his tax plan, and instead make him a martyr to the “constitutional conservative” cause that is still in search of a champion against Mitt Romney.

Photo credit: roberthuffstutter

It’s About (the) Time: Ending the Nonstop Campaign

Posted on by The Progressive Policy Institute

Somewhere in the last two decades, politicians began to believe that the way to win an electoral majority is not to prove that you can govern well, but to prove that you can campaign.

Today, politicians are caught in an ever-escalating, never-ending, 24-hour, 365-day campaign cycle dominated by the burden of raising enough money to wage a campaign creditably. For incumbents, the heft of a candidate’s war chest is what keeps potential challengers at bay—which means that even the safest members need the insurance of a sizeable sum of cash on hand. And for every candidate, last quarter’s results are just about the only proxy by which a candidate’s viability is judged.

The constant horserace over money (not ideas) has taken its toll on the quality of governance. For example, the Rasmussen report released a poll in July finding that 85 percent of Americans view members of Congress as “just out for their own careers.” Almost every poll finds Congress’s approval rating in the single digits.

Second, serious debate about any issue—e.g., the federal budget or taxes—is virtually impossible because there is no “safe period” in which an issue can’t be turned into a political football. Moreover, politicians simply have no time to devote to learning the arcana of policy. They are too busy attending fundraisers. As Republican freshman Richard Nugent said, “As soon as I got to Congress, people started asking me if I had started fund-raising,” Nugent said. “I was amazed at that. It seems to me that a person ought to get some results first before you start getting too focused on re-election. Otherwise, what on earth are the voters sending you to Washington to do?”