Schultz's Take

The Swinger Voter in the 2012 Elections

2012-01-22T15:24:00.001-06:00

Winning politics is often about identifying and mobilizing the swing voter. But in light of allegations of Newt Gingrich’s desire for an open marriage, maybe candidates should be reaching out for the swinger voters. What do we know about them?

In 1992 while stories of candidate Bill Clinton surfaced about an extramarital affair with Gennifer Flowers, I published “Expose Yourself to Politics,” documenting what we know about voter political orientations and sexual activity. In general, the more sexually active the less likely to vote. No surprise here! But what do we know today about the swinger voter?

Examining the National Opinion Research Center (NORC) data 1972 to 2010 here is what we know.

Among individuals who identify themselves as a strong Democrat, 9% have had more than one sex partner in the last year. This compares to 6.4% strong Republican. Among those who consider themselves regular Democrats it is 8%, regular Republican 9.8%. Slightly more Democrats have more multiple partners than the Republicans. Conversely, more Republicans have had no sexual partners in the last year compared to Democrats. This might tell us something about why the GOP is more likely to turnout than Democrats.

But now let’s get to the critical question about swinger voters. Among strong Democrats, 16% claim to have had an extramarital affair compared to 9.4% of strong Republicans. Among regular Democrats, it is 18.2% and for regular Republicans, it is 15.9%. For independents, the percentage is 15.7%

According to NORC survey results, 12.5% of the population admits to being unfaithful. The promiscuous are not an insignificant voting bloc, especially when 73.3% of them claimed to have voted (compared to 74.3% who did not have an affair). Capturing nearly 13% of the population is a great way to begin to build a winning coalition.

But what if some swingers, as noted above, are hardcore partisans in that they may personally stray but politically remain faithful? Of the 12.5% who are personally unfaithful, nearly 16% claim to be political independents. Alas these individuals are the true swinger voters and the voting outcome of these few individuals comprising approximately 2% of the population could very well determine who wins in 2012. The question that remains then are what are the hot bottom issues that appeal to these voters? I look forward to answers in 2012.

Respublica Factio Est Omnis Divisa in Partes Tres (The Republican Party is divided into three parts)

2012-01-22T08:49:00.000-06:00

As Julius Caesar once described all Gaul as divided into three parts, so too is the Republican Party after the South Carolina primary. And while both Caesar and Mitt Romney aimed to come, see, and conquer their respective territories, it was Newt Gingrich who crossed the political Rubicon and inserted uncertainty into the GOP primary process by winning in South Carolina.

Face it, Mr. Inevitable is still in trouble. Seven days ago Romney was the winner in Iowa and New Hampshire and he was cruising to a double-digit lead in South Carolina. A win there would have probably cemented the nomination for him. But then the sky fell in. Santorum is certified the winner in Iowa by a nose and now Romney’s 25% second place finish does not look so good–placing him exactly where he was four years ago. Yes he does win NH but he was supposed to, as he did in 2008.

Then there were all the missteps about economics. That he payed about 15% income taxes, and that he did not make much in speaking fees–only about seven times the average household income in America. Then Gingrich unleashed his attack on him and vulture capitalism (far better than any offered by Obama or the liberals excluding Dennis Kucinich and Bernie Sanders) in a state where economic unease is high. It also did not hurt that Gingrich played the race card in SC by talking about welfare. Top that off with Romney playing it safe in the two debates while Gingrich did to him what Rome did to Hannibal, and the sack of Mitt was complete.

The Republican Party is clearly divided into three parts. Santorum wins the evangelical midwest, Romney the business northeast, and Gingrich the racially divided south. These are the three bases of the Republican Party with Paul representing a fourth libertarian wing that is mostly outside of the party as it is composed of students anti-war activists, and libertarians, not your normal GOP fare. There is no real sign that the party is coalescing around one candidate–at least not Romney. Instead, if anything, the momentum may be shifting to Gingrich.

Gingrich won big in SC. Exit polls show that he won evangelicals and non-evangelicals, TEA partiers and none, and he won among those who felt economically insecure and with those whose main aim was to beat Obama. Romney did well with moderates–all three of them living in Charleston. Gingrich’s marriage issues did not seem to matter (I presume the swinger vote went for him) and CNN’s opening and predictable question in the Thursday’s debate about it gave Newt the perfect opportunity to bash the media and score points. Endorsements by Rick Perry and Sarah Palin (along with Chuck Norris) in South Carolina portend that he might be the frontrunner now.

Mitt still can point to money, organization, and polls in Florida, but one should not count on that. Mitt underwent a double-digit collapse in SC in one week and nothing prevents the same by January 31. But South Carolina is also a perfect bellwether–since 1980, every GOP winner of its primary has eventually received the party nomination. Four years ago SC stopped Mitt’s presidential prospects and the same seems to be a possibility today. I can only imagine Romney last night muttering “Et tu Newt?”

Understanding Occupy Wall Street

2012-01-21T13:39:00.000-06:00

A packed house at Hennepin United Methodist Church on Thursday night as I spoke to Citizens for Global Solutions. The title of my talk: "Occupy Wall Street and the Twilight of American Capitalism." Thanks to all who came; it was a warm reception on a chilly night.

Obama’s Bar Fight: Politics is about winning over the swing voters and Obama ain’t doing it

2012-01-19T13:27:00.002-06:00

President Obama is in the middle of a bar fight that he may lose. The NY Times reports that only 31% of the swing voters this year support him, this compares to 52% in 2008. (Of course the good news is no one likes the GOP and what they have to offer!) So why is this a bar fight?

E.E. Schattschneider, one of the most astute political scientists in last 50 years drew a comparison between politics, swing voters, and bar fights in his 1960 The Semisovereign People. He noted that bar fights are won or lost depending on who the audience supports. The same is true in politics. In an era when no political party commands a majority, the battle for victory resides in capturing the swing voter. Politics is thus about moving marginals (swing voters). Politics is a bar fight.

Both the Republicans and the Democrats of course will do their best to mobilize their political bases in a effort to win an election. But that is generally not enough. According to a recent Rasmussen reports poll, 35.4% of the American adult population considers themselves to be Republican while 32.7% consider themselves to be Democrats.

These numbers reflect a historic switch in the post WW II era were Democratic affiliation was much greater than for Republicans. Recent Gallup surveys place the ranks of Democrats at 43%, the GOP at 40%. This survey seems more consistent with the historic slight edge given to the Democrats. But both surveys highlight the same point–neither party commands 50% of more of the electorate. For Rasmussen, 32% report no or other for party affiliation, for Gallup, it is 17%.

Neither the Republicans nor the Democrats command a majority of the population as their base. They therefore cannot win elections as a rule simply by mobilizing their base. Instead they have to win over some swing voters to their side. Real swing voters are those who do shift sides and preferences in voting, as opposed to voters who claim no party affiliation but nonetheless still vote consistently for one party or another.

The battle for control of much of American politics, especially at the presidential level, is an effort to capture swing voters to support you. As discussed earlier presidential politics revolves around swing states. It is also true that in many state and local races the demographics and district lines for offices make few seats uncompetitive. Some estimates are that in Congress at best only about 15% or so of seats are truly competitive. But in many races, and at the presidential level, the battle is to move swing voters in a few swing states. Who are these swing voters?

Efforts to define swing voters are often elusive. In his The Swing Voter in American Politics William G Meyer notes that there is no one single swing voter. Instead, there a clusters of several types. There are the suburban soccer moms, many formerly Republican but who have left the party (while their husbands have not) because of its stand on many issues. These women care about family issues such as health insurance and education and are more moderate on issues such as abortion and gay rights. There also are the NASCAR dads who fit into this category. One can also locate young people. The list of groups is broad but finite.

In many cases the swing voters are not only politically not partisan but moderate in their political views. In some cases they are highly educated; often they are not always highly motivated to vote and therefore not always reliable or cannot be counted on to show up. In some cases these voters know about the issues, and they may get their political information from tradition or non-traditional sources. In other cases, they are not politically engaged and not well informed about the issues.

The difficult task for candidates going after swing voters is twofold. First, identifying the demographic they wish to reach given their issues, and second, deciding whether it is better to try to mobilize or demobilize them. If you demobilize them they will not vote for the opposition. That is good. Seeking to mobilize them to support you is good, but it may be costly to reach them. Also, they may represent niche demographics and therefore hard to reach or locate. Moreover, one you reach them you then have to give them reason to vote. Thus swing voters present two troubles: How to locate and reach them and then get them to vote for you. These are separate problems but often intertwined.

Who are the most important swing voters in American politics? The simple answer is that it depends on the election. However, some arguments can be made that the soccer mom is still one of the most important swing voters. While Democrats do enjoy a gender gap advantage in terms of getting a greater percentage of women as opposed to men to vote for them in recent elections, this may be due to the fact that Democrats have been more successful in reaching out to them as the Republican Party has moved in a more conservative direction. Critical to presidential success in recent elections has been to look at where the female voters go–if they break in large numbers for the Democrats then it is more likely the Democratic candidate wins.

However, the argument can also be made that other swing voters, include young people under 30, are important. These are individuals whose turnout is mercurial and not dependable. If the overall turnout rates in America for voting in national elections is approximately 60%, turnout for those under 30 is perhaps 20 or more points lower. Barack Obama was very successful in appealing to them and having them turnout to vote, although again some polls suggest that their turnout in 2008 was not unusually larger.

Finally, swing voters might also be potentially include individuals whose politics may not line up neatly with the two major parties. There are pro-choice and pro-gay-rights voters who nonetheless are fiscally conservative. These individuals face dilemmas in partisan voting and may be swing voters.

Whatever the final composition of swing voters, it is simply enough to say that it is a bar fight to win them over. When we think of a presidential election, one might be able to say that the real battle is to win over swing voters in swing suburbs in swing states. This is actually a pretty small battleground.

Yet Again--the Fraud on Voter Fraud: My Comments on Politics Nation

2012-01-17T20:08:00.005-06:00

Yet again the fraud on voter fraud rears its ugly head.

James O’Keefe of Project Veritas tried to punk New Hampshire election judges by impersonating dead people and seeking to vote. Unfortunately for him the only fraud committed may be by him. I comment on O’Keefe’s scam on Al Sharpton’s Politics Nation and in Talking Points Memorandum.

The philosopher Ludwig Wittgenstein closes his Tractatus with the wonderful line: “Of which we have no experience, we must remain silent.” His statement is a plea about the need to have empirical proof to resolve many matters of debate. Wittgenstein’s admonition precisely addresses the debate on proof about voter fraud. I have commented on this point before and will do again in light of the video alleging voter fraud in New Hampshire.

First, producers of the video are caught in a contradiction. They want to demonstrate how easy it is to commit in-person voter fraud by simulating it. However, one of two things are true. First, if they want to demonstrate how easy it is to commit this fraud they actually need to consummate the act. They did not do that if they actually did not cast a vote. Had they cast the vote then voter fraud occurs. But if they stopped short of that we actually do not know if they would have gotten away with the fraud. We do not know if they have been caught and prosecuted once records were check to see if any dead had voted. We also do not know if the canvass or any complaints would have been filed to catch them. Thus, we really do not have in this video here clear examples of voter fraud.

Conversely, if the producers in the video did actually commit voter fraud to prove their point then they are essentially estopped from claiming they did not violate the law.

But more generally, isolated case studies are a few examples of false impersonation here do not constitute good empirical evidence of widespread voter fraud. The fact that this video depicted potentially how easy it is to commit false impersonation does not support the proposition that in fact widespread voter fraud exists. A robbery at one bank does not prove banks are unsafe. As the saying goes one swallow does not constitute a spring. Single case studies are the weakest form of empirical evidence there is. Thus, this video, for whatever it says, fails to say much about the reality of voter fraud.

Immanuel Kant spoke of metaphysical versus empirical statements. Too much of the voter fraud discussion is simply the former-broad assertions without real evidence. It is like faith-based claims. Voter fraud is an empirical debate but is not treated as that. It is an article of faith for those who believe it does and rigorous social science inquiry will not resolve the issue. Voter fraud is a political narrative asserted on a plain that is not about empirical evidence. No amount of evidence will resolve the issue. It is like debates over whether the Loch Ness Monster or Big Foot exist or whether there was a second shooter on the grassy knoll.

I have made these comments several times. I have also sought to make this point in a piece “Is Voter Fraud Like Littering?: Empirical and Methodological Considerations.” However, regardless of my pointing out the circularity of the debate on the topic of fraud, it goes on and I am confident that it will persist regardless of what the evidence does or does not say.

Capitalism versus Democracy: The Free Market and the 2012 Elections

2012-01-14T09:42:00.002-06:00

A spectre is haunting American capitalism–the spectre of democracy and the 2012 elections.

As the 2012 campaign season unfolds what has become so fascinating is the degree to which it is becoming a referendum on capitalism both in the United States and across the world. Yet this is not an election where the most forceful criticism is coming from the socialist left demanding a revolution, but at least in the United States it is being driven from the right by the TEA Party and the likes of Newt Gingrich criticizing Mitt Romney and venture capitalism. All of this highlights the tension or unease there is in reconciling democracy and free markets, populism and capitalism.

Historically many argue that there is an interconnection between the rise of capitalism, religion, and democracy. Both emerged roughly at the same time in Europe during the sixteenth and seventeenth centuries. Scholars asserted that the concept of economic liberty and being free to act as the pejorative economic man in the market place reinforced and gave impetus to the individual liberty and the right to make choices in the political marketplace. Limited government protected both economic and political liberty.

Milton Friedman, in his classic Capitalism and Freedom emphasized this connection, seeing not only historical connections between free markets and individual freedom, but such a connection remained critical to the present. When the gates of communism came crashing down in the 1990s many argued that a prerequisite to building democracy in these former totalitarian states was first privatization of state enterprises and the establishment of market economies. To a large extent, the evolution of western capitalism and democracy have been inextricably connected. To many, it is no coincidence that the American Declaration of Independence and Adam Smith’s Wealth of Nations were both penned in the same year.

Yet capitalism and democracy or free markets and limited government are not always reinforcing but can be in tension. Chile under Allende was the epitome of free market capitalism and totalitarianism. Similarly China has perhaps the most successful capitalist system in the world right now under the direction of an oppressive state with limited political freedom. But in the United States, we supposedly have blended the right combination of capitalism and democracy. But in 2012, that blend is on the ballot this November.

Now of course one immediately thinks that the questioning is coming from the left. The Occupy Wall Street “We are the other 99%” is a serious critique of the growing mal-distributions of wealth in America since the 1970s that come to equal that of the early 20th century. Repeated reports document a country where the rich have vastly increased their incomes and share of the wealth at the expense of others. It is a country where social mobility and the belief of anyone can emerge from poverty and become rich is tempered by the reality that the US has the lowest social mobility of any major western country. We are a country torn by high degrees of economic and racial segregation in schools and neighborhoods. One would think this would be the referendum on capitalism slated for this November.

Or perhaps it is Obama-socialism, at least as described by those on the right that is what is driving the critique. One might think that Obama’s tepid embrace of Occupy Wall Street, his push for universal health care, his bailouts of banks and the auto industry, and his flaccid regulatory reforms would be the cause of placing capitalism on the ballot. But it is not. Instead it comes from the right.

Internationally, the European debt crisis that started in Greece and spread to Italy has been driven the critique not against capitalism but democracy. With clear political majorities in these countries rejecting the type of financial restructuring and cuts in government services demanded by the European Central Bank, the IMF, and the World Bank, Greece and Italy were forced to remove their leaders and replace them with technocrats more supportive of what the financial institutions wanted.

In the US, the most forceful criticism has come from the TEA and Republican Parties. The Tea Party is a populist group critical of what it perceives to be the creeping socialism of Obama and the Democrats. Michele Bachmann repeatedly excoriated Obama as a socialist. But she did the same in her attacks on fellow Republicans.

But now there is Romney. Romney is the Gordon Gecko of 2012. His work as a venture capitalist at Bain led to the take over and destruction of many companies and jobs and, fair enough, the creation of many other news jobs. But Gingrich and Perry have attacked him, making venture capitalism as dirty word as socialism. Their critiques about Romney destroying jobs, companies, and communities and creating new ones overseas or at wages far inferior to the old ones lost are devastating. Gingrich right now is offering the most powerful critique of capitalism there is. But so is Ron Paul in demanding return to the gold standard and in attacking the Federal Reserve. Both are playing on the anxiety of an electorate rightly worried that capitalism has abandoned them.

The Republican nomination process thus is surprisingly turning into a referendum on capitalism. Romney is the mainstream candidate who is the pro-business-cut-the-taxes type of candidate. He is opposed by Gingrich, Paul, and Perry, who are seeking to rally popular support against this type of capitalism. Never mind that they may be hypocrites or that their solutions are perhaps more capitalism and less democracy or government regulation of business and economic redistribution to solve the problems of capitalism.

These attacks on Romney scare too many Republicans as hitting too close to home and now the chickens are coming home to roost. Demands from many Republicans to knock off the on swipes at venture capitalism are illuminating the popular anxiety many have that perhaps free markets do not always serve the people, and capitalists themselves may not always be supportive of democracy.

The Iowa Caucus Results: And the winner is...

2012-01-04T08:49:00.009-06:00

Not Romney. Not Bachmann. The winners are Obama, big money, and the massive divide in the Republican Party as the primaries head to New Hampshire and South Carolina.

A first look at the results suggests clear winners and losers. Romney, Santorum, and Paul are the clear winners. Romney wins a state only a few weeks ago he conceded. Santorum comes out of nowhere to almost win, and Paul does well enough to stay near the top. In fact Paul is the most consistent of all the Republicans. He came in second in the August, 2011 straw poll and now finishes a close third.

But look deeper and the fortunes of these candidates look very different.

Romney's Win
Yes, Romney wins Iowa and he will no doubt win New Hampshire. Many candidates are bypassing that state and are aiming for South Carolina on January 21. Romney leads in polls in all the early states, he has the money, and he has the organization to succeed. Yet he lacks a passionate base, and so Iowa was not a great victory for him. Recall that in 2008 Romney came in second in Iowa with 25%–this is exactly where he is today. It is not that Romney is a stronger candidate today than a month ago (let alone four years ago). Instead, the GOP base–especially the social conservatives–are more divided today than in 08. Romney tremendously benefited on Tuesday from a fractured conservative base.

Think back to 08. Huckabee wins Iowa with 34%. Add his percent to Fred Thompson’s 13% and the social conservatives have 47% of the vote. Now shift to 2012. Romney has 24.6%. Compare that to Santorum (24.5), Perry (10.3), and Bachmann (5.0) and that totals 39.8%. Yes the clear social conservatives have a lower percentage, but they are more divided, especially if one concedes that some of Gingrich’s votes too might come from the social-conservatives.

But think also about how Paul went from 10% in 2008 to 21.4% in 2012. He more that doubles his vote. One message from Iowa is how with Romney stuck at 255 in two caucuses, he has failed to win over the more conservative wings of his party. He is in no better shape than before, he just looks better because of a more divided party.

But Romney’s win came also with big money. Super Pacs were the big winner in Iowa spending more than $16 in ads. Romney benefitted from this spending and lethal attack ads on Gingrich. Thus, were it not for big money and a divided conservative field, Romney would look no better today than four years ago.

Romney has failed to close the gap with the majority of the GOP base. He has been stuck at 25% in Iowa and across the country for months. He still faces a distrust problem among conservatives and there is still little passion for him. As I said before, he is Mr. Inevitable but that hardly is the basis for a party rallying around you. Going forward he needs to win over the conservatives and that may not happen easily. Look to see rumors or calls for others to enter the race and with the GOP now running primaries on a proportional and not a winner-take-all basis, candidates such as Paul have every incentive to stay in the race, pickup delegates, and prevent a sealing of the deal for Romney.

Santorum's Close Second
Santorum wins but this is a short-lived one, perhaps. He is the latest beneficiary from the “Anybody but Romney” vote. Unlike others such as Bachmann and Perry who rose and there was time for media vetting and scrutiny, this did not happen with Santorum. He benefitted from the implosion of other conservatives, the Anti-Romney feeling, conservative endorsements, and luck of timing. He will face more scrutiny now and Romney and Super Pacs will turn on him. Santorum has little organization and money going forward and he challenge will be to capitalize on Iowa.

Given all this division, Obama must be thrilled. The GOP are divided and will spend resources fighting one another. This is good news, especially to hope that the social conservatives do not quickly rally around Romney or someone else. However, Obama should not rejoice yet. The potentially long GOP primaries may mean that Republican candidates spend a lot of time and get a lot of air time criticizing him and it may also mean that the candidate who survives is a better campaigner as a result of the long primary fight.

Perry and Bachmann
Now the clearest losers are Perry and Bachmann. Perry has money to go on but he is so damaged that he is returning to Texas to reassess his campaign. Wise move.

The bigger story if Bachmann’s fall from first in the Iowa straw poll to essentially last in the caucus. Her fall from grace is told in City Pages.

Her errors are numerous and she never grew as a candidate. In fact, her presidential campaign simply magnified her flaws from her congressional campaigns where her easy victories were more a consequence of good district lines and weak opponents. But Bachmann was a one trick pony–She never tired in repeating a line–“I will not rest until Obamacare is repealed”–but she had nothing beyond that. She lacked a real narrative or vision for her presidency and it showed.

What will Bachmann do next? She will go onto SC but she lacks money, staff, and a media presence after today. She is a zombie–walking dead–or a piece of toast.

Bachmann is no shoe-in to get re-elected for Congress in MN for a couple of reasons.

First, Minnesota's have soured on her and that too may be within her district. Statewide I have seen polls putting her negatives in the upper 50% range. Whether the same is true for her district is a good question. However, many were upset that she began her presidential campaign or at least announcement that she was considering a run for the White House on the day she was to be sworn in for Congress back in January 2011. They look at that, her rhetoric in Iowa confessing her roots there and love for the state to be a turning of her back on MN. She will have to explain all this rhetoric and abandoning her district should she decide to return home to run again.

Second, the bigger problem is redistricting. We will not know until February 22 what her district lines will look like. Her district is way over in population and needs to be apportioned with other congressional ones to achieve one-person, one vote. Currently she has benefited from one of the most solidly pro-GOP districts in the state. No guarantee that will happen again. Moreover, at least one plan for redistricting--puts her home of Stillwater, MN in Democrat Representative Betty McCollum's district. McCollum's district is a solidly Democrat one that includes mostly St. Paul. It make a lot of sense to redraw McCollum's district to extend out to the Wisconsin border. If that happens, Bachmann would have to decide to run against McCollum in a district that favors a Democrat. Other possible districting scenarios are also possible and we will not know until the MN courts finish their work in February.

Under MN law, Bachmann does not have to declare her candidacy for Congress again until June. However, the MN caucuses are on February 7, and if she decides to run she may want to declare sooner to prepare. Right now, uncertainly about redistricting and whether she will run again have depressed other GOP candidates from being able to gain traction or declare. One rumor is that Tom Emmer--former GOP gubernatorial candidate in 2010--wants to run.

My guess for Bachmann? If she runs and wins it is a prologue to her then challenging Franken for the US Senate in 2014. If she does not run, she tries for a political commentator job on CNN or Fox. CNN needs her more. However, her poor performance in Iowa and bad book sales have hurt her value. Maybe she goes on the speaking circuit. But to do any of this she needs to do better in SC to raise her value. That is perhaps why she goes on: to salvage something.

Countdown to Iowa

2011-12-30T14:42:00.007-06:00

The Iowa caucuses are just a few days away. As it approaches it appears that the state is up for grabs with varying polls placing Romney and Paul in the lead. A few quick observations and thoughts.

Bachmann’s collapse.
This is one of the interesting stories to tell, tracing her victory in the August straw poll to what is certain to be poor finish on Tuesday. She is hoping that the 45% undecided break and that she is the recipient. No chance. The numbers do not suggest it. As Gingrich has faded his support has gone in three directions–Paul, Santorum, and Romney. Moreover, she has little chance to recapture the momentum after her manager defected. Bachmann is already a political zombie–walking dead–before Tuesday and really cannot not do much next Wednesday baring a miracle. Even then, she has no infrastructure to go beyond Iowa.

Paul’s day in the sun.
Paul will do well and still may beat Romney. He has a loyal following of young much like Obama 08 and one issue will be whether with school out that helps or hurts him. Paul’s GOTV is terrific and it may carry the day. He has taken a hit with his 1990s newsletter but it is not clear what impact that will have. Paul will have legs beyond Iowa and he may be a gnat to Romney as the latter seeks to consolidate.

Gingrich as Mr. Nice Guy.
Who would have ever thought of Gingrich as Mr. Nice Guy? The attack ads worked on him and he did not respond. He failed to remember the rule–define or be defined. He let his past define him and has lost momentum in the polls.

Santorum’s surge?
One poll has Santorum in third. He has benefitted from the other conservatives collapse (including Bachmann) but does he have the organization actually to deliver bodies on Tuesday?

Romney’s resurgence?
Iowa was a loser for Mitt but now he has a chance to win it and then New Hampshire the next week. He benefits from the mistakes of others and by being the consistent second choice of everyone else. In a field where there is some disarray perhaps simply holding on to 25% is enough.

Perry's Irrelevance.
What is left to say? He has put his foot in his mouth so many times his breath must smell like shoe polish. He has no momentum and appears to be spending all his money here with hopes like Bachmann that something breaks for him.

Are the GOP in trouble?
One dumb headline this past week said that there was a crisis with the GOP because going into Iowa there was no clear frontrunner or choice. Is it not the purpose of the primary and caucus system to select the nominee? It used to be that the conventions selected nominees and the crisis was if there were no clear favorite then. Then the fear was that going into the convention there was no clear favorite. Now it seems that there is a crisis if there is no favorite going into the caucuses and primaries. This is jumping the gun. Think of Iowa as the start of a decision-making process that is supposed to produce a nominee. The nominee is not supposed to be decided before the process starts.

Yet the GOP still face problems in terms of a message, perhaps nominating another Goldwater like candidate, and also via lack of support among Hispanics, Blacks, and other key constituencies in some swing states.

Obama’s problem.
Remember once a Democratic candidate running for reelection with high unemployment, slow growth, a large deficit, and rising gas prices? This was Carter in 80. We all know the economy is not a great issue for Obama but gas prices may also hurt him, too. Reports this week suggest $4 gallon gas this summer. Spikes in gas prices will not help him. Look to see another potential tapping of the Strategic Oil Reserve this summer.

Obama’s Christmas Present

2011-12-24T09:07:00.005-06:00

Christmas came early for Barack Obama as Republican prospects to pick up the presidency took a major hit this week. A series of events again demonstrated that Obama cannot win but the Republicans certainly can also lose the presidency.

Miscalculating the Payroll Tax
The most glaring event of the week was the misplaying of the House GOP vote on the extension of the payroll tax. In principle they may have been correct that a one year deal is preferable to a two month extension but they needed to act but did not. Perhaps they thought Obama would again capitulate like he did in August with the debt deal but the politics was very different then as opposed to now. In August failure to reach agreement meant a government shutdown, making Obama look hapless. This time no deal meant tax increases on the middle class and that would have stuck to the Republicans. Moreover, even the Senate Republicans–including Mitch McConnell and John McCain–pressured the House to assent to the deal. The House GOP here simply overplayed their hand and lost.

Obama the Economist Populist
Contributing to the miscalculation is the traction Obama has received in running as an economic populist. He has given two major speeches in the last few months describing himself as a man for the people. The first was his $450 billion jobs speech a few months ago and the other was his recent Osawatomie, Kansas speech. In both he talked of the need to help the middle class. Both were fine speeches, but talk is cheap.

Obama rightly so should be criticized as the Democrat who abandoned the middle class and the poor. He continued the Bush policy of bailing out the banks and he has put more emphasis on stabilizing the financial sector than he did in helping home owners and the working class. While his original stimulus bill did help, I argued after the 2010 elections that his failure has been to appear to side more with the banks than the people. Given how much he took from Wall Street in 2008 to finance his campaign, no surprise here.

But Obama has been lucky. Occupy Wall Street and the “We are the other 99%” campaign have helped him. Both shifted focus to the Republicans in Congress and running for president that there is a clear class divide in America. Previous blogs of mine have attested to this fact and the growing economic divide in America over the last 30 years. Congressional refusal to raise taxes, a Republican presidential debate revealing no candidate willing to raise one dollar in taxes for every ten dollars in spending cuts, and the failure of Congress to enact Obama paltry $450 billion jobs bill all make it clear that they do not care about the American people (had they enacted the bill they could have disarmed the president and still pointed to how they supported the president on all his major economic programs but they still failed).

The point is that Obama can look like an economic populist because of the failures of Congress and the GOP to offer a credible alternative and to play politics in a way that makes them look like they care for anyone besides the top 1%. Obama is winning because of the implosion of the Republicans.

The Dismal Presidential Choices
Obama is also benefitting from a Republican presidential field that is not a varsity or junior varsity but the freshman team. It is a team running increasingly further and further to the right. A team that is further to the right than the Reagan Party–it is the Palin Party still as I wrote about several times t his year. It is a party that has flirted with several conservatives–Bachmann, Perry Cain, Gingrich, and now maybe Paul as the preferred choice over the more moderate but lackluster and passionless Romney. They seem out of touch with America in their talk of tax cuts, privatization, and return to the gold standard.

Now with little more than a week before Iowa, the race is definitely up in the air. Recent polls confirm what I asserted in an interview last week that Paul, Gingrich, and Romney will be the order in Iowa come January 3. But even if Paul does not win, his ascendency is a problem for the Republicans. If he does well in Iowa is libertarianism will play even better in New Hampshire and Romney needs to worry about a relative poor showing there on his part. This year with the Republican primaries and caucuses allocating delegates not by winner-take-all but proportionally, unless there is a quick kill by one candidate in January, look to a long primary and a potential brokered convention.

