Controlling Gas Prices and Other Economic Heresies

Economics the topic this week, tackling four issues that ought to be on everyone’s mind. It is a plea to political leaders to have the courage to speak the truth and for citizens to be willing to listen to it.

Gas Prices
$3.50 a gallon for gas! This is some jump in present gas prices based on speculation about the future of Libya and other Middle East oil producing countries. Increased gas costs can justifiably be based on objective factors such as decreased supply, increased demand, exploration and costs in a post-peak world. But surely there is no basis for jacking up the price at the pump premised upon subjective speculative factors? Or is there?

At the root of this debate is a clash between rival economic theories. Current economic orthodoxy is that gas stations, distributors, and oil companies are economically justified to raise prices on current gas and oil based upon speculation by traders about future gas and oil because it necessary for “cost recovery.” As the argument goes, if today the price of a barrel of oil goes up by 10% is it ok to raise the price at the gas pump or at the distribution point equally by 10% or more in order to recover future anticipated costs. This is an interesting theory but it fails to make sense.

Think about an alternative economic theory that is more realistic. Let us say that on February 27, 2011 gas is selling at the pump for $349.9 per gallon. Assume also that the price of crude oil on the commodities market goes up by 10% that day. Should dealers and distributors be permitted to raise gas prices by 10% or more on the gas they already own and have purchased? No. The gas they have in their possession was purchased in the past at a different price P1. The gas sold on February 27, 2011 (T1) should be based on price P1. It is P1–gas purchased in the past but now presently in the distributors’ or stations’ tanks–plus a reasonable profit that should determine the price of gas at T1. It should not matter what speculation is taking place on the commodity markets regarding future gas prices.

Another way of making this argument is to say that if crude oil gas prices are rising, they should not affect current gas prices. Sellers of gas can recover costs on the new price P2, at some future time T2. To allow for “cost recovery”–raising of gas prices on current gas already purchased based upon future speculation really amounts to what used to be called profiteering or price gouging. Moreover, to allow for speculation on future prices of gas to affect the price of current gas already purchased by stations or distributors only helps to encourage gas speculation and price volatility.

We saw a few years ago how crude oil speculation drove gas to $4 gallon plus. There was no decrease in production and proof that it was gouging was that the major oil companies had record profits. The same is already occurring again.

There ought to be a law that prevents the raising of gas or energy prices on current supplies based upon future speculation. Let new supplies, which reflect the new crude oil prices, reflect the new price. This is a better free market theory that does not encourage speculation.

Wisconsin Budget Crisis
Governor Walker contends he needs to strip collective bargaining rights from public employees in order to address the state’s structural deficit. He cites public employee health care and pension costs as the problem. There are several reasons his theory is wrong.

First, even if he is correct, the public employees’ unions have already indicated their willingness to negotiate on these points. That should settle the issue about the need to strip away rights.

Second, Walker is not correct in his linkage, at least to the extent that he asserts. Wisconsin’s deficit, much like many other states, is driven by several factors. 1. There is the recession driving down tax revenues at the same time demand for government services are increasing. 2. Overall health care costs are rising in America in the public and private sectors. Obama’s health care law was originally supposed to address this issue but there really is very little in the 2010 Patient Protection and Affordability Act that does that. Thus, the health cost issue is a more pandemic issue not confined to public employees, unions, and Wisconsin. Blame a mediocre federal health care bill for that issue. 3. Many states have failed to raise taxes for years and in the case of Wisconsin, a tax cut was pushed through. Combine a tax cut with rising health care costs with a recession and a demand for government services and what do you get? You get a state deficit. These are not factors driven but public employees’ collective bargaining rights.

Finally, it should be pointed out that the pension and health care benefits were freely negotiated in the past. Cutting both only leaves these individuals and their families economically worse off in the future. They were promised these benefits as a result of a fair bargain. Stripping away collective bargaining rights is like taking your bat and ball home because you do not like the way the other side is playing the game.

Fixing Social Security
Obama’s budget is a failure and the GOP response is just as bad. Both sides fail to address the real needs to tackle Social Security, Medicare, Medicaid, and the horrible tax structure we have. Throw Michelle Bachmann and the Tea Party in with that too. All of them are dishonest about the budget.

Social Security is easy to fix with two changes. The first is gradually raise the eligibility age to 67 over the next five years to a decade. Second, Social Security taxes are currently capped at approximately $106,000. This means that if you make more than this amount any income above this is not taxed. A simple answer is lift the cap. Turn the current regressive Social Security tax from a regressive to a progressive one. Lifting the cap and raising the age easily solve the Social Security problem for the future.

Fixing Health Care to Cut Costs and Improve Public Health
The 2010 Patient Protection and Affordability Act was a positive social good but a missed opportunity. The good was in extending health insurance to 36 million or more Americans. The missed opportunity was its failure to go far enough to address public health care needs and reduce costs.

