November 17, 2008

To Hawthorn Friends and Family –

            Below is the latest from Steve Lombardo, sent out last Thursday.  My few comments are:

On the Nature of “Change” –

            In 2008, voters voted, first and mostly, AGAINST Geo. W. Bush, his performance and policies, with some vote against the Republican Party’s dominance for 20 out of the last 28 years and some against believed corruption/ear-marking.  The same anti-Washington/anti-past vote also doomed Hillary Clinton and John McCain.  People were voting against something they believed was terribly broken.

            Voters also voted, second and massively, FOR Barack Obama, his appeal, his spirit, his character, his promise of hope . . . but NOT his policies, certainly not super-liberal, big-government policies.  They did not vote for government by a team of White House “Czars” or the deeply polarizing congressional leadership of Nancy Pelosi and Harry Reid.  Certainly, the critically important independent voters (to whom Steve refers, below) did not vote for Obama to see a massive shift to the left.

            They wanted – and voted for – a real change.  But they wanted real compassion, real competence, and real improvement.  Polls show a majority of Americans do NOT think they’ll be better under the Democrats’ healthcare or climate change reforms . . . are unlikely to be satisfied with financial regulatory reform . . . and they KNOW they aren’t better off economically.

            It really doesn’t matter whether the bailout of Wall Street, the nationalization of General Motors, the wars in Afghanistan and Iraq, and the staggering deficits started under Bush (which they did) or have been reaffirmed by Obama (which they have).  They are part of the change Americans thought they were voting to achieve.  And, for all sorts of good reasons, those changes haven’t been – probably can’t be – realized . . . while the ear-marking and massive spending it leads to continues.

            But all the voters know is that the change they voted for isn’t happening.

            The question is whether the voters are going to believe their change mandate has been ignored . . . and clearly, deeply angered, vote overwhelmingly for further change, turning the Democrats out of power in the Congress in 2010 and the White House in 2012?  Even if the first happens – and the odds are certainly against it in the Senate and, absent a coalescing movement and charismatic leader, also in the House – a Democratic disaster in ’10 does NOT portend an Obama loss in ’12.  Reagan lost Senate (1) and House (27) seats in ’82, and handily won re-election in ’84 (58.8%), and in ’94, Clinton lost the Senate, and for the first time since ’54, the House, yet was re-elected in ’96.

“La-la Land” (a.k.a. California) -- 

            Or, “they come, they go.”

            Despite endorsement and fundraising support from former President Clinton, the Mayor of San Francisco, Gavin Newsom, pulled out of the governor’s race, a race the mayor of Los Angeles, Antonio Villaraigosa, had earlier declined to enter.  Certainly the fact that both had very public airings of their extra-marital affairs did not help matters.  That leaves the Democrat nomination to Attorney General and former Governor Jerry Brown (a.k.a. “Governor Moonbeam”).

             If that didn’t make politics interesting enough, two very impressive CEOs have entered the top two races bidding for the Republican Party’s nominations,  Carly Fiorina, formerly of Hewlett-Packard, attempting to unseat incumbent Democrat Senator Barbara Boxer (who is busy championing the climate change bill through Congress), and Meg Whitman, formerly of eBay, who is trying to reclaim the Governor’s Mansion by defeating former Governor Jerry Brown.  Neither has a “lock” on nomination, but each is the front-runner.  And neither will escape the pitfalls of the usual first-time candidate emerging from the business board room.  Much has already been made about both candidates’ failure to register and vote.

            Also, Connecticut Governor Jodi Rell also announced she wouldn’t seek a re-election she could have won.  It’s just not fun being a governor any more.

Can A Democrat Ever Be Convinced Government Can Be “Too Big” -- ?? -- 

            Yes, and this Democrat now has been.  Despite a long-held view that if it weren’t for federal action, if we had left it to the states, not only would we still have segregation, we’d still have slavery.  Even I, child of the FDR/Truman big governments and heir to the activist vision of the Kennedys, have come to accept that “too much” federal government is, well, too much.

            Sunday’s WASHINGTON POST had a front page story about how the omniscient Obama administration has concluded that the federal government now needs to take over safety regulation of local subways and commuter lines.  Admittedly, local/state governments have failed – in a few spectacular and tragic cases – to ensure safe commuting.  And I don’t want the FAA and NTSB to abandon their (competing and inept) airline safety duties to the states; I want them to improve federally. 

