After an often-turbulent, 14-year relationship, the American people broke up with the Republican Party last month, sending a clear message that they had found new suitors in a Democratic President and Congress. Today, and for the next year, the GOP must face a touch choice. Does the party stick around and fight for a love lost, or step back, evaluate what went wrong adopting the classic "it's not you, it's me," strategy to assure the party's long-term viability?
With the events that have unfolded since Republicans were swept out of Washington, it would be tempting to stick around for a fight. The Right's favorite punching bags - the Clintons and their minions are back as part of the Obama Cabinet. Juicy corruption charges are engulfing politicians in the President-elect's home state of Illinois. Congress is on the verge of an historic heist of the taxpayer's treasure.
With so many opportunities, the temptation to score political points today must be unbearable. But for the sake of the Grand Old Party, we must resist.
After winning the hearts and minds of the progressive wing of the Democratic Party during the primaries, President-elect Barack Obama ran in the general election as a blank slate, upon which Americans could pin their hopes and dream that he could change the country to the America they desired. Only after the election when he had to start thinking of governing did Obama shifted to the center of the political spectrum.
Already, there are rumblings from Obama's early supporters that President-elect Obama is not the same man as Candidate Obama. Congressman Barney Frank is already chiding the President-elect for a pledge to be a "post-Partisan" President along the lines of California Governor Arnold Schwarzenegger or New York Mayor Michael Bloomberg. And Progressive Democrats have created a political action committee to hold members of Congress accountable in 2010 for their votes in the first two years of the Obama Administration.
Given enough time to govern, the Democratic Party will tear itself apart or, at the least, offend the very people who brought them to power. In two or four year's time, the American public's flirtation with one-party rule from the left could be turned into just another "rebound" relationship where, as often in romance, bad judgement trumps common sense.
There is a natural reaction, of course, to rally around the GOP flag. Bring up Bill Clinton's sex-capades, try too hard to link Barack Obama to the auctioneering of his Senate seat, or appear too obstructionist on attempts to fix the American economy. With those "tough love" propositions, Republicans will bring Democrats - and the American public - closer together, not tear them apart. Given enough time - and opportunity - the party's internal divisions will easily boil over.
In order to facilitate the self-destruction of Democratic dominance, Republicans must sit down and shut up for awhile. So for now, it is best that the Grand Old Party take not just forty days and forty nights, but forty weeks in the wilderness. Give the Democratic Party time to bicker, then fight, then tear itself apart.
Step back, and look at how America has changed and how our party must change in order to win it back voters affection, respect and regard.
In both the first and final ads for the Yes on 8 campaign - supporting a Constitutional Amendment to eliminate the right of same-sex couples to marry in California - proponents argued that the people, not San Francisco-based judges, should be the final arbiters of the matter.
Today, in a stroke of irony, the Yes on 8 campaign lawyers are asking the California Supreme Court to decide the referendum's fate, after prevailing by a narrow margin on November 4th. And it doesn't sound as though the battle between the courts and the voters will end on the day that the California Supreme Court makes its ruling.
More surprising, given the threats to recall any judges who disagree on the constitutionality of Proposition 8, it's clear the religious right would rather undo decades of work to build a conservative judiciary than allow two loving people to get married.
At issue before the courts is a fundamental Constitutional question: Who has the power to determine the rights of a minority? Is that for the courts to decide or for the voters? And did Proposition 8 attempt to over-rule the courts or change the state's constitution. The legal tests to determine it success rest on this very specific point of law.
Proposition 8 seems discreet, adding just fourteen words to the California constitution and dealing with just one subject. But a question about the intent of the amendment - and it's actual legal status - remains unresolved. Does Proposition 8 take away a power from the Courts and give it to the electorate? If it did, well, we have a interesting set of circumstances.
On statutory questions, the courts clearly are the final arbiters. That was made clear in several decisions including the overturning of Proposition 187, the 1994 initiative which denied state benefits to illegal immigrants, and Proposition 22, the 2000 initiative statute to limit marriage to heterosexual couples. On the issue of protecting minority rights, the people of the state of California can - and do - make those decisions. And the courts can undo them.
