Year of Divided Government Dragons 龍 2012 Senate Election Outlook

King DivGoverah astride the capitol.
A 2012 divided government sequel?

For the committed dividist, deciding how to vote in a national election is a two step process. The first step is a realistic clear-eyed assessment of the prospects for either party taking control of the House, Senate, and White House. The next step is advocating and casting a vote for the scenario most likely to prevent one party rule of the legislative and executive branches. Finding the divided government vote in any given election cycle is far easier than it sounds. In fact, it is usually quite obvious.

Healthcare on the ground. Pivot to the banks. Healthcare on the ground.*

With President Obama's propensity for continuous machine gun-like rapid fire communication, it is important to sort out which administration missives demand attention and which can be safely ignored. I take my cue from the number of politico's lined up behind the podium.

Based on this metric, Thursday's briefing deserved our attention. This was a 10-bagger. Ten - count them - ten administration and congressional luminaries lined up like so many potted plants serving as backdrop to the presidential announcement. There you have Paul Volcker, Bill Donaldson, Joe Biden, Chris Dodd, Barney Frank, Christine Rohmer, Peter Orszag, Larry Summers, Tim Geithner and somebody else I don't recognize. The occasion was President Obama's announcement of the latest refinement to the administration "Financial Reform" initiative:

"It's for these reasons that I'm proposing a simple and common-sense reform, which we're calling the "Volcker Rule" -- after this tall guy behind me. Banks will no longer be allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit, unrelated to serving their customers. If financial firms want to trade for profit, that's something they're free to do. Indeed, doing so –- responsibly –- is a good thing for the markets and the economy. But these firms should not be allowed to run these hedge funds and private equities funds while running a bank backed by the American people."

He cautioned financial industry lobbyists to not fight his "common sense reforms ... if these folks want a fight, it's a fight I'm ready to have." The remarks came one week after he announced "we want our money back, and we're going to get it. And that's why I'm proposing a Financial Crisis Responsibility Fee to be imposed on major financial firms..." and one day before hitting the road for an Ohio Townhall where he promised to "never stop fighting to protect you from the kind of deceptive practices we've seen from some in the financial sector". Clearly, the predicted presidential populist pivot against the banks is well underway.

Coincidentally (or not), all this bank bashing takes place in the context of a stunning rejection from the Massachusetts electorate, and equally breathtaking Democratic party retreat on the health care reform bill.

Wall Street reacted badly, falling in anticipation of the President’s speech, sliding further while he was speaking, and continuing to drop after he finished. This was possibly the worst Wall Street reaction to an administration initiative since Tim Geithner announced the plan to save Wall Street almost one year ago. Then, Tim Geithner was standing next to Obama as financial reform was introduced and later when the details were fleshed out over the summer. There is less certainty where he and Larry Summers stand now. At least in their role as potted plants, they appear to have moved closer to the exit than the president.

Whether financial reform is more politics than policy, or optics over substance, or whether it goes the way of health care reform, will be dependent on Congress and the bills being shaped in Chris Dodd's Senate and Barney Frank's House committees. It cannot be encouraging to reform proponents that Barney Frank went directly from his role as stage prop to an interview on CNBC where he soft pedaled the reforms announced minutes before.

Wall Street professionals were understandably confused:
I have not seen Rick Santelli quite this exercised since he inadvertently inspired the Tea Party movement last spring.

Let’s wrap this up with a quick Financial Reform Bill status check: The President is on the stump, giving speeches, sitting for interviews, and conducting town-halls in a media blitz supporting this major reform initiative. He campaigned on this reform and his administration has promoted several iterations of the bill since taking office. In the meantime, Democrats in the House and Senate are crafting reform bills that are inconsistent (if not incompatible) with each other and with the President’s promises.

No one knows what version, if any, will pass.

I think I have seen this movie before.

*Afterword:
Although I don't watch American Idol, I am given to understand from a usually reliable source who does, that everyone will instantly understand this reference to a recent pop culture phenomena. For any who may be as culturally illiterate as myself, the source of the title is a "song" from this audition on American Idol. I first heard Brett Favre's locker room rendition. In an effort to be culturally relevant I thought I'd add a verse in honor of the presidential pivot.

Healthcare on the Ground*
(with apologies to Larry Platt)

Healthcare on the ground.
Healthcare on the ground.
Lookin' like a fool with healthcare on the ground.

Brown in the Senate,
Pivot to the banks,
Healthcare on the ground.

Call yourself a populist,
lookin' opportunist,
Talkin' banks down,
with healthcare on the ground.

Divided and Balanced.™
Now that is fair.

The future of news and commentary: Taiwanese animation & Hitler recaptioning

The time is fast approaching when all news and commentary will be delivered as either a Hitler bunker scene re-captioning, or a Taiwanese animation. This week's top stories:

The Late Night Talk Show Kerfuffle

H/T Daily Dish

Scott Brown Wins Ted Kennedy's Massachusetts Senate Seat

H/T Whited Sepulchre

One of these formats is adequate for anything that happens.

Divided and Balanced.™
Now that is fair.

