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| Erskine Bowles and Alan Simpson |
Our Winners:
Erskine Bowles, Former Clinton Chief of Staff
Alan Simpson, Former Senator (R-WY)
My third co-recipients (following John McCain in 2008 and Rick Santelli in 2009) get no stipend or trophy, just a few bytes in cyberspace and sincere acknowledgment and appreciation.
I usually try to tap into a bigger picture in my selections, which I think have been fairly unique. Take, for instance, the more obvious choice, Barack Obama in 2008. First, there had been a buzz building about his potential candidacy since his keynote address at the 2004 Democratic National Convention. I do think the way he was able to outmaneuver Hillary Clinton, the heavy favorite, by capturing most caucus votes (not awarded on a proportional basis) and holding his own in primary states, with proportional assignments, his ability to distinguish himself from the other senators because (as a state, not US senator) he had opposed the liberation of Iraq (a huge issue with the party base), and his innovative use of high technology and appeal to a coalition of new/younger voters was remarkable. But let's temper the enthusiasm: the only two successful Democratic Presidential nominees since 1964 had been centrist Southern governors (Carter and Clinton). None of the major Democratic candidates had any credible administrative experience, Obama's chief competitor was only barely into her second term as a US senator, and for all practical purposes, all the major candidates had the same progressive voting record. There was no true diversity of views in the field: you had candidates trying to assert which candidate was more ideologically pure on the same issues. (I think the centrist voters gravitated towards Hillary, ignoring her liberal voting record, because they considered her a proxy for her husband and his record in office.) Barack Obama beat, in my opinion, a very weak field for the nomination.
The election was not that remarkable; it was a change election year when the outgoing incumbent President had one of the lowest approval ratings on record; Obama had a campaign war chest multiple times larger than the cash-strapped McCain campaign; Obama had a limited track record and the advantage of youth; and the economic tsunami and ensuing economic uncertainty favored the safety-net Democrats. McCain found himself on shakier ground as the public shifted its attention from the improving picture in Iraq to the economy, where McCain admitted just a few years earlier he needed "to be educated". McCain made two devastating mistakes that led many independents and moderates to question his judgment: the selection of Sarah Palin as his running mate and the temporary suspension of his campaign over TARP legislation.
I'm not going to repeat my many criticisms of Sarah Palin here; some of my pre-selection posts discussed her as a potential candidate, but I had dismissed it because of the ongoing Troopergate investigation due to be released near the election. I thought it would have been unwise for McCain to risk an adverse finding. I'm personally convinced McCain loved the fact that he swerved the press and opposition with a choice nobody expected. But many people, including myself (although I deliberately low-keyed my criticisms of McCain during the campaign), thought he had undermined his experience argument against Obama with the selection of a first-term governor, not even halfway through her first term.
McCain abysmally handled the TARP situation from a tactical and strategic campaign standpoint. The Obama campaign had been trying to define a McCain Presidency as a Bush third term. The American public was largely against the bailout. Obama was backed into a corner: the Democratic-controlled Congress had to act. McCain could have used the situation to tap into public discontent and to distance himself from Bush. By unilaterally suspending his campaign without getting his ducks in a row, i.e., postponement of the first Presidential debate and an Obama agreement to do the same, McCain came across as rash or desperate, and Obama came across as more calm, cool, and collected, in effect turning the table on the basic advantages of an older candidate.
So then, why did I choose McCain as my man of the year? The interested reader can read the post, but let me point out McCain's 2007 campaign collapse and his subsequent cash-strapped campaign comeback from single-digit support status is one of the most remarkable stories in American political history. What made it even more stunning is the fact he had to fight off the attacks from media conservatives, whom loathed his initial Bush tax cut votes, his support for campaign reform, and (of course) immigration. But I also think that his election night concession speech is one of the most remarkable, elegant, honorable ones I've ever heard. If and when Obama is defeated for reelection, I will always believe that the beginning of the end was Obama's "elections-have-consequences" attitude, spurning McCain's open invitation for bipartisan cooperation, to use huge Congressional majorities to ram a minority progressive agenda down the nation's throat. When Obama chose to bypass McCain, one of the truly bipartisan leaders during his multiple terms in office, he all but killed bipartisan cooperation: Obama only seems to compromise when he doesn't have the numbers and he needs votes for his own key political self-interests (e.g., the middle-class tax cut extensions); the fact that he did not have a bipartisan mandate on health care, financial reform, or the stimulus didn't stop him at all, only conceding photo op opportunities, which really really aimed at manipulating the American people into believing single appearances of discussions on health care (where, in fact, he constantly interrupted Republican legislators, disagreeing with them) or to a House Republican retreat constituted his idea of post-partisan politics.
