A Commentary By Michael Barone

Republished with permission of Rasmussen Reports
http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_michael_barone/obama_s_state_capitalism_a_failure_of_modesty

Thursday, August 12, 2010

“The pace of economic recovery is likely to be more modest in the near term than had been anticipated.” Those were the carefully chosen words of the Federal Reserve Board after its meeting Tuesday. Translation into English: We wuz wrong.

So were a lot of people, including departing White House economics adviser Christina Romer, who wrote that the Obama Democrats’ February 2009 stimulus package would hold unemployment below 8 percent.

It wasn’t just administration spokesmen who expected a solid recovery.

California economist Bill Watkins in newgeography.com recalls a conference last fall in which all the other economists presented rosy scenarios and only he forecast extended malaise. He was relieved that his colleagues didn’t pelt him with tomatoes.

It’s easy for Republicans to make partisan hay of all this. They can point out, as Bush administration economist Larry Lindsey does in the Weekly Standard, that the congressional Democrats’ stimulus package was not the timely, targeted and temporary measure recommended by national economic director Larry Summers.

They can add that the threat of pending regulations interpreting the health care and financial regulation bills and of pending tax increases as the Bush cuts expire have created a climate of uncertainty in which consumers don’t consume, banks don’t lend and businesses don’t create jobs.

All true. But in this summer of unrecovery, it’s still important to understand how so many smart people got so much so wrong.

One answer comes from economist Arnold Kling writing for american.com. Kling argues that the collapse of the housing market and the financial crisis disrupted what had been “a sustainable pattern of specialization and trade” and that we need to let the market economy develop a new one.

Instead, the policies of the Obama Democrats have been aimed at propping up the old order — holding up housing prices and the mortgage market, keeping the Detroit auto companies in place, maintaining the lush standard of living of public employee union members (the purpose of the $26 billion the House was summoned back to Washington to approve Tuesday).

Maintaining unsustainable patterns of production, Kling writes, prevents the trial-and-error process of private investment that creates new jobs and patterns of production that will be sustainable.

Across the Atlantic, Marc De Vos, director of the Itinera Institute, a Brussels think tank, advances similar arguments in his book “After the Meltdown.”

The financial crisis, he argues, has brought a revival of “state capitalism,” in which governments “have an increased and distorting role in economics.”

The state should be the partner of the market, not the owner or manipulator of the market,” he writes. “Governments should not pick economic winners and losers. The state may be back, but the politicians should be modest.”

Modesty, unfortunately, is not the dominant character trait of a president who predicted that his election would be seen as “the moment when the rise of the oceans began to slow and our planet began to heal.”

But facts are stubborn things. The fact that the private sector economy has not responded as administration economists expected and confidently predicted should be a wake-up call.

It shows the limits of expert knowledge and the ability of political actors to make optimal economic choices.

The intellectual firepower of this administration may be high. But so was the intellectual firepower of the postwar British Labour governments that nationalized steel, auto companies and the railroads.

That didn’t turn out so well, and for decades, the British economy lagged behind those of America and its European neighbors. State capitalism has been tried before. It didn’t work.

Market capitalism works better because it doesn’t depend on one set of actors to make all the choices. Entrepreneurs with a vision for the future can take their chances, and most may fail. But some will turn out to be Bill Gates or Steve Jobs, who change our world in ways that 99 percent of economic experts were unable to predict.

In the meantime, American voters seem prepared to return a negative verdict on the Obama Democrats’ version of state capitalism. Bailout favoritism and crony capitalism, it turns out, are not vote-winners.

The open question is whether Republicans will present and advance public policies that leave the way open for market capitalism to find its way to a new sustainable pattern of production, as it has done before. Let’s hope for that kind of change.

Michael Barone is senior political analyst for The Washington Examiner.
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Views expressed in this column are those of the author, not those of Rasmussen Reports.

Rasmussen Reports is an electronic media company specializing in the collection, publication and distribution of public opinion polling information. We poll on a variety of topics in the fields of politics, business and lifestyle, updating our site’s content on a news cycle throughout the day, everyday. Scott Rasmussen, president of Rasmussen Reports, has been an independent pollster for more than a decade.

Disclaimer:
The Views and Opinions Expressed by the author are his or her opinions only and do not necessarily reflect those of Crown Equity Holdings Inc. or its agents, affiliates, officers, directors, staff, or contractors. The author at the time of this article did not own any shares or receive any consideration financial or otherwise from any company mentioned or referred to in the article.