According to a CDC or NIH study (I cannot remember which), about ten percent of American’s society’s health is driven by lack of access to health care. Approximately 30% is due to genetic factors, 20% environmental, and another 40% percent by preventable life style choices. Genetic is self-explanatory. Environmental refers to pollution in the air and water and to public safety issues such as guns and crime. But the last category, life-style choices, refers to the fact we eat too much, drink too much, eat the wrong foods, and fail to exercise. All of us have seen the stories about chronic obesity in our society and it, along with American waistlines, are growing every day.

A broader health care plan in the United States need to address the life-style choices. However, as soon as this is talked about one sees annoying commercials sponsored by groups that represent unfoods on TV complaining that this is social engineering or an effort to tell Americans what to eat and drink. Is that not the kettle calling the pot black. This is exactly what they have been doing for years in their ads and now they object to some efforts to counteract their ads.

A good health care (and effectively a good economic) measure needs to address these personal choices.

Finally, there is also the problem of end of life care. We consume the majority of our health care expenditures in the last six months of our life. I am not raising the Sarah Palin ill-informed death panel issue, but clearly we need to address end of life health care. I do not know the solution but we need a more rational solution.

The Education of Michele Bachmann

President Michele Bachmann. Those words send an emotional shock up the spine. For Tea Party members and supporters they represent their greatest hope, finally someone who will right the country and defend the Constitution. For liberals and perhaps many Republicans, their greatest fear, an ignorant bomb thrower, cradling the craziest of ideas about economics, politics, and the law.

But what is certain, almost no one does not know who Michele Bachmann is and none are neutral over her. She elicits in all a visceral reaction few others can, rivaling the responses to Obama and Palin.

But what makes Bachmann run? How do we explain her meteoric rise in less than a decade and her lighting rod status? As someone who has watched Bachmann from the start of her career, and with one of my former students (in a campaigns and election class) Andy Parrish as her campaign manager and aide, I look at her from a unique perspective. What drives Bachmann is her ego. The single most brilliant skill Bachmann possesses has been her ability to ride a rhetorical wave of conservativism as a vehicle to fuel her personal ambition. For those who support her, the reality is that their darling is long on rhetoric and short on results and she should be a real disappointment to all of them. For liberals, she has become a distraction, diverting precious resources and time away from real policy. Bachmann thus is a product of both liberals and conservatives, both of whom find her useful to their causes, and she knows it and has used both to drive her career.

The Rise of Michelle Bachmann
When news broke the other day that Bachmann was contemplating a presidential run reporters asked me if I was surprised. I said no. In fact, for the last six months or more I repeatedly stated in talks to groups that 2010 would be Bachmann’s last run for Congress. But, at that time I contended she would challenge Amy Klobuchar for the Senate in 2012. I argued that because redistricting and the potential loss of a Minnesota House seat would put her out of a job (especially if the Democrats won both the governorship and the legislature). More importantly, I argued raw ambition and ego would drive her to abandon the House for the Senate.

Raw ambition and conservative rhetoric have been the hallmark of her record of her entire career, along with a legislative record devoid of accomplishment.

Bachmann first bursts on to the Minnesota political scene in 2000, knocking off moderate GOPer Gary Laidig in a primary. She went on to victory in the Senate that year and in 2002. During her brief years in the Senate as a minority member she accomplished little, but made huge headlines about gays, abortion, and taxes. It was here she learned an important lesson–state the outrageous, keep your name in the news, promote yourself. Even in the State Senate she had already become the poster child for both the new GOP and the Democrats wanting to run against her and use her for fund-raising.

She then runs for the House of Representatives in 2006, beating a weak Patty Wetterling in a district ideally suited to Bachmann. It was districted plus 6 for the GOP, encompassing perhaps the most conservative in the state. The seat was open when Mark Kennedy abandoned it to run for the Senate against Amy Klobuchar, both seeking to fill the seat vacated by Senator Mark Dayton. The Sixth District House seat, way more conservative than the rest of Minnesota, is a poor springboard to run for statewide office. Kennedy found that out. His conservative rhetoric that played so well in the 6th doomed him statewide as it proved impossible for him to reinvent himself as a moderate.

Bachmann then again won in '08 against another equally bland and ineffective candidate in El Tinklenberg, a former MNDOT commissioner who was uninspiring as a candidate. Bachmann won big in a Democrat year, honing a image of strength and resolve against Obama and the coming order.

Then in 2010, she won in a GOP anti-Obama year against former state senator Tarryl Clark in a race of epic dollar proportions. It became the most expensive House race in US history with Bachmann alone raising nearly $20 million. She won by 12 points in a race Democrats never had a chance to win. In fact, back in September I blogged about how Democrats were wasting their money. They were diverting too many resources to an unwinnable race and should have shifted money elsewhere.