That decision as to where Proposition 8 legally stands now rests in the hands of the California Supreme Court. Unlike federal courts, these judges are subject to election and the specter of a recall vote if the people disagree with their actions. Proposition 8's proponents already tried to blackmail businesses who opposed their constitutional amendment, and now they're trying to blackmail the State's highest court, which is despicable.
Proponents of Proposition 8 are already threatening a recall of any judge who votes to overturn the measure. California Republican Party Vice Chairman Jon Fleishman argues that "proponents of Proposition 8 do have a "nuclear option" in their arsenal. That option is the recall or non-reconfirmation of members of the California Supreme Court, if they refuse to uphold Proposition 8. It has happened before, and the issue was the California death penalty."
While claiming that, "The court should have a chance to do the right thing," Proposition 8 attorney Andrew Pugno also threatens that, "no one would be able to stop," a recall vote on the judges.
Republicans should be wary of taking the nuclear option out against Republican judges who were appointed by Republican Governors.
Should any member of the California Supreme Court be removed from the bench now or in 2010, their successor will be appointed by centrist Governor Arnold Schwarzenegger, or even worse, a newly-elected Governor Jerry Brown, Antonio Villaraigosa or Gavin Newsom and face confirmation by a hyper-partisan, Democratic-controlled State Senate. Years of work to give the state a responsible conservative judiciary will be wasted.
So I ask my fellow Republicans: Is gay marriage worth giving up decades of struggle to control the State courts? Even if these judges lost their jobs, do you think a Schwarzenegger- or Brown-appointed replacement would overturn their decision?
To win the White House, President-elect Barack Obama seized on two simple words that summed up what he meant to voters and the world: "change" and "hope".
Obama would signal a change from a Bush Administration which had squandered the goodwill of the world and the American public over the last six years, and he became the embodiment of the hopes of a nation - and the world.
And therein lies the greatest danger for an Obama presidency. He may well be giving people false hope.
In Barack Obama, the auto-worker in Michigan saw the revival of an ailing industry.
In New York, Barack Obama represented the possibility of a more stable financial system.
In small towns like Wasilla, Alaska, Barack Obama represented the hope that maybe their boys won't have to go on yet another tour in Iraq.
In Barack Obama, a gay Californian saw an insurance policy for equality should Proposition 8 pass, as it did, eliminating the right to marry for same-sex couples.
In Barack Obama, the French radio reporter saw the possibility that the United States join international institutions such as Kyoto, international courts of justice, accords on human rights and education, and a Sarkozy-led Bretton-Woods for the 21st-Century.
Can Obama be everything to everybody who placed their hope for a better future in the change he would bring? I am afraid not.
It is nearly impossible to get more than 50% of Americans to agree on anything unless they are faced with a zero-sum choice. Indeed many of the 52% of American voters who supported Obama have a different idea of what "change" means than the President-elect does.
Already, Obama voters are taking the blame in California for the elimination of the right to marry for same-sex couples on the same day that California extended a litany of rights to farm animals. I am pretty sure that is not the kind of change in which gay and lesbian Americans believed.
In Europe, Obama's visage already graces more newsstand covers than any other politician or celebrity. In one man are embodied the hopes and aspirations of the French, the British, the Kenyans; just about everyone around the globe, according to an Economist poll.
Barack Obama will have a friendly Democratically controlled Congress to work with and should be able to advance most of his agenda - whatever that was. His greatest risk is that in order to advance an Obama Agenda, he will have to accept a Pelosi Agenda. That's sure to pull the president-elect further to the left than the change agent candidate, who built a coalition of everyday Americans, not partisan liberal extremists, would like.
In fact, Obama is already trying to lower expectations. In his victory speech on Nov. 4, he said that change may not happen "in one year, or even in one term." It's as if he expects to fail at being everything to everyman as he promised during the campaign.
Obama should look at his predecessor as a cautionary tale. After September 11th, George Bush had an approval rating even higher than Barack Obama does today. He was our leader as the nation was under attack and he garnered international support for his actions. But Bush was unable to reconcile the agendas of the 90-percent of Americans who approved of his job performance and the coalition of nations who supported us after the attacks.
