Sunday, August 28, 2011
With Hurricane Irene now raging through the U.S. East Coast from its Caribbean origins (supposedly “The Tempest” was set in the Caribbean), I could not help but think of Shakespeare’s play with its iconic storm created magically by the play’s main character Prospero, the exiled Duke of Milan. Although it remains to be seen how “historic” and great a storm Irene will be, it has certainly gripped in advance of its path the justifiable concern of millions of Americans who are likely to be affected by it, and the entire rest of nation watching from “a safe distance.”
One of the most famous visual images of this play was the painting “The Shipwreck” by the most celebrated 18th century portraitist George Romney. Yes, current frontrunner for the Republican nomination Mitt Romney is a descendant/kinsman of George Romney the painter, and that got me to thinking about a second tempest now going through the United States, a fellow named Rick Perry who is also the current governor of Texas. In only a few weeks, Mr. Perry has announced his late entry into the presidential contest, and has already emerged as Mr. Romney’s main challenger. Liberal Democrats seem not to regard Mr. Perry as a storm, but rather as Caliban, the disfigured and scary character who is another principal figure in the play. (Mr. Romney’s supporters, no doubt, hope that Mr. Perry is only a “tempest in a teapot.”)
The reader might think I am depending too much on coincidences here in drawing Mitt Romney and Rick Perry into this (how about Michele Bachmann as Ariel?), but of course, Shakesepeare’s 17th century plays are is so full of coincidences and references to other sources that I feel no compunction to hold back my devious way to bring up the current state of the 2012 presidential election and the contest for the GOP nomination.
While everyone hopes that the damage from Hurricane Irene will be minimal, there are many who wish that Tempest Perry will cause maximum damage. Some conservatives, unhappy with the bona fides of Mitt Romney as a true out-and-out man of the right are hoping that Mr. Perry will derail the Romney candidacy. Some liberals, fearful of a terrible defeat in November, 2012, hope that a man perceived as too far to the right, i.e., Mr. Perry, will be nominated, thus giving President Obama a better chance to win re-election.
Just as we do not know Hurricane Irene’s full course (as I write this), the impact of Tempest Perry is also unclear. He will now be subject to extraordinary scrutiny, and as he has already discovered, every word he utters will be examined under a political electron microscope. (Some of Mr. Perry’s recent utterances would indicate he is perhaps more like Caliban than his supporters would wish.) Mr. Perry will now have to stand on the stage with his rivals, and answer questions from the media and debate moderators that will contrast him to Mr. Romney, Mrs. Bachmann, and that most formidable GOP debater of all, Newt Gingrich.
I don’t know if it will be a tragedy, a comedy or a history, but it almost certainly will be quite a play to listen to and watch.
Monday, August 15, 2011
(AMES, IA) This was my fourth Iowa Straw Poll in Ames, Iowa, and, as always, I had a very good time. As my readers know, I take presidential politics very seriously, but I have learned that this Republican quadrennial event in central Iowa is not really a serious political moment in the long campaign. It is, instead, a ritual that raises substantial cash for the state party, and serves as a celebration of contemporary Midwestern conservative politics. (For those who collect political buttons, bumper stickers, hats, t-shirts, brochures and other political memorabilia, it is also the true opening of the presidential campaign on the Republican side.)
When there is an incumbent GOP president running for re-election, they don’t even hold the straw poll. When they do, about 15,000 or so active Republicans show up on the Iowa State University campus, pay $30 for a ticket, picnic on burgers, pulled Iowa pork, hot dogs, ice cream and other summer food, and then vote for their favorite candidate. In many cases, the ticket was paid for, and their transportation provided by, their favorite candidate. This year, as has happened in past years, the most serious GOP candidates didn’t even participate.
The results are often not a surprise. On the drive down from Minneapolis, both the driver of the car and myself correctly predicted the 1-2-3 order of the voting results. I suspect most close watchers of the campaign got it right also.