Yet Democrats could not resist. For every day FOX news featured Bachmann, Keith Olbermann did the same on MSNBC. Why such lavish attention from both networks for a two term congresswoman? Ratings! Conservatives loved to see her and liberals loathed her. Bachmann was a media icon and profit center, and she know it.

Bachmann for President
So Bachmann wins a third term in Congress. She is the head of a Tea Party caucus in a GOP-led Congress. She is on the verge of real political power. So why bolt and run for president? Simply, ego and the demand to deliver on rhetoric explain the choice. Along with dwindling options otherwise.

Imagine Bachmann in the House now that the GOP controls it. Bachmann now has to translate rhetoric into legislative skill and deliver. This is something she has never done. She served in the minority both in the Minnesota Senate and in the House of Representatives. She never had to deliver on promises, she never had to move legislation, and she did not. Her skill was not constituent service or getting things done–it has been advancing herself.

Now the GOP are in charge and responsible. For Bachmann this is a challenge. She hast to deliver on all her rhetoric. What better way to avoid it than to run for a different office. Why not the Senate? No way. Polls suggest that a 2012 bid against Klobuchar was a far cry compared to the weak opponents of the past. Klobuchar has the highest approval rating of any politician in MN, leading Bachmann by 17 points in the polls. Bachmann sees these numbers and knows the 6th district is a lousy platform for a Senate bid. Instead, go in a different direction–ride the Tea Party wave and take on a potentially weakened Obama in 2012.

Bachmann the Politainer
In seeking to explain the phenomena of Jesse Ventura who went from wrestler and B movie actor to the governorship in 1998, a graduate student and I coined the term politainer. A politainer was an entertainer who understood how to use multi media venues and marketing as a catapult into a political career. Politainers were a creature of a new phenomena in America–politainment or the collapse of politics into entertainment. Once elected a politainer–a politician and entertainer–continued to manipulate the convergence of politics and entertainment to further a political career.

Ventura was a politainer, as was Schwarzenegger. Both used their entertainment personas to launch political careers and once elected, continued to manipulate the politianment environment to further their ends. We still live in the land of politainment, it has changed. The world of the Internet, social networking sites, and Twitter create even more extraordinary multi-media venues than ever before. Obama understood that and exploited them all in 2008. But, he did it differently from Ventura. If Ventura sought to exploit his entertainment persona and brand for political purposes, Obama sought to take his political brand and persona–honed with his 2004 Democratic National Convention speech–and transform himself into an entertainment marketing concept. He did it successfully in '08. His talks became rock concert events, and among the young especially, he used the new and social media to market himself.

Then came Palin. She has taken what Obama did to a new level. Her post-VP run is marked by a multi-media transformation into a politianment brand. She is Sara Palin, Inc., and Sarah Palin©.

Now we have Bachmann. She bears significant resemblance to both her parents, Obama and Palin. All three have had rapidly rising careers marked by strong political rhetoric, enthusiastic fans, and a mastery of the new world of politainment. But what distinguishes Bachmann from Obama and Palin is her ability to connect to the anger of some voters who see a world slipping way to the socialism of Obamacare, gay marriage, and the UN. It is the linkage of Bachmann to a politainment world and what historian Richard Hofstadter called the paranoid style in American politics that makes her unique. She draws on the classic dark side of American resentment, fear of others, anti-intellectualism, and paranoia, combining them with a profit-driven politainment world that needs people like her to promote for ratings. She speaks for the features and prejudices of many, and serves the purposes of FOX, MSNBC, and other media outlets. She is a creature of their making and she uses them for her own purposes.

But What is Bachmann’s Endgame?
I guess I got it wrong in the sense that I underestimated the depth of her ego. Whether she believes what she says is unimportant, all of that has been secondary to Bachmann’s first goal–herself. In a career otherwise devoid of real accomplishment, what Bachmann has mastered is the ability to understand the new politics of the 21st century–one that has take politics and entertainment and merged them together into a hyperactive, sound bite, rhetoric driven multi-media 24/7 world. She is not the first to discover this world, but she has perfected it.

There is a great closing scene in the 1992 film The Candidate featuring Robert Redford. Redford plays a paper thin vapid plastic Hollywood candidate who wins a Senate race. The film closes with him looking into the camera, exclaiming: “What do we do now?”

In many ways this is Bachmann. No, I do not mean that Bachmann is vapid. She has been brilliant in understanding how to manipulate the media and others for her goals. All political candidates do that to some degree. But, Bachmann instead has done all of that without a real legislative record and without having to be in a position where she has to be responsible for her rhetoric. Her endgame is not policy and politics.

I envision talk of a presidential bid to be used as a springboard for her next position–perhaps as hosting another FOX or CNN show of her own and giving speeches for outrageous fees. Both jobs suit her well. She can continue to be the rhetorical bomb thrower without having to deliver on anything of substance. She gets to be Michelle Bachmann and not have to work with others. Her decision to float rumors of a presidential bid on the day a new GOP Congress took over and the other Minnesotan, Tim Pawlenty, began his presidential bid show that she is not in it for the party but herself.