I wish President Obama well. I hope to heck that he can make everybody as happy as he's led them to believe he will. One of the greatest pain inflicted on anyone is the scorn of having their false hope shattered.
If we learned anything from the late 1990's, it should have been this: bubbles burst. What goes up explosively, must come down, in a similar manner.
The tech bubble that led to happy memories of the Clinton Administration came apart suddenly, sending the Dow Jones Industrial Average down 40 percent and the NASDAQ down 60 percent in just one year. But those good times were so good that we forgot what happened next.
I don't know if it is true or not, but Amsterdammers like to tell a story about the tulip craze. At the height of the tulip bubble, a bulb could fetch as much in the open market as a canal house on the Prinzengracht.
America has had its fair share of tulips in the last decade - the Internet, housing, corn, food, and oil - and each has risen precipitously, made a handful of speculators rich, until the bubble burst spectacularly. The common man usually only made it into the ponzi-scheme just before the bubble burst, leading them to buy high, sell low.
Lately, the stock market has reminded me of the main character from the movie, Terminator. We have developed stock trading machines that are so intelligent that they are out of our control. Last Friday, followers of the Dow Jones Industrial Average must have suffered whiplash as the market swung back and forth in a range of more than ten percent - sometimes rising or falling hundreds of points during a commercial break on CNBC.
The machines - computers, really, programmed to get the most out of every trade - told us Friday that an 8000-point Dow was the bottom, and the machines tested that bottom twice, only to have immediate surges of 600-points or more.
With this odd scenario in mind, it seems readily apparent that the new bubble in the American economy is the DOG bubble. That would be the Dow Jones Short Exchange Traded Fund. Woof.
Which would mean that speculators were betting on a reverse bubble. They were profiting off the Dow's fall. What's more, they'll continue to do so. As with most bubbles, there are corrections along the way. Were Monday's record gains just a correction or a sign that even the DOG bubble has burst? Only time will tell.
In the world of media, the "Feiler Faster Thesis" says that as society gets faster, the media cycle - our awareness and interest in a story or event - shortens. Once, when we relied on paper, news story may have had legs of several days; today, on the web, most stories last less than twenty-four hours. By the time a weekly or biweekly publication prints any "news" most readers have seen or heard the stories already.
Which raise a question: Is the Feiler Faster Thesis is spilling over into the markets? Bubbles used to last years; long enough for everyone to adopt the conventional wisdom that the price of a good - stock, tulip bulbs, houses, oil - would never change course. The last series of bubbles seem to have lasted but months each. And, of course, we are only weeks into the DOG bubble. It could be gone by the time you read this.
If we are lucky, the markets will find something new to fall in love with, other than the mass destruction of wealth through selling our markets short. Perhaps it will be gold, or maybe the Swiss Franc, but by the time the average person becomes aware of it, I'd suggest it will also be time to go against the grain and bet that the next bubble will burst as well.
Woof. Woof.
After the presidential race, the most closely-watched election in America is Proposition 8, the California Constitutional Amendment which would eliminate the right to marry for same-sex couples. For the gay and lesbian community, the lap-dogs of the Democratic Party for decades, the debate over how to direct its limited resources is about to come to a head.
A few weeks ago, it became clear that for the first time, Proposition 8 had a genuine chance of passing in November when we learned the measure's proponents had raised $25 million to the opponents' $15 million. But that same day, the Barack Obama for President Campaign announced a $5000-per-plate fundraiser with Joe Biden in the heart of West Hollywood. It's set for this week.
Immediately conversation at the debate-watching parties switched from conversation about the dullest presidential debate in memory to a new, hotter topic: What should be more important to gay Americans, electing Democrat Obama or defeating Proposition 8?
I, for one, was shocked to even hear there was a debate. The Religious Right, and especially the Mormon church, decided long ago that buying the election in California and defeating Prop. 8 was more important than sending John McCain and Sarah Palin to the White House. They've put their money where their mouths are.
But in gay enclaves like West Hollywood, the answer for many gay and lesbian Americans isn't so clear. The reaction to Biden's visit has fallen into two camps: those who argue that Obama will do more good for gay and lesbian equality if he is elected, and those who want to say, "Please, Joe, Don't Go!"
