2010 - %3, October

The Third Party Chimera

| Tue Oct. 5, 2010 11:42 AM EDT

Megan McArdle reacts to Thomas Friedman's cri de coeur for a third party to save us from the craven mendacity of our current party duopoly:

It's not that I'm against third parties, mind you. It's just that when I look at multiparty states elsewhere, I can't say that they look noticeably more honest than our two-party system. A third party might be an improvement over the ones we've got. But I doubt it would get into office by telling us the truth: that solving our problems is going to mean hefty tax increases or unpleasant spending cuts, or both. American voters seem to like being lied to.

That's pretty much my usual reaction to this idea. Lots of other countries have multiparty democracies, and they don't seem noticeably more willing to make tough choices than ours. Besides, contrary to the usual Friedmanesque conventional wisdom, a successful third party in America would probably be socially conservative and economically liberal, which I don't think is what Friedman has in mind.

Just in general, "how does this work in other countries?" is an underasked question. It's not a panacea, since every country has different demographics, different history, different cultural institutions, and different political traditions, and it's not that the answers are always clear — they usually aren't — but international comparisons do provide some useful guidance. Parliamentary vs. presidential, private healthcare vs. national, socialism vs. capitalism — you can infer some useful information about all these things if you're willing to look beyond our borders and take other countries seriously, neither downplaying differences nor using them as excuses to ignore anything you don't like. You can also get a pretty good idea of what doesn't matter, and my quick read is that having more than two parties doesn't generally improve things.

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Expect Fewer Women in Congress Next Year

| Tue Oct. 5, 2010 11:10 AM EDT

Despite the hullabaloo surrounding Sarah Palin's "Mama Grizzlies," the number of women actually holding office in the next Congress is likely to decline for the first time since 1978.

Why? USA Today explains that's it's mostly because of two factors: 1) women in Congress are disproportionately Democratic, and it's a tough year for Democrats; 2) the economy is still faltering, and women are generally seen as weaker on economic issues. "They don't want to take risks in a bad economy, and they perceive women as being riskier," says Democratic pollster Celinda Lake. As a result, USA Today concludes, "Independent analysts predict that the number of women in Congress—currently 56 Democrats and 17 Republicans in the House, and 13 Democrats and four Republicans in the Senate—will decline for the first time in three decades." One poll tracker for the Cook Political Report estimates a drop of five to 10 women in the House and that the number of women in the Senate will either drop slightly or stay the same. 

It's easy to overlook this reality given the amount of attention that female Republican candidates have attracted. But while more Republican women are running for office than ever—leading the National Republican Congressional Committee to label 2010 "the Year of the Republican Woman"—fewer are making it past their primaries: "A record 128 Republican women filed to run for the House, according to the Center for American Women and Politics at Rutgers University, although fewer went on to win GOP primaries than in 2004."

So though Palin may be helping to inspire more conservative women to run than ever, that doesn't necessarily translate to more women in office. In the end, Palin didn't make it there, either.

The White House Goes Solar

| Tue Oct. 5, 2010 10:42 AM EDT

The White House gave a group of solar-boosting climate activists something to shine about on Tuesday, with the announcement that President Obama's home will soon feature its own set of solar panels.

The group 350.org has been campaigning for the Obamas to reinstall solar on the White House since July, and last month delivered one of Jimmy Carter's old panels to the doorstep. The 350.org folks held a meeting with White House officials during their visit to DC last month, but didn't get a commitment one way or another. Now the White House says it plans to have the panels installed by next spring.

The Associated Press broke the news, which Energy Secretary Steven Chu and White House Council on Environmental Quality Chair Nancy Sutley formally announced at the GreenGov conference at George Washington University Tuesday morning. The system will provide some power for the Obama's residence in the White House and will be used to heat water.

"This project reflects President Obama's strong commitment to US leadership in solar energy and the jobs it will create here at home," said Chu. "Deploying solar energy technologies across the country will help America lead the global economy for years to come."

The group hopes the panels will serve as a "constant reminder to be pushing the Congress for the kind of comprehensive reform we need," they wrote in a blog post this morning.

"The White House did the right thing, and for the right reasons: they listened to the Americans who asked for solar on their roof, and they listened to the scientists and engineers who told them this is the path to the future," said 350.org founder, writer, and Mother Jones contributor Bill McKibben. "If it has anything like the effect of the White House garden, it could be a trigger for a wave of solar installations across the country and around the world."