Bachmann in power will disappoint her Tea Party followers. Get out while the popularity is high and the cash value keen. Get out before they turn against you and realize that you have done nothing for them except disappoint.

Eyewitness to History: The Minnesota Gubernatorial Debate at Hamline

On Saturday, October 9, Hamline University hosted a gubernatorial debate on campus in conjunction with Fox 9 news. I attended and observed the debate, giving me an opportunity to assess the candidates up close.

The Context

Coming into the debate, my sense is that Dayton had a slight lead of 3-5 points over Emmer, with Horner a distant third at around 12-15% support. The three candidates had some shared goals–avoid gaffes and motivate their bases–but they also had divergent objectives. Dayton has a lead, but his base is less motivated to vote this November. He especially needs to motivate women and the swing voters to turn out. If they do, he wins.

Emmer is behind slightly but his base–angry white males–are highly motivated to vote. Emmer also needs to win some swing voters to his side since I do not believe he can win simply by motivating his base, even if Dayton’s does not fully mobilize to vote.

Horner needed a knockout punch. He may have plateaued by capturing his base and a few swings, but he cannot rise much further unless he can convince voters that one of the other two candidates cannot win in November. Most probably, this means he needs to convince other GOPers that Emmer cannot win, thereby leading to a rush of voters from Emmer to him in fear that Dayton will win.

My analysis assumes at this point several things. First it assumes both Dayton and Emmer are holding their bases and that Dayton is doing better at capturing the swings than Emmer and Horner. In making this argument I am at odds with Larry Jacobs and what his MPR poll states. On Almanac I made these claims and Larry said his poll suggests that there are large defections from the bases of both Dayton and Horner, that swings are more in play for Horner than I think, and that in general the GOP is worried about holding on to its voters. He cites as evidence of the latter the Horner press conference with over a dozen former GOP state legislators endorsing him and the reaction that Tony Sutton had to this press conference.

With all due respect to Larry, I have already made clear why his poll is really flawed. Steve Schier has made parallel claims. I am unpersuaded that the poll accurately captures what the electorate and party alignment is in Minnesota and that means that the lead of Dayton’s is inflated in his poll. Larry’s poll is at odds with almost every other poll and it comes in conflict with recent Rasmussen polls showing both Dayton and Emmer holding 80% of their bases.

Finally, in many ways I do not think that the current GOP cares about other former legislators endorsing Horner. They represent an older GOP party replaced by a new more conservative one. Yes, they do not want to see them vote for Horner, but that is no longer their base. Sutton criticized their actions, but that is not a sign of panic.

About the only thing I agree with Larry and his poll is that it is difficult to determine who the likely voter is. Stacy Hecht well stated this problem on Almanac, with the other three of us (Schier, Jacobs, and me) concurring.

The Debate

This was the 23rd debate. In too many ways the candidates looked like they were going through the motions. Each had predictable answers to predictable questions, and each responded to one another the way you expected.

Each campaign had its groupies there and they applauded on cue. Fox 9 wanted a more contentious debate and encouraged candidates to cut off one another. They wanted theater. The candidates did not oblige, again seeming to prefer the predictable to the novel.

Dayton:

He seemed flat. He did not answer the questions directly and his style was weak. He did little to excite his base. He could have done more to link Emmer to Pawlenty and Palin to excite his base, but he did not. He also did not criticize the others very much and he did not do much to reach out to female voters or swings. Dayton did discuss education which is important to his base but the passion was not there.

His finest moment? Discussing why we need bullying legislation, he spoke of equality and same sex marriage. He also quoted James Madison on why government is needed here–men are not angels.” The nerd in me liked this.

Emmer:

He seemed on autopilot. The answer to everything was cut taxes, less government, and create more jobs. A variation of this was his constant protest that he was the only candidate who has put forth a balanced budget. No one but his base believes this. His answer to a student question about what he planned to do about the high cost of going to school? Schools needs to restructure and if we had more and better jobs then student debt would not be a problem! Hmm, tell that to anyone with huge students debts. Even a high salary does little to address the burden of high debt load.

His defining moment? He came out against new legislation to crack down on bullying motivated by anti-gay bias. He said we had too much government already and that it was up to parents teaching respect and giving teachers more authority to do what they need to do but cannot because of fear of lawsuits. Clearly Emmer was speaking to the base.

Horner:

He was clear with answers and specifics. As a communications specialist he knows how to frame answers. He did a good job distinguishing himself and pointing out he was not a DFLer or GOPer.

His finest moments? Two stand out. First, he gave specifics to what he would cut to balance the budget. He noted JOBZ and ethanol subsidies as two cuts. Also, when responding to Emmer, who said no to new anti-bullying laws because it was a private issue, Horner said when others get hurt it is a public matter.

And the Winner Is?

