Posts filed under “Think Tank”

Will Donald Trump Crack-up the Republican/Tea Party Alliance?

In an interview some years ago, I described the conservative and libertarian movements as all chiefs and no Indians. By this I meant that these movements, as they existed historically, were mostly just a tiny group of intellectuals writing for small circulation magazines and journals, without much of a public following. To be sure, a plurality of Americans identified as conservative and supporters of free enterprise, but their political philosophy was passive, disorganized and unarticulated. Such people were epitomized as the “silent majority.”

At various times, those on the right have tried to create a mass movement by coopting groups aligned with them on certain issues that had a broader and more disciplined base of support. The libertarian economist Murray Rothbard, for example, tried to bring the “new left” around to libertarianism on issues such as opposition to war and legalization of drugs. This effort failed and he turned his efforts toward coopting what are sometimes called “paleoconservatives.” These tend to be unreconstructed Southerners still angry at Abraham Lincoln for being the first “big government” president. But such people are too small-C conservative to be comfortable among libertarians that are seen by them as hippies and nonconformists.

The late journalist Jude Wanniski spent years cultivating the Rev. Louis Farrakhan, leader of the Nation of Islam, in hopes of converting him to supply-side economics. (I worked for and with Jude for many years.) I think Jude believed if Farrakhan would adopt supply-side economics as the official economics of the Nation of Islam, then all its members would automatically convert as well and Jude would finally have an army that would follow his lead. This effort never went anywhere and alienated many Jews who view Farrakhan as anti-Semitic.

In the 1980s, Charles and David Koch began to fund groups like Citizens for a Sound Economy, which later morphed into FreedomWorks and Americans for Prosperity, explicitly established to be grassroots membership organizations that would pressure on Congress to enact free market policies. For many years, however, CSE and other such groups were more “astroturf” than real. I remember once talking to CSE’s membership director and I asked how it was that year in and out the group claimed exactly 250,000 members, no more no less. I asked how many of these people were actual members of CSE. She said that anyone who had ever given money to the group or attended one of its events was deemed to be a member.

The Koch-built infrastructure suddenly had a massive influx of genuine activists in 2009 when the Tea Party movement spontaneously emerged. Veterans of the Koch operations quickly swung into action and provided leadership, money and organization for the Tea Party. Without this, it is very likely that the Tea Party would have burned itself out, just as the Occupy Wall Street movement on the left did.

The Tea Party immediately turned its sights on taking over the Republican Party. It took advantage of the fact that no Republican can be elected without first securing the Republican nomination. Historically, this is a process controlled by regular party insiders who anoint those who have paid their dues to the party by working their way up through lower-level offices to the point where they are deemed worthy of more important positions such as congressman. Control was maintained by the fact that nominating conventions and primaries involve small numbers of people and it didn’t take very many of them to determine who got the party nomination, with electability usually being the primary qualification.

In the last 40 years, only 7 percent to 8 percent of eligible voters participated in GOP primaries. Before 2010, the percentage varied from a low of 7.3 percent in 1974 and 2006 to a high of 8.7 percent in 1994, according to an American University study. But in 2010, the first election year of the Tea Party era, Republican turnout jumped to 9.8 percent, suggesting that a fourth of all GOP primary voters were new to the process.

The result was the nomination of  Tea Party-endorsed candidates in many states, often with minuscule percentages of eligible voters, winning with just 2 percent to 6 percent of eligible voters. Several won the general election, but in some states winnable elections were simply thrown away when inexperienced Tea Party members such as Christine O’Donnell in Delaware and Sharron Angle in Nevada secured the GOP nomination for the U.S. Senate. This allowed Democrats to hold the U.S. Senate for another 2 years.

There is no evidence that the Tea Party had any regrets about its actions. Its members believe that standing for principle is the foremost requirement for holding office, that all compromise is evil and must be opposed no matter the consequences. Although the vast bulk of Republican officeholders believe such an attitude is nuts, that the very nature of politics demands compromise and negotiation, they dare not say so publicly lest they find themselves facing a well-financed Tea Party challenger in the next primary.

There is not a single Republican in Congress who feels safe from a Tea Party challenge. In 2014, House Majority Leader Eric Cantor was defeated in the primary despite massively outspending his novice opponent. It is apparent that Tea Party members would rather maintain their stranglehold on the GOP than advance their own agenda incrementally. For them, it is total victory or nothing.

One problem with this attitude is that the Tea Party seems to have forgotten how the American government works, mistaking it for a parliamentary system in which the legislature has total control. Lacking the votes to overcome a Barack Obama veto, Tea Party members apparently believe that futilely voting over and over again to repeal the Affordable Care Act accomplishes some purpose. Later this year they plan to shut down the federal government to protest funding for Planned Parenthood based on discredited, doctored videos from disreputable anti-abortion activists.

This simplistic attitude toward public policy issues also distorts the process for nominating a Republican presidential candidate. Extremism on all issues is rewarded, while moderation and carefully considered policy positions are an albatross. This was on full display in the Republican debate on August 6.