So why did former Minnesota Governor Tim Pawlenty withdraw from the race only hours after the voting (even though he came in third)? Ostensibly, it was that candidates allow the media to portray the Straw Vote as a real contest in which “expectations” are exceeded or fall short. The results of the Straw Poll do not even necessarily reflect the results of the meaningful Iowa Caucus in February. Thus, GOP frontrunner Mitt Romney (who won the Poll in 2007, but lost the nomination) did not participate. Nor did Texas Governor Rick Perry who used the date to announce formally in another state that he is entering the presidential race.
The media openly predicted that Pawlenty would withdraw if he failed to meet “expectations” in the Straw Poll, and reported it when he did in due course. Now many in the media will complain that such a “quality” candidate should not have been “forced out” so soon. (Heisenberg’s Uncertainty Principle has certainly come to U.S. presidential politics……)
In only two months, Minnesota Congresswoman Michele Bachmann came out of nowhere to win the Poll. She defeated perennial libertarian Ron Paul by a narrow margin. Paul, who has a devoted and noisy (but tiny) following usually fares well in unrepresentative polls such as the Iowa Straw Poll, but his weird combination of libertarian and isolationist politics will have him forgotten soon after the time the real voting takes place. Mrs. Bachmann, it should be noted, was born and raised in Iowa, and she made much of being a native daughter before the voting. It was no small advantage, as was her prominence in the contemporary Tea Party which includes many Iowa activists. Once she was in, Mr. Pawlenty did not have a chance. His brief rise to becoming the major challenger to Mr Romney was damaged weeks earlier when he attacked Mr. Romney and then backed off. Lacking Mrs. Bachmann’s instinct for successful attention-getting controversy, and burdened by an expensive over-staffed campaign, he faced bleak fundraising after Ames.
This is the same dilemma faced by former Speaker Newt Gingrich a few months ago when his campaign faltered after he blundered into an unnecessary confrontation with fellow Republican Congressman Paul Ryan. Gingrich’s expensive and overstaffed campaign came to a crisis when his fundraising dried up and many of his staff resigned. But Mr. Gingrich did not withdraw. With a much smaller staff, he has campaigned on, knowing that the actual voting was months away, and that he had something to say. Mr. Gingrich did very poorly in Ames, but it was no surprise. He has continued to do well in the presidential debates, receiving high marks even from observers who had written him off. Mr. Gingrich is not likely going to make an historic comeback here, but his decision to proceed without a large paid staff, expensive advertisements, and other hoop-la is an interesting one, and in strong contrast to Mr. Pawlenty’s.
The media has been beside itself with anticipation of Governor Perry’s entry in the race, assuming that before-his-announcement polls accurately reflect his strength, and that he might clean Mr. Romney’s political clock. I think everyone needs to be careful about this kind of so-far unsupported enthusiasm. Now that he is in the race, he will be much more carefully examined by voters and the media, and we will know just what kind of candidate Governor Perry is, and how strong he is, for example, outside the Bible Belt and the South.
We now have about four months before the real primary/caucus campaigning begins in earnest. Mitt Romney remains the man to beat, and although the Iowa Straw Poll has put forward Mrs. Bachmann (who now with Mr. Perry become his major challengers), the Ames event did eliminate the person who might have given him the most difficulty in nominating campaign. Mr. Romney is showing a lot of self-discipline. He has notable obstacles ahead, but I need to repeat one more time that the November election between the two major parties is always decided by the political center and by independent voters, and there is no sign that either Mrs. Bachmann or Mr. Perry will appeal to those voters who will make the difference.
The presidential election of 2012 inevitably will be a plebiscite about whether or not to retain President Obama in office. The current state of the economy, and the Obama administration’s inept handling of it and foreign affairs, indicates that almost any credible Republican nominee could win next year, but that would be, in my opinion, a premature conclusion. It also assumes that Barack Obama will choose to run for a second term. A Republican nominee who did not appeal to the political center might have a very difficult time winning the 2012 presidential election if the Democratic nominee were now-New York Governor Andrew Cuomo. Even if Mr Obama runs again, new events and circumstances could alter the present political consciousness, particularly if the GOP selects a nominee who could not build broad appeal in November.