On style and substance (that is how he looked and in answering the questions) Horner won. However, he did not knock anyone out. Emmer was second, Dayton third. Emmer managed to say what his angry base wanted to hear, Dayton did not do much to excite the passion of his supporters.

Horner’s clock is still ticking but he needs major movement soon. Dayton needs to refocus in the last few weeks and appeal to suburban females to vote for him. Pitch commercials to them. He also has started linking Emmer to Pawlenty and needs to do more of that.

Emmer has his base excited but needs to pick up some moderates. Also, everyone is expecting him to do a meltdown like Hatch did in 2006. Maybe Horner, Dayton, or a third party add will do that. Emmer also has a Pawlenty problem in another way. Pawlenty is unpopular and does nothing for him but as governor he could assist in policy or other ways. However, Pawlenty is off on his Don Quixote-esque pursuit of the presidency and seems uninterested either in Emmer or Minnesota. However, that is another story for another blog.

Thoughts on the MN Primary: Looking to the General Election

What did we learn about the August 10, MN primary? A few interesting things.

Turnout
First, I confess, I was wrong. I predicted an August primary would produce a 12% turnout or a 2% decease from previous years. Instead, it went up to 15%. I am glad I was wrong. Instead of people being confused by a new date perhaps candidate groundwars and the novelty of the new date increased turnout.

Second, because of increased turnout, the winning number for the DFL primary was much higher than I predicted. Moreover, given how many voted in the DFL primary, this suggests more passion or hunger by the DFL to win the governorship. This is why the primary turnout increased, and it does give Dayton some momentum heading into November.

Why Dayton?
Many DFLers expressed shock that Kelliher lost. I never thought she would. All along I said that Dayton had the name recognition advantage, the money advantage (over Kelliher but not Dayton), and was at least second in terms of ties to organized interests (AFSCME) in terms of organized interests. All this counted a lot. But I also suggested his strength would be with the Iron Range and his Lt. Governor. This is what paid off. Kelliher was really an urban Twin Cities candidate but never really one with broader appeal across the state.

I also think there was a certain arrogance on display with the DFL establishment on Tuesday. As I listened to MPR on Tuesday night Brian Melendez and others in the DFL seemed self-confident and cocky that their machine would deliver for Kelliher. Why believe that when the track record for the last two decades demonstrates the contrary. I think Kelliher’s shock and late concession on Wednesday reflected this arrogance too. Neither she nor the rank DFL get it in terms of understanding that they do not speak or represent the broader spectrum of those who consider themselves Democrats.

What is significant about Dayton are two things. First, he won with rural and blue collar support. The GOP should be worried about this. Generally, Emmer and the GOP can count on rural votes and some blue collar. However, Dayton ran strong where the GOP normally do. Assuming that the DFLers can bring their organization statewide and in the metro region to support Dayton, the DFL has a good campaign.

Second, Dayton won with a coalition and themes that bring back to life the old Perpich era. He did well with workers and the Iron Range and he ran on populist themes that harken back to that era. His emphasis on education returns the DFL to the Perpich one of making MN the brainpower state. Normally I do not think the past beats the future in politics, but here Dayton is cementing together one last time the old Perpich themes and coalition and updating for 2010. It might work again.

The General Election
It is trite to say that Dayton versus Emmer represents the broadest liberal/conservative divide in decades and that this sets up Horner for the center. All this is true. This also sets up the old Perpich coalition v. the new Tea Party brand of the GOP. Two different populist movements in conflict.

Emmer faces some weaknesses. Support for him among his base is a little soft, leaving Horner with room to grab GOPers. Also, Dayton has a stronger hold on moderate swing voters and female suburban voters (the soccer moms) than does Emmer. This is the battleground and Emmer is way behind here. He needs to figure out a way to remessage and move to the center. However, thanks to Matt Entenza and bad campaigning on his own account, the DFL has already defined Emmer. Emmer made the same mistake as Kerry in '04–he let others define him instead of defining himself. Once defined it is hard to undue.

Emmer also faces a McCain problem. In '08 McCain knew Bush was unpopular and that “change” was the mantra of the year. He needed to figure out how to run against Bush, a member of his own party, and also recognize that America was going in the wrong direction. If you are of the same party how can change mean staying with the same party? This is a tough trick to perform and McCain failed.

Emmer has a similar problem. He says MN is on the wrong track and it needs a new direction on taxes and regulation. He seems to forget that Pawlenty was governor for the last 8 years. How can he run against is own party? This is the McCain-Bush problem repeated here. Yes, Emmer represents a different wing of the GOP compared to Pawlenty (it is the Reagan v. Palin wing), but the DFL have already linked Emmer to Pawlenty.

Finally, the issues. Briefly, it is the economy and jobs. Average voters do not care about the record of Dayton as senator or the budget deficit. If the GOP talk about Dayton’s senate life that get away from core issues of the economy. Conversely, if the DFL talk too much about DWI and the deficit that also lose focus.

What is Orthodox Republicanism?

