GOP | Shifting Strength, 1928-2012

May 21, 2015–The stakes of the 2016 election are made clear in a Real Clear Politics chart by Sean Trende and David Byler.

It shows changes in party strength based on Federal and state elections–weighting equally the presidency, Senate, House, state governors and state legislatures.

Will GOP Grow in 2016?

The RCP blogpost on Tuesday extends the chart to offer three different scenarios for the outcome of the 2016 Federal elections - win, lose and draw. Their conclusion is that the 2016 election is important.

Some broad principles emerge from the chart:

• Voters tend to move away from the party of the presidency.
• After 1936, the GOP steadily improved its electoral position, with a slight blip in 1944.
• Only three incumbent Presidents widened their party's lead by much: FDR in 1936, Truman in 1948 and LBJ in 1964.
• All were Democrats and they widened their lead by being decisive in a crisis.
• When half-hearted policies don't work, it could be because they were inadequate.
• Political fortunes can change quickly if perceptions are altered by events.
• Voters were disappointed in six GOP presidents: Hoover, Eisenhower, Nixon, Ford, GHW Bush, GW Bush.
• Reagan and Clinton (despite his impeachment) held their own after the first mid-term.
• Voters are fickle, but they care about the economy.

Since I am writing about the financial crisis of 1929-33 and FDR's first Treasury Secretary, one of the three Republicans in FDR's first cabinet (the other two were Ickes and Wallace),  my focus is on the early years of the chart, especially what happened between 1928 - the first election year shown - and 1936.

The peak score of 50 in 1928 dropped down to -119 in 1936–a plunge of 169 index points. This is the largest shift in the electoral winds on the chart. Most of the time (60 percent of the time) the index varies between plus and minus 30 percent.

1912-1928

Why did that huge shift between 1928 to 1932 happen and what lessons does this shift offer for today? I am using as my guide Paul F. Boller, Jr.'s Presidential Campaigns (Oxford University Press, 1996).

Let's start at 1912, when Woodrow Wilson won the presidency because the Republicans were divided between Republican Taft and Bull Moose party leader Teddy Roosevelt. All three candidates were competing for progressive voters. Four years later, the country had shifted to the right and the race was about who could keep the country out of war (it took only till April 2 before Wilson had asked "the Gentlemen of Congress" to declare war). By 1920 the country had moved further to the right, fearful of the Russian Revolution and the League of Nations. Even though Wilson was not on the ballot, the vote was largely against him. The Republicans were confident of winning - and, sure enough, Warren Harding won 60.2 percent of the popular votes against James M Cox; 404 electoral votes to 127.

Harding died of a heart attack in office, and Vice President Calvin Coolidge took the reins. Coolidge ran in 1924 against a Democratic Party that was divided between Eastern voters who were "wet" and Western and Southern voters who were "dry". After a marathon of balloting, the two sides compromised on Wall Street lawyer John W. Davis to oppose Coolidge, who was a shoo-in with 54 percent of the votes.

In 1928, the first year of the RCP chart, Herbert Hoover campaigned on the theme of prosperity and efficiency, and Al Smith was tainted with being from Tammany New York and being Catholic and being a "wet". Hoover won with 58 percent of the vote and a 444-87 majority in the electoral college. However, it was clear that urban voters were growing fast, which meant that being "wet" might mean winning. (A cartoon of the period has Smith after the election calling the Vatican, with the one word comment: "Unpack.")

The Importance of 1929

The 1932 election reversed the 1928 numbers. The lopsided victory this time went to New York Governor Franklin Delano Roosevelt. The country had lost its prosperity and Hoover lost the platform he had stood on four years before. The long-time Treasury Secretary, Andrew W. ("Andy") Mellon came under scrutiny and during the campaign the Democrats developed a capsule summary of the Hoover years:

Mellon pulled the whistle
Hoover rang the bell
Wall Street gave the signal
And the country went to hell.