Tuesday, August 9, 2011
With yesterday’s 600-point drop in the Dow stock average, and an even more severe drop in the NASDAQ stock average, we see a predictable consequence of the previous Friday’s after the-close-of-the-market announcement of Standard and Poor’s downgrade of U.S government bonds. Over time, the stock market usually reflects realistically the near and intermediate term prospects of the economy, but in the wake of dramatic economic news, the market often reflects the fears and confusion of investors, particularly small investors. So-called “panic selling” frequently occurs, and the price of most stocks decline beyond a “fair and reasonable” level. Sophisticated traders, and experienced investors usually wait until the small investor’s emotions are exhausted, and then begin to acquire stocks they believe to be below what they are worth. The “bottom” usually occurs at a point of maximum fear, and this stock market phenomenon is called “capitulation.”
We don’t know yet if capitulation has already occurred, or if the market has more decline in it, but after more than 50 years of personal stock market investing, I suspect we are close to it. Nevertheless, current economic conditions have an unprecedented character, and the traditional rules may not apply. I warned recently that the debt ceiling “crisis” was a political contrivance of the liberal Obama administration engaged in a life-or-death struggle with conservatives over revenues (taxes) and spending (federal entitlements). The real warning sign, I said, was the potential for a a downgrade of U.S. securities. Congressional Republicans blinked in the details of their agreement with President Obama, raising the debt ceiling while cutting only a small amount of spending. They won a long-term victory in preventing tax increases and changing the debate from “how much an increase” to “how much can we cut,” but that was too little for Standard & Poor’s concern about U.S. debt and deficits.
President Obama is now exposed as a man who has no real idea of what is going on in the economy and what to do about it. Although Republican conservatives do know what is going on, and what should be done, they control only one house in Congress, and are overly fearful of being blamed for our prolonged economic distress. I did applaud Speaker Boehner for what he did accomplish in his debt limit “deal” with President Obama, but, like many who are worried about the direction of U.S. economic policy, I am concerned that the “deal” was too little and, possibly, too late. Obviously, Standard & Poor’s thought it was too little and too late.
Panic occurs in confusion. With an administration that wants to prolong the mistakes of the past (including growing deficits, untenable unfunded liabilities, and unrealistic and unsound attitudes about raising revenues), investors are not only confused, but without a positive light at the end of our economic tunnel, their confusion becomes compounded. Small and inexperienced investors traditionally over-react, but what happens if more sophisticated investors, many of whom have large cash positions, do not intervene as they traditionally do? Anything can happen in “maximum confusion.”
The more stubborn Mr. Obama is, the more that the investment community in the U.S. and worldwide, will downgrade the prospects of the U.S. economy. The coterie around Mr. Obama apparently has no will or stomach to tell him the economic truth; many of his aging allies in the Congress even share his outmoded economic views.
Last January I wrote that Mr. Obama might not run for re-election. My comment was received with incredulity, even by some conservatives. The fact that the Republican field of presidential candidates seemed “weak” or lacking in so-called “charisma” encouraged Democrats and their media supporters to think he would actually win re-election. It was as if the 2010 election had not really occurred. Obamacare, huge deficits, growing unfunded liabilities, demagogic calls for “taxing the rich,” and new spending programs went forward as if nothing were amiss.
One year before the 2010 elections, I openly predicted the results. The electoral disaster for the Democrats, as I saw it, was inevitable. I will now say that if Mr. Obama and his allies do not make a dramatic turn in their economic policies, and soon, 2012 will be the greatest electoral catastrophe a political party will have suffered in modern times. Voters, conservatives and independents, are worried and confused. It’s only a matter of time before liberals will come to share their concerns. The federal government is failing to respond to the crisis which grows day by day. Governors in individual states (including at least one Democrat in a major state) are putting new and prudent policies in effect, and by the summer of 2012, they will be seen as successful, and that will magnify the dimensions of the Democrats’ defeat in November if Mr. Obama does not begin to embrace their reforms.
The stock market between now and then will go up and down. The American economy is much bigger than any group of politicians, but if there is a perception of no relief from government policies, it will go down much more than it will go up. This is not a true “recession,” but more like a “contraction” of the economy, and thus in spite of bail-outs and government spending, unemployment persists at very high levels, and business confidence remains low.
