James Pethokoukis

Politics and policy from inside Washington

Harry Reid in 2010

Dec 15, 2009 19:06 UTC

Stu Rothenberg on the Senate Majority Leader:

Finally, I am struck how much Senate Majority Leader Harry Reid’s (D-Nev.) ballot test numbers resemble those of former Sens. Rick Santorum (R-Pa.) and John Sununu (R-N.H.), as well as soon-to-be-former New Jersey Gov. Jon Corzine (D). All three, of course, lost re-election bids.

Since a late July GOP poll, Reid has not exceeded 43 percent in a ballot test against a potential opponent, and he has generally drawn around 41 percent of the vote against his two most likely Republican challengers. His last lead was in a late November 2008 Daily Kos poll in which he had a 46 percent to 40 percent advantage over former Rep. Jon Porter (R), who has since taken himself out of consideration.

Why the Dems keep pushing healthcare reform despite polls

Dec 15, 2009 14:22 UTC

An average of healthcare polls by Real Clear Politics shows it unpopular by a 53-38 margin. But why are the Ds still pushing hard to get it passed? Byron York analyzes the various motivations after to talking to a Dem strategist:

“In the House, the view of [California Rep. Henry] Waxman and [House Speaker Nancy] Pelosi is that we’ve waited two generations to get health care passed, and the 20 or 40 members of Congress who are going to lose their seats as a result are transitional players at best,” he said. “This is something the party has wanted since Franklin Roosevelt.” In this view, losses are just the price of doing something great and historic. (The strategist also noted that it’s easy for Waxman and Pelosi to say that, since they come from safely liberal districts.)

“At the White House, the picture is slightly different,” he continued. “Their view is, ‘We’re all in on this, totally committed, and we don’t have to run for re-election next year. There will never be a better time to do it than now.’”

“And in the Senate, they look at the most vulnerable Democrats — like [Christopher] Dodd and [Majority Leader Harry] Reid — and say those vulnerabilities will probably not change whether health care reform passes or fails. So in that view, if they pass reform, Democrats will lose the same number of seats they were going to lose before.”

Paul Ryan and the future of the GOP

Dec 14, 2009 15:19 UTC

This  commentary from  GOP thought leader Rep. Paul Ryan of Wisconsin really sets the intellectual and political framework for where the GOP might be headed.  He goes after Crony Capitalism, the melding of Big Money, Big  Business and Big Goverment. This is what’s next. Here are some important bits:

1)  Since bringing us back from the precipice however, the Troubled Asset Relief Program [TARP] has morphed into crony capitalism at its worst. … No longer concerned with preserving overall financial market stability, Treasury’s walking around money continues to be deployed to reward the market’s Goliaths while letting its Davids suffer.

2) Washington is working hard to nationalize other sectors of our economy too. The House Finance Committee is pushing a massive financial “reform” bill, effectively creating banking utility companies. The Treasury Department has effectively nationalized the housing finance sector, with Fannie Mae & Freddie Mac demonstrating how fast big businesses, through a federally blessed and backed oligopoly, can fall. Now, on both ends of Pennsylvania Avenue, health care and energy lobbyists continue to fall over themselves to cut their deals–knowing that if they aren’t at the table, they’ll be on the menu.

3) Big businesses’ frenzied political dealings are not driven by party or ideology, but rather by zero-sum thinking in which their gain must come from a competitor’s loss. Erecting barriers to competition is a key to maintaining advantage and market share. With Washington leading the way, it makes sense for the big boys to redirect their resources to their lobbying shop and government affairs office. They’re far less interested in expanding the economic pie than with making certain that they get their slice.

4) For every encroachment into the market by the federal government–under the guise of “reform”–there exist pro-market alternatives that Republicans must articulate and passionately defend. University of Chicago’s Luigi Zingales, who has written extensively on the issue of crony capitalism, reminds policymakers that the path forward requires “adopting a pro-market, rather than pro-business, approach.”


If Ryan ever regretted the vote on Medicare Part D, he must have a short memory. The difference between he and the Democrats in root philosophy in health care is zero. That is why they both put forth Health Care bills. Why? They both believe in the unconstitutional interference in health care by the government using taxes, tax credits to one group so that another benefits. Sounds like a statist to me. Does Ryan’s bill have surface differences. Sure it does. But once you allow an unconstitutional interference, it will end up growing ever larger.

