March 08, 2007

China & Taiwan's Running Dispute

The verbal shots across the Taiwan Strait were stark.

"Taiwan is our territory," said Tan Naida, a delegate to the National People's Congress in Beijing. "Just look at history. Why can't we take Taiwan back?"

"Taiwan wants independence," said President Chen Shui-bian of Taiwan in Taipei. "Taiwan wants to change its name, Taiwan wants a new constitution, Taiwan wants development."

That aspect of the running dispute between China and Taiwan over the island off the coast of China is clear enough. Much of the rivalry, however, is riddled with contradiction. The consequence is an uneasy and perhaps dangerous stalemate about which the Bush Administration has done little but wring its hands.

Perhaps the most evident contradiction is the difference between what Beijing says and what it does. The party line includes frequent appeals to "compatriots" in Taiwan to reunite with the mainland. It's a Communist Party version of: "Come back, Taiwan, all is forgiven."

Yet many Chinese actions alienate the people of Taiwan. Some is petty harassment. When Mr. Chen flew to Nicaragua in January to attend the inauguration of President Daniel Ortega, China pressed Mexico not to allow his airplane to fly through Mexican air space on the return trip, forcing the plane to swing out over the Pacific and adding several hours to the flight time.

Chinese officials seem to go out of their way to humiliate the Taiwanese. In international sports events, the team from Taiwan is forced to compete under the clumsy name of "Chinese Taipei." The same is often true in international economic forums.

During a seminar in Honolulu some months ago, the head of a Chinese delegation walked out in a huff when he discovered that staff members of Taiwan's quasi-official consulate were in the audience. Elsewhere, a senior Chinese official, approached by a TV reporter from Taiwan, sneered on camera: "Who cares about you?" That was televised all over Taiwan.

China's campaign to isolate Taiwan diplomatically is well documented. For years, Beijing has blocked Taiwan's application to join the United Nations and affiliated agencies such as the World Health Organization. That effort is often extended to non-governmental organizations.

Equally well documented is China's military modernization aimed primarily at Taiwan, including an estimated 1000 missiles aimed across the strait. Chinese leaders last week announced an 18 percent increase in military spending, to $45 billion. Many Western estimates place China's real military spending at twice that.

China's hostility clearly affects the attitudes of Taiwanese as seen in polls taken three times a year, the latest in December. About 85 percent opted for maintaining the status quo, meaning moving toward neither independence nor unification with the mainland. Taiwanese seem to take at face value the Chinese threat to launch an attack if Taiwan seeks formal independence.

Among the contradictions on Taiwan's side were those in the "Four Wants" proclaimed by President Chen last week.

Chen said earlier that Taiwan would not seek formal independence. He has said that Taiwan would not change its formal name, the Republic of China, to the Republic of Taiwan. He has said he would not seek a new constitution that would, in effect, be a declaration of formal independence. Only the desire for more economic development did not contradict earlier statements.

Buttressing President Chen's "Four Wants" have been new versions of history textbooks used in Taiwan's high schools that emphasize Taiwan's separate identity and renaming state-owned enterprises to substitute the word "Taiwan" for "China." Corporate executives say this is not easy as all sorts of legal and regulatory changes must be made.

Where the history of Taiwan was included in China's history before, the new series of four textbooks has a volume on Taiwan's history, another on China's history, and two on world history. Among the company name changes, the China Post Company has become the Taiwan Post Company and the Chinese Petroleum Corporation has become CPC Taiwan.

The Bush Administration, preoccupied with Iraq and other pressing issues, has tried to persuade both Taiwan and China not to make unilateral changes that would upset the status quo and what the White House and State Department see as stability across the Taiwan Strait.

A State Department spokesman said President Chen's "Four Wants" were "not helpful" about the same time the department issued a Congressionally mandates report on human rights in which China was accused of allowing human rights to deteriorate.

The open question is how long Taiwan or China will refrain from drastic measures to resolve the dispute.

March 06, 2007

Is Hillary Steaming on the Titanic?

Part of the dynamic that Senator Clinton always had working in her favor was the ability of her husband to deliver the black vote, en masse, for her if she ran into minor bumps along the way in Iowa, New Hampshire and even Nevada. This was always a critical element in why she was such an overwhelming favorite to capture the Democratic nomination. The Obama phenomenon has made this analysis inoperable.

Against candidates like John Edwards, Mark Warner, Evan Bayh, Bill Richardson, or even Al Gore, former President Bill Clinton would have been in a position to deliver Hillary the black vote. And when Senator Obama originally threw his hat in the ring there was a question of just how much of the black vote he would be able to get against Hillary. Six weeks ago I was of the opinion that she had a decent chance of winning the black vote, but today, in the aftermath of the David Geffen affair, which helped whack ten points off her lead, and then this weekend's head-to-head down in Selma, on the current trajectory there is no way Hillary Clinton will beat out Barack Obama for the black vote.

And what has to have the Hillary camp scared stiff is the possibility that not only will Obama win the black vote, but that he might win it overwhelmingly. Last night on Fox News' Special Report with Brit Hume, Fred Barnes suggested that Obama would win 80% of the black vote. Today I would agree that 70 - 80 percent is a very real possibility.

If you watch Obama's speech from this weekend he sends a clear message that he is not going to let any campaign try and make the case that he is "not black enough." As the first of the second generation of black candidates to run for president -- as opposed to Jesse Jackson and Al Sharpton, who had no chance of winning the White House -- not only does Barack Obama have a very real chance of being the next president, but at the current rate he may well be the front-runner by summer.

He has closed Hillary's recent 20-point plus lead to only 10.2% in the latest RCP Average; he trails Rudy Giuliani by only 3.5 points and actually leads John McCain by 1.4% in today's RCP Average.

Obama's ability to take away the black vote, en masse, from the Clinton campaign may turn out to be the iceberg that sinks the H.M.S. Hillary.

February 28, 2007

Giuliani Out Front, Obama Gaining on Hillary

Both ABC News/Washington Post and Diageo/Hotline released major polls on the 2008 campaign yesterday. On balance the numbers were positive for Barack Obama and Rudy Giuliani and mixed -- at best -- for Hillary Clinton and John McCain.

The favorable/unfavorable ratings of Giuliani versus Clinton in these two polls are striking. Rudy sports spreads of +36% in the ABC/WP (64/28) and +33% in Hotline (58/25) compared to Hillary's barely positive spreads of +1% in ABC/WP (49/48) and +3% in Hotline (49/46). The Giuliani/Clinton differential is over 30 points in Rudy's favor.

Giuliani's favorability ratings will only go lower as the campaign progresses and if he does win the Republican nomination, by Election Day there is no chance he will have favorable/unfavorable spreads over 30 points. However, the bigger unknown is where will Hillary Clinton's favorable/unfavorable rating head over the course of the campaign. Usually candidates' favorability ratings deteriorate as a campaign intensifies, which, given where Sen. Clinton stands today, does not bode well for her in both the primaries and the general election. The question is will the fact that she has been such a public and polarizing figure for over 15 years mute the historical tendency for candidates' unfavorable ratings to climb. In other words, does the public know all of Hillary's negatives?

To the degree Sen. Clinton remains the favorite and the likely Democratic nominee there is a floor for how low her favorability rating may fall. But if the shield of inevitability surrounding her continues to crack and Obama (or John Edwards or Al Gore) becomes a real alternative, then Democrats may begin to turn on Clinton. This of course would have serious implications on her ability to hold on to the nomination, but would also negatively affect her general election prospects.

