The Very Nub Of It

As always, we can take two different photographs of the same political crisis. The first photo is of the immediate circumstance; the second is the big picture over time and consequences.

The debt default crisis has obvious immediate consequences, that is, at some point in the next few weeks (not necessarily the Tuesday deadline stated by the president and his secretary of the treasury), a technical condition of default on the debt of the government of the United States will exist. Contrary to the Cassandra-like warnings of the Obama administration, this will not mean that our government will not pay its obligations, particularly to bond holders of U.S. government securities. Nor will it mean that Social Security checks will not go out to elderly recipients. Nor will the security of the nation be placed in jeopardy. To raise the debt limit previously set by law will enable the administration to try to pursue its long-term policies of increasing federal spending. To refuse to raise the debt limit makes that pursuit impossible. That is the nub of the whole crisis.

The liberal government establishment, and even some in the conservative government establishment, see the raising of the debt limit, and its consequent increase in federal spending as not only inevitable, but the right thing to do. It has been done routinely for decades.

Living in the most prosperous nation on earth for many decades now, these establishment figures see the role of government as a supplier of aid, welfare and entitlements. They believe this. No one should doubt that, in most cases, they are well-meaning and sincere.

The movement which opposes this view is not, by any means, monolithic. Much media attention is given to the recent “Tea Party” as the sole engine behind this view, and the Obama administration has predictaby attempted to demonize this movement in the hope of diminishing its influence. In fact, the Tea Party phenomenon arose almost solely as an economic protest, and while it is conservative, it is not just Republicans, but also includes many independents and fiscally-minded grass roots Democrats who had become alarmed by establishment government economic policy, including growing deficits, unfunded liabilities, as well as the weakening justifications for whom and where public money was being spent. The Tea Party has been demonized by the left as a radical right wing movement which holds unpopular social views, but that is wholly a political contrivance and a slander. (There may be a relatively few who call themselves Tea Partiers who hold unacceptable or radical social views, but it has nothing to do with the economic movement.)

The grass roots uprising against government as usual, however, is not at all limited to those in the Tea Party. There is a much broader composition of this movement which includes traditional conservatives, independents, libertarians and Democrats. That is why the national elections of 2010 produced such a clear and powerful result, and why the consequences of that election have led to the debt limit crisis of 2011.

Perhaps much more important a factor hanging over this crisis is not the technical detail of default, but the clear warnings from those non-governmental agencies which rate the quality of all bonds and securities, e.g. Standard & Poor’s and Moody’s. They have stated and warned that if the debt and deficit circumstances of the federal government are not repaired in short order, they will lower the credit rating of the Untied States government from its current AAA rating. Why will they do this? Because our government budget deficits are too great, and because our government spending is too much. What are the consequences of a lower rating in real terms? It means that investors who are required to buy only AAA-rated financial instruments will not be able to purchase and invest in U.S. government bonds. This would cause a massive dislocation of national and international financial markets, and possibly result in a worldwide economic calamity as investors desperately seek out acceptable investments which may or may not be available. Lowering our rating also would mean that government borrowing would become more expensive. It is the individual taxpayers who would have to pay for that increased cost. In short, we should be much more concerned about losing our invaluable AAA bond rating than with perpetuating the increased debt which has put our rating at risk.

The ugly little secret of the U.S. debt limit crisis is that if President Obama and Senator Harry Reid were to succeed to raise the debt limit without ironclad cuts in spending, Standard & Poor’s and Moody’s would be MUCH MORE LIKELY to lower their credit ratings of U.S. bonds. I am not guessing about this. The agencies have specifically and unambiguously stated that if U.S. deficits are not immediately a drastically reduced, they will lower their ratings. The Obama-Reid outcome of the current crisis virtually guarantees that the U.S. will lose its AAA rating. Even the Boehner plan, now passed by the U.S. house of representatives, falls short of the financial agencies expectations. But at least it is a step in the right direction. It is, in fact, a long-needed brake of federal spending (something, it is important to note, was done by both Republicans and Democrats over decades).

Yes, there is a lot at stake in the debt limit crisis, and in the larger crisis of U.S. domestic economic policy. But it is only when we look at the big picture that we can see what that stake really is. The little picture presented to us by President Obama and his political allies is a sham, a lie, a misrepresentation of our economic circumstances, our choices and our future. The big picture is that we Americans are living at the financial edge of unsustainable economic policies and programs, and that the time is running out during which we might repair these circumstances.

Speaker Boehner and Majority Leader Cantor are establishment conservative figures. Unlike Congressman Paul Ryan and several of the new Republican governors (and New York Democratic Governor Andrew Cuomo), Mr. Boehner and Mr. Cantor perhaps came later to the understanding that the Congress had to respond radically and decisively to economic conditions and to their freshman members, i.e., cap and trade and the balanced budget amendment. Their instincts perhaps were to negotiate and compromise. But two circumstances have transformed them as political leaders. First, President Obama and Majority Leader Reid, desperately holding on to a drowning economic philosophy, have not been willing to truly negotiate. They call for compromise, but what they really mean is surrender. Second, the freshman GOP members of the U.S. house, backed by millions of grass roots voters, have stood their ground. The majority of voters in 2010 were promised transformation, and this House of Representatives is delivering as best it can the fulfillment of those promises.