The summer of 2011 is becoming the summer of maximum confusion. It will not likely remain in that state very long. If the Democrats cannot get their house in order, the Republicans will find the right candidate, someone who will not blink in the face of liberal blame-gamesmanship or a fear of completing the political transformation already begun. Forget the polls of today and conventional “wisdom.”
In November, 2012, some real change will be demanded by the American people, tired of bad news, confusion and failure.
Monday, August 8, 2011
We are less than a week away form the Iowa Straw Poll, the symbolic opening event of a presidential campaign year, at least for Republicans. It is always a colorful affair, and the first occasion for political memorabilia collectors to load up, especially with the buttons and bumper stickers of minor candidates who soon enough will disappear from the campaign trail.
The Straw Poll is a fundraising event for the Iowa Republlcan Party. Candidates pay for space to display their candidate and his or her political wares. They pay for the admission tickets for many to attend, and bus them in from all over Iowa. Others come on their own dime, but the final tally is much more about political organization than true voter popularity. The Iowa Straw Poll only occasionally predicts those who win the Iowa caucus (next February), the GOP nomination or the presidency. On the other hand, since 1979 it has become a “tradition,” and I would not miss it.
While it does not accurately reflect Iowa voters’ attitudes, the Straw Poll usually settles some scores, and this year will probably be no exception.
Here are some of the specific matters that could be decided in Ames this year: First, a Minnesota “grudge” match has developed between former Governor Tim Pawlenty who entered the campaign early, and Minnesota Congresswoman Michele Bachmann, who entered it late. Minnesota shares a border with Iowa, and Mrs. Bachman was born in Waterloo, IA. Only a few months ago, Mr. Pawlenty was initially the most serious “dark horse” in the GOP field, and on his way to become favorite Mitt Romney’s major challenger. But this changed when Mrs. Bachmann entered the race, openly courted Iowa evangelicals, and rose quickly in the polls. (Some of the latest polls now have her leading.) Mr. Pawlenty, however, faltered after an ill-advised and bumbling attempt to attack Mr. Romney. As of late, Mr. Pawlenty has redoubled his effort in Iowa with an all-out 24/7 tour of the state, adding his wife, and spending some serious money for the effort. My sources tell me that this will pay off, and that Pawlenty will exceed Straw Poll expectations (now expected to be a fourth-place finish), thus keeping his campaign alive for the Iowa caucus, the New Hampshire primary, and possibly beyond.
Ron Paul (a libertarian more than a Republican), has a small but devoted following, tends to do very well in straw polls, particularly the Iowa Straw Poll. He has a next-to-zero chance of winning he GOP nomination, but he might even win the vote in Ames. If he does, the poll’s results will be even more ignored than usual, and the occasion will result in being only what it is, a fundraiser for the state party.
Mitt Romney, Newt Gingrich and Jon Huntsman did not purchase display space in Ames, and won’t be actively seeking votes there. But they will be on the ballot, and a better than-expected total for any of them would be politically helpful. (Romney particulary would see his frontrunner states enhanced if he comes in the top three.) In addition to Bachmann, Pawlenty and Paul, Rick Santorum, Herman Cain and Thaddeus McCotter will have booths in Ame and are on the ballot. No surprises are expected with any of these minor candidates.
Texas Governor Rick Perry is not on the ballot, although write-ins are possible. Some consider his probable late entry in the race could be significant. (Others consider his impact will be more like Fred Thompson’s late entry in 2008, i.e., minimal.)
Although the media, collectively, likes to think it can impel candidates who do not do well to leave the presidential race, I think two major figures will remain in the field no matter what happens in Ames. They are Pawlenty and Newt Gingrich. Pawlenty, who was co-chairman of the 2008 John McCain presidential campaign, remembers the Arizona senator’s remarkable comeback after being declaredpolitically D.O.A. in 2007. Gingrich, already a major figure in Republican history, feels he has something unique and important to say in 2011-12, and won’t leave until he thinks he has fully expressed what is on his mind.
