Soren Dayton's blog

Why doesn't the right own entrepreneurialism? The left has moved

For much of the 20th century, the entrepreneur has been a core Republican constituency. Arguments based on small business have been central to our messaging. And interest groups like the NFIB have been among our most loyal activists, while the Chamber of Commerce has kissed up to anyone in charge.

However, The Economist's Adrian Wooldridge notes that this is no longer the case in a special report on entreprenuerialism:

This special report will argue that the entrepreneurial idea has gone mainstream, supported by political leaders on the left as well as on the right, championed by powerful pressure groups, reinforced by a growing infrastructure of universities and venture capitalists and embodied by wildly popular business heroes such as Oprah Winfrey, Richard Branson and India’s software kings. The report will also contend that entrepreneurialism needs to be rethought: in almost all instances it involves not creative destruction but creative creation.

It is absolutely true that in many important ways, the left embraces the rhetoric of entrepreneurialism. And many significant figures of modern business are on the left. I think that it is fair to say that the left has reacted in many ways to the fall of the Soviet Union by reorienting thier ideology.

In Europe, they speak of "unreconstructed parties of the right" like the French Socialist party and reconstructed ones, like the British Labour Party under Tony Blair. (and to a certain extent Gordon Brown, although his manifest failures and those of timing will never give us a clear glimpse into his thinking)

It seems to me that only recently has there been a counter-manuever on the right that responds politically, rhetorically, and strategically to the adjustment on the left. We see these in the quite serious Canadian Conservative Prime Minister Stephen Harper, somewhat less serious British ToryDavid Cameron, and, somewhat differently, the Swedish Moderat (New Modertna, as their campaign literature called them) Fredrik Reinfeldt.

In many ways, we have not made that adjustment on the right in the United States. In our seemingly never-ending attempt to return to Reagan, we have forgotten that the left has done something, and it requires a response on our part. This is not necessarily a move to the right or to the center, but a reframing of the debate. The left has done this by making, at least rhetorically, entrepreneurialism compatible with certain kinds of redistribution.

What do we need to do on the right that both stops this movement on the builds our next coalition?

The coming public pension queen?

I have written a little about a potent political issues involving public pension funds. Bloomberg has a story about the Chicago Transportation Authority pension fund, which was facing a huge budget shortfall:

“We’ve identified the problem and a solution,” said CTA Chairman Carole Brown on April 16, 2007. The agency decided to raise money from a bond sale.

A year later, it asked Illinois Auditor General William Holland to research its plan. The state hired an actuary, did a study and, on July 17, concluded that the sale of bonds would most likely result in a loss of taxpayers’ money.

So what happened? They proceeded with the bond issue anyways, against the advice of the state auditor, who turned out to be right:

Thirteen days after that, the CTA ignored the warning and issued $1.9 billion in bonds. Before the year ended, the pension fund was paying out more to bondholders than it was earning on its new influx of money. Instead of closing its funding gap, the CTA was falling further behind.

But the thing is that when public employee pensions lose bets with their money, the taxpayers pay the bills:

In the CTA deal, the fund borrowed $1.9 billion by promising to pay bondholders a 6.8 percent return. The proceeds of the bond sale, held in a money market fund, earned 2 percent -- 70 percent less than what the fund was paying for the loan.

The public gets nothing from pension bonds -- other than a chance to at least temporarily avoid paying for higher pension fund contributions. Pension bonds portend the possibility of steep tax increases.

This is exactly the objection that so many, including public employee unions on the left, have to provisions of TARP and other bailout proposals.

Most Americans who are fortunate enough to even have a credible retirement plan are looking at their 401(k)s and seeing 40% losses. The public employee unions are looking at their losses and reminding the government that they are owed a guaranteed rate of return. In Oregon it is 8%, which is a fantasy-land number only reached during booms and never sustainable. But the public employee unions turn around and force tax increases on the rest of us.

This is an enemy who is easy to imagine and attack. This is someone who is taking away from your nest-egg to fatten their own because they didn't win their bets. They live off your tax dollars at their jobs. Then they live off your tax dollars in their retirement.