So What Does All this Mean for Obama?
Obama is now in much better shape in the polls for reelection than he was a few weeks ago. Polls have his approval rating up to 49% and it now exceeds is disapproval rating. He has a 7 point lead over Romney and much larger leads over the other Republican candidates. Congress’s approval is under 10% and public approval of the Tea Party has weakened. There are small signs of economic improvement but certainly no indication of real growth or significant decreases in unemployment in 2012. The economic news and prospects should doom him and the Electoral College road to reelection is complicated, but Obama now has a clear lead in Florida.

But compared to the Republicans running for president and those in Congress, he looks good. Obama can run for reelection on a slogan of “No matter how bad I am look at the alternative.”

Merry Christmas President Obama! Your present came wrapped with Republicans in a box they are building themselves in.

Gingrich and Koch: Character Matters

2011-12-22T08:30:00.002-06:00

This essay originally appeared in the December 21, 2011 edition of Politics in Minnesota. This is an abbreviated version of that essay.

Does character count? Stories of New Gingrich’s three marriages and Minnesota Senator Amy Koch’s “inappropriate relationship” with a staffer have again thrown that issue into the news. Whether these private acts or activities should be considered when evaluating public officials fitness for office raises difficult questions about where personal character fits in. Is there no privacy for public officials? Is everything fair game for the voters to ponder when selecting or judging candidates for public office? The simple answer is that character matters, but how and under what circumstances is really the issue.

“Character” is an elusive term. In political parlance it seems to refer to many variables including one’s personal conduct and morality. Supposedly Gingrich’s three marriages and Koch’s inappropriate relationship tell us something about fitness for public office. Maybe simply being unethical in one’s private life is enough to exclude one from public office. But it is not always clear how public and private morality connect.

Character, as Aristotle would declare, refers to habits. To do something once–steal–does not make one an unethical person. We all err. None of us are perfect. But occasional falls from grace do not render us ethically bad. However at some point acts become habits–what we do is a reflection of who we are–and we then can be judged to be unethical or bad when it speaks to our character–when it is a habit of the heart.

But judging when transgressions are habits that form character and when they apply to fitness for office is complex. One of the worst forms of character assassination is dredging up something from a candidate’s past as a way to judge them presently. All of us do dumb things when younger that we regret and the mark of maturity is learning and growing from them. We cannot judge our life as if all our choices were made at the present time.

Past choices might tell us something about the present, but they need to be assessed in terms of how we have grown from them. Not to do that condemns all of us to be ever judged from our youth or an earlier point in time that we may or may not have growth from.

When do past bad ethics form a basis of a present unethical character? Here is where the issue of judgment fits in. Many jobs have technical skills that are required for proficiency. Being a doctor, plumber, or electrician come to mind. But many also require the capacity to make good judgments–often ethical choices. This is the case with elected officials called upon to make decisions about public welfare and the common good. Elected officials are not simply delegates voted into office to do the bidding of the majority. They are elected in part as Edmund Burke pointed out to make good judgments on behalf of their constituents. Citizens are not fully informed about all issues because of time and other factors. The purpose of a representative system is to allow public officials to serve as trustees for the people–rendering their judgments in a way that they can act in the public interest. This trustee relationship necessitates good judgment.

The public is most certainly entitled to consider character as it relates to making good judgment when it comes to determining fitness for office. Here is where personal morality comes in.

Does Gingrich’s three marriages speak to his fitness to be president? Maybe. If those marriages speak to his present character and judgment as president then yes. But even more needs to be asked. Americans rightly hate hypocrisy. Saying one thing and doing another is hypocritical. Making oneself an exception to rules of conduct that is expected of others is the core of being unethical and hypocritical. Gingrich’s 1994 Contract for America demanding that Congress be held to the same standards of conduct others are expected to follow was correct. The problem for Gingrich is that his views on marriage, gay rights, and perhaps even abortion seem at odds with his own personal life. His personal character places into play the right of the public to ask how he can reconcile his own personal code of conduct with the political positions he espouses. This connects to his judgment and the former House Speaker should as part of his campaign clarify how all of these relate to his capacity to make good judgments as president.

Similarly, Amy Koch’s behavior speaks to her fitness for office in at least a couple of ways. The allegations are that the inappropriate behavior implicates a sexual relationship with a Senate staffer. Most of us have learned at work that supervisors should not date subordinates since such relationships raise concerns of favoritism, sexual harassment, and hostile work environments. Senator Koch should understand that. Not to do so and to engage in an ostensible sexual relationship with a subordinate raises questions about good judgment.

But more importantly, Senator Koch is married and she led a Republican chamber last spring that adopted and sent to the voters a constitutional amendment banning same-sex marriages. That amendment rendered a judgment about marriage and the personal morality of others. It is hypocritical that while this amendment was being debated she might have been engaged in a inappropriate relationship at work. Unlike Gingrich where his three marriages and affairs took place in the past and presumably he might have grown and learn from them and he is now a changed person–as he contends–Koch’s behavior is not in the past but now, merging her private and public lives but in terms of the judgments she is making presently as senator and also because of the relationship taking place with a Senate staffer and subordinate. It is all of these facts coming together that place her character and judgment in play.

Random Ruminations on the Republican Rumble

2011-12-14T08:37:00.004-06:00

So what are we to make of the latest stories about the Republican presidential contest showing a surging Gingrich in Iowa and across the country, a slipping Romney, and a not so surprising rise of Ron Paul? Some quick thoughts here.

Iowa polls show a state up for play. Romney and Perry are dumping millions in to the state in a battle that is less about substance and policy than character. Character looms larger because the real policy differences among the candidates are trivial.

Bachmann’s Saturday debate line of casting Gingrich and Romney together as “New Romney” was politically brilliant. It turns Gingrich into a moderate and makes her the sole conservative alternative. She will drive this message home for the next few weeks.

Gingrich is the repentant sinner. What better way to make political advantage out of one’s character flaws by admitting the errors, admitting one’s sins, and asking forgiveness. The repentant sinner plays well with religious conservatives.

Ron Paul wins Iowa? It can happen. He almost won the straw poll in August and he has a strong dedicated group of followers. He has money and organization. Is he the new flavor of the month emerging? Look to see a potential surprise victory her and if so, look to see him do well in New Hampshire–a state more supportive of his libertarian views. Again do nor rule out a Paul third party bid.

Huntsman as Gingrich’s VP? Yes, the two person debate demonstrated they can work together. Huntsman is the favorite Republican of Democrats and he appeals to swings. He appeals to westerners and moderate east coast Republicans.

Romney: I bet you $10,000 that he damaged himself on Saturday and now that he is part of the fray he will get bloodied by the character battles. He needs to change is narrative and fortunes and that is not coming soon.

Bachmann has a trickle of an opening after Saturday and her 99 county tour of Iowa is meant to whip up political support and recapture lost conservatives. Media profile is good but Iowa is about delivering real bodies on caucus night and get out the vote efforts and ground wars are more important now than airwars.

The Republican Choice: Why Gingrich?

2011-12-08T06:26:00.005-06:00

Is Newt for real? This is the question increasingly asked as polls indicate that former House Speaker Newt Gingrich has taken the lead among the Republican presidential contenders. The simple answer may be yes, boding badly the for campaign of Mitt Romney who has struggled for months to be the inevitable last choice candidate once all the others have faded. But Newt’s rebirth and Romney’s campaign strategy are linked, pitting inevitability against reliability.

Don’t Hate Me Because I’m Mitt

Mitt Romney has had an identity problem from the get go. Best summed with the label “Multiple Choice Mitt,” Romney faces an initial problem that no one knows where he really stands on the issues. He is a former moderate Massachusetts governor who supported reproductive rights, gay rights, and he signed into law a health care bill essentially identical to Obamacare. Romney is a skilled businessperson and politician who saved the 2002 Olympics. He knows how to get things done. This should be his political narrative for his presidential campaign. But it’s not.

In 2008 Mitt ran away from this narrative. He pandered to the conservative base of the party, renouncing his moderate positions. Yet given the global economic collapse and John McCain’s avowal that he did not understand economics, had Romney stressed his business experience then he might have won the nomination. Now in 2012 as the Republican Party has moved further to the right Romney has abandoned even more of this narrative, seeking to out-duel the other presidential contenders in terms of xenophobia against immigrants, bashing gays, abortion rights, and taxes, or in renouncing health care reform. Mitt both wants to be the can do governor and businessman and the right wing extremist. No one really trusts him anymore–especially the Tea Party base–thus the moniker Multiple Choice Mitt.

But Mitt also suffers from another flaw–he is a pretty boy. Pantene shampoo famously featured a 1990 commercial with Kelly LeBrock who cooed “Don’t hate me because I am beautiful.” Mitt may be hated for that reason. He is rich, handsome, has perfect hair, and a trophy wife. All reasons to hate him because he has it all. Few can identify with him because of that. Voters bonding with presidential candidates is important. In 2004 voters preferred Bush over Kerry because the latter came across as an aloof prig.

Mitt also has another identify problem–no charisma. He is wonkish and more of a technocrat. He is reminiscent of another former Massachusetts governor–Michael Dukakis–who was similarly skilled but also boring. Politics is about passion and no one can really get passionate over Mitt.

Romney, though, has labored to make a virtue out of all of this. Be the viable second choice who outlasts everyone else in the race. Manage the best campaign, raise the most money, site the most offices, and script the best choreographed speeches. Romney’s strategy is to be the “steady Eddy”; be the one true love or candidate who is there for you after the quick romances and one night stands for the others pass by. Romney’s strategy–Mr. Inevitable.

But why Newt?

He’s not Romney. That is only part of the appeal. The other part of the appeal is that he is the last candidate standing. Gingrich appeared to flame out early before it became fashionable for the other Republican contenders to do so. Stories of infidelity, million dollar credit lines at Tiffanys, growling at the media, and a campaign staff quitting en masse; Newt was just ahead of his time. Since then we have see the other flavors of the month, as the media calls them, rise and fall. Trump. Bachmann. Perry. Cain. Each had an Andy Warhol 15 minutes but each faded as the presidential debates and vetting process grinded on. But eventually each undid themselves. Who was the last one standing? Not Romney, but Gingrich.

Most importantly, Gingrich is actually Mr. Reliable. Unlike Romney where no one knows where he really stands, everyone knows Gingrich and his views. His reliability is a political virtue compared to claims of inevitability. Gingrich was there with the Contract for America in 1994. He led the impeachment against Clinton in 1998. He carries the mantle of the Reagan brand. He is a known and dependable conservative. Yes he is full of warts, but unlike Cain and others, he admits them and says it’s time to move on. Americans hate denial or lying but can accept sinners and that is what Gingrich understands.

Conservative Republicans distrustful of Romney and not liking the other choices finally came back to Gingrich. He is more than the flavor of the month. But even if he is, it is good to be the flavor when it is your month and with it being T-minus less than a month to the Iowa caucuses. The timing is great. Gingrich leads in Iowa, South Carolina, and Florida, three of the first four contests. He is behind in New Hampshire but picked up the critical Union Leader newspaper endorsement. Romney was expected to win big in New Hampshire. He may still win but unless it is a blowout he will look vulnerable.

What is happening now with Gingrich is different than what transpired with Bachmann, Perry, and Cain. What is now occurring is the coalescing of the party around him. Cain’s endorsement is a sign, look to see others also endorse him as they leave the race early in January (except for Ron Paul who will potentially run again as the third party Libertarian candidate and complicate GOP strategy). By the end of that month look to see a race between Gingrich and Romney. Beyond January, the task will be organization, money, and momentum. Right now Romney has the first two but not the third. Gingrich has the third but not the first two. His challenge is taking his momentum and the passion around him to create the organization and money he needs to win the nomination. If he can do that, Romney is done.

Statistics mask reality: Unemployment isn't going down, and Minnesota doesn't have a budget surplus

2011-12-07T18:41:00.005-06:00

Today's blog appeared in Minnpost as an editorial on December 7.

"Lies, damn lies, and statistics." Proof that this adage rings true can be seen in two recent stories declaring the national unemployment rate had dropped to 8.6 percent and that the State of Minnesota had a budget surplus of $876 million. While many herald these numbers as signs that the American and Minnesota economies are improving, the truth is that both mask a reality that is far grimmer than the statistics reveal.

The meek jobless recovery from the 2008 recession persists. With unemployment hovering around 9 percent, the American economy seems stuck in terms of job production. Obama had proposed a series of tax cuts and projects to stimulate hiring, but their fate in Congress during a presidential election has doomed them. Even if passed, the original September $450 billion jobs plan would do little to encourage business hiring. That will not occur until consumers are willing to spend enough money on goods and services to make it profitable for businesses to hire. As late as just a few weeks ago the Federal Reserve Board predicted that well into next year unemployment would not fall below 8.5 percent. Such a number poses a political problem for Obama – with the exception of FDR, no president has been reelected with an unemployment rate greater than 8 percent.

The surprising drop in the unemployment rate from 9 percent to 8.6 percent in November appeared to be good political and economic news. Yet it is not for several reasons. First, the rate reflected less a robust growth in the economy than many individuals leaving the workforce because they could not find work. The official unemployment rate calculates only those actively looking for work. If you cannot find work and have stopped looking, you are not counted among the ranks of the unemployed. Buried in recent unemployment figures was evidence that the workforce was contracting — many individuals have simply stopped looking for work. Perhaps half if not more of the drop in the rate in the last month was due to this fact.

Low rate of job creation

Yes, the economy produced 120,000 new jobs. That appears to be good news, but not really. The country is millions of jobs away from re-creating all of the positions lost since 2008. Millions of additional jobs are also required for new workers entering the labor force. The economy needs to produce perhaps 300,000 or more new jobs per month for several years before the loses of 2008 are recaptured. This would require economic growth far greater than the 2–2.5 percent increase projected for the near future.

There is little sign of significant turnaround for the American economy. Consumer debt remains high – nearly $830 billion – and student-loan debt will soon be $1 trillion. Housing prices and sales remain flat, consumer confidence low, and despite some bright signs that Black Friday and Cyber Monday were good, few are foretelling a serious consumer economic boom. The 8.6 percent unemployment rate fails to capture all this.

Minnesota: In the money?

If the 8.6 percent unemployment rate is a lie, news of the $876 million budget surplus is even more so. With predictions prior to the announcement last week that the state was up to at least $1 billion in the red, news of the surplus was greeted as proof that the Minnesota had turned the corner. Republicans cheered the news as proof that balancing the budget with cuts alone and no tax increases was correct. Dayton, with nodding approval of Zygi Wilf, hoped that the surplus would make public financing of a new Vikings stadium more salable. But despite claims by all that a surplus exists, the reality is: It does not.

First, recall the budget deal from last July to end the government shutdown. It came with $2.2 billion taken from K-12, and $700 million in borrowing off of Minnesota’s tobacco endowment. This was on top of other budget cuts to vital programs.

The reality is that the balanced budget was achieved by serious debt financing.

Second, the budget projection benefits from a law that calculates inflation when it comes to state revenue but ignores it for obligations. This means that the actual projection released last week is distorted by overestimating income and underestimating obligations.

Third, the budget agreement from July required that approximately the first $900 million of surplus must be used to replenish the state budget reserves and rainy-day funds. Thus, this $876 million is already called for and not available for spending.

One-time fixes

Fourth, whatever the reality of the current state budget, the fixes, such as borrowing to balance it last July, were one-timers. They failed to address to long-term fiscal imbalances in state financing, setting up the next biennial budget to again be several billions of dollars in the hole.

Finally, whatever the fiscal forecast stated, another one is due at the end of February 2012. That is the one that will be used by legislators to make the budget. It is still not clear whether it will be as optimistic as the one just released, especially if the state and national economies fail to recover.

Minnesota really does not have a surplus. Nor is the United States experiencing a serious decrease in unemployment. These two statistics mask a reality that shows how numbers do not always tell the truth.

Top Ten Things That Should or Should Not be Done with Minnesota Unexpected Budget Surplus

2011-12-02T16:59:00.004-06:00

A surprise for all–Minnesota appears to have a $876 million budget surplus. Santa came early and now the talk at the state capitol will be over how to spend the money. Here is my short list on some good and not so good ideas.

My suggestions are in descending order from good to bad ideas. Expect debate in MN to focus more on the bad as opposed to the good ideas.

Do nothing. The surplus is illusionary and may vanish or change dramatically before the next fiscal forecast by the end of February, 2012.
Save it. Bring up the state’s rainy day fund.
Save it for the deficit in 2013-14 budget.
Use the money to pay off the interest and borrowing off of the tobacco endowment.
Repay the money borrowed from K-12.
Restore the cuts to the homestead tax credit.
Restore local government aid funding.
Restore health and human services cuts.
Tax cuts for businesses and wealthy to create jobs.
Money for the Vikings stadium.

Bonus suggestion: Provide a down payment on Zygi Wilf's next townhouse.

The Collapsing Business Plan of American Higher Education

2011-12-01T15:50:00.003-06:00

The dominant business model for American higher education has collapsed, taking with it the financial integrity, academic quality, access, and independence that college and universities once enjoyed.

Since the end of World War II two business models have defined the operations of American higher education. The first was the Dewey model that lasted until the 1970s. The second, a corporate model, flourished until the economic crash in 2008. What the new business model for higher education will be is uncertain, but from the ashes of the status quo we see emerging one that returns to an era before World War II when only the affluent could afford college and access was limited to the privileged few.

Model I: The Dewey University

The first post-World War II business model began with the return of military veterans after 1945 and it lasted though the matriculation of the Baby Boomers from college in the 1970s. This was a model that produced an ever expanding number of colleges for a growing population seeking to secure a college degree. It was a model that coincided with the height of the Cold War where public funding for state schools was regarded as part of an important effort to achieve technological and political supremacy over communism. It also represented the expansion of more and more middle and working class students entering college. This was higher education’s greatest moment. It was the democratization of college, made possible by expansion of inexpensive public universities, generous grants and scholarships, and low interest loans.

Public institutions were key to this model. They were public in the sense that they received most if not all of their money either from tax dollars to subsidize tuition and costs or federal money in terms of research grants for faculty. The business model then was simply–public tax dollars, federal aid, and an expanding population of often first generation students attending public institutions at low tuition in state institutions. Let us call this the Dewey business model, named after John Dewey, whose theories on education emphasized the democratic functions of education, seeking to inculcate citizenship values though schools.

Model II: The Corporate University

Yet the Dewey model began to collapse in middle of the 1970s. Perhaps it was the retrenchment of the SUNY and CUNY systems in New York under Governor Hugh Carey in 1976 that began the end of the democratic university. What caused its retrenchment was the fiscal crisis of the 1970s.

The fiscal crisis of the 1970s was born of numerous problems. Inflationary pressures caused by Vietnam and the energy embargoes of the 1970s, and recessionary forces from relative declines in American economic productivity produced significant economic shocks, including to the public sector where many state and local governments edged toward bankruptcy.

Efforts to relieve declining corporate profits and productivity initiated efforts to restructure the economy, including cutting back on government services. The response, first in England under Margaret Thatcher and then in the United States under Ronald Reagan, was an effort to retrench the state by a package that included decreases in government expenditures for social welfare programs, cutbacks on business regulations, resistance to labor rights, and tax cuts. Collectively these proposals are referred to as Neo-liberalism and their aim was to restore profitability and autonomy to free markets with the belief that unfettered by the government that would restore productivity.

Neo-liberalism had a major impact on higher education. First beginning under President Carter and then more so under Ronald Reagan, the federal and state governments cut taxes and public expenditures. The combination of the two meant a halt to the Dewey business model as support for public institutions decreased and federal money dried up.

From a high in the 1960s and early 70s when states and the federal government provided generous funding to expand their public systems to educate the Baby Boomers, state universities now receive only a small percentage of their money from the government. In 2004, the State of New York constituted only 29% of SUNY’s funding and 31% for CUNY. As of 1998, New York spent more on its prisons than on higher education. In 1991, 74% of the funding for public universities came from states, in 2004; it was down to 64%, with state systems in Illinois, Michigan and Virginia down to 25%, 18%, and 8% respectively. Since then, the percentages have shrunk even more, rendering state universities public institutions more in name than in funding.

Higher education under Neo-liberalism needed a new business model and it found it in the corporate university. The corporate university is one where colleges increasingly use corporate structures and management styles to run the university. This includes abandoning the American Association of University Professors (AAUP) shared governance model where faculty had an equal voice in the running of the school, including over curriculum, selection of department chairs, deans, and presidents, and determination of many of the other policies affecting the academy. The corporate university replaced the shared governance model with one more typical of a business corporation.

For the corporate university, many decisions, including increasingly those affecting curriculum, are determined by a top-down pyramid style of authority. University administration often composed not of typical academics but those with business or corporate backgrounds had pre-empted many of the decisions faculty used to make. Under a corporate model, the trustees, increasingly composed of more business leaders than before, select, often with minimal input from the faculty, the president who, in turn, again with minimal or no faculty voice, select the deans, department heads, and other administrative personnel.

The corporate university took control of the curriculum in several ways in order to generate revenue. The new business model found its most powerful income stream in profession education. Professional education, such as in public or business administration, or law school, became the cash cow of colleges and universities. This was especially true with MBA programs. Universities, including traditional ones that once only offered undergraduate programs, saw that there was an appetite for MBA programs. The number of these programs rapidly expanded with high-priced tuition. They were sold to applicants that the price would more than be made up in terms of future income earnings by graduates.

This business model thus used tuition from graduate professional programs to finance the rest of the university. Students either were able to secure government or market loans or those from their educational institution to finance their training. Further, the business model relied heavily upon attracting foreign students, returning older Baby Boom students in need of additional credentials, and recent graduates part of the Baby Boomlet seeking professional degrees as a short-circuit to advancement.

This model accelerated with the emergence of the Internet, on-line classes, and was especially perfected with the propriety for-profit schools. In the case of the expansion of on-line programs over the Web or internet, a specialist designs the curriculum for courses, sells it to the school, and then the university hires adjuncts to deliver the canned class. Here, the costs of offering a class are reduced, the potential size of the classes are maximized, and if and when the curriculum needs to be changed to reflect new market needs or preferences, it is simple to accomplish. Traditional schools, seeing this model flourish, began emulating it, expanding on-line programs, often with minimal investments in faculty.

A second way higher education became corporatized was in the increased funding streams from corporations. These funding streams became necessary as a result of decreased public support funding for higher education. One way schools have become more dependent upon private funding is simply by turning to corporate donors either to contribute directing to them, or by way of naming, that is, giving private corporations the right to donate in exchange for naming some part of a school after them. For example, in recent years many business schools have adopted famous names of companies in return for donations or sponsorships.

Overall, the new business model relied heavily upon the expansion of pricey professional programs sold to traditional and non-traditional students who financed their education with student loans. This model took off with the Internet, and was facilitated by a management structure and partnering that drew higher education into closer collaboration and dependence upon corporate America.

The Collapse of the Corporate University

The corporate business model worked–until 2008–when it died along with the Neo-Liberal economic policies that had nourished it since the late 1970s. The global economic collapse produced even more pressures on the government to shrink educational expenditures. But the high and persistent unemployment also yielded something not previously seen–the decline of students seeking more education. The decline came for two major reasons. First, Baby Boomer were aging out into retirement, no longer needing educational training. With that, the Baby Boomlet had run its peak, with the American pool of potential students rapidly decreasingly. In effect, the demand for education had dropped.

Second, traditionally MBA and other professional degrees flourished in tough economic times as individuals used their unemployment as the opportunity to get retrained. But since 2008 that has not happened, in part because of the persistent high unemployment and rise of consumer debt.

Unlike previous post World War II recessions, the most recent one has dramatically wipe out the wealth of consumers–some $13 trillion in wealth was lost–and consumer debt has skyrocketed. Student loan debt has also ballooned and is now greater than personal consumer debt–$829 billion compared to $826 billion. The average student loan debt for a graduate of the class of 2010 exceeds $25,000. In effect, potential students are tapped out–they have no money to finance further education, they see that companies are not hiring, and overall, find little incentive to debt finance for jobs that may not exist. The result? A crash in applications to graduate professional programs including MBA and law schools. From 2009 to 2010, MBA and law school applications declined by 10% for full time programs.

The corporate business model has crashed. It was a bubble that burst much like the real estate one that burst in 2008. But in actually, it was a model waiting to burst. The corporate business model functioned as education Ponzi scheme. Higher education paid for programs by raked in dollars from rapidly expanding professional programs and selling degrees on the promise that the high tuition costs would be worth it to students. But as all Ponzi schemes go, they soon collapse and that is what higher education is now experiencing.

The Next Business Model?

But what is the next business model? In a foreseeable era of high unemployment, decreasing public funding for education, and persistent consumer debt, significant retrenchment will occur along a few models. For one, a few elite universities will continue to exist, serving elites who can afford to pay the privilege of attending them. This model negates the democratic function of higher education that existed since World War II.

Second, expect significant collapse and merger of weaker institutions as they seek to find ways to complete for a dwindling student population and resources. This model decreases access to higher education as the range of college and university choices decrease.

Third, while many for-profit institutions may not be able to withstand market pressures, look to see many traditional colleges and universities will have no choice but to emulate that management style. It may not be a viable business model but given economic pressures for the future, that may be the only one that exists, rewarding a few schools that are able to provide a curriculum that is cheap enough that students want to attend. In effect, the new business model is a hyper-extension of the current model. This may mean even more alliance with corporate America along with curriculum pressures that further de-emphasize traditional liberal arts studies in place of professional education. One sign of that already is the movement to take professional degrees such as MBAs and now offer BBAs instead.

Likely business models for higher education are not good. They threaten to erode the strengths that American higher education enjoyed for years, while at the same time not articulating a plan that is financially sustainable.

Defining Obama: Presidential Image and Narrative in the 2012 Elections

2011-11-27T08:25:00.008-06:00

In so many ways it may already be too late for President Obama. It may be too late for him to construct an alternative narrative about his successes and accomplishments that he can use on the campaign trail to support his re-election. For many Americans, the narratives have already stuck that his presidency and policies are a failure.

Two rules that every successful presidential candidate remembers are that “politics is like selling beer” and that “define or be defined.” The first rule refers to the power of political narratives, the second to the constructing your own image–creating an image–or having someone else do it for you. Both of these are rules about constructively using the media–generally in an aggressive and proactive way to do messaging.

This blog has repeatedly discussed the power of political narratives. Candidates need a compelling narrative that describes who they are, their vision for the future, and what they want their presidency to look like. The narrative is their reason for running for office (“I am running for president because...”) and the direction they want to take their presidency and the American public. George W. Bush was chided for lacking that “vision thing” and rightly so, but he still won in 1988 for other reasons (see below).

The way of persuasion is about having a narrative. We tell stories about ourselves when job hunting (the cover letter and resume), we tell stories to do fund raising (“Send money to feed the homeless”), and businesses sell products by telling stories (“Drink this soda and you too will be cool.”). It is less reason and facts that move people than it is narratives, with the best being about the future, messages that are optimistic, and those which inspire passion.

The great narratives of our time were Ronald Reagan’s “It’s morning in America” and Bill Clinton’s appropriation of Fleetwood Mack’s Don’t Stop Thinking About Tomorrow. Both were brilliant narratives about hope and the future. They were narratives that promised a better tomorrow; they appealed to America’s sense of progress, optimism, and that the future will be better than the past. Perhaps one of the most famous lines in movie history–Scarlet O’Hara’s “Tomorrow is another day” from Gone with the Wind captures the compelling nature of this American belief in a better future.

The 2008 presidential race witnessed dueling narratives of John McCain and Barack Obama. McCain’s narrative spoke of the world being a dangerous place and that we should not trust enemies. He touted his military experience to keep us safe and he sought to get America to forget that he was a Republican wanting to the keep the White House in his party’s hands after a failed eight years under George Bush. McCain’s narrative sought to channel the Reagan brand one more time but it failed. It failed to an Obama narrative of change. A narrative of hope for the future, of an appeal to a new generation wanting their turn at power. Obama simply had a great narrative. He also had the fortune of a collapsing economy that worked to his favor, and a Republican vice-presidential candidate in Sarah Palin who few thought was qualified to be president in the event of McCain’s death.

But beyond the narrative, Obama also understood the power of define or be defined. In politics, you need to define who you and your opponents are before they do that to you. Remember the famous 1990 Andre Agassi Canon commercial–“Image is Everything”–that captures the point.

Image construction is important to politics, especially if you can do it to your opponents. On Labor Day 1988 Michael Dukakis had a 18 point lead over George Bush. Bush used Willie Horton, references to the ACLU, and stories about the Massachusetts’ governor not wanting to kill someone who hypothetically raped his wife to cast him as a pinko who was soft on crime. Bush went to win the presidency by three points.

In 1992, when allegations of marital infidelity nearly wrecked Bill Clinton’s campaign, his staff used the latest technology of the day–the fax machine–to proactively counter stories. Finally, in 2004, the Bush campaign brilliantly defined John Kerry as an elitist coward who purposively injured himself three times to get out of Vietnam early. The genius in transforming a three-time Purple Heart winner into a coward was amazing; thus the power of narratives.

Again in 2008 Obama understood the charm of definition. He defined himself as the candidate of hope and change, of McCain the candidate of the old an stodgy, and he also successfully declared Ronald Reagan and his narrative to be dead. Obama brought narrative and definition together to create an amazing campaign story about himself and his opponents.

But the brilliance of 2008 rapidly faded. All that was done so well in 2008 failed Obama and the Democrats in 2010. They lost the narrative and definition. Palin mocked Obama by asking how we liked the “hopey-changey stuff?” The Republicans tied TARP to Obama and not Bush. They decried that the stimulus bill was a failure (even though it did work but was insufficient to address the real depth of recession the economy was in), and they questioned his competence and leadership. All of this has stuck. In part it stuck because there was some truth to many of the accusations, but still the Republicans were lethal after being trounced in 2008. They went on the attack from January 20, 2009 and redefined Obama as a failure.