This is the nub of where we are, and hopefully, where we are going. It is very clear that the whole liberal philosophy of government is collapsing around us. But, as is true in this case, it will take another election to complete the economic and political transformation.

Meanwhile, Speaker Boehner’s job is not just to avoid being blamed for not raising the debt limit. His historic opportunity is to bring the era of increasing public debt to a close.

With ironclad cuts in equivalent spending, the debt limit might be raised. But the real danger, as I have pointed out, is not default, but the credit rating. All solutions lead from that stubborn and unpleasant reality.

The Beginning Of The End Of A Presidency

If anyone was not convinced that Barack Obama is ill-suited to be president of the United States, his conduct in recent days during the still-unresolved debt ceiling controversy should have moved them over the line to that understanding.

In one sense, Mr. Obama is the natural focal point, as leader of the liberal party, to defend the point of view that the debt ceiling should be raised so that government spending could continue, and that taxes should be raised to pay for this action. This is the way it has been done in principle for many decades, although government spending deficits and unfunded liabilities have not ever been at present levels, nor has the rationale for “doing business as usual” ever been so unarguably indefensible. The liberal party, the Democratic Party, showed signs of growing out of its old assumptions and patterns for a brief period, at the close of the second term of President Clinton, an instinctive centrist who could and did read the handwriting on the wall of American politics. Al Gore and John Kerry took their party backwards in their presidential campaigns which followed, and they lost. Barack Obama, in the wake of dissatisfaction with the terms of George W. Bush, and most immediately, the economic disaster of the mortgage banking industry, won his election, but he did not verbalize the atavism of Gore, Kerry and neo-New Deal liberal politics. Instead, he ran on vague rhetoric and slogans that promised change, but which contained no specifics. In fact, Mr. Obama was a cipher, a man with few detailed records of his past.

Now we know why there were no details. What there might have been of them, they almost certainly would have revealed how slight was his background in public policy and service. Not one of the previous 43 U.S. presidents has had a slighter resume than Mr. Obama’s.

To make matters worse, Mr. Obama took office at a moment in American history when its economic circumstances and its position in the world required a chief executive of extraordinary skills and experience. Perhaps if a Barack Obama had been elected in 1924, 1952 or 1992, the nation might have gone through his term with minimal damage. But 2008 was a pivotal moment, with great economic and political forces loose in he world.

I said at the outset of his presidency that Barack Obama was a political amateur. Nevertheless, he did win the election, and American history has examples of presidents with limited backgrounds rising to their occasions. Abraham Lincoln is perhaps the most notable example, but Harry Truman and Ronald Reagan come to mind as those who also far exceeded their resumes. Mr. Obama has now been through several crises, and has distinguished himself in none of them. Our position in the world has weakened even as international regard for Mr. Obama has declined. Our economic conditions, long past the time when a robust business recovery should have been underway, remains chronically weak with high unemployment, weak major financial sectors, and a general lack of confidence by U.S. business in taking risks to innovate and expand. Presidents don’t cause recessions, but President Obama’s policies, including his healthcare legislation, intention to expand deficits and government spending, and radical populist notions of taxing the rich, are prolonging our economic problems.

There is some hope for the future of the Democratic Party. It includes the names of New York Governor Andrew Cuomo and Virginia Senator Mark Warner, as well as younger men and women not yet well-known. But their political day lies ahead, and today the party is controlled by Mr. Obama, Nancy Pelosi, Harry Reid, Charles Schumer, Barney Frank, and Dick Durbin. These are men and women whose ideas are archaic, unproductive and self-defeating.

Meanwhile, we have just seen the spectacle of President Obama being sidestepped in the debt ceiling issue, and placed involuntarily in the background, as he rants on and on about “taxing the rich” and other ideas too embarrassing to be taken seriously.

After the serious defeat of liberal public policies in the 2010 national elections, it was suggested by some conservative commentators as well as the usual liberal ones that Mr. Obama would rebound and win re-election in 2012. That was not an unreasonable prediction. After all, Bill Clinton had endured a similar defeat in 1994- 95, but had staged a remarkable comeback (employing conservative and centrist ideas). Mr. Clinton was a skillful and experienced politician.

One more time, in the current debt limit debate, Barack Obama exhibits none of the skill his supporters have claimed for him. Instead he has whined, overpromised, deceived, and acted like a primadonna. He offers no new ideas, no new public policy strategies, no effective economic principles, and no new plans of his own. His strategy is to demagogue on social security, Mediicare/Medicaid, and debt ceiling consequences. His heralded “rhetoric” has become hollow and empty. Instead of negotiation and compromise, he prances and poses.

When someone is elected president of the United States, they receive, and rightly so, the respect of the office, leeway to make initial mistakes, and time to develop their own plans to resolve national problems. Mr. Obama has received these and more, but there is no sign of growth, maturity and political skill as he enters the third year of his presidency.

Time is almost up. I think we have already seen the beginning of the end of a presidency.

The Most Underestimated Politician in Washington, DC

At the outset of his becoming speaker of the U.S. house of representatives, John Boehner, congressman from Ohio, had the good wishes and modest hopes of his fellow Republicans, and big question marks from everyone else.