By scheduling a big-ticket fundraiser in the heart of the Golden State just week's before the election, the Obama campaign has turned the debate over civil rights for gays and lesbians into a zero-sum game. Should the $5,000 contributions be going out-of-state to elect Barack Obama? Or should they be going to buy television ads to protect the freedom to marry?
Sending Biden to West Hollywood in the heat of the battle over Proposition 8 is either a tone deaf decision or a stroke of genius. Either way, it's a signal that Democrats thoroughly understand the political aspirations of America's gay and lesbian community - and are going to take full and complete advantage of their long-time supporters.
In her debate with Biden, Republican Governor Sarah Palin adopted Barack Obama's position of supporting hospital visitation rights. Contrast that to Biden's saying he was opposed to marriage equality for same-sex couples, and that he believed that domestic partnerships can be constitutionally equal. By contrast, those like me who oppose Proposition 8 and are working actively to defeat it, are making the argument that marriage does matter - socially and in the eyes of the law.
The choice for gay and lesbian Californians should be clear. Do they want to remain full citizens of California with full equality under the law, or would they prefer to elect a Democrat to the White House who promises little more than what some communities have been offering for more than two decades, the right to "register" their partnerships at city hall?
To anyone thinking of writing that $5,000 check without doubling or tripling the amount to stand up for their own rights first, I have one comment: "Say it Ain't So!"
Can California being seeing a repeat of electoral history with this year's ballot measure on same-sex marriage?
Back in 1982, when Los Angeles Mayor Tom Bradley was running for governor, California voters told pollsters that they intended to vote for the African American candidate, but on election day, they pulled their levers for his opponent, George Duekmejian. With the chance to vote for Barack Obama the "Bradley Effect" is back on the political radar.
This year, we may well see the "Ru Paul effect." She's the drag queen everyone loves from a distance but might not want as a next door neighbor.
Campaign consultants, including myself, on both sides of California's Proposition 8 - the initiative which would eliminate the right to marry for same-sex couples - are facing a similar gap between how people say they'll vote and what they'll actually do on election day.
Following the release of last week's Field Poll, which showed Proposition 8 losing by seventeen points, Yes on 8 campaign manager Frank Shubert spun the results this way, "Recent polls published by California media outlets claim that Proposition 8, restoring marriage in California as between a man and a woman, is trailing among voters. These polls, including the Field Poll released this week, suffer from the same historic problem that other polls on this subject around the country have had: they do not accurately reflect the true support for traditional marriage."
According to Shubert, the Field Poll mistakenly underestimated support for Proposition 22 - the last state measure to "define" marriage - by nine percent. And he hints at something like Bradley in his reasoning: "I can't say for sure why polls almost always understate support for traditional marriage, but I believe it is because the media portrays same-sex marriage as being politically correct," Schubert said.
"Supporters of traditional marriage don't want pollsters to consider them intolerant, so they mask their true feelings on the issue. The result is that support for traditional marriage rises considerably when voters cast their ballots in the privacy of the voter booth. It is my opinion that the same thing will happen in California when voters cast ballots on Proposition 8."
Shubert's point is that Californians inherently believe that no person should be treated differently under the law, so they will tell pollsters that they're against Proposition 8, when they really are leaning towards voting for it. He may be onto something.
Just five years ago, California held a recall election where a famous action-film star was on the ballot. Human polling vastly underestimated the support for the actor, now Governor, Arnold Schwarzenegger. By eliminating the human element, however, some robo-polling was able to get the numbers right long before the October election. People, it seems, were embarrassed to admit that they supported a movie star - especially one with a colorful, over-the-top body builder's past - to be their next governor.
It wasn't the first time that human pollsters were tricked by the psychology of an election. After all, Ru Paul's pronouncements - Work it! - are great on the runway but, well, not universally appropriate or appealing. So, it's not unrealistic for Shubert and the crowd who wishes to re-define marriage in California, to rely on the hope that people are at their core indecent and would lie about it to a stranger.
For the No on 8 Campaign, opponents must reinforce people's inherent belief that, regardless of how they feel about marriage equality, it's wrong to treat people differently under the law - a message which is at the core of their new ad campaign.
