David Corn

David Corn

Washington Bureau Chief

Corn has broken stories on presidents, politicians, and other Washington players. He's written for numerous publications and is a talk show regular. His best-selling books include Hubris: The Inside Story of Spin, Scandal, and the Selling of the Iraq War.

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The Newest GOP Myth: We've Drifted from Our Principles

| Fri Nov. 14, 2008 1:49 PM EST

This was first posted at www.davidcorn.com....

In the aftermath of a decisive defeat, Republicans and conservatives are nursing their wounds and wondering what went wrong. Many have come up with an easy answer: the GOP has drifted from its core principles; consequently, the voters have handed it the pink slip.

But is the drift more to blame than the principles?

Let's look at one example of this argument. Michael Steele, the former Maryland lieutenant governor and an unsuccessful candidate for Senate in 2006, is running to become the new head of the Republican Party. In a statement he released on Thursday, he said,

The Republican Party must present a vision for the future of America that relies on our conservative values and core principles. It is wrong to believe the voters have suddenly become liberal. They have just lost any sense of confidence that the Republican Party holds the answers to their problems. We must face the fact that our party has failed in recent years to live up to our own principles -- we have failed to be 'solutions oriented' in addressing the concerns of all Americans.

Does Steele have it right? Has his party failed to present "solutions" in recent years? Not really. The Republicans have presented plenty of "solutions," but the voters have not cared for them.

What are the two core principles of the Republican Party? Cutting taxes (to ensure a smaller government) and swinging a big stick when it comes to national security. There's also the social issues, such as opposing abortion rights and gay rights. But those lifestyle issues have often been a second-tier matter for many Republican leaders.

Now look at the George W. Bush presidency and the John McCain campaign. The core issues were tended to by both. Bush pushed tax cuts and started two wars (one of them elective!). How loyal to the core was that? He didn't crusade against abortion rights and gay marriage, but he said the right things (from a social conservative perspective). Sure, government spending did go up on his watch--as did the deficit and the national debt (due to his tax cuts)--but much of that was attributed to increased military spending (another conservative idea) and expanding Medicare benefits. Does Steele and his fellow GOP handwringers believe they can get back to the White House by downsizing the Pentagon and undoing that Medicare expansion?

Bush has ended up an unpopular president because he was both conservative and incompetent. He launched an unnecessary war in Iraq and then mismanaged it. He lost an American city. On economic policies, he was a market-oriented fellow who snorted at regulation. For most of his presidency, his economic policy was essentially tax cuts, tax, cuts, tax cuts--and let the market sort out the rest. That conservative approach didn't work. Now he's a corporate socialist, throwing hundreds of billions of dollars at corporations that screwed up. But he had turned off the public long before making that lurch.

As for John McCain, he, too, ran on core conservative principles. He called for an across-the-board freeze on federal spending. He supported supply-side tax cuts (that he had once opposed). He called for a robust national security posture. And he did what many conservatives do: he accused the Democrats of being tax-and-spend liberals ("socialists," his running mate called them) and claimed the Ds were dangerously weak on national security. On health care, he proposed market-oriented tax credits. He and Sarah Palin opposed abortion rights.

So what was there for a voter seeking Republicans loyal to core conservative principles not to like? McCain was offering lots of solutions. He had his (erratically-derived) proposals for addressing the economic meltdown and housing crisis. He said he had a plan for nabbing Osama bin Laden.

It seems that voters just aren't keen on conservative solutions now. They do not appear to be yearning for a smaller government that does less. Many actually are hoping that the government will take steps to help them and their fellow citizens in these tough (and getting tougher) times. If conservatives are going to claim, as Palin explicitly did, that government is the problem and an obstacle to freedom, they can be credited for sticking to their ideological guns, but they're not likely to put together a governing coalition at this moment.

There certainly have been periods when the conservatives' siren song of lower taxes and less government appealed to many Americans. But it's easier for conservatives to sell those core notions either (a) during not-so-hard times or (b) after a left-of-center administration has messed up. (For the latter, think Jimmy Carter.) In a vacuum, American voters don't crave conservative solutions. For many Americans, ideology is relative. That is, what they want depends on what is happening around them.

So Steele and his comrades are stuck--with a lousy brand (thank you, President Bush) and with core principles that are not in sync with the current market demand. This is not to say that the party is dead. There are no permanent majorities in the United States. If the Democrats botch the job in the next two years, that ol' pendulum could swing back and knock them on their backsides. But for the time being, the Republicans must move beyond this return-to-core-principles line--unless they are content to tread water in a pool of self-delusion.

If Steele truly believes his back-to-the-future rhetoric, Democrats ought to be rooting for him.

