An ill wind that blows no good.. for a moderate third party.

Week three of the impeachment drama and the plot thickens.

We learn that Rep. Adam Schiff, Chairman of the House Intelligence Committee knew about the "surprise whistle blower complaint" weeks in advance of announcing it and his aides were helping draft the complaint.  If he knew about it, this calls into question the whole narrative that Speaker Nancy Pelosi was converted to the impeachment camp only when she and the rest of the Democratic Caucus heard about the complaint on the weekend before it was tabled by the committee.  A suspicious mind could easily believe the this final eruption was stage-managed for maximum effect.

On the other side, a Presidential Tweet-storm has erupted words like traitor and scum bag being thrown around.  While some maintain that the President may be disturbed, Paul Brandus has an intriguing explanation of his reaction to the whole impeachment fracas:  As a business man running a private empire for the past 30+ years, he has never had to face this.  His reaction may mirror the private reactions of other headstrong business leaders facing opposition; we just get to see the whole business on TV.

Donald Trump executed a corporate takeover of the Republican Party in 2016, marshaling a large block of alienated voters who were choked with both the Republican leadership and the Democrats.  He owns the party and the Republican party establishment is being held hostage.  Worse, they're suffering from Stockholm Syndrome and, with the recent exception of a few like Jeff Flake and Mitt Romney, are dutifully marching in lock-step with the President.

The Democrats just can't come to terms with the fact that they lost the 2016 election -fair and square - to a reality TV show host who revels in shoving their faces in the dirt.  Calls for impeachment rang out before the Inauguration and, with the willing cooperation of the mainstream news media, they have continually turned over rocks, dug up dung and thrown it at the wall to see what sticks - only to discover the President seems to be Teflon-coated.  While they may feel they finally have a cut-and-dried case for impeachment there is an air of desperation in this Hail Mary pass.   Worse, they face the risk that more than half the electorate may see them as sore losers, trying to undo the result of an election they refuse to accept.

It's possible to see how the hard core, left wing base of the Democratic Party might get behind this final impeachment push but more difficult to see what Speaker Pelosi and moderate Democratic House Members might see in this.  Matthew Continetti suggests that there is an end-game for the Democrats .  It involves making sure President Trump gets good and sullied going into the election regardless of the price paid.  He points out that all things being equal, the President is on a path to re-election.   Incumbency, a Democratic presidential field too far off base, and a strong economy may lead to a second term.  There is a real chance however that this might be derailed if enough independent moderate voters are persuaded that the President just doesn't deserve a second term by reason of his conduct and the censure of Congress.

Pity the poor moderate independent voter in America these days.  Polarization is too weak a word for our current political situation.  Like something out of a science fiction novel, both parties seem to be living in parallel, mutually contradictory universes while occupying the same country.  The media is no help either with the current climate drawing news organizations into one camp or the other.

So what are the prospects for third party efforts?  Third parties need an opening when one of the two extant major parties fails to address voter concerns.   The Whigs arose in opposition to Andrew Jackson when there was no opposition at the end of the Era of Good Feelings.  The Republicans rose from nothing to the Presidency only when the Whigs failed to address the slavery issue.   Since then, third party efforts have been regional, sectional or centered on an individual (Teddy Roosevelt's Bull Moose Party or Ross Perot's Reform Party).  Ross Perot probably did best, aided by the fact both the Democrats and Republicans had tacked to the center and neither party was addressing  lunch bucket issues that resonated with middle and working class voters.

Donald Trump could be viewed as the most successful one-man third party effort in American history.  Rather than tilting at the two major parties, he sensed weakness in one and just took it over.  He saw that both political parties were ignoring the interests of a large group of Americans, stuck himself in front of them and took over the Republican party.  This might become the wave of the future.  Imitation being the sincerest form of flattery, Tom Steyer is trying the same trick on the Democrats.   

The next election might be a real donnybrook with both of the main parties ending up like the Ginham Dog and the Calico Cat.  Perhaps when the dust is settled, Americans will want a break and look to a moderate third party who can bind wounds and move the country forward with some measure of consensus.  It might not be a great election cycle for a moderate third party to make headlines but its a great time to build one.  We will need one soon.