The news is just the first of several big announcements on solar that the Obama administration plans to make on Tuesday. This afternoon, Secretary of the Interior Ken Salazar and Governor Arnold Schwarzenegger are holding a press conference during which they are expected to announce the approval of two new solar projects on public lands in California. Salazar hinted last week that several big announcements of large-scale renewable projects are coming soon.

Solar industry officials are, as you might guess, pleased about the White House announcement. "Putting solar on the roof of the nation’s most important real estate is a powerful symbol calling on all Americans to rethink how we generate electricity," said Rhone Resch, president of the Solar Energy Industry Association. "It's an example of how each one of us can improve energy security, employ Americans and cut electricity costs."

DC Ticker on ABC News: Burton, Buy; Sessions, Sell

| Tue Oct. 5, 2010 9:56 AM EDT

For some time, I've had a mostly daily feature on my Twitter feed called DC Ticker, in which I issue buy or sell orders for various political and policy players. It's amusing (I hope) shorthand for who's trending up or down, according to the news of the moment. I keep the assessment non-ideological. Some Twitter followers were irritated recently when I issued a buy order for Karl Rove, but this rating was based on the increasing influence of the billionaire-funded super-PAC he has put together to exploit the Citizens United decision and assist GOP candidates in the 2010 congressional campaigns.

Now, DC Ticker is expanding. ABC News White House correspondent Jake Tapper is starting a weekly digital show today. It's called Political Punch, which happens to be the name of his rather good blog. Each edition of the PP show will include a DC Ticker report from me. Part of the fun so far in compiling the DC Ticker has been in not explaining the picks. Often, the reasoning is obvious (if you pay attention to political developments). But not always. Occasionally, if enough people ask, I might offer an explanation. But there's no guarantee. The producers of Tapper's new show, though, have requested transparency for DC Ticker. So here's a brief run-down of the choices and the whys.

* Bill Burton, buy. Lots of chatter of late about White House press secretary Robert Gibbs leaving his post for another White House gig or to head the Democratic National Committee. Burton, the assistant press secretary, is in line to take Gibb's place at the podium (though there are others presumably in contention).

Rep. Pete Sessions, sell. He heads the Republican Congressional Campaign Committee. With a flurry of articles saying, well, the Democrats just may be able to hold on to the House majority, his stock is slipping.

John McCain, sell. A New Yorker piece contained a telling nugget: McCain dressing down Sen. Lindsey Graham, a fellow Republican, for trying to steal McCain's "maverick" label. High school, anyone?

Anthony Kennedy, buy. Yeah, yeah, yeah, there's a new Supreme Court Justice named Elena Kagan, and she is a she. But as the court opens its term this week, Kennedy remains the main swinger on this bench.

Jon Stewart, buy. At the start of this week, nearly 200,000 people had declared on Facebook that they will attend his Rally To Restore Sanity on October 30 in Washington, DC. Whether this event is serious or a stunt, Stewart wins: he'll get plenty of media attention this month and, best of all, a ratings hike. (For my quasi-serious take on Stewartpalooza, see here.)

You can receive my almost-daily DC Ticker report by following my Twitter feed. (#DCticker is the Twitter hashtag.) Please feel free to argue with my selections—though all decisions of the judges are final. And please feel free to make suggestions for buy or sell orders in the comments below or on Twitter (by replying to @DavidCornDC). And there's this: DC Ticker is merely an advisory service. It and its author cannot be held liable for any investments made in politicians, policy wonks, or government officials on the basis of the information presented.  

Pay Attention to Pat Toomey!

| Tue Oct. 5, 2010 6:15 AM EDT

The media love to cover radical and somewhat wacky candidates like Carl Paladino, Christine O'Donnell, Sharron Angle, and Rand Paul. But lost in all that finger-pointing is the fact that in Pennsylvania, a Senate candidate who in any other year would be among the most conservative in the country is on a glide path to take Arlen Specter's old seat. Pat Toomey, a former congressman and longtime president of the far-right "Club for Growth," has led Dem Rep. Joe Sestak in the polls for months. And despite some apparent tightening in recent weeks, polling guru Nate Silver gives Toomey an incredible 92 percent chance of winning the race.