To those who think that the GOP must start somewhere. How about with constitutional laws? If both parties, including Ryan, continually ignore the Constitution, in time human nature leads you to the same place. That we “must start somewhere” and “not be too picky about voting records” has been a hallmark call for the GOP for decades. Where did it get the country? What percent of of GOP in Senate and House voted for Medicare Act of 1965? Two shy of 50%. That is dangerously close to a majority. And over 40 years ago. On a bill often decried by GOP apologists as one-sided vote. When again did the GOP lose its small constitutional government compass? A Republican, incidently from Wisconsin, even helped write the Medicare 1965 bill.

from an AMA article on it see below excerpt: http://www.ama-assn.org/ama1/pub/upload/ mm/369/medicare.pdf

The Byrnes Bill
In contrast to the largely Democrat-backed King-Anderson bill, Republicans in Congress lent their general support to the Byrnes bill. “The bill was submitted by Congressman Thomas W. Byrnes of Wisconsin. Like Eldercare, it called for coverage of hospital and physician services for the aged through the purchase of private insurance. Administration, however, was to be federal. Financing was to come two-thirds from general revenues and one third from deductions on the individual pension checks of those who voluntarily chose to
participate in the program.” (Campion 274)

Posted by Wisconstitutionalist | Report as abusive

The UK banker bonus supertax

Dec 10, 2009 20:50 UTC

I don’t see this happening in the US.  I mean, the effort to raise taxes on private equity carried interest, while passing the House, is going nowhere in the Senate. And that is far less controversial and a less stupid idea. And remember how the 90 percent tax on AIG bonuses fell flat back in March.  The one caveat, as Dan Clifton notes in an earlier post,  here is that 2010 is an election year and the combo of big bonuses  and high unemployment could cause endangered Ds to play the populist card and try something

Washington and the 2010 stock market

Dec 10, 2009 16:32 UTC

Here is how economic analyst  Ed Yardeni sees things:

Could the S&P 500 rise back to its record high next year? I was in Boston on Tuesday, and met with the first money manager on Planet Earth to ask me this question. That is definitely a contrarian’s scenario. I am currently predicting a 2010 high between 1300-1350, and more specifically 1332 by March 6, which would be up 100% on a y/y basis, from the Da Vinci Code bottom of 666. Then I see a nasty correction on growing concerns that the expiration of the Bush tax cuts might depress the economy in 2011. That selloff could last until the November Congressional elections. If Gridlock wins, with the Democrats losing their majority control of one or both houses of Congress, then stocks might resume the bull market.

12 reasons the job market is worse than you think

Dec 9, 2009 20:30 UTC

The November jobs report may not be the only piece of good statistical news on the way. Wait until all those census workers start making their way into the data. But a drill down reveals deep, deep problems in the US labor market where unemployment averaged just 5.5 percent from 1989 through 2008:

1. Add in long-term discouraged workers and the unemployment rate is 22 percent. (via Shadow Government Statistics)

2. The ISM non-manufacturing employment index in November pointed to a 192,000 drop in service sector jobs vs. the increase of 58,000 the Labor Department reported. (via David Rosenberg of Gluskin Sheff)

3. On a rolling 12 month basis, individual taxes withheld have dropped by nearly percent, from $1.42 trillion to $1.31 trillion. (via  Zero hedge)

4. If not for discouraged workers leaving the workforce, the unemployment rate would have only ticked down to 10.1 percent. And that is after a surge to 10.2 percent in October from 9.8 percent in September. Sounds like a bit of reversion to the mean.

5. Single month dips are common. The unemployment rate bottomed at 3.8 percent in April 2000 and peaked at 6.3% in June 2003. During that time, the jobless rate fell five times. In the early 1990s unemployment cycle, the unemployment rate actually fell no fewer than six times. Just last July, the rate dipped by a tenth of a percent. (via David Rosenberg of Gluskin Sheff.)

6. The JOLTS survey showed that job openings fell back by 80,000 in October and new hires plunged 95,000. (via David Rosenberg of Gluskin Sheff.)

7. Both the median and average duration of unemployment hit record highs.

8. The annual survey from the ISM found that just 32% of manufacturers intend to boost their staff requirements in 2010 and a mere 15% of non-manufacturers intend to do so (vai David Rosenberg of Gluskin Sheff)

9. The Business Roundtable survey showed just 19 percent of companies intend to boost employment.

10. Payroll processor ADP, America’s largest processor of payroll information, publishes an independent survey of employment based on its own data reported a loss of 169,000 jobs. Asblogger and bond guru David Goldman notes, the correlation between the ADP and BLS is 95 percent, so the discrepency “lies at the extreme range of error for the two series.”

11. According to the Conference Board’s monthly survey of consumer confidence. those “claiming jobs are ‘hard to get’ increased to 49.8% from 49.4%, while those claiming jobs are ‘plentiful’ decreased to 3.2% from 3.5%.”