Now think about where Obama is as 2012 is about to begin. Obama’s successes are defined as failures. The stimulus did help, TARP made money (Yes, it was a Bush program), and he did deliver on many other promises. Health care reform is decried as Obamacare and bank regulation as killing the economy. Obama’s narrative of change has degenerated into “It could have been worse” as described so many times in this blog. Obama still lacks a narrative and worse, he is defined as a failure and as unable to rescue the economy. Again, there is much evidence that this is accurate, but even if not, Obama has been defined by a narrative that he cannot escape. Obama needs to escape the economy and run against a do-nothing unpopular Congress. He needs to cast himself as an economist populist that fights for the other 99%. In short, Obama needs a complete makeover.

It will be hard to do this now that he has already been defined by the Republicans for the last four years. But even if not for the last four years, clearly in the last few months the Republican presidential debates have been influential in doing that. While Obama does his presidential thing, the GOP candidates debate and get press. They get air time attacking the president and he does not respond. The candidates collectively have succeeded in crafting an image of Obama that has stuck. While four years ago content analysis of media coverage of Obama demonstrated overwhelming positive images, were a similar study done today the hypotheses today would be of just the opposite–overwhelming images. Obama has been defined–his narrative for him written by his opponents.

Obama at least has one advantage–the image and narrative for his Republican opponents is being written and it is a negative one. Palin never had a chance to run for the presidency with over 60% of the public thinking her too dumb or unqualified to be president. Now think about the other Republican contenders–Romney as a boring multiple choice Mick–Bachmann as a religious zealot–Perry as a lightweight cowboy–Cain as a lightweight sexual predator–and Gingrich as a cranky, adulterer, arrogant, hypocrite. These are largely self-defined images reenforced by the media. Hardly the images that are winning presidential formulae.

As the Iowa caucuses loom it will be telling to see how Obama tries to remake his image and narrative. Again, it may be too late to do that but with the narratives and images of his opponents equally dismal Obama might be able to pull off a second term with a slogan reminiscent of we chanted when Richard Nixon was running for a second term: “Don’t change dicks in the middle of a screw, vote for Nixon in 72.” Better the devil we know than the one we do not. That may be Obama’s best hope for a narrative.

Bonus quiz and word association time: When I mention Obama or any of his GOP rivals, what words or images come to your mind? Let me know your suggestions.

Occupy Wall Street highlights documented structural and political inequalities

2011-11-17T14:52:00.011-06:00

This blog post originally appeared on Minnpost on November 17, 2011.

Occupy Wall Street (OWS) is a cacophony of voices speaking a simple message about the structural economic and political inequalities in America and around the world. Sharing affinities to the 1999 World Trade Organization protests against globalization, OWS looks to the growing power of global financial institutions and their stranglehold on governments around the world.

OWS points to how the Bush and the Obama administrations loaned or credited trillions to banks and the too-big-to-fails to bail them out after they gambled on Wall Street, only to see homeowners face record losses in their houses and illegal foreclosures by these institutions. Tax breaks and loans were provided to the big auto companies but little was done to help the unemployed. The banks of Europe were recapitalized by the International Monetary Fund and the European Central Bank, but Greece and Italy was compelled to take the so-called "haircuts." Democracy has taken a backseat to saving capitalism. This is the message of OWS.

While Rome and the rest of the world burn, Nero fiddles. At least in this case, the fiddling is done by the Republican presidential candidates, who assert that all that ails the economy can be cured by more tax cuts and free markets. But while the GOP fiddles, a host of interesting studies have come out documenting and criticizing the ideology of Herman Cain, Michele Bachmann and company, as well as offering some insights into the state of the American economy. These reports are worth noting since they have received scant notice in the mainstream media.

The rich are getting richer, the poor poorer, no matter how you examine it.

In October a Congressional Budget Office report documented the growth in income in the United States from 1979 to 2007. For those in the top 1 percent bracket, their income increased by 275 percent. For those in the top 20 percent, it increased by 65 percent, for the middle incomes it was a 40 percent increase, and for those in the bottom 20 percent it was scant 18 percent. In 2010, the census reported the richest 5 percent of the population accounted for 21 percent of the income, with the top 20 percent receiving over 50 percent of the total income in the country.

Moreover, the latest census figures point to a poverty rate in 2010 of 15.1 percent, representing a record 46 million people in poverty. But earlier this month the US Census Bureau issued a new report recalculating what constitutes poverty — noting that current estimates are based on an outdated methodology from 1960s. This measure for calculating poverty did not include government transfers (welfare) or tax cuts when making estimates, and it also did not reflect the current spending patterns of Americans. Using new measurement tools, which the Census Bureau calls the "supplemental measure of poverty," the study concluded that the poverty rate is actually 16 percent — higher than the old estimate — constituting more than 49 million individuals in poverty. So much for welfare queens getting rich on the system.

The rich and poor live in separate worlds.

There is a geographic basis to poverty. Generally the assumption is that poverty is concentrated to the urban cores of major cities. One way to measure the spatial dimension to poverty is to use census data. Census tracts where 25 percent or more of the households live in poverty are referred to as high-poverty neighborhoods, and those with 40 percent or more of the households in poverty are referred to as extreme-poverty neighborhoods. Concentrated poverty is a problem because of the issues surrounding low economic opportunity, high government social service costs, and crime.

Looking at concentrated poverty across the United States, the Brookings Institution recently concluded that 10.5 percent of all individuals lived in extreme-poverty neighborhoods, up from 9.1 percent in 2000. Estimates are that more than 15 percent overall live in concentrated-poverty neighborhoods, with the most rapid growth occurring in the suburbs. The Twin Cities metro region is not immune, with 9.4 percent of the population living in concentrated poverty neighborhoods that include some suburbs but mostly the Minneapolis-St Paul urban cores. These trends parallel 2000 census data demonstrating the gravitation of poverty from the cities to the inner ring suburbs, creating really a two-tiered metro region marked by affluence and poverty.

Similarly, in the just released Stanford University/Russell Sage Foundation’s “Growth in the Residential Segregation of Families by Income, 1970-2009,” researchers found that America was becoming increasingly segregated by income. In 1970 only 15 percent of families were living in affluent or poor neighborhoods, but in 2007 it was 31 percent. They researchers also found that high-income households were less likely to be found in mixed-income neighborhoods than the rest of the population. In general the percentage of Americans dwelling in middle-income neighborhoods was dwindling and, in fact, these types of residential neighborhoods were shrinking.

Overall the study noted the increased economic and racial segregation in this country, with individuals of different classes less and less likely to come into contact with those from other social-economic backgrounds. America has become a tale of two cities.

Taxes really are not job killers.

The canned line from the Republican candidates has been this: high taxes are killing the economy and forcing companies out of business. Three reports again reject this contention.

The Bureau of Labor Statistics compiles data on reasons for mass layoffs. In its most recently survey, which covers 2010 and 2011, factors such as cancellation of a contract or order for goods, insufficient demand for products and increased automation account for the vast majority of layoffs. High taxes do not even appear on the list as a reason.

Second, the National Federation of Independent Business (NFIB) recently completed a survey asking small businesses to identify the single biggest problem they face. Taxes came in third, with poor sales listed as the biggest issue.

Third, the Citizens for Tax Justice recently released a report, “Corporate Taxpayers & Corporate Tax Dodgers,” documenting the biggest businesses that have failed to pay their fair share of taxes. Among the worst offenders, corporations such as GE, DuPont, Boeing, and Wells Fargo paid no income taxes from 2008-2010, let alone the theoretical 35 percent statutory corporate rate. The Citizens for Tax Justice report documents scores of blue-chip American companies that failed to pay any taxes during these three years, questioning the claim that high taxes are depressing employment and their economic growth.

Moreover, in addressing the arguments made by Herman Cain and others that high corporate tax rates discourage American companies from repatriating $1.2 trillion in money being held overseas, the Corporate Taxpayers study points out that corporate tax rates in other countries are often significantly higher. Additionally, if there is a tax advantage to off-shoring jobs it comes only because American law allows for a permanent deferral on foreign profits. The solution is simple: repeal the deferral and do not allow corporations to use the tax code as an incentive to out-source. Overall, the United States government is facilitating this problem by adopting policies that encourage evasion.

The message from all these studies point to a nation increasingly divided by income, region, and class. They point to a country where the rich pay little taxes or better yet, are able to use the tax code to their advantage — and to a world where in reality, unemployment and slow economic growth are not due to high taxes but to other factors.

Occupy Wall Street is about highlighting these facts, seeking to reintroduce the simple concept that capitalism is meant to facilitate democracy and not vice versa.

The Clock Ticks: History, Unemployment, and Presidential Elections

2011-11-12T19:11:00.006-06:00

Less than one year to the 2012 elections. Less than 60 days to the New Hampshire primary. Barely 50 days to the Iowa caucuses. The official presidential race is upon us. But as the clock ticks, time is running out for Obama and history is against him.

The basic problem is the economy. Only 80,000 jobs were added in October, placing the unemployment rate at 9.0%. The Federal Reserve Board projects slow economic growth next year–2-2.5%–with the unemployment rate settling in at about 8.5% by election time. Of course these numbers are bad for all those looking for jobs or businesses hoping to grow, yet for Obama it is a real problem.

Since 1932 only two presidents have ever won re-election when the unemployment rate was above 6%. In 1936 and 1940 Franklin Roosevelt won reelection with unemployment rates of 17% and 14.6%, but both of these elections should be treated as outliers or oddities. In 1936 the unemployment rate had dropped from nearly 24% to 17% and the economy was growing at an annual rate of 14%. In 1940 World War II was upon America and with patriotism high, support for Roosevelt was strong. More importantly, the economy was growing at 10% but the perception was that the president had the country going in the right direction.

In 1984 Ronald Reagan won re-election with an unemployment rate of 7.5%. Yet his victory occurred when the economy was growing at more than 11% and gas prices were tumbling from then record highs. Reagan definitely benefited from the perception that it truly was morning in America, especially after the unemployment rate tumbled from around 10% in 1982 and 1983.

But FDR and Reagan aside, high unemployment–six percent or more–is the death knell for a presidential re-election bid. In 1976 Gerald Ford ran for re-election when the unemployment rate was 7.7%–he lost to Jimmy Carter. Four years later the unemployment rate was 7.1% when Carter ran for a second term against Reagan. He lost to the tune of Reagan asking Americans if they were better off now than they were four years ago. In 1992 George Bush sought a second term with an unemployment rate of 7.5%–he lost to a Bill Clinton reminding the voters that it was “the economy stupid.” Conversely, Nixon won with an unemployment rate of 5.6% in 1972, Clinton 5.4% in 1996, Bush in 2004 with 5.5%, Eisenhower 4.1% in 1956, and Truman in 1948 with 3.8%.

Key to a presidential re-election is the actual unemployment rate. But economic, and the reality or perception that it is moving in the right direction, is also important. If there are not significant declines in unemployment along with economic growth and a perception that the economy is moving in the right direction, presidents are not given a second term.

Obama faces an economy where the best projection is of high unemployment and low economic growth. But there is more. Home values remain about 25% or more below what they were in 2008, consumer and now student debt is high, and many people have already blown through their unemployment benefits and face an uncertain future. Consumer confidence remains near historic lows, suggesting little chance that retail sales and spending for the coming holidays and into next year will revive the economy. The public just does not believe the country is headed in the right direction and few think we are better off now than four years ago.

History suggests Obama will lose. This assumes the Republicans put up a viable candidate with a compelling narrative. Yet so far that task seems elusive. Bachmann has come and gone. Perry has gaffed himself to death. Cain’s numbers place him in the GOP lead, but his negatives are escalating as it becomes more apparent that he is a misogynist who treats every woman in a demeaning fashion. Romney is boring and the Republican base does not really know where “multiple choice Mitt” stands on the issues. Gingrich is too acerbic. Congressional approval is less than 10%, with the public placing more blame on the Republicans than Obama for the gridlock in Washington. In short, the Republicans have the Democrats' disease—they are poised to snatch defeat from the jaws of victory. Obama can still win—he has money, the bully pulpit, and demographics that place perhaps as many as 200 or more electoral votes in easily into his presidential win column without too much effort. Now all he needs is the narrative for his re-election.

Obama hopes for a rerun of the 1948 Truman surprise victory over Dewey, campaigning hard as an economist populist against a hapless elitist. Yet the 1948 campaign featured an economy far better than 2012 so the parallels here might not be good.

Obama is also running on the fear factor—Hope that the American public will be afraid of an extremist Republican president presiding over a Republican Congress. Fear came be a powerful too, but 1980 demonstrated with Carter was up for re-election, fear of a crazy Reagan who would blow up the world was pushed aside by the desire for change and disgust with the status quo. Obama knows the public wants change—as he promised in 2008—but it is hard to run on that narrative when you an incumbent seeking re-election. He needs to navigate a message that promises change while staying the course with him. It’s a hard task—made only more difficult by the unemployment numbers—but Reagan and FDR did it, and now Obama needs to figure out how to channel their magic to do the same.

The Legal Football Field: Forcing the Vikings to Stay in Minnesota

2011-11-05T19:12:00.009-05:00

Does a snow-collapsed Metrodome mean the Vikings are on the hook for another season in Minnesota? Quite possibly according to the 1979 contract between the team and the Metropolitan Sports Facilities Commission (MSFC). Yet while the news of the day suggests this is the case, as does the 2002 litigation surrounding the Twins and the Dome, there is no certainty that a court would force the team to stay on another year. At stake here are complex legal issues and principles worth reviewing and clarifying.

The crux of the issue here is the expiration of the Vikings lease-contract with the MSFC at the end of the current football season and rumors that unless public financing is forthcoming to build a new stadium, the Vikings are leaving. In the last couple of days the original lease agreement was reviewed and an interesting contract clause was located. It states in section 15:3:

"For each football season, or part of football season, while this Agreement is suspended, the term of this Agreement ... shall be extended by one football season."

The occasion for invocation of this clause is the collapse of the Dome earlier this year due to snow and the playing of home games at TCF Bank stadium (UMN) and then in Detroit.

Now under the normal rules of contract law, parties generally are not in breach if they are unable to perform for reasons beyond their control. Impossibility to perform is generally accepted as a defense against claims of breach of contract. However, section 15.3 appears within a part of the contract titled as “force majeure.”

Generally force majeure refers to acts of God–acts that are beyond the control of parties such as severe weather, floods, wars, or other acts unforseen by the parties. Normally a roof collapse due to snow would qualify as force majeure. Yet 15.3 also covers this issue and states that: “In the event of a total or partial destruction rendering the stadium not suitable for playing home games...” Thus, the contract appears to define force majeure here, meaning that the collapse of the Dome might well require the Vikings to stay on another year.

But there is still another legal issue at stake here–the concept of specific performance. Generally if contracts are breached the courts do not order specific performance–that is they do not order that the breaching party must actually perform the contract. Instead, the remedies for contract breaches generally are monetary–one pays money. Now there are several formula to calculate damages and they will be ignored here. However, the point is that there are very few instances in Minnesota law where specific damages are awarded.

Specific performance is not generally awarded in personal service contracts or in the case of commercial leases. Landlords usually cannot compel a tenant to stay on and the reverse is usually true too–a tenant cannot require owners to rent to them. Specific performance is ordered only when there is no way to measure or monetize the damages (figure out how to place a cash value on the damages), when the performance called for is something unique–the transaction of real estate for example–,or when the contract contemplates or calls for specific performance.

In the case of the Vikings agreement with the MSFC, one could argue that the agreement itself allows for specific performance by the fact that section 15.3 defines force majeure and what should happen when the team cannot play in the Dome due to its incapacity. Moreover, section 20.8 of the Agreement also provides that the parties can insist upon the “strict and prompt performance of the terms of this Agreement.” Arguably, this clause permits specific performance.

Additionally, one could argue that the nature of the contract–compelling performance of a professional sports franchise–involves something so unique that monetary damages cannot replace the loss. In effect, losing a pro football franchise is something that cannot be replaced with normal contract money damages and therefore specific performance is required. Don’t bet on this as a winning argument.

Furthermore supporters of specific performance can turn to the case of Metropolitan Sports Facilities Com'n v. Minnesota Twins Partnership, 638 N.W.2d 214 (Minn.App. 2002). Here the Twins were required to remain playing in the Dome after major league baseball wanted to contract the league and shutdown the Twins. That case involved an injunction to prevent the contraction. Unlike the Vikings’ lease, the Twins’ had an obligation to play in the Dome unless their force majeure clause applied. It excused them from performance if they were unable to play a home game for a reason beyond the Team’s and the Commission’s control, including strikes, an act of God, a natural casualty, or a court order. Contraction was not force majeure.

The facts in that case are very different from the one with the Vikings. Here, the issue is not contraction but possible breach of contract. Moreover, the Twins case was about a temporary injunction to prevent a team from being eliminated and not simply leaving town. With the Twins, if they were contracted the harm was permanent and it might not be possible to collect money damages. Here, the possibility to collect money damages does exist.

Overall, the Vikings’ agreement with the MSFC gives the latter and the state a new legal tool to use for bargaining. Whether a court would actually enforce it may be immaterial to the uncertainty of how a judge might interpret it and how the agreement might provide a leverage for negotiation.

The Hype on Taxes: They Don’t Matter Much

2011-10-31T19:18:00.008-05:00

Taxes impede economic growth. This is the belief among the Republican presidential contenders as they offer plans to cut taxes as a panacea to stimulate the economy. Herman Cain’s “9-9-9” assumes lower income tax rates for corporations and individuals will stimulate the economy. Newt Gingrich wants to cap top rates at 15% and Rick Perry has called for a national flat tax of 20%. Mitt Romney has a 59 point plan that includes tax cuts. Ron Paul wants a constitutional amendment to eliminate income and estate taxes. Michele Bachmann wants a return to the Reagan era tax cuts. All want to make the Bush era tax cuts permanent.

Yet do high taxes really hurt the economy as much as they believe, and will lowering them have much of an impact on stimulating it? The economic literature is clear — tax breaks to encourage economic relocation or investment decisions are inefficient and wasteful. Hundreds of studies reach this conclusion. When businesses are surveyed regarding factors important to their investment decisions, taxes often come in behind proximity to markets, suppliers, and the quality of the labor force. These other factors occupy a larger percentage of a business's budget than do taxes, and all of them are far more critical to long-term success than are taxes. Businesses occasionally admit this. Nearly 62 percent of those interviewed in a California study on hiring tax credits indicated that they had never or rarely affected their decision to employ individuals. Speaking at a recent chamber of commerce event, I asked business leaders whether the Obama tax cuts would encourage them to hire. Unanimously the response was no—they were unwilling to hire until such time that consumers were willing to buy their products and services.

Anecdotal stories and illustrations also confirm the tax fallacy. High tax states such as Minnesota have generally fared better in terms of economic growth, unemployment, median family incomes, and location of Fortune 500 companies, than low tax ones such as Mississippi and Alabama. In many situations high taxes, and with that, government expenditures on education, workforce training, and infrastructure, correlate positively with income, low unemployment, and business retention. One needs to look not just a one side of the equation—taxes—but the other side too—what taxes buy—to see what value businesses get out of them in terms of educated workforces and infrastructure investments. Most debates fail to do this.

Bureau of Economic Analysis statistics demonstrate how economic growth is related to tax rates. One can compare annual economic growth as measured by the percent change in the gross domestic product (GDP) percent based on current dollars to the highest federal individual tax rate and the top corporate tax rate since 1930. If taxes are a factor affecting economic growth, one should see an inverse relationship between growth of the U.S. economy and higher tax rates. The GDP should grow more quickly when top individual and corporate tax rates are lower. If taxes are a major factor deterring economic growth, lines on a graph should go in opposite directions: As tax rates go up the GDP should go down.

No such pattern emerges between high taxes and GDP growth over 80 years. During the Depression of the 1930s corporate and individual taxes rates increased, but in 1934 through 1937 the GDP grew by 17%, 11%, and 14% annually. Top corporate tax rates climbed to over 50% through the 1960s, again with no discernable pattern associated with decreased economic growth. The same is true with top tax rates on the richest which were 91% into the 1960s. Conversely, since the 1980s after Kemp-Roth and then after 2001 with the Bush era tax cuts, there is no evidence that the economy grew more rapidly than in eras with significantly higher tax rates on the wealthy and corporations. Looking at time periods when tax rates were at their highest, GDP often grew more robustly than when taxes were cut. Visually, the attached graph simply fails to demonstrate that tax rates negatively impact economic growth. (Click on the graph to get a better view of it).

Pictures are worth a thousand words, but statistics are priceless. Statistically, if a tax hurts economic growth, the correction with it is -1. If they positively facilitate growth the relationship is 1, and if they have no impact the relationship is 0. The correlation between GDP and top individual taxes is 0.29, between GDP and top corporate taxes is 0.32, and among the three it is 0.14. Statistically, there is a slight positive impact on either top individual or corporate taxes or economic growth, but overall almost no connection between tax rates on the wealthy and corporations and economic growth in the United States.

But what about taxes as job killers? Again running similar statistical tests, there is little connection. Using Bureau of Labor Statistics data on unemployment rates since 1940, the correlation among top individual and corporate taxes and the annual unemployment rate is -0.02—essentially no connection at all.

The simple claim of Perry, Cain, and others that high tax rates on the wealthy and corporations hurt economic growth and job production is false. The evidence is simply not there to support assertions that high taxes alone hurt the economy or that cutting them will have the stimulus effect asserted.

A plea for fact-based policymaking in an era of political myths

2011-10-28T07:38:00.006-05:00

Comedian George Carlin quipped that "business ethics" was an oxymoron. The same can now be said about reasonable politics. Politics and the making of policy seems less to rest upon reasoned debate, social-science evidence, and facts than upon hope and belief. Rep. Michele Bachmann panders to ignorance when decrying vaccines as causing retardation. She, along with Herman Cain, Gov. Rick Perry, and most of the other Republican presidential hopefuls deny global warning, evolution, and a host of other well-established facts, preferring to base their candidacies and appeals on propositions lacking rational or empirical support.

Ronald Reagan famously misspoke: "Facts are stupid things." He seems to have gotten it right when it comes to political debate, pointing to how truth takes a backseat to myth or worse — lies. Two of Reagan's myths — welfare queens exploding the federal budget deficit, and supply side economics as trickling down to benefit us all – both failed truth tests. But that did not matter then or now; people bought them as simple answers to complex problems.

Today, untested or worse, crackpot or refuted ideas dominate political debate. Nationally, we hear rants about how illegal aliens are a drain on the economy and that they take jobs from Americans, when in fact the evidence suggests otherwise and that they are net contributors to our country. Taxes are assailed as job killers when evidence suggests that they are a marginal factor behind workforce quality, access to supplies and consumers, and transportation costs as more important factors affecting business location and expansion decisions. Conversely, little evidence supports the idea that tax holidays to repatriate corporate savings back to the United States will yield job production. Herman Cain more or less admits that his "9-9-9" was conceived as a bold political idea that was not based on any real evidence of its impact.

A bevy of other stupid public policies and political myths dominate the American political landscape. Wrongly we believe that welfare migration is a major problem in the country. Some contend that teaching sex education to teenagers encourages promiscuity, that we can pray away homosexuality, or that same-sex marriage hurts traditional matrimony. Never mind what the best research and facts state.

Both parties indulge

Myth-based politics does not seem confined to one party. Gov. Mark Dayton is determined to secure funding for a new Vikings stadium even though the economic evidence is overwhelming that public subsidies for this purpose are one of the worst uses of tax dollars there is as a tool for economic development. Conversely, the Minnesota Majority continues to beat the drum of voter fraud as stealing elections when the absolute best research suggests that in-person election fraud is negligible, that there is no evidence that it has affected the outcome of any recent election, and that voter-identification laws will not prevent this fraud and instead will disenfranchise many individuals.

As a professor who has taught public policy for nearly 25 years and a former government administrator and planner who worked in the world of facts, evidence and research, I find all this frustrating, especially when called upon to testify before the Legislature. Seldom have I seen facts — and not ideology or prejudice — move elected officials.

My students are not given the liberty simply to assert opinions unless they can support them with evidence. We should ask no less of our politicians and government officials. Reporters do not press candidates to substantiate their claims, and the public often gives them a free pass, letting emotion, anger or frustration guide decision-making. What results are bad laws and foolish policies that do not work, waste taxpayer money, and often make the problems worse than before.

Evidence dismissed

Recently I gave a talk to a local Rotary Club about the 2012 elections. When I finished, a minister came up to me and asked where I stood on voter-ID laws. I told him that I had researched and written on the subject extensively and that the evidence of fraud was negligible. He dismissed my statement, declaring: "I am from Milwaukee, I know about voter fraud. They bring busloads of those folks up from Chicago all the time to vote in our elections."

I shook my head in disbelief. "Those people?" He might as well as said blacks, because that is what he meant. I am not sure what disappointed me more — the racism, the dismissal of the facts or that he was a minister. Why he asked my opinion I do not know — except to confirm his prejudices. It was clear his mind was made up and no amount of facts would change it. He embodied all that is wrong with contemporary politics — one not of evidence-based policy making but one dominated by blind ideology, ignorance or willful disregard of the facts

Today's blog appeared in the Friday, October, 28, 2011 Minnpost.

Michele Bachmann's Meltdown

2011-10-22T16:28:00.006-05:00

The Iowa presidential caucuses of January 3, 2012 are less than 75 days away and their outcome are more in doubt today than ever. What once looked like a certain victory for Michele Bachmann now looks less and less likely, and talk of her presidential prospects sounds more like a deathwatch especially in light of the resignation of her New Hampshire staff.

August 13, 2011 seems so distant now. Barely nine weeks ago Bachmann surprised many by winning the Ames straw poll. She was on top of the world, leading the GOP pack as the darling of the Tea Party. But then came the collapse. Rick Perry entered the race eating at her conservative base. Bachmann was unable to move to the center given her rhetoric and positions, and she disavowed any intention to do so. Media attention and scrutiny mounted, missteps and statements about HPV and retardation damaged her, and the cycle of decline began.

In the last few weeks numerous problems have mounted. Declining poll numbers followed with dismal debate performances that revealed no more than canned vacuous answers. All this was followed by poor third quarter fund raising and campaign debt and now her New Hampshire staff has stepped out.

Is Bachmann done?

Essentially, yes. As noted in several of my blogs, her campaign rested upon an Iowa strategy that is faltering even now. The belief before was that a victory in Iowa would be the springboard to success in other states such as New Hampshire and South Carolina. But she never did much to campaign there and her presence and infrastructure there was always weak. But now with Nevada and Florida moving up their delegate selection, Bachmann’s campaign was damaged even more because she did not have staff there to help her. The point here is that the Iowa strategy presupposed that she had money and structure in place in other states to take advantage of the Iowa victory. But she did not have this and thus, even if Iowa does still become a victory for her, she will be unable to take advantage of it. (Here are similar comments of mine in a story about Bachmann).

But now she is losing even in Iowa. Evidence is seen in the polls and in other candidates now returning to it to campaign with the belief they can win the state. She is falling back in the pack. She increasingly looks more like Rick Santorium than a leader in Iowa. She gives speeches to a few faithful but continues to slip in the polls. She has little new to say and the buzz she once had is gone. She has been unable to take advantage of Perry’s drop and instead Cain has benefitted. While potentially she can recover to win Iowa, the new January 3 date gives her less time to do that. Thus, an earlier Iowa date gives Bachmann too little time to recover and her dismal fund raising and failure to plan beyond Iowa make it unlikely she can go much further beyond Iowa.

Lessons Learned

What we learn from Bachmann’s collapse in part is that her great congressional campaign machine was unable to transition to a presidential level. You cannot win the presidency with a $40 average campaign contribution and an unwillingness to grow and expand a base, especially when others are also competing for that base. Bachmann took for granted that she owned the Tea Party–never do that.

In addition, her electoral skills were always vastly over-rated. She had a plus-6 GOP district in Minnesota–a district tailored to her. Her victories were over weak opponents or took place in the banner Republican year of 2010. In many ways, she looked stronger than she really was and perhaps she believed she was the star that the media had declared. While I always thought she had a chance to do well as an Iowa candidate and perhaps beyond, what is most striking is how amateurish she turned out to be as a candidate. That is the product of never facing a serious primary for Congress nor a serious contest in the general election.

Bachmann’s Clouded Future

So what next for Bachmann? Does her December book even have value now? Hard to say and it is unlikely it will save her campaign. Do we see her move on to CNN or another network with her own show? Her increasingly collapsing campaign makes that even less of an option.

Does Bachmann return to run for her congressional seat again? Maybe, she has until June to decide. But redistricting uncertainty and the prospects of a less friendly set of lines for the sixth district pose challenges. Moreover, the worse her presidential campaign looks the more it makes her potentially vulnerable to a primary challenge. Bachmann has never attracted big donors and if she were to run for Congress again her small donors may be tapped out or unwilling to give. She is in a bad situation right now and her options are ticking away along with the clock to Iowa.

Class divides America -- and conflicts reflect a broader battle

2011-10-18T07:05:00.005-05:00

This blog originally in Minnpost on October 17, 2011.

A line in the sand of American politics is being drawn. It is a line that cut through Madison, Wis., last spring in the debate over unions. It is a line being cut through Wall Street over the role of banks and hedge-fund managers in destroying the American economy in 2008. And it is a line cutting though Washington, D.C., in Congress over how to produce jobs, regulate banks, reduce the deficit and debt, and provide health care to those who need it. That line is about class in America.

There is a basic belief in America that we are all in it together. We are one big happy middle class where the interests of the rich and poor are not in conflict. Rising tides lift all boats, as Ronald Reagan used to say. There are no class conflicts in this world. That what is good for GM is good for America, and that we live in a society where all of us can be winners with no losers in the economic marketplace. The promise of America is of a non-zero-sum game — some do not have to lose for others to win. The truth is far uglier.

America is a nation characterized by increasing class divides. In 2010 the Census reports the richest 5 percent of the population accounted for 21 percent of the income, with the top 20 percent receiving over 50 percent of the total income in the country. This compares to the bottom quintile accounting for about 3 percent of the total income.