Congresswoman Michelle Bachmann’s formation of the congressional Tea Party caucus portends the Republican Party both a challenge and a confrontation. It is a battle for the soul of the GOP, suggesting a new definition of the party in light of its 2006-8 loses. Yet this remaking of the party is only the latest effort by the Republicans to define themselves, asking what in fact is orthodox Republicanism?

If the GOP takes over the House, the Tea bloc could hold the balance of power. If the Democrats retain control, the Tea caucus might force the Republican leadership into an ever more uncompromising ideological corner. But in either case, the formation of the caucus is the maturing of the Tea Party as it travels from a grassroots movement to an institutional force within the Republican Party. The real question though is whether the Tea caucus rebrands the GOP or the later coops the former.

This is not the first time the Republican Party has sought to remake itself. Think of the GOP at its inception as the party of Lincoln, committed to emancipation, civil rights, and economic freedom. Fast forward to Harding, Hoover, and Landon, the party of small government, business, and opposition to the New Deal. Then jump again to the 1950s and 60s. At the time I grew up in New York, Eisenhower was president building the interstate highway system, signing a major civil rights bill, and denouncing the military-industrial complex, while Governor Rockefeller, Senator Javits, and Democrat Senator Bobby Kennedy battled amongst themselves for the crown of who was more liberal.

The contemporary battle for the Republican orthodoxy begins in 1964 when Barry Goldwater challenged the Rockefeller wing of the GOP for dominance. Goldwater’s “Extremism in defense of liberty” speech was a repudiation of the accommodation with the New Deal that Eisenhower, Javits, and the Rockefeller wing had reached. Goldwater may have lost the election but he propelled the GOP in a direction that first triumphed with Reagan’s victory in 1980 and his inaugural speech declaration that government is the problem, not the solution.

The Reagan coalition blended together often contradictory movements of economic liberty and social conservatism. The former requires a minimalist state protecting individual choice, the later requires an activist one second-guessing freedom. While ideological, it was still willing to compromise within its party and with Democrats, producing notable and important legislation such as the 1986 tax reform and the 1990 Americans with Disabilities Act. From 1980 to 2008 the Reagan brand is what defined the party. But beginning with the presidency of George Bush in 2001, and clearly by its end the Reagan brand had worn thin and when McCain ran and lost in 2008 it was clear that Reaganism was dead. Obama’s victory, along with Democratic gains in 06-08, signaled that change. For whatever it meant, it was preferred to Reaganism.

But the seeds of Reagan’s demise in McCain’s 2008 loss produced the heir of a new Republicanism in Sarah Palin. Palinism still seeks to balance the social conservatism and economic liberty of Reaganism, but it takes seriously the Goldwater extremism speech in its hyperactive purism and refusal to compromise. Palinism takes aim at the New Deal, combining it with nativism and constitutionalism that came to a head in the formation of the Tea Party and its mantra “I want my country back.”

The Palin makeover of the GOP combines Goldwaterism and Reaganism with a cult of personality, a multi-media advertising campaign, and a dose of Ayn Rand libertarianism. Palin, Fox news, conservative talk radio, and blogs have all produced less a coherent ideology or world view than it has yielded an attitude and brand. It is brand built on populist anger, anti-government feelings, opposition to immigration, gays, abortion, Democrats, and anything else that inspires fear. Partaking of that brand is Michelle Bachmann, and now the congressional Tea Party caucus.

While ideologically incoherent, Palinism has a deeper totalitarian aspect to it. Language describing some GOP members as RINOS (Republican in Name Only), talk of a 2009 conservative litmus test, and complaints that even Senators Bob Bennett and John McCain are not pure enough speak to a new orthodoxy.

So what is orthodox Republicanism now? It may be no more than a marketing brand or technique attempting to repackage a collection of contradictory ideas, some that have been part of the Republican Party for some time, others that are new. Palinism’s rebranding of the GOP offers little new, except for a multi-media cult of personality campaign that draws upon the anger and fear of many that their way of life is threatened and that someone else is to blame for it. If only government, gays, immigrants, abortionists, Democrats, and RINOS did not exist, we could take back our country and prosper again. This is orthodox Republicanism.

Palin, Emmer, and the Battle to Rebrand the Republican Party

**UPDATE-See my KARE11 TV interview about the Minnesota Governor's race here:

Palin’s endorsement of Tom Emmer was a classic game changer. The announcement last Thursday on the heels of the Minnesota Republican Convention was unpredictable but now in hindsight it makes perfect sense and it should have been predicted. The endorsement is really about two things: Palin’s sway over the Republican Party across America and as a surrogate battle over the presidential nomination between Palin and Pawlenty, should she decide to enter the race.