A Commentary By Michael Barone

Republished with permission of Rasmussen Reports
http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_michael_barone/house_democrats_head_for_a_thumping_at_the_polls

Thursday, July 29, 2010

Democratic spin doctors have set out how their side is going to hold onto a majority in the House. They’ll capture four at-risk Republican seats, hold half of the next 30 or so Democratic at-risk seats, and avoid significant losses on target seats lower on the list.

That’s one plausible scenario. The shift of opinion away from Democrats so evident in the polls could turn out to be illusory. The widely held assumption that Republicans will turn out in greater numbers than Democrats could prove wrong.

Democratic candidates do indeed have a money advantage in many close races, and their campaign committee has more cash than its Republican counterpart.

All that said, this Democratic spin sounds a lot like the Republican spin back in the 2006 cycle. If the numbers don’t change too much from 2004, Republicans said then, we can hold on. If the numbers don’t change too much from 2008, Democrats think now, they can hold on.

But the Republicans, as George W. Bush said, took “a thumping” in 2006. And most signs suggest Democrats will take a thumping this year, too.

To see why, take a look at the generic ballot question: Which party’s candidate will you vote for in elections to the House? The current realclearpolitics.com average shows Republicans ahead by 45 percent to 41 percent. Ten of this month’s 15 opinion polls asking the question had Republicans ahead; Democrats led in four (twice by 1 percent), and one poll showed a tie.

Keep in mind that the generic ballot question historically has tended to under-predict Republican performance in off-year elections. Gallup has been asking the question since 1950 and has shown Republicans leading only in two cycles, 1994 and 2002, and then by less than the 7 and 5 points by which they won the popular vote for the House in those years.

So the Republicans’ current lead in the generic ballot question suggests they may be on the brink of doing better than in any election since 1946, when they won a 245-188 margin in the House — larger than any they’ve held ever since.

Another metric is daunting for Democrats. Polls in House races almost always show incumbents ahead of challengers, because incumbent members of Congress are usually much better known than their opponents. An incumbent running below 50 percent is considered potentially in trouble; an incumbent running behind a challenger is considered in deep doo-doo.

In 1994, I wrote an article in U.S. News & World Report arguing that there was a serious chance that Republicans could capture the 40 seats that they needed then, as now, for a majority in the House. It was the first mainstream media piece suggesting that, and it appeared on the newsstands on July 11.

I cited as evidence five polls showing incumbent Democratic congressmen trailing Republican challengers. None of those Democrats had scandal problems; all five lost in November.
Today, a lot more Democratic incumbents seem to be trailing Republican challengers in polls. Jim Geraghty of National Review Online has compiled a list of 13 Democratic incumbents trailing in polls released over the last seven weeks.

They’re from all over the country: one each from Arizona, Arkansas, Illinois, Mississippi, New Mexico, North Dakota, Ohio, South Dakota; two from Virginia; three from Pennsylvania. Most if not all of these incumbents are personally attractive, hardworking and ethically unsullied.

Some of these poll numbers are mind-boggling. Tom Perriello, a 727-vote winner in Virginia 5 in 2008, has been running two weeks of humorous ads showing what a hard worker he is. A poll shows him trailing Republican state Sen. Robert Hurt 58 percent to 35 percent.
In industrial Ohio 13, which Barack Obama carried 57 to 42, a poll shows incumbent Betty Sutton trailing free-spending Republican Tom Ganley 44 percent to 31 percent.

As Geraghty notes, we haven’t seen polls released by many other Democrats on Republican target lists. Most are conducting polls; many have reason to release favorable results if they’re available.

This looks like a case where the absence of evidence is evidence of absence.

Two years ago, Barack Obama was elected president with a historic 53 percent of the vote — more than any other Democrat in history except Andrew Jackson, Franklin Roosevelt and Lyndon Johnson.
These metrics — the generic ballot results and polls in individual districts — suggest that House Democrats are headed toward historic losses. Quite a swing in 18 months.

Michael Barone is senior political analyst for The Washington Examiner.
COPYRIGHT 2010 THE WASHINGTON EXAMINER

DISTRIBUTED BY CREATORS SYNDICATE INC.

Rasmussen Reports is an electronic media company specializing in the collection, publication and distribution of public opinion polling information. Scott Rasmussen, president of Rasmussen Reports, has been an independent pollster for more than a decade.

The Views and Opinions Expressed by the author are his or her opinions only and do not necessarily reflect those of this Web-Site or its agents, affiliates, officers, directors, staff, or contractors. The author at the time of this article did not own any shares or receive any consideration financial or otherwise from any company or person mentioned or referred to in the article.