His first impression was positive, albeit a bit teary (revealing a small tic of the new speaker, although an endearing one). Mr. Boehner was brought to power by an historic off-year national election in which voters across the nation had registered their abhorrence of the radical policies of the new Democratic administration under President Barack Obama and his colleagues in the U.S. senate and house, Harry Reid and Nancy Pelosi. The switch from Democratic majorities in 2006 and 2008 had been amazingly rapid, and was brought on by trying to intimidate radical policies, but the new Republican majority in the U.S. houses faced Democratic control in the U.S. senate and in the White House.

Some observers thought that Congressman Eric Cantor, a brilliant new GOP leader form Virginia who did become house majority leader, might be a tougher figure in the role. Mr. Boehner was a charmer and an effective minority leader, but the role of speaker, for the first time since 1993, now was to be an historically pivotal role. Being minority leader is usually a checkers game; the speaker of the house, especially when the other party controls the executive branch is a serious game of chess.

The whole nation has just been given an education by Speaker Boehner in how this serious game can be played. Perhaps the most presumptive president in memory, although himself an amateur politician, was used to getting his way, particularly in the first two years of his first term. His way, it turned out, to be one public policy mistake after another. With unemployment at chronic highs, deficits soaring, and the so-called debt limit at its legal edge, the nation has been gradually losing its confidence and its patience with its chief executive and commander in chief. Nevertheless, Barack Obama routinely summoned Republican leaders to one-sided discussions (after ignoring them in his first two years) after which he deplored GOP unwillingness to “compromise.” In fact, the president’s idea of compromise usually turned out to actually be the surrender of the other side.

It was as if Mr. Obama had been on vacation during the 2010 election and its results. (In fact, I know some serious persons who will argue that he was.)

The Old Media, having invested so much of their reputation in Mr. Obama’s rise to power, continued to perform as uncritical cheerleaders. After all, with the New York Times, Washington Post, NBC/ABC/CBS and their cable outlets all singing Mr. Obama’s praises no matter what he said or did, how could anything be wrong?

The 2012 presidential campaign began later than usual; there was a nominal frontrunner, but no overwhelming Republican or conservative figure among them. The president faced campaign criticism, and media criticism from the emerging New Media, including commentators on Fox News, in conservative print media and in the opposition flagship, The Wall Street Journal, but there was no one who really stood up to Mr. Obama’s routine misstatements of fact, unsupported claims, and misunderstandings of political and economic reality.

That time is now over. Until the Republican Party chooses its presidential nominee in Tampa, there is someone in the loyal opposition who seems to have the president’s number. That person is John Boehner. So far, he can’t be bullied and can’t be bluffed. Mr. Cantor, the majority leader, is proving to be an able colleague. The GOP “freshmen” from 2010 are sticking to their guns on the issues which brought them to Washington, DC, including no new taxes, no more deficits and smaller government. If the truth be told, Mr. Boehner was not at first one of them, but he wisely adapted his leadership to them. (If he had not, his caucus would have splintered and fallen apart.)

Already, in various states, the transformation of American public policy is taking place. Under Governors Mitch Daniels of Indiana, Chris Christie of New Jersey, John Kasich of Ohio, Bob McConnell of Virginia, Scott Walker in Wisconsin, Rick Perry in Texas, and at least one Democrat, Andrew Cuomo of New York, new relationships between raising government revenue and public spending are being enacted. A state government shutdown in Minnesota recently ended when conservative principles won most of the day. Florida, New Mexico, Iowa, Pennsylvania and, yes, California (under new Governor Jerry Brown) are also moving in this direction.

Somehow, President Barack Obama seems to have missed all of this. His lifeless populist rant of “tax the rich” has found no resonance among voters outside a small radical group. Perhaps the president should make a telephone call to Governor Mark Dayton of Minnesota, instead of badgering Speaker Boehner. I’m sure Governor Dayton will take his call, and will patiently explain to the president that “tax the rich” rhetoric isn’t worth the effort. (Governor Dayton showed significant leadership recently by abandoning this idea and its rhetoric and brokering a settlement with the state conservative legislative leadership.)

Meanwhile, there is a new sheriff in Washington, DC. I hope Speaker Boehner sticks to his principles and doesn’t think initial successes have finished his job. In fact, much rests on what Speaker Boehner and his colleagues can accomplish between now and the 2012 election when the American voter will have their next opportunity to make their government work right again.

Prediction: Republicans Will Take Control Of U.S. Senate in 2012

Most electoral attention in the past few months has been on the developing presidential election of 2012, but there is another important political story next year which may dramatically shape the term of 2013-2017 regardless of whom is elected president.

There are 23 Democrats and Democratic-leaning independent seats up next year, and only 10 Republican seats. Moreover, many of those Democratic seats are vulnerable while few, if any, of the GOP seats are.

If President Obama remains in as much political trouble as he is in now, and the economy fails to make a clear rebound, including unemployment continuing at levels of 6-10%, the results in the U.S. senate and house elections will dwarf even the remarkable outcome of 2010 when the GOP took decisive control of the U.S. house and made major gains in the U.S. Senate. It would be easy to predict conservative control of the U.S. senate in that scenario, even a level of GOP control that would close off cloture debate (60 seats).

I would like to suggest, however, that even if the economy turns around sufficiently, and the Republican ticket is weak, a re-elected Barack would face not only another GOP-controlled U.S. house, but a GOP-controlled senate as well.

