A Merry Obama Christmas

It was a good week for Obama according to most politicos. He got repeal of DADT, passage of the arms treaty with Russia, and adoption of the 9-11 victims’ medical funding. After a shellacking on November 2, many see these accomplishments as signs that Obama is not dead and that he is well on the road to redefining his presidency and proving that he will be able to work with the GOP for the next two years. There is, a new life for Obama and he demonstrated that he has the skill to work across the aisle. Obama proved his abilities and competencies this past week.

This is the conventional reading of what happened. But is this reality? Maybe, but I think a lot more has to do with the fact that Obama capitulated on one big item–the Bush era tax cuts–and as a result the GOP got what it really wanted and all else did not matter.

Let’s look at the victories of the last few weeks. Obama gets unemployment insurance extensions, some minor stimulus in the tax bill, and then all the legislation noted above. All good perhaps, but there are other ways to look at all this.

First, too little too late. By that, Obama gets all this way past when it mattered. He needed to get much of this before November 2, to help him and the Democrats. Repeal of DADT before then might have helped with his base. But it took until the last minute after the election to get it repealed. It provided no political bump for November 2, and it is not clear how much passage of any of these items will be either to his base or swing voters in 2012.

Second, many of these items should have been secured easily. An arms treaty, extension of unemployment, and DADT, all should have been easy. Some of them should have received broad GOP support especially when many workers are Republicans who have lost their jobs. Thus, it is good they passed, but that should have happened all along. Obama gets credit for doing now what should have been no brainers earlier in the year. Good job.

But was it Obama’s skills that rounded up Democrats and eroded GOP opposition? This is Obama’s read. However, for the most part, the GOP gave up fighting on these because in the end they were the hostages in a bigger battle–tax cuts for the wealthy.

It’s the (capitalist) economy stupid!
What really mattered to the GOP was the extension of the Bush tax cuts to the rich. This is what they really wanted. It means mega billions for the rich, a massive continuation of wealth transfer or retention for America’s wealthy. It is worth hundreds of billions to them, even though the tax cuts do little or nothing productive in terms of producing jobs, investment, or helping the economy. The cuts do little to stimulate, they do little to ease unemployment, they do little to address home owner foreclosures, they do little to encourage capital investment in the new green economy or in upgrading our infrastructure. They do add $900 to the federal deficit!

The GOP got what they wanted. They and Obama were willing to mortgage America’s fiscal future to serve their political needs.

Once Obama capitulated on the tax cuts he essentially melted GOP resistance on everything else that was being held hostage. To the GOP they were minor issues. Don’t get me wrong, repeal of DADT is important, as is the arms treaty and the other measures passed. But they pale in comparison to the GOP and others in terms of the economic consequences of the tax cut. The cuts continue the economic era of Reagan and Bush, failing to really reverse course on what matters most–the economy.

The melting of GOP opposition on many issues demonstrates how many social and other issues are simply sideshows and wedge issues for the bigger game of the economy and protecting rich corporate interests. Sadly, Obama went along with that in his effort to refine his presidency. He got some things he wanted but at the expense of losing the big one on taxes and the economy.

Thus, the great skill Obama might have demonstrated this past week was to recognize that he could win on all the other issues so long as he gave on this big one. Merry Christmas from Barack Obama.

Missed Opportunities

**UPDATE**
If you missed the political panel on Almanac Friday (12/17/10) you can watch the segment here. The panel is at about the show's halfway mark and the debate was kind of ugly!


In politics, as is true with most things in life, timing is everything. Opportunities come when windows open, but those windows do not remain that way forever. The DFL, Dayton, and Obama are the thought of opportunities in today’s blog.

Minnesota Democrats, Mark Dayton, and the Independence Party
Face it–the Minnesota Independence Party is a permanent minor party. After a highwater mark in 1998 when Jesse Ventura received 37% of the vote and won the governorship, the party has fallen into a permanent minor status. In 2006, Tim Penny received 16.2% of the vote for governor, in 2008 Peter Hutchinson received 6.4%, and in 2010 Tom Horner received 11.9%. In 2008, Dean Barkley received 15.2% as a Senate candidate. The party is more than a blip but it does not seem to have enough strength to be a serious challenger for statewide office in Minnesota. My guess, as I stated throughout the 2010 campaign, was that the Independence Party commands about 10% of the voting population. Its members seem to be composed of former moderate Democrats and Republicans, as well as others who politics do not line up with the two party profile.