Just watch. In 10 years, there will be a new phrase in American politics. The public pension queen.

The Fairness Doctrine fight is not over

Adam Theirer, a scholar at the Progress and Freedom Foundation, notes that the Fairness Doctrine was part of a regulatory paradigm being pushed by the left and, in particular, the group Free Press. This fight is not over. Adam's piece is worth reading:

Of course, the radicals at the (Un)Free Press weren’t about to let one of the Left’s old favorite regulations go so away without asking for something in return.  One of the reasons that Silver and Ammori are suddenly willing to give their blessing to the Doctrine’s burial is because they want to get on with the more far-reaching agenda of micro-managing media markets using a variety of less visible regulations.

Indeed, in their paper, Silver and Ammori go to great pains to try to show that the Fairness Doctrine supposedly has nothing to do with all the other regulations that they want Congress and the FCC to continue to enforce, or even expand.  These goals include media ownership restrictions, diversity mandates, local programming regulation, and so on.  Recognizing that the Fairness Doctrine was not only ineffective but also a useful tool for many on the political Right to whip their base into action, the Free Press moved to preemptively divorce their other pet projects from the Fairness Doctrine.

It’s a brilliant tactical move by Free Press; lull Limbaugh and other conservatives into a deep sleep by throwing them the bone of a Fairness Doctrine win, and then push a far more radical regulatory agenda through the back-door once they’ve stopped paying attention.  Of course, these things cannot be as easily divorced as the Free Press radicals want us to believe.  The Fairness Doctrine was just one part of a much grander regulatory paradigm that so-called progressives have pushed for under the banner of “public interest regulation.”



Comparing Obama's energy plan

Barack Obama's budget proposal pays for a healthcare plan -- we don't know yet what the plan is -- with a carbon tax. Really.

Obama's budget proposes a health care reform fund that would cost $635b over 10 years. Obama also proposes a cap-and-trade system that would generate $640b in revenue over 10 years.

So Obama wants to fund universal healthcare with a tax on carbon, wtih some administrative stuff on the other side to make the tax more complicated and harder for business to negotiate.

It is worth putting this in comparative perspective. Al Gore and the Liberal Party of Canada both had proposals for a carbon tax.

Gore proposed replacing the payroll tax with a carbon tax. The Tax Foundation noted Gore's striking language at the time:

Former Vice President Al Gore has a novel approach for dealing with global warming: tax carbon dioxide emissions instead of employees’ pay.

Penalizing pollution instead of penalizing employment will work to reduce that pollution,” Gore said Monday in a speech at New York University School of Law.

The carbon tax would replace all payroll taxes, including those for Social Security and unemployment compensation, Gore said. He said the overall level of taxation, would remain the same.

Obviously, this never came to a vote, but the idea has garnered some significant intellectual support. George W. Bush's Chairman of Economic Advisors, Greg Mankiw, supports a stimulus that would replace the payroll tax with a gasoline tax.

In a meaningful sense, using the revenue to create universal healthcare is signficantly to the left of using it to lower the tax burden of all Americans.

Contrast it with the proposal of the Liberal Party of Canada, which proposed the "Green Shift", moving into the last election:

At the heart of the energy plan is an energy tax on carbon fuels, which will be based on consumption.

New taxes are expected to generate about $15.4 billion annually in revenue in four years. But the Liberals say their plan will be revenue neutral because it will cut income taxes and increase family support payments.

Dion said his plan is "as powerful as it is simple."

"The Liberal Green Shift will cut taxes on those things we all want more of -- such as income, investment and innovation -- and shift those taxes to what we all want less of: pollution, greenhouse gas emissions and waste."

However, the Conservative Party of Canada successfully branded this idea, the "permanent tax on everything", and this issue was part of the reasons that the LPC lost the most recent election there and Stephane Dion, its primary advocate, was forced to step down as party chair.