Congressional Budget Office research found that the income gap between the top 1 percent of the population and everyone else more than tripled since 1973. After-tax income for the top 1 percent increased by 281 percent between 1973 and 2007, while for middle class or middle quintile it increased by 25 percent, and for the bottom quintile it was merely 16 percent.

Looking beyond income to wealth, the maldistribution has not been this bad since the 1920s. According to the Institute for Policy Studies, in 2007 the top 1 percent controlled almost 34 percent of the wealth in the country, with half of the population possessing less than 3 percent. The racial disparities for wealth mirror those of income. Studies such as the Survey of Consumer Finances by the Federal Reserve Board have similarly concluded that the wealth gap has increased since the 1980s.

Record numbers in poverty

Social mobility in America has ground to a halt. A 2010 Organization for Economic Cooperation and Development study found that social mobility in the United States ranked far below that of many other developed countries. Other studies, including those in 2005 and 2010 in the Economist, similarly point to declining social mobility in the United States that makes it difficult for individuals to rise from one social economic status to a better one. In fact, there is better than a 95 percent chance that children will not improve their social economic status in comparison to their parents. Finally, the latest Census figures point to a poverty rate in 2010 of 15.1 percent, representing a record 46 million people in poverty. The numbers are equally grim when one looks at women, children, and people of color in poverty — all record or near-record numbers. Few really can move on up to live the American dream.

The reality is that America is a zero sum game. There are winners and losers. What is good for corporate America is not benefitting most Americans, and it is increasingly clear that in simple terms the rich are getting richer, the poor poorer. The reality is, we are not all in it together and class divides America. We see the divide in where individuals live, what they eat, and the entertainment they consume. It is seen in who votes, runs for office, and in political contributions. It is reflected in our tax code, criminal-justice system, and educational opportunities.

Class exists. The problem is, few want to acknowledge it. And when someone talks of economic redistribution, bailing out homeowners and not banks, taxing millionaires, or blaming Wall Street and not the government for the economic problems that ail America, cries of class warfare are raised. Or worse — Herman Cain "McCarthyited" the Wall Street protesters as "Anti-American," invoking the ugliest of all political epithets to assail opponents.

Protests are symptoms

Yes, class conflict exists in America. Protests in Wisconsin over attacks on unions or on Wall Street to challenge the power of banks reflect this. But they are merely symptoms of the broader battle over a simple question: "Why government?" It is a debate over whether free-market fundamentalism prevails as a means to provide order and declare winners and losers in America versus letting the government correct the imperfections and errors that capitalism has produced. It is between saying that the direction of the country is decided by "one dollar one vote" or by "one person one vote." It a battle over whether the government serves the interests of corporations and the rich or the rest of us.

Class exists in America, as it does in all other nations of the world. Like it or not, there are diametrically opposed interests in this country and the real questions are whether the government and politicians should do anything about it and whose interests they should serve.

Presidential Politics: It’s about the money

2011-10-16T17:40:00.005-05:00

The third quarter presidential financial reports are in and this is a good time to string together some thoughts about the candidates.

“Money is the mother’s milk of politics,” said former California Assembly Speaker Jesse Unruh.

Money is what it is all about in campaigns, especially presidential politics, as they have evolved into hundreds-of-million dollar businesses, replete with fundraisers, media consultants, travel consultants, pollsters, and a host of other specialists. The days of candidate door-knocking and Lincoln-Douglas debates are part of a quaint Norman Rockwell past. Modern presidential campaigns are won or lost with money.

Third quarter reports are in and we can learn a lot about candidate prospects by examining their fund-raising balance sheets. Of most interest, Michelle Bachmann’s along with those of Obama, Romney, and Cain.

Bachmann

Bachmann is dead financially and it confirms her descent in the polls. In the third quarter she raised $4.2 million, suggesting that her congressional money machine was not equipped to make the presidential leap. Yet her second quarter produced barely $4 million, and she spent nearly $6 M. This is embarrassing and bad news for her.

Embarrassing–She rails against government deficits and need to live within our means yet she cannot do that with her own campaign. She has proved to be a bad steward of her own money–how can we trust her with the public treasury? Her credibility on the budget is gone.

Bad News–Bachmann’s financial woes confirm her poll problems and fall from grace. Think about it–the 3Q should have been a slot machine for her. In August she was at the top of the polls and had won the Iowa straw poll. She had a massive donor list and money should have poured in. Yet it did not. Perry clearly hurt her as did her bad debate performances and gaffes. She failed to capitalize on her opportunities.

But that is not the end of it. Bachmann has not been to New Hampshire since June. She has little or no organization outside of Iowa where she continues to camp out. Her poll numbers are bad and hurt fund-raising, and now this news about the 3Q only makes it harder to generate cash.

Even if Bachmann wins Iowa in January it will not be enough to save her. Everyone expects her to do well there so she will not get much of a bounce even my winning. But assume she wins, what then? With no organization in other states she will not be able to capitalize on the win there to help her move forward. Her financial number reveal a candidate who will meet her Waterloo one way or the other in Iowa. She lacks an infrastructure in other battle ground states and thus she may be a one-state candidate.

How long will Bachmann last? I think she makes it through Iowa at most. At the least she stays in the campaign through December because she has a book coming out then. Is she counting on the book bolstering her campaign? No–Bachmann is now in it for herself. She is using her presidential campaign and her supporters for the personal benefit if herself. An active campaign makes for books sales and for money in her own pocket.

Call me cynical but it is now clear Bachmann does not care about the presidency or her supporters. She is in it for the money. Watch her make a few million on her book, leave her creditors on the hook, and she walks away from politics rich and her supporters used.

Obama and Romney

Obama raised a ton of 3Q money, dwarfing all of the GOP. Good for him–he will need it if he wants to win reelection. Money, the power of incumbency, an unpopular Congress, and the penchant of the Republicans to want to nominate a candidate so conservative that no swing voter will support them (Think Goldwater and 1964) may overshadow the 9% unemployment rate. Obama still lacks a narrative for reelection and GOP will run on the mantra of “change” against him.

Romney hangs tough with $14 million, but GOP polls continue to place him at about 25%–a spot that has not changed for months. He seems stuck, unable to gain more support as the different flavors of the month–Trump, Bachmann, Perry, and now Cain–seem to come and go. Romney may have the best shot of all to beat Obama but he generates little excitement. His problem is that he is like the guy who reminds a woman of her first husband. He has the same problem with the Republicans. He generates little excitement and affection. His boringness is why other candidates look good to the Republicans–they are searching for something more exciting and for someone who will fulfill their fantasies. Romney is out of place with the current version of the Republican Party. If he does get the nomination he will generate little excitement among the Tea Party folks. Remember, Rod Stewart is right–it is about passion–especially in politics–and Romney lacks it.

Wall Street, Obama, and Romney

If you want loyalty and a friend, get a dog. This is what Obama must be thinking about Wall Street. They were his friends in 08 when they needed him and they gave to his campaign. Now Romney is out-pacing him when it comes to Wall Street money. Why?

Wall street got what it wanted from Obama–the bailouts–and they do not need him anymore. Obama was played like a violin–he bailed them out before getting anything from them and now that they are fat with cash again they cast him aside for someone else. No surprise.

Cain and Final Thoughts

Cain might be the flavor of the month but it is good to be the flavor when it is close to the real start of the primary season, which is just a few weeks from now. His poll numbers are great but his fund-raising is lackluster at less than $3 million (which includes a ton of his own money). In the last few days the media has poured scrutiny on him–look to see more of that in the coming weeks.

His 9-9-9 will come under huge analysis. Cain admits that 9-9-9 was conceived of as a bold idea. Bold it is, smart it is not. It is not based on any real economics but instead it captures the attention of those who want quick simple solutions.

Wait to people begin to think about the 9% federal sales tax. I am sure consumers and businesses will love it. Plus 9-9-9 will force massive budget cuts and fail to generate the revenue needed to address the debt. Look to see 9-9-9 lampooned soon.

Bad Ideas Never Die: How to Stop the Vikings Arden Hills Stadium Proposal

2011-10-14T08:39:00.010-05:00

Bad ideas never seem to die. Proof of that is the continued folly of Ramsey County, Tony Bennett, Governor Dayton, and some in legislature to continue to press for public funding for a new Vikings stadium. Two events this week pushed this folly into the news again. The first was refusal by the Ramsey County Charter Commission (RCCC) to place a proposal on the ballot in 2012 that would require voter ascent on any public funding for the Vikings. The second is a Met Council feasibility study on construction of the stadium in Arden Hills. While opponents were wrongheaded in putting their faith in the RCCC option to halt the stadium, the feasibility study really offers the best arguments and tactics for them to stop the project in Ramsey County.

The Folly of Public Subsidies for Sports

Public subsidies for professional sports teams are economic follies. Back in a February 10, 2011 MinnPost piece; I outlined the economic argument against them. Simply put, such economic subsidies are economically inefficient, are horrible economic development tools, and they fail to produce the returns on investment to the public that they tout. Overall, studies are conclusive in terms of their bad economic value compared to other investments that governments can make.

Yet these bad ideas do not seem to die. Politicians get sports fever, they chum up with team owners, take their political contributions, or get captured by the “a major sports teams makes us a first class city” syndrome and therefore want to build a new stadium in their community. They get gripped by the “if you build it they will come” mentality,” and they also get Pharaoh envy–they see a stadium as their form of a pyramid that they can point to as a final legacy of their time in office. Overall, even in the best of times public subsidies are economic sinkholes for communities but in bad economic times the argument is about priorities. Money for greedy billionaires ahead of highways, schools, and heath care? Money for the Vikings and not to help tornado victims in Minneapolis (yet I know this is another country)? What statement are we making when we say money for sports is more important than K-12 education?

Finally, remember, professional sports is a business and this is supposed to be America, the land of capitalism. Since we are we supposed to subsidize businesses, especially ones that are profitable? What part of this do politicians not understand?

How not to stop the stadium?

Ramsey County Charter Commission

Asking the RCCC to place on the 2012 ballot a proposal to require voter ascent for public funding for a Vikings stadium would have been closing the barn door after the cows ran out. The Vikings and Ramsey County could have done the deal before that vote. The vote, even if successful, might have come too late and the damage would have already been done. Opponents confused the RCCC with the Ramsey County Commissioners (RCC). The RCCC is not a policy body–it defines the structure of government for how policy is made. The pressure needs to be directed on the RCC to stop the project but that seems unsuccessful. Thus, option two.

How to stop the stadium?

Met Council “Stadium Proposal Risk Analysis”

The best read of the week was the Met Council’s “Stadium Proposal Risk Analysis” documenting the costs and problems associated with the Arden Hills site. In summary, the report correctly states that the potential pollution, site remediation, and infrastructure costs associated with the project may be far greater than anticipated. Moreover, because an environmental impact statement (EIS) and state and federal permits may be required for the site, completion of the project within the time frame anticipated is also doubted. What does all this mean?

The proposed Vikings site is polluted and perhaps more so than anticipated. The real costs cold balloon and one may never know the full bill until the project is begun. At that point one is faced with a sinkhole problem. By that, hundreds of millions are already committed and to finish the project more will be required.

First, the project could have significant cost overruns.

Second, the pollution and remediation efforts expose the public to potential lawsuits from the cleanup and it is unclear what insurance is available to cover the county.

Third, the infrastructure repairs are extensive and may again be far more extensive than stadium supporters are describing.

Fourth, all of the above will require government environmental permits to begin the work, but only at the EIS is completed. The EIS an permitting process could take years, delaying the project well beyond the Vikings deadline and what are now given as estimates for project completion.

In short–the Arden Hills project is potentially more expensive and complicated than its advocates claim. Here is where opponent have leverage. Over the years I have seen more projects delayed or killed than I can count because of shoddy EIS. In a rush to complete a project an EIS is rushed and done poorly, risks are ignored, and estimates of remediation downplayed. What happens then is either permits are not issued or lawsuits are filed in federal court holding up projects for years because of a rush to sneak projects through. Think of the replacement for the Stillwater Lift Bridge and I have said enough.

Thus, if opponents really want to kill the Arden Hills project the RCC and Dayton may be their best friend. In their rush to get the project done they will do a bad EIS and risk assessment, setting up the real ability of opponents to challenge the EIS in court, thereby delaying the project for years and driving up the costs of doing the project beyond the underestimated price tag that is already being touted for this folly.

Class Warfare and the American Dream

2011-10-03T06:55:00.007-05:00

Note: This piece appeared in Politics in Minnesota, Capitol Report, September 29, 2011.

America is the land of dreams. The United States is lauded as the land of opportunity, the place where anyone can go from humble beginnings and become a millionaire. It is the tale of rags to riches, of the Horatio Alger story, of a nation where we can rise as far as our talent takes us. Yet dreams die hard. The reality is that America is a nation of increasing poverty, economic inequality, and decreased social mobility; at least according to a series of recent studies and reports documenting the economic woes of the United States.

The first study is from the United States Census Bureau in 2010 describing poverty and income in America. In 2010 the richest five percent of the population accounted for 21% of the income, with the top 20% receiving over 50% of the total income in the country. This compares to the bottom quintile accounting for about 3% of the total income.

A second study by the Center on Budget and Policy Priorities in 2010, drawing upon Congressional Budget Office research, found that income gap between the top one-percent of the population and everyone else more than tripled since 1973. After-tax income for the top one-percent increased by 281% between 1973 and 2007, while for middle class or middle quintile it increased by 25%, for the bottom quintile it was merely 16%. Looking beyond income to wealth, the maldistribution has not been this bad since the 1920s. According to the Institute for Policy Studies, in 2007 the top one-percent controls almost 34% of the wealth in the country, with half of the population possessing less than 3%. The racial disparities for wealth mirror those of income. Since 2007 the wealth gap has increased as the value of American homes–the single largest source of wealth for most Americans– has eroded. Studies such as the Survey of Consumer Finances by the Federal Reserve Board have similarly concluded that the wealth gap has increased since the 1980s.

But Americans dream and believe they can rise to the top–get lucky, be the Horatio Alger rags to riches story; thus our fascination with buying lottery tickets. Yet social mobility in America has ground to a halt. A 2010 Organization for Economic Cooperation and Development study found that social mobility in the United States ranked far below that of many other developed countries. Nearly half of the economic advantage parents have in the United States is transmitted to their children; a number nearly two-and-one-half times that of Australia and Canada. The biggest cause of social immobility according to the report is declining educational opportunities for many students. Other studies, including those in 2005 and 2010 in the Economist similarly point to declining social mobility in the United States that makes it difficult for individuals to rise from one social economic status to a better one. In fact, there is better than a 95% chance that children will not improve their social economic status in comparison to their parents. Few really can move on up.

Conversely poverty in America has increased. In FDR’s second inaugural speech in 1936 he spoke of a nation that was one-third ill-clothed, ill-housed, ill-fed. In the 1950s due in part to the New Deal anti-poverty programs, the poverty rate fell to 22%, with over 39 million poor persons living at or below poverty level. By 1969 Great Society programs reduced the poverty rate to 12.1%, with a further decline to in 1973 where the poverty rate was 11.1%, representing 23 million.

Yet after that, and especially beginning with the Reagan era’s retrenchment on social welfare programs, the poverty rate has continued to climb. In 1983, the poverty rate was 15.2%, in 1992, the rate was 14.5%, representing 36.8 million, and in 2003, 12.5%, representing 35.9 million. Moreover, in 1992, the poverty rate for female-headed families with children was 48.3%, and 21.9% under the age of 18 were in poverty (14.6 million children). In 2009, 14.3%, or nearly 40 million in poverty, and now the latest Census figures point to a poverty rate in 2010 of 15.1%, representing a record 46 million in poverty. The numbers are equally grim when one looks at women, children, and people of color in poverty–all record or near record numbers.

One could recount in even more detail the picture of an America with growing class differences that are fixed. We live in a world where there are clear rich and poor, with the income and wealth differences played out in terms of racial and gender disparities. We live in a nation where the privileged few go to better schools, live in safer neighborhoods, have better access to medical care, and therefore are healthier and live longer. As F. Scott Fitzgerald once stated in his play The Rich Boy: "Let me tell you about the very rich. They are different from you and me.” Yes they are–they are privileged.

Many reasons explain the growing gap between the rich and poor and America. But at the core one can point to the emasculation of the New Deal and Great Society programs that once provided income transfers to the poor. There is the dramatic cuts on effective tax rates in America that prior to the 1980s were 70% but now are less than half that such that the poor and middle class, as Warren Buffet pointed out, pay a greater percentage of their income in taxes than he does. Similar tax cuts have been gifted to corporations. As a result, the rich are asked o contribute less to society and economic inequalities that exist are not offset by tax policies and income transfers.

Moreover the war on organized labor has had its toll. Unions from the 1930s until the 1980s had a significant impact on increasing wages, benefits, and the quality of life for America. But first beginning with Reagan’s firing of the PATCO air controllers in 1981 and continuing to Wisconsin governor Scott Walker’s assault on public employees this year, unions have come to be depicted as the new welfare queens in America, blamed for declining American competitiveness and budget deficits. Never mind that successful nations such as Germany pay higher wages and benefits, many believe that the only way to future prosperity in this country lies with immiserizating the American worker.

A couple of weeks ago Republicans lambasted President Obama’s call for tax increases on the wealthy as class warfare. The Republicans deserve credit–at least they recognize that there are class differences in America and that a war exists. However, only one class is fighting–the corporate rich–while the rest society sits idly by immobilized.

“Don’t be Cruel”: The Limits of Republican Compassion

2011-09-30T08:19:00.004-05:00

Since when have cruelty and greed have become politically and ethically acceptable in America? From the looks of the base of the Republican Party, both seem to be selling in 2011.

Just look at Republican presidential contenders and the debates so far. Rick Perry gets applause from the audience when he stated that he presided over more than 200 executions in his state. Conversely he gets attacked for using the word compassion when advocating some route for illegal aliens to get citizenship in America. States such as Arizona pass laws to randomly stop and question individuals who look illegal; Alabama adopts a law punishing the children of illegal aliens. Republican candidates jockey for position to show who is tougher on immigration. They talk of building fences and deploying troops to barricade the Mexican border, and proposals to amendment the Fourteenth Amendment to limit citizenship receive applause.

An openly gay solder Stephen Hill asks a question at the Orlando, Florida Republican debate and he is booed by the audience and then literally denounced by the candidates. No one thanks him for his service, for placing his life on the line. Michele Bachmann, Rick Santorum, and the rest of the candidates acted as if he did not exist, denouncing homosexuality as wrong and gay marriage as evil.

But there is more cruelty and greed. Unemployment is 9% and underemployed near 16%. The delinquency rate for homes (homes foreclosed or facing foreclosure) is above 8%–nearly one out of twelve owners are in danger of losing their homes. In 2010, 15.1%, of the population, representing a record 46 million, are in poverty. Record numbers of women, children, and people of color are in poverty. Nearly 50,000,000 are without health insurance. Better girls get cervical cancer than receiver the HPV. Better that children get aids or sexually-transmitted diseases than talk of birth control. Better women give birth to unwanted babies the product of rape than allow for the sale of RU 486. Children go hungry to underfunded schools.

But the GOP fiddles while America burns. They say we need to slash government spending, cut back on social services, preserve tax cuts for millionaires, and punish people who come to America seeking a better life. Cut back on disaster relieve and FEMA funding to extract budget cuts. Somehow the free market will save us all. Yes, the same free market that brought us the market crash, the mortgage crisis and the subprime problems, tainted meat and cantaloupes,

At one time America was the embodiment of the inscription of the Statue of Liberty--“Give me your tired, your poor, your huddled masses yearning to breathe free.” But no more. How did this all happen?

Perhaps it began with Ronald Reagan asking in 1980 “Are you better off now than you were four years ago?” Such a question made greed acceptable. Maybe it was Rick Santelli’s 2009 rant on CNBC against government bailouts to help owners that spurred the emergence of the Tea party. Who knows! The issue is that the anger expressed this year in the Republican presidential debates is so un-American and unpatriotic. And an unchristian.

Social conservatives talk of America as a Christian nation. I thought compassion and charity were the essence of Christianity. At least this is the version I learned growing up. But somehow the social conservatives seem inured to social compassion. They fail to practice what their faith preaches. This is not my Christianity, my America, my vision of socially responsible capitalism. Adam Smith, author of the economic classic Wealth of Nations, also wrote the Theory of Moral Sentiments and of the virtues of social compassion. America’s legacy is one of open arms to help others. Christianity of a religion embracing the golden rule.

America is not a suicide pack. We are in it together–we are supposed to be one nation-indivisible. We should be helping one another–with the thought that on another day they will help us. This is the America I grew up in.

My question to the Republican presidential candidates and members–“Have you no sense of decency?”

The Made for Television Campaign: Or why there are so many debates and is anyone listening?

2011-09-23T16:09:00.003-05:00

Another day, another Republican presidential debate. Thursday night witnessed another debate–the third in 15 days–among the GOP contenders for president. Yet what did we learn about the candidates from it? Perhaps no more than they are artful at reciting their talking points. The debates revealed no new policy insights, no growth or development in positions, and no breakthroughs in terms of more detail on positions already articulated. The debate was an exercise in carefully delivering choreographed and rehearsed statements that had been pretested and repeated in the past.

Yet the debate leads one to ask why so many debates now, is anyone paying attention, and why has the dialogue and statements by the candidates appeared to have frozen?

Why so many debates so early?

State competition for attention.

The general election for presidential is November 2012–more than fourteen months from now. The real Iowa caucus is in February 2012–approximately five months from now. Why all the debates so soon? The simple answer is money and the expansion of primaries.

Think back to 1960 when Kennedy ran for president. There were very few primaries and the first was in New Hampshire and it generally did not take place until the spring of the election year. Most states then still did party conventions. In an era when few primaries existed one did not really begin running for president until late in the year before the election. More realistically, declarations to run for president took place early in the election year. Primaries and state conventions took place in the spring and ended by June and the general election more or less began around Labor Day. The campaign season was short.

But now nearly every state has a primary or secondarily a caucus. The expansion of democracy with parties to move presidential selection beyond the state convention and let party rank and file select their candidates really begin in the 1970s–especially with Jimmy Carter in 1976. This change has several implications. First, delegate selection at caucuses and primaries has made state parties and events more powerful and important than the national party convention. The latter now are more photo opps or coronations than real events to select presidential candidates. The power to select presidential candidates thus has shifted to the state level.

Second, the explosion of primaries and conventions requires space and time. There needs to be time and space on the calendar to hold all the caucuses and primaries Presidential candidates need time to reach voters in those states. They need to campaign in those states. Moreover, each state wants to be influential–it wants candidates to come to their state to campaign and it wants their state to be the one that has a real say in who the next president will be. States thus compete for presidential selection influence with one another. This has gradually pushed out the primary and convention season and led to state parties coming up with crafting ways to expand influence–straw polls and early primaries for example. Each event thus takes on special importance, especially when it is early–as each of these events come to be seen as significant or an early clue about viability. Moreover, parties use events such as straw polls and debates to bring attention to themselves, and also as fund raising tools.

But unlike with a convention where presidential candidates only needed to reach a small number of delegates, primaries and caucuses require them to potentially reach thousands or millions of voters in a state. The only way that is possible is via the mass media-television. Thus state campaigns are not simply personal appearances and speeches to ask for votes–they are media campaigns too reaching out to potential voters. All this requires money.

Thus, the campaign season is longer to accommodate competition among states to gain an edge in presidential selection in an era where national conventions mean little and state primaries and caucuses have each become mini-presidential campaigns requiring money and media exposure. Thus, each state wants to run a debate or do a straw pool as early as possible to maximize influence.

But what do we learn?

Little.

Debates are scripted with talking points that are poll-tested and focus-grouped researched. Watch several debates and one will hear Bachmann repeat for the umteenth time: “I will not rest until we repeal Obamacare.” Why repeated so much without elaboration or development? These are talking points geared to the way we consume news.

In 2004 I watched the debates between Bush and Kerry. Every 30 minutes they repeated their lines and statements already stated the previous hour. Why? They understand the concept of the 30 minute tv cycle. People tun in and out on a 30 minute cycle. We are conditioned to view tv in the 30 minute sit-com chunk. Repeat your lines for each half hour time slot and you maximize your messaging.

Now combine that with candidates having test marketed their comments to reach specific audiences. The two together mean candidates repeat the same statements frequently in the same debate. They also now do the same in multiple debates.

Even worse. With so many debates candidates come to know what they will say, what their opponents will say, and what they should say, all based on audience reaction. Debates seemed seem scripted like plays and the lines actors rehearse in them. There seems to be minimal incentive to change your script unless it is not working for you, but that is hard for candidates to do. Think about Pawlenty’s inability to do this.

Finally, why are they televised? They rise of cable news and the 24/7 news cycle means airspace to fill. Debates are easy and cheap filler. Broadcast the debate, do a post debate analysis, and this keeps your analysts busy and audience and advertisers happy.

Are voters listening?

Doubtful.

Most voters are not listening because nothing new is said. Each debate repeats the same lines from a previous debate. It is like watching the same movie several times. It gets stale.

What does all this suggest? The debates are saying little and Nielsen ratings probably confirm little viewership. They are scripted events that feed on themselves, producing little debate and serving little more than advertising events for candidates and state parties .

Moreover, it is only September 2011–13 months before the election. Most voters are zoned out, thinking more about other things–such as their kids, holding a job, and making sure they can pay their bills. None of these debates seem to offer any ideas on how to address these problems.

It's About Jobs--Obama's Failing Quest for Reelection

2011-09-17T07:58:00.012-05:00

President Obama gave a jobs speech about a week ago and it was clear that the job he is most worried about is his. Offering an anemic job proposal that neither the Republicans nor the Democrats in Congress find appealing, Obama is in political trouble, with a 60/40 chance that he will not get reelected. Why such dismal prospects?

Obama was a brilliant campaigner. He understood the basic rule of politics for how to get elected, yet as president and now in seeking reelection, he just does not seem to get it. What are these rules of politics? For our purposes, four rules are critical.

The first is that politics is like selling beer. By that, politics and political success are contingent upon developing a powerful narrative. Narratives are stories–they are stories that explain who you are as a candidate, what you hope to accomplish as president, what your view of the world is. Narratives are rhetorical and persuasive tools to convince voters to support you. Moreover, good narratives are positive and look to the future. Great example of past narratives are Reagan’s “Morning in America,” Clinton morphing Fleetwood Mac’s “Don’t Stop Thinking about Tomorrow” into a campaign mantra, and even Obama’s 2008 “Change we can believe in.” All were inspirational.

But where is Obama’s narrative now? The problem is he has no narrative. In 2010, the Democrats went down to defeat because either they had no narrative or at best, their narrative was “It could have been worse.” The latter, in reference to claims that had Obama not acted with the stimulus and Dodd-Frank the economy could have been worse. Such a narrative was neither inspirational not compelling. It died in the face of the a brilliant Republican narrative stolen from Obama in 2008–change.

The narrative again in 2012 for the Republicans will be change. Obama still lacks a narrative. His speech on jobs last week was an effort to cast himself with a narrative that it is “the economy stupid” and that he cares more about it than the Republicans. So far, that new narrative is not working.

The second rule of politics is mobilize your base. It is imperative to nail down your political base if running for office. You need to get them behind you, excited, and mobilized. Politics begins with dueling bases. If your base stays home and the other shows up, you are in trouble. As Woody Allen correctly stated: “Ninety percent of life is showing up.”

Obama’s base is eroding. Recent NY Times polls show that the unions, white working class, the young, and the liberals in his party are discouraged, and disappointed with Obama. It is for good reason–he blew them off too many times. He continuously gives into the Republicans instead of fighting for what his base wants. Somehow Obama the law professor believes that everyone will be reasonable and willing to compromise. It takes two to tango and only one side is dancing. Moreover, Obama consistently blew off supporters–stating that they had to wait on don’t ask don’t tell, gay marriage, changing rule son unionization, or dealing with the environment. He has told his supporters he has bigger fish to fry and that they must wait. Bad moves. The best way to disappoint supporters is to raise their expectations and then dash them.

The third rule is that politics is a bar fight. Fights in bars are won or lost by the ability to capture the audience to your side. In politics, this means the battle is for the swings. Even if each side mobilizes its political base, that does not guarantee victory because neither the Democrats not Republicans represent 50% +1 of the voters. Neither party has majority status. The battle is thus to capture the swing voters and states. Among voters, the suburban moms and moderates are the swings.

Obama’s new strategy is to refine himself as the moderate centrist, seeking to show he is reasonable and the Republicans are not. Obama’s job speech, his efforts to compromise on the debt deal, and so much more recently have been efforts to do this. Yet the efforts to create this new narrative have failed. He has failed to capture the swings, but luckily for him, the same is true for the Republicans.

Obama has failed to capture the swings because of his inability to propose economic plans deep and broad enough to really stimulate the economy and produce jobs. He has failed to address the mortgage crisis that continues to depress real estate prices, sales, and personal wealth. And he has done nothing to reinvigorate consumer demand. His jobs proposal was anemic and failed because it did not offer solutions to these problems. As so aptly stated by several small business owners at a talk to the Twin Cities West Chamber of Commerce: “Tax cuts will not encourage me to hire anyone. So long as no one wants to buy my products I have no reason to hire anyone and tax cuts are not going to change that.”

Finally, Obama has forgotten a fourth rule of politics–Rod Stewart is right--It’s about passion (in reference to a song he wrote many years ago). Passionate people are motivated and will vote and give money vote. They will show up. Obama seems to assume a dispirited base has nowhere to go but back to him. He banks on this and tries to appeal to swings (and a miserable Republican candidate) to pave his way to victory in 2012. However, a lethargic base and an inability to capture swing voters with an uninspiring narrative is certainly not a winning formula. Combine all this with 9% unemployment and a probable double-dip recession and that result is one more ex-president out of work.