How could that be possible? I have two major reasons. First, historically, presidential elections do not often produce equivalent results in the house and senate races. A review of recent “landslide” presidential elections demonstrates that, although the party of the winning candidate makes gains, those gains are often much more modest than the popular or electoral presidential vote. Second, even in a best-case scenario for Mr. Obama in 2012, there is very little evidence that he would have any notable coat tails in the congressional elections. Mr. Obama’s re-election, however narrow, would be a personal triumph for him (and a damning comment on Republicans for selecting such a weak ticket to oppose him), but a state-by-state appraisal indicates that many Democrats running for re-election or election to fill the seats of retiring members will be running on their own (as many did in 2010).

Let me be specific, although this is only a preliminary look at races not yet fully formed:

Six incumbent senators have already announced their retirements. Of these, only retiring Democratic seats are vulnerable.

The ten Republican seats up in 2012, including incumbents running for re-election, show so far none in the “vulnerable” category, although the seat of retiring Senator Jon Kyl (Arizona) and recently appointed Senator Dean Heller (Nevada) could become competitive by next year. In addition, Senator Richard Lugar (Indiana) is being challenged by conservatives in his own party.

In contrast, several Democratic seats are already quite vulnerable. Retiring Senator Kent Conrad (North Dakota), retiring Senator Herb Kohl (Wisconsin), retiring Senator Jim Webb (Virginia) and retiring Senator Jeff Bingamon (New Mexico) could easily be replaced by Republicans. Incumbents running for re-election, including Senator Ben Nelson (Nebraska), Senator Claire McCaskill (Missouri), and Senator Bill Nelson (Florida) are in deep trouble, and, as matters look now, will be replaced by conservative Republicans. Additionally, Democratic incumbents either retiring or running for re-election in Hawaii, Michigan, New Jersey, Ohio, Washington and Connecticut appear to have strong Republican challenges ahead.

I realize that predictions this far away from election day (15 months) are always very speculative, and that historical events can always intervene to change a political environment relatively rapidly. We also do not even know who will be on the Republican ticket. So I am not predicting specific numbers in the GOP pick-up pf the senate. On the other hand, the remarkable imbalance of incumbent seats being contested in 2012, the vulnerability of so many Democrats, the prospects of the economy, and the lack of vulnerability among the few Republican seats up for election, enables me to predict this far ahead that there will be a new majority leader of the U.S. senate that first week of January, 2013, and many more gains for the conservatives no matter the outcome of the presidential election.

Minnewisowa Returns!

The political superstate of Minnewisowa (Minnesota, Wisconsin and Iowa) is back as prime battleground for the 2012 presidential cycle. It behaved true to form in 2008, with all its 27 electoral votes going easily to Barack Obama. But the political landscape has changed notably in all three states since then.

Minnesota has elected a Republican legislature and, for the first time in 20 years, a Democratic governor (but barely). The GOP also picked up a U.S. house seat. A budget dispute has now closed the state government down for three weeks, although a just formulated “deal” will probably bring that to an end in days. It is unclear what the aftermath of this shutdown will be, although the Democratic governor did agree to the basic terms of the Republicans. On the other hand, incumbent Democratic U.S. Senator Amy Klobuchar so far does not have a serious opponent.

Wisconsin elected a Republican governor in 2010 and a GOP legislature. Conservatives also picked up two U.S. house seats and a U.S. senate seat. Promised reform was enacted by the Republicans with much controversy, but state government is now considerably more Republican than it was.

Iowa elected a Republican governor, and has lost a U.S. house seat in 2012 which may reduce the Democratic congressional delegation from the state. As in the other two component states of Minnewisowa, urban unemployment remains high and the state’s ethanol production remains controversial.

Minnewisowa now has 26 electoral votes instead of 27 it had before, but with a faltering national economy that has also hit the midwest hard, President Obama’s prospects for the historic turnout that propelled him to victory nationwide and here in 2008 are significantly reduced.

The greatest political energy throughout Minnewisowa has been the reinvigoration of rural and outstate conservative voters. The confrontation with labor unions in Wisconsin has also brought new energy to urban liberals there for the time being, with union members efforts concentrated on recall and retribution votes taking place over the summer. The first of these, an attempt to prevent the re-election of the conservative state supreme court chief justice, fell short.

Many political observers have noted that the unpopularity and controversy of conservative-led austerity measures in all three of these states could likely fade by next years if these measures produced the economic turnaround they are designed to do. Reform Republican governors in Indiana, Ohio, New Jersey, Virginia and Florida,, and Democratic Governor Andrew Cuomo in New York, have all seen their poll numbers decline, but they have brought about reduced government spending, lower taxes and restraint of labor union demands which are also expected to pay big dividends by mid-2012.

The components of Minnewisowa will have special circumstances in 2012. Two of the major GOP presidential contenders are from Minnesota (Tim Pawlenty and Michele Bachmann), two of the national figures who emerged from the 2010 national elections are from Wisconsin (Congressman Paul Ryan and Governor Scott Walker), and Iowa remains the first voting state in 2012 with its first-in-the-nation caucus, as well as its symbolic GOP Straw Poll in Ames next month.

