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GOP Unable To Wash Away Santorum

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After his disappointing loss to Michele Bachmann in the Iowa Straw Poll, Former Minnesota Governor Tim Pawlenty officially withdrew from the 2012 Presidential campaign.  Pawlenty finished third with 14% of the votes.  Bachmann picked up 28% and Congressman Ron Paul was right behind her with 27%.  Despite the fact that Rick Santorum finished fourth with a paltry 9.8%, the Pennsylvanian has not discussed abandoning his own Presidential bid.

Santorum has not held public office since his humiliating defeat in the 2006 election, at which point he lost his Senate seat to Democrat Bob Casey, Jr. by a 59%-41% margin – the worst defeat for an incumbent Senator since 1980.  One might assume that such a bidetory washout would forever purge Santorum from that zone within the Beltway.  Nevertheless, Santorum apparently believes he will have greater success with a national campaign in post-Tea Party America.

Strangely enough, Santorum’s fourth-place finish in the Ames Straw Poll is being spun as a victory.  Dan Hirschhorn reported for Politico that Santorum’s fourth-place showing helped grease the candidate’s fundraising efforts:

Still underfunded, the campaign enjoyed its strongest overnight online money haul in the hours after the straw poll, and is planning to step up its fundraising efforts in Pennsylvania, his financial home base after two Senate terms.

Nevertheless, as Daniel Larison discussed in The American Conservative, Santorum’s fourth-place finish was solely a result of the candidate’s persistent, lingering presence in Iowa:

The reality is that Santorum has been living and campaigning full-time in Iowa for weeks, he ought to be rallying social conservatives to him in much larger numbers than he does, and his fourth-place finish out of a field of six direct competitors is confirmation that his campaign is going nowhere.  Beating out Herman Cain and Thad McCotter on the ground does not mean much at all.  His presidential bid has always seemed to be a vain effort to re-fight the battles of his failed 2006 re-election campaign.

Michael Falcone of ABC News observed that Santorum “has been languishing near the bottom of national polls”.  The question remains as to whether a candidate, whose agenda is so tightly focused on conservative “values voters” could gain momentum in a campaign dominated by financial issues.  As George Will pointed out, Santorum has repeatedly emphasized that “… America’s debt crisis is, at bottom, symptomatic of a failure of self-control  …”

Dan Hirschhorn noted at the conclusion of his Politico report, that Santorum’s “end game” remains a mystery.  I suspect that Santorum’s true objective could be to secure the number two place on the Republican ticket as the GOP’s Vice-Presidential candidate.

It’s reasonable to assume that the presence of Santorum on the back end of the Republican ticket could provide their campaign with a frothy mixture of enthusiasm, including support from social conservatives who would not otherwise vote for a less-polarizing Presidential nominee.

Meanwhile, Santorum continues to swim upstream, while jumping down the throat of the hard right’s newest rising star, Texas Governor Rick Perry, who refused to advocate a relativistic interpretation of the Tenth Amendment.  Governor Perry provided this response to Santorum’s blast:

“You either have to believe in the 10th Amendment or you don’t,” Perry told reporters after a bill signing in Houston Wednesday.  “You can’t believe in the 10th Amendment for a few issues and then [for] something that doesn’t suit you say, ‘We’d rather not have states decide that.’”

You can probably see the problem exposed by this dust-up.  If the Republican Party can’t wash out Santorum, the remaining GOP Presidential hopefuls will begin to appear liberal.


 

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Inviting More Trouble

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I frequently revert to my unending criticism of President Obama for “punting” on the 2009 economic stimulus program.  The most recent example was my June 13 posting, wherein I noted how Stephanie Kelton provided us with an interesting reminiscence of that fateful time during the first month of Obama’s Presidency, in a piece she published on William Black’s New Economic Perspectives website:

Some of us saw this coming.  For example, Jamie Galbraith and Robert Reich warned, on a panel I organized in January 2009, that the stimulus package needed to be at least $1.3 trillion in order to create the conditions for a sustainable recovery.  Anything shy of that, they worried, would fail to sufficiently improve the economy, making Keynesian economics the subject of ridicule and scorn.

As it turned out – that is exactly what happened.  Obama’s lack of leadership and his apologetic, half-assed use of government power to fight the recession has brought us to where we are today.  It may also bring Barack Obama and his family to a new address in January of 2013.