As a point of reference the Final RCP Favorable/Unfavorable Averages going into the '04 election for President Bush and John Kerry were +7.4% for Bush and +1.2% for Kerry -- a differential of 6.2% for Bush. Today's Giuliani/Clinton differential is over 30 points in Rudy's favor. Clinton can potentially close that gap to single digits, if she is able to keep her favorability ratings even. But if her numbers go negative and stay negative, she could be digging herself (and Democrats) an insurmountable hole against a candidate like Giuliani, who today has plus 30% favorability ratings. Giuliani's ratings will fall, but if he is the Republican nominee they will almost assuredly be positive in the spring of 2008.

Democrats are certainly aware of Clinton's vulnerability in this regard, which makes Obama's strong favorability ratings of +23% in the ABC/WP (53/30) and +31% in Hotline (50/19) all the more attractive to Democrats looking for a general election winner. On the back of the Geffen imbroglio (which unquestionably hurt Hillary) the last thing the Clinton machine wants is a consensus to form that Obama would fare better in the general election. Zogby's head-to-head polls also out this week which show Hillary trailing Giuliani and McCain by 7 and 8 points, while Obama leads both by 6 and 4, don't help in this regard.

McCain who is increasingly becoming the odd-man-out has some relatively good news in that his favorability remains quite strong -- +17% in ABC/WP (52/35) and +22% in Hotline (58/26), which bodes well for his general election prospects. However, his horserace numbers in the Republican field have to be troubling to his campaign as Giuliani beats him by 23 points and with Newt Gingrich out of the race by a whopping 30 points (53/23) in the ABC/WP poll. With sustained numbers like that, the general election is going to be irrelevant for McCain.

All the momentum continues to ride with Giuliani and Obama, while the long-time front-runners of McCain and Clinton flounder. McCain lost his front-runner status several weeks ago; we'll see about Hillary's over the next few months.

February 15, 2007

Running the Republican Numbers on Rudy

Trying to read too much into any 2008 poll at this point, especially with respect to horserace numbers, is somewhat silly and a waste of time. But the new FOX News poll does have some interesting tidbits in the internals asking about voters' general impressions on issues. Again, I don't want to make too much of the numbers, only to point them out as more grist for the mill.

Here are the numbers that have some relevance to Mitt Romney:

Are you more who are more or less likely to support a candidate who is a Mormon?
Republicans only:
More likely 8% (a lot more likely 4%, somewhat more likely 4%)
Less likely 30% (a lot less likely 19%, somewhat less likely 11%)
Not a major factor 59%

Are you more who are more or less likely to support a candidate who has changed his or her position on the issue of abortion?
Republicans only:
More likely 16% (a lot more likely 6%, somewhat more likely 10%)
Less likely 28% (a lot less likely 16%, somewhat less likely 12%)
Not a major factor 39%

And here are the numbers with some relevance to Rudy Giuliani:

Are you more who are more or less likely to support a candidate who is pro-choice on the issue of abortion?
Republicans only:
More likely 22% (a lot more likely 12%, somewhat more likely 10%)
Less likely 46% (a lot less likely 36%, somewhat less likely 10%)
Not a major factor 30%

Are you more who are more or less likely to support a candidate who supports civil unions
for gays and lesbians?

Republicans only:
More likely 8% (a lot more likely 5%, somewhat more likely 3%)
Less likely 50% (a lot less likely 39%, somewhat less likely 11%)
Not a major factor 38%

Obviously, as a general proposition, the numbers show that between the two, Rudy has the more significant obstacles to overcome. But we already knew that.

Nevertheless, Rudy beats John McCain handily in a head to head match up, 56 to 31. Twenty-four percent of Republicans say they would "definitely vote for" Rudy, 56% say they "might vote for" him, and 17% say they would "under no circumstances" vote for Giuliani. McCain's numbers are slightly worse: 13% "definitely vote for," 54% "might vote for," and 25% "under no circumstances" vote for.

The biggest red flag for Rudy has to be that only 42% of Republicans surveyed correctly identified him as pro-choice. Twenty-one percent of Republican voters have it wrong and think Rudy is pro-life, and another 36% of Republicans don't have a clue what his position on abortion. In other words, nearly six out of ten registered Republican voters have yet to learn something about Rudy which, we can infer from the first question on abortion, will make close to half of them either "somewhat" less likely or "a lot" less likely to vote for him. There's no doubt the same holds true of his position on civil unions for gays, and the Second Amendment as well.

In time we'll see if Rudy has the skill and the charisma to defuse these differences with the Republican base and also whether conservative Republicans are willing to cut Giuliani any slack on social issues out of deference to his superior leadership skills and his commitment to fighting the war against Islamic jihadists, which is the overriding issue for most Republican voters.

November 28, 2006

Midterm Results Point to Increased Volatility Among the Electorate

Yesterday USA Today carried a story titled "Democratic Gains in Suburbs Spell Trouble for GOP."

Democrats carried nearly 60% of the U.S. House vote in inner suburbs in the nation's 50 largest metropolitan areas, up from about 53% in 2002, according to the analysis by the Metropolitan Institute at Virginia Tech.

This isn't surprising, and it comports with other data showing Republicans lost Independent voters. Over the next several months there will be considerable debate about whether the '06 mid-terms foreshadow the beginning of a more significant realignment away from the GOP towards the Democratic Party.

I think it is wise to be careful not to draw too many sweeping conclusions from the mid-term results, because of Iraq's dominating influence over the election. There is no doubt that Republicans lost Independent and moderate voters, and that they lost voters in the suburbs. The real question is whether this is a one-time event or the beginning of a trend. Was 2006 more of a vote of no-confidence on U.S. Iraq policy, or was it the early stages of a real and sustained move among swing voters to the Democrats?

Independent voters are becoming a more significant slice of the voting public, and to the degree these voters break solidly toward one party - as they did this year - they have the ability to produce dramatic swings in the final election results. However, both parties would be foolish to think that they have an easy "in" with this swing block. Democrats would be naive to think these voters are now solidly behind a Nancy Pelosi agenda and Republicans would be equally naive to assume recent Republican-leaning Independents who deserted them this year are going to automatically return to the fold in 2008.

After the 2000 election Michael Barone referred to America as "The 49% Nation" in the Almanac for American Politics:

In 1996 Bill Clinton was re-elected with 49.2% of the vote. That same year Republicans held the House when their candidates led Democrats by a 48.9% to 48.5% margin. In 1998 Republicans held onto the House when their candidates led in the popular vote by 48.9% to 47.8%. On November 7, 2000 George W. Bush won 47.9% of the vote and Al Gore 48.4%. The same day House Republican candidates led Democrats by a 49.2% to 47.9% margin. Round off these numbers and you have 49%, 49%, 49%, 49%, 48%, 48%, 48% 49%, 48% - essentially the same number over and over.

In the 2004 presidential election 47 out of 50 states voted exactly the same way they did in 2000, with Kerry coming within a tenth, 48.3% of Gore's 48.4%. The favorable political winds from 9/11 and the War allowed President Bush and House Republicans to break out of the 48/49 deadlock with Bush drawing 51% against Kerry, and House Republicans 51% in 2002 and 50% in 2004.

But this year the mess in Iraq and the lack of any clean solution to the conflict destroyed the GOP advantage on national security and provided the catalyst for the Democrats' 52%-53% victory in the House vote.