But if poll after poll after poll keep returning the same result, maybe people need to start trusting their veracity.
Last week, I proudly joined a number of current and former Republican Party officials in Los Angeles to condemn an L.A. county GOP event promoting California's Proposition 8 - the measure which would eliminate the right to marry for same-sex couples.
Now, the role of the local political party plays California is to help elect its members to office. Which is why another, less heralded ballot measure, Proposition 11, is much more important - now and for decades to come. Proposition 11 is on California's ballot this fall but it's not just a California issues, as a look at a number of large states' (Texas) voting districts demonstrates. The ways in which legislative districts across the country are drawn is a wonky - but important issue - for anyone interested in politics.
Here in Los Angeles, County Republican Chairman Linda Boyd defended the "Town Hall Forum" on Proposition 8 as a good way to elect more Republicans by energizing the volunteer base. But even if Boyd is correct, in the long-term she's dead wrong. Not only will Proposition 8 eliminate constitutional rights for many loyal Republicans, but if the party wanted to elect more Republicans, it should focus instead on passing Proposition 11, the ballot measure designed to end gerrymandering by creating a fairer process for drawing voting districts.
Although the California Legislature and the U.S. Congress are less popular than President George Bush in California - a Herculean feat - almost no member of either body is seriously worried about losing his or her job eight weeks from now. Under the current scheme - which some say was a cynical deal by the legislature and the state's Congressional delegations - exactly zero legislative and only a few Congressional seats have changed parties. I can't think of a better testament to the broken system California has for drawing its legislative boundaries.
State legislators draw the lines for the seats they will sit in every ten years and those incumbents draw lines creating election districts that don't foster real competition. Only in one case of gross malfeasance by an incumbent Congressman have we seen a seat in Congress change hands
So California elections - our primaries, really - have become a race to the ideological extremes. Democrats must only compete for the votes of Democrats and Republicans must only compete for the votes of other Republicans within the boundaries incumbents have drawn for their own and their parties' benefit. November victories are decided not by a vote of the people, but by a vote of 120 politicians when who drew the assembly district boundaries nearly a decade ago. Party activists - the folks who really turn out for primaries - seal these agreement every Spring.
There is no incentive for any politician in Sacramento to reach across the aisle, because the risk of a primary challenge to a perceived "maverick" is greater than the risk of losing in November. And there is no substantive political discourse in Sacramento because no one needs to satisfy any but he hardest of hard core party loyalist. Which is why - and this is just this year's example - there is was state budget for nearly three months.
If the Republican Party's mission is to elect more Republicans, then it's Proposition 11, not Proposition 8, which matters most. If approved by the voters, Proposition 11 will take the power to draw political boundaries out of the hands of politicians.
With fairer, more competitive districts, both Democrats and Republicans will have to compete for the hearts and minds of the voters - real voters with real issues on their minds and - perish the thought- an interest in issues, not party loyalty. That can only be a good thing for the voters, and ultimately California.
Standing up for the voters' right to choose their elected officials may not win any seats in November 2008 and it doesn't give the party's conservative base any quick-and-dirty talking points. But Proposition 11 will give Republicans a chance to make their case to voters in November 2018, November 2028 and beyond. And that, my friends, should be the mission of the Republican Party of Los Angeles County.
In 1992, the Republican National Convention opened the "Culture Wars" which would define American politics over the next decade. On the floor of that convention, Pat Buchannan famously declared, "There is a religious war going on in our country for the soul of America. It is a cultural war, as critical to the kind of nation we will one day be as was the Cold War itself."
That war is over but there's a new culture war in America.
With the juxtaposition of this year's Republican and Democratic conventions and the game-changing nomination of Gov. Sarah Palin as the next Vice President of the United States America entered a new Culture War pitting two visions of America - and two parts of America - against one another.
The new Culture War is big city versus small towns.
The new Culture War will be fought between the beer-drinking, jorts-wearing Florida Gator fans and the chardonnay-sipping Trojan nation of the University of Southern California.
The new Culture War will be waged between the bicoastal jet-set and those that they refer to as "flyover people".
The new Culture War is Scranton versus San Francisco.