At the same time the IP is about 10% of the voters, neither the DFL nor the GOP seem able to command a majority of the population. If the governor’s race is considered, there has not been a governor who received more than 50% of the vote since 1994. The 2008 Senate race shows the same, although the 2006 race did produce a majority with Klobuchar. The point here though is that the fate of the GOP, DFL, and IP are connected–all three are fighting for majority status and none can achieve it alone.

In a parliamentary system the permanent minority status of parties forces coalition governments to form and rule. Ventura sort of did that in 1998 when he picked his commissioners from across all party stripes. There is a similar opportunity here now for the DFL and Mark Dayton.

The DFL and Mark Dayton need to raid the IP. There is an opportunity here for the DFL and Dayton to reach out to the IP and bring them into their party. The GOP could do this too but seem to have abandoned this approach recently when it shunned its moderates who supported Horner. These Arnie Carlson and David Durenburger types have no place to go except a permanent minority status within a 10% IP. The DFL and Dayton should reach out to them? What should they do?

* Dayton should appoint Tom Horner and other prominent IP members to serve in his administration
* DFLers should allow IP members to caucus with their party

In addition, now is the time to reconsider fusion. Fusion was a big issue about 15 years ago. It would allow cross party endorsements on the ballot. Thus, as is the case in NY, a candidate for the Democrats could appear on ballot also as the endorsed candidate for the Liberal Party. Here, fusion would allow a candidate to appear as the DFL and IP endorsed candidates. Fusion, which is not legal at present in Minnesota, potentially would allow for a building of political coalitions to form a majority party and the strengthening of a third party. IP voters who otherwise would not vote DFL would vote for the person as an IP candidate. Something that ranked choice voting will eventually allow for the same creation of new majorities, but I am not sure that alone with will do that even though I support RCV as a voting option.

Whatever the practical option is, the simple statement here is that there is an opportunity for the DFL and Dayton here–raid the Independence Party, bring their voters over, and use the chance to create a new majority.

Thoughts on Dayton
A few quick thoughts on the Dayton transition. He has appointed good people so far, most notably Peter Watson as his counsel. The rest of his staff is good, but missing so far from the early appointments is a budget director. With a $6.2 billion deficit and the demands to have a budget in early January, one would think one of the first appointments would have been a budget director. Moreover, none of the early appointments are budget people. He need to act quickly. The best names out there? Matt Smith who was budget director under Ventura and Senator Dick Cohen who has done the budget for the Senate for years.

Lacking a budget person already has hurt Dayton. His meeting with the GOP legislative leadership was interesting and a nice gesture, but they are driving the budget agenda right now because Dayton does not have a budget person in place.

Additionally, Dayton keeps announcing how he is reaching out to the GOP and he seems to be modifying his positions. So far I have yet to detected the same with the MN GOP vis-a-vis Dayton and their views.


Thoughts on Obama
Dayton’s compromise segues to Obama and his signing of the extension of the Bush era tax cuts. He justified the move as a necessary compromise, as a way to get middle class tax cuts, to get unemployment tax cuts, and to stimulate the economy. (See the above video link to TPT's Almanac to see me arguing with Larry Jacobs on some of the following points)

Bad economics. There is some stimulus here but not much. In many ways the tax cuts only continue the status quo and too much of the cuts go to the rich who will not use it to stimulate the economy unless you believe in supply-side economics. Second, despite Larry’s assertion that mainstream economists say it will raise the GDP by 1.5%, that bump is at best short term and wears off by 2012 ( also cannot find economists who are saying what Larry is asserting). Third, the cuts add $900 to the deficit, only delaying the inevitable problems of deficits and eventually spending cuts which will probably hurt the poor and middle class first. Overall, whatever short term economic benefit there is, the benefits are outweighed by the economic problems they create.

Bad politics. This is a naked grab by Obama to get middle class and swing voter support. I doubt it does that. Two years from now they will not remember this. Second, the tax cuts are extended only for two more years and in the middle of the next presidential campaign they will be debated again. Obama will again be unable to oppose their extension and again they will pass. Democrats who oppose them will be unable to do so because opposing tax cuts is never easy.

Obama basically sacrificed his political base and the economy for his political fortunes and I am not sure how much benefit he reaps from it.

The End of the Obama Presidency?