The size of the Democratic victory is significant, though I think it speaks more to an increase in election volatility rather than a longer-term directional move toward the Democratic Party.

Volatility is retuning to American politics. The "49% Nation" stasis of the last decade is poised to be cracked wide open. This means great opportunity and great risk for both parties. Real world events and the respective leadership we see from each side, along with the choice of nominees for 2008 and the platforms they run on will have massive influence over the voters in the middle who determine the majority.

Depending on the path the parties choose over the next two years, the potential for either an electoral blowout or a significant third party candidate in 2008 is very real.

November 13, 2006

The Libertarian Effect

In one closely watched Congressional race (Sodrel v Hill, IN-9) and two critical Senate races (Missouri and Montana), the Republican candidate was defeated by fewer votes than the Libertarian candidate received.

[Note: the last data I could find on the Missouri race still had two of the 3746 precincts to report, so it is possible that statement isn't true for Missouri, but if it is not true it is still very close and does not diminish my point.]

In other words, in these two critical Senate races and if the Republican had gotten the Libertarian's votes, the Republican would have won.

For the rest of this article, please recognize that I am speaking of the small-"l" libertarian, and not the Libertarian Party of the candidates mentioned above. A "libertarian", in the shortest definition I can muster, is someone who is fiscally conservative and socially liberal. In other words, it is someone who wants the government to perform a very small set of legitimate functions and otherwise leave us alone.

I can hardly contain my glee at seeing this happen after years of hoping it would. And in such dramatic fashion, with such important results. I did not hope it would because I wanted Republicans to lose, but because the Republicans had become corrupted (by which I do not mean corrupt in the typical sense.) They became enamored of power, and believed that they could get away with expanding the size, intrusiveness, and cost of government as long as they had government aim for "conservative" goals rather than liberal ones. This loss, and the way it happened, was the best thing that could have happened for Americans who care about a government focused on limited government and liberty.

No, the Democrats are not that government. They believe in anything but limited government, and they only believe in liberty in one's personal life, but not in one's economic life. In a sense, Democrats believe that the citizens work for the government.

Republicans on the other hand have acted in just the opposite way: they believe in economic liberty and they know we do not work for government. But they do not believe in personal liberty. The failure of the strategery of the Republicans, to focus on "the base" by trotting out social issues such as the South Dakota no-exception abortion ban (which lost, I'm pleased to say) demonstrated two things: First, social issues do not have long coat-tails. Second, the GOP base is fiscal conservatives more than it is social conservatives.

Fiscal conservatives, even more than social conservatives, were the demotivated voting block. Fiscal conservatives who are not socially conservative, i.e. voters who are libertarian even if they don't know it or wouldn't identify themselves that way, were the key swing vote in this election and were the reason that the GOP lost Congress...the Senate in particular.

In a recent study called "The Libertarian Vote", David Boaz (Cato Institute) and David Kirby (America's Future Foundation) discuss the growing number of American libertarians, the growing dissatisfaction among them (including me) with the GOP, and the continuing shift in voting patterns caused by that dissatisfaction. Tuesday held the obvious conclusion of this shift.

The party which went from reforming welfare to banning internet gambling by sticking the ban inside a port security bill, the party which went from Social Security reform to trying to amend the Federal Constitution to prevent gay marriage, the party which went from controlling the size and scope of government to banning horse meat became a party which libertarians and Republicans alike could not stomach.

The Democrats are a disaster, though they probably realize they need to move to the center. The Republicans have just been taught a brutal lesson that they also need to move to the center (on social issues) and back to fundamental principles of our Founders on issues of economics and basic liberties. No party can rely on the unappealing nature of their opponent to be a strong enough motivation to win elections, nor should we let them win if being just a bit better than the other guys is all they aspire to.

What I love about libertarian voters is that they vote on principle, not on party. The GOP might not like it, but politics should not be about blind loyalty if your party has lost its way. So, I disagree with suggestions that libertarians are fickle and unreliable voters. Instead the Republicans became an unreliable party. The Democrats on the other hand are extremely reliable -- they will always raise spending and taxes, get government involved where it doesn't belong. But other than the tax cuts of several years ago, the Republicans have been no different other than choosing different areas of our lived to intrude upon.

I hope that the result of the Libertarian Effect, particularly on the GOP, will be that the next election may provide us an opportunity to replace this batch of Democrat placeholders with Congressmen who not only have read the Constitution, but respect it. Congressmen who understand that Republican voters do not elect politicians to have them impose their (or our) morality on the people, but rather to keep government from interfering in our lives and leaving us, in the immortal words of Milton Friedman, "Free to Choose".

November 10, 2006

McCain/Pawlenty in 2008

Looking ahead to the 2008 electoral map, there are two regions where the parties are increasingly competitive: the Southwest quartet of Colorado, New Mexico, Arizona and Nevada and the upper Midwest trio of Minnesota, Iowa and Wisconsin.

In what turned out to be a very rough year for Republicans, Tim Pawlenty's reelection in the Minnesota Gubernatorial race, coupled with the 2008 GOP convention in Minneapolis-St. Paul and Minnesota's ten electoral votes, should elevate Governor Pawlenty to very near the top of the VP short list - irrespective of who the Republican nominee turns out to be.

Two and half weeks ago I wrote:

With the possibility of a Democratic takeover of Congress having risen considerably these last few weeks McCain is well positioned to pick up the pieces from a dispirited and angry Republican party if they indeed lose two weeks from today.

At the end of the day McCain's biggest appeal to Republicans in the fight for the nomination will be his claim (credibly) that he can win in 2008. And a Speaker Pelosi and Majority Leader Reid could be all John McCain needs to convince enough nervous conservatives to get behind him to ensure blowing the Democrats out of the water in 2008.

Republicans are a bit stunned right now, but I don't think conservatives outside of Washington DC are necessarily that upset with Tuesday's result. Don't get me wrong, Republicans didn't want to lose Congress, but they also understand that realistically the election results aren't going to change much with President Bush still in the White House. There was little reason to think the last two years of the Bush administration would get anything of consequence accomplished with a narrow Republican majority. Now with the Democrats in charge of Congress, the odds highly favor nothing of consequence getting done. The number of substantive issues that are going to satisfy 40 Republican Senators, President Bush's veto, and the Democratic caucuses in the House and Senate are close to zero.

Which means we are in a holding pattern until 2008.

As big as the 2006 election was, the truth is it was really just a warm-up for 2008. With the almost certain likelihood that at least one of the liberal members of the Supreme Court will step down in the next 6 years the -- and with four solid conservative votes in Scalia, Thomas, Roberts and Alito -- all three branches of government will be riding on the 2008 election. (One consequence of losing the Senate is President Bush will not be able to get another Alito or Roberts confirmed.)

Which brings us to John McCain and 2008.

The hostility toward McCain in conservative quarters is real and significant. However, as the magnitude of just how big the 2008 election will be creeps into people's minds, two trends that are very likely to occur over the next year are 1) a rapprochement between McCain and conservatives, and 2) a significant ratcheting up of anti-McCain rhetoric and demonization from the MSM. Ironically, the increase in hostility to McCain from the Washington press corps will help him significantly in his battle for the Republican nomination.

It should be said McCain is not a lock; the anti-McCain animus in conservative circles is very real. But the prospect of a Democratic president with a Democratic Congress and multiple Supreme Court appointments will concentrate many a Republican mind.