12. It is tough to top Goldman’s analysis:

The level of un- and underemployment is so huge by historical standards as to make the usual sort of measurement questionable. With nearly 20% of the population unable to find proper work, there is a different sort of workforce. The vast majority of job creation in the US during the past two generations came from small businesses, which display only vaguely on the radar of government agencies as well as the bigger private surveys. The financial crisis killed small entrepreneurs as surely as Joseph Stalin killed the kulaks, and the roots of the economy are dead and dry.


Lost Soul,HELP I have been on my job for 5yrs.On 1/08/10 I went to work as always with my smileing face,Ready to jump in and work my depts.The company is know as Freds in the big town of Quincy Fl.The sweat blood an tears i put into my job was meant for nothing.the big shots that went home to there prime rib had come an went.left the word i had been let go.IT goes deep about my app.that i filled out 11/10/2005 wow!They always love me when iwas going an doing by the way iam now 54yrs old WOW.With no job ,Taken care of my 80yr old MoM. they dont even know how hard an long i have come in my life.from long long ago of recovery due they care.please can anyone HELP! My custermers my life of 5yrs my poor mother my confussed mind.my# is 850/875-1685

The state of the union

Dec 9, 2009 18:27 UTC

It ain’t so hot, says David Rosenberg of Gluskin Sheff:

Things are so good in the U.S.A. that President Obama’s approval rating just sank to a new low for any president at this post-election juncture and Treasury Secretary Geithner is now seeking to have the $700 billion TARP extended to October. In fact, Obama wants to tap $200 billion from the program to fund a jobs initiative — let’s hope it turns out to be more effective than the last package that was supposed to cap the unemployment rate at 8%. It is rather amazing that here we are, 30 months after the onset of the credit crunch, and we see this as a headline on the front page of the FT: Obama to Boost Jobs With Bank Rescue Cash.


Why am I always being told to “continue reading” when there is nothing additional to read? If this is going to be on every post could you at least put something like “more below the fold” on each one that has more to read? That way we don’t have to click on every single link to see if we are missing anything. It makes no sense.

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Obama’s jobs plan

Dec 8, 2009 20:15 UTC

A few cents from IHS Global:

The President’s speech was short in terms of the details. He did not specify how much of the remaining resources from TARP should be dedicated to deficit reduction versus additional stimulus spending. Nor did he specify any targets for spending under the four areas that were highlighted in his speech. Effectively the President has kicked the ball into Congress’s court in order to work out the details.

The problem right now is that Congress is overwhelmed with a range of high priority legislative measures ranging from health care reform to financial regulation. How soon Congress will be able to consider new stimulus measures is really hard to say, but we would not expect a bill to be proposed until January or February of the New Year.

The bottom-line is that these measures to stimulate small business in particular are critical in order to have any hope at all of getting the job market turned around in 2010.

Congress has a short window here in order to accomplish this, but if the bill is delayed beyond the January/February window then there is little chance of this happening.

Me: I think the timing issue is critical, both from a political and economic standpoint. Timing is running out given the difficulties of passing much in an contentious election year

The TARP slush fund gets slushier

Dec 7, 2009 15:25 UTC

The New Normal may be a bummer, but it’s not life-threatening for the economy. The only systemic risk at the moment is the political prospects of Democratic incumbents on Capitol Hill. They dread standing for reelection in 2010 if the unemployment rate remains anywhere near double digits. The forthcoming jobs bill is a product of political panic. And using TARP to pay for it confirms the fears of those back in the fall of 2008 who thought the bank bailout fund would eventually become a political slush fund.

Tea Party fever! This can’t be good for the Republican brand …

Dec 7, 2009 13:52 UTC

From pollster Rasmussen:

Running under the Tea Party brand may be better in congressional races than being a Republican.

In a three-way Generic Ballot test, the latest Rasmussen Reports national telephone survey finds Democrats attracting 36% of the vote. The Tea Party candidate picks up 23%, and Republicans finish third at 18%. Another 22% are undecided.

Among voters not affiliated with either major party, the Tea Party comes out on top. Thirty-three percent (33%) prefer the Tea Party candidate, and 30% are undecided. Twenty-five percent (25%) would vote for a Democrat, and just 12% prefer the GOP.

Among Republican voters, 39% say they’d vote for the GOP candidate, but 33% favor the Tea Party option.


Mr Austria,
Re moneterism I was referring to Peth’s preferences which are heavily oriented towards supply side and Friedman worship,not yours. As for the Austrian school I was suggesting keeping its adherents as far way from actual power and contrained solely in blogs like say Mish Shedlock’s as possible. Austrian school stuff is not irrelevant but small doses preferable to the massive doses some ideologues would like.

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