Christine O'Donnell will almost certainly not be in the Senate in January. Carl Paladino probably won't be governor of New York. And Silver gives Toomey a better chance of winning that either Angle or Paul. Yet Toomey's radicalism has received relatively little national attention. Make no mistake: Toomey is incredibly conservative. A Pollster.com analysis of Toomey's votes in the House of Representatives found that he was more conservative than 97.9 percent of all members of Congress (House and Senate) since 1995. Using DW-Nominate scores, a common measure of liberalism or conservatism, Pollster's Harry Enten found that Toomey would be the second-most conservative Senator in the current US Senate—to the right of Jim DeMint and behind only Oklahoma's Tom Coburn. Yet this is a man who is leading dramatically in the polls in a state that has voted for every Democratic presidential candidate since 1992—and went for Obama by 10 percent. 

Considering that Pennsylvania is heavily unionized—it has a higher percentage of union members than all but 13 other states—Toomey's virulently anti-labor record is particularly notable. Arlen Specter, the Republican whom Toomey primaried in 2004 (and chased out of the Democratic party in 2009), tried to cultivate a reputation as a friend of the unions over his nearly three decades as a GOP Senator. Toomey has made no such efforts. He has a lifetime 7 percent voting record from the AFL-CIO.

The rest of Toomey's record is just as conservative. While Toomey was running the Club for Growth, the conservative group spent $10 million pushing George W. Bush's unpopular, failed plan to privatize Social Security so that people could gamble their Social Security money in the stock market. He also supported reducing the tax rates for corporations—including Wall Street banks—to zero. And as a member of Congress, Toomey pushed hard for financial deregulation—especially of the derivatives products that he used to trade. More on that in my story today. Check it out.

Meet the Tea Party's Merch Man

| Tue Oct. 5, 2010 6:00 AM EDT

One of the stranger elements of the rise of the tea party movement has been its odd mix of politics and money-making schemes. Take the Tea Party Patriots, a national umbrella group that claims to represent more than 15 million activists nationwide. Last week, TPP launched a series of TV ads in Kentucky encouraging voters to put "Tea Party Patriots" signs in their yards before the election. The ads are part of a new push by the TPP to get tea partiers to the polls in November. The group hopes to install 1 million TPP signs on lawns across the country before the election in an effort to "increase the visibility of the tea party movement," according to a press release.

The timing and placement of the ads and the campaign kickoff is interesting, though, given that Kentucky is also home to Rand Paul, one of the tea party's biggest stars. Paul is running for the senate as a Republican. TPP is a nonprofit, and as such, it can't endorse candidates specifically, but it can put generic tea party signs on lawns across the state that might be interpreted as supporting Paul. Sally Oljar, a Tea Party Patriots national coordinator in Seattle, insists that the campaign wasn't done with Paul in mind. "Our goal is of course to leave no stone unturned in our get out the vote campaign," she says, but notes that it was "not our inention to affect Paul's campaign." Oljar says that the idea for the campaign came from the yard sign company itself and that TPP "decided this would be a good way to raise our profile."

The sign-maker in question is the Spalding Group, a Kentucky-based firm that bills itself as "the Republican source for web, print and design," and boasts that it has supplied signs and other paraphenalia (all of it made-in-America) to the past six Republican presidential campaigns. The company was founded by Ted Jackson, a former Reagan administration official who has been involved in Republican politics for 25 years. Spalding hosts TPP's online store, where tea party activists can load up on various "Don't tread on me" t-shirts and other TPP merchandise, including yard signs, which run for $8.95 a piece (and include a bumper sticker and political button with each purchase). Spalding paid for the TV ads TPP ran in Kentucky.

The TPP yard-sign marketing effort isn't the first time that Jackson has run a "million" campaign for a candidate or group. In 2008, he gave away a million "NOBAMA" bumper stickers as part of a plug for Spalding's online store for John McCain in response to the liberal group MoveOn.org's pro-Obama bumper sticker giveaway. In 2005, Spalding gave away 1 million bumper stickers for its anti-gay marriage client Alliance for Marriage. Explaining the giveaway, Jackson said at the time, "It is difficult to create a grass-roots movement without materials that allow people to publicly identify with the issue," a comment that sounds pretty much like what he says about his company's work with TPP.

As for whether the yard sign effort is a sneaky way to campaign for Rand Paul, Jackson says the reason his firm launched the tea party ads in Kentucky was a simple one: "That's where we are." Of course, he recognizes the potential boost the tea party signs might offer to Paul. "I think if somebody’s putting a tea party sign in their yard that’s very likely a vote for Rand Paul," he says. Jackson's firm actually worked for Paul's opponent, Jackson's "good friend" Trey Grayson in the GOP primary. But now that Paul is the Repubilcan nominee, Jackson plans to vote for him. Meanwhile, he says, the TPP ads, which only ran for a few days last week, were so successful that his company is planning to expand them to other markets in Florida, Ohio, and California.