A Commentary By Michael Barone

Republished with permission of Rasmussen Reports
http://www.rasmussenreports.com/public_content/political_commentary/commentary_by_michael_barone/rising_speculation_about_bombing_iran_s_nukes

Thursday, July 22, 2010

Many years ago, I was privileged to attend a dinner with James Rowe, one of the “passion for anonymity” young aides to Franklin Roosevelt, original author of the winning strategy for Harry Truman’s 1948 campaign and close confidante of then-President Lyndon Johnson.

Rowe described how Johnson tested insider opinion. He would call an ideologically wide range of acquaintances and ask their views on an issue of the day. Most responded as he expected. But when one or two said something he hadn’t expected, he would take notice. Maybe things weren’t going as he thought.

That memory returned as I read three recent articles saying there’s an increasing chance that the United States — or Israel — might well bomb Iran’s nuclear facilities. One was by Time’s Joe Klein, who has been a harsh critic of George W. Bush’s military policies and a skeptic about action against Iran. The other was by self-described centrist Walter Russell Mead in his ever-fascinating American Interest blog.

Former CIA agent Reuel Marc Gerecht in The Weekly Standard argues cogently that an Israeli strike on Iran’s nuclear facilities would not lead to all the negative consequences widely feared and could shatter the mullah regime. This is not out of line with his views over the years.

Gerecht assumes that the United States will not launch an attack. Klein, contrary to his past views, disagrees. He cites American diplomats who feel that Iran’s spurning of a reasonable deal justifies military action and American military officers who say they know more about potential targets than they did two years ago. Also, he says the Gulf Arab states favor a strike, as evidenced by the United Arab Emirates ambassador’s July 6 statement saying that it would be preferable to a nuclear Iran.

Klein thinks Barack Obama is still dead-set against bombing Iran. Mead is not so sure. He thinks Obama is motivated by a Wilsonian desire for “the construction of a liberal and orderly world.” Or “the European Union built up to a global scale.” A successful Iranian nuclear program, in Mead’s view, would be “the complete, utter and historic destruction” of Obama’s long-term goals of a non-nuclear world and a cooperative international order.

This may sound far-fetched. But recall that Woodrow Wilson was re-elected in 1916 on the slogan “he kept us out of war.” Then, in 1917, he went to war and quickly built the most stringent wartime state — with private businesses nationalized and political dissenters jailed — in modern American history. A Wilsonian desire for international order is not inconsistent with aggressive military action. Sometimes the two are compatible.

It would be ironic if the professorial Barack Obama launches a military attack when his supposedly cowboy predecessor George W. Bush declined to do so. I remember attending meetings of conservative columnists with Bush in which his words and body language convinced me he would not order the bombing of Iran.

Others were not so sure. The December 2007 National Intelligence Estimate was clearly a bureaucratic attempt to prevent Bush from attacking in his last 13 months in office. It declared on its first page that “in fall 2003 Tehran halted its nuclear weapons program,” while conceding in a footnote that “uranium conversion and enrichment,” the most difficult part of a nuclear bomb project, was continuing.

The fact is that Iran has been at war with the United States since 1979, when it seized and held our diplomats for 444 days — an act of war under settled principles of international law. Few in the United States then wanted to regard it as such (though Sen. Pat Moynihan said we should “bring fire and brimstone to the gates of Tehran”).

Later the mullah regime sponsored the 1983 attack on our Marine Corps barracks in Lebanon and attacks on our soldiers in Iraq — more acts of war. Six presidents have chosen not to retaliate for reasons of prudence that have much to commend them. War with Iran would be a terrible thing. But one can also believe, as the UAE ambassador incautiously said, a nuclear-armed Iran would be even worse.

Joe Klein may be right that “this low-level saber-rattling” he describes may be “simply a message that the U.S. is trying to send the Iranians: It’s time to deal.” Walter Russell Mead may be right in saying “there’s a possibility that (Obama) will flinch.” But I take it seriously when these two non-hawks say Obama might bomb Iran. LBJ would have taken it seriously, too.

Michael Barone is senior political analyst for The Washington Examiner.
COPYRIGHT 2010 THE WASHINGTON EXAMINER

Disclaimer:
The Views and Opinions Expressed by the author are his or her opinions only and do not necessarily reflect those of Crown Equity Holdings or its agents, affiliates, officers, directors, staff, or contractors. The author at the time of this article did not own any shares or receive any consideration financial or otherwise from any company mentioned or referred to in the article.