At this point, the “austerian” economists are claiming that the attenuated stimulus program’s failure to bring us more robust economic growth is “proof” that Keynesian economics “doesn’t work”.  The fact that many of these economists speak the way they do as a result of conflicts of interest – arising from the fact that they are on the payrolls of private firms with vested interests in maintaining the status quo – is lost on the vast majority of Americans.  Unfortunately, President Obama is not concerned with rebutting the arguments of these “hired guns”.  A recent poll by Bloomberg News revealed that the American public has successfully been fooled into believing that austerity measures could somehow revive our economy:

As the public grasps for solutions, the Republican Party is breaking through in the message war on the budget and economy.  A majority of Americans say job growth would best be revived with prescriptions favored by the party:  cuts in government spending and taxes, the Bloomberg Poll shows.  Even 40 percent of Democrats share that view.

*   *   *

Though Americans rate unemployment and the economy as a greater concern than the deficit and government spending, the issues are now closely connected.  Sixty-five percent of respondents say they believe the size of the federal deficit is “a major reason” the jobless rate hasn’t dropped significantly.

*   *   *

Republican criticism of the federal budget growth has gained traction with the public.  Fifty-five percent of poll respondents say cuts in spending and taxes would be more likely to bring down unemployment than would maintaining or increasing government spending, as Obama did in his 2009 stimulus package.

The voters are finally buying the corporatist propaganda that unemployment will recede if the government would just leave businesses alone. Forget about any government “hiring programs” – we actually need to fire more government employees!  With those annoying regulators off their backs, corporations would be free to hire again and bring us all to Ayn Rand heaven.  You are supposed to believe that anyone who disagrees with this or contends that government can play a role in job creation is a socialist.

Nevertheless, prominent individuals from the world of business and finance are making an effort to debunk these myths.  Bond guru Bill Gross of PIMCO recently addressed the subject:

Solutions from policymakers on the right or left, however, seem focused almost exclusively on rectifying or reducing our budget deficit as a panacea. While Democrats favor tax increases and mild adjustments to entitlements, Republicans pound the table for trillions of dollars of spending cuts and an axing of Obamacare.  Both, however, somewhat mystifyingly, believe that balancing the budget will magically produce 20 million jobs over the next 10 years.  President Obama’s long-term budget makes just such a claim and Republican alternatives go many steps further.  Former Governor Pawlenty of Minnesota might be the Republicans’ extreme example, but his claim of 5% real growth based on tax cuts and entitlement reductions comes out of left field or perhaps the field of dreams.  The United States has not had a sustained period of 5% real growth for nearly 60 years.

Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, “they will come.”  It is envisioned that corporations or investors will somehow overnight be attracted to the revived competitiveness of the U.S. labor market:  Politicians feel that fiscal conservatism equates to job growth.

*   *   *

Additionally and immediately, however, government must take a leading role in job creation.  Conservative or even liberal agendas that cede responsibility for job creation to the private sector over the next few years are simply dazed or perhaps crazed.  The private sector is the source of long-term job creation but in the short term, no rational observer can believe that global or even small businesses will invest here when the labor over there is so much cheaper.  That is why trillions of dollars of corporate cash rest impotently on balance sheets awaiting global – non-U.S. – investment opportunities.  Our labor force is too expensive and poorly educated for today’s marketplace.

*   *   *

In the near term, then, we should not rely solely on job or corporate-directed payroll tax credits because corporations may not take enough of that bait, and they’re sitting pretty as it is.  Government must step up to the plate, as it should have in early 2009.

Hedge fund manager, Barry Ritholtz discussed his own ideas for “Jump Starting the U.S. Economy” on his website, The Big Picture.  He concluded the piece by lamenting the fact that the federal debt/deficit debate is sucking all the air out of the room at the very time when people should be discussing job creation:

The focus on Deficits today is absurd, forcing us towards another 1938-type recession.  The time to reduce the government’s economic deficit and footprint is during a robust expansion, not during (or just after) major contractions.

During the de-leveraging following a credit crisis is the worst possible time to be deficit obsessed.

Don’t count on President Obama to say anything remotely similar to what you just read.  You would be expecting too much.


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A Love–Hate Situation For The Stimulus Bill

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February 2, 2009

As the Senate focuses its attention on the economic stimulus bill, Republicans are putting up a good fight, after the measure sailed through the House of Representatives, despite unanimous Republican opposition.  Time magazine reports that Republican Senator Mitch McConnell believes that the bill will fail in the Senate because it does not provide enough tax cuts.  The Republican insistence on tax cuts has already been addressed by President Obama, who included more tax cuts into the measure.  In an editorial for Bloomberg News, Michael R. Sesit complained:

Obama’s proposed cuts are politically motivated — a bone thrown to Republicans, who embrace lower taxes.  The president’s desire to promote bipartisanship is a laudable goal.  Yet pursuing it at the expense of sound economic policy is a high price to pay.  Obama has enormous public support and doesn’t need Republican cooperation to pass his stimulus program.