In all fairness, the one thing Obama has going for him is that the Republican field is equally horrible. Perry and Bachmann are unappealing to swing voters and they lack any real plan for the economy and the nation. Romney is bland and boring and his narrative has failed to captivate, and Congress’ approval rating is 12%. The choices are bad, making it not much of a surprise that a third of the voters want a viable third party and many want to see other candidates run for president.

Contrary to conventional wisdom, the Democrats need a challenger to Obama. They need an alternative to force the president to fight for his base and galvanize them. Obama needs to work for his party vote, he needs to define himself, he needs to learn how to fight. He has failed to do all of that so far, questioning both whether he deserves his party nomination and whether he can win reelection.

(Cartoon courtesy of the New Yorker Magazine.)

And the loser is....Michelle Bachmann: Thoughts on the GOP Presidential Debate

2011-09-08T08:29:00.005-05:00

It may not be clear who won the Wednesday night Republican presidential debate at the Reagan Library, but it is clear who lost and it was Michelle Bachmann. It may not be over for her yet, but she left the debate badly wounded and spiraling downward, ready to follow the path already forged by Tim Pawlenty a few weeks ago.

The Rise of Bachmann

Bachmann has had an amazing ride the last few months. Declaring her official candidacy the night of the New Hampshire presidential debate, she won it in part by being the new kid on the block, giving short quick answers, and simply holding her own compared to the other candidates. Her success, culminating in the Iowa Straw Poll victory a few weeks ago, was the product of several factors.

First, unlike the other candidates, she had a clear narrative that appealed to the Tea Party wing of the GOP. Without Palin in the race, the Republican Party remade in the ideology and image of her was lacking a candidate that captured the excitement of the Tea Partiers. Neither Romney, Pawlenty, nor the other contenders captured that excitement and appealed to them. Bachmann did. Thus, with the Tea Party bloc representing about one-quarter to one-third of the party, and with these individuals being highly motivated and likely to attend to show up for a straw vote or a grass roots activity (much like they did in August, 2009 to oppose Obamacare), Bachmann had an advantage for the start in appealing to and motivating this crowd.

Second, Bachmann had a clear Iowa strategy, drawing upon her birth in Waterloo. It was this strategy that knocked Pawlenty out of the race because he tool had an Iowa game plan, but it failed. Bachmann’s social and economic conservatism also appealed uniquely to an Iowa crowd too.

Thus, put together these factors–a remade Republican Party, no Palin or other Tea Party candidate, Bachmann’s message, the Iowa strategy, and her ability to appeal to a large bloc of voters–and you get a straw poll victory.

However, Bachmann peaked in Iowa.

Bachmann's Fall

The roots of her demise were obvious even before Wednesday night. Look at the debate in Iowa before the straw poll. She tangled with Pawlenty and managed to look petty in it. She did not rise above the crowd as she did in the New Hampshire debate. Moreover, she failed to say anything new or significant, simply repeating one-lines she always had–railing against Obamacare and seeking to defend her pithy legislative record against charges by Pawlenty that her accomplishments were insubstantial. Pawlenty was right and when Bachmann stated that her record included introducing the Consumer Lightbulb Freedom of Choice Act it was clear that no lightbulb over her head had gone on. It was beginning to flicker off.

Bachmann’s weaknesses have always been there but magnified in the last couple of weeks, coming into full view last night. Bachmann did not have much of a record of accomplishment. Moreover, she has zero qualifications when it comes to jobs and the economy and with unemployment at 9% plus, her inexperience was a liability waiting to happen. Moreover, Bachmann appealed to a bloc but needed to expand that appeal beyond a core group of supporters. She never did that. In fact, she could not do that. Her rhetoric was always clear in how it appealed to one group of people. There was no way she could redo her message to appeal to a broader constituency. New Hampshirites are fiscally but not socially conservative. Her rhetoric would not fly there.

Moreover, her rhetoric in the last few weeks doomed her too. Comments about earthquakes and floods on D.C. representing the wrath of God did not play well. Moreover, her naivety and lack of gravity and depth on issues was apparent. Other candidates rolled out jobs programs and developed ideas on foreign policy, Bachmann simply repeated her same old lines. Staff increasingly had to manage and apologize for her. She was being handled because who she was, was not working.

Moreover, the new kid on the block status was wearing thin. Remember when Trump, Cain, and Giuliani had risen to the top of the polls, only to fade soon? Bachmann suffered the same fate. Simply, she became boring–the worst fate for a candidate–and she lost the buzz.

But had no other Tea party candidates emerged should could have run a long way with a bloc of 30% of the party. But something happened–Rick Perry.

The Perry Factor

Perry immediately cut into Bachmann’s bloc support. She was unable in the last weeks to stem the hemorrhage, and the same was true last night. So think about how Bachmann got squeezed. She failed to hold on to Tea Party bloc and at the same time failed to expand her base. She was doomed.

Wednesday’s night debate revealed how far she had fallen. She was marginalized. She had few questions directed to her, little camera time, and no one really attacked her directly. When she did speak she repeated the banal one-liners she had used for weeks, revealing little growth or thought. She had no plan for the economy. Her responses were often incoherent and at least twice the moderators pointed out she had failed to answer the question and gave her another chance to answer. She failed on the second attempt too.

This was a big debate for Bachmann. She fell to third in the polls, she lost Ed Rollins and her campaign manager, and she needed to take on Perry and recapture momentum. She did nothing to reverse her decline. Now it is too soon to say it is over for her. The Iowa caucuses are months away. However, she is damaged now and may be in the downward swirl of money and support that Pawlenty faced a few weeks ago. She may not be toast yet but they're getting the butter out now.

Final Thoughts: Perry, Romney, Huntsman, Gingrich, and Palin

Perry is the front runner and may run the course of the ups and downs of the new kid on the bloc syndrome. The most disturbing part of the debate for him was the discussion of the death penalty. In 2000 George Bush looked almost gleeful in describing his record of execution in Texas. Perry came close to this too. Worse, the crowd applauded when he stated how many he had killed. This issue may appeal to a Texas and conservative base but not to a broad swing voter in an America much less supportive of execution than in 2000. Bush talked of compassionate conservativism–there was no compassion in Perry’s eyes or words last night.

Romney and Huntsman were the voices of reason last night. Romney defended Social Security and talked of jobs. Huntsman admonished the GOP not to be the party opposing science–it cannot reject climate science and evolution.

Gingrich? Where was he. He had almost no camera time even though he had important things to say.

Finally, if I were Sarah Palin watching the debate last night I would conclude that it is time to run for president. She too could cut into the Perry base and pull the Tea Partiers over to her. She has an opening.

What Obama Should Do: A Real Jobs Bill for America

2011-08-30T20:30:00.005-05:00

President Obama came to Minneapolis to the American Legion Convention talking jobs. . . sort of. As of yet Obama has yet to propose a jobs program and in Minneapolis he spoke of a tax credit to hire a vet. As typical, the proposal was too little, too modest, and lacking vision.

Were the vet tax credit adopted it would help only a small spectrum of those unemployed, pitting other unemployed against vets for jobs, ensuring a resentment of the former against the latter. Moreover, there are questions about the job skills for many of these vets and whether military skills have civilian application. For many, workforce training, medical assistance for war injuries, and serious enforcement of the Sailor and Solder’s Act to prevent employer discrimination against vets would be even a better idea.

Yet the tax credit Obama is proposing is typical of the timidity of his vision. His 2009 stimulus bill, panned as a failure by many, did its job but was probably half the size of what it needed to be to make a real impact according to most experts. The best study of the stimulus bill, “The Net Fiscal Expenditure Stimulus in the U.S., 2008-9: Less than What You Might Think, and Less than the Fiscal Stimuli of Most OECD Countries,” by Joshua Aizenm an and Gurnain Kaur Pasricha, concluded that the federal money made available by the stimulus mostly just replaced budget cuts at the state and local level. All it did was to prevent the Great Recession from getting worse–it merely replaced state money with federal money. No significant stimulus as a result.

Thus, the vet tax break along with his rumored infrastructure bank proposal and his desire to extend the payroll tax break, will be insufficient and short of the mark. Obama will be limited in how much money he can invest in jobs, hemmed in by the constraints of the debt ceiling deal he capitulated to. No, Obama, will propose too little, compromise too much, and in the end, it will die a victim of the 2012 election politics. If by some chance a jobs proposal is adopted, it will have little impact, giving Republicans even more ammunition to argue that Keynesian economics has failed, the government is inept, and that Obama must be thrown out of office, only to be replaced by more of the bankrupt Ayn Rand economics that got America into the mess it currently is in.

The Republicans are not going to do anything to help Obama and the economy. This means instead of proposing anemic measures that will not succeed, propose a grander vision and set of ideas for jobs. Offer the alternative, run on it, and make that the theme for 2012.

What should a broader jobs vision include? Such a vision should recognize the need to produce jobs across several sectors of the economy. It needs to be sufficient in size to make a difference. It must also be sustainable.

So an infrastructure bank to rebuild roads and bridges is good. Ever since the collapse of the I-35 bridge in Minneapolis in 2007, it’s been obvious we need to rebuild our infrastructure. The American Society for Civil Engineering places the price tag for rebuilding this country’s infrastructure at $2.2 trillion dollars. Yet even if money is spent for this, only some will find jobs. Yes construction workers would be helped, but not white collar, older, and many female workers. Face it–56 year-olds unemployed by the recession for over a year are not getting construction jobs. They would be left out. As would young people still looking for a first job.

Moreover, infrastructure would do little to help the housing industry which is still ailing. Latest HUD reports find single-family home building permits down 10% this quarter compared to the same period last year; actual sales of new single-family homes were down 6%; and total delinquencies for all homes stood at 8.32%, up from the last quarter of 2010. Thus, a jobs bill needs to address many aspects of the economy and the diversity of types of people unemployed. Moreover, it needs to be big–big enough to help many of the different sectors. It needs to address infrastructure, workforce development, and housing.

But finally, a jobs program must be sustainable. Sustainable means capable of actually stimulating the economy enough so that it will actually grow. Sustainable also in that it pays for itself in the short and long term. Thus, how to pay for it? Three ideas.

First, Wall Street Journal articles report U.S. companies sitting on nearly $2 trillion in cash, unwilling to invest it in jobs. Second, Bloomberg News and other sources note another $1 trillion in offshore earnings and accounts. In the Iowa debate earlier this month Republicans proposed a tax holiday to bring the money home to invest. Again good theory but the last time the holiday occurred, businesses did not invest in jobs. They spent it on mergers and acquisitions, dividends, stock buybacks, and executive bonuses. None of these is useful for job production. Let’s require companies to use this money to invest in American jobs, or tax it and lend it to businesses that will provide jobs. Use the tax code to make corporations invest in jobs and not rely on taxpayer dollars.

Finally, use treasury bonds to finance capital jobs projects. Bonding is still the best way to pay for long term infrastructure. Demand is still high for treasury bonds-as evidenced by the fact that when Wall Street heaved after the S&P downgrade of the U.S. credit rating, money poured into T-bills.

Thus, here is a proposal for Obama to stimulate job production and the economy.

* Five year $2.2 trillion bonding bill to repair U.S. infrastructure.

* 100% tax credit for solar equipping all homes and buildings (the added bonus here is on energy savings and costs).

* 100% tax credit on all individual workforce training expenses for unemployed workers.

* Principal-only repayment of all existing student loans.

* Principal-only repayment on all FHA, VA, Fannie Mae mortgages.

* 100% tax rate on all cash savings by corporations held domestically unless used to hire, train, or reinvest in workers.

* Tax amnesty on all offshore corporate savings repatriated to the US if used to hire, train, or reinvest in workers. Conversely, impose a tax penalty on US corporations that fail to repatriate and invest in jobs.

The exact details of a proposal like this can be refined, but they addresses many problems ailing the economy, while also drawing significantly upon the private sector to finance or invest in producing jobs.

Touchdown! How the Vikings are buying political influence to get a new stadium

2011-08-22T08:30:00.006-05:00

Taxpayer dollars spent to build sports stadiums for professional teams are an economic waste of money. Study after study proves this. Yet demands to provide public money to build a new Vikings stadium refuse to die. Why? The reason is simple — Zygi Wilf and the Vikings have spent millions lobbying and in political donations to persuade the governor and legislators to give them a new stadium — and the investment may be paying off.

Wilf took principal ownership in the Vikings in 2005. According to records filed with the Minnesota Campaign Finance and Public Disclosure Board, since 2006 the Vikings have spent $2.82 million in lobbying, including $1.16 million in Wilf's first year as owner. In his first five years as Vikings owner Wilf has averaged $564,000 per year lobbying.

Complete data for the first half of 2011 is not available and we will not know what the Vikings spent this year until next January. However, the Vikings did employ five lobbyists who disbursed nearly $29,000 lobbying. Lobbyist disbursements are merely a tip of the iceberg in total lobbying expenses, and there is every reason to think the Vikings spent way in excess of the $564,000 average.

But lobbying is not the only way to use money; contributions to candidates and to the legislative caucuses, too, are smart investments. Just look at 2010 alone. Zygi Wilf and his family made contributions totaling $17,000 to candidates for governor or the Legislature in 2010. They covered all the major gubernatorial candidates, including a total of $3,000 to Mark Dayton and $1,000 to Tom Bakk. Lester Bagley, principal lobbyist for the Vikings, added another $1,850 to this.

But contributions do not stop there. In 2006, Wilf and the Vikings spent a million plus dollars on lobbying but nothing on political contributions. In 2008 the Vikings, Wilf, and his family spread $18,500 among the legislative caucuses. And then in 2010, the Wilfs gave $27,600 to all four legislative caucuses. Bagley made contributions of $1,850 to the Republican House and Senate caucuses, as well as to the Chamber of Commerce and to the Third (Tom Saxhaug) and Sixth District Senate DFL (Tom Bakk) caucuses. These 2010 contributions represent a significant ramping up of Wilf's political activity to get a stadium.

Given the spending on lobbyists, political donations to the caucuses and political candidates, it is no surprise that Gov. Dayton and legislators are pushing for a new Vikings stadium. Wilf and the Vikings have spent a few million to reap hundreds of millions in public subsidies and eventually more in terms of profits from the new stadium.

Not a bad investment. It is this spending by Zygi Wilf that explains why the debate for a public stadium persists.

This blog also appeared in Minnpost on August 22, 2011.

Nails in the GOP Coffin: Thoughts on the Iowa Straw Poll Results

2011-08-14T08:52:00.003-05:00

Bachmann wins, Pawlenty is out. What do learn from the Iowa straw poll? Whatever political moderation existed in the Republican Party, it rapidly disappearing as the GOP is being remade in the image of Palin and Bachmann.

Bachmann

The headline clearly is that Bachmann received nearly 29% of the vote. No surprise there. Bachmann has narrative that clearly appeals to a demographic of social conservatives and Tea Party members. For months I argued that mobilizing this vocal and active segment of the part would make Bachmann a major force in Iowa. With a divided field she had captured a large bloc of voters and she used this appeal along with her Iowa connection and strategy to do well in that state. Her challenges of course will now be to move beyond Iowa, reach out to others beyond her base in the party across the country. Moreover, as the field of GOP contenders winnows (Pawlenty exists) and expands, will she pick up supporters or lose them? Bachmann is definitely the headline of the party but challenges persist.

The GOP

Look beyond Bachmann. She received 28.6% of the vote, Paul 27.7%–together they accounted for 56% of the straw poll. These are two candidates who represent perhaps the most extreme agendas among the GOP field. Add to them Santorum who polled at 9.8% and one finds that nearly two-thirds of the straw poll went to what would appear to be non-mainstream candidates. Pawlenty, perhaps the most mainstream and establishment candidate who participated in the field, polled barely 14%. This is a party that has moved dramatically to the right of the one that picked Romney as the Iowa straw poll winner and McCain as their nominee in 08. The GOP had redefined itself. It is–as I have argued for months–no longer the party of Ronald Reagan. Sarah Palin successfully remade the party into one captured more firmly by the Tea party and owing much of its ideological allegiance to a blend of Barry Goldwater, Pat Robertson, and Ayn Rand. Paul and Bachmann represent different wings of this new party, but Bachmann is better poised to run within this new party because her rhetoric and narrative are less pedantic and more appealing that Paul’s cerebral musings about the gold standard.

Romney

Romney is in trouble. In theory the frontrunner, but he is the frontrunner in a GOP party that no longer exists. He is part of the old Reagan Republican Party (along with Pawlenty) now fading. As the Party has shifted look to see it be more difficult for him to maintain his lead. Bachmann represents the new center of the new Republican Party. She and Paul may not be the fringe, Romney and Pawlenty are.

Pawlenty

No surprise he is dropping out. He never had a chance. He never had a narrative and he was a Reagan Republican running in a Palin Party. He tried to fake being more conservative than he was, coming off as inauthentic and phony. He made Iowa make or break and he broke. Bachmann helped seal the deal and yet again unended her Minnesota rival. But Pawlenty was doomed even without her–he just lacked appeal as a candidate and he never created a rationale for he presidency. It also does not help to have a non-existent legacy as governor besides bankrupting it.

Perry

Perry changes the equation for Bachmann. They will fight out for many of the same supporters and the challenge will be to see what happens. Perry is Bachmann but with executive experience. But Perry’s support demonstrates again how far to the right the GOP has moved.

But what does it all mean?

Commentators state the challenge is for Bachmann to capture swing or centrist voters within the party. She may not need to do this. First, her bloc approach may be enough to help her for a long time. Second, the moderate GOP voters may be leaving, going the route of while males who abandoned the Democratic Party in the 1970s and 80s. If the Reagan Revolution redefined the GOP and Democratic Party membership, then the Palin-Bachmann redefinition will do the same. Some will leave the Party, perhaps leaving it a much more conservative one that even before. Within a party of vanishing moderates, Bachmann can win.

The Scream! Thoughts on the Iowa Republican Debate

2011-08-12T08:57:00.009-05:00

No question about it–the lunatic fringe has taken over the Republican Party. The August 11, Ames, Iowa Fox debate featured calls for the return to the gold standard, the right to choose light bulbs, criminal prosecution for doctors who perform abortions to save the lives of mothers, obtuse readings of the Tenth Amendment, and petty and personal squabbles attacking one another and the media. All we needed was for someone to assert that the Earth was flat and that it was located at the center of the universe. It was enough to make one what to scream!

The debate lacked substantive and constructive ideas. It was devoid of facts, researched ideas, and any sense of real research across the areas of economics and law. While all the candidates were correct in contending that Obama lacked a economic plan for America, none of them offered anything of substance either based upon research and evidence regarding what works or not. It was all pure ideological pandering to a crowd, with sound bites crafted by speech writers. All seemed to think that the only solution was more tax cutting, giving businesses even more breaks than they have now. It was a collective pep rally for trickle down economics, contending that too high of corporate, capital gains, or other taxes were the cause of the economic slowdown. Cain at least was honest in saying that he was not bothered if the tax cuts to corporations resulted in them paying more dividends and not investing. So much for the veneered justification of supply-side economics as a jobs producer.

Moreover, other candidates had equally dismal and shallow assertions about economics. Paul wants to dismantle the central bank and return the US to the gold standard. Pawlenty thinks we can achieve 5% economic grown for many years if we enact his nonexistent economic plan. Bachmann thinks she can turn the economy around in 90 days. Gingrich blames it all on Dodd-Frank and Sarbanes-Oxley–repeal them and all will be fine. Huntsman and Romney simply said trust me–I was in business and I know how to create jobs.

But perhaps the most interesting part of the debate was when pressed about a bipartisan deal to cut the deficit and asked if they would sign off on a deal that would have 10:1 spending cuts to tax increases. None supported it.

None of the candidates seemed to have a sense about job creation or about a role for government investment in the economy to build infrastructure. In doing so, they forget even that Adam Smith in the Wealth of Nations called for this. Or that this is what Alexander Hamilton called for in creating the national bank and in supporting credit and manufactures. All seemed to endorse Ayd Rand economics, a libertarian free for all market place of the survival of the fittest.

But economics was not the only place where crackpot theories prevailed. Constitutionally, they were all horrible. Bachmann stated that the Constitution does not allow the government to require individuals to purchase anything such as insurance. She was unable to square that with her reading of the Tenth Amendment which gives states broad power to regulate, even traditional topics such as marriage. By her logic, states could not require individuals to purchase auto insurance and perhaps even licenses for practicing medicine or doing anything else. Moreover, despite all her defense of the Tenth Amendment, she would take away the power of states to pass legislation allowing for same-sex marriage. At one point the debate degenerated into a discussion of whether the Tenth Amendment would allow states to enact slavery or polygamy.

In 1984 a challenger to Senator Fritz Hollings demanded the senator a take a drug test and release the results. Hollings replied by stating that he would take such a test if his opponent took an IQ test and made it public. Last night’s debate gave me new appreciation for Hollings’ suggestion. Candidates for the presidency should be better informed about the world of economics, politics, and the law. We talk so much about civics education and literacy tests for citizens. Maybe candidates should be required to pass such a test as a condition for running for office.

Final Thoughts: Bachmann v Pawlenty: Pawlenty’s Sexism

The Bachmann/Pawlenty feud is the media highlight of the debate. Both came off looking petty and small. Pawlenty is correct that Bachmann has no real legislative record, Bachmann is correct that Pawlenty has switched on many issues. Leave it there. But both felt they needed to dig at one another, underscoring the deep animosity the two h ave always had toward one another, not only enhanced by their rival Iowa strategies. Yet Pawlenty came off worse. He was given a second chance to criticize Romney and again soft-peddled it. Thus, he was too weak against Romney and too aggressive and petty against Bachmann. This attack reveals a deeper sexism with Pawlenty.

Recall in 2006 his attacks against DFL Lt. Gubernatorial candidate Judy Dutcher when she blanked on a reporter’s question about E85. At one point DFL Gubernatorial candidate Mike Hatch stated about Pawlenty: “Look at how desperate he is, he is attacking a woman.” Hatch took heat for that statement but in retrospect he seems prescient. Pawlenty’s sexism is his inability to confront and challenge men, preferring to pick on others he perceives as weak, such as women. This is the the wimp factor.

Conversely, Bachmann competed for the dumbest answer of the night. When asked to defend her legislative record against Pawlenty's criticisms, she replied: "I introduced the Lightbulb Freedom of Choice Act so people could all purchase the lightbulb of their choice." I am not sure what is worse, that this is the sum of the legislative record that she is proud of, or that she wants to give individuals more choice to select light bulbs than gay people to marry or women to control their reproductive choices.

The Winners are...?

Who won?

Gingrich had real policy answers even if they are wrong. He was correct to trash the super-committee as a lack of leadership and at least his comments about Sarbanes-Oxley and Dodd-Frank, even if wrong, were real ideas.

Romney wins since no one attacked him and escapes with no bullet holes.

Huntsman has the single best answer of the night. When asked about his support of civil unions he said he stood by his position. But more importantly, when criticized for accepting Obama’s request he become ambassador to China, Huntsman replied: "I’m proud of my service to this country. If you love your country, you serve her. During a time of war, during a time of economic hardship, when asked to serve your country in a sensitive position where you can actually bring a background to help your nation, I’m the kind of person who’s going to stand up and do it, and I’ll take that philosophy to my grave." If we had more answers and people like that our country would not be in the shape it is today.

Lessons of the debt deal -- politics in the age of American decline

2011-08-05T06:41:00.007-05:00

Today’s blog also appeared in Minnpost on August 5, 2011.

Lessons of the debt deal -- politics in the age of American decline

By David Schultz | Friday, Aug. 5, 2011

The deal to raise the debt ceiling damaged the United States in many ways. It did little to address the long-term economic problems of the country while exposing the fragility of American political institutions and the factional nature of this country's political system. It reveals the politics of America in the age of decline.

Time magazine founder Henry Luce once declared post World War II dominance of the United States the American Century. America's economic dominance financed its political and military supremacy, giving it the leverage to affect world politics. Too often pundits declared the American Century over, yet these proclamations seemed premature. The American supremacy that historian Francis Fukuyma proclaimed with the fall of the Berlin Wall in 1989 was supposed to reveal an America as the sole economic and political superpower in the world. That did not happen. Now whatever one can say about the debt agreement, it did little to reverse the threats to American dominance.

The debt deal needed to confront two issues: the debt financing the empire in the past, and the debt financing its future. Paying an increasing percentage of the federal budget to debt management is bad accounting. Yet the agreement really did little to confront either. The debt ceiling was raised — partially averting one problem — but the real choices about how to finance long term spending commitments were ignored. Creating a super committee pledged to find $2 trillion plus in savings merely postponed the tough choices for the future. As such, the agreement was more symbolic than substantive.

Four broad issues challenge U.S. financial future

Yet long-term spending and its economic impact are not the only issues that need to be addressed. Collectively, four broader forces challenge America's financial future, hampering its leadership role in the world.

• The first is the declining economic performance of the country, both short and long term. Short term, the economy is headed to a double-dip recession, simultaneously decreasing tax revenues and increasing demand for government services. Longer term, America needs to reinvest in its infrastructure, schools and workers, modernize its technology, and transition to new energy sources. The debt agreement makes it difficult for the United States by choking off investments required for any of these. Lacking investments in the economy, it will never grow fast enough to generate the tax revenues necessary for the American empire.

• Second, demographics will continue to challenge the United States as its population ages, demanding more health-care expenditures and retirement benefits at a time when the number of workers to sustain their parents decreases rapidly. Health-care reform in 2010 did little to address cost containment, and there is no indication that the debt-reduction super committee will tackle these problems in the coming months, especially as the 2012 elections approach.

• Third, the current tax system is unsustainable. It is inefficient, failing to support economic growth and job production. It is also inequitable, pushing less of a demand on corporations and the wealthy to pay their share. All this was predictable. Nine months ago Obama caved into an extension of the Bush-era tax cuts. Now to pay for them, the poor and middle class must sacrifice. Merely repealing the Bush-era tax cuts would get the United States a long way toward dealing with its longer term debt. Better yet, return the corporate tax rates to what they were in the 1960s, a time when U.S. corporations were their most profitable, and lift the income cap of Social Security taxes, and most of the longer-term debt problems disappear. Instead, the opposite is occurring — the American empire is a corporate one financed more and more by cuts to the poor and middle class.

• Fourth, much of the recent debt is the cost to pay for military excursions abroad in places such as Afghanistan and Iraq. America continues to spend unsustainable amounts to fund its military and foreign-policy objectives. The debt deal did nothing to rethink these priorities and instead threatens military spending as an incentive to make cuts elsewhere.

Fewer resources for U.S. priorities in the world

The debt deal thus does little to generate for the United States the resources it needs to maintain its economic and military position in the world. It is vastly overcommitted already, unable to sustain its current objectives let alone take on new ones in the world. For the future the United States will have fewer resources to pressure for human rights in Syria and Iran, to confront global terrorism, and to economically compete in a world becoming better educated and more productive than America.

The debt-management deal could have addressed the problems facing America but did not. It failed because of a collapse of domestic politics. The American Century was held together by a bipartisan consensus sustained by economic growth. Take away that growth and the consensus disappears. Thus, the factional politics and serious dissensus between President Obama and the Republicans in Congress over the debt ceiling and reduction was so intense because of a basic dispute over how to finance American commitments in an era of declining resources. Lacking economic growth, politics has become a zero-sum game, with clear winners and losers. Here, the debt deal revealed little in terms of a victory to reverse the decline, thereby suggesting an intensity of politics for the foreseeable future.

Debt Ceilings and Trojan Horses: What the Fight in Washington is Really About

2011-07-30T08:46:00.006-05:00

The debate over raising the debt ceiling limit is a Trojan horse. It is only partially about allowing the government to pay for obligations that it has already incurred. If that were all it is about then the vote should be pro forma. But it is not. It is merely a proxy for a different set of battles that now appear to have little to do with the debt ceiling. Instead it is about power, influence, the 2012 election, and a zero-sum view of the world.

There is a sense in which the debate over the debt ceiling is about economics and government. By that, it is over the role of the government in the economy and what is the best way to provide goods and services into the future. It is a debate, at its best, about government versus markets, how public debt affects economic growth, and perhaps even a discussion over entitlements. If only that were true then the discussion would be more lofty and interesting than it is now. But instead, because the debt ceiling is a proxy for other battles that is what makes it so hard to resolve.

First, the debt ceiling is about influence. Who runs Washington, D.C.? Is it President Obama, Harry Reid and the Senate, John Boehner, or the Tea Party freshman? For each of them, they view this battle as a personal test of strength. For Obama, this is a test of presidential strength and influence. A faltering economy is already dooming his presidential re-election and he is only saved by the fact that the Republicans are running a gaggle of mediocre candidates against him. But look at Obama–he looks perfectly powerless as a bystander in the debt debate. His speech last Monday night was a drip. It was a plea to the American public to help him out. He literally conceded he has no influence over Congress in this debate, practically begging its members to come to reason. His speech came after he tried to negotiate a deal.

For Obama, part of the problem lies in the fact that as Senator he voted against raising the debt limit, but the real problem is one dogging his presidency–competence and a hands-off attitude to do the real dirty work. He refuses or is incapable of expending personal capital to get what he wants in Congress. That approach almost cost him his health care bill, and it also led to him getting a weak Dodd-Frank law and in caving in on the Bush-era tax cuts. Obama just does not know how to fight and execute. Thus, Obama needs the win on the debt limit to save his presidency. Another crash to the economy only makes him look even weaker and more ineffective.

Boehner too needs this win, but also on his terms. He is a weakened speaker of the house after this week. The bill he pushed through on Friday was simply stupid–it was no different than an earlier one but this time it had a balanced budget amendment attached to it. That amendment, even if passed, would not solve any problems. Congress would still have to make the tough economic choices it fails to do now. Another gimmick. The speaker had to pass something, especially after the Tea Party alliance, to prove he was in charge. He is not. He is trapped and it is not sure he is either the leader of his party or leader of the House. If he did what made the most sense–craft a more moderate bill that appeals to House Democrats and which looks more like the Reid bill, then he alienates the Tea Party members who might not continue to support him as either party leader or speaker. But by passing the bill he did–after making it a clash of wills–he showed how little influence he had over his caucus.