My choice last year, Rick Santelli, reflected the country's backlash against a spendthrift Congress and President, whom used their new clout not to focus on pro-economic growth policies, but to act on pent-up demands for progressive legislative priorities (including climate change and health care, which, if anything, increased economic uncertainty), all but ignoring the recession after a massive stimulus bill and associated morally hazardous or counterproductive legislation, e.g., mortgage assistance, auto company and state/local bailouts, cash for clunkers (what better way to help struggling lower/middle-class people looking for affordable vehicles than to withdraw the supply from the market, essentially driving up used auto prices?), etc. Instead of letting various markets find their bottom, all Barack Obama did was postpone the day of reckoning (e.g., the auto company bankruptcies); the Dems initially fought the auto bankruptcies tooth and nail, arguing nobody would ever buy a car from a company which had filed for bankruptcy; and then all of a sudden they decided spread-the-assets-around bankruptcies (that screwed over higher-standing bondholders in favor of Dem special-interest union interests) were in the country's best interests. It just wasn't that the progressives were enacting mostly ineffectual, counterproductive laws, but they were willing to spend whatever they could, running up the next generation's credit card while at the same time unfunded liabilities (social security and Medicare) were due to escalate as the baby boomer generation started to retire in 2007. Businesses and local or state governments have to cut back (after all, they have to balance their budgets), but Pelosi and company were in a state of denial: why, every dollar the federal government spends, after all, is a "stimulus". Hire someone to dig a hole and fill it up again? No problem--the worker's pay gooses the economy, no matter how intrinsically unproductive his task.
I have to admit this year's selection of Bowles and Simpson was not based on initial high expectations. As an academic and former business school professor, I'm skeptical of anything significant coming from task forces and commissions, and any business professional probably has probably rued the amount of time spent in meetings (like "that's one hour of my life I won't get back"). Second, like the GOP Congressional leadership, I was naturally suspicious of a commission to reduce the deficit; there are fundamentally two ways to close a budget gap: increase revenues or decrease spending--and the latter almost never happens, at least in Washington DC. With strident liberals like Jan Schakowsky and Dick Durbin (never mind strong conservatives like Paul Ryan), it seemed unlikely anything meaningful could come out of a commission that among other things had to wrestle with a 75% vote necessary to compel bringing it up to a vote in Congress.
Along the way, Alan Simpson, who always had a way with words, angered the liberal elite, making reference to 310 million tits on the federal government's social security cash cow. But the co-chair's plan, which I discussed at length in my Nov. 14 post, was a serious attempt at bipartisan compromise: instead of the typical class-warfare rhetoric from progressives like outgoing Speaker Pelosi, it seriously looked at the fact that the social security program never got the kind of revenues necessary to accommodate longer payment cycles (i.e., the actuarial "inconvenient truth" reflecting longer lifespans) with retaining the same retirement age. Progressives are in an unbelievable state of denial: do they honestly believe confiscating the transfer payments of 2% of retirees is going to resolve an increasingly insolvent entitlement program? Never mind the fact that higher income people are unlikely to break even on their/their employers' contributions... Some have even suggested that the 15-plus% of higher-earning worker payroll taxes should be considered an an "insurance policy", never mind the fact that the current social security system is already a redistributionist system. But the Bowles-Simpson compromise takes on gimmicky annual adjustments (which typically have outpaced increases in the cost of living) and deferred eligibility.
Bowles and Simpson also did the politically courageous step of tax reform (simpler, fewer, lower income tax bands rooting out special-interest exceptions and even an American sacred cow of politics, the mortgage interest deduction), advocated deep cuts in both domestic and military programs, and set tough targets on the deficit and debt relative to GDP.
The majority of the committee accepted the compromise 11-7, not enough to make the 75% criterion necessary to bring the proposal to a vote. (Most of the adverse votes came from the House, including a couple of conservative Republicans worried that revising the tax-free exemption of health care may result in companies dumping their health care coverage under ObamaCare.)
What is amazing is that notoriously fickle senators, with one exception, accepted the general framework. This becomes particularly important in the upcoming mixed government with the GOP heading the House, and the Dems controlling the Senate and White House. Despite the deal on tax cut extensions, there is every indication that the Obama hyper-political mindset has not changed. He has insisted "triangulation"--Clinton's policy of trying to meld the partisan extremes during the last 6 years of the Clinton Administration--will not be his approach going forward. I suspect, like the Clinton-Gingrich budget confrontation, that the White House will attempt to maneuver the House into a politically unpopular position, figuring to draft off the Congress' low approval ratings.
Obama is in a state of denial; just like he couldn't understand people clinging to their guns and religion, just like he couldn't get his point across on health care, Obama is underestimating the unpopularity of his class-warfare politics. I think John Boehner is shrewd and will not overplay his hand. Everybody realizes that a $13.8T national debt is unsustainable. Like it or not, the Bowles-Simpson framework has provided a starting point with legitimate bipartisan credibility:
ERSKINE BOWLES: Yes. Well, Paul Ryan, who is head of the Budget Committee in the House, has already said 85 percent of what we recommend will be in his budget. And, as you know, the head of the Senate Budget Committee and the ranking member voted for it today. I think we have made enormous progress. I think the era of these deficit denials is over.