Tax cuts are also politically hard to reverse, which will eventually be necessary once the economy is back on its feet and inflation picks up.

The Time article quoted Massachusetts Representative Barney Frank’s response to the cry for even more tax cuts:

“I never saw a tax cut fix a bridge. I never saw a tax cut give us more public transportation.  The fact is, we need a mix,” Frank said.

In his January 29 op-ed column for the New York Times, David Brooks reflected on what Larry Summers (the newly-appointed head of the National Economic Council) had to say throughout 2008 about the nature of a large-scale stimulus package, such as the one under consideration.  Brooks noted “three clear guidelines” established by Summers for developing a plan such as this:

First, the stimulus should be timely.  The money should go out “almost immediately.”  Second, it should be targeted.  It should help low- and middle-income people.  Third, it should be temporary.  Stimulus measures should not raise the deficits “beyond a short horizon of a year or at most two.”

In criticizing this bill, Brooks argued that these parameters have been abandoned.  Among his suggested “fixes” would be the removal of the permanent programs built into the proposal.

Meanwhile, E. J. Dionne has written about how progressive Democrats are split into two camps, expressing different priorities for the measure:

One camp favors using the stimulus to focus on the needs of Americans of modest means.  The $819 billion stimulus bill that passed the House Wednesday night on a party-line vote, as well as the proposal being developed in the Senate, includes substantial new spending for the unemployed, for food stamps and for advances in health-care coverage.  The tax cuts in both versions tilt toward Americans with lower incomes.  Education programs also fare well.

But another group of progressives sees the bills as shorting investments for infrastructure:  roads, bridges and particularly mass transit.  This camp was buoyed by a report released Wednesday by the American Society of Civil Engineers concluding that it would take $2.2 trillion to bring the nation’s infrastructure into good repair.

Many sources, including the San Francisco Chronicle, have criticized this bill as being laden with “pork” projects, unlikely to spur economic growth or to create jobs.  Beyond that, Jeanne Cummings provided an interesting report on the Politico website, revealing how the business sector sees this “oversized legislation” as a “golden opportunity”.  The Democrats do not seem averse to this interest:

Senate Democrats, hoping to draw more bipartisan support, have already signaled they’re going to beef up the business provisions.  Versions of some of the most coveted tax breaks are already in the proposal by Senate Finance Committee Chairman Max Baucus (D-Mont.).

But business leaders and their trade representatives would like to see even more love in the stimulus.  And they’ve commissioned special studies, blanketed the committee with letters and recruited industry bigwigs to make their case.

In the face of this expanding government largesse, an editorial in Sunday’s Washington Post called upon President Obama to remind those in Congress “including leaders of his own party, who are cluttering his fiscal stimulus plan with extraneous and counterproductive provisions” of the admonition he gave to the bad actors on Wall Street.  In his disgust with the misappropriation of over $18 billion in TARP money for bonuses, the President said:  “show some restraint and show some discipline and show some sense of responsibility.”  In a passage reminiscent of David Brooks’ emphasis on the “three clear guidelines” established by Larry Summers, the Washington Post editorial noted that:

Instead of giving the economy a “targeted, timely and temporary” injection, the plan has been larded with spending on existing social programs or hastily designed new ones, much of it permanent or probably permanent — and not enough of it likely to create new jobs.

Former Clinton administration budget director Alice Rivlin fears that “money will be wasted because the investment elements were not carefully crafted.”  Former Reagan administration economist Martin Feldstein writes that “it delivers too little extra employment and income for such a large fiscal deficit.”  Columbia University’s Jeffrey D. Sachs labels the plan “an astounding mishmash of tax cuts, public investments, transfer payments and special treats for insiders.”

Let’s face it:  the Republicans aren’t the only ones who are upset about the excesses in this stimulus plan.  In fact, most Republican governors favor this bill.  Last week the National Governors Association called on Congress to pass the plan.  Beth Fouhy reported for the Associated Press that Florida Governor Charlie Crist and Vermont Governor Jim Douglas are pushing Republican Senators to pass the bill.  Although such a measure may be distasteful to Republican ideals, these hard times demand that Republican governors follow the procedure described by Rush Limbaugh as “bending over and grabbing your ankles”:

Minnesota Gov. Tim Pawlenty, who is widely viewed as a potential presidential contender in 2012, said governors have little choice but to accept the relief being offered.  “States have to balance their budgets,” he said.  “So if we’re going to go down this path, we are entitled to ask for our share of the money.”