Jackson isn't just helping TPP out of the goodness of his heart (which he acknowledges). He would like the TPP store to corner the market on tea party gear, which is now sold in a host of different places. He thinks tea party activists need a central shopping site online. It's a potentially lucrative business. If the company's television advertising succeeds in getting tea partiers to buy a million signs, that translates into $8 or $9 million in business for his company and a nice chunk of change for the Tea Party Patriots, which receives some of the proceeds. (Neither Jackson nor Oljar would divulge what the TPP percentage is on the store sales, but Jackson says "it's significant.") The potential fundaising doesn't quite put TPP in the league of FreedomWorks, the group led by former House Minority Leader Dick Armey and funded by corporate donations, but it's not bad for a barely year-old group that claims to be a grassroots organization. And who knows? All those yard signs might just help get Rand Paul elected to the U.S. Senate.

You can watch the ads here:

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Cuccinelli's Attack on Climate Science Continues

| Tue Oct. 5, 2010 6:00 AM EDT

Ken Cuccinelli, Virginia's crusading right-wing attorney general, is taking another shot in his war on climate science. On Monday, he issued a another subpoena of documents from the University of Virginia's climate science program. This comes after a judge rejected his last attempt to force the university to turn over documents.

Cuccinelli is seeking the records of Michael Mann, a climate scientist now at Pennsylvania State University. Mann is best known for the so-called "hockey stick" graph illustrating the uptick in global temperatures over the last century, which skeptics have launched numerous attacks on since it was first published more than a decade ago. The furor was stirred again last fall when hackers stole and released a number of emails between climate scientists that those who question whether the planet is warming spun as evidence of a conspiracy. Cuccinelli took the so-called "ClimateGate" controversy as an opportunity to harass Mann and attempt to prove that he committed "fraud" in his work on climate change.

"The Cooch" has tried to obtain the documents under the Virginia Fraud Against Taxpayers Act, but judge rejected his first subpoena in August, finding no evidence to back up his claim that Mann committeed fraud. Cuccinelli's new subpoena narrows the scope of the documents he's requesting to only those related to one $214,700 state grant to fund a 2003 climate study. Cuccinelli claims that Mann "mislead the granter" by basing his application on flawed studies, and that UVa. has documents that his office needs to investigate that assertion. He also expands his reasoning for the request, arguing that two of Mann's papers on global warming "have come under significant criticism" and that Mann knowingly included "false information, unsubstantiated claims and/or were otherwise misleading" in his publications.

"Specifically, but without limitation, some of the conclusions of the papers demonstrate a complete lack of rigor regarding the statistical analysis of the alleged data, meaning that the result reported lacked statistical significance without a specific statement to that effect," the civil investigative demand from the AG's office states.

Of course, one might wonder what part of Cuccinelli's resume qualifies him to evalute the rigor of Mann's climate work. That aside, it also neglects to mention that multiple investigations into the so-called "ClimateGate" controversy found no evidence of any wrongdoing on Mann's part and the science has repeatedly been affirmed in other studies. UVa. has until Oct. 29 to decide whether to produce the requested documents or fight this subpoena as well.

Of course, this isn't really about Mann; it's about the bigger goal of undermining climate science and instilling fear in scientists. Francesca Grifo, senior scientist and director of the Union of Concerned Scientists' Scientific Integrity Program, said Cuccinelli is "flagrantly abusing his power" for political gain. "The attorney general continues to harass Michael Mann and other climate scientists simply because their results don’t fit with his political views," said Grifo, adding that the main goal is perpetuating public doubt and confusion on the subject. (UCS also has a timeline of events in Cuccinelli's crusade against Mann.)

Mann himself gave a statement to the Washington Post criticizing the latest subpoena:

"I find it extremely disturbing that Mr. Cuccinelli has sought to continue to abuse his power as the attorney general of Virginia in this way, in the process smearing the University of Virginia and me and other climate scientists," Mann said. "The people of Virginia need to be extremely disturbed that he is using their tax dollars to pursue this partisan witch hunt."