On one side of the Culture War are two lawyers, Barack Obama and Joe Biden; one a big-city machine politician, and the other who hails a train station along the Boston-Washington corridor, home of the Eastern Establishment.
On the other side is a self-described maverick senator from the wild west, John McCain. Joining him is a small-town mayor who surprised her detractors beating incumbents time and again in a meteoric rise to power.
This is a subtle change, but an important one, and is a distinction that the left-leaning media missed dearly when they derided Palin's years of experience on the city council and as mayor of Wasilla, Alaska. Why? The fiercest battles between Obama and his former rival Sen. Hillary Rodham Clinton were not fought in the metropolises along the coast. The votes that dragged out the primary were cast in small cities, with small-town mayors and small-town issues.The swing voters in November's general election will also be in these small towns, the communities that dot the landscape you can see from from Row 1, Seat A on the redeye out of San Francisco.
In many ways, Wasilla, Alaska may become a proxy for each and every one of those small towns. These are cities and towns where the politics of Washington are impossible. The divisiveness and partisanship of Washington won't work in Wasilla, or any other small town, because everyone knows each other, everyone's kids know each other, and people know better than to make enemies of their own neighbors.
When people in Latrobe or Scranton (once Biden's hometown but he's long since rinsed the coal dust off his Gucci loafers) hear Palin's story they understand and respect it even if they disagree with her on the issues. They can relate to a working mother who got involved to stop her home town from being a place where going off to war was a more attractive than staying. They can relate to Bristol Palin's out-of-wedlock pregnancy because, well, what else is there to do in Wasilla? And kids, well, they make mistakes. They can also relate to the story of a hometown girl who skyrockets into the spotlight. And they want her to succeed, because her success is theirs.
In the new culture war, Palin the the voice for the residents of small towns across America, the towns where those crucial swing votes will be cast. Deriding Palin and her experience in Wasilla, is deriding not just the Governor of Alaska, but all of Wasilla, and every town like it across America.
Former would-be vice president John Edwards was right to say that there are two Americas. There is Wasilla and there is Washington. There is Newark, Ohio and there is Newark, New Jersey. There is Scranton and there is San Francisco. And the first battle of this new Culture War has been engaged.
When John McCain picked Alaska Governor Sarah Palin as his running mate at the start of the Labor Day weekend, analysts immediately labeled the move as a cynical ploy to woo Hillary Clinton's female voters, who still felt jilted by the Democratic Party's selection of Barack Obama as their nominee.
But only a political insider would see the world so narrowly. It's men, not women, that Obama should be worried about losing.
Like others, I do not see Kim Gandy and the National Organization for Women stumbling over themselves to put a woman in the White House as they did earlier this year. It's the married men, who felt abandoned by the Republican Party on its march towards theocracy whose votes are put back in play with the selection of Sarah Palin.
Within twenty four hours of the Palin pick, one of my best friends declared his excitement for the McCain campaign. He made this announcement as I was driving him home from the airport - he had been in Denver all week at the Democratic National Convention. My father and my brother voted for Obama in the Texas Primary, but on the heels of the Palin nomination, my father wanted to know how he could donate to McCain's campaign and let them know that it was all about her.
So what gives? I've had trouble explaining this transformation to others because most people see politics as linear. Obama, on the far left of American politics, is about as far away from the anti-abortion, pro-gun, pro-tax cut Palin as you can get. Even my two-dimensional, circular theory of politics - that Big Government Liberals and Big Government Conservatives aren't so far apart - fails to explain how one woman could cause such a tectonic shift in people's political persuasions.
Sarah Palin's greatest asset is not the fact that she has more executive experience than Barack Obama and Joe Biden - combined. Her track record of fighting corruption and reforming government may not boost her running mate's chances. Nor will, Sarah Palin win over many voters because she lowered property taxes in Wasilla by sixty percent when she was Mayor.
No, Sarah Palin brings a new aesthetic to the once pallid McCain for President Campaign. The effect that Palin, a former Miss Wasilla and runner-up for Miss Alaska 1984, has had on the McCain campaign goes well beyond men's tendency to avoid thinking with their heads. She's making an old man look young.