For the freshman Tea Party, their stated aim is a zero-sum battle with Obama. Passing a debt ceiling is viewed as a victory for Obama, a capitulation to the Washington status quo, and a resignation of their principles. Better the world be brought down than show weakness.

Finally, for Harry Reid, he needs to show he and the Senate Democrats are still relevant. Snubbing their nose at the Boehner bill and passing their own Senate version is about showing that they have more influence than the House.

One could go on and on, charting out the real interests and battles here that lie behind the debt ceiling debate. It would be easy to describe the rational ways out of the crisis–delink the debt ceiling from debt reduction, or develop more permanent solutions to the issue, such as repeal the redundant and no longer needed 1917 law that requires congressional approval for increases in the debt ceiling, or even serious tax reform as part of a deal to raise the debt ceiling–but all that is an appeal to a serious and adult way out of the issue that presupposes that the debate is really about the debt ceiling. But it is not. All of the parties here have personal interests and agendas to hold fast, rendering the debt ceiling debate merely a Trojan horse for what is really driving the fight.

The Minnesota Budget Deal: Lipstick on a Pig

2011-07-22T08:05:00.006-05:00

The deal that ended the government shutdown in Minnesota was terrible both in how it was negotiated and in what it produced. While initially all parties who negotiated it described it as bad, increasingly they are defending it, seeking to find beauty in its ugliness. Yet let’s call this effort what it is—putting lipstick on a pig!

A Bad Budget Process

The government is shutdown. Barricades block access to the capitol. The legislature is suspended. The press and public are barred from observing negotiations. The opposition is kept in the dark. Once a deal is struck and the legislature is allowed to meet the public is given little notice about their deliberations which take place in the dark of the night. Members are restricted in their debate; they have no time to read the bills. They are told to vote for the bills and ordered to be finished by dawn. Sound like politics in a dictatorship or former communist country? Welcome to Minnesota.

From the week before the shutdown to the ugly end last Wednesday, Minnesota was a model in anti-democratic politics that violated all accepted norms of transparency, openness, and accountability. The Republican leadership and Governor Mark Dayton insisted on secrecy to allow for candidate debate, demonstrating hostility to democracy, a contempt for process, and an indifference to open government. What they did is possibly also illegal, violating Minnesota Statutes §13.D, the Open Meetings Law. Were a local government to have done what the legislature and the governor did it would violate the law. The process was bad.

And A Bad Budget Deal

But did the ends justify the means? Did the bad process produce a good result? Except for the delirious who have to salvage something out of it, no one likes the deal struck. But there are two types of dislikes. One is where everyone has to give but the final product is good for the state. The other is where everyone gives and it is bad for the state. The deal struck is the latter.

The budget deal is bad for Minnesota. Nothing was done to address the long term structural deficit the state faces; it is more budget gimmicks. K-12 faces more shifts and possibly borrowing from schools that never gets repaid. Minnesota’s competitive economic edge has historically resided in its highly educated workforce. Yet the budget deal sacrifices long term welfare and economic good for the state, continuing a repeated raiding of education money that questions how much of a priority Minnesota really places on schools.

The tobacco settlement money gets robbed, diverting it from the stated purpose to address health costs and education surrounding smoking. The borrowing here off the tobacco money means increased debt for the state. Thus, Minnesota continues to borrow and shift debt to the future in ways similar to what federal government has done for years. It is no different than paying off one credit card with another. In 2013 Minnesota will be back to the same place it is now. Minnesota is effectively deficit spending but budget tricks and borrowing hide that reality.

In short, long term problems and needed investments are sacrificed to end the current shutdown crisis. The governor and the legislature shut Minnesota government down to reach this deal? Given how bad it was, maybe it would have been better to continue the shutdown.

The Leadership Crisis

But why such a bad deal? One can point to political gridlock, dueling claims of political mandates, ideological polarization, and a host of other issues. But ultimately the blame comes down to a lack of leadership among the three principals–Senate Majority Leader Amy Koch, Speaker of the House Kurt Zellers, and Governor Dayton.

But why the lack of leadership? One answer is that all are inexperienced. None of them had ever been responsible for moving a budget through the legislature. For Koch and Zellers, they are new leaders heading up caucuses for the first time in years in the majority, composed of many new members and rookie committee chairs. They were not up to the job. For Dayton, the lack of leadership was surprising given his resume. Yet his experience in executive positions is distant, his relationship with the DFL party has always been fragile, and this was his first time shepherding a budget through the legislature.

Terrific, Minnesota’s political leadership this year were rookies and JVs.

So here is the leadership deficit: If this is the best deal Dayton, Koch, and Zellers can negotiate, with a process that was undemocratic and possibly illegal, then that questions their ability to lead the state and their parties. The three should have never let Minnesota get to this place.

Bachmann,Pawlenty, and the Government Shutdown: As Minnesota Goes, so Goes the Nation

2011-07-21T13:14:00.004-05:00

The parallels between the politics of the Minnesota governmental shutdown and the impasse at the federal level to extend the debt ceiling are compelling. But to understand both, one especially needs to look at the transformation of the Minnesota Republican Party, a party once representing a more moderate stance which is being increasingly remade in the image of Michelle Bachmann and the Tea Party. This change offers lessons about the prospects of a deal on the debt ceiling, the rival presidential campaigns of Minnesotans Michelle Bachmann and Tim Pawlenty, and the nature of American politics and the Republican Party in general.

On the surface the dispute in Minnesota between the Democratic Governor Mark Dayton and the Republican legislature had been over the state budget. Dayton wanted to spend $37 billion and erase the $5 billion deficit with some cuts that do not hurt the poor or education, and with tax increases on the wealthy. The GOP wanted to spend $34 billion and erase the deficit with cuts alone that seem to burden the poor, elderly, education, and local governments. But the budget is a proxy for a deeper disagreement over rival views of the government versus the market. The Republicans see government and taxes as bad, intruding upon the wisdom and functioning of markets. Let markets act and they will generate jobs prosperity, and solve the basic problems of society.

For Dayton, while market solutions and the private sector are the preferred places to produce jobs and make decisions, they recognize markets fail. Markets fail to address needs of equity. They produce inequities in wealth and income distribution, they fail to address core problems of education funding and disparities, they fail to address problems in infrastructure investment.

Yet the Republicans are not consistently anti-government. Many still find it necessary to hire police and enforce basic laws, and apparently to enact laws to prevent same-sex couples from marrying, ban stem-cell research, and outlaw abortion. The real difference between the Republicans and Dayton is over how much government and who it should favor. It is a debate of government versus the market, individual versus society, and secularism versus religion. These debates in Minnesota parallel what is happening at the national level in Congress and with the Republicans and President Obama. The fight over the debt ceiling is merely a proxy for a deeper divide over government.

The debate over 'why government' is ideological. Yet arising simultaneously are other phenomena aggravating the debate over 'why government'–the triumph of ideology over pragmatism and party polarization. Minnesota microcosms the nation. The ideological divide, especially for the Republicans, means all or nothing. By that, if one side is right the other must be wrong and therefore no compromise is possible. As Kurt Zellers, Minnesota's Republican speaker of the house, stated: “Whether it's a half a tax increase, a whole tax increase, or a quarter tax increase ... it's a bad idea.” Thus the equivocation of compromise to capitulation.

But demographics reinforce partisanship. Minnesota is more than a red and blue state–it is polka dotted. The partisan distribution of the state has a clear geographic pattern. The Democrats solidly have the Twin Cities and some of the other urban cores, the Republicans have the rest. The geographic partisanship is hard to correct with redistricting given residential patterns. This means the electoral forces that should drive elected officials to compromise do not exist. Instead, fully partisan areas simply reinforce the current ideological divide. In Minnesota there are only a handful of legislative seats that can really swing, the rest are solidly partisan. This creates little incentive to compromise. The same pattern exists in Congress, with less than a quarter of the seats really swing.

But political parties nationally and in Minnesota are more polarized than a generation or so ago. There is more ideological cohesion in the parties, especially for the Republicans. At one point the Minnesota Republican Party was moderate, selecting individuals such as former governor Arne Carlson and U.S. Senator David Durenburger. They represented a party still connected to the old Rockefeller wing. Neither are now welcome in their old party. They have been eclipsed by two new versions of the Republican Party. Version one, the Reagan remake, produced Tim Pawlenty and it was clearly more skeptical toward taxes and government, yet not uncompromisingly hostile. Arne Carlson raised taxes when needed and Pawlenty did it via user fees.

Yet Minnesota now has a new version of the Republican Party replacing the Reagan brand. Its roots go back to Barry Goldwater and it expresses frustration with the Reaganites who it viewed as too willing to compromise with Democrats. Reaganism lost nerve and principle, and it needed to complete what he started but did not finish. It is a party centrally guided by religious fundamentalism, constitutional originalism, and political purism. This is Tea Party Republicanism–the party of Michelle Bachmann in Minnesota and Sarah Palin nationally.

Pawlenty’s presidential bid is a casualty of this new Republicanism. He is either too moderate for it or he is forced to drive further to the right, aping messages his rival Bachmann already resonates. He is a dinosaur or Johnny-come-lately, a candidate without a clear narrative or constituency. But the other casualty is Minnesota state politics. The inability of Tea Party Republicans to compromise drove Minnesota into a shutdown, and it continues to dog its resolution even after Dayton gave into many of its demands. The Minnesota shutdown is the moment of opportunity for the Republicans–use the leverage to get it all. This too seems to be the mantra for the Republicans at the national level when it comes to the debt ceiling.

The lessons one learns from Minnesota is that the remaking of the Republican Party, reinforced by demographics, has produced a showdown with disastrous effects. This is the same phenomena operating at the national level regarding the debt ceiling. The results from Minnesota offer pessimistic predictions for the country.

An American in Vilnius

2011-07-14T19:11:00.006-05:00

Today ends my one week excursion to Mykolas Romeris University in Vilnius, Lithuania, to teach in a human rights program. This was my second trip to the beautiful city, the last time being October 2008 when the State Department sent me here to speak about the presidential elections and American politics.

Lithuania is a beautiful but tiny country of 3,000,000 people with rolling hills and dairy farms that remind me of Wisconsin and upstate New York.. It is one of the three Baltic states along with Latvia and Estonia. It is east of Poland, south of Latvia, and north of Belarus. It is an ancient country dating back 1,000 years when at one time it ruled from the Baltic to the Black seas. It was gobbled up by Germany and Russia, achieving independence in 1918, only to be taken over by Russia during WWII. It endured Russian occupation until its independence in 1991.

Lithuania is now a stable western-European style democracy. It is a member of NATO, the European Union, and the Council of Europe. It is a progressive, free society. Vilnius, the capital, is a stunning city. Once known as the Jerusalem of the North, it had a large thriving Jewish population until Hitler liquidated them. Between Hitler and then the Soviet KGB, Vilnius and Lithuania faced brutal oppression. The Old Town of Vilnius is rich with beautiful old churches and ornate architecture. It is simply a pleasure to walk the streets and see the people.

Lithuania has been in my heart for years. As an undergraduate I took three semesters of Latin. My teacher was from this country. She was the smartest person I ever met and my all-time favorite professor. Reportedly she knew more than three dozen foreign languages.

After 2008 I was asked to return and teach. I came this summer to join faculty from France and Lithuania to teach students in human rights. The students came from Lithuania, Belarus, France, Ukraine, and the United States.

The joy of teaching here is the contact with so many people from around the world. Experiencing their perspectives on America (we are less relevant to them than we think), understanding their struggles, and seeing how different generations view issues such as human rights.

Human rights here are important in a society that had them suppressed for so long. I visited the KGB museum–stood in cells where people were executed. I stood in the spot were executions took place and which, when the Soviets left in the 1990s, they tried to hide by destroying records, painting over blood, and cementing over human bones.

Americans complain about government. They think their liberties are abused. They whine they want change. The protest about taxes and injustice. They need to visit Lithuania. This is a country that is stable and did not shutdown–contrary to what happened in Minnesota.

Blink: How and Why Mark Dayton lost the Budget Battle

2011-07-14T18:27:00.004-05:00

The loser always blinks first in a staring contest. Governor Mark Dayton blinked first.

The late Thursday afternoon announcement that Dayton and the Republican Legislative leadership had reached a tentative budget deal was a near capitulation by the governor. He failed to get his tax increases on the wealthy to fund his spending, instead agreeing to the final Republican offer to fund the budget with more accounting shifts and a borrowing off of the future tobacco settlement funds. Dayton gets to say he got more spending and maybe a bonding bill without social legislation that he opposes. But these victories were insignificant and irrelevant. What does the deal mean for Dayton, the Republicans, Minnesota, and perhaps the Democrats in Minnesota and at the national level?

What Dayton lost: It’s not just the budget battle

The budget battle was a contrast of dueling ideologies and claims to mandates. Dayton ran promising tax increases on the wealthy to fund new spending, erase the deficit, spend $1 billion on a bonding bill to put Minnesotans back to work, and change the direction of the state. The Republicans ran against taxes, new spending, and staying the course. They got more of what they wanted than Dayton.

Dayton consistently blinked. He cut back several times on his idea for tax increases. He kept reducing or hedging his electoral pledge on taxes, at each point further reducing the amount he wanted to tax. He even compromised on taxes, pleading instead for any type of revenue increase. At each juncture the Republicans said no, seeing weakness offers to compromise. In the last few days, despite claims his claims in court that the governor had inherent authority to address the budget shutdown, Dayton was never willing to use this claimed authority. Perhaps Dayton thinks to the general public this final giving in to the Republicans looks like he was the more responsible one willing to compromise in the best interests of the state, to Tony Sutton and the GOP it is a sign of weakness. A sign perhaps that in future negotiations Dayton will similarly give in.

Dayton’s decision to compromise potentially makes him irrelevant in the future. Think about it. Dayton gets a bonding bill. Politically who is helped by the bill? Not Dayton since the bill will long since be forgotten if he runs again in 2014. Instead, the Republicans benefit. They get funding for capital projects back in their districts that will help them with their re-election in 2012. The GOP does not need Dayton for social legislation. Gay marriage is already going to the voters as a constitutional amendment. The same can happen with abortion, stem cell research, and voter ID. The Republicans can end run Dayton at will in the future.

Moreover, Dayton just alienated the DFL and state workers. DFL legislators stood behind Dayton and he abandoned them, giving them little cover for 2012 and with their supporters. Among his base there is anger too that he gave up on them after they all supported him in 2010 and in the shutdown.

A bad deal for Minnesota

The budget deal is bad for Minnesota in many ways. Nothing was done to address the long term structural deficit the state faces; it is more budget gimmicks. It appears K-12 faces more shifts and possibly the borrowing from them never gets repaid. The tobacco settlement money gets raided, diverting it from the stated purpose to address health costs and education surrounding smoking. The borrowing here off the tobacco money means increased debt for the state. Thus, we continue to borrow and shift debt to the future in ways similar to what federal government has done for years. It is no different than paying off one credit card with another. In 2013 Minnesota will be back to the same place it is now. Minnesota is effectively deficit spending but budget tricks and future debt obligations hide that reality.

Perhaps Dayton is counting on 2012 producing DFL victories in the legislature that will change things, but do not bet on that.

But why did Dayton blink first?

The answer is simple: Dayton cared more about the government and Minnesota than did the Republicans. He was afraid of the lasting impact the shutdown would have on the state’ economy and government. Settle before more damage is done. The Republicans were willing to risk more–their negotiating strategy dovetailed with their views on government. So what if government is shutdown or crippled. They wanted to reduce government so hanging tough worked for them. For Dayton and the Democrats, they believe in government and what it does and the idea of supporting government by prolonging a shutdown ultimately proved too much for the governor.

So what does it all mean?

The Minnesota budget impasse and the shutdown was becoming a nationalized political issue much in the same way that the battle over collective bargaining became so in Wisconsin. Do Republicans in Congress read what happened in Minnesota as a sign that if they took hang tough Obama too will blink? Obama too cares more about government that Congressional Republicans. He faces a tough election in 2012 and he has already demonstrated willingness to compromise (the Bush tax cuts) to reach out to moderate or swing voters. Look too to see him blink before or more than the Republicans in Congress.

Afterthought

It was not the closing of many governmental services that drove Minnesotans to anger about the shutdown. The real crisis seemed to be when the racetracks and lottery closed, bars had difficulty getting beer, liquor, and cigarettes, beer distributors could not stock Minnesota shelves, and the baseball fans faced the prospect of baseball without beer. Perhaps life without gambling, booze, and smokes is what brokered the compromise. What would Minnesota be without the them?

Broken Politics: Ending the Shutdown and Fixing the State

2011-07-07T13:27:00.008-05:00

Minnesota politics and its once pristine national reputation are broken. Politically, the government shutdown is only the mostly recent reminder of how decrepit and polarized it is. A near shutdown in 2001, partial in 2005, a botched unallotment in 2009, heated recounts in 2008 and 2010, and now 2011 all point to something beyond personalities and more structural in Minnesota. The faces have changed, yet the problems persist. The State’s reputation for the Minnesota Miracle, the land of Lake Wobegon, a state where government is clean and works, is shot. Even states like California, with persistent budget problems, or Wisconsin under Scott Walker, do not shut down but eventually manage to adopt budgets. We stand alone as a dysfunctional example of political polarization.

Divergent ideologies, combined with partisanship and rival claims of electoral mandates certainly feed the impasse between Dayton and the Republican legislative leadership. But the roots of this impasse go deeper. Demographic and electoral forces in Minnesota explain how ideology created the shutdown, offering clues both to short and long term solutions to ending this current crisis and perhaps addressing future ones.

Ending the Shutdown this Time

Dayton and the legislature appear not to have a sense of urgency in resolving the deadlock. This is the argument I made on Fox 9 News on July 6, with Heidi Collins. There are many political reasons for this lack of urgency.

Short term the shutdown does not end unless one side surrenders or both sides compromise. Surrender is difficult, no one wants to look like they have caved in. Conversely, with the two sides ensconced in their rival positions, compromise too looks like capitulation. Any good mediator will tell you that the way out of the current problem is something that allows both sides to claim victory–a perceived face-saving or win-win situation. Republicans cannot give on taxes and revenue unless they get something else their political base wants–new laws on social issues. Thus, not a surprise that prior to July 1, the Republicans seemed willing to give on some revenue, but in return for limits on stem cell research. The Republicans need to show something to their base if they are to compromise. Similarly, Dayton has been willing to give on taxes, but needs something else such as a global agreement on spending, to look like a victor and appease his base.

But while one waits for the compromise or capitulation to occur, one has to ask what forces will drive the two sides to this compromise? Clearly appeals to the public good have not worked for the last six months. Once the shutdown occurred, and the longer it goes, the short term sting from it decreases as life under partial government become normal. Moreover, the courts, the special master and even Dayton seem willing to let the judiciary order more spending, thereby reducing more pain. It appears no one trusts the political process to do the right thing.

What about an outside force to resolve the dispute? The Carlson-Mondale blue ribbon panel was stillborn from its inception, both because the Republicans do not trust Arnie Carlson who is not one of them anymore, and because adopting recommendations of a panel would imply deference to reason and rationality and not politics. The panel could have offered political cover to the two sides to compromise, but its logic appeals to moderates and swing voters, not the political bases who are driving the impasse. Perhaps the bases need to feel the pain of the shutdown? For the Republicans, something is necessary to make millionaires demand an end to the shutdown, something that costs them money. The same is true for the Democrats.

But perhaps a different outside force is needed to bring the parties together, but what? This is the structural issue.

Broken Politics and the Electoral Connection

One would have thought that political anger of voters would drive legislators and Dayton to the table. But that presupposes they and Dayton fear reelection. Certainly some legislators, maybe 30 or less, live in swing districts where this is an issue. But for the vast majority, this is not a concern. Minnesota is a red and blue state. The partisan distribution of the state has a clear geographic pattern. The DFL solidly have the Twin Cities and some of the other urban cores as well as St. Louis County, the Republicans the rest.

The geographic partisanship is hard to correct with redistricting given residential patterns. This means the electoral forces that should drive elected officials to compromise do not exist. Instead, fully partisan areas simply reinforce the current ideological divide. Longer term, then, one of the causes of the partisanship is the geographic red-blue divide in the state reinforced by districting. Addressing this problem is an imperative, but the solutions are hard to envision. In the short term, impetus for ending the shutdown may come from the legislators in the swing districts who are fearful of losing in November 2012.

Partisanship is also exacerbated by the caucus system. It rewards extremists on both sides who have the time and tenacity to outlast everyone else in seeking to influence the direction of the major parties. The caucus system nurtures zealots, ideologically opposed to the other side and often unwilling to compromise. Abolishing the caucus system, or at least seriously restructuring it to encourage more diversity within each party, should also be on the horizon.

At the gubernatorial level, not since Arnie Carlson’s reelection in 1994 has a governor been elected with a majority vote. Since then, the winners have been elected essentially by their political bases. The presence of a third party candidate has literally guaranteed minority governors not to be beholden to swing voters for their election. Adoption of ranked choice voting for statewide offices might resolve this, making governors indebted to more swing voters might force them to compromise.

Non-Solutions: It's not the gift ban law

Finally, two non-solutions. Some will call for the return to non-partisan legislative elections as Minnesota once had. Removing the party labels will not remove the underlying partisanship. Second, some will point to the state gift ban law, contending that because lobbyists can no longer wine and dine legislators, members of the two political parties no longer socialize. The gift ban law does not prevent legislators from socializing, it simply says special interests cannot buy influence through gifts. Blaming the gift ban law for the impasse is no different than a legislator stating: “I will not cooperate with the other side unless a lobbyist buys me a meal.” This sounds like a five year old threatening to hold his breath until he gets the toy he wants.

Overall, the government shutdown is sourced in partisanship rooted in demographic forces accentuated by an electoral system that makes compromise more difficult. It renders both a short and long term solution difficult, damaging the governability and reputation of Minnesota.

Minnesota Government Shutdown--What's Next?

2011-07-05T11:09:00.005-05:00

Analysis on FOX9 News regarding what it might take to get the two sides to come to the table and hammer out a deal.

Professor Talks Shutdown after Prediction: MyFoxTWINCITIES.com

Minnesota’s Budget Battle: Assessing Gearin’s Decision

2011-06-29T14:05:00.006-05:00

“It’s time you did your job.” Essentially this is what Judge Gearin stated today in her ruling that only core functions will receive core mandated funding. In reaching that decision she took a minimal view of the role of the courts in resolving the budget dispute, clearly placing the responsibility on the governor and the Republican legislative leadership to reach agreement. But how do we read Gearin’s order, as well as the one yesterday, ordering funding for the state court system, in terms of what it means for Minnesota and the different players in budget battle?

Comparing 2005 and 2011

In 2005, seven of the budget bills did pass the legislature and were signed by the governor. They excluded K-12, Health and Human Services (HHS), and transportation. Those three bills accounted for about 70-75% of the state budget. Thus, the seven bills that passed before the shutdown accounted for about 25-30% of the state budget. Once you throw in the judge's order for temporary funding you probably had 90% of the state budget addressed. For the most part most of the functions of the state were covered.

This year one of ten bills was passed and signed into law. The one bill signed in to law, the agriculture bill, accounts for about 1/2 of 1% of the state budget. Thus, 99%+ of the budget was not adopted or agreed to by the governor and legislature. As of yesterday with the court decision to fund the courts, approximately another 3-4% of the state budget is addressed. This still leaves about 95% not covered.

Judge Gearin’s decision is minimal. It covers core state constitutional functions, programs mandated by federal law, and some additional funding for health care and to keep the animals at the zoo fed and safe. Additionally, funding to school districts and local governments, to the extent already obligated, must be paid. Gearin’s order is largely consistent with what I argued in a Minnpost piece from June 9, 2011 .

Given Gearin’s order, what percentage of the state budget will be addressed by it? It is difficult to ascertain from the order how much of K-12 gets funded. The same is true regarding the state HHS funding. These are the two largest pieces of the budget and constitute about 70% of the budget. Estimates are 80% of K-12 are covered. If K-12 is 40% of the state budget then about 32% of the budget is covered here. In terms of Health and Human Services, assume also about 3/4 covered. If HHS is 30% of the state budget then that is about 23% of the state budget. Add in local government aid (LGA) which is about 9% of the state budget. Most of that is covered by Gearin's order. Assume 90% is covered and that is another 8% of the budget. Finally add to that funding for core administration of the executive branch and public safety about another 7%. In total Gearin's order mandates funding for about 70% of the state budget., Add to that the current 5% covered already with the agriculture bill and the funding for the courts, then maybe 75% of the state budget has been addressed.

The Gearin order also suggests that most of the 36,000 state workers are out of work on July 1. An estimate is 23,000 lose their jobs. The real issue becomes how many state workers are needed to work the prisons, provide medical care, and perform core public safety and other functions. No question the Minnesota unemployment rate takes a major hit and goes up dramatically on July 1.

Legal Analysis

There were legal winners and losers in the Gearin decision, as well as in the Tuesday one on court funding issued by Judge Christopherson.

Governor Dayton appears to be a legal winner in that Gearin sided with him on a minimalist interpretation of what will be funded. However, Dayton did not win everything. He did not win the mediation and he also did not win in his argument that the case was not ripe for review and that the court should not issue an order. The Court implicitly rejected Dayton’s argument that he had inherent executive authority to act and therefore the Court should not.

Conversely, Attorney General Swanson and many organizations seeking to have their definition of core state function funded lost. Horse racing, continuing construction projects, and keeping zoos open, while nice, are not essential. Gearin offered reasonable legal arguments, seeking to balance Article XI of the Minnesota Constitution (No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law”) with the Federal Constitution’s Supremacy clause with Article III of the Minnesota Constitution (separation of powers). Essentially she said yes, appropriates and the budget need to be handled by the legislature and the governor as required by Articles III and XI, but these clauses must also be read in light of the requirements of the Supremacy Clause and separation of powers so as not to threaten the constitutional duties of the executive branch. While Swanson made good legal arguments, Gearin construed her powers narrowly in order to respect the powers of the other branches.

The House and Senate Republicans lost legally similarly to the Attorney General. Yet the biggest losers were the four Republican senators who argued first to have the court order the governor to call a special session and then to declare that Article XI precludes any judicial orders to maintain temporary funding. The core of their argument was a wooden reading of Article XI that seemed to assume only the legislature can order funding “by law.” Gearin rejected that argument by appealing to the Supremacy clause and by asserting that respect for separation of powers required and permitted court action.

Judge Christopherson also rejected this reading of Article XI. He too appealed to the U.S. Constitution and the State Constitution to make his claims. But also in a section of his decision entitled “reconciliation” he contended that this clause has to be read in light of other clauses of the State Constitution and not as stand alone. It was necessary to do that to give meaning to the entire Minnesota Constitution and not just part of it. More or less, this was again the argument I made in my Minnpost piece. In short, the a core legal argument that Republicans have been using in battles or court-ordered funding for abortion and in other budget battles, was rejected.

Last Thoughts: Political Winners and Losers

Simple: Dayton wins the political-legal battle and has a strategic advantage over the Republican legislature. Dayton has new leverage to use in negotiations, with voter ire taken out in 2012.

Of course, Minnesotans lose here. A second shutdown in six years, a loss of services, and embarrassment nationally as a state that cannot get its work done.

Constitutional Chicken: Litigating the Minnesota Shutdown

2011-06-24T15:45:00.008-05:00

As kids we played chicken all the time, daring someone to do x or cross over a line. The same game of chicken is being played now with the Minnesota budget and economy. First it was between the Governor and the Republican legislature during session, now in Court and the participants have expanded to include the Attorney General, interest groups, and the courts themselves.

At Thursday’s hearing in Ramsey County (which I attended) Judge Gearin closed the day by indicating that all of the sides were playing chicken with the state. And numerous times she admonished that the stakes were high, the problems serious, and that no one should expect her to bail them out. In many ways, her threat too was one of chicken. Do not expect her to blink. See my first thoughts on the court proceeding on Fox 9 News from Thursday, June 24, 2011.

The Stakes

There are numerous agendas at play here. Of course, there is the agenda to secure a budget by July 1, to avert a shutdown. There is also a broader agenda between contending and philosophical views on state spending and what role we view for the government in our society. But there are also significant other economic, political, and legal or separation of powers issues here.

Economic

The economic stakes are significant. I discuss them on Kare 11 News on Thursday, June 23, 2011.

According to the Bureau of Labor Statistics the May unemployment rate in Minnesota was 6.6%. This is based on a state workforce of 2,977,400, with total employed being 2,781,000 and unemployed 196,300. Assume all 36,000 state workers given notice are furloughed. Using the May figures, this pushes the total unemployed to 233,300, yielding an unemployment rate of 7.8%. The economic consequences of the shutdown are apparent–nearly a 20% increase in the unemployment rate almost immediately.

Laying off state workers and cutting state services is only the beginning. There is also the multiplier effect. By that, for every dollar of state spending, it produces more down the line. Paying public employees means they will additionally purchase food or consume items, thereby resulting in more spending across the economy. Now some market fundamentalists claim the government adds no value and produces no multiplier. Yet they are often the same ones who claim that tax cuts for the wealthy trickle down to the poor.

Mainstream economists who have studied government spending verify that multiplier effects exist. University of California San Diego Professor Valerie Ramey is considered the leading expert. She indicates that the historical average for the United States government is 1.4. For every government dollar the ripple effect across the economy is $1.40. Money spent early in a recession has a larger multiplier than in a recovery. The multiplier effect varies with consumption. Government spending placed in the wallets of those who will consumer more of it will produce greater multipliers than those who do not. This is the concept of marginal propensity to consume.

Minnesota’s current gross state product (GSP) is about $275 billion. One estimate from the United States government is that Minnesota spending is $20 billion per year, or about 7% of the GSP. Assume a State multiplier of 1.4x; then total annual state spending produces additional effects equal to another $8 billion. Suddenly state spending accounts for over 10% of the GSP.