The Republican Party would also be well served to a tilt back toward to its Western-style Goldwater/Reagan roots, promoting individual freedom and limited-government. McCain's record on spending and national security issues is very much in the Goldwater-Reagan mold, and if he can reassure conservatives on judges he will become the heavy favorite for the GOP nomination.

October 10, 2006

Will GOP Mobilizaiton Make A Difference?

Peter from Pasadena writes with an excellent question:

I am hoping that at some point you might comment at the site on the election and polling impact of the micro-targeting and 72-Hour turnout techniques that we have heard so much about the Republican Party using. These techniques have evidently been responsible for anomalous and ahistoric levels of GOP turnout when specifically and thoroughly applied in the last few election cycles. Are they powerful enough to drive surprise elections results on November 7? If so, to what degree?

This is a really fantastic question. Unfortunately, it admits of little more than an anecdotal/intuitive answer. The effect of voter mobilization upon final vote turnout is something that has been under-studied in scholarly circles. I think this has to do with a lack of data. Offering a rigorous test of voter mobilization -- one that makes a serious attempt to identify whether the apparent link between turnout and mobilization is not simply a product of spurious causality -- would be difficult to do because parties, candidates, and outside interest groups do not offer the details of their programs to social scientists.

To appreciate this, consider what we would have to do to really test the effectiveness of mobilization. You would build a model that predicts the final vote in a district that depends upon a whole host of factors like demography, candidate spending, voter interest, etc. To inquire whether the 72 Hour Program makes a difference, you would include a measure of it in your model. Ultimately, your goal would be some kind of equation that predicts how a party's share of the vote. For instance:

Republican Share of Vote in District = Baseline + Influence of Demographic Features + Influence of Candidate Spending + Influence of Voter Interest + Influence of Resources Dedicated to GOTV Effort

The idea here is that each of the factors on the right-hand side of the equation has an independent effect on vote choice. We would expect the GOP GOTV's efforts to be positively related to GOP share of vote, holding all of the other variables constant, and that its positive relationship is not explicable by simply random factors (i.e. the difference between the reported effect and 0 is outside the "margin of error").

The problem is that we cannot really "operationalize" the final variable, resources dedicated to GOP GOTV effort, because we lack the data. This is a general problem with the parties: they are public-private organizations, and only required to release financial data at a level of specificity that is much lower than what we need to "run" this model. What is more, they are not required to release information on how they organize their operations - so we cannot even necessarily use a measure like "RNC Spending In State" because who knows to what extent the state/local parties are picking up the tab for GOTV efforts. There is plenty of legal "money laundering" that goes on between party organizations.

So - we cannot say conclusively that the GOP's 2004 efforts had a decisive effect, nor can we make a conclusive argument for 2006. We simply lack the data.

My intuition is that mobilization will make a difference, though not as much as it did in 2004 and 2002. Observing political actors gives us some prima facie evidence on this front. I tend to heavily discount the "conventional wisdom" of journalists/pundits because the nature of their jobs is to just offer endless pontification -- day in, day out. There is no consequence if a pundit is wrong. No real reward if a pundit is right. So, they can go down any randomly incorrect causal path and it will not make one whit of a difference in the world. Their job is just to "blah blah blah" all day, right or wrong. Political operatives are very different. Unlike the pundit class, where there really are no stakes whatsoever, the stakes are high among politicians and their strategists. And I have noticed that all political operatives seem to be in awe of the GOP's current program. The GOP views it as their secret weapon. The Democrats view it as that which could doom them. Apparently, its force is so great that it induced Dean, Schumer and Emanuel -- three incredibly assertive and self-confident "alpha" males, who between them strongly hold two radically different visions of the future of their party -- to reach an armistice. That is something.

More generally -- voter mobilization is a long-standing tradition of American politics. If it did not work, I suspect that strategic politicians would have moved away from it long ago. So, the fact that we cannot demonstrate its efficacy via a statistical model does not mean that it is ineffective. Our inability is a testament to our lack of data.

As I mentioned, I think the difference will be less than it was in 2004 and 2002. The presumably dispirited state of those the program seeks to mobilize seems to me to necessarily reduce its efficiency (i.e. it will cost the GOP more money to be as effective as it was in the past). Mobilization reduces the costs (and increases the benefits) of voting by reminding people to vote, by helping them get to the polls, by making them feel like they are performing a civic duty, etc. Accordingly, its effectiveness is predicated upon the voter's assessment of the costs/benefits of the voting act. If GOP voters are seeing lower benefits to voting because of dispiritedness, then the same amount of mobilization activity will be less effective, as the average voter needs "more" to get him to the polls.

But just how dispirited is the GOP base? Is the media correct about their assessment of it? I'll try to tackle that tomorrow.

September 20, 2006

How Much Trouble Is Chocola In?

I noted with interest the recent publication of a Research 2000 poll from Indiana's 2nd Congressional District. It showed Democratic challenger Joe Donnelly with an impressive 8% lead over 2 term representative Chris Chocola. Even more worrisome for Chocola is that Donnelly has hit 50%. What is more, several previous polls have given Donnelly a lead outside the margin of error.

The Indiana 02 race serves as an interesting contrast to what has been happening in many districts around the nation. Races that, perhaps in the Spring, seemed to be vulnerable for the Republicans are now appearing to be less vulnerable. I am thinking in particular of CA 11, KY 03, NV 03, NH 01, NH 02, NJ 07, NY 19, NY 20. There were either strong candidates in the mix, strong fundraisers in the mix, or weak incumbents in the mix to give the NRCC worries about these districts as late as Memorial Day. But -- Democratic challenges have not really materialized in any of these places. What is surprising is that these districts are, at best, only marginally Republican. So, it is surprising to see these districts dematerialize for the Democrats. Back around Memorial Day, most of these were at the top of my watch list (well -- not CA 11 so much).

On the other hand, there were just as many downright conservative districts that seemed to be toss-ups back around Memorial Day. Of these I am thinking of IN 08, IN 09, KY 04, NC 11 and VA 02. Much like the aforementioned marginal districts, all of these featured one or two things that disadvantaged the Republican incumbent. Either he/she was new, not a very good candidate, saddled with ethical questions, facing a top tier challenger, etc. However, they were all districts in what really must be classified as heavily Republican turf. Off the top of my head, I believe Bush's average share of the two-party vote in these six districts was something like 59%.

Accordingly, one would expect that, if districts were going to fall off the map, it would be these districts. But these conservative districts really have not fallen away. They have stayed competitive. The Democrats, it seems, stand a better shot at taking out a Republican incumbent in a district that went 59% for Bush than they do in a district that went 52% for Bush.

And then there is IN 02. This was really on nobody's radar as of Memorial Day. And it seemed to have been off the radar for good reason. Chocola won his sophomore effort with 54% of the vote. Not terribly impressive for a second run, but not too shabby, either. Unlike somebody like John Hostettler in IN 08 or Charlie Bass in NH 02 -- he was not a quirky candidate. He ran a traditional, and traditionally funded, campaign. He spent $1.4 million, twice as much as his opponent, in 2004. A good show. His district is not the most Republican in Indiana, but Bush did win it in 2004 with 56% of the vote. The best news for Chocola seemed to have been that he drew the same challenger as 2004 -- Joe Donnelly, who has never held elective office. This, to me, was a sign that the Democrats were not successful in their recruitment endeavors for IN 02, if they tried at all (they probably did). A political neophyte who loses by 9% two years prior is not your "go to guy" to pick the seat back up.