The current Obama presidency came to an end last week. What it means for 2012 and his re-election bid is that for the first time I think there is a serious chance that he might not get reelected. The reasons for that are the economy, alienating his base, and potential white voter backlash.

In general it is hard to defeat sitting presidents. Yes, Carter and Bush I both lost, but it took bad economic conditions and a third party vote for Ross Perot to do that. Previous to that, Ford did lose but he was barely an incumbent and he pardoned Nixon, and LBJ opted not to run. However, before that, it was Hoover (1932), Harrison (1892), Cleveland (1888), Van Buren (1840) and John Adams (1800) who lost when running for election. The economy and major crisis seem to be the usual reasons for incumbents losing.

Kerry in 2004 is a testament to how difficult it is to defeat a sitting president. They have to make major mistakes or blunders to lose, or be so dragged down with the economy that their candidacy is destroyed by it. Obama faces both.

The economy remains a mess. In a couple of blogs ago I wrote about the persistent unemployment, the failure to address the mortgage market, and the perception that he favored the banks over the people. These problems persist. Yes, Obama will get some bump from the economy in the next year or so but short of a miracle too many people will be jobless.

Beyond the economy, two fatal blows were delivered. First the failure to repeal “don’t ask, don’t tell” means he has dramatically lost or alienated the young under-30 vote and the GLBT community. They supported him enthusiastically in '08 and stayed home in '10. The latter will be true in '12.

In addition, his compromise on the Bush tax cuts infuriated his liberal base. The cuts may still pass, but he threw Democrats and liberals under the bus in order to appease swing voters. The House refusal to bring the original proposal to a vote demonstrated the anger. Had this been a parliamentary system, the refusal to vote on it would have triggered a vote of no-confidence and a collapse of the government. That is what happened last week effectively.

The fatal error here is Obama alienated his base. They will not vote against him in '12, but certainly they will not come out strong for him. He is counting on them having no alternative and voting for him. Don’t count on it. Ignoring your base and raising expectations–only to disappoint–is the surest way to lose them.

Thus, Obama’s strategy? Hope your base holds their nose and votes for you in '12 out of fear of the GOP, and try to regain the swings voters. Preliminary polls suggest the swings like the Obama tax deal, but is it enough to swing them to his side? Maybe not.

Many who voted for Obama in '08 were whites so disappointed with Bush and the economy they were willing to take a chance. Fear and disgust melted some white opposition but they may not happen again. Obama may have a harder time getting their support.

So, how is the end of the Obama presidency? Obama is swapping one type of presidency for a another. If the narrative of the first presidency was change now it is survival. It is a defensive presidency, one aimed at governing with the support of the GOP and swings and not the Democrats. Why after two years he thinks he can win over the GOP is a mystery to me. Finally, I remain perplexed regarding the narrative that Obama has for the next two years. What is it?

A Note on Michael Bloomberg
Bloomberg has said no to running for president in '12. He has a great opening. A combination with Obama disenchantment, a GOP field that is ultra conservative, and the independent streak the NYC mayor has (plus his money), give him a great opening in '12 if he wants it.

Dayton and GOP-led Legislature should act on what works, not ideology and wishful thinking

My latest blog is an piece published in Minnpost. It can be found here.

Dayton and GOP-led Legislature should act on what works, not ideology and wishful thinking
By David Schultz | Friday, Dec. 10, 2010

Emmer Concedes: The Futility of Going to Court

What took Emmer so long to concede the election? Many of us saw the futility days, if not weeks ago, but Emmer troopered on. But many factors came to a head on Tuesday making it clear that it was over.

The recount process was effectively over and Mark Dayton maintained a nearly 8,800 vote lead. The Minnesota Supreme Court ruled against Emmer on his argument about reconciliation and the matching of the number of ballots with voters. He had withdrawn almost all of his frivolous and non-frivolous ballot challenges, and there appeared to be no other place to add to his totals. The math was against him, and opinion polls showed nearly two-thirds of Minnesotans said he should concede.

All of these factors were important considerations to his decision. But, perhaps the most underrated variable or factor transpired last Friday when Justice Paul Anderson–in his capacity as a member of the Canvassing Board–hinted to Emmer’s attorney (and former chief Justice) Eric Magnuson that bringing a court case might violate state law and legal ethics. It was from that point on that Emmer withdrew many challenges, leading to the concession on Wednesday.

What was Anderson talking about and how did it affect Emmer’s decision to concede? What might his comments say about others still thinking of challenging the election outcome?