More than a year out, similar economic and demographic patterns throughout Minnewisowa signal the “superstate” may be poised for further political change. The presidential campaign, in addition the state legislative and congressional elections here, just as it did in 2000, 2004 and 2008, provide special focus for voters, but this time perhaps with a different result.

A Republican Ticket That Probably Can’t Lose In 2012

It’s just speculation at this point, but I think there is a Republican ticket that probably can’t lose, barring the unforeseen, the 2012 presidential election.

No votes have been cast yet; in fact, we are a month from the Iowa Straw Poll. So it is clearly speculative that the frontrunner, Mitt Romney will win the GOP nomination. Nevertheless, Mr. Romney does seem on the road to win in Tampa. Governor Rick Perry will probably enter the contest now, and that will slow the Romney train down, but neither Mr. Perry, Mrs. Michele Bachmann nor Mr. Tim Pawlenty seem yet to have the political force to stop this train on the tracks.

There are several excellent vice presidential choices for whomever is nominated. These include New Jersey Governor Chris Christie and several of those now running for the top spot, i.e., former Governor Pawlenty, current New Mexico Governor Susana Martinez, current Governor John Kasich of Ohio of and former Speaker Newt Gingrich. But there is one potential vice presidential choice whose impact on the election I think would tower over all others.

Senator Marco Rubio of Florida would almost certainly accomplish what any ideal running mate could bring to a ticket. Not only would he bring Florida, with its huge number of electoral votes, to the GOP side (Florida’s votes went Obama in 2008), as the first Hispanic nominee for vice president, he would almost certainly swing many in the huge American Hispanic vote from the Democratic column to the Republican side. A charismatic, young and eloquent figure, and a candidate from the South, he would provide needed balance to Mr. Romney, a northerner and a Mormon. Although only in his first term in the U.S. senate, Mr. Rubio has considerable background in Florida state politics. (Considering that Mr. Obama was in his first senate term in 2008, and had much less experience in state politics than Mr. Rubio, the Florida Republican’s credentials could not be credibly challenged by Democrats.)

I am sure that, at this point, Senator Rubio will deny any interest in the vice presidency, and he would probably be sincere. Like Governor Christie, he is not ready to run for the presidency (although both are prominently mentioned as candidates in 2016 or 2020), but in September, 2012, in Tampa, it would be very difficult for Mr. Rubio to say no to an invitation from just-nominated Mr. Romney. (I point out that even Lyndon Johnson, the powerful senate majority leader in 1960, could not resist the invitation from John F. Kennedy.)

I realize that Mitt Romney, despite his growing lead now, might not win the GOP nomination. Anything can happen in U.S. politics these days. Even so, Senator Rubio might prove an irresistible choice for Mr. Pawlenty should he win the nomination. (In that case, two young GOP nominees on the ticket could prove just as effective as the youthful Bill Clinton-Al Gore ticket was in 1992.)

As I said at the outset, this is all just speculation. But I would suggest that it might be worthy to store these thoughts for a moment about a year from now when the GOP nomination almost certainly be decided, and the vice presidential choice becomes the number one item of political discussion, and possibly, key to the outcome of the November election.

We’re Here!

This is the time when the nation, and individual states, make the critical and historic decisions about their future economic well-being.

Finally, it is not a decision that is decades, years or months to come. The decision will be made now.

Minnesota is a harbinger of what might happen in Washington, DC. Although I have pointed out that there are folks in both parties who know what needs to be done, the Democratic Party leadership has defensively buried its collective head in the Potomac River sand, and we are not able to hear from Democrats who want to be a part of the transformation of American economic policy. Republicans in the U.S. Congress, in governorships and in state legislatures, however, have no such ambivalences about reversing three-quarters of a century of increased taxes, increased government spending, expansion of government at all levels, and the mindless increase of entitlements in American society.

Rumors that these Republicans will now “cave” into desperate liberal warnings and rhetoric about imminent disaster if these programs are not renewed, the debt ceiling is not raised, if taxes for the rich are not increased, and if government is not allowed to further control the lives of Americans, seem mostly to originate in the Old Media that have become “obedient pets” of the the old order. Speaker of the U.S. House of Representatives John Boehner has made it clear there will be no new taxes, no new spending and no bigger government. Even if he did not, the bulk of the GOP members of the U.S. house would balk at any agreement that did not honor these principles. The governors of New Jersey, Virginia, Ohio, Indiana, Wisconsin, Florida, Texas and New York are showing remarkable leadership and singlehandedly have revived the original federal relationship as intended by the Founding Fathers who wrote the U.S. constitution.

The “deal,” however is not done. President Obama has thrown in his lot with the historical past. The U.S. senate majority seems to have no interest in being part of an historical transformation of U.S. politics. Individual governors and state legislatures are resisting change. Interest groups which benefit from the accumulated “favored” treatment of the past seventy-five years are understandably unwilling to be part of inevitable historical change.

Make no mistake about it, it is going to take one more national election to finish the job. I want to stress that the transformation of American politics need not be an ideological one. What is driving this transformation is economic necessity which equally affects all Americans, regardless of party or ideology. (I trust there are other Democratic politicians besides Governor Cuomo who understand that some boldness, courage and independence now will propel them to the leadership of a revived Democratic Party after the Obama-Pelosi-Reid era is over.)