Going into the debate, Donald Trump appeared to have done the best job of mastering simplistic solutions to every major issues, well-articulated in practiced sound-bites. Clearly, he benefited from his years in “reality” television.

It appeared that Trump was the favored candidate of Fox News before the debate, which it sponsored and is far and away the most influential news source for virtually all Republicans. As I noted previously, Fox made Trump as a political figure by inviting him on repeatedly to discuss political issues despite his lack of political experience and paucity of policy knowledge. His stock-in-trade is and always has been bombast, which plays well as television entertainment, but not so much when the stakes are higher.

Trump was clearly shocked by the sharpness of the questions at the debate, especially from Fox anchor and former prosecutor Megyn Kelly. He subsequently attacked both Fox and Kelly personally in a variety of twitter posts and media interviews.

With Trump and Fox now on opposite sides and the Republican establishment eager to quash his threat to run next year as a third party candidate, which would virtually guarantee a Democratic victory, conservatives began to choose sides. Erick Erickson, a paid Fox contributor who runs the politically powerful RedState website, publicly disinvited Trump to an Atlanta gathering at which most other Republican candidates appeared.

Of particular interest, I think, is that two of talk radio’s most powerful voices, Rush Limbaugh and Mark Levin, quickly came to Trump’s defense. I suspect this was as much a market-driven decision as an honest personal one – talk radio has long catered to the more downscale, less educated wing of conservatism, where most Trump supporters dwell. Whatever else one thinks of Limbaugh and Levin, they are enormously useful allies in the sort of fight Trump is waging.

It is too soon to know whether Trump is in this for the long haul, but I would not underestimate his ego or willingness to spend freely from his vast fortune to secure the Republican nomination. Early signs are that his support remains firm in post-debate polls and he is still leading the pack. If the Republican field stays divided, preventing consolidation around the strongest non-Trump candidate, one cannot dismiss his chances of success.

Of more importance to me is that if the forces for and against Trump play out as they have so far, with Fox and Tea Party leaders siding with the GOP establishment while talk radio and large numbers of the Tea Party grassroots are committed to Trump, we may see the crackup of the Republican coalition that controls Congress, many state legislatures and governorships. The Tea Party will go down in history as just another populist movement that lacked staying power and Donald Trump will be its William Jennings Bryan.

-Bruce Bartlett

Category: Philosophy, Politics, Think Tank

Liscio Report: Comments on July Employment

COMMENTS ON JULY EMPLOYMENT Philippa Dunne & Doug Henwood The Liscio Report, August 7, 2015     This is a report custom-designed for the dog days: little of interest to distract one from the important business of R&R, including, if you’re lucky, fishing. A bit on the weak side, perhaps – especially the household survey – but not…Read More

Category: Markets, Think Tank

New Rules

1. You’re a musician, not a recording artist. It’s 2015 and not only have recording revenues declined, the whole world of music has gone topsy-turvy. Yes, there are a few superstars who base their careers on successful recordings, but everybody else is now a player, destined to a life on stage. This ain’t gonna change,…Read More

Category: Music, Rules, Think Tank, Weekend

When Women Out-Earn Men

When Women Out-Earn Men Jaison R. Abel and Richard Deitz Liberty Street Economics AUGUST 05, 2015     We often hear that women earn “77 cents on the dollar” compared with men. However, the gender pay gap among recent college graduates is actually much smaller than this figure suggests. We estimate that among recent college…Read More

Category: Think Tank, Wages & Income

“The Fourth Amendment was designed to stand between us and arbitrary governmental authority. For all practical purposes, that shield has been shattered, leaving our liberty and personal integrity subject to the whim of every cop on the beat, trooper on the highway and jail official. The framers would be appalled.”—Herman Schwartz, The Nation     Trying to…Read More

Category: Legal, Think Tank

Interest Rates and House Prices: Pill or Poison?

Interest Rates and House Prices: Pill or Poison? Òscar Jordà, Moritz Schularick, and Alan M. Taylor FRBSF Economic Letter 2015-25, August 3, 2015     Policymakers disagree over whether central banks should use interest rates to curb leverage and asset price booms. Higher interest rates make mortgages more expensive and could prevent borrowers from bidding…Read More

Category: Inflation, Think Tank

Category: Think Tank

It’s official. Puerto Rico defaults

Puerto Rico Defaults – Our new Muni Book Davd Kotok Cumberland, August 1, 2015   It’s official. Puerto Rico defaults. Here is a full list of discussions. As my colleague and co-author, Michael Comes, has described in detail, this is a default on a “moral-obligation” bond. Litigation will certainly start next week. A moral ob….Read More

Category: Books, Fixed Income/Interest Rates, Think Tank

The Golden Dilemma

Category: Gold & Precious Metals, Think Tank

Bank For International Settlements: 85th Annual Edition

Category: Think Tank