But, in the Spring, moved in with ads against Chocola, and his numbers started to soften by the summer. And they have gotten softer. And softer. And then in mid-September, Research 2000 releases a poll that shows Chocola down by an eye-popping amount. And, Chocola only offered tepid protest.

IN 02, just like IN 08 and the rest of the aforementioned tight races, feature two important Republican advantages. First, incumbents are running for reelection in all locations; while these incumbents are relatively weak, none of them have any damning weaknesses (Charles Taylor in NC 11 comes the closest to that, but he wheathered ethical questions several cycles ago). None of them are Tom DeLay or Bob Ney weak. But they are also not Conrad Burns or Rick Santorum weak. Incumbency is still an advantage, not a liability, for them; though its boost will be muted in these districts because none of them have really built for themselves the "personal vote" that insulates so many others. What will be of more significant advantage in these districts is that they are all Republican in their partisan orientation. All of them, historically, vote for Republican presidential candidates at a larger percentage than the nation as a whole. This implies that, at the least, a strong plurality of voters in these districts are Republicans.

If Chocola was down 8 in a district that leans Democratic usually, it would be time to write him off. And the NRCC most certainly would. But, with a district that leans Republican, he can still expect at least some of the voters in the district to "come home" to him. Whether enough of them will is hard to say. Charlie Cook has IN 02 as a toss-up. Stu Rothenberg sees it leaning to Donnelly. Both of them could make strong arguments that ultimately would boil down to how much of Chocola's base is going to come back his way. At this point, the expectation that Republicans will come home in sufficient numbers is still nothing more than an expectation -- and so, minimally, you'd have to go with Mr. Cook.

This race, and this as yet unfulfilled expectation, gets to an interesting phenomenon about this election. It is strange that so many of the races identified as toss-up or even as leaning Democratic are actually in solidly conservative districts. It is also strange that the downgrading of races that seems to have taken place recently is in relatively moderate districts. This indicates to me some instability in the consensus estimate of vulnerable races. By the estimates of most analysts, we should expect the Democrats to get 20% up to even 40% of their seats from conservative districts. In 1994, the GOP picked only about 12% of their seats from districts that were as liberal as these were conservative.

Now -- of course -- this could just be the way things work out this time around. All of these incumbents in conservative districts have weaknesses. Some of them have significant weaknesses. If each of them has a non-zero chance of defeat, there is necessarily a non-zero chance that all of them could lose. However, it seems unlikely that such a large proportion of Democratic gains would come from these districts, given that we know that (a) people tend to vote their partisanship in congressional elections and (b) when they vote against their partisanship they tend to do so to support the incubment. In other words, we should not expect the GOP to lose such a large proportion of its seats in solidly Republican districts, but rather in marginally Republican districts and marginally Democratic districts. What I mean is that such hefty Democratic gains in Republican areas would violate the narrative of congressional elections. You'd eventually see somebody at some academic conference panel on the 06 elections start talking "realignment," which would be extremely peculiar as the House has never once been the first mover in a realignment. It tends to be the last.

What does this mean moving forward? Well -- if 30% of GOP loses do not happen in solidly Republican districts, if the final number is more like 12% -- one of two things would have occurred. (A) the Democrats, come October, start to fizzle out in these races as Republicans "come home" to Republican incumbents; ultimately, the Democrats pick up less than the consensus estimate. (B) The Republicans, come October, start to see a much more sizeable playing field, as Republicans in moderate districts start to abandon Republican incumbents just as is happening in these districts; ultimately, the Democrats pick up more seats than the consensus estimate. Those aforementioned races that are of late off the radar would come back on.

Simply stated, the fact that there are right now so many solidly conservative districts on the toss-up list is a sign either that Democratic strength is overstated or understated.

September 19, 2006

What is John McCain's 2008 Strategy?

Senator John McCain's handling of the detainee issue with the President could have very long-reaching political ramifications. By and large, McCain had been doing a pretty good job over the last ten months aligning himself with President Bush and signing up high-profile Republicans for his 2008 run. McCain seems to have learned his lesson from 2000 that if he wants to be President as a Republican, he first has to win the Republican nomination.

On a personal level as someone who firsthand experienced brutal torture as a Vietnam POW I am sure McCain is acting on this issue out of personal conviction. So while the substance of his position may not be open much compromise, the public relations angle of how he handles this blowup certainly is. Looking at this issue politically, McCain's approach only works if the McCain camp has strategically come to a decision that the Republican nomination is simply unattainable and that an independent bid is his only realistic chance to win the Presidency. But that logic doesn't make a lot of sense as McCain has no reason to think he doesn't have a very good shot of winning the GOP nomination.

At this stage in the '08 nominating battle McCain, Giuliani and Romney clearly look like the Big 3. And while Giuliani looks good in some of these early polls, McCain still has to be regarded as the front-runner. That is what makes this fight with the President all the more perplexing. Perhaps McCain feels his history as a decorated POW in Vietnam will provide him cover on this issue and it some sense it definitely does. But McCain has only so many more sticks he can shove into conservative eyes before he really starts to hurt his chances for the GOP nomination.

The political error McCain and his advisors are making, insofar as it relates to 2008, is that this isn't about the specifics of the policy, which will be sorted out in time and which McCain's war record does provide him cover with conservatives. What really hurts him looking toward 2008, as far as the nomination, is his unwillingness to engage in partisanship. As we enter the election season, partisan Republicans see President Bush getting engaged and turning the 2006 debate toward issues that will help Republicans keep Congress - and they see John McCain personally stepping in and halting GOP momentum.

Partisanship is what conservatives want to see from John McCain. One of the reasons the socially liberal Giuliani is acceptable to many conservatives is his willingness to be partisan. If John McCain still wants to be President - and if he wants to win the Presidency running as a Republican - then he pretty quickly needs to start picking fights with Harry Reid, Hillary Clinton and Chuck Schumer and not President Bush. If McCain is running for President as an Independent, then he's following a perfect strategy.

August 04, 2006

The End of the Right?

E.J. Dionne may have a special affinity for declaring various ends to conservatism. But that doesn't mean he's wrong. Make sure to check out his piece today (also linked on the main page) on "The End of the Right?"

Sure, the GOP's in trouble in 2006. But its problems go much, much deeper than that. Under George W. Bush, conservatism has ceased to mean much of anything at all. It's not about small government, it's not about fiscal discipline, it's not about states' rights, it's not even about competent war leadership. And, as Dionne says, it reached something of a low last night with the Republicans trying to swap an increase in the minimum wage (which Republicans are supposed to hate as a government intrusion into the economy -- and an economically illiterate one at that) for a repeal of the estate tax (a good idea, certainly, but far from a top priority).

How has Bush led us to such incoherence? Andrew Busch, author of Reagan's Victory: The Presidential Election of 1980 and the Rise of the Right, put it well in an op-ed on OpinionJournal earlier this week: "Mr. Bush has neglected the critical task--carried out by Barry Goldwater, Ronald Reagan, and Newt Gingrich--of advancing a public argument that connects his otherwise disparate policy decisions to a broader philosophical framework. He has failed to articulate the philosophical argument for limited government that once defined the Republican Party."

