James Pethokoukis

Politics and policy from inside Washington

Can the GOP still take Connecticut?

Jan 6, 2010 19:27 UTC

A 30-point gap against a popular politician is a steep hill to climb. But my great pal Larry Kudlow makes the case:

Dick Blumenthal is just as liberal-left as Dodd.

If Linda McMahon runs a tea-party/free-market/populist/no-bailout/cut-taxes-and-spending/tough-on-terrorism/pro-Gitmo campaign she can win. She has the dough. Im having dinner with her tomorrow night.

Blumenthals a nice guy, but will be an ineffective campaigner. Hell be pro-Obama and Obamacare. Hes ripe for losing.

Rob Simmons could also do it, but hes not a tea-party guy and hes a weak campaigner.

The White House got Dodd out because he was a sure loser. Theyll make him an ambassador someplace.

New poll shows Blumenthal big favorite for Dodd seat in Connecticut

Jan 6, 2010 17:39 UTC

From Public Policy Polling:

Chris Dodd’s retirement has shifted one of the Democrats’ most vulnerable seats to one of their safest. A Public Policy Polling survey conducted Monday and Tuesday, before Dodd made his announcement, finds Attorney General Richard Blumenthal with leads of 30 points or greater against all three Republican candidates.

Blumenthal leads Rob Simmons 59-28, Linda McMahon 60-28, and Peter Schiff 63-23. That’s quite a contrast from Dodd’s numbers in the same poll, which found him trailing Simmons 44-40, tied with McMahon at 43, and leading Schiff 44-37. 59% of voters in the state have a favorable opinion of Blumenthal to just 19% who view him unfavorably. He’s liked by 71% of Democrats and 60% of independents, and even a slight plurality of Republicans by a 37/35 margin.

While Blumenthal now appears to be the likely Democratic nominee, the poll results also confirm that just about any Democrat other than Dodd would have been favored to hold onto the seat. Chris Murphy was also tested in the poll and found to lead Simmons and McMahon by 7 points and Schiff by 16. Dodd’s approval rating stands at 29%, with 57% of voters in the state disapproving of him. 45% of Democrats, 24% of independents, and 7% of Republicans express support for the job he was doing.

“The Blumenthal/Dodd swap should bring a huge sigh of relief to Democrats,” said Dean Debnam, President of Public Policy Polling. “Dodd was probably going to lose this fall, while Blumenthal starts out as an overwhelming favorite.”

The impact of Dodd’s Senate departure

Jan 6, 2010 15:17 UTC

Some talking points/analysis on the  Chris Dodd retirement

  1. Makes it more likely Ds keep CT Senate seat, but also a sign of voter discontent with incumbents. Welcome to the U.S. Senate Richard Blumenthal, who says he will run.

  2. Makes it more likely that financial reform will be bipartisan, Dodd wants this to be a legacy moment for him. But the GOP may stall.

  3. I predicted Dodd would retire when he announced his support for Bernanke. (Yes!) Opposing him would have been the smarter political move.

  4. His Banking committee replacement in 2011 is likely Tim Johnson, considered friendly to the financial services industry. Hard to see a Glass Steagall repeal getting through a committee run by him.  Byron Dorgan, by the way, was a G-S guy and he is leaving, too. Sweeping financial reform happens now or never.

The campaign against Larry Summers

Jan 6, 2010 10:21 UTC

A quick exit for Larry Summers? That’s the goal of an incipient whispering campaign within segments of his own party. Detractors of the superstar White House  economic adviser blame his deficit-phobia for a skimpy stimulus and resulting jobless recovery in the United States.

Many Democrats fret that a toxic tandem of so-so economic growth and stubbornly high unemployment could cause huge losses in November’s midterm elections, perhaps even a loss of the House of Representatives. So let the Blame Game begin. In particular, an amalgam of influential liberal bloggers, New York Times columnist Paul Krugman, and even nervous White House and congressional politicos have concluded that the Obama administration erred in not pushing for a 50 percent larger stimulus plan than the $800 billion effort in early 2009 — or for a massive second dose of steroids since.

Summers has been central to those decisions. He has argued that while government can partially fill the economy’s output gap, overdoing spending — and borrowing to fund it — would spook global bond markets. Such reasoning annoys Washington liberals, as it did during the Clinton years when much of the left-wing, “Putting People First” agenda lost out to the deficit reduction advocated by Treasury Secretary Robert Rubin, Federal Reserve chairman Alan Greenspan and, yes, Summers. A near-trillion dollar stimulus plan and trillion dollar deficits apparently just aren’t enough when you have visions of coast-to-coast high-speed rail and a modern-day WPA program dancing in your head. Given the kvetching on the left, you would almost think Summers was pushing for a crash balanced budget.

It’s the same brand of deficit hawkishness liberals see at work in the healthcare reform process. (Amazingly, a $900 billion plan that will almost certainly expand the budget deficit is still too fiscally strict for these folks.) Many Dems also sniff at Summers’ past employ at hedge fund DE Shaw. Hey, what value could experience outside of academia and government possibly have, right?

But Summers is certainly right to focus on controlling government deficits. Uncle Sam has at least $10 trillion in new debt to sell over the next decade and needs to maintain investor confidence. Bond fund giant Pimco, for instance, is already cutting back on Treasuries because of the flood of new issuance.

Even dyed-in-the-wool Keynesians should also concede that government borrowing can become excessive. A stunning new study by Carmen Reinhart and Kenneth Rogoff found that when government debt-to-GDP levels rise above 90 percent in advanced economies, annual GDP growth falls by one percentage point or so. The International Monetary Fund projects that America’s debt-to-GDP ratio will reach 94 percent this year.

Summers isn’t going anywhere right now. Imagine the strange optics of axing the White House’s economic guru just when President Obama is arguing that his policies are slowly righting the ship. But should the economy dip again or November’s elections prove disastrous, there will be a political price.

And while the high-profile Summers is near the top of the list to pay it, he might not be the only one. The left, brimming with anti-Wall Street fervor, would also like the president to give Treasury Secretary Timothy Geithner his walking papers. An obvious replacement would be JP Morgan CEO Jamie Dimon.

But liberals want no part of ex-Wall Streeters or ex-Clintonites. So who would that leave to replace Summers or Geithner? Who would be on the liberal short list for an Economic Policy Dream Team besides Krugman and Biden adviser Jared Bernstein?  (Certainly no one in favor of cutting taxes.) Financial markets would probably love to know.

Of course, the real problem for the anti-Summers crowd is Barack Obama himself, the man “progressive” columnist David Corn said has already left liberals “alienated from politics today.” Obama’s instincts, along with real political and fiscal limitations, seem to consistently push him toward center-left economics. But the White House isn’t like a baseball team where it’s far easier to fire the manager than get rid of problem players.

COMMENT

Larry Summers ran over my dog!

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