As the stimulus bill makes its way through the Senate, it will be interesting to see whether the final version involves dispersal of more than or less than $826 billion.  Don’t be surprised if it hits the One Trillion mark.

The Al Franken Month

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January 26, 2009

At the end of 1979, Al Franken appeared on the “Weekend Update News” during Saturday Night Live to announce that the 1980s would be “The Al Franken Decade”.  For those of us old enough to remember, it’s scary to realize that “The Al Franken Decade” ended almost twenty years ago.  In 1999, Franken released a book entitled:  Why Not Me? concerning his fictitious run for the Presidency in 2000.  The cover of the book featured a photograph of Franken being sworn in as President.  Although many news publications restrict their discussions of Franken’s background to the subject of his years with Saturday Night Live, they overlook the elements on his resume qualifying him to serve as a United States Senator.  For one thing, he graduated cum laude from Harvard in 1973.  In 1996, he wrote a book entitled: Rush Limbaugh Is a Big Fat Idiot and Other Observations, wherein he dared to challenge the most outspoken pundit of conservative talk radio.  The book found its way to the number one spot on the New York Times best seller list.  He subsequently took on the Fox News organization with his book:  Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right.  The book sported a picture of Bill O’Reilly on the cover and included a chapter criticizing O’Reilly’s on-air statements.  From 2004 through 2007, Franken hosted his own talk show on Air America Radio.  His program was primarily focused on political issues.

Franken’s Minnesota campaign against Norm Coleman for the United States Senate has found its way into the court system, with the trial scheduled to begin today.  By the time votes had been counted (on November 18) Coleman was ahead by only 215 votes.  Because the candidates were separated by less than 0.5 percent of the vote, Minnesota law required an automatic recount.  On January 5, 2009, the Minnesota State Canvassing Board certified the recounted vote totals, with Franken leading by 225 votes.  The next day, Coleman filed suit, contesting the recount result.  The trial of this case is taking place before a three-judge panel of “trial-level” judges.  As you can imagine, there will likely be an appeal from whatever result is reached in that case.  In the mean time, Franken has filed a motion before the Minnesota Supreme Court to compel Secretary of State Mark Ritchie and Governor Tim Pawlenty to sign the election certificate, designating Franken as the winner.  That hearing is set for February 5.

A good source for understanding the court battle over this Senate seat is MinnPost.com.  There, you will find Jay Weiner’s guide to the trial as a handy reference.  Mr. Weiner has spelled out the issues raised by Coleman’s suit in the following manner:

Were the more than 2.9 million votes cast on Nov. 4, 2008, for Democratic challenger Al Franken and Republican incumbent Sen. Norm Coleman counted accurately, fairly and uniformly statewide?

Were about 11,000 of the 288,000 absentee ballots cast rejected properly and with consistent measures in all 87 counties?

Were any votes counted twice? Just because a precinct registry says 20 people voted and 22 votes exist, does that mean votes were double counted?  Are there other reasons such discrepancies could exist?

Should votes cast on Election Day that have since gone missing be counted?

Should votes that were found after Election Day that weren’t originally counted by included in the final tally?

Jay Weiner’s article also included his take on the ultimate outcome of this suit:

For all the talk of alleged double-counted votes or missing votes or newly found votes after Election Day, it seems unlikely that Coleman can scrounge up enough votes in those categories to net him the 226 new votes he needs.

Meanwhile, Michael O’Brien of The Hill website, has disclosed that Coleman has taken a job with the Republican Jewish Coalition while this battle continues:

In what could be seen as a sign that Coleman thinks his bid to return to the Senate may be lost, he has signed on to do consulting work for the group, which is comprised of a number GOP leaders.

“The senator needs to earn a living while the contest is going on,” said Coleman spokesman Mark Drake, who said the job does not at all affect Coleman’s bid to win reelection.

With the Democratic Party poised to capture yet another Senate seat, we can expect a lot of excitement to surround this trial.  The Al Franken Decade may be long gone but, like it or not, the current decade has brought us The Al Franken Month.  Beyond that, if this trial ends up the way most commentators expect, the United States Senate will experience at least one Al Franken Term.  Six years may not be another decade … but it should be fun.