It will take another national election to finish the job, but what happens now will be a key to the character of the change that will happen. We’re here!

Political Dinosaurs In Minnesota

Former Minnesota Governor Tim Pawlenty is going through a difficult period in his quest for the Republican nomination for president, although only days ago he had acquired some positive momentum with a speech in Chicago on economic policy. This momentum was lost when he ill-advisedly attacked GOP frontrunner Mitt Romney for “Obamneycare” and then backed away from confronting the former Massachusetts governor. Since that time, Mr. Pawlenty has seemed less sure of himself, and is now the object of some negative media scrutiny.

I have long suggested, however, that Mr. Pawlenty has been generally lucky in this campaign, and that he he has shown not only some original rhetorical approaches, but a gift, already evident in his time as governor, for the felicitous phrase.

The fiscal impasse in his home state between a liberal Democratic governor who wants to “tax the rich,” and a conservative Republican legislature which refuses to raise taxes and wants to slash state spending may provide Mr. Pawlenty with another lucky break.

That is because, instead of dodging the impasse, Mr. Pawlenty has waded into it, recalling for a national audience his eight-year role of not allowing tax increases in the state, and for holding back spending increases. When a group of aging politicians, once prominent in state politics, formed a committee to propose a “third way out” of the impasse, Mr. Pawlenty pounced with one of his trademark political zingers, describing the proposals of the group as a “visit to Jurassic Park.”

These aging politicians included no less than former Vice President Walter Mondale, former Governor Arne Carlson and former U.S. Senator David Durenberger. The latter two served as moderate Republicans; Mondale, of course, served lifelong as a liberal Democrat. All three, however, have moved to, or remained on, the left since leaving office. Mr. Mondale, it should be remembered, sealed the fate of his 1984 presidential bid by proclaiming on national TV that he would raise income taxes. (In full disclosure, I endorsed both Carlson and Durenberger in a newspaper I edited and published in Minneapolis when they first ran for office, and I have praised Mr. Mondale for his long and distinguished public service, culminating with his superb job as U.S. ambassador to Japan under President Bill Clinton. Mr. Carlson, who served as Minnesota governor 1991-1999, was, in my opinion, an excellent governor.}

But that was then. Now these gentlemen have weighed in on the current crisis with sincere but outdated ideas of what constitutes a “compromise” to resolve the impasse. Much of their compromise proposal is conventional, i.e., raising the user taxes on cigarettes and alcoholic beverages, lowering the state’s (high) overall sales tax, but broadening it to include items not now taxed, and lowering state spending (the most realistic part). But a final and key component of their “third way” budget resolution is to add a temporary 4% increased income tax liability to all Minnesotans. Their rationale for this was that “everyone should be part of the solution.” Governor Dayton promptly thanked the group, composed mostly of those who supported him or his Independence Party opponent, but not the Republican candidate, in the last election, and strongly rejected the 4% tax increase, saying he wanted only rich Minnesota taxpayers to help pay for the budget shortfall. Republicans predictably rebuffed the whole proposal.

I do think this committee meant well, but being composed mostly of politicians of the past, they simply did not understand the nature of the dispute. Governor Pawlenty’s phrase describing the “third way” proposal as a visit to Jurassic Park captured the sense that those who see increased taxes as a viable component of a solution to the impasse are, in effect, political dinosaurs, living in a past age.

There seems to be some misunderstanding in the national media that Minnesota is still the “liberal” state it was twenty-five years ago in the era when Hubert Humphrey and Walter Mondale were national figures from the state. Mr. Pawlenty is being a bit disingenuous when he describes Minnesota as a “blue” state as, for example, Massachusetts still is. Until 2010, no Democrat had been elected governor of Minnesota since 1986. After 1990, Minnesota had numerous Republican U.S. senators, as well as U.S. members of Congress. Minnesota cannot be described as a “red” state, it is true, but it has become more of a centrist state. In fact, statewide polls reveal that the largest bloc of voters (about 40%) consider themselves independents. Since 1998 (when Jesse Ventura was elected governor), the centrist Independence Party has meant the difference in all of the gubernatorial races, as well as some of the senate and congressional races.

The lesson of the 2010 national and state elections was that most voters have reached the end of the road in their toleration of tax-and-spend post-New Deal economics. Accumulated entitlements over the past 50 years have brought the nation to the brink of economic failure, with deficits, unfunded liabilities and the cost of government and bureaucracy out of control. The imposition of Obamacare, or mandated federal health insurance, was the final straw as voters revolted, putting Republicans promising no more tax increases, reduced spending and smaller government back in Washington, DC and many state capitals.

Any resolution to the impasse in Minnesota will have to take this political reality into account. Accusing Republican legislators of being unwilling to compromise because they refuse to raise taxes is to try to pretend that 2010 did not happen. Mr. Obama and Mr. Dayton, are both proponents of “tax the rich” redistributionist economics that had a heyday in the 1930’s, but they sound increasingly “prehistoric” to the voters of today. Republicans in the U.S. Congress or in the Minnesota legislature who would accede to this kind of economics would almost instantly feel the wrath of the persons who count most in this whole confrontation, the electorate.