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Was Obama Economic Envoy Part of the Problem?

| Wed Nov. 12, 2008 12:17 PM EST

The Obama transition office announced on Wednesday that the president-elect will send two representatives to meet with delegates attending the G-20 economic summit being held this weekend: former Secretary of State Madeleine Albright, a Democrat, and former Congressman Jim Leach, a Republican. The pair, according to a press release, will hold "unofficial meetings to seek input from visiting delegations on behalf of the President-elect and Vice President-elect." Afterward, Albright and Leach will brief Barack Obama and Joe Biden.

Leach is both a curious and obvious choice. First, the obvious: he's a Republican who led the Republicans for Obama effort during the presidential campaign. By calling on Leach, who had a long career in the House as a liberal GOPer, Obama can show he does believe in bipartisanship. Now the curious: during part of his stint in Congress, Leach chaired the House banking committee and shared responsibility for passage of the Gramm-Leach-Bliley legislation, which broke down the wall between commercial banks and investment banking.

Since the current Wall Street collapse began, policy wonks have debated whether this 1999 law led to the present troubles. But let's look at an Obama campaign statement released last March (when he gave a speech on financial regulation) that referred to the Gramm-Leach-Bliley Act:

Instead of finding the right level of government oversight in a vibrant free market, we've let the special interests set the agenda. Changes in the financial landscape, driven by technology and globalization, made the 1930's era Glass-Steagall Act--the New Deal era law that required that investment banking be kept separate from commercial banking--increasingly inefficient. While reform was desirable, the banking, insurance and securities industries spent over $300 million lobbying Congress to shape that reform to meet their own interests. In the two years before Glass-Steagall was repealed in 1999, financial service industries gave $58 million to congressional campaigns; $87 million to political parties; and spent $163 million lobbying Washington. But though the regulatory structure was outdated, the need for oversight was not. Unfortunately, in the rush to repeal the law to create immediate opportunities for certain Wall Street firms, little effort went into modernizing the government's supervision of the financial industry--to guard against the potential for conflicts of interest, to insist on transparency, or to ensure proper oversight of new and complex financial products or the dramatic rise of investment banks and non-bank financial institutions, like hedge funds and Structured Investment Vehicles. Nearly a decade later, our financial markets--and everyday Americans--are paying the price.

Paying the price--for a bill that Leach helped to usher through Congress. That's a tough critique.

Responding to Obama's Win, Michael (Son of) Reagan Says, Go After Dems on Sex

| Tue Nov. 11, 2008 5:08 PM EST

The Obama win is driving some conservatives crazy. On Tuesday, Michael Reagan, talk show host and son of Ronald, sent out an email announcing a new outfit called Reagan Action, which among other things, will seek to "expose" the sexual "corruption" of leading Democrats. And he was characteristically over the top:

Dear Conservative Friend,
My father wasn't afraid to call evil what it was -- and neither am I. He defeated the "Evil Empire" called the Soviet Union -- but now we face a new "Evil Empire." It's called Socialism, and it's taken over our once-free nation through the victories of Obama, Pelosi and Reid.
We MUST do this. Really -- what choice do we have, except to fight back and WIN? As my father, President Ronald Reagan, once said, "We must act today in order to preserve tomorrow."
It's official: America has its first truly Socialist president... and it's the Republican Party's fault.
No, scratch that -- it's the so-called "leaders" of the GOP who are at fault for this humiliating defeat -- and I say it's time to name names and make heads roll in our party. Because, my fellow conservatives, we have been BETRAYED by the very people who promised that, if we would just elect them, they would get into office and vote OUR conservative values.

Michael Reagan, who sure likes bold face and capital letters, notes that he is angry with President Bush and

the so-called "leaders" of our party, who promised us that if we'd just vote for who they put up for election, we'd finally get what we wanted: smaller government, lower taxes, dramatically lower spending, pro-life laws, pro-marriage constitutional amendments, pro-American economics... well, YOU AND I put them in power, and they gave us nothing but BIG GOVERNMENT, BIG DEFICITS, and LIBERAL COMPROMISES.

So what's he going to do about it? Reagan is declaring "the NEW Reagan Revolution to bring Conservatism BACK!" And how will contributing to Reagan Action--yes, this was a solicitation letter--bring back conservatism? This new group, Reagan promises, will

EXPOSE LIBERAL CORRUPTION-- With the Democrats back in power in both Congress and the White House, you KNOW that they'll be falling right back into their habits of taking lobbyists' money under the table, trading votes for campaign contributions, spying on and sabotaging Republican legislative plans, covering up their leaders' sexual "flings," and spending taxpayer money on personal expenses like never before. But this time, YOU AND I will be there every step of the way, making sure that no stone is left unturned, every dark corner is filled with light, and every illegal act is paid for with censure, impeachment, recalls, investigations, and jail time for every criminal we expose in Washington, D.C.