Mellon resigned in early 1932 as Hoover was impeached. Hoover asked his end-of-term Treasury Secretary, Ogden Mills, to lend him a nickel to buy a soda for a friend, and Mills replied laconically: "Here's a dime. Treat all of them." What had happened, of course, was the Crash of 1929 and the  beginning of the Great Depression. To be fair, Hoover experimented with some public-works initiatives, but they didn't turn the economy around. A clueless Republican convention called for a balanced budget, requiring cuts or tax increases - as did the Democratic convention that followed. (FDR embraced the plan but wisely decided later to ignore it to bring down unemployment). The two leading candidates at the Democratic convention were FDR and former NY Governor Al Smith. FDR's staff spoke privately to the next-leading candidate, John Nance Garner, Speaker of the House, offering him the Vice Presidency in return for his support of FDR; he agreed. FDR was nominated and won with 57.4 per cent of the votes to Hoover's 39.7 percent, with the electoral college splitting 472-59.

Here is a larger version of the chart to help in reading the headings.

Changes in GOP Electoral Strength, 1928-2012, Chart by Sean Trende and David Byler, Real Clear Politics. 

OBAMA | First-Term Green Legacy

President Obama achieved a great deal in his first term to advance energy efficiency and renewable energy. But his objective of making significant progress to slow climate change was not achieved. It was beaten by the fossil-fuel lobby acting through the know-nothing opposition of Tea Party Republicans or their brow-beaten colleagues.

With his reelection, in the teeth of huge spending by his opponents, the President is in a good position to get through some of his original program that was left on the table. The lessons of Hurricane Sandy may help his case.

Obama's Eco-Achievements

Obama started by making solid appointments, with Steven Chu as Secretary of Energy and Lisa Jackson as Environmental Protection Agency Administrator. He supported climate-change proposals at Copenhagen, and admitted that what was achieved there "was not enough". Here's what he did achieve in his first term, mostly through his budgeting and regulatory authority:

1.    Obama put energy efficiency and renewable energy on state agendas. The $90 billion investment in green jobs in the stimulus bill may not immediately have created 5 million new jobs — many states were not ready to take advantage of the programs in a timely way. But it encouraged states and localities to focus on needed environmental initiatives and the longer-term impact of their efforts is real and accounts for about half of the 23 percent lower projections in just a few years of 2020 emissions.

2.    His EPA has twice raised auto fuel-efficiency standards under the Clean Air Act. Nixon's Clean Air Act was the basis for the Obama EPA's higher Corporate Average Fuel Economy ("CAFE") standards, first requiring 35.5 mpg fuel efficiency by 2016 and now 54 mpg by 2025. By using existing legislation, Obama moved America forward despite the Congressional stalemate.

3.    He regulated carbon emissions under the Clean Air Act. Obama's EPA won a major victory in June 2012 when the U.S. Court of Appeals, DC Circuit, unanimously affirmed EPA's ruling in 2009 that (1) greenhouse-gas emissions pose dangers to public health and welfare and (2) four measures would be instituted to regulate carbon emissions.

4.    He saved the U.S. auto industry and its technology-generating capacity. The auto industry bailout was not just a job-creation success. By keeping this major component of U.S. industry alive, the President kept the United States as a strong player in electric-car technology and in the campaign to generate more efficient batteries.

5.    He has used federal purchasing power to reduce carbon emissions. He has made energy efficiency part of the mandate and procurement criteria of theGeneral Services Administration and has supported the Energy Star rating program of the EPA and Department of Energy.

6.    He has supported four rounds of the ARPA-E program for energy technology research. The Advanced Research Projects Agency, once part of the Department of Defense, has an energy component administered by the Department of Energy. It has so far made awards for 107 project awards, with amounts ranging from $400,000 to $6 million each, for research on such topics as "electrofuels", carbon capture, batteries, electric grid, thermal energy storage, and rare earth substitutes. It would be hard to overestimate the long-term importance of this effort for the United States and for the planet.

Why Obama Failed to Address Climate Change Directly

That Obama didn't succeed in doing more on climate change reflects unpredictable developments. The BP oil spill early in his first term discouraged offshore oil drilling, and the Fukushima nuclear meltdown discouraged further nuclear power development, constraining his options. But most important, the Republican House of Representatives adopted a totally negative stance toward the President's climate-change goals. The entire minority membership of a committee headed by Senator Barbara Boxer's committee boycotted hearings on the House-passed Waxman-Markey cap-and-trade bill. I had a ringside seat to observe the crackup of the legislation in the 111th Congress, as senior economist for Congress's Joint Economic Committee. The bill was debated to death in the Senate. After the election of more Tea Party adherents in 2010, it was all over.

