Rightward Bound: Making America Conservative in the 1970s

It is perhaps premature to pronounce American conservatism dead though well it should be. The conservative movement is, however, rather moribund, bereft of any new ideas on anything of consequence from health care to energy to climate change to the economy. What does conservatism stand for in 2008 that they didn't stand for it in 1980? Maybe I am missing something for all I hear is a tired catechism of "lower taxes,""limited government,""free markets,""balanced budgets,""family values," and a "strong military" which really means "empire" in their parlance.

But this conservative agenda has run its course even if a large swath of the American public still recite its ethos for by any objective measure, American conservatism has failed. Lower taxes brought us an ever widening social gulf such that a country like Uzbekistan has more equal distribution of income than the United States. Limited government is such a laughable part of the conservative creed for at no time in American history is government as large, as pervasive or as intrusive. Free markets brought us the collapse of global financial markets drunk on derivatives with estimated liabilities of over $50 trillion dollars. In pursuit of the Conservative dream, we have run up $9 trillion in debt since 1981. The only balanced budgets during this period came under a Democrat. Republican family values is a bizarre combination of rights for the unborn, the brain dead and nuclear families. The rest of us need not apply. And the conservative version of empire is nothing more than American exceptionalism and unilateralism that we can neither afford financially nor morally.

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Chuck DeVore Launches Campaign Ad in Bid for California Senate Seat in 2010

We're two years away from it, but that is not stopping Republican hopeful Chuck DeVore from launching an attack ad on Senator Barbara Boxer in the race for the California Senate seat. The ad is a 90 second spot and thankfully Internet-only. (sorry I can't figure out how to embed video)

Mr. DeVore is currently a member of the California Assembly representing coastal Orange County in the 70th District and he is the current Republican whip in the Assembly. Due to term limits, is ineligible to run for reelection in 2010 and has thus set his sights on the US Senate. He's written a novel about a Chinese invasion of Taiwan and he worked for a time for former Congressman Christopher Cox. But in California, he is known for one issue, an unrelenting advocacy of nuclear power. He's authored four bills on nuclear power, none of which have made it out of committee. His other mantra is lower taxes.

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The End of Monetary Policy

I apologize in advance since this post isn't as tight as I'd like it but I've been dwelling on three things this evening, the President-elect's news conference on Monday in Chicago, the expected fed funds rate cut on Tuesday and some comments by Paul Krugman in Germany's Der Spiegel. So with this introduction . . .

Another reduction to the Federal Reserve's funds rate, the interest banks charge each other on overnight loans, is all but certain to be announced tomorrow. The Fed's funds rate is already near historical lows at 1.0% but most economists expect the Federal Reserve to cut the rate in half to 0.5%. Some economists are even pushing for a more aggressive three-quarters of a point reduction. Their argument is that such a cut might cushion some of the economic fallout and prevent a tailspin. Well, I think that's already too late. I think I am sanguine when I say we'll be lucky to lose only 750,000 jobs next year.

My sense is that a fed rate cut is spit in the ocean. Not that I am against the rate cut, it should be cut, but rather that the cut in and of itself isn't likely to spur the American economy much less the global economy. The bitter truth is that we have reached the end of monetary policy as an instrument. To spur the economy, we really waiting on President Obama's fiscal stimulus. Only a Keynesian style investment program is likely to soften the edges of the economic downturn.

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US Election Turnout -- 61.6% of the Nation's Eligible Voters

The states have finished their tallies and have certified their results. It becomes official tomorrow when the Electoral College meets to elect Barack Obama the 44th President of the United States. All told, the number of voters increased 7.4% in the United States in the 2008 Presidential election over 2004. More than 131 million people voted this time around, the most ever for a Presidential election, compared to a little more than the 122 million who voted in 2004. Overall, 61.6% of the nation's eligible voters turned out to cast their ballots. That's the highest turnout rate since 1968, when Republican Richard M. Nixon defeated Democrat Hubert Humphrey and native son George Wallace. Four years ago in the Bush-Kerry race, 60.1% of those eligible voted.

As a measure of comparison, the electoral turnout rate in Spain's March Parliamentary elections (9-M) was just under 75% (though only 53% voted in the Basque Country) and 59.1% in Canada's recent election. In Canada, the highest voter turnout was in Prince Edward Island, where 69.5% of registered voters cast ballots. The lowest turnout in Canada was in Newfoundland and Labrador, where just 48.1% of registered voters took part.

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The Combative Harry Reid

I must admit I love the combative Harry Reid. Wish he were more like this:

"By rejecting every good-faith bipartisan compromise -- including those from the White House and Senator Bob Corker -- it is now abundantly clear that Republicans have no interest in keeping the Big Three from collapsing.... Republicans may think that rejecting this legislation sent a message to the auto industry. Instead, they sent a message to every single American that they are more interested in settling scores than solving problems." -- Senator Harry Reid

It's plainly evident that the Republicans are not interested in solving problems but it's not clear to me at least what scores did the GOP settle today? If anything, I would hope that the American public will look at each other tonight and ask who are these clowns? How out of touch can they be?

Let's hope that today marks the day the GOP signed its own death warrant. Certainly any hopes of winning a mid-western state any time in the foreseeable future went out the window today.

An open thread.

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Planning -- A Conservative Dirty Word

Usually, they will put central in front of it for full force. Central planning is the latest conservative epithet in the wake of President-elect Obama's bold and sweeping proposals for revitalizing the increasingly moribund American economy. Here's Robert Tracinski, the editor of The Intellectual Activist:

The real story of the bailout of the Detroit auto industry is not simply the waste of taxpayers' money on failing enterprises. Rather, the real news is Congress's apparent confidence that the way to revive Detroit is to impose central planning on the auto industry. This would be done by appointing a "car czar" empowered to "act as a kind of trustee with authority to bring together labor, management, creditors and parts suppliers to negotiate a restructuring plan. He or she also would be able to review any transaction or contract valued at more than $25 million."