And Reagan will also be directing "Reagan Activists to "fill the news media with letters to the editor, guest editorials, and news articles detailing the socialistic and corrupt policies of the new liberal regime."

This is some effort he has planned--mounting an army of Reagan-loving volunteers to go up against the "evil" Obama administration and take the country back from the socialists. And Reagan is even willing to probe the sexual "flings" of Democrats.

Reality check: is the United States now a socialist state about to be headed by a socialist leader? (Let's leave aside the Wall Street bailout.) There are two explanations for Reagan's letter. (A) He's become totally unhinged by the Obama victory, and (B), he's crassly trying to squeeze whatever cash he can out of conservative donors by exploiting their ideological paranoia. Maybe the correct answer is all of the above.

Obama Announces Transition Ethics Rules--And Keeps on Fundraising

| Tue Nov. 11, 2008 3:02 PM EST

The Obama gang can be pretty good when it comes to managing the message. Today, John Podesta, the chief of the Obama transition, announced the ethics rules for the transition. Here they are:

* Federal Lobbyists cannot contribute financially to the transition.

* Federal lobbyists are prohibited from any lobbying during their work with the transition.

* If someone has lobbied in the last 12 months, they are prohibited from working in the fields of policy on which they lobbied.

* If someone becomes a lobbyist after working on the transition, they are prohibited from lobbying the Administration for 12 months on matters on which they worked.

* A gift ban that is aggressive in reducing the influence of special interests.

As he talked to reporters about these rules, the transition team sent out an email to reporters listing these prohibitions. Included in the email were positive reviews of the rules from two veteran Washington experts on government: Thomas Mann of the Brookings Institution and Norman Ornstein of the American Enterprise Institute. They are two go-to sources for Washington reporters on government and reform issues. And here--for reporters' convenience--were we-love-this quotes from the pair.

Mann noted:

The ethical guidelines released today for the Obama transition are tough and unequivocal. They will prevent some honorable people with rich experience from serving in the transition. That is a real cost but it is more than balanced by the strong signal sent by the President-elect. He aspires to attract to government able individuals whose highest priority is to serve the public interest. This is a very constructive step in that direction.

Ornstein said:

Restoring trust in government is a prerequisite to enacting good policy and the tough choices the country needs. This ethics policy for the transition is a far-reaching, bold and constructive step to do just that. The policy may exclude some good people with deep experience in their fields, but it will also exclude those who see government service as a springboard to financial success, or who are more intent on pleasing future potential employers or clients than making tough choices in the public interest. As much as anything, this ethics policy is a statement about the tone and tenor of the Obama administration. It is a good sign.

There--I did just what the Obama camp wants reporters to do: make use of these served-up-on-a-silver-platter quotes.

But there is a question: why does the transition accept any contributions at all? Podesta noted that the Obama transition will cost $12 million, but that the government will only pick up $5 million of this tab. Consequently, President-elect Barack Obama and his supporters will raise another $7 million. According to the new rules, contributions from federal lobbyists, corporations, and political action committees will not be accepted. Individuals cannot give more than $5000. And all donations will be disclosed.

Yet when the top priority for Obama and his aides is preparing to govern, why should any time be spent on raising money for the transition? Given that the nation is spending trillions of dollars to rescue the financial industry, it shouldn't be too hard to fund fully the transition effort. Can't Congress just appropriate another $7 million--which is chump change these days--and let Obama get on with the show?

That $700 Billion Wall Street Bailout May Be Closer to $3 Trillion

| Tue Nov. 11, 2008 1:50 PM EST

How much will the Wall Street bailout cost? Remember that the widely-used number was $700 billion. Well, it may be over three times that amount. Bailoutsleuth.com reports that the actual (and perhaps rising) price tag now stands at over $2 trillion:

Adding together the $170 billion that the Treasury Department has currently agreed to provide banks in additional capital, the $150 billion that the Treasury Department and the Federal Reserve are providing to AIG and the $2 trillion that the Federal Reserve has provided banks in emergency loans brings the total assistance to $2.32 trillion.
If the estimated savings from the new tax breaks are included, the assistance would climb to $2.46 trillion. That total does not include other measures not focused directly on banks, such as Treasury Department's $200 billion in support for Fannie Mae and Freddie Mac, and the Federal Housing Administration's $300 billion HOPE for Homeowners program.

Add all of that together and you reach almost $3 trillion. (How many solar panels can you buy for that?) Remember that Bill Clinton came into office and he and his aides encountered deficits much bigger than expected. What's going to happen when Obama moves into the White House and has to contend with the real cost of the so-called rescue? (Yes, the Treasury is supposed to get some of this money back--eventually.) By the way, to provide some context, the current (and falling) GDP of the United States is $14.4 trillion. The total bailout tab is over one-third of the nation's entire output of goods and services.

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