So let's make this really clear. Obama's plan is significantly to the left of something that failed miserably in Canada. How's it going to play in the states?

As always, Newt Gingrich is leading the way on messaging:

"Let me get this straight," said Gingrich. "We're not going to raise tax on anybody making under $250,000 a year unless you use electricity. And we are not going to raise taxes on anybody under $250,000 a year unless you buy gasoline. And we are not going to raise taxes on anybody who makes under $250,000 a year unless you buy heating oil. And we're not going to raise taxes on anybody who earns less $250,000 a year unless you use natural gas."

"And I try to think to myself," he added, "even in the left wing of the Democratic Party, where there are some people who are fairly unusual, how many of them don't use heating oil, natural gas, gasoline or electricity?"

If Obama is lying like this, and the left couldn't win a fight significantly to the right of this one in Canada with a significantly healthier economy, I think that we can win this fight here.

Time for the GOP to embrace transparency

Watch this video from the Sunlight Foundation's Read the Bill project:

Read The Bill from Sunlight Foundation on Vimeo.

It is not an accident that there are so many Republicans -- John Boehner, Jeb Hensarling, and Ted Poe -- in this, and that the Democrats -- Brian Baird and Bobby Scott -- are Democrats who are sometimes gettable on Republican votes.

Transparency is an issue that Republicans will win every time in the war of ideas, and the House Democrats are already uncomfortable.

Just last week, Blue Dogs and liberals like Peter DaFazio asked for more regular order. The Democrats are exposed. The Democrats know it.

Now it is time for Republicans to stand up and win this fight once and for all.

CT-SEN: Rob Simmons, please run!

Wow. Rob Simmons on Judd Gregg.

"Good for him to stand up for his beliefs,'' Simmons said of Gregg. "It's ironic that the Democratic choices don't get approved because they don't pay their taxes, and the Republicans don't get approved because they won't sell out their principles.''


The big one hits California

The California state legislature passed a budget this week. This was not expected because the fiscal problems that the state are so severe that the core interest groups in California could not be reconciled. Taxpayers and public employee unions can no longer even have the figleaf of agreement by issuing bonds, which had been Governor Arnold Schwarzenegger's approach. And a 2/3rds majority is required by each body of the legislature to pass a budget.

Into the breach jumps State Senator Abel Maldonado (R-Santa Maria), a leader of one of the moderate factions in the state party. He supported -- and brought votes along with him -- the budget in exchange for a ballot initiative that would reform the primary system. The San Francisco Chronicle describes it:

A proposed constitutional amendment would go before voters in June 2010 instituting a "top-two" primary system, which would effectively eliminate party primary ballots, erase candidate party labels in primary elections and allow voters to choose the two candidates - of whatever party - who would compete in the general election.

In swing districts, it is likely that the top vote getters would be from each party. In districts that are highly partisan, as nearly all of the state legislative and Congressional districts are, there is the possibility that two Republicans or two Democrats could get on the general election ballot.

This could reduce the current party apparatus another interest group in the process, but not a dominant one. There is plenty of evidence that the parties hate it. Ron Nehring, the chair of the CA GOP said:

Ron Nehring, chairman of the state GOP, said the measure will "lead to further polarization."

Without a Republican or Democratic designated candidate on primary ballots, that means "in some areas, like San Francisco, you'll never, never see a Republican candidate on the general election or November ballot - meaning the Republican perspective is missing from the dialogue," he said. "And in parts of Orange County, Inland Empire ... you will never have a Democrat on the ballot," he said. "Is that a healthy thing? No, it's not."

The difference is that moderates in either party are more likely to get through to the general election ballot and stand better chances of winning -- assuming that they, in turn, don't factionalize too much. Why? Because "Decline to State" voters, what California calls independents, will also be more likely to be involved in the primary process. Candidates will stand more of a chance of building coalitions across the entire ideological spectrum.

If this passes in 2010, and the state continues with another highly-partisan/highly-ideological redistricting, the 2012 election could be quite interesting.

What will Michael Steele do with the presidential primary calendar?