-- Mike Power







     

The road not taken

Thanks to President Trump's phone call to the Ukrainian President and Speaker Pelosi's capitulation to pressure from her Democratic Caucus, we're likely to endure the spectacle of an impeachment just as the 2020 election cycle gets underway.  What possible good can come of this?

David Brooks for one sees no good outcome.  I have to agree with him.  The likely outcomes seem to be:

• Congress becomes totally focused on impeachment to the exclusion of other critical business.
• Impeachment gets voted down in the Senate
• President Trump's core supporters get energized.
• Independents get pissed at the Democrats for a futile gesture taking them away from dealing with substantive issues.
• The Democrats House majority gets chopped back or lost. 
• VP Joe Biden gets taken out of the presidential race, removing the leading moderate Democratic candidate.
• The Democrats nominate a presidential candidate too left wing for most Americans to support.
• The President gets re-elected and we get 4 mores years of political warfare.

Speaker Pelosi's sudden capitulation to the impeachment crew - before any of the evidence came out - seems mysterious to me.  There might be method behind this but it seems totally focused on her keeping control of her House majority.  Consider:

•  No House vote was taken to open up the impeachment hearings.  You would think that if this support was so strong, she would do so immediately to let the American people know how serious this was.  Nope. Refusing to do so protects her wavering, moderate members for a while longer rather than putting them on the record.
• She has outsourced and distributed the impeachment inquiry to both  Rep. Jerry Nadler's judicial committee and Rep. Adam Schiff's intelligence committee.   With two on the job, they stand a better chance of turning up something substantial.  They also both want some limelight They may regret this if the impeachment process turns out to be a fiasco but the Speaker probably avoids getting splattered by letting them run with the ball.
• She could care less about the presidential race.  The back blast from any impeachment inquiry will likely take out VP Joe Biden and perhaps any chance for a moderate candidate.  If voters go to the polls sensing President Trump might get re-elected, the Democrats might even hang on to their House majority as a counterweight.  

 There's a chance voters might get really choked with Congress for wasting time on this rather than dealing with substantive issues and turf out a lot of Democrats.  It's a risk she has to take.  A good politician is like a good surfer; you make the best of the waves you've got.  And hers was heading towards impeachment.

There is another alternative here which cooler heads have proposed: Presidential censure.  The most famous example was the censure of  President Jackson which so enraged him he fought hard to get it expunged from the Senate record.   A number of commentators have called for this in response to the Ukrainian call crisis including Bill Whalen in Forbes and  Thor Hogan in the Washington Post. 

There are three good tactical reasons for the Democrats to choose censure over impeachment:

1. President Trump has masterfully exploited divisions in the Democratic Party; censure would give the Speaker a chance to turn the tables on him.  A lot of Republicans were uncomfortable with the President well before he went on record asking a foreign head of state to help him dig up dirt on a potential opponent.  Dozens of Republicans in both the Senate and the House would support a censure vote to express their disapproval (or worse) with the President's performance.  Having put themselves on record as supporting a censure vote, they would be a lot easier to pressure in a subsequent impeachment vote - if one came up.   A censure vote might be sold to the Democratic caucus as a baby-step towards a more certain impeachment. 
2. A bi-partisan censure vote might not influence President Trump's base voters but it certainly would influence independent and moderate voters.  Without these voters, the President stands no chance of re-election.
3.  Finally, a censure vote could proceed quickly and let Congress get back to business dealing with important issues now relegated to the back burner.  Ultimately, Congress will be judged on its effectiveness and a lot of Americans don't see impeachment as a big issue.  The Speaker knows this.

In June, Speaker Pelosi ruled out censure, calling it a "day at the beach" for the President.  She might want to reconsider but it might be too late.  Her wave is already too close to the beach. 

-- Mike Power

What are the odds?

If you read this blog, you likely have a passing interest in third party politics.  If so, there's a nasty little axiom of political science you should know about:

Duverger's Law 

Duverger's Law asserts that two party systems are favored in a first-past-the-post, winner-take-all election.  Common sense tells us why.  When there's only one winner possible and all the winner has  to do is get more votes than the runner up, voting for a third party seems pointless or could be  counterproductive (if they guy / gal you hate gets in).   Voters tend to self-sort into two broad coalitions and elections becomes two-party races.  The video below explains it all:

Scale matters here I think.  If you're running for Dog Catcher in Gold Point, party affiliation doesn't matter and the field can be large. When the stakes are high, the pressure to sort into two parties is much greater.   In a presidential election, it's virtually irresistible: it's going to come down to a choice between two candidates. 