The shutdown will clearly have dramatic effects on the economy and unemployment rate beyond laying off state workers. The State recently informed 572,000 Minnesotans on cash welfare, food support and health care programs; 7,000 families receiving adoption assistance payments, and 26,000 families receiving child-care subsidies that they may not receive help after July 1. All these are individuals who will most likely consumer most money they receive from the government, thereby producing a higher multiplier effect. But the multiplier does not stop there.

Many private vendors and contractors doing business with the state–including those from the private and non-profit sectors–may not get paid and would stop work. Local governments too, facing uncertainly and a halt to payments, might also be forced to layoff. It is not inconceivable to see a partial or total shutdown of the state pushing the unemployment rate to over 8%.

Political

The political stakes here are significant. The GOP Legislature and the Governor are in a battle over who controls the state and the political agenda. But both are also battling with their bases.

If the GOP blink and compromise they have a better chance of winning re-election in 2012. But if they do they alienate their political base and Tony Sutton, facing challenges from the right. They are trapped by their own rhetoric.

Dayton so far has played it well with the cut spending and raise some taxes and then agreeing to cut more and reduce some taxes. Public opinion still supports him but recent polls show support for him is down to about 43%–approximately his vote last November. He is down to base politics in terms of support for his leadership. But support for the legislature is in the 25% range–even worse. Dayton can continue to use the 4/2 strategy to his advantage. He is up for election in 2014, the GOP next year 2012. An angered public takes it out on them first.

If Dayton forces the GOP to crumble because of public opinion and fears of 2012, he breaks the GOP’s back. He does that by pushing Tony Sutton and the TEA Party wing to challenge the already conservative state GOP, forcing a war within the party.

Dayton has to win this battle to retain support of his base, he appears to have lost support from all but that. If he gives in anymore he damages support to his core constituency. Thus the reasons or why Dayton added medical payments at the last minute to his list of core functions to be funded–better not alienate the grandma in the nursing home vote.

Legal

The legal battle here are amazing and reveal contrasting views of the State Constitution and political power.

AG Swanson has produced the best legal brief and arguments that build on past state law. She has argued for a more expansive notion of core functions, using her consumer advocate role to represent the people. Her brief argues for continued funding of federal mandates, the constitutional obligations, statutory requirements, and protection of vulnerable people in the event of a shutdown. This would result in a soft shutdown, less onerous than Dayton.

Dayton’s legal arguments are most fascinating. He first asks that Judge Gearin order mediation. She cannot do that since the legislature is not a named party and therefore cannot be brought into mediation. There also are constitutional problems (separation of powers) in issuing this order. not issue any orders until after July 1. Dayton’s second legal argument is that the issue is not ripe. He also opposes allowing the joining of additional parties, contending that there is no real dispute here yet. His attorney argues that once July 1, hits, then maybe one can go to Court to order certain action but until then there is no real legal issue. But more importantly, Dayton has suggested that he has inherent constitutional authority as governor to act on July 1, to keep core state functions going! This is an amazing argument based on separation of powers and the governor’s veto. His arguments remind me of Nixon during Watergate, Bush after 9/11, and Pawlenty when he acted to use unallotment to end the budget impasse. This is a significant assertion of authority. Dayton’s arguments for the funding of core functions by the court is far less than Swanson, but the legal implications of his arguments more extensive.

Now the GOP. First the four GOP senators who cannot shoot straight. First they go to the Supreme Court asking a halt to the Ramsey County proceeding. The basis of their claim is that they did not think they could win in district court so therefore they wanted to go to the Supremes. (They also mentioned in their brief that they did not want the court to intervene since it would change the balance of power in a political dispute). The Supreme Court correctly told them to go to district court. They reminded them they would take original jurisdiction only in emergencies and this was not one. Overall they instructed them on Civil Procedure and Law School 101–file complaints in the proper court and don’t venue shop.

Then on Thursday the same gang of four ask the judge to order Dayton to convene a special session. They somehow forgot the plain language of the state constitution textually commits this decision to the governor. Somehow all the language about the political question doctrine, separation of powers, and constitutional interpretation they developed in their Supreme Court brief was forgotten. This is also the gang that takes what they think is a literal reading of Article 11 of the State Constitution in contending (wrongly) that only the legislature can appropriate funds. Obviously they have forgotten about issues such as the Supremacy Clause and do not understand the difference between the state and federal constitution.

Then there is the House and Senate GOP. Their main legal strategy seemed to be to agree with Swanson and allow for more of the government to be run as core functions. If Swanson wins then the GOP get the minimal government they want.

Finally, the courts are a major player here. They too have filed to make sure they are funded. And then of course Gearin. She made clear her disgust with the whole process, threatening minimal action that will please no one.

Overall, everyone is playing chicken. But what are the real stakes here? Former AG Mike Hatch stole the show. He indicated he was representing a woman who received state medical assistance to breath. He pointed out that she wanted to continue to do so after July 1. That summed it up.

Closing Thought

How long the shut down? Submit your answers to my blog. I do not know how long but am certain it better not go to State Fair time. Imagine 1.6 million angry Minnesotans talking to elected officials at the Fair.

Do the Math: The Costs of the Government Shutdown (And how to avoid them in the future)

2011-06-15T21:32:00.008-05:00

This originally appeared as an opinion piece on June 10, 2011 in Politics in Minnesota.

The Minnesota state government shutdown looms larger and larger. But what is the cost of the shutdown? Some may think that closing down Minnesota government, partially or totally, however briefly, might yield savings. For those who believe government taxes and spending hurt private investment, the shutdown should produce a bonanza for private economic growth. Yet with public employees furloughed and their salaries and benefits not paid, programs not implemented, and projects not funded, all of this should lead to significant savings to the state, especially if it produces broader cuts and reductions in state and local spending.

But savings as a result of a shutdown are illusionary, outweighed by the costs. While ideally it would be best for the governor and the legislature to reach agreement, there is a serious need to consider adopting an alternative proposal to prevent future threats or real shutdowns–an automatic continuing resolution that funds and taxes the state at the same level of the previous biennium if no agreement is reached by the end of regular session.

There are savings associated with the shutdown. They include not having to pay wages and benefits to public employees. There are also operating costs as a result of not having to delivery certain programs. These could be savings in terms of health care expenditures to individuals for programs and services. The question is whether costs due to a shutdown are more or less than the savings?

How does one calculate the cost of a real or threatened shutdown? Economists use the term avoidable costs to refer to expenses that would not have to be incurred were some transaction or event not to occur. There are certain costs incurred with the shutdown that could be avoided if a budget deal were secured or no interruption in funding occurred.

What are avoidable costs? There are a host of costs incurred as a result of a shutdown that could be avoided. First, there are the costs associated with planning for the shutdown and then the start up of government functions. This also includes time spent by state agencies and workers on planning for the shutdown that is not spent on doing regular work. One cannot simply close and lock the state door at 5 PM–there must be an actual plan on how to do this, with this planning diverting state resources away from regular service delivery. These planning costs occur even if the actual shutdown does not occur. Second, there are the actual costs of shutting down the government such as laying off people, terminating or halting contracts.

Third, there are uncertainty costs. These include costs to state and local governments and school districts incurred as a result of not knowing how much money they will have for the next two years. A local government or school district not knowing know much money it will have may refrain or delay hiring teachers or planning programs. Uncertainty means creating contingency plans or otherwise delaying making some choices, thereby costing more money.

In addition to planning for the shutdown and restart, there are actual costs of starting up government functions such as rehiring individuals. It will cost money to notify, rehire, resume benefits, notify vendors, and begin implementing programs.

While government is shutdown, the State of Minnesota potentially loses revenue. This loss of state revenue includes delayed payments and tax collections and park fees. There are also litigation costs such as asking for temporary funding in court or in other litigation surrounding a partial shut down.

Finally, two last costs. There is a loss of personal income and out of pocket expenses associated with public employees being out of work. Many of these workers will have to pay for medical benefits out of their pocket or assume other expenses. And there is also a loss of state income and consumption as a result of public employees planning or actually being out of work. This loss of income includes losses to private vendors not being paid on contracts, lost business due to parks being closed, and other losses of income resulting in the state not operating. As more people are out of work, this hurts Minnesota’s economy.

Adding it up, the total costs associated with the shutdown exceed total savings. Moreover, many of the savings disappear once workers are rehired and programs have to address backlogs in services undelivered during the shutdown.

The point of this exercise here is simple: Taxpayers are going to spend more as a result of a government shutdown because Dayton and the Republicans could not agree. For conservatives who rant about government spending and taxes, their intransigence over tax increases and their unwillingness to compromise means taxpayers pay more.

Given the costs of a real or potential shutdown, can something be done? One solution is to adopt a variation of what they do in Wisconsin. In that state an automatic continuing resolution funds state programs if the legislature and the governor fail to reach agreement on the budget on time. Here in Minnesota given that there was a real shutdown in 2005, an almost shutdown in 2001, and many other years where special sessions were needed to reach agreement, automatically carrying over into the new biennium the previous budget and taxes solves many problems. It certainly does not address all budget issues and it is inferior to reaching agreements, but it is one way to avoid the costs associated with the threatened or actual shutdown.

And the Winner is. . . Preliminary Thoughts on the New Hampshire GOP Presidential Debate

2011-06-14T07:43:00.005-05:00

Who won the debate last night? Bachmann and Romney emerged as winners in very odd ways.

Bachmann won but not really on substance. She won by her announcement that she was officially running for president. Her announcement was brilliant in the sense that she knew it would be the major news or headline item the next day. Yet again with this announcement she proved her ability to capture headlines and to shine the spotlight on her. Thus, Bachmann wins the public relations battle.

Romney was also a winner. The expectation was that the other candidates would go after the frontrunner and smear him with the phrase Obamacare. They failed to do so. Even Tim Pawlenty, who just a couple of days earlier had attacked Romney for creating Obaneycare, shrank for doing it. Because Romney held his own, did not suffer an attacks, and also managed to attack Obama himself, he appeared to escape the debate without scars and therefore won.

Beyond the Bachmann announcement and the failure of the field to attack Romney, there were no surprises in the debate. All of them attacked Obama and all of them more or less said the said thing when pressed on the economy, health care, abortion, and gay rights. What was most striking was how little they really disagreed, with all concurring that any of them would be better presidents than Obama.

But even more striking was how bland all were and how little they had to really offer as president. They were all strong in their criticism of Obama and the government but offered little in terms of real solutions. They all said the problems in the economy and the world were rooted in too much government and taxes, contending that by cutting both the private sector would solve our problems. Government thus crowds out real private sector innovation. Paul was most clear in arguing this. But beyond saying government was bad they offered little in terms of what government could do or why they wanted to be president. Instead, they all seem to be running for a job they want to eliminate.

Tale of Two Pawlentys

Pawlenty was interesting. It was a tale of Two Pawlentys. There was the governor of Minnesota who liked to describe himself as a moderate. Now it is a Pawlenty who took pride in passing pro-life laws, packing the court with pro-life judges, and a candidate against law rights and any type of government action. Who is the real Pawlenty?

Quick note on Bachmann

With her formal declaration that now means her congressional seat is up for grabs. All along it seemed clear that November, 2010 was the last time she would run for the House of Representatives. At that time it looked like redistricting or a run for the senate would be next for her, not the presidency. Nonetheless, Bachmann’s seat is open and that should begin a scramble for it. Moreover, think about her poor constituents. From the day she was sworn in this January Bachmann has been effectively running for president. She will now continue to do that leaving her district without any real representation.

At the debate Bachmann held her own and looked and sounded like the rest of the field. She turned away comments about her extremism and association with the TEA party may hurt her. She did a good job in sounding as bland as the rest.

Also, if Bachmann does not succeed in her presidential bid, running for president does not hurt her marketability or chances to challenge Franken in 2014.

Hamline University School of Business BBQ on June 22

2011-06-09T07:37:00.006-05:00

Looking for cheap eats? Come to the June 22, 2011 Hamline University School of Business BBQ and picnic at the Minnesota State Capitol from 11:30- 2:00. Learn about our public administration program and meet faculty and other students.

Famous Daves (not me!) supplies the food. Yum!

See attached for more information and to reserve your spot.

Minnesota judges can order temporary spending to prevent a government shutdown

2011-06-09T07:02:00.010-05:00

Today's blog post was on Minnpost.com on June 9, 2011.

May a Minnesota judge order the spending of tax dollars to fund essential state functions if the state Legislature and Gov. Mark Dayton do not reach a budget agreement by July 1? This is a legal question that will be asked in the coming days as it is anticipated that Attorney General Lori Swanson will approach a Ramsey County District Court judge with a court order for just this purpose. Yet some contend the court lacks this authority and it cannot do this. They are wrong.

The core of their argument rests on three claims. First they point to Article XI, section one of the Minnesota Constitution, which states: "No money shall be paid out of the treasury of this state except in pursuance of an appropriation by law." Second, they argue that the failure to reach a budget deal is a nonjusticiable "political question" that should be resolved by the political process. Third, they contend separation of powers precludes the courts from addressing budgetary matters. These arguments all rest upon an incorrect understanding of the Minnesota courts and the state constitution.

The central error here is drawing a parallel between the Minnesota and the federal courts. The argument is that the U.S. Constitution and its separation of powers preclude federal courts from intervening in political questions and from ordering spending. Besides this claim being wrong on the national level, there is a major difference between the federal and state courts. Whatever limits there are on federal courts, they do not necessarily apply to the state judiciary. State courts, including those in Minnesota, have unique powers compared to those found at the federal level. They are governed by state constitutions that allocate powers to the three branches of government that often differ from those found at the national level.

Across the country state courts have been given powers under their constitutions to issue advisory opinions, to order spending to achieve adequate school funding, serve on redistricting commissions, and to enforce unique rights not found at the federal level. The same is true in Minnesota. There is case law supporting Minnesota courts ordering funding to ensure that the state judiciary can operate. What if the Legislature and the governor disliked a Minnesota Supreme Court decision and decided to retaliate by not funding the judiciary? Such a move would violate the state constitutional separation of powers clause (Article III) and Article VI, which invests judicial power in the Minnesota Courts. At the very least, separation of powers demands funding for the courts, regarding of whether it was appropriated according to whatever Article XI states.

Reading in light of other clauses

A central canon of statutory and constitutional interpretation is to read words to avoid absurd results or to render some language superfluous. A reading of Article XI that states money can only be appropriated if approved by the Legislature would produce odd results that render Article VI and Article III meaningless. Article XI must be read in light of other constitutional clauses.

Moreover, a so-called strict constructionist reading of Article XI and separation of powers must be understood within the context of the Minnesota and not just the U.S. Constitution. Article III of the Minnesota Constitution has a different history and meaning from federal separation of powers, thereby again suggesting that Article XI appropriation authority must be read differently from what is found at the federal level.

Because Minnesota courts follow different rules from the federal courts, claims of justiciability and separation of powers that appeal to federal analogies are inapt. What might be considered a political question or otherwise textually committed to Congress or the president under the U.S. Constitution might not be true in Minnesota.

An additional duty

But in addition to the Minnesota courts having different powers from those found at the federal level, they also have an additional duty beyond interpreting state constitutional provisions and the law. They are expected to enforce the U.S. Constitution and federal law. When state and federal constitutions and law conflict, the federal wins. Thus, notwithstanding any state constitutional provision, a state court might be required to order the funding of any federally mandated program, even if the no budget deal was reached. Thus, whatever Article XI of the Minnesota Constitution might mandate is overridden by federal law.

In sum, those who argue that the Minnesota courts cannot order funding for essential governmental functions are asserting a wooden and formal reading of the law. The uniqueness of state court authority, constitutional provisions, and the need to enforce federal law give Minnesota courts the power to act. This was true in 2001 and 2005 when state courts declared they had the authority to act, and the same should be true in 2011 if called upon to so rule.

Bachmann, Palin, Overdrive

2011-06-01T08:06:00.004-05:00

Bachmann and Palin. The very prospects of both entering the presidential race have created a frenzy. Both are media magnets and savvy in the art of attracting attention. But how do we assess them as presidential candidates within the GOP field and, if either to emerge as a nominee, as a potential candidate against Obama?

I discussed this issue on Fox 9 News recently . Look at the video in addition to my analysis below.

Outsiders within the GOP

The simple way to describe Bachmann and Palin is that both are outsiders within the Republican Party who draw their strengths from very similar sources. Both candidates have clear messages about taxes, limited government, and social conservatism that appeal to the Tea party wing of the GOP. Thus both have something that Tim Pawlenty, Newt Gingrich, and perhaps even Mitt Romney lack—a clearly identified voice or political narrative that definitely appeals to an energetic base of the Republican Party. This linkage of a voice to a constituency is critical because it means that both of these candidates have a capacity to mobilize an identifiable portion of the party. When it comes to Iowa for example, a state all about caucuses and grassroots organizing, the ability to appeal to a specific and highly energetic constituency is very important, especially for Bachmann.

Comparing Bachmann to Palin

Bachmann and Palin share other affinities. Both are terrific at fund-raising. Palin is a major draw on the speaking circuit and since leaving the vice-presidential race she has branded herself and daughter Bristol into a Paris Hilton like commodities that has made her millions. Palin is an industry and can raise money, perhaps even for a presidency. Not as well known as Palin, Bachmann has proven to be a powerful fundraiser–garnering $20 million plus for her Congressional campaign last year and reportedly with more than $2.5 million already for her potential presidential bid. Moreover, each has a propensity to say the outrageous–Bachmann in declaring the constitutional framers as having freed the slaves, Palin in her take no prisoners campaign rhetoric. Both have been recurrently featured on Fox and MSNBC, pandered before conservative and liberal audiences as Nielsen ratings enhancers.

There is no question though that Palin is the better know of the two candidates. Right now she is near the top of the GOP polls and her bus tour is gathering a lot of attention. Were Palin to run she would start off strong, even if she were to skip Iowa.

Bachmann’s is truly an Iowa strategy. From Waterloo, she hopes to mobilize her roots and appeal to a Tea party constituency (and discontent with other GOP candidates). It is not inconceivable that she could get 20% of the caucus attendees, thereby pushing her to the front of presidential contenders. This is possible but for Palin.

Palin and Bachmann draw strength from the same part of the party. Should both enter they potentially split their support and the Tea Party wing. This sets up some interesting dynamics. First, if both run, does their conservatism force the rest of the GOP further to the right or do they concede it to them and battle for whatever one calls the more moderate wing of the party? Even if only one of the two runs, the same question can be asked. But if both run the potential of a split complicates strategies for all of the field in terms of appeal to their base, ignore, move to the right or more centrist.

Their Negatives

But as much as there are strengths are parallels to Palin and Bachmann, both face liabilities. Both are outsiders in the party. Palin likes her rogue persona and Bachmann has constantly upstaged the GOP in terms of stealing the light from Paul Ryan and the Republican response to Obama’s State of the Union speech. Then there is their political rhetoric–nothing moderate here for either. How they can broaden their appeal beyond the Tea Party within the GOP is a mystery, let along to the swing voters in a general election will be difficult.

Palin has two additional problems. She is well known (a plus) but also has astronomical negatives. Carrying over from the 2008 VP bid, over 60% view her as unqualified to be president. She did herself no favors in her self-absorbed response to the representative Giffords shooting. Second, she has little in terms of a presidential infrastructure that can help her in Iowa or other early states and having alienated many in the GOP establishment, she is damaged goods in many ways.

Bachmann too has alienated the GOP establishment but she is not as well known nationally and therefore does not appear to have the same negatives as Palin. People have not made up their mind about her since she is not as well known. Unlike Palin, Bachmann has a chance to define and make her image and create a narrative. Palin is already done. She has no real potential for growth and makeover–perhaps by choice. Her brand and persona are fixed. Finally, Bachmann is working Iowa and seeking to build an infrastructure, Palin really is not.

Final Thoughts

Overall, assessing the two, while Palin is better known Bachmann has more room to grow as a potential GOP presidential candidate. But of course, both many stand in each other’s way, competing for money, voters, and a slice of media coverage. Because of their similarity, don’t look for the Tea Party dream ticket of the two running together. This is a ticket that would appeal to 25% of the general election electorate–giving Obama a major victory.

No doubt we have not heard the last of Bachmann and Palin. “You ain’t seen nothing yet” as BTO once sung.

Acta Est Fabula: Pawlenty’s Presidential Crawl Officially Begins

2011-05-24T09:59:00.005-05:00

On Monday Tim Pawlenty made it official–he is running for president. No surprise here. He has been preparing to do this for the last two years more or less. Yet how do his prospects look? Perhaps the best thing going for him is that the GOP field is weak and he has an opening. His momentum, if any, is as a result of a void in Republican support for a presidential candidate.

Pawlenty’s presidential announcement was poor. First think of the visuals. Television is visual and you want to avoid talking heads. Pawlenty chose the Iowa state capitol as a backdrop but when I viewed it all that was visible behind him were trees and grass. No capitol, no flags, no people. It looked like he was standing in the park, speaking to a small group, running for dog catcher. It did not look presidential, it looked more amateurish. There was no interesting visuals or spark to light up the talk. Contrast to Obama or a Bachmann–there would have been crowds around them on camera cheering. Here, the applause sounded like Tiger Woods sinking a shot for par 3.

Now the message and delivery. Pawlenty has been a candidate in search of a narrative or message ever since he commenced his presidential bid. He has sought to define himself as the ”Sam’s Club Republican,” as the tax cutter, and as a social conservative.

He now appears to want to be a prophet, telling the American public the truth. Pawlenty uttered “truth” 16 times, aiming to the be straight-talking Harry Truman of his generation, telling folks not what they want to hear but what they need to hear. At the same time he also sought to copy a well-trod path of running against Washington, D.C., using Obama “change” mantra from 08 which also worked successfully for the GOP in 10. “Truth” for Pawlenty” in 12 is his version of “Change.”

Yet the narrative will not work. Obama’s narrative was positive, forward, and self-defining. Pawlenty’s is not. It was dark and depressing. Pawlenty needed a speech that defined who he was and what America would look like under his presidency. The message was dark and pessimistic–one of cuts and sacrifice. It reminded me of Walter Mondale in 1984 saying he was going to tell the truth when running against Reagan. It did not work. It was also dark like Jimmy Carter’s July 15, 1979, “Crisis of American Character” speech, even if true, it was not inspiring.

Pawlenty lacks a rationale for why he wants to run for president, as evidenced by his Time magazine interview when asked why he wants the office he stated: "I don't know. I wish I had a good answer for you on that." Pawlenty lacks an elevator speech for his presidency, he lacks a clear narrative for running, and he lacks a definition for his campaign. That came out in his Des Moines declaration. He needed an announcement with fireworks but it did not occur. He should have began his declaration with his vision and self-definition and then moved on to the case against Obama. Yet he failed to do that, leading instead with a dark message and bland delivery that failed to give his campaign a jump start.

Finally, poor Pawlenty. Tornadoes obscured his message. What next? Bachmann again upstaging him?

Pawlenty’s big hope is that no other GOP takes fire and he slips in by default.

Right now, Pawlenty may get 7-10% in Iowa, limp through New Hampshire, and then die in South Carolina.

The New Minnesota Normal: Special Sessions and Government Shutdowns

2011-05-21T09:27:00.012-05:00

The 2011 regular session of the Minnesota Legislature limps to an end without a budget deal. No news here, it was entirely predictable. Not since 1999–the first year of Jesse Ventura’s term as governor–has a budget session of the Minnesota Legislature ended on time without a special session, partial governmental shutdown, or a controversial ending such as in 2009 when Pawlenty used his unallotment power (subsequently declared illegal by the Minnesota Supreme Court) to balance the budget.

What has emerged is the new normal for Minnesota politics. The new normal is that the completion of the budget does not occur by the constitutionally-mandated deadline in May but instead July 1–the commencement of the new budget year. That seems to be the new deadline. But even then, that date, like October 1, for the federal government, appears more suggestive than drop dead. A threatened partial shut down in 2003 and then a real one in 2007 too eased the stigma of missing July 1, in Minnesota.

Why the New Normal?

The question becomes why? Why has the new normal emerged? Why does it seem impossible to reach budget agreement? One answer is divided government, yet even back to the days when Perpich was governor and the DFL controlled the legislature there were special sessions to address the budget such as in 1985. Under Carlson and then Ventura they became more frequent and then under Pawlenty and now Dayton they have emerged as the new normal. No; divided government is only a partial answer.

There are two causes explaining the rise of the new normal. The first is a growing ideological divide over the nature of government. The second is structural, questioning the efficacy of the current budget process.

Why Government?

The governor and the GOP-led legislature are as far apart today as they were in January regarding all the essentials over the budget. Dayton wants to spend $37 billion and erase the $5 billion deficit with some cuts that do not hurt the poor or education and with tax increases on the wealthy. The GOP wants to spend $34 billion and erase the deficit with cuts alone that seem to burden the poor, elderly, education, and local governments.

At the heart of the dispute between the Governor and the GOP is a basic difference in their rival views of the government versus the market. The GOP generally seems to see government and taxes as bad, an intruding upon the wisdom and functioning of markets. Let markets act and they will generate jobs prosperity, and solve the basic problems of society.

For Dayton, while market solutions and the private sector are the preferred places to produce jobs and make decisions, they recognize markets fail. Markets fail to address needs of equity. They produce inequities in wealth and income distribution, they fail to address core problems of education funding and disparities, they fail to address problems in infrastructure investment.

No, it does not look like the GOP wants no government. Many still find it necessary to hire police and enforce basic laws, and apparently to enact laws to prevent same-sex couples from marrying and women from terminating pregnancies or give tax breaks to the wealthy. The real difference between the GOP and Dayton and the DFL is over how much government and what government should do in our society. It is a debate between rivaling views-government versus the market, the individual versus society.

The debate over “why government” is ideological. Arising simultaneously are two other phenomena aggravating the debate over why government–the triumph of ideology over pragmatism and party polarization.

Daniel Bell famously wrote in the 1960s a book entitled “The End of Ideology.” There it is described a United States where belief was that we had reached consensus on basic issues of what constitutes the good life and the role of government in society. The issue was not ideology or goals but merely technique of the means to the end. Nearly 50 years later, we now seem to be living not with the end of ideology but with its resurgence.

There are basic ideological divides over means and ends. But more importantly, the ideological divide for some means all or nothing. By that, if one side is right the other must be wrong and therefore no compromise is possible. Thus, the emergence of ideology over pragmatism.

Political parties nationally and in Minnesota seem more polarized than 20, 30, or 40 years ago. There is more ideological cohesion in the parties, especially for the GOP, than in the past. This is a product of special interest politics and caucuses which are dominated by ideological extremists.

Thus, combine politically polarized parties with a take no prisoners ideological divide over the role of government and what do you get?

A Flawed Budget Process

But the polarization is only one problem. The second is the flawed budget process in Minnesota. It is a process built for the horse and buggy days trying to operate in the 21st century. Government is so much more complex, the budget numbers so much larger, the functions more diverse, that it is perhaps impossible to reach consensus and make decisions between the beginning of January and the State Constitution forbids the legislature to meet in regular session after the first Monday following the third Saturday in May in any year. There simply may not be enough time to do the budget by law.

But think also how flawed the current budget process is right now. The old governor makes the initial budget. New governor is elected and needs to update it to reflect his priorities and the fiscal forecast in November. The Legislature comes to work in early January and then it waits until late January or so for the governor to release the budget. Then they all wait until late February for the updated fiscal forecast.

Thus, it is really not until late February or March that the work on the budget commences. And even then, there are separate hearings in the House and Senate, forcing conference committees to act. The budget also is really ten separate bills, with spending distinct from taxation, and no real work gets done until there are agreements on the different spending targets for each of the areas such as HHS, K-12, and so on.

Sound confusing? It is. It is also inefficient. At least two months are wasted at the beginning of every budget cycle waiting for the governor’s budget, the fiscal forecast, and then agreement on budget targets. Now add more wrinkle–budgets are created right after state elections when often many new legislators or constitutional officers are elected. They are green, often learning on the job while creating a new budget. In a distant past when life and budgets were less complicated (and smaller), perhaps it was possible to do all this with a part-time citizen legislature. But those days have passed. A new budget process is needed, with new time lines and ways to move the work along.

Thus, as the session ends the only real question is whether there is a budget by July 1. The bet here is 60/40 odds of a partial shutdown. The reasons are ideological and process-driven, producing the new normal.

The Politics of Constitutional Amendments: Lessons from Minnesota's History

2011-05-15T09:06:00.012-05:00

All indications are there will be at least one if not multiple state constitutional amendments on the 2012 ballot for Minnesotans to consider. Possibilities include a ban on same-sex marriage, photo identification for voting, a requirement for a 60% legislative vote to raise taxes, and perhaps others.

Supporters of these proposals contend the public has a right to vote on them, critics respond no; asserting that resorting to amending the Minnesota Constitution is unprecedented and inappropriate. Who is right? There may be no definitive answer, yet state history reveals 150 plus years of amendments, yielding interesting conclusions about constitutional politics.

Since ratification of the Minnesota Constitution in 1858, there have been 211 constitutional amendments proposed to the voters, with 119 adopted. Until 1898, constitutional amendments required a majority of both houses in the legislature to propose them to the voters, with a simple majority of those voting on the amendments to approve them.

In 1898 the amending process was changed, thereafter requiring a qualified majority of all who voted in a specific election to vote in favor the amendment. Voting in the election but not voting on the amendment counted as a no vote. Amending the Constitution was made more difficult because critics claimed special interests and groups were using the process to further their politics.

Over time, interesting patterns have developed regarding when amendments have been offered and adopted.