Emmer Concedes..But Will Others?
Emmer has conceded and stated he will not raise a legal challenge to Dayton. But will the Republican Party or other loyal supporters forego a challenge? That is the great question. On December 14, the State Canvassing Board will meet, likely declaring that Dayton has the most votes and then issuing him an election certificate. However, what is not clear is whether the GOP or someone else will contest the election outcome, thereby forcing a trial, the delaying of the issuance of an election certificate, and the possible seating of Dayton as governor on January 3. This delay means Pawlenty stays on as governor–with a Republican legislature–foreshadowing an opportunity to adopt a legislative agenda many conservatives have wanted for decades.

Filing an election contest is tempting. Yet those who see it as a way to damage Dayton or push a Republican agenda, they should think again. Legally, it is not so clear that a challenge would get far and instead, it could be dismissed quite quickly.

Bringing the Election Contest
Even if Tom Emmer opts not to contest the election that does not end it. Minnesota Statute §209.02 permits any voter in the state to bring a contest, challenging the “irregularity in the conduct of an election or canvass of votes, over the question of who received the largest number of votes legally cast, over the number of votes legally cast in favor of or against a question, or on the grounds of deliberate, serious, and material violations of the Minnesota Election Law.” This is a broad statute, permitting almost anyone in the state to challenge the election for almost any reason.

Even if Emmer does not contest it, it does not preclude State GOP Chair Tony Sutton and the Republican Party, or any other party in the state from doing it. Some interest group or party could contest the election, believing it could delay the seating of Dayton for months.

Responding to a Contest
But if a contest occurs, will it be a repeat of the nearly six-month delay in seating of a winner as occurred with Franken and Coleman? No, there are critical differences here.

First, the vote difference here is enormous by comparison. The math is against Emmer winning. There are not enough votes in dispute to reverse Dayton’s lead. Additionally, there are really no good legal arguments left for Emmer to raise now that the Supreme Court ruled against him. There is also no evidence of serious or widespread voter fraud. In short, whatever legal arguments Emmer or a third party could raise, they would not change the outcome of the election–Dayton still wins.

If a contest is brought, Dayton’s attorneys could respond by saying that they concede all the legal arguments raised by the other side but nonetheless it would still not change the outcome of the election. This is sort of like asking for a directed verdict or a summary judgment in the case. These options could dispose of the contest quickly.

But a second option could prevent the case from going anywhere. Rule 11 of the Minnesota Rules of Civil Procedure precludes lawyers from filing suits that are frivolous that seek to harass, cause unnecessary delay, or are brought for other improper purposes. Similarly, legal ethics, specifically Rule 3.1 of the Minnesota Rules of Professional Conduct, prohibits attorneys from raising frivolous claims. Lawyers who bring such cases run the risk not only of having them immediately dismissed but also face sanctions from the courts. Every first year law student learns to fear Rule 11 sanctions.

One could argue that any election contest that simply seeks to delay the seating of Dayton is frivolous and runs a Rule 11 risk. Moreover, even if there are some outstanding legal issues or questions, bringing a court case here is risky. Unless one can demonstrate that but for these legal issues Emmer would have won, such a lawsuit could be labeled as frivolous. Dayton’s lawyers could raise a Rule 11 claim and perhaps get the case dismissed almost immediately, along with subjecting any attorney both to legal sanctions and the threat of ethical discipline.

Overall, those who think that filing a contest is a simple way to delay matters should think again. Their suit might easily be dismissed and their attorneys may face severe legal and ethical sanctions.

Politics and Economics: Magnuson’s Threat and Obama’s Problem

Politics:
The Gubernatorial Recount

The Minnesota Canvassing Board met yesterday (12-3-10) to review ballot challenges during the Minnesota governor’s race recount. Two fascinating things emerged: First the numbers regarding the challenge, second the dialogue between Tom Emmer’s lead lawyer, Eric Magnuson and state Supreme Court Justice Paul Anderson.

First, with almost all of the recount done, Dayton still leads by approximately 8,800 votes. The recount, as of 2 PM yesterday, yielded 2,880 frivolous challenges by either the Dayton or Emmer side, and 909 non-frivolous by the same. The total is 3,579, the bulk of them coming from the Emmer camp. The Dayton camp had then announced it was withdrawing all these challenges.