Iowa Republicans throw a good party. There will be free barbecues, hot dogs, potato salad, beverages of choice, as well as rock and blues bands. other entertainments, political memorabilia, funny hats, and glad-handing politicians. Like the national conventions, the Iowa Straw poll, in addition to fundraising, is primarily a holiday for the national media. More serious political signals will have to wait.
Thursday, August 4, 2011
The debt ceiling “crisis” has passed, but the critical issues have been barely addressed. The final “deal” had something for everyone, but there was much more, in long-term impact, for the conservatives. Some Tea Partiers and Rush Limbaugh are not very happy, but there was almost no chance their idealized expectations would be attained. Moreover, for them and others who wanted to let the deadline on raising the debt ceiling simply to pass without any action, it was just an opening skirmish in a politico-economic war that can only be decided in the 2012 elections.
Most of the complaining, however, is taking place on the left where it is now fully realized that the conservatives have the upper, if incomplete, hand.
The bottom line, as I see it, is that the consequences of the 2010 national elections have now become the transformative instrument that they were designed to be. The debate of where to increase public spending, and how much to spend, the established tradition for many decades has been replaced by a new culture of reduced public spending and no new taxes. This is what is driving liberals to moan and lament. Their multi-trillion dollar party is over for the foreseeable future. The man they expected to prevent this, President Obama, failed in this basic task, and the left base of the Democratic Party is not happy. To be fair to Mr. Obama, however, a more experienced and clever president might have obtained better terms, but there was no way he or the liberals could have averted the outcome.
On the other hand, although the old trend was halted, the size of the “cuts” is not very large, and as now established through the debt ceiling agreement, not even close to a level that will, for example, avoid eventual downgrading of U.S. debt instruments, something that I have been asserting is much more consequential and dangerous than failing to raise the debt ceiling. The AAA rating by the three major private agencies which set the rating is holding for the short term, but the details of the “deal” fell far short of requirements for averting the downgrade in the intermediate and longer term. The agreement, while historic in that they brought deficit spending in principle to a halt, is essentially now a shell game in the hands of the mandated congressional special committees.
There was no reasonable opportunity to “settle” the issues which separate liberals and conservatives in this “skirmish.” With the White House and the U.S. senate in Democratic hands, and the U.S. house in Republican hands, the debt ceiling crisis could only lead to a much more critical confrontation in the 2012 national elections. As I have pointed out in another commentary, it is almost a certainty that Republicans will gain control of the U.S. senate regardless of the outcome of the presidential election, and (although less of a certainly) it is likely that the conservatives will continue their control of the U.S. house. So next year’s national elections will primarily be about whether President Obama is retained for a second (but probably powerless) term, or he is replaced with someone who will “finish the job” begun in 2010.
The unexpected can always happen in national politics, and often does in one way or another, but it is difficult to see how the economy, with its hands tied by liberal programs and policies, including Obamacare, can recover in less than the a year. On the other hand, the beginning of the introduction of conservative polices now, especially in many individual states, will actually help the economy.
We are in the midst of a transformative period of U.S. economic policy. The liberal assumptions and practices have failed to remedy the current crisis. Liberals will disagree with this, but they cannot avoid the facts of prolonged unemployment, unfunded liabilities, titanic deficits, and the lack of confidence in U.S. current economic policy. it is true that Republicans and Republican presidents have often been complicit in this, and can rightfully be criticized for it, but the simple truth is that it is a very liberal Democratic president now in the White House, and liberal Democratic policies at work in the economy.
Obamacare clearly will make matters worse, possibly much worse, and the liberal preoccupation with raising taxes and increased public spending no longer have their traditional support, especially among independent and centrist voters who will, as always, decide the next election.
It might be comforting to assert that there was an unambiguous winner in the debt ceiling crisis now concluded. As I said, there were details in the final agreement for all sides. But the bottom line is that the direction begun in the 2010 elections is not only intact, it was strengthened. The primary task ahead for Republicans and their presidential nominee is now to articulate how they will repair the economy, reassert U.S. foreign policy, and restore voter confidence in the American future.
A skirmish is past; a long and contentious struggle lies ahead.