Era	Dates	Proposed	Adopted	Percentage Adopted
Nineteenth Century	1858-1898	66	48	73%
Progressive Era	1900-1918	45	10	22%
1920s	1920-1928	15	7	47%
Depression and WW II	1930-1944	20	8	40%
Total	1958-2010	211	119	56%

During the 19th century, 73% of the 66 proposed amendments were adopted. After changes in the amendment process, the Progressive Era—a period supposedly notable for significant social and economic reform in the Minnesota and across the country, only 10 of 45 or 22% of the amendments were adopted. Many amendments were offered during this time but few were accepted by the voters. Conversely, since WWII, and especially since the Constitution was reorganized in 1974, nearly 70% of all proposed amendments were adopted.

Constitutional amendments come in bunches. Many times in Minnesota history three, four, or more amendments have been on the ballot at the same time. The record is 1914, 11 amendments proposed, one adopted. Because of frequent amending, no definitive pattern emerges regarding whether they encouraged turnout, but there is no doubt than in their day proposals to let women vote or authorize gambling drove excitement and turnout. Moreover, in years when more than one amendment appeared on the ballot, usually one dominated the public’s attention, sometimes damaging the prospects of the other amendments from passing.

Looking at the types of amendments proposed, they fall into four groups. There are structural amendments addressing the organization of government, such as the length of the legislative session, giving the governor the veto, or regulating the size of the judiciary. Financial amendments include authorizing the state to impose taxes, bond, give special bonuses to military veterans, or otherwise to spend money. Rights amendments deal with matters of individual rights, such as franchise and jury trials. Finally, regulatory amendments dealt with various aspects of regulating private corporations, such as the liability of its officers.

Of the 211 amendments proposed, they can be classified as follows:

Type	Proposed	Adopted	Adopted Percentage
Structure of government	97	51	53%
Finance (taxes, bonding)	82	50	61%
Individual rights	17	12	71%
Regulatory (corporations)	15	6	40%
Total	211	119	56%

What do we learn about the content of the amendments proposed and passed? Clearly many addressed contentious issues of the time. No, they did not address abortion or marriage and surprisingly none sought to ban alcohol sales. These are today’s hot button issues, or ones that we might consider contentious. But controversial is relative to the times, and amendments dealing with regulation of railroads during the robber baron era, or giving women or Blacks the right to vote were the headlines of the day. Resorting to constitutional amendments as a populist political strategy has been a part of Minnesota politics from the beginning.

But looking at the content of the amendments adopted, some interesting patterns emerge. Among the 12 adopted Amendments addressing individual rights, five of them expanded voting rights. In the entire history of the state only one constitutional amendment, in 1896, restricted voting rights. Here it limited the practice in place until then that allowed aliens or non-citizens to vote in Minnesota. This practice encouraged and welcomed Scandinavians to Minnesota.

Three other amendments also limited rights, addressing issues surrounding use of juries in civil and misdemeanors. The message is clear—amendments to the Constitution have generally expanded rights, especially voting, and not contracted them.

Second, among the 50 adopted amendments dealing with finance, 17 authorized new taxes, bonding authority, or spending, and only six restricted or made it more difficult for public spending. Of those six, four in the nineteenth century restricted the ability to use public money to help the railroads (again seeking to limit the power of the robber barons), one in the nineteenth century barred the spending of public money for religious schools (Minnesota’s Blaine Amendment, similar to those adopted in many other states about the same time), and then one amendment during the Depression prohibited the taxing of personal property and farm equipment. Minnesota’s history thus demonstrates more a pattern of enabling spending to build schools and undertake public projects than to restrict it.

Votes and not history will decide whether amendments on the ballot in 2012 will pass. Yet the current amendments directed toward restricting rights, voting, and public financing seem out of sync with Minnesota’s history. But for good or bad, resorting to the amendment process is a part of Minnesota history to address politically charged issues of the day.

A Rock and a Hard Place: Why the Republican Party of Minnesota is a Victim of its Own Rhetoric

2011-05-09T10:27:00.006-05:00

If ever a party were trapped by its political rhetoric it is the Republican Party of Minnesota (RPM). With two weeks to go before the end of the regular legislative session it is more than ever clear that there will be no budget deal by then, forcing a special session and perhaps running a risk of a partial government shutdown on July 1.

Right now it does not look like there is a common ground or room for compromise–mostly because of the GOP–and the Republicans stand to be the biggest loser if there is a shutdown, so long as the DFL can play it right. Fortunately for the RPM, the DFL is probably unable to set the political hook.

An Easy Prediction
In January as the legislative session began I argued that the issue was not whether there would be a special session but whether a deal was possible before July 1. Given that more often than not in the last 15 years the Minnesota Legislature and the governor have been unable to arrive at a budget during regular session, predicting a special session was easy. Moreover, given the respective views of the governor to spend $37 billion and balance the budget and address the $5 billion deficit with cuts and tax increases, versus the RPM desire to spend $34 billion and balance with cuts alone, finding room for compromise by May 24, seemed unlikely.

Hardening Positions
Since January the positions of Dayton and the Republican legislature have hardened even more, with them turning more firm in the last few weeks.

First, Tony Sutton, RPM Party Chair, sent a letter to the Republican legislators urging them to remain firm on no tax increases. Second, Geoff Michel has stated that the Republicans have already compromised enough in agreeing to spend $34 billion or $3 billion more than they wanted. (Yet he did not indicate how with that compromise the Republicans planned to pay for that extra spending). Third, last week the Republicans rejected racino, sending a signal that they are opposed to any revenue increases. Fourth, the Republican budget bills have delivered on their promise–significant cuts to cities, education, and the poor while not authorizing tax or revenue increases.) Whether the numbers add up here to balance the budget is another question.)

Conversely, Dayton has made it clear that he does not support these cuts. He also stated last week he would prefer a special session rather than sign these bills.

The lines have been drawn in the sand. There seems to be no room or avenue for compromise. Both sides are playing chicken, waiting for the other side to blink or give in. As of now, there seems to be no middle ground for compromise, rendering deadlock and partial shutdown a possibility.

Who is to blame?: The Republicans
Who is to blame for the impasse? It would be easy to blame both sides, but this is one time where the Republicans bare the majority of the responsibility.

For the Republicans, compromise on taxes and revenues is tantamount to surrender. Opposition to tax increases has become an article of faith for Republicans in power. They and the base of their party appear to view taxes as a line in the sand over which they do not compromise. To agree to increase taxes is a sell out and will cost you dearly with the base and in the party.

Literally, it is impossible given the special interests and entities that make up the RPM for them to give on taxes. Tony Sutton’s letter to the Republican Legislators makes that clear, and the recent hiring of Craig Westover for the RPM Party reinforces the sense that this is not the party of Arnie Carlson and David Durenburger. It is not a party about responsible pragmatic governance, but about an ideological opposition to taxes, whatever the cost to the public.

The Republican Rock and Hard Place
So here is the problem for the Republicans–they look unreasonable but cannot compromise because of their base and they face potential voter wrath in 2012 if the budget crashes and there is a government shutdown.

Dayton has played it well. His message of tax increases and some budget cuts resonates with the public. Polls support this approach and the combination of cuts and taxes sounds reasonable to most. Moreover, when deficit moved from $6 to $5 billion Dayton eliminated his onetime user fee as a token of compromise. Dayton has made it sound like he is willing to give, including considering racino and the Tom Horner type proposal that would substitute sales taxes for income taxes.

The RPM is trapped by conflicting goals. Its base and ideology says no taxes increases yet to go through with the pledge risks massive and unpopular cuts to education and health programs. It also risks a government shutdown which is not going to be popular.

Yet the RPM wants to retain control of the legislature and remain the in the majority the day after the 2012 elections. To secure that goal it has to win over swing voters, the majority of whom do not support their message. In the 2010 governor’s race, 56% of the voters supported Dayton or Horner for governor, both candidates who favored the tax increases and some cuts approach to balance the budget. These two candidates also captured the vast majority of the swing voters in the state.

If there is a partial government shutdown or if the cuts are unpopular, the Republicans stand to lose the most in 2012 since the entire legislature is up for election and the majority party generally takes the brunt of the voters’ anger. This is what happened nationally in 2006, 2008, and 2010. In all three elections the mantra or political narrative of “change" was popular. Look to see the same in 2012.

The RPM has every incentive to compromise and maintain their majority status. Yet they cannot do that or else face the anger of the Tea Party voters and their conservative fiscal base which opposes compromise.

Thus the rock and the hard place–compromise to keep majority status and face the anger of the base, or appease the base and lose the swing voters and the majority status.

The 2012 Strategy

This is what DFLers are hoping for–a RPM meltdown. They are hoping the Republicans meltdown and with 2012 potentially a better year for Democrats than 2010, they get back their majority status. Yet this requires the DFL to set the political hook and message correctly on this. One cannot bet on this.

One also cannot bet the DFL will not blink in the budget negotiations. This is what the Republicans are banking on.

Finally, in anticipating a tough 2012 year, the GOP is resorting to the placement of constitutional amendments on the ballot to reprise 2004 and motivate their base and offset a DFL year. Yet 2012 is not 2004. The ban on same-sex marriage may backfire and inspire progressives and the young to vote, and pushing social issues, while important to the base, may not be popular with the general public, thereby again alienating the swing voter.

The Republican Party of Minnesota is trapped by its own special interests and rhetoric, rendering 2011 compromise a dirty word and 2012 a possible loss of majority status.

Ethical Neutrality and the State: Thoughts on my previous blog

2011-05-05T19:06:00.002-05:00

Several of you raised good questions about my previous blog. Let me try to respond.

The core problem as John points out is how to reconcile majority rule with constitutionalism, especially in a pluralist society. I do not claim to have a solution to the problem, this is my best effort at addressing the problem. In fact, anyone who claims they know the truth about how to solve this problem or about the nature of what is the good life that we all ought to live is either lying or arrogant. No one knows, and that is my starting point.

I do not think there is no connection between law and morality. The likes of Augustine, Thoreau, and Martin Luther King, Jr. have all discussed the relationship between the two. Bu in asking whether one can use the law to impose morality, there are two questions. The first is the efficacy of using the law to impose moral beliefs or your or the majority’s conception of the good upon others. History is littered with examples of that from the Spanish Inquisition to the war on drugs to Prohibition. Seeking to force others to believe what you believe either is unsuccessful or results in a loss of the law’s legitimacy or a backlash against compliance.

The second issue is should the law reflect moral values? I would argue that in a pluralist society the answer is that the law enforces a thin as opposed to a thick theory of the moral good. A thick theory of the good is the state or the government imposing a particular view of the type of life all of us should live. This is the type of theory of the good the Puritans asserted. A thin theory of the good suggests that the state or the government establishes certain basic values regarding liberty and equality, for example, but much beyond that individuals are left to their own to define the good for themselves. This is what a free and pluralist society does.

A pluralist liberal society begins with a simple proposition–there is no certainty over the thick theory of the good. We instead intrust to individuals within a broad framework of the law the right to make their own moral choices, especially over matters that are in dispute. Because we discuss on matter of faith the law remains silent on these issues, and issues are to make their own choices while respecting the rights of others to make theirs.

When it comes to the issue of abortion, this is not a scientific issue but instead a matter first of theology and then ethics. There is no scientific answer to when life begins. This is a matter of religious faith and I may not choose to agree with the theology that another holds.

To say life begins at conception is a meaningless and empty statement. Just because something is alive and human does not give it moral rights. My kidney is alive and human, does it have moral rights? Normative choices have to be made regarding when we ascribe moral or ethical rights to something.

But having said that something is alive and human, still does not tell us anything. We then need to decide about what rights exist and how they compete with the rights of others. Given that, it is still not clear that something alive and human has moral rights that outweigh that of a woman. Thus, within a pluralist society, woman get to make the call about how to resolve a moral issue in consultation with a doctor or others as they choose.

My broader point then is that we do not know what is right, a pluralist society operates with a thin theory of the good, and we defer to women to make their choices about abortion given that no scientific fact can resolve the issue and the moral and theological issues are contested matters.

Finally, as I have argued in a couple of contexts and have been misconstrued intentionally on this, one of the hallmarks of ethical theory and a pluralist society is that we need to have a choice to hold people responsible for their actions. There are many things that I might find objectionable but others should be allowed to do those things and then be required to accept the consequences for their choices. Political society is clearly free to say many things such as spousal abuse are wrong and punish because of the violence against others. Here the party prosecuted has a choice and has violated a norm and therefore should be held responsible. Given that the issue of fetal rights is a matter of major dispute, we cannot impose our vision of the good upon others and second, we cannot take away the ability of women to make a choice. Some may chose wrong or contrary to what I would do but in a free society that values autonomy, this choice is what forces women to take into consideration the moral gravity of the situation.

I am quite certain I have not resolved all the issues posed here.

Personal Values and Legislating Morality: Majorities do not always get their way

2011-05-04T11:45:00.004-05:00

Efforts at the Minnesota Legislature to ban same-sex marriages and abortion raise an important question: Should citizens or majorities be entitled to enact their morality into law and impose those beliefs upon others? In other words, should elections translate personal morality into public policy? While values-based voting may be permissible in some situations, such a stance is contrary to the basic principles of a democratic society that values toleration and individual rights.

Constitutional republics or democracies like the United States are constructed with the premise that it is majority rule subject to the protection of minority rights. The is the logic of the American constitutional system as designed by James Madison and the constitutional framers, and this is why we have a bill of rights. Majority rule is the law of the land, subject to important checks and limitations. Majorities are generally allowed to make policy, but it does not extend to choices that are discriminatory, persecute minorities, or impose religious-moral principles upon others. It is this latter limitation that seems to be the subject of dispute in contemporary America, especially with religious fundamentalists. What we have here is a difference in contrasting views of the United States and the relationship between church and state or morality and the law.

The United States is the product of two political foundings or traditions. The first is an older religious tradition dating back to our Puritan-Pilgrim founding. Such a view—seeing America as the last great hope to found John Winthrop’s “shining city on the hill”—depicts government as inseparable from religious-moral principles. Here, the government’s purpose is to improve the moral quality of the community and it citizens by enacting into law the moral preferences of the majority—at least so long as they reflect the word of God.

But a second founding owes its origins to the Spirit of 1776. It is a political tradition—referred to as Liberalism—that traces back to the British political philosopher John Locke and to Thomas Jefferson and the Founding Fathers who signed the Declaration of Independence, the Constitution, and the Bill of Rights. It is a secular view of society where government must respect individual moral choices, opting to be neutral regarding how its citizens define their vision of the good society and life for themselves.

A critical difference between the Religious and Liberal traditions lies in their rival views on morality and government. A Religious tradition accepts as legitimate a majority using the government and the political process as a means of translating personal moral values into public policy that may be imposed upon others.

Conversely, the Liberal tradition rejects this practice as illegitimate. Be it James Madison stating that we must prevent a majority faction from using its power to threaten the public good or hurt the rights of others, or Alex DeTocqueville discussing the importance of restricting the tyranny of the majority, a hallmark value of a Liberal society is that majority rule is tempered by minority rights.

While America is the product of two political foundings, the Liberal tradition supplanted the religious one with the adoption of the Constitution and the Bill of Rights. The principles of a free society demand that the government remain neutral towards individual moral choices. Why? As John Stuart Mill and Liberal philosophers argued, political neutrality regarding our personal moral choices respects individual rights. It also recognizes that the majority ‘s views may not be correct or that God may not be on their side, that it is no one’s business how I live my life (if I hurt no one else), or that simply a minority may view the world differently from others. If a majority can secondguess my moral choices on abortion, or whom I decide to marry, why not also legislate to make many other personal choices illegal, such as what books I choose to read, movies I wish to view, or how I wish to make a living.

Central to the concept of a Liberal society is the idea of toleration. I may not personally have an abortion, decide to smoke, drink, or gamble, but my personal views on these subjects should not dictate how others choose to conduct their lives.

Similarly at the state capitol I hear many argue that they should not have to pay for woman’s abortions because they morally object. They miss the point. Political society is not for the selfish and anti-social. There are lots of things the government funds that I may not use or support. However, I am willing to pay taxes for them both because others find them useful or because they too will pay taxes to support things I use but cannot pay for. Political society is cooperative, not selfish. I do not expect my moral values to govern the lives of others in the same way I do not expect their values to dictate my choices.

St. Augustine wrote in On Christian Doctrine that individuals can only be held morally responsible for their actions if they have a choice. God gave humans the choice to sin in order to preserve but moral responsibility and to give us dignity. He was correct. Deny women the right to choose and you take away their moral responsibility. Force others to follow your moral values and they are denied their agency to make choices. The essence of a free society is the capacity to make a choice. “Free to choose" as Milton Friedman once said.

The error religious fundamentalists lies in failing to understand the crucial difference between voting on conscience and expecting others to live by the choices I make for myself. Political toleration and the principles of a free society recognizes that America is a morally and religiously diverse nation and that using government and the political process to impose a single moral vision upon all of us is illegitimate.

Constitutional Prejudice: Why the Minnesota Senators Got it Wrong on Same-Sex Marriages

2011-04-28T08:04:00.007-05:00

No surprise–Minnesota Senate Republicans unveiled on April 26, a state constitutional amendment to bar same-sex marriage. Assuming it clears the legislature and goes to the voters there is no guarantee that it will pass. But that is beside the point. The purpose of the amendment is less about its actual passage than about symbolic politics and voter mobilization in the 2012 elections. Its proposal demonstrates a gross misunderstanding of American politics, the Constitution, and is an unfortunate and cynical appeal to prejudice for political gain.

Why a constitutional amendment to bar same-sex marriage? It seems unnecessary given a 1971 Minnesota Supreme Court decision Baker v. Nelson and a 1997 state law barring same-sex couples from marrying. Yet GOP Senators in affirming their reasons for the amendment stated that laws can change and courts can alter their minds but constitutional amendments are more permanent. They contended that voters have a right to have a say on who is allowed to marry.

The senators are correct about the former, wrong about the latter. However, the law should change to reflect new circumstances and public opinion and judges should calibrate interpretations in light of new facts and circumstances. The law should not be fixed in the past reflecting old prejudices and beliefs. To argue that is to assert that the law should be frozen in the past. Democracy is about consent of the present, not of the past.

But the law should not be fixed in the past. Such logic was characteristic of the most notorious Supreme Court case of all time–Dred Scot v. Sanford–an 1854 decision declaring African-Americans (then slaves) could never be citizens because it was contrary to the intent of the constitutional framers. The same logic persistent in the 1874 Minor v. Happersett case where the Supreme Court ruled that women could not vote for similar reasons. These decisions reaffirmed old prejudices and beliefs. The purpose of the law should not be to enshrine dogmas and prejudices. The Supreme Court said the same in its 1967 Loving v. Virginia decision striking down a Virginia law barring couples of different races from marrying. In Loving the Court declared marriage a fundamental right–the essence of a free society is letting people decide with whom they form a life. Democracy is about majority rule, but such a decision about who we can marry is not a choice for majorities to decide. This is why we have a Bill of Rights–to protect the minority from the tyranny of the majority.

As Justice Jackson eloquently declared in a case affirming freedom of religion: “The very purpose of a Bill of Rights was to withdraw certain subjects from the vicissitudes of political controversy, to place them beyond the reach of majorities and officials and to establish them as legal principles to be applied by the courts. One's right to . . . freedom of worship . . . and other fundamental rights may not be submitted to vote; they depend on the outcome of no elections.” The same is true with marriage. I doubt anyone believes that the voters should have been able to decide in 1967 or today whether individuals of different races should marry. Proposals to put this to a vote simply mask racism and appeal to prejudice. The same logic applies to same-sex marriage.

There is no good public policy reason to bar same-sex couples from marrying. But the constitutional amendment is not about policy, it is about symbolic politics and voter mobilization. As was demonstrated in 2004 when Karl Rove and the GOP placed bans on same-sex marriage on the ballots across many states, it was a terrific hot button issue to mobilize voters. It worked. The religious conservatives turned out in droves.

Placing a ban on gay marriage on the ballot for 2012 might work for similar purposes. First, it is a symbolic payback to the religious right who backed GOP candidates in 2010. Thus, it is pandering to special interests. Second, placing the amendment on the ballot is simply an effort to repeat 2004. The hope no doubt is that this amendment in 2012 will offset what some think will be a better year for Minnesota Democrats when Barack Obama and Amy Klobuchar are on the ballot. Place this amendment on the ballot and as the theory goes, it will drive more conservatives to vote.

However, 2012 is not 2004 and such a strategy may backfire as public opinion has changed and it may engage progressives this time. This is a gamble the GOP senators are taking. Their purpose thus is not so much to pass the amendment but use it and cynically appeal to prejudice to pay off supporters and drive voter turnout.

You’re Hired: Trump for President?

2011-04-20T08:01:00.006-05:00

“You can make the transition, but it is a hard transition to make,” said Schultz, who added that he doesn’t think Trump is seriously considering a run. “It might work in a political atmosphere where people don't want traditional candidate -- if he can carve a message and convince voters he is a viable candidate.”
----David Schultz, Fox 9 News, April 19, 2011

Donald Trump for president?! Rising popularity for Trump among many in the GOP (as evidenced by recent Iowa and other polls) and speeches by him to the Tea Party fuel speculation that he is running for president. Moreover, his pandering to the right by joining the birther movement all point to the belief he is a serious candidate for president. This was the subject of a April 19, 2011 Fox 9 news story in which I was interviewed. Follow this link to the video and story.

Republican activist and former Lt. Governor Annette Meeks dismissed Trump’s candidacy as a joke, and many voters in Minneapolis when ask, also questioned his viability. Some thought that he was a reality show celeb but that did not qualify him for the presidency. Others thought his businessman status might make him qualified. All this is grist for good debate.

The core questions are: 1) Is Trump a viable candidate and 2) Is he going to run?

The Case for Trump
Trump brings to the presidential table many assets and equally as many liabilities. The four biggest assets are his name recognition, personal wealth, his business experience, and the aura of the unknown. In terms of name recognition, everyone knows the Trump name even if they do not know who he is. Some many say reality show star, others that he is a businessman. It does not matter. He has name recognition and in the world of politics that counts for a ton. Ask Tim Pawlenty about this, as he travels the country and people say “Tim Who?”

Being a rock star or a politainer (politician and entertainer combined) is a major boast to success in politics. It gives you a buzz and a heads up on other candidates. It shows your ability to market yourself, establish a political brand, attract media attention, and to perform many of the functions critical to success in contemporary politics. Trump has already demonstrated these skills, suggesting they can be transferred to politics.

Name recognition will be critical in 2012. Everyone knows Obama. He too is a rock star and it is hard to beat an incumbent president. Trump’s advantage is a media presence that is greater than anyone else on the GOP side. This gives him a head start against Obama.

Second, Trump is wealthy. Obama plans to raise $1 billion for his reelection. It will be nearly impossible for any Republican to rival this. However a self-financed candidate such as Trump might be able to counter the Obama money. Thus, Trump has a money advantage.

Third, Trump is a businessman. The GOP and the electorate like the idea of a businessperson running for president, even if in reality they do not elect such people. Ask Mitt Romney. Trump can claim to be a Ross Perot type candidate, bringing business sense and decisiveness to government. Think of all the people he will say “You’re fired” to if elected. Many find this attractive.

Finally, there is the aura of the unknown. No one really knows what Trump believes and they glom on to him what they hope and believe.

Trump thus has many assets. At a time when the GOP is searching for a viable candidate and there is no hands down leader, Trump has a window.

But some argue he is merely a reality show star, how can anyone take him seriously? Jesse Ventura was no better than a wrestler and B-movie star and Arnold was an actor yet both made the transition to the governorships. In an atmosphere where people do not like government and traditional politicians, Jesse and Arnold emerged. The same might be true for Donald and that is perhaps why he is attractive to the TEA Party folks.

Trump’s Lumps
But Trump has liabilities. He has high name recognition but also high negatives. Many people just do not like him. He is arrogant, bossy, loud, and obnoxious. He is not likeable. Likeability (sic) is a critical factor when people vote for president. John Kerry learned this when he challenged Bush in 2004–voters personally liked Bush more.

Trump also has the seriousness problem. Yes he is a reality show star who can leverage that brand politically. But he needs to make that transition. He needs to convince people he is real candidate and not simply a joke. He can do it, but the high negatives he has (or I am sure he has) suggests a different road for him versus Jesse or Arnold who did not have the same high negatives when they began their campaigns.

Many also do not trust Trump. Fox 9 reported that he gave millions to the Democrats. How will that be viewed among many GOP faithful. There is the allure of the unknown but also the fear that he cannot be trusted to hew a political line. Sure this is an asset for many, but for others a fear of unpredictability. There is also the fear that his bluntness will alienate many voters. In part, this is where Ms. Meeks is coming from.

Finally, Trump the person is a problem. He has filed for bankruptcy a couple of times, he personal life has divorces in it, and there is no sense that he follows an orthodoxy on social issues such as abortion or gay marriage. These are all problems for many GOP, and in many circles, for swing voters.

In short, Donald Trump is out there, but out there are many things that can be attacked and it is not clear in a debate how well he will come off beyond being an obnoxious New Yorker.

But will he run?
No. Trump is not really going to run. He is a genius of self-promotion and branding. Were he to run his television show is off the air due to the equal time doctrine. His candidacy will risk his business brand and Trump will not take a chance to hurt that brand. Instead, as I said to Fox 9, he will flirt with running for months to enhance his brand and then decide not to do it. In the process, he will be a distraction to the GOP in their search for a viable and real candidate, thereby hurting their efforts to unite behind someone to take on Obama. Trump will steal the headlines away from the other candidates and divert attention from the case against Obama. This is also what Ms. Meeks fears. The Democrats must be loving this.

American Politics Ala Jerry Springer

2011-04-15T08:28:00.004-05:00

What has happened to civility in American politics? This question dominated the news following the shooting of Representative Giffords a few months ago, but it has been an on-going leitmotif of political writing and analysis for the last few years. Two questions are prompted by the civility question: (1) Is American politics any less civil than it was 10, 20, or maybe a 100 years ago; and if so 2) What is the cause of that increased incivility?

The thesis of this blog is simple: The Jerry Springer Show is a metaphor for American politics. It is about staged conflict and drama and not about a rational discourse about public policy. It is the drama of good versus evil and demonizing opponents.

What prompts me to write about it is an event at the Minnesota Legislature this past Tuesday. I was supposed to testify before the House Civil Law Committee against another abortion bill. This is the one banning women from terminating pregnancies after 20 weeks. I had previously testified against the bill, contending it was unconstitutional. The bill was originally queued second on the committee’s schedule, allowing me time to testify and then make it to class. A request was made to put me on the testimony schedule. When I arrived two things had occurred. First, the bill was moved to near the end of the schedule and, second, I was not on the list to testify. Apparently the schedule had been changed to accommodate the preferences of the majority who wanted to placate one of their witnesses. Regularly, both parties, when in the majority, change hearing times and make it miserable for opponents to testify. This happened to me a few years ago also with a judiciary bill I sought to testify against. It became so clear that they did not want me to testify that we had to arrange for me to stay outside the room and out of committee sight until testimony was called for so I could then sneak into the room to talk. So much for committees and legislators wanting to use hearings to gather facts, but that is another story.

However the second thing occurred once I left this past Tuesday to go to class (less my students run away). Miraculously about five minutes after I left the bill was called up. A mere coincidence that it occurred after I had just left! However, the ACLU and a minister testified against the abortion banning bill. Afterward, Representative Tony Cornish called both (according to those who told me) “reprehensible and disgusting.”

Now maybe Cornish did not agree with the policy positions of the ACLU and the minister, but was it necessary to call them names? When I was growing up I learned two things from my parents ”Sticks and stones will break your bones but names will never hurt you” was one. The other was that it was childish and immature to call people names. I think my parents were correct. Name-calling is childish and immature. You only call people names when you wish to demean others, or when you have no other way to respond to arguments. It is what guests do on Jerry Springer–they simply insult one another. It may make for cruel humor but it does not substitute for rational, informed debate.

American politics has a long history of wide-open, robust, and often uncivil debate. Accusations about George Washington buying elections with rum date back to before the American Revolution. The 19th century regularly featured harsh cartoons and editorials attacking candidate and party character. The 1950s McCarthy era featured accusations of disloyalty. The list goes on. Only the most halcyonic or rose-colored view of American history would say politics was cleaner or more civil then. Yet there is clearly an incivility today, and the question is why or what seem to be the roots of it today?

One answer is the change in party composition in America. Parties are more polarized now than they have been in at least 50 if not more years. There is a big gulf or divide over some issues such as abortion and gay rights. There are fewer conservatives in the Democratic Party and the same for liberals among the Republican Party. Thus, the more ideological strain of American politics produces more polarization and that in turn inflames rhetoric.

Moreover, the good versus evil or extremist politics play well in the 24/7 news cycle. I find that I cannot watch any national news talk show. They are so predictable and boring. Pick individuals of extreme views on opposing sides, have them yell at other, and we call that fair and balanced news. The same is done with the media picking one person from the other side to interview and that person holds very unorthodox views. All this is a Jerry Springer approach to the news. Whoa be it that a news station places rational, thoughtful individuals on a panel to discuss real issues and solutions.

Parties, or at least candidates and elected officials pander to this polarization. We are at a point where each side demonizes the other, accusing its opponent as evil, calculating, as some type of low-life. We make the other party or other side the enemy, and the purpose of doing that is to motivate the base. Make the battle one of good versus evil. This is what Tony Cornish did. The abortion hearing was televised and supporters of his position were in the audience. It was good copy to call names and demonize the opponents. I bet he runs the tape on You-Tube and for his next election. Again, it was a Jerry Springer moment.

My point here is that incivility has always been with us in politics. The current causes are new, rooted in 24/7 news cycles, changing notions of news, party polarization, and candidates pandering to all these events by using inflamed rhetoric for perhaps personal electoral advantage.

The result of all of this has produced the stalemates we see in Congress and legislatures across the country. How do you negotiate and compromise the devil? You cannot. Thus, what we have yielded is a take no prisoners and a do not compromise rhetoric and approach to critical issues that precludes any reasonable and meaningful debate. Facts be damned, legislative hearings are not about making good policy, they instead are staged events, no less different than the Jerry Springer Show.