In 1970, it would have been hard to believe that 42 years later the nation still would not have such a carbon tax or a carbon-price-setting mechanism like a cap-and-trade system. Green issues then had bipartisan support. President Nixon's strong Clean Air Act amendments to the original 1963 Act created the EPA, William Ruckelshaus became its first head (and the late Russell Train its second), and new water-pollution laws were passed after two years.

What stopped progress? OPEC's decision to create an oil shortage. Inflation cascaded through private and public prices and economic concerns overtook environmental ones. The GOP took on the mantle of environmental deregulation in the name of promoting economic growth, although significant instances of environmental progress have occurred under Republican leaders since Nixon.

The GOP's Opposition to Environmental Rules Is Negotiable

President Reagan, for example, may have cut social and environmental budgets, including one-third of EPA spending, but in his second term he did something important. He noted the high cost of ozone-depleting chlorofluorocarbon (CFC) gases and he promoted a worldwide reduction via the 1987 Montreal Protocol. This Protocol has been described as the most successful international convention ever, signed by 197 countries and the European Union, and it has stopped the growth of the ozone hole although some aerosol substitutes, such as hydrofluorocarbons, continue to contribute to global warming even though they don't damage the ozone layer.

President George W. Bush during most of his administration was, like Reagan, antagonistic to environmental regulation, but in the latter years of his presidency he championed significant initiatives to conserve natural resources that became law, and he moved the country along on the path toward greater energy efficiency.

Given that Reagan and Bush 43 added valuable environmental achievements late in their second terms, President Obama has some encouraging precedents. The fact that his re-election results are strong may have something to do with Republican leaders entering the 113th Congress with a more serious inclination to cooperate with President Obama than two or four years ago. He now has a real opportunity to achieve more of the change he promised in 2008.

Proposals for the President's Second Term

Climate-change legislation deserves to be near the top of the President's second-term agenda. Even if the United States magically reduced its emissions to zero, the planet will be threatened by the continuing rapid industrialization of China, India and other emerging economies. For the United States to exercise global leadership on this important topic, it must do more at home.

Some things will happen on their own. The Energy Star rating has been shown in several articles by Professor John Quigley and others to raise the value of a property significantly for both sale and rental, so this certification has legs. Venture capitalists are supporting renewable energy projects. Vehicle manufacturers are hard at work on fuel and battery efficiency. HSBC Bank projects the low-carbon economy will triple to $2.2 trillion a year by 2020.

The President in his second term has a Groundhog Day chance to push forward programs and laws that directly address climate change. Through the last two Congresses, Carol Werner at the EESI has faithfully been pushing out information on a large number of Congressional initiatives in the arena of clean energy and climate strategies. Here are five ways ahead that seem to me to be most promising:

1.    A carbon tax. The lack of progress of the Waxman-Markey bill in the Senate despite support of the President's Climate Action Partnership has reopened bipartisan consideration of a direct tax on carbon of perhaps $20 a ton. This might add 10 percent to the cost of gasoline, but it would lead to correct signals being provided throughout the economy. Pigou-type taxes on pollution ("tax bads, not goods") are viewed with a friendly eye by many analysts on both the left and the right.

2.    Trading permits — the Cantwell bill. As a backup for a carbon tax or a parallel strategy, the limited cap-and-trade bill proposed by Senator Maria Cantwell (D-WA) is a good plan that could be a focus for bipartisan negotiation. It creates an "upstream" (at the power-generation source) market for carbon among large energy producers and users. It seems to me easier to understand and execute than the broadly based Waxman-Markey bill.

3.    Championing state and local initiatives. With Hurricane Sandy as the backdrop, support local environmental investments and rethinking of zoning and building codes or planning for surge protectors. Green incentives in the stimulus bill have encouraged states and localities to act to improve energy efficiency and reduce emissions. Without a carbon tax or a national market for carbon permits, these efforts need encouragement. The President can help revitalize them with national support of subnational and private investments.

4.    Using the Presidency to make the case for change. Michael Northrop, program director for sustainability at the Rockefeller Brothers Fund, urges the President to use his second-term status to tell the truth about the U.S. coal industry, its grave impact on climate change, its declining share of electric-power fuel, its declining employment. Coal employs 40 percent fewer Americans than a few years ago as U.S. solar jobs grow 13 percent annually. He recommends the President convene a national bipartisan climate action planning council composed of sitting and former state and local officials, company CEOs and civic leaders, with leadership by a senior advisor in the White House appointed for this task. A good idea.