            But at some point the government needs to learn what the voters long ago learned:  the answer to every problem, however real, is NOT the federal government.  If city and state governments can’t ensure commuter safety, they need to be replaced – by local voters – with those who can, rather than shifting the function to the federal government.   It is one thing to let the federal government set standards and use the clout of federal transit spending to ensure state performance.  It is quite another for the federal government to begin to run state compliance agencies for states that opt out of safety monitoring or are deemed inadequate to conduct monitoring in the first place.   It is hard to believe this is a problem better solved at the federal level.

            Even a Democrat CAN learn . . . and if the Democrats in Congress and the White House don’t start learning, they’re not going to be there much longer.

John

Friends,

We re-learned something important last Tuesday: President Obama doesn’t have proprietary rights to “change.”  Change is a non-partisan electoral phenomenon, and last week the forces of change bit the Democratic hand that fed them in 2008. Change didn’t end when Obama was elected, and this anti-Washington, pro-reform sentiment will likely shape the political environment for the next several months. 

To some extent, of course, results in VA and NJ were about key segments of the electorate (such as suburban voters and white women) returning to their ideological comfort zones, but the results there were more about a general dissatisfaction with the direction of the country; that was the key driver in the defeats of two Democratic governors.

While passing some type of health care reform will almost certainly provide a boost to Democrats, we believe that the prolonged focus on health care reform—by Congress and the media—is frustrating voters who continue to be more concerned about the economy.  This is why we saw the President announce a “Jobs Summit” this morning.  Where has the White House political team been since January?  Under a rock?

A lot can—and will—happen in the next 12 months that will impact the 2010 midterms.  The generic congressional ballot, however, is one of the better predictors of future election outcomes and the trend is undeniably positive for Republicans.  Below is a regression trend going back a little over one year.  Just for fun, if we project this out to Election Day 2010 we’re looking at a GOP landslide.  That, of course, is unlikely, but it does show that Democrats should be concerned with the overall trend.

Some additional notes on the current environment, informed by last week’s exit polls:

1.       The GOP swept VA and won the Governor’s race in NJ by flipping the Obama coalition on its head.  Yes, turnout was lower (normal for off-year elections and unsurprising considering turnout for the 2008 Presidential election) but independents, suburban voters and even young voters (in VA) went for the Republicans.  Obama won VA by 7 points and NJ by 20!  These two maps really tell the story (click for the larger originals):

2.       The economy was a key driver of anti-incumbency sentiment last week and this will continue unless perceptions of economic peformance improve.  While the Dow is soaring again, unemployment has hit 10.2%.  Despite the growing talk about a recovery, it has yet to hit Main Street.  A recent Ipsos/McClatchy poll shows that only seven percent of Americans believe that the U.S. economy has “turned the corner.”  From most voter perspectives, the economy is still a mess and they are unsatisfied with the Democrats’ response.  This is confirmed by the exit polls:

·         89% of NJ voters were worried about the economy and Christie won 51% of the vote among them (Corzine 43%, Daggett 5%).

·         85% of VA voters were worried about economy and McDonnell won 63% - 36% among that group.

In short, voter attitudes regarding the direction of the country are really hurting the President and Democrats right now. 

3.       All politics is local, but the perception is that local economic woes are due to national, systemic problems.  The storyline is that the recession was the result of insufficient regulation and excessive speculation on Wall Street, and it’s clear that voters now believe that these type of things fall under the purview of the federal government.  This skepticism toward the federal government’s ability to deal with these problems was further reinforced by reactions to the stimulus.

4.       The exit polls confirm that we’re still in a “change” mindset.  Republicans also won handily among independents (66-33% in Virginia and 60% - 30% - 9% in New Jeresey).

·         Thirty-nine percent of NJ voters said “change” was the most important quality, not “honesty,” “experience,” or “values,” and “change” voters broke 67% - 26% - 7% for Christie.

·         McDonnell also won the youth vote 54% - 44%.  While this group represented just 10% of the turnout, it is a surprising result for a socially conservative Republican.

5.       The stage may be set for another wave election.  Suburban voters and white women favored both Christie and McDonnell after breaking for Obama in 2008.  These groups were key to both Clinton’s victory in 1992 and the subsequent swing back to the GOP in the 1994 midterms.   While the economy was not front-and-center at that time, the failure of a transformative liberal agenda to properly address issues sounds familiar.  Again, we must stress that we are a long way away from Election Day 2010 and this is just one scenario—if an increasingly plausible one.