Why Romney Is Pulling Ahead Now

The Republican contest for the presidential nomination is well underway, and following a few surprises of who is running and who is not, the full field is in sight, if not formally complete. Three potentially major candidates could yet enter; in fact former Utah Governor Jon Huntsman is now in. Texas Governor Rick Perry is probably going to enter, and former Alaska Governor Sarah Palin just might enter. These latter three have noticeable bases in the GOP. Mr, Huntsman will be the most moderate candidate in the field, and yes, there are moderates remaining in the party, but he has little chance to win this cycle. Mr. Perry is a formidable figure, but he is a regional candidate. He would have impact because his region makes up an important base in the GOP, and there is no true southern candidate in the field. Mrs. Palin has a huge political personality, but many in her base have already gone to her friend Mrs. Michele Bachmann, and it’s late for her entry.

The three major contestants, as of now, are Mitt Romney, Mrs. Bachmann and Tim Pawlenty. Mr. Romney leads in most of the polls, leads in fundraising, has the highest name recognition, and his frontrunner status seems only to grow by the week.

Yet Mr. Romney is not the favorite of the conservative or Tea Party bases of the Republican Party. He has liabilities, most notably his association with Romneycare, his medical insurance plan from his years as governor of Massachusetts. President Obama’s Obamacare federal plan is enormously unpopular and unworkable, and in fact helped precipitate the Democrats’ stunning defeat in the 2010 elections. Mr. Romney’s opponents have tried to make Romneycare to be the same as Obamacare, and thus discrediting him. President Obama even disingenuously stated that Romneycare inspired his plan. Mr. Romney seemed slow in refuting these arguments against him, but when he did, he made the points that his plan was a state plan with many differences from the federal plan, and contained features insisted on by the Massachusetts legislature.

Mr. Romney is also a Mormon, a Christian group allegedly unpopular with some other conservative Christian groups.

Conservative talk show hosts have not truly warmed to him, nor have many conservative leaders and ideological spokespersons. In some ways, his candidacy is similar to John McCain’s in 2008 when McCain was not the favorite of the conservative base of his party.

Some suggest that there is a “runner-up syndrome” in the Republican Party in which the person who came in second in the previous cycle wins the nomination the next time out. Ronald Reagan, George H.W. Bush, Bob Dole and McCain himself support this notion, and there seems to be some validity to it.

But I would suggest that there is also something else propelling Mr. Romney forward. This is the growing awareness that, whether he is an individual Republican’s first choice or not, Mitt Romney is the most likely person in the field to appeal to the American political center in 2012. This is critical because it is becoming clearer every day that President Obama is highly vulnerable for re-election, and that barring nominating a radical nominee unacceptable to the political center and independent voters, the GOP nominee will likely be the next president. It should be added that, in addition to a controversial nominee, a basic policy mistake could lead to a Republican defeat. Newt Gingrich has pointed out that such a mistake would be the poor presentation of medicare reform (this giving Mr. Obama an emotional issue with which to attack his
opponent).

Having gone through the 2008 presidential nominating campaign in 2008, and coming in second, Mr. Romney is more unlikely to make such a mistake, or to make a serious verbal blunder as his father did in 1968.

In 1964, Republicans nominated Barry Goldwater, and in 1972, Democrats nominated George McGovern. Each of these men were wildly popular with the ideological bases of their party, but had little appeal to the political center, and lost in landslides. Similarly, in 1984, Democrats nominated Walter Mondale who right away asserted that he would raise taxes, pleasing the old New Deal liberal base, but turning off younger independent voters. Mondale lost 49 of 50 states.

Many in the conservative media, as well as leaders of conservative groups, remain skeptical or opposed to Mr. Romney, but the polls are suggesting, for whatever they are worth at this point, that Mr. Romney’s appeal at the independent grass roots is growing. Mr. Romney’s political conduct of late indicates he has already figured much of this out.

All of this could change, of course, with some dramatic new developments, or a huge political gaffe, but we are only six months away from the first voting. I am not yet predicting a Romney triumph in Tampa. I also caution those who are writing Tim Pawlenty off in this contest. In spite of some mistakes, and lack of resources, he has shown himself to be the most imaginative of the GOP candidates so far, and will have opportunities to recover (unless Mrs. Bachmann demolishes him in Iowa and New Hampshire).

Another clue to Mr. Romneys’ growing strength is, and will be, the focus on him and attacks on him by President Obama and the national Democratic Party. I think Mr. Romney is the Republican the Democrats fear most as their opponent in 2012, and I suggest that will become more and more evident in the months to come.

Minnesota Shutown Is An Historic Oportunity

Most Minnesotans know by now that their state government has been shut down because the state cannot pay its bills. It is also a national news story, and many persons across the nation are looking to see how Minnesota will resolve it budget impasse.

An impasse it is because the Democratic (here called the Democratic-Farmer-Labor Party or DFL) governor is adamant so far about raising additional revenue to pay for state programs by placing an additional tax on rich Minnesotans. At the same time, the Republican controlled legislature is insisting there be no new taxes while limiting new spending. It is the classic political/economic confrontation of contemporary America, and the same scenario is being played out in other financially-overdrawn states as well as in a similar confrontation in Washington, DC where a Democratic president and Democratically-controlled U.S. senate is at basic odds with a Republican-controlled U.S. house of representatives.