The term "car czar" is not quite right. As a metaphorical description of the bailout, it evokes the right location--Russia--but the wrong era. "Car commissar" would be much more exact. Perhaps he will begin his work by issuing a five-year plan for the revival of the Big Three.

After all, it's Frei Marktwirtschaft Uber Alles. The free market will provide an answer. How bankrupt is this line of thinking? Not as much as it should be. The nation and the health of the American economy is being held hostage by recalcitrant elements of the Republican party who in pursuit of some perverse ideological point about "free markets" and "limited government" seem willing to let an industry that directly employs a quarter of a million Americans and indirectly contributes to perhaps another five million jobs collapse. It is as if they want the country to fail. The truth is they want government to fail but are they are willing to let country fail to achieve such.

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The Balance Sheet Recession

In its 4Q08 report released today, the UCLA Anderson Forecast for 2009 is rather grim reading. Widely respected, the UCLA Anderson Forecast predicts that the current recession affecting the US economy will last at least four quarters of negative growth followed by very low growth rates of well under 3% with rising unemployment rates that last through 2010. The UCLA Anderson Forecast unit expects real GDP to shrink by 4.1% in this the final quarter of 2008 and by another 3.4% and 0.8% in the first and second quarters of next year, respectively, as consumer and business spending weaken and as the foreign trade that had propped up growth much of this year sags. Indeed, the trade deficit widened today as exports fell sharply. The unemployment rate, according to the report, is forecast to rise from October 2008's 6.5% to 8.5% by 4Q09/1Q10. Put into meaningful numbers, that's a loss of two million jobs over the next 12 months.

"Because Europe and Japan are already in recession and China and India are suffering from a significant slowdown in growth, the export boom of the past few years will wane," the report said. "Make no mistake the global economy is in its first synchronized recession since the early 1990s."

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Obama Begins to Fill His Energy, Environmental and Natural Resources Team

The New York Times is reporting that President-elect Obama will name Nobel Prize winning physicist Dr. Steven Chu as Secretary of Energy. Dr. Chu is currently Professor of Physics and Molecular and Cellular Biology of University of California, Berkeley and the director of the Lawrence Berkeley National Laboratory. He won the Nobel Prize in Physics in 1997 then as a Professor of Physics and Applied Physics at Stanford University for his research in laser cooling and trapping of atoms.  At Stanford, Dr. Chu spearheaded the Bio-X program bringing together scientists from physics, chemistry, biology and engineering backgrounds to work on complex issues such as climate change and alternative energy development. As director of the Lawrence Berkeley National Laboratory, Dr. Chu was instrumental in forging a research pact reached between UC Berkeley, oil industry giant BP, the Lawrence Berkeley Lab and the University of Illinois to develop technologies to reverse climate change. Under Dr. Chu, Lawrence Berkeley Lab has also been conducting research into bio-fuels and solar technologies.

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"The Future Is Cao"

Less than 24 hours after his upset defeat of a longtime Democratic congressman from New Orleans, Anh "Joseph" Cao found the weight of the entire Republican Party resting on his diminutive shoulders.

The chairman of the Republican National Committee said Cao's election Saturday night showed that, even battered and bruised from political drubbings in the past two years, Republicans "still know how to win elections." House Minority Leader John A. Boehner (R-Ohio) was more blunt, issuing a memo Sunday declaring: "The future is Cao."

Well it might have helped that Anh "Joseph" Cao ran against a political corpse, indicted Congressman William J. Jefferson down in the Louisiana 04. It's not much different than up in Alaska where Mark Begich bested convicted felon Senator Ted Stevens. Still for the GOP, Anh Joseph Cao, the first Vietnamese-American elected to the US Congress, is a bright hope even if the GOP establishment didn't offer him much support for his historic run.

Yet just three weeks ago, no one in the GOP establishment had even heard of Cao. They didn't know his improbable story of triumph -- how he fled war-torn Vietnam after the fall of Saigon as an 8-year-old refugee jammed into a helicopter. Now they've seized on his rags-to-political riches story, along with the victory last week of Sen. Saxby Chambliss in a special election in Georgia, as rare pieces of good news after the dismal November elections.

Vietnamese-Americans have long supported the GOP for reasons not unlike those of the Cuban-American community, a hatred of a communist system that they feel stole their country from them. Every April, here in San Francisco, Vietnamese-Americans will gather to commemorate the fall of Saigon. Every year, that crowd gets thinner and decidedly older.

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The Winners from the Bush Years - The Top 0.1% of Americans

When all is said and done, the Bush legacy is a widening income disparity. Not that this should be a surprise, after all, George W. Bush boasted at a fund-raiser in 2000 of the nation's high and mighty that what he saw there that night dinner was the "haves" and the "have-mores". That top 1% should be quite appreciative. The rest of us, not so much.

Bush's top economic priority was to cut taxes on the supra-wealthy; as he famously said at that dinner, the "have-mores" are his political base. The marginal income-tax rate, the estate tax, the tax on dividends, and the proceeds of the profits tax all fell sharply in his first term. The result is below. The table shows average income gains, adjusted for inflation, from 2002 through 2006.

Income GroupDollar IncreasePercentage Increase
Bottom 90 Percent$1,446 4.6%
Next 9 Percent$14,496 10.0%
Top 1 Percent$321,132 41.8%
Top 0.1 Percent$1,809,824 57.6%
Source: Washington Monthly

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