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Saturday, November 12, 2011

Now that the 2011 elections are in the books it is time to reflect on the results. Whereas the 2010 midterms were unambiguously a big Republican victory (or, perhaps more accurately a big Democratic defeat), the 2011 elections are a mixed bag. Republicans did increase their strength in state legislatures (full results from Ballotpedia.org), and the results in Virginia show some more warning signs for the Obama campaign. But it is the referendum results in Ohio that I find most illuminating. I agree with Henry Olsen's take on the results. Writing in The Weekly Standard, Olsen believes that the key to understanding the Ohio results is to understand the white, working class voter. Those voters are not in sync with the ideological conservatives who make up the core of the Republican grassroots movement and, for the most part, its elected elites. They came out in droves to express a vote of no confidence in President Obama and the congressional Democrats in November, 2010 which, combined with the enthusiasm of the conservative core voters and the disillusionment of the liberal base of the Democratic Party led to the GOP tsunami. White, working class voters make up the bulk of the public employee union membership, especially the police, firefighters, transit workers, water and sewer workers and the like. Their leaders (with the exception of the police and firefighters) almost always back Democrats. But the rank-and-file don't always follow their leaders when they get into the polling place and have a chance to cast a secret ballot. These folks don't like the bailouts for big banks and corporations, but they do like their wages, salaries and benefits. The Ohio ballot measure directly threatened their own economic security so, naturally, they came out against it.

Facing these facts, how should the GOP proceed?

First, understand that white, working class voters don't want to vote for Obama. They made that clear in the Democratic primaries when they voted in large numbers for Hillary Clinton, and they made it clear in the 2010 midterms, and the polling data continues to indicate that they are not warming up to the President. You can infer whatever you like from the data, that these voters are a bunch of racist, ignorant hillbillies or they are simply being misled by Limbaugh, O'Reilly, etc., it really does not matter why they are voting they way they are voting. It is simply an electoral fact. So, for the Republican Party, they present a huge potential voting bloc for their nominee. But they cannot be taken for granted, because they are not voting FOR something, they are voting AGAINST something (Obama).

Second, these voters will push back against anything that directly threatens their economic security. While the majority of white, working class voters are not public employees, unless a direct connection can be made between their own tax rates and the benefits of public employees, expect very little in the way of support for cutting those benefits. So, referendums to raise taxes will fail (as in Colorado), and referendums opposing more government intervention in health care, that is, Obamacare, will pass (as happened in Ohio) as Obamacare is widely viewed by white, working class voters as a threat to their health care security. But referendums that directly threaten working class public employees will usually fail.

Third, by understand points one and two, GOP candidates can make themselves acceptable to white, working class voters by attacking Obama, vowing to help repeal Obamacare, vowing to oppose bank and corporate bailouts, vowing to oppose tax increases, but assuring voters they will not cut Social Security, Medicare, Medicaid or eviscerate the rights and protections working folks have either at their private sector OR public sector jobs.

For ideological conservatives, this smacks of blatant pandering and hypocrisy. Of course, it IS pandering and hypocrisy. From a public policy perspective it is also, in the long run, unsustainable. But the only way to ensure that the conservative party is in charge when the time comes to make the real reforms and hard choices is to get their candidates elected. It has never been a pretty business, but sausage-making never is.

Wednesday, November 02, 2011

With the Greek government in turmoil over a proposed referendum on the EU bailout deal one wonders where this is all headed. For at least a year many informed observers have believed that a Greek default was inevitable, but it seems that the political leadership of Greece and the leading EU nations are simply incapable of admitting that fact, so they have spent the intervening months in an effort to prevent the inevitable or, barring that, at least make the default orderly and call it by some other more palatable name. It seems to me that all such efforts are in vain, as the inescapable fact remains that the European Union adopted a common monetary structure (the Euro as a common currency) without adopting a common fiscal structure (the surrendering of sovereign control by the nation-states of the EU over their tax and budgetary structures). This is unsustainable, as events are now bringing into crystal clarity.

Meanwhile, the problems in the Eurozone are part of a larger economic situation that continues to show eerie parallels to the Great Depression. Just as that jarring economic dislocation caused social and political unrest, so we too might be headed for years of unrest.

Nile Gardiner has some thoughts on Europe's folly.