Palin and Emmer both come from the Tea Party movement of the Republican Party. Both are very conservative, representing the third incarnation of the Republican Party in the last two generations. The first incarnation of the GOP was the old moderate wing that was composed of the Jim Jeffords (VT), Lincoln Chafee (RI), and before that, the liberals Nelson Rockefeller and Jacob Javits. This was the party challenged by Barry Goldwater and its culmination came to a head with the election of Ronald Reagan in 1980.

Reagan branded a new Republican Party that was conservative and who saw government as the problem, not the solution seeking a moral fiscally conservative, limited government that believed in deregulation, the market place, and which supported social issues. While conservative this party still managed to work across the aisle with Democrats on many issues. The Republican Party of the last 30 years has been the Reagan brand.

The Reagan Brand had a long life and many adherents, including Tim Pawlenty. As governor, Pawlenty sought to be both a social and fiscal conservative. Socially, his legacy will be one who opposed gay marriage and benefits for same sex couples, supported limits on abortion including a 24 hour waiting bill, and who also initially opposed stem cell research. Fiscally, his legacy is opposition to taxes and his refusal to formally sign any tax increases during his eight years as governor. However that is the extent of his footprint, leaving little other lasting legacy except for his positioning for a presidential candidacy within the Reagan Brand.

Unfortunately, Pawlenty does not understand that the Reagan Brand was coming to an end. George Bush’s eight years as president signaled the coming of the end of the Brand and John McCain’s 2008 loss to Obama the death of it. McCain during the 2008 St. Paul Convention spoke immediately following a biopic of Reagan, and McCain himself said that he wanted change (like Obama) but it would be change back to the Reagan values. McCain’s campaign was thus an effort to extend the Reagan Brand for one more election and it failed.

But McCain’s campaign also brought to life the third recent wave of Republicanism as incarnated in Sarah Palin. This is the anger, anti-government, Tea Party, nativist, anti-intellectual, and practically libertarian wing of Republicanism. While McCain lost the election, Palin won in the sense that she is now fighting to create the new Brand for the party built around her and the likes of Michelle Bachmann, and perhaps Tom Emmer.

Palin wants to represent the new face of the GOP and is traveling the country to endorse candidates. She brings her star power–a rockitcian– wherever she goes. She has created her brand by drawing up pop culture marketing of herself and is combining it with her support for candidates she likes. Doing this accomplishes two things. First, should she run for president she will have many favors owed to her and her rebranding of the party will be one supportive of her values. Second, even if she does not run she is still remaking the face of the party, effecting the Palin brand for a new generation of candidates. This is where Tom Emmer comes in.

Tom has increasingly moved to capture and align himself with the Palin wing of the party. He has moved further to the right over the years. When Tom was first elected he contacted me and asked to carry my campaign finance reform legislation in the Minnesota State Legislature. He introduced my version of McCain-Feingold for the state along with a host of other finance bills. I wonder if he would support them today? I like Tom as a person and we get along well but we have testified on the opposite side of several issues. He supports photo ID for voting, I have testified against it. He supports public disclosure of the names of judges who issue parental bypass orders permitting minors to secure abortions, I have testified against it as simply an effort to commit thuggery against judges.

My point here is that Emmer has been smart to see where the Republican party is headed and it is not towards Reagan, Pawlenty, and Siefert. That brand is dead and is now being replaced by Palin, Bachmann, and Emmer, unabashedly conservative.

Palin’s endorsement of Emmer thus placed her imprimatur on him to help band the Minnesota Republican party. In doing that, Palin yet again one upped Pawlenty. The first time was a few weeks ago with the Palin-Backmann rally in Minneapolis. This time she made Pawlenty all but irrelevant at the State GOP convention. His speech meant nothing on Friday, she stole the show from him and she had more influence in the convention than the governor did in his own state convention. I see the Palin endorsement as a surrogate battle for the presidency between Palin and Pawlenty. It was about rival views of the party, influence, and legacy and guess who won again? Palin again makes Pawlenty look weak.

Final thoughts on Emmer? In his acceptance speech he said in Palinesque that he would not run to the center during the general election but would stay true to his conservative views. Normally this would be a suicide strategy for a gubernatorial candidate in a two party race, but here in a three party contest it might make sense.

The three most important rules of politics for candidates are: 1) have a good political narrative; 2) mobilize your base; and 3) capture the swing voters. In MN, no party had support of more than 50% of the population, meaning that the swing voters control the balance of power in the state. Normally both the DFL and the MN GOP would seek to mobilize their base and then moderate to capture the swing voters. Emmer is signaling he will not follow this strategy. Why might this make sense?

The DFL will have Kelliher Anderson, Dayton, or Entenza as their nominee after the August 10, primary. All three are liberal candidates. My guess is that the percentage of the population that votes or leans Democrat in MN is about 36%. Tom Emmer is perhaps the most conservative GOP candidate in decades. The percentage of the population that votes or leans GOP is about 32%. Finally, the core base of the Independence Party is about 10%. This leaves about 22% of the population that swings.