5.    Continued agency actions. Since the Congress is unpredictable, the most reliable way forward is to continue exercising executive authority through the EPA, Department of Energy and other agencies to lower emissions and to build clean-energy markets. The President has already done much by using federal buying power to support clean-energy markets, but he can do more. Catalogs of options include those of the Center for Climate Strategies and the Presidential Climate Action Project.

The timing of Hurricane Sandy could not have been better for purposes of bringing more business leaders on the side of action to address climate change. Stay tuned and make your voice heard.

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Dr. Marlin is Chief Economist for the New Jersey Institute for Social Justice in Newark, NJ.  The views expressed in this post are not necessarily those of the Institute.  The abopve post appeared on the Sallan Foundation site a few days ago.

TRANSITIONS | Lessons for Obama

Nov. 27, 2008–I was dipping back into a book by Carl M. Brauer, Presidential Transitions: Eisenhower through Reagan (Oxford University Press, 1986) and found much information that might be useful to the Obama transition. The last chapter, "Conclusions: Historical Patterns and Lessons," concentrates all the book's earlier stories and comparisons into a dense guide for any transition staff that has time to look up from the resumes they are reviewing.

Here's one rule Brauer gleans from all of the transitions his book covers:

Relations between outgoing and incoming Presidential administrations have usually been civil... but rarely productive or educational (p. 258).

A common experience is for outgoing staff to prepare themselves for a debriefing, never to be asked for it. I know that in New York City many a briefing book for the next administration has been unopened.

Instead of gleaning as much information as possible from the outgoing administration at every level, incoming Presidents

frequently overreact to a perceived flaw in their predecessor. In reaction to Truman, Eisenhower was too anti-political. In reaction to Eisenhower, Kennedy was too anti-organizational. In reaction to Nixon, Carter was too "anti-imperial." In reaction to Carter, Reagan was too ideological.

Nixon did not overreact in this way, but he did not foresee, says Brauer, how Johnson's war in Vietnam would become his war. This illustrates a general point that

new Presidents and those around them, buoyed by their recent electoral victory, tend to believe that bad things cannot happen to them. But bad things do happen. Some Presidents are reelected, but all Presidents leave office with significant amounts of scar tissue... [A]ll Presidents have made decisions at the start of their administrations that they later regarded as serious mistakes or should have so regarded (p. 258).

Brauer believes that Presidents need to damp down "excessive optimism" and too much faith in the potential from "organizational reform".

Misery Index Climbs

Wall Street indexes rise and fall but the economic misery index goes on forever as a single-number summary of what is happening on Main Street. I therefore think it is well worth watching as a measure of how the economy is doing. The index (simply the sum of unemployment and inflation rates) rose in June to 10.5, the highest level in 15 years, i.e., since January 1993, the month President Bill Clinton was inaugurated and President G.H.W. Bush left office. Under Clinton the index improved but it has recently climbed back to what it was when he took over.

Misery Index in the Last Month in Office of Recent Presidents:
Carter: 19.3
Reagan: 10.1
Bush 41: 10.6
Clinton: 7.9
Bush 43 (as of June 2008): 10.5

More (Huffington Post)

Avoiding U.S. Fiscal Ruin - David Romer in 2007

Washington’s Out-of-Control Budgets - Notes on a Lecture by Prof. David Romer. (The following report is abbreviated with his permission from notes on the lecture taken by Bill Batt, staff political scientist in the New York State Assembly's Legislative Tax Study Commission, 1982-1992.)

On October 25, 2007, Scranton University held its 22nd Annual Henry George Lecture  and Romer was the Lecturer. [Henry George was a self-taught, widely read economist who favored taxing land rather than labor; he ran with labor support for the mayoralty of New York City in 1886, coming in second, ahead of Theodore Roosevelt, and again in 1897, dying at the height of the campaign. - JTM] The city of Scranton, Pa. itself was wild that day, as it played host to fans of the NBC hit serial, "The Office", set in Scranton. 