Busch argues, correctly I believe, that coherent argument is much more important to the GOP than to the Democrats. They want to give away free stuff; that's easy to understand. We want to take away free stuff, lower taxes, and strengthen the economy and civil society; and that takes a lot more explaining. Without coherent argument or any sense of conservative first principles, Bush has repeatedly given away the store in the name of compassionate conservatism: with the worthless No Child Left Behind law, with the extravagant Medicare prescription-drug bill, etc., etc.

How to come back? Busch outlines a conservative plan based on:

• holding the fiscal line on both taxes and spending;

• re-energizing a public philosophy of constitutionalism and limited government;

• supporting a measured cultural traditionalism;

• incrementally introducing mechanisms for greater choice and accountability into existing public programs;

• concerted campaigning in the black and Hispanic communities on the basis of moral and religious standards, as well as entrepreneurship;

• continuing to promote the vitality of civil society.

It all sounds pretty good to me. There's no time or way to bring the Republican Party around by this fall. But as we head into the 2008 primary season, conservatives concerned about the direction of the party should keep these concepts in mind.

Just because Republicans have been winning elections doesn't mean conservatism is triumphant. In fact, given the compromises that have been made to get here, true conservatism may well be in its worst shape ever.

July 21, 2006

Lieberman Going Down in Connecticut

It was August 7, 2000 when Al Gore picked Joe Lieberman to be his running mate. In a little under three weeks on August 8, 2006, Joe Lieberman's 35-year political career as a Democrat is likely going to come to an end. That is an amazing fall from grace for someone who was just hundreds of votes shy from becoming Vice President of the United States - and who in all likelihood would be prepping his run for President next year - and is now fighting for his political existence. Lieberman is not only likely to lose his primary match up against anti-war insurgent Ned Lamont, but it is increasingly likely that his fallback position to win in the general as an independent is far from the sure thing he thought it was only 4-6 weeks ago.

Joe Lieberman's world is imploding in slow motion right in front of him and he and his campaign clearly have no clue what to do. Yesterday's Quinnipiac poll confirms private polling and shows Lamont surging ahead of the three-term incumbent, 51% - 47%, a 19-point swing from Quinnipiac's last poll only six weeks ago showing Lieberman with a 55% - 40% lead. To make matters worse, Quinnipiac's numbers have been running considerably more favorable towards Lieberman, as Rasmussen Reports' June survey had Lieberman ahead only 46% - 40% and was taken around the same time Quinnipiac pegged Lieberman's lead at 15.

It's clear Lamont has the momentum. The polls look to be playing catch-up to the anecdotal evidence that all of the energy is on the side of the challenger. Lieberman's other problem is that he is utterly unprepared to execute the organizational ground game needed to get his voters to the polls on a Tuesday in early August. Cake walk wins in 1994 and 2000, coupled with solid job approval numbers which mirror the state's other Democratic Senator Chris Dodd have bred an arrogance and complacency that is catching up with the Lieberman campaign big time. Suddenly, they are finding themselves in a battle for their political lives and they are nowhere near fighting shape.

The news that former President Bill Clinton will be campaigning with the Senator may give his campaign a boost. But the fact that they are bringing him into Waterbury which Lieberman should have already had locked up, as opposed to Fairfield County where Lamont is the strongest, shows just haw far Lieberman is on the defensive.

If he goes on to lose August 8th the question is whether he can get things turned around in time for the fall. Right now, both Quinnipiac and Rasmussen have him ahead in a three-way race, by 24 points and 15 points, respectively. But Lamont will almost assuredly get a huge boost from a win in the primary, and Lieberman will be burdened with the baggage of a humiliating primary rejection.

Incredibly, Joe Lieberman may feel worse the day after the election this fall than he did six years ago.

June 26, 2006

Is Free Speech Making a Comeback? - Ross Kaminsky

In a decision released today in the case of Randall et al v. Sorrell et al, a divided Supreme Court invalidated Vermont's strictest-in-the-nation campaign finance laws.

The Vermont laws included some provisions which exceeded restrictions in many other states, including (quoting from the Court's decision):

1) "A political party and all of its affiliates together abide by exactly the same low $200 to $400 contribution limits", a provision the Court found to violate the right to associate in a political party,

2) "The Act excludes uncompensated volunteer services from its "contribution" definition, (but) does not exclude the expenses volunteers incur, e.g., travel expenses, in the course of campaign activities." This makes it difficult to use volunteers, again violating right of association.

3) The Vermont law's limits were not indexed for inflation, meaning "that limits already suspiciously low will almost inevitably become too low over time."

By a 6-3 vote (the 3 being Stevens, Souter, and Ginsburg), the Court reversed lower courts' decisions which allowed Vermont's political speech gag rule and sent the cases back to the Second Circuit Court of Appeals for reconsideration. The Supreme Court's ruling reaffirms the Buckley decisions prohibition on states limiting candidates' spending.

The first major campaign finance case is the well-known Buckley v Valeo. In the decision in the current case, there is a fascinating and not-so-subtle argument about Buckley among the justices who agreed that the Vermont law was unconstitional.

The generally spineless Justice Breyer made a point of arguing that Stare Decisis (essentially respect for precedent) caused him to believe "subsequent case law has not made Buckley a legal anomaly or otherwise undermined its basic legal principles." Justices Scalia and Thomas retort with "Buckley v. Valeo provides insufficient protection to political speech, the core of the First Amendment, is therefore illegitimate and not protected by stare decisis, and should be overruled and replaced with a standard faithful to the Amendment."

Not everyone has seen the light of freedom however. From the opinion of the liberal Justice Stevens: "I am convinced that Buckley's holding on expenditure limits is wrong, and that the time has come to overrule it. I have not reached this conclusion lightly." In other words, not only does Stevens think contribution limits are OK, but he also thinks the Buckley decision should have allowed expenditure limits. Justices Ginsburg and Souter are lost as usual. Luckily Stevens and Ginsburg are the most likely judges to retire next.

In any case, there is a clear indication here that further challenges to campaign finance would be met by a Court which is more interested in protecting the First Amendment than we've seen in a long time. Indeed, in his concurrence in today's judgment, Justice Kennedy simply concurred in the judgment rather than participating in a big debate, reminding us that he disagreed with the Court's ruling in the original challenge to McCain-Feingold (also called "BCRA") in McConnell v. Federal Election Commission. Kennedy (who will forever in my mind be the villain from the Kelo case) made arguments in his concurrence which bear repeating:

The First Amendment guarantees our citizens the right to judge for themselves the most effective means for the expression of political views and to decide for themselves which entities to trust as reliable speakers. Significant portions of Titles I and II of the Bipartisan Campaign Reform Act of 2002 (BCRA or Act) constrain that freedom. These new laws force speakers to abandon their own preference for speaking through parties and organizations. And they provide safe harbor to the mainstream press, suggesting that the corporate media alone suffice to alleviate the burdens the Act places on the rights and freedoms of ordinary citizens.

Today's decision upholding these laws purports simply to follow Buckley v. Valeo and to abide by stare decisis...; but the majority, to make its decision work, must abridge free speech where Buckley did not. Buckley did not authorize Congress to decide what shapes and forms the national political dialogue is to take. To reach today's decision, the Court surpasses Buckley's limits and expands Congress' regulatory power. In so doing, it replaces discrete and respected First Amendment principles with new, amorphous, and unsound rules, rules which dismantle basic protections for speech.