When the Canvassing Board examined the frivolous challenges, it became clear to all that they were in fact frivolous. For example, in Renville County Emmer people appeared to challenge all ballots where there was a write-in candidate for the school board. Clearly Magnuson when confronted with that fact was embarrassed and had to admit that he needed to withdraw these challenges.

What the review of the ballot challenges demonstrated is a couple of things. First, even if all the challenges by Emmer broke his way he could not eliminate the 8,800 vote lead that Dayton has. Second, the frivolous challenges were just that–frivolous–and they will be rejected. This further narrows any gain that Emmer may have.

Overall, what the recount suggests is that for the most part the Minnesota election system is probably 99.9%+ accurate in reading voter intent and counting. The final vote after the recount will be essentially the same as it was before the recount started.

These facts are increasingly clear to Emmer’s attorney Eric Magnuson. I enjoyed the exchange between them. Anderson first pointed out that lawyers cannot bring frivolous lawsuits (Rule 11 as we all learn as 1L law students). Bringing such suits is sanctionable and unethical for lawyers. Second, Anderson asked Magnuson if he really wanted the Canvassing Board to review all the frivolous challenges even though it would potentially take a lot of time and even if he did prevail, they still would not win.

This is where Magnuson offered a threat. He said that he expected the Board to do its job and review all these ballots in the interest of obtaining an accurate count. He did not address the issue that the numbers do not work for them. His threat seemed to be if you do not examine them now (which could delay finishing the recount and certifying Dayton the winner) then Emmer might have to ask a court to do that later.

Thus, the real strategy emerges–and Anderson pointed it out. Emmer and Magnuson seek to delay the recount process now and perhaps make it difficult for Dayton to take office on January. If the Canvassing Board does not do what they want then they will go to court afterward to raise their legal challenges–even if it does not change the result. There is also no promise that they will not seek to delay now and go to court later. Thus the threat.

As I watched the hearing I thought a lot about legal ethics. I teach professional responsibility or legal ethics to law students. Anderson was correct that lawyers cannot bring frivolous claims and we have an obligation not to use the legal process simply to obstruct justice. That is what is going on here. I thought also about how current Minnesota law allows an election contest almost for any reason. Ethically, lawyers should not be able to bring election contest suits unless they can show that were they to prevail in their arguments the result of the election would have gone the other way (they would have won).

The ethics problem I see here is that even if Emmer could prevail in all his legal arguments, that will not produce enough votes to change the outcome of the race. Dayton still wins. If legal ethics does not prevent bringing this type of suit, counseling a client such as Emmer (who is also a lawyer) that he should not take this type of action because it is purely vindictive should be what we ask of a client. But in the end, I recommend we amend Minnesota election law. The law should say that one does not have an automatic right to file a contest. Instead, there must be a “but for” threshold that needs to be met. By that, an attorney would have to plead that but for the legal mistakes made, the results would have been different. This should be the standard governing frivolous suits. If one cannot show the results would have been different then one should be barred from bringing the suit or judges should be allowed to dismiss on motion. This may still be a possibility for Dayton lawyers should Emmer go to court, but a statutory rule would be better here.

Economics: Obama’s Problem
Three bits of bad economic news this week. First, only 39,000 new jobs were generated for the American economy, pushing the unemployment rate to 9.8%. Second, the Financial Times pointed out this week that in the next few months 6.5 million homes will go into foreclosure. Third, The Economist pointed out that October, 2010 existing home sales dropped by 2% compared to September, and by 26% compared to October, 2009. Sale of foreclosed or distressed homes constituted 34% of all sales in October, 2010.

The US economy remains weak, despite the consumer holiday shopping rush and record profits for corporate America. With an anemic GDP growth rate in the third quarter of 2.5%, unemployment is not turning around soon. Weak employment and home sales (and continued foreclosures) suggest more aggressive measures are needed to help the economy. However, I see little coming from the Obama administration, even without the coming gridlock from a new GOP Congress.

Obama has a problem. Yes “it’s the economy, stupid,” but it is also him. He helped the banks and they are again profitable but he failed to help homeowners and jobseekers very much. Getting extended unemployment benefits is a short term fix, but does not to really help the economy, those looking for work, or those losing their homes. Obama and his economic team never seemed to get it in the first 22 months and they still seem clueless about the need to directly intervene into the mortgage markets to stabilize the economy and to take more direct action to encourage job growth. Simple tax cuts that are not targeted will not solve those problems.

The economy wrecked Bush I when he ran for re-election. This is Obama’s problem now to worry about.