David H. Romer is the Herman Royer Professor of Political Economy at the University of California, Berkeley. He is a member of the American Economic Association Executive Committee, co-director of the Program in Monetary Economics at the National Bureau of Economic Research, and a member of the NBER Business Cycle Dating Committee – the so-called “wise men” who decide when national business cycles begin and end.

The lecture title was "Avoiding Fiscal Ruin: Failed Strategies and New Approaches to US Budget Policies." Professor Romer posed three questions: (1) How did we get here? (2) What are the likely consequences? and (3) What are some possible solutions? He showed simple PowerPoint bullets and graphics describing the past history and looming fiscal crises the nation faces in the next few decades:

History of the U.S. Budget

• The United States ran a small budget surplus throughout the years 1791-1929, except for support of the Civil War and World War I.
• The U.S. budget had an annual surplus in the early 1950s, and a deficit every year since then except for the final years of the Clinton administration.
• We are now running a $200 billion deficit, some 2 percent of GDP, which will grow enormously in the next two decades if most assumptions are borne out about health care, social security and other demographic trends. (He did not comment on the budgetary impact of the wars in Afghanistan and Iraq.)

The nation got into this position because we have in recent years stopped thinking of taxes and spending as going hand-in-hand. Moreover, beliefs about appropriate budget policy have changed. The prevailing view in the 1950s was that budgets should be in balance, at least averaged over a few years. Truman, in this regard, was a fiscal conservative, even though he favored government support of services. In the 1960s, a view took hold that balancing the budget was less important than maintaining economic growth. Hence deficits were sometimes necessary as a stimulus at certain points in the economic cycle. Nixon remarked, in 1971 [quoting Milton Friedman in 1965 - JTM], "we are all Keynesians now."

Reagan, in the 1980s, wanted to shrink government, as he believed that "government is the problem." It was possible, he argued, to do so according to a strategy of cutting back on domestic programs, called "starving the beast" [the original use of the term is attributed to David Stockman, Reagan's first budget director - JTM]. It followed to his adherents that cutting taxes would lead to a fall in government spending.

Cutting taxes doesn't have much impact on expenditure levels. Revenues, he argues, change for many reasons, and by tracing the history and motivation for tax changes, he has shown that the cause and effect relationships are very complex, and that correlation and causation should not be confused. He has looked at speeches, news conferences, reports, votes, and events such as wars and recessions, and concluded that it might even be that invoking "starve the beast" rhetoric actually leads to increases in tax and expenditure. Moreover, so many factors are involved in tax policy changes that there is typically shared fiscal responsibility – blame and credit for any policies are quite diffuse.

Problem. When the two sides, revenues and expenditures, are not viewed together it becomes difficult to focus policy. All indications are that U.S. taxes will soon need to increase, but little attention is being given to revenue designs.

With baby-boomers retiring, medical expenses increase, debt service increases, infrastructure renewal demands grow, and so on. Some leaders are already calling for such increases. But all the forecasts are necessarily based on existing law, which will need to be changed. The phase-out of tax measures in the year 2010 will lead to new initiatives, and these will call for new assumptions.

Likely Scenarios. Only three scenarios are possible:

1. Lower national saving, which will mean less reinvestment, slower growth and a lower standard of living.
2. A national economic crisis in anticipation of what is in reality a "Ponzi scheme".
3. Pay off the debt, either by raising taxes or printing more dollars. His comparison with past experiences in nations in Latin America was not lost on the audience. Nor did he see the United States abandoning care for its elderly.

Solutions. Professor Romer argues that we need to:

• Educate the public to a level where a solution is politically possible. He said that we need to link taxes and spending together once again as was the case prior to the 1960s. The political appetite for such policies are not presently on the horizon, but he suggested that perhaps some kind of "mutual disarmament pact" could be devised such as was set up earlier to address the Social Security crisis in the 1980s, and as exists now for closing military bases.
• Improve accounting practices by the federal government and for the U.S. economy.
• Introduce strong "pay as you go" rules such as were attempted in the Gramm-Rudman approach two decades ago.
• More radically, introduce a stringently fashioned "balanced-budget amendment."
• In addition, or alternatively, create a separate agency, comparable perhaps to the Federal Reserve System, that would be granted powers to impose fiscal and budgetary requirements.

Professor Romer was not sanguine that any solution was within sight, even though we are on a "potentially ruinous fiscal path." He argued that we need to contemplate major changes to address the problem.