A few examples show how BCRA reorders speech rights and codifies the Government's own preferences for certain speakers. BCRA would have imposed felony punishment on Ross Perot's 1996 efforts to build the Reform Party. BCRA makes it a felony for an environmental group to broadcast an ad, within 60 days of an election, exhorting the public to protest a Congressman's impending vote to permit logging in national forests. BCRA escalates Congress' discrimination in favor of the speech rights of giant media corporations and against the speech rights of other corporations, both profit and nonprofit.

To the majority, all this is not only valid under the First Amendment but also is part of Congress' "steady improvement of the national election laws." Ante, at 6. We should make no mistake. It is neither. It is the codification of an assumption that the mainstream media alone can protect freedom of speech. It is an effort by Congress to ensure that civic discourse takes place only through the modes of its choosing. And BCRA is only the beginning, as its congressional proponents freely admit:

"This is a modest step, it is a first step, it is an essential step, but it does not even begin to address, in some ways, the fundamental problems that exist with the hard money aspect of the system." 148 Cong. Rec. S2101 (Mar. 20, 2002) (statement of Sen. Feingold).

Our precedents teach, above all, that Government cannot be trusted to moderate its own rules for suppression of speech. The dangers posed by speech regulations have led the Court to insist upon principled constitutional lines and a rigorous standard of review. The majority now abandons these distinctions and limitations.

Today's ruling is the first major crack in the wall which government has built between citizens and politics (to protect incumbents, primarily) in the past 30 years. There are at least 3 Justices who obviously want to overturn most campaign finance law and one who is open to overturning at least expenditure limits. I would also expect Justices Roberts and Alito to be open to hearing arguments which tend in the direction of weakening campaign finance laws as violating our First Amendment rights. I hope that citizens in other states bring such challenges.

When the Founders wrote the First Amendment protecting freedom of speech, it was primarily political speech which they were thinking of. What would Jefferson say if he learned that political speech has become the least protected type of speech in our great Republic? It is some combination of tragic, embarrassing, and dangerous that we have let politicians muzzle us by claiming they are preventing corruption when all they are really doing is preventing competition.

June 16, 2006

The Resilient Economy - by Brian Wesbury

Imagine you were working on a 500-piece puzzle and had assembled 497 pieces, but found out that the last three pieces did not fit. In fact, you realized that they were from a completely different puzzle all together. What would you believe, that the three pieces were the right ones and the 497 were wrong, or vice-versa?

This is an important question for people looking at economic data these days. Those who think the economy is slowing focus on the 0.1% increase in retail sales during May. But, one or two-month slowdowns in economic data mean nothing. Retail sales are up 7.6% in the past year and 8.5% at an annual rate over the past six months. Excluding autos, retail sales increased 0.4% in May and are up 9.1% in the past year and 9.6% at an annual rate in the past six months.

Moreover, the future for retail sales does not look dour at all. Yes, non-farm payrolls increased by a less than expected 75,000 in May, but the household survey reported a 288,000 jump in employment. The Household Survey has been a much more accurate predictor of economic strength in this recovery than the Establishment Survey.

The unemployment rate has fallen to 4.6% and average hourly earnings have accelerated sharply in recent months, rising at a 4.2% annualized rate in the past six months. Wages and salaries have accelerated as well, rising at a 7.9% annual rate in the first four months of 2006. Tax revenues to the federal government are growing even faster (13% above last year during the first eight months of this fiscal year) and people do not pay taxes on income they do not earn.

While industrial production data showed a decline of 0.1% in May, output has climbed 5.2% at an annual rate in the past three months and 4.4% in the past year - both faster than overall GDP.

Early data for June signals a rebound. Initial unemployment claims have fallen to 295,000, while the Philadelphia Fed manufacturing survey was 13.1 in June - a level that is indicates real growth in the 3.5% to 4.0% range. New orders in the Philadelphia area rebounded strongly in June with 31.8% of area manufacturers reporting rising orders and only 14.1% reporting declining orders - another signal of stronger than anticipated growth ahead.

Along with data that reflects a solidly growing economy, inflation remains elevated. The Consumer Price Index expanded by 0.4% in May, while the "core" CPI jumped 0.3%. No matter how you slice and dice it, "core" inflation is clearly running well above the Fed's comfort zone.

The bottom line is that the economy is still in very good shape, while inflation is moving higher. It may be easy to pick out some data here, or some anecdotal evidence there, that paint a picture of slower growth. However, that evidence is in the distinct minority. When put together, a vast majority of the data reflects an economy that continues to roll along much as it has for the past three years.

(Brian Wesbury is the Chief Economist for First Trust Advisors in Chicago, IL)

May 05, 2006

Blair Suffers Again

As expected, Labour took it on the chin in local elections in Britain yesterday, scoring its lowest share of the vote since 1982. Tony Blair's party finished at 26%, one point behind the Lib-Dems and fourteen points behind the Tories and David Cameron. The projected result is a net loss of some 175-200 council seats for Labour, which is close to double what party leaders had hoped for, but far from the 400+ seat loss that analysts said would have represented a "total meltdown" for Labour and the absolute end for Blair.

Still, Blair has once again been hurt at the polls, and he responded today with a major reshuffling of his beleaguered cabinet. Embattled Home Secretary Charles Clarke is out, Foreign Office Secretary Jack Straw is being replaced, and Deputy Prime Minister John Prescott will stay on with a stripped-down list of responsibilities.

The Guardian, Britain's leading left-wing newspaper, casts the results of the election this way in its lead editorial:

Some inside government will argue that the depth of the crisis is exaggerated: a Labour campaign which trumpeted the party's record on lawlessness and antisocial behaviour was swamped by chaos at the Home Office. But others, perhaps the chancellor, believe the party's weakness draws on far deeper roots. That view is right. John Prescott and possibly Charles Clarke will be the scapegoats, but they are not only the cause of failure.

Tim Hames offers a similar take from the conservative perspective:

It would be staggering if the keystone cops activities of Charles Clarke, the personal life of John Prescott and the apparent hostility of nurses towards Patricia Hewitt, the Health Secretary, had not made a bad situation worse for Labour in the last ten days of the campaign. But the trends that seemed to materialise in a complex series of ballots yesterday were not new nor do they herald a new political era.

Blair brushed aside calls for him to step down after Labour's weak showing in the last election, and he just recently made news by saying he planned on sticking around through 2009. After last night, Blair will probably be lucky to last through 2007 - and some think he may not even make it through the end of 2006.

May 02, 2006

The Democrats' Illegal Immigration Opportunity

Brad Carson has a great article today on illegal immigration and the Democratic party. Carson represented Oklahoma's 2nd district for two terms and gave up his safe seat for a shot at the Senate in 2004 but wasn't able to overcome John Kerry's 32-point drubbing in the state and lost to Tom Coburn by 12 points.

Carson recounts a dinner party he attended in Washington with prominent journalists, think tank heads and politicians where the largely liberal group expressed a "grave concern over the growing gap between rich and poor in the nation. But few offered any real solutions."

He refers to this group as the "overclass":

Nearly everyone at the party was part of what the writer Michael Lind calls the overclass, educated at the best universities and earning hundreds of thousands of dollars each year. Their children attended private schools. Everyone had a fine retirement package and subsidized health care, and each was immune to the vicissitudes of middle-class economic life. From their cloistered positions, the solution to nearly all perceived problems - from globalization to crime -- is education, which was their own personal visa into the merit-obsessed overclass. For this group of people, immigration is not about inequality in America, but instead all about a cheap nanny, inexpensive lawn care, or proof of multicultural bona fides. Even to bring up the subject of immigration is to seem impolite, if not crass.