Monday Tuesday Massachusetts Miscellany [UPDATED]

Is there a better political story than the Brown/Coakley special election in Massachusetts? This is a much more exciting contest than either of the playoff games on Sunday. The latest (and last) Public Policy Poll has Brown up by 5 points, the Merriam River Group has him up by 9.7% and a Massachusetts bellweather city poll has him up by 15 points. This live Pollster.com graph is a composite of all polls:


While those crossed hockey sticks are pretty compelling, the outcome remains uncertain. Nate Silver explains why...

"It's certainly tempting to take the Ockham's Razor argument for Brown -- "look at the trendlines, duuuude!" -- which has become the conventional wisdom even if nobody is saying it. And it's perhaps just as tempting to play the role of the contrarian, sort of buy the rumor and sell the news, and insist that Coakley will leg it out. But for the time being -- and subject to change based on last-minute polling -- I'm not comfortable with any characterization of this race other than too close to call."

... then expands on the risks of trendspotting here. Charlie Cook, like Nate Silver still calls it a toss-up, but unlike Nate, is leaning to Brown. Regardless of whether you agree or trust their political leanings, these are smart analysts. I suspect they are right and this will be a very close race. After all, this is still Massachusetts.

The simple reality is this: Boston is a Democratic party machine city, and Massachusetts is a Democratic state. A political machine is designed to manufacture votes. I am not talking about anything illegal, I am just talking about basic old style, precinct by precinct footwork, “walking around money”, busloads of voters rounded up and driven to the polls, preachers in the pulpits delivering the flock, etc. No matter how large the enthusiasm gap in a campaign, nothing can get out the vote more effectively than an army of foot soldiers on the ground manning a well oiled political machine. The question in Massachusetts is whether the machine was ready to go, or if they can crank it up fast enough now that they know they have a problem. OTOH, if the foot soldiers decide to change teams or desert their posts, the machine does not work as well. Another question is whether Libertarian candidate Joseph Kennedy will siphon a couple of percentage points from Brown (or Coakley). This election cannot be predicted and will likely be a nail biter. Maybe even Al Franken close and settled in the courts.

The last big effort to turn back the Scott Brown tide was in evidence all weekend. It had two tracks, a high road, and a low road.

On the high road, President Obama arrived to headline a rally of Democratic Party luminaries stumping for Martha Coakley. Among them, Representative Patrick Kennedy, who explained that, a vote for Scott Brown is really a vote for George W. Bush, and Boston Mayor Thomas Menino who denounced the "dot coms" that are pouring money into Browns campaign. Scott Brown held a competing event, billed the "Peoples Rally" where he drew as big a crowd as the president, favoring local heroes like Curt Schilling and Doug Flutie over Republican pols. His comments from the rally here.

On the low road, the Massachusetts Democratic Party distributed a glossy mass mailer falsely claiming that Scott Brown wants hospitals to turn away rape victims. It was denounced by liberals and conservatives alike and may prompt a defamation lawsuit. Closer to the norm of electioneering partisan nonsense, a 2008 you tube clip with Brown questioning whether Obama's mother was married was widely distributed across the left-o-sphere. The intent was apparently to link Brown to birthers. The charge itself was quite a reach, and didn't stick, but not for lack of trying. Even a Nobel Prize winning economist chose to cheapen his New York Times column, using it as a platform for distributing this pure partisan hackery.

Byron York of the Washington Examiner concludes that the electorate's preference for divided and balanced government is one of "Two factors will decide Massachusetts Senate race":"

"After all the speeches, politicking, and attack ads, there are just two issues that will determine the winner of the Massachusetts Senate seat in Tuesday's special election. The first is health care and the second is one-party government. And in Massachusetts, neither issue works exactly as outsiders might think -- and right now both are working in favor of Republican Scott Brown... And for the independent voters who will play a critical role in Tuesday's election, Massachusetts' one-party rule mirrors the one-party rule in today's Washington, where national Democrats are deciding important issues among themselves without even the pretense of including Republicans... Given the uniqueness of Massachusetts politics, voters' feelings about the top two issues in this election -- health care and one-party rule -- seem unlikely to be affected much by outside appeals, whether they be from President Obama, former President Clinton, or former New York City mayor Rudy Giuliani, who campaigned for Brown on Friday. What do those outsiders have to add to the public's understanding of how the issues play out in Massachusetts? State voters have their own distinctive perspective, and that is what will guide their decision on Tuesday."

HOPE floats. I am getting a tingly feeling in my leg.

UPDATE:

Nate Silver throws in the towel – 538 Model Posits Brown as 3:1 Favorite.

The post-mortems, cries, lamentations, and rending of garments begin. Even while the "corpse" is still breathing.

UPDATE: 19-January-2010

This is what I'm tracking: The prediction market InTrade.com showed Brown with an 80% probability of winning early, dropping to 60% (a big bet on Coakley?) now rising again back over 80%. If you buy into the notion that a robust prediction market with real people betting real money is the best poll, this looks like a done deal.

For fun, I am also following Professor Jacobson's Live Tuesday comment feed at Legal Insurrection and Stacy McCain at The Other McCain - just to revel in the excitement and energy.

I hope this political wave makes it to the left coast. Time for Babs to go.

Divided and Balanced.™
Now that is fair.