So - we all know that no third party candidate have ever come close to getting elected President of the United States.  Ross Perot did best at about 19% in 1992 but that's a long way from winning.  We can safely conclude that the odds of a third party candidate getting elected President are zero.  There might be other benefits to a third party of running a national presidential candidate but we shouldn't kid ourselves about their chances. 

But what about other offices?  In some future post, I'll compile the statistics for the House of Representatives and Senate.  In this one, I'd like to look at state governors.  Since 1790, there have been 2,414 governors elected in all of the states (you'll have to do the tallies manually from this Wikipedia summary).   Of these, 82 were elected as independents or third party candidates. So, for governor, we have betting odds of about 3.4%.   So - a third party or independent candidate has a 1 in 33 chance of getting elected governor.  Way better odds than running for President.

Certain states tend to favor third parties.  Nevada had a noteworthy run from 1895 to 1911 when candidates from The Silver Party were repeatedly elected governor to defend the state's vital economic interests.  Minnesota, North Dakota, Wisconsin, Virginia and South Carolina had viable competitive third parties at the state level for various periods of time.

The bottom line seems to be that a national third party's best chance of influencing national politics will start at the state level with state politics.  

If the Alliance Party is going to effect real change, it's likely going to have to start at the bottom with local candidates running for local office (hopefully more exalted than dog catcher).   I think it's also worth keeping in mind that if one of the major parties steals and implements any of our good ideas, we also all win.  The bottom line is to get on voters' radar screens by proposing pragmatic, common sense, moderate solutions and debating them on their merits.  If we can influence the direction our country takes - either directly through election or indirectly through adoption - we will have done our bit.  

-- Mike Power

 

 


  

The debt bomb is now ticking faster...

As we start this post, the US national debt is $22,539,726,000,000 growing by about $1,000,000 a minute.  Earlier this summer, Congress and the White House agreed on a budget deal that ensures this will only grow faster.

Following the budget deal, the Congressional Budget Office put out a revised deficit estimate and the projection is for increased budget deficits as far as the eye can see:

Note that more than half of future deficits will be used just to pay the interest on the national debt.  

 Valery Ramey, writing in the Wall Street Journal, summarizes the likely trajectory for the national debt in an era of sustained deficits.  We are on track to grow the national debt to levels not seen since World War II. 

Unless drastic action is taken soon, we may grow the national debt to more than 100% of GDP, joining China and Japan in the danger zone.  Unfortunately, unlike China or Japan, much of our debt is held by foreigners.  We've enjoyed this privilege because the American dollar is the world's reserve currency. 

Central bankers however have begun to be alarmed about this.  Having the  dollar as the world's reserve currency was fine after WWII when the US had by far the world's largest economy.  That's changed however and China is on track to become the world's largest economy in the next decade.  Inevitably, the world will have to move away from the dollar and when that happens, we will have to pay market rates - interest rates - for money.   Imagine the effect on our budget and economy when interest rates on Treasury bills have to be say 2% higher to get them sold.  We are currently spending 1.8% of GDP on debt servicing; this is projected to rise to 2.6% of GDP by 2029 with no change in reserve currency status.  If countries start moving away from the dollar - and not buying our debt - interest rates will rise by more than projected and we will be borrowing and taxing increasing amounts of money just to pay the interest on the national debt.  Zerohedge summarizes the history of reserve currency transitions through history; you can make the argument that our time might be up.

Is there any indication this is happening?  Last week at Jackson Hole, central bankers got together for their annual meeting and outgoing Bank of England governor Mark Carney made the case for a new transnational reserve crypto-currency.   Over the past decade, other countries have been returning to an older transnational reserve currency - gold.

Democrats and now Republicans have convinced themselves that the national debt just doesn't matter - no matter the size.   We can just grow our way out of it with nary a care.  With interest rates near zero world-wide, we might get away with this a bit longer.  If we lose reserve currency status or interest rates revert to more normal levels of around 4%, we're going to discover that we are no longer masters in our own house.   Some very hard choices will have to be made.

The only national political party to make a central issue of controlling the deficit and debt is The Alliance Party.  Let's hope people listen to us before it is too late.

-- Mike Power