The power of the chairman to impact the future of the party is, to a degree, limited. Michael Steele will be able to attract a range of people that other candidates may not have been able to. But there is one area in which  the Chairman's race for the Republican National Committee will have significant power. He will pick the committee that sets the next primary calendar.

RNC rule 10(d), added this year, creates a "Temporary Delegate Selection Committee" which Steele "shall convene ...  as soon as practicable after the 2009 Republican National Committee Winter Meeting", at which he was elected.  The Committee will make a recommendation to the full RNC, which must approve or reject it on a 2/3rds vote of the full committee by the Summer meeting of 2010, to complete the process before the presidential nomination contest begins in full. (the full text of the rule is after the jump)

The key thing is that Steele picks 11 of the members and will have almost complete control over the committee, if he wants it. What will Michael Steele do? What will Michael Steele want? This could be a major legacy of his term as chairman. It will complete before he has to run for re-election in 2011, and it will probably mark the beginning of Presidential maneuvering. Also, given the differences between RNC and DNC rules, whatever deal that Steele cuts with the Democrats on this will likely be long-standing. 

Region Member Defeated
Northeast David Norcross (NJ) Ron Kaufman (MA)
South John Ryder (TN) Morton Blackwell (VA)
Midwest Pete Ricketts (NE) Bob Bennett (OH)
West Fredi Simpson (WA) Ron Nehring (CA)

The remaining four members were elected at the Winter Meeting. The elected members, their regions, and who they defeated are in the table. For people who follow, the RNC, these are interesting. Norcross and Ryder are two old RNC hands, while Ricketts and Simpson are new. My understanding is that the issue in the West was simply an anti-California one, while Bennett, the author of this rule, was rejected partly over this rule and the way that the issue was handled at the Convention.

The complete rule 10(d) and an embed of the complete RNC rules are after the jump.

Did Hilda Solis violate BCRA, in addition to House ethics rules?

The DC Examiner noted that there could be another, even more serious issue with Hilda Solis. Recall that she was on teh board of Americans Right at Work (ARW), serving as its treasurer, a position with fiduciary responsibilities, in violation of House ethics rules. However, this 501(c)4 also filed electioneering documents with the FEC:

But ARW also spent thousands of dollars on television spots described by the group in its report to the FEC as "electioneering communications." Since as treasurer, Solis is required to approve all ARW spending, she must have signed off on the spots. This may well put her and ARW in violation of the Bipartisan Campaign Finance Reform Act of 2002. Among the Republicans targeted by ARW were incumbents Norm Coleman, Lisa Murkowski, Susan Collins, Gordon Smith, and John Sununu. The anti-Sununu ad, for example, cost ARW $169,225 to air in New Hampshire, while another $69,105 paid for airing an anti-Coleman spot in Minnesota. So ARW clearly spent funds, with Solis' knowledge and approval "in connection with an election for federal office." Again, as treasurer, Solis could hardly have been in a ceremonial or passive participant.

It appears that this was clearly illegal.

So Obama's nominee violated the law and House ethics to participate in an organization. She is also closely linked to the most demonstrably corrupt union in America. And her husband doesn't pay his taxes.

Clearly, these are very solid grounds to reject her for a position in the Cabinet.

NJ-GOV: GOP Christie up 6 over Dem incumbent Corzine

 This is one that we need to pay attention to. Republican Chris Christie is up 6, 42-36, over incumbent Democratic Governor Jon Corzine.

Save Jersey pulls the real highlights:

On the day Chris Christie officially kicks off his campaign for Governor, his campaign is boosted by news of a poll that shows him as the strongest challenger to Governor Jon Corzine. While neither candidate breaks 50% in the ballot test, Corzine is carrying a 50% disapproval rating. Even further, 54% of New Jerseyans say that Corzine does NOT deserve a second term. Christie leads Corzine among independent voters 49%-24% (a margin that would ensure victories in Bergen and Middlesex). 

 Jim Geraghty has more at the Campaign Spot.

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