With DFL and GOP picking candidates who might excite the bases, this leaves enormous room for the Independence Party to carry significant influence and carry the moderates. Emmer may be banking on a viable third party challenge to capture the center, but he is also counting on the anti-incumbent fever and the hope that his base is angrier and more mobilized than the DFL base. In short, while the GOP has a smaller base, they may be more motivated to win and if Emmer simply concentrates on the base, hopes the DFLers are not too motivated to vote, and the Independence Party candidate (Tom Horner I suspect) chews up much of the center, perhaps he (Emmer) will win. We shall see.

In a future blog I will discuss why I think Horner has a real good chance to do well this year if the perfect storm of politics comes together.

Palin, Bachmann, Rockitics, and Petters

Rockitics in Minneapolis
So yesterday Sarah Palin and Michelle Bachmann appeared together at the Minneapolis Convention Center before a rock concert crowd reminiscent of Obama’s 2008 Target Center appearance. What do we take away from the event?

First, they have learned from Obama. If Bill Clinton and Jesse Ventura were classic politainers who mastered the art of combining politics and entertainment (politainment) then Obama understood how politicians needed to be rock stars to excite the crowds and generate media events. Rockitics is what he perfected. He understood how to use multimedia venues such as social nertworks and Twitter to hype himself and his speeches and rallies further did that.

Politicians as rockitcans simply understood that one of the basic rules of politics is that selling candidates is no more than selling beer–it is creating image, a message, or a narrative, and using multiple opportunities to market the message. Being a rock star with political rallies that feel like concerts venues is simply another way of doing that.
Palin and Bachmann in their respective ways understand that. Palin has mastered the art of the continuous 15 minutes of fame. She is never outside of the public eye, pursuing constant media attention on Fox news, in her own shows, her book tour, and whatever else she does. Similarly, Bachmann has done the same with her multiple appearances. Both have also carved an interesting role for themselves as spokespersons for the Tea Party wing of the GOP. They both say highly inflammatory statements that make Democrats cringe and excite the Tea Party people. Both understand that media coverage is about the outrageous–say the most controversial things and you get covered. No different than Ozzie biting the head off a bat. It was stupid but everyone remembers. Palin and Bachmann understand this and use it to their advantage. Moreover, and the troubling part of all this is that often times their comments are simply and factually wrong, but it does not matter. Politics is a narrative and they have a simple narrative that appeals to many of the faithful.

The real issue will be whether their rock concerts can go mainstream? In the Bachmann case, her district is conservative and there is little chance Democrats can unseat her now. Their hope is to tie her down and then hope redistricting either eliminates one seat in MN (hers) or they can redraw lines and make her vulnerable in 2012. My prediction, if Bachmann is redistricted out in 2012 watch her to run against Klobuchar in the senate and get waxed. Otherwise, she runs against Franken in 2014. For now, Bachmann is safe.

Palin may have high name recognition but one wonders if the swing voters thing she is any more qualified to be President now than she was in 08. I doubt that. She has done little to demonstrate mastery of the issues, preferring to run as a 21st century member of the “know nothing” party.
Sean Hannity suggested it would be “kinda cool” to see a Palin-Bachmann 2012 ticket. A ticket yes to excite the base, no to winning.

The biggest loser yesterday? Pawlenty. The Palin-Bachmann event shows how little excitement there is for him and how dim his prospects.

Petters’ Sentence
Tom Petters gets 50 year for his fraud with parole no soon than 41 years. With it unlikely than he prevails on appeal, Petters never sees freedom again. How do we assess the sentence?
Certainly the sentence is less than the 300+ years the prosecution wanted and more than the 4 years his attorneys requested. Fifty years sounds like a compromise, but it is one significantly dictated by the federal sentencing guidelines which determine prison time by the number and types of crimes committed. In imposing the sentence the quality of mercy was not strained and it did not rain down upon Petters. He is paying for his crimes, but so is the public.

Think about it. It will cost about $50,000 per year to incarcerate him so do the math and taxpayers will pay $2.5 million to punish him. Yes, losing his freedom is punishment, but his acts cost us already $3.6 billion. If Petters was smart enough to swindle all this money might it not make sense to think he might be smart enough this make this kind of money and payoff the victims? Prison in some ways makes no sense, it does little to undo the damage he has done. However we live in such a “lock them up and throw away the key” society that we think jailing everyone is the answer for everything. Few elected officials get elected for proposing alternative sentences for fear of looking soft on crime. As a result, harsher and harsher sentences, more crowded prisons, and more lives thrown away with little hope or effort to redeem. In some states we now spend more on prisons than education.

Petters’ sentence should make us think about these issues, as well as about human nature and how gullible others other to believe in the get rich quick scams proposed by him and Madoff. Come to think of it, perhaps Petters is simply the poster child and personification of the greed of Wall Street and the economic crash of the last few years. All of us want to be Willie Lomans and hit it big. There will be more Petters and the 50 year sentence will not deter them or future victims wanting to score big.