American voters like to see their leaders as a reflection of themselves. That is why we hold politicians to a higher moral standard than, say, Hollywood actors. To many men across the country, Obama, the fresh-faced candidate of change was young and virile, and offered hope not only for the country, but for themselves. Although the projection of self upon the candidate was imperfect - Obama is indeed young, and with his svelte physique he doesn't look like most Americans - it was the best among many poor choices.
But the addition Sarah Palin to the GOP ticket changes the equation. As Rush Limbaugh put it, she's a babe.
You've, of course, heard the expression that we are the company we keep. I am well aware that people perceive me differently whether I am hanging out with my twenty year-old buddies than when I am with my friends in their thirties. I don't even want to think about how the look at me when I am enjoying happy hour with my sixty year old associates!
Likewise, perceptions of John McCain and Barack Obama have shifted because of their selection of a running mates. Throughout the next few months, Sarah Palin, an intelligent, charming, attractive woman half his age, will be by John McCain's side as he makes his case to become president. To many men, that's got to be the American Dream. John McCain, overnight, went from an American Methuselah, to a political version of Hugh Hefner.
So I have to ask: who wins the virility wars now, Barack?
After a brief midsummer bump, consumer spending is on the decline, always a signal of a drop in economic confidence by your average American. The economic stimulus checks of 2008 apparently did not provide the same benefits of the 2001 payments which, until the World Trade Center attack, pulled the country out of the Post-Tech Bubble Recession.
Of course, the U.S is still not in a recession. American exports are surging and the dollar is strong. The price of oil is falling, so inflation should be less of a worry. So what gives? Why are consumers not buying in to the economic rebound?
The American consumer is under a lot of stress. Wage inflation is not keeping up with actual inflation, so as people's paychecks remain constant, their cost-of-living continues to rise. And the amount of pressure they're under - when it comes to paying taxes to Uncle Sam - remains constant.
Although some may argue about the efficacy of the 2001 Economic Stimulus Package - labeling that year's payments "Bush Tax Cuts," as if the president's name were a four-letter word - the fact remains that when it was time for Congress to try to salvage the economy this year they took a page from the Karl Rove's 2001 playbook and wrote a check to every American taxpayer.
In fact, Congress doubled the amount of the checks! But somehow, they did not have the same effect.
Why not? Well, there were three main differences between the 2001 Stimulus Package and the 2008 version.
For starters, in 2001, we all received our tax rebate checks in the mail. That $300 may not have been much, but it was something tangible. It felt like relief.
In 2008, in order to speed up the effects of the stimulus package, Congress and the White House decided to send money to taxpayers via direct bank deposit, so it would hit their bank accounts immediately.
That's kind of like the difference between reading an actual newspaper and reading on-line. If I have the calendar, datebook or whatever section sitting in front of me, I will at least see if anything is interesting. On-line, I seldom venture into that section of the newspaper website. With the decision made for me, I get what I want how I want it and move on.
Taxpayers didn't see an actual check so they were less likely to go out and spend the money. They used the "surprise" cash - oh, look, we've not overdrawn! - to pay down debt or skip a savings payment.
The 2001 Stimulus Package was more than just a bunch of checks going out to everyman. In addition to the $300 checks in the mail, marginal tax rates were reduced across the board. The rich and ultra rich were paying less taxes on every dollar, but because they reinvested their proceeds from the stimulus, the rich and very rich ended up paying a greater share of taxes after their tax cut than before.
Now that's stimulating the economy!
This ties into perhaps the greatest difference between the 2001 and 2008 stimulus packages, when it comes to boosting consumer confidence. In 2001, the rebate checks accompanied a marginal tax rate reduction from 15% to 10% on the first $6,000 of taxable income with even more reductions as paychecks went higher. This meant that, after the stimulus checks were spent, people continued to see paycheck inflation without the negative effects of wage inflation. Every two weeks, they had more money than they had before. And that's what kept the economy running.
So if Congress looks to pass yet another economic stimulus package before the election - hey, they're Democrats, anything can happen - they might consider taking a pass on the politically expedient tricks of sending people checks right before the election. Instead, they should look at what worked the last time around and stop teasing taxpayers.