We're Still at War: Photo of the Day for October 5, 2010

Tue Oct. 5, 2010 5:30 AM EDT

Gen. David H. Petraeus, commander of NATO and International Security Assistance Force troops in Afghanistan, visits a successful road construction project in the Badakshan province, Regional Command North, Sept. 30. Petraeus also attended a shura with Afghan President Hamid Karzai and U.S. Ambassador to Afghanistan Karl Eikenberry. Photo by U.S. Navy Chief Petty Officer Joshua Treadwell

Will Financial Reform Work?

| Tue Oct. 5, 2010 1:36 AM EDT

Will financial reform help create a safer banking system? Last week I said that a key sign would be falling profits, since safer banks ought to be less profitable banks. Unfortunately, banks seem pretty bullish about profits, a sign they don't really think all the new regulations will change their business practices much.

Today, the Wall Street Journal begs to differ:

Investor presentations by top bank executives in London last week, combined with increasingly dour projections for the third quarter that ended Thursday, are crystallizing the challenges banks face. "The business models on the Street are going through dramatic changes," says Clayton Rose, professor of management practice at Harvard Business School, based on the most drastic shifts in the "political, regulatory, and economic environment since the 1930s in the financial industry."

....Return on average equity for the major investment banks, a key barometer of profitability, could be halved from the 20% range a few years ago, according to SNL Financial. And costs are rising, leading to expected waves of industry job cuts.

Morgan Stanley and Goldman, the two major firms that derive most of their earnings power from Wall Street businesses, are expected to earn about $12.1 billion in profits this year — 23% less than in 2006, their peak earnings year, according to Thomson Reuters. Their revenues are still largely dependent on trading, with about 60% of 2009 and estimated 2010 revenues coming from trading, according to Sanford Bernstein.

It's too early to know for sure how this is going to turn out, so for now consider this just another data point. On the one hand, a big part of this anticipated profit crunch is due to lower volumes of stock trading, something that wasn't really affected by the financial reform bill. So that doesn't mean much. On the other hand, the Journal story suggests that higher capital requirements, curbs on prop trading, and derivatives rules are also a big part. If that's the case, maybe the new rules will really have some bite. Stay tuned.

Republican Mouths vs. Insurance Industry Money

| Tue Oct. 5, 2010 1:21 AM EDT

Noam Levey has a wonderfully revealing piece in the LA Times today about the health insurance industry's hopes and dreams for a Republican Congress next year. The insurers, it turns out, like the new healthcare reform rules that force everyone to get health insurance, but they aren't so keen on all those other pesky regulations:

The insurance industry, attracted by the prospect of millions of new customers as a result of the coverage mandate, initially backed President Obama's campaign to overhaul the healthcare system. And insurers scored a key victory when Democrats abandoned plans to create a government insurance plan, or "public option." But insurers are increasingly balking at the myriad new directives in the healthcare law.

Among other things, the law prohibits insurance companies from denying coverage to sick children and canceling policies when customers get sick. The law bars insurers from placing lifetime caps on how much they will pay when their customers get ill. Many consumers will also get new rights to appeal denied claims and win new access to preventive care without being asked for copays.

"The health reform law did not deliver the uninsured in the way that insurers wanted," said veteran healthcare analyst Sheryl Skolnick, senior vice president at CRT Capital Group.

That final quote is priceless. "The health reform law did not deliver the uninsured in the way that insurers wanted." Apparently they wanted the uninsured trussed up and delivered to their doorsteps wallet first, but without any actual obligation on their part to provide decent service in return. And they know just how to get their wish: "The industry would love to have a Republican Congress," says Wendell Potter, a former Cigna insurance executive. "They were very, very successful during the years of Republican domination in Washington."

But this is creating a wee problem for everyone. You see, Republicans are loudly proclaiming right now that they want to eliminate the part of the law that forces everyone to buy insurance. But that's exactly the part of the law that insurance companies like. In fact, they want to see it strengthened. At the same time, they want to get rid of the popular parts of the law that keep insurance companies from figuring out ways to screw patients. But those are the provisions that Republicans say they'll keep if we turn over Congress to them.

And yet, the insurance companies are massively funding Republicans this cycle anyway. Why would that be? It's almost as if they're sure that Republicans are just blowing campaign smoke and will support their agenda once they're safely in office. They're so sure, in fact, that they're willing to put their money where their mouths are to the tune of millions of dollars.

So which do you believe? Republican mouths or insurance industry money? Decisions, decisions.....