In some states with these problems, the governorship and the legislature have been of like mind, and an historic transformation has begun to take place. Most far-reaching of these is perhaps Ohio where former congressman John Kasich is the new governor. He has turned the state completely around with conservative policies that cut back state spending, reduced the size of Ohio stated government, and levied no new taxes. Kasich, a Republican, was a leader for advancing these principles when he was in Congress, but they are not necessarily partisan. Others such as former Democratic Congressman Tim Penny worked closely with Kasich in those congressional days, and remains a friend and confidante. Penny failed to win the Minnesota governorship in 2002, and an historic opportunity for that state was thus lost. The man who beat Penny, conservative Republican Tim Pawlenty, did try to transform the state’s economic policy, but he lacked control of the state legislature, and was unable to initiate much true reform, other than block new taxation.

The new governor of Minnesota is the very liberal Mark Dayton who ran on a platform of increasing the income taxes of rich Minnesotans. Dayton had been a presence in Minnesota politics since the early 1980s when he served as a commissioner for DFL Governor Rudy Perpich and then ran unsuccessfully for the US. senate. He subsequently ran for and won the post of state auditor for one term. After a failed bid for governor in the 1990s, he re-emerged to stage an upset win in the 2000 DFL U.S. senate primary, defeating the DFL-endorsed candidate, and went on to win the senate seat. He also served one term, but retired in 2006. In 2010, Dayton again re-emerged to challenge the DFL-endorsed candidate for governor. He won the primary, and went on to win the state’s top executive position by the narrowest of margins, and like his predecessor Tim Pawlenty, gathered only a plurality of votes.

Dayton is an heir to the state’s fabled department store fortune, and grew up in privileged circumstances. Not unlike many other rich Democratic politicians in his circumstances, he adopted the populist position of seeking to tax the rich, as if to make credible his claim to be an ordinary Democratic person. While he served well as a state commissioner and state auditor, he was clearly not comfortable as a U.S, senator in Washington, DC. His retirement forestalled probable defeat at the polls in 2006. His most notorious moment in that job was when he closed his office in the Capitol following a health scare. (Although he was ridiculed for this, I wrote then in a Washington daily newspaper defending his action, saying while it was a political mistake, his motivation was the welfare of those who worked for him, and he did not deserve all the opprobrium he was receiving.)

I do not share some of Dayton’s political philosophy, and certainly disagree with his populist rant about “taxing the rich,” But I have observed that his long political career in Minnesota has not been without personal integrity and notable political accomplishments. The latter includes coming back against all odds in 2000 and 2010 to win high office, and defeating party-endorsed DFL candidates. I have long opposed the so-called precinct caucus system in Minnesota as undemocratic and elitist, and Dayton has almost single-handedly rendered it impotent.

But now, Mark Dayton is at a new crossroads in his political career, and clearly the most important one, perhaps the most important he will ever face. As the surprise winner of the 2010 Minnesota governorship, while the DFL equally surprisingly lost control of both houses of the state legislature, and the first DFL governor in 20 years, Dayton is in a unique position to resolve the budget impasse in Minnesota. The DFL needs him far more than he needs the DFL, and he could fashion an historic resolution to the state government shutdown. In my opinion, it is time for Dayton to shed his atavistic and discredited mantra about “taxing the rich.” Nowhere in the U.S. is this policy working. I don’t think that Dayton’s life experience as a “rich kid” needs any longer to be compensated for by him. He has paid his dues over 30 years. He has shown himself to be compassionate and progressive.

The way out of the current Minnesota shutdown impasse is for a true compromise. A true compromise is not “splitting the difference” between the DFL and GOP positions. It is not meeting “half way.” That would rightly be perceived as as a one-sided victory for the DFL since it would raise taxes. Raising taxes is off the table in 2011, as is increased state pending and expanding state regulations and government. The voters decided that in 2010, and even more powerfully, economic circumstances in the state and nation, preclude it. In my opinion, Governor Dayton should go beyond the tax issue, accept new governmental discipline, and demand as his side of the bargain the preservation of certain progressive and DFL-favored institutions and programs. He may worry that he would be criticized in his DFL political base for conceding the tax issue, but as I have previously pointed out, the DFL political base needs Mark Dayton much more than he needs them.

I would also argue that if he does not do this, and get the credit for statesmanship, he will have to do it in the end anyway, and not get any credit. The GOP leaders of the legislature, and its members, would be committing political suicide to agree to any tax increase. And, as I pointed out, they won the election running on a no-new-taxes platform, while Dayton, I would argue, did not win because he said he would tax the rich, but in spite of that. (His Republican conservative opponent was discredited early in the 2010 campaign, and ran well behind GOP legislative candidates.)

Not only Ohio shows the way for state government today. Governor Mitch Daniels of Indiana, Governor Chris Christie of New Jersey, Governor Bob McConnell of Virginia, Governor Rick Scott of Florida are leading similar movements in their states. Yes, they are Republicans, but believe it or not, conservative measures are also being adopted by such Democratic governors Andrew Cuomo of New York and Jerry Brown of California. Doing the right and successful thing is NOT necessarily a partisan matter in these difficult economic times.

The onus for resolving the Minnesota shutdown is not primarily on the Republican conservative legislature. The real responsibility, as it usually is, is with the state governor. Mark Dayton is at his biggest crossroads. Let’s see if he rises to the occasion.