Carson's goes on to ask:

America tolerates an immigration policy that adds millions of very low-skilled workers every decade, who come to this country at the expense of low-skilled native workers. Why? There is no good explanation, especially for Democrats, who like to believe that their core constituencies are the middle and lower classes of America.

The illegal immigration debate is presenting Democrats with an enormous opportunity to drive a wedge in the Republican majority. Carson writes:

Democrats' major political obstacle is the increasingly intractable opposition of the non-union working and middle class, exactly the groups who most fervently oppose illegal immigration. While the opponents of immigration no doubt include nativists and xenophobes, the vast majority of those who oppose illegal immigration do so on sound public policy grounds. Illegal immigration is seen rightly as a threat to their economic livelihood. So when the Republican Party offers a platform that not only comports with their social and religious beliefs, but also addresses the one economic threat that is open to government solution, is there any wonder that the working and middle classes find solace in the GOP? Democrats should find a way to bust up this alliance between economic populists and social conservatives, and make many current Republican voters choose which of these movements matters most.

Ross Perot's 19% in 1992 represents the economic populists, a number that I suspect has grown in the last 14 years. It was this group that threw its lot in with the GOP in 1994 which provided Republicans with the troops for their takeover of Congress. George W. Bush has strengthened the social conservative element of this coalition, but these two groups (along with libertarian/small government conservatives) form an important part of the Republican majority. Economic populists like Ross Perot and Pat Buchanan are extremely patriotic and abhor the anti-American strains of the political left, which is what prevents them from voting for most national Democrats.

A Democrat who is strong on national defense, unapologetic about American power and willing to get tough and stop illegal immigration could win a lot of these voters.

April 26, 2006

Free Markets Work - by Larry Kudlow

The greatest story never told? It's still the booming American economy--spurred by lower tax rates, accommodative money, huge profits, big productivity, plentiful jobs and a general free-market capitalist resiliency.

Some folks are bellyaching and gnashing their teeth about oil and housing; but you know what? Housing is softer but is holding up just fine. Today's Wall Street Journal says its time to buy a home in Houston, Dallas and Atlanta, rather than the east and west coast. Good point. As for gas at the pump, it averaged about $2.40 in March and about $64 for crude oil. But this was not an economic impediment. Production, retail sales, and employment were all very strong in March. Very strong indeed.

Today's durable goods report was off the charts strong. Airplanes, transportation, metals, industrial machinery, computers, even motor vehicles and car parts. But wait. The key point: business investment in capital goods was unbelievable. New orders for core cap-ex, (ex defense and aircraft) have grown 9 percent at an annual rate and 12 percent over the past year. That is a leading indicator of future business spending.

And there's more. Backlogs of unfilled orders increased over 12 percent at an annual rate in the first quarter--the best in two years. This key measure is a leading indicator of the new orders leading indicator, a very important forecasting tool for business economists. With this kind of real world corporate activity in the pipeline, it shows that highly profitable businesses will be doing a lot of hiring in the months ahead in order to expand plant and equipment capacity. Just what the doctor ordered.

At these lower tax rates, capital is still relatively inexpensive and investment returns are unusually high. What's more, President Bush's mid course correction on energy policy is going to stabilize, or even reduce, upwards pressures on the price of oil and retail gasoline.

Regrettably, Mr. Bush included a lot of liberal-left greenie gobbledygook about price gouging inspections and oil company investments. But he may have included that to stop a windfall profits tax from coming out of Congress.

Continue reading "Free Markets Work - by Larry Kudlow" »

April 24, 2006

Oil, the Economy, and Inflation - Brian Wesbury

During the seventeen years between 1986 and 2002, the price of West Texas Intermediate crude oil averaged $20.53/bbl. In 2003, the average price for oil reached $31.14/bbl., in 2004 it was $41.44/bbl., in 2005 it was $56.47/bbl., and during the first three months of 2006 the price has averaged $63.35/bbl. On Friday, the price rose above $75/bbl., an all-time high in nominal terms.

Most commentary about these price increases have focused on specific issues of supply and demand in the energy markets. In fact, most commentary about any commodity price movements focuses on specific, market-oriented issues, such as Chinese demand, production problems, or weather.

This focus on microeconomic issues misses the impact of monetary policy. In the 1970s, oil and other commodity prices moved up as Fed policy was inflationary. During the 1980s and most of the 1990s, monetary policy was focused on bringing inflation down. It became a widely followed maxim during that period that investors should shy away from "stuff" and focus on value-creating "ideas." This trend accelerated in 1997 when Fed policy became deflationary.

With prices low, investment in commodity production was deterred. As a result, once the Fed started fighting deflation, commodity prices, including gold, silver, copper, and energy products started rising again. Yes, other factors, such geopolitical instability and capacity issues, have played a role. But, the underlying monetary policy environment is still the fundamental driving force beneath these movements.

After adjusting for inflation, the price of oil is still below its peak of $85/bbl. in the second quarter of 1980. Yes, energy prices are rising rapidly, and consumers are spending $244 billion more on energy per year today than they did in 2001. However, total after-tax incomes are running $1.7 trillion higher. In other words, consumers have $1.48 trillion more to spend today - even after subtracting energy costs - than they did in 2001.

When we jump in a bathtub the water level rises significantly. The ocean is another story. The more liquidity in an economy, the easier it is to absorb rising prices. This is why record-high energy price have not caused the economic damage that many expected. Inflation is both a cause of rising prices and a cushion against them.

(Brian Wesbury is the Chief Economist for First Trust Advisors in Chicago, IL)

March 30, 2006

The "Culture of Rape" at Duke University

It will be interesting to see where the story of the Duke lacrosse team heads in the next several weeks. For those unaware, the top-ranked Duke team was suspended from play after an exotic dancer claimed that she was gang raped by three players at a private party. There is a clear racial element to the story, as the alleged victim is black and 46 out of the 47 members of the team are white.

All 46 white players on the team were asked to provide DNA to the local authorities investigating the case (the accuser says her attackers were white). The Smoking Gun has the document filed by Durham police outlining the alleged victim's account of what happened on the night of March 14th. The alleged crime is brutal and if true, these young men are in a world of hurt and deserve to be met with the full force of the law.

The team's three captains have issued a statement on behalf of the team stating "unequivocally that any allegation that a sexual assault or rape occurred is totally and transparently false."

I don't even pretend to know what happened at this party. It's easy for me to believe that there are some real bad apples on this team and the alleged victim was subjected to something like Jodie Foster in The Accused, or worse. It's also possible this young woman was demeaned and treated shabbily by a bunch of drunk college athletes and decided she would show them by making up a story about being gang raped. And then, of course, there are all of the gray areas in between.

I do, however, find this quote in USA Today from Duke student Alvaro Jarrin protesting the incident just a wee bit hysterical:

It is important that we not let this go down easily, There's a culture of rape at Duke, so we're hoping this will get them to speak up. This rape is a symptom of a larger problem at Duke.

Being a Maryland basketball fan I have no love for the Duke student body, but the idea that there is some kind of "culture of rape" at Duke University is just absurd. This type of attitude is a by-product of the Women's Studies, leftist mentality that is so prevalent among student activists and faculty on college campuses.

There are so many cross currents here (race, rape, privileged athletes, poor victim, college politics) it will be fascinating to see how this story unfolds as the facts spill out......which they will.

This has the potential to blow up into a huge story.