Democratic Message

Could GM Bailout Be Profitable for Taxpayers?

Set aside the irrefutable argument that unemployment would be a lot worse if Uncle Sam didn’t invest in GM, thereby saving thousands of jobs.  It now appears the taxpayer could also earn a profit on that investment.

GM is set for an IPO this week.  Initially the IPO price was set at $26 to $29.  But due to increased investor interest, the IPO price is now being set in the $32-33 range.

A higher GM share price and an increased offering size means the initial loss to U.S. taxpayers from the bailout of General Motors will be more limited than initially thought. The U.S. Treasury owns nearly 61 percent of GM as a result of its $50 billion taxpayer-funded bailout.

Based on a diluted share count of 1.9 billion, $33 per share would give GM a market value of about $63 billion. GM needs a market value of roughly $70 billion for U.S. taxpayers to break even.

The final terms for both offerings will be determined when GM prices its IPO, the company said, which is expected to be on Wednesday and it will begin trading on the New York and Toronto Stock Exchanges on Thursday.

The Feds aren’t selling all their shares at the IPO price.  Bloomberg is reporting that if the stock does well, however, we taxpayers could make a profit.

The Treasury needs to sell GM’s stock at an average of $43.67 each to break even on its entire investment, data compiled by Bloomberg show. That means the shares would have to climb to almost $50 for the government’s remaining stake to offset its loss in the IPO, the data show.

Now how will the Dems communicate this success story?

Obama Must Be a Genius

Because this makes no sense to a mere mortal like myself.

After two years of the Party of No, Obama blames himself for the tone in Washington.

He said his own “obsessive” focus on implementing the right policies had led him to ignore a part of the reason voters handed him a mandate in 2008.

“I neglected some things that matter a lot to people, and rightly so: maintaining a bipartisan tone in Washington,” he told reporters in a brief question-and-answer session aboard Air Force One as he returned from a 10-day trip to Asia. “I’m going to redouble my efforts to go back to some of those first principles,” he promised.

…For much of the last two years, Mr. Obama and his aides have pointed the finger of blame at Republicans, saying that efforts at changing the way Washington works have been systematically blocked by Republicans.

But Mr. Obama appears to have now concluded that some of the fault is shared by his own staff, which often pursued politics by traditional means as he tried to push through fiscal stability measures, health care reform and new financial regulations.

And I am sure the GOP will redouble their efforts.

Ah, but he’s such an optimist.

Mr. Obama told reporters that he “very confident” that voters this month were not casting ballots for gridlock.

“They are not going to want to just obstruct, that they’re going to want to engage constructively,” he said of his Republican adversaries. “And then we’re going to have a whole bunch of time next year for some serious philosophical debates.”

I think he’ll soon break out into a rendition of Kumbaya.

But then he says, it was really just a misunderstanding by the American people.

Among the things he neglected, he told reporters on Sunday: “Making sure that the policy decisions that I made were fully debated with the American people and that I was getting out of Washington and spending more time shaping public opinion and being in a conversation with the American people about why I was making the choices I was making.”

I’m beginning to wonder if Obama has intellectual ADHD.

Is the Democrats’ Problem the “Messaging”?

Yes, was the conclusion of Mo Elleithee and Mike Gehrke of Benenson Strategy Group at this morning’s Northern Virginia Democratic Business Council breakfast. Democrats did a poor job of communicating how their programs and policies would help voters, they said. Many on the left have made that argument, too.

While that is true, this communication problem should wait until other, more fundamental problems are addressed. We can do them simultaneously, but we can’t lose sight of those issues that would make our communications more effective.

First is the long-haul challenge, which is to address one valid criticism: Government is broken, or at least needs a major tune-up. It’s not just Congress or politics. Government doesn’t work as people think it should. Many on the left like to point to government programs that people like: Social Security, Medicare, etc. as proof that if they just understood us better, they’d love government. But beyond specific programs, people believe that government operations are inefficient, wasteful and intrusive. So as long as you’re not proposing cuts in their programs, they are willing to buy into that notion that “government is the problem.” And they are right.

The problem is that government is paralyzed by process. For why and how I recommend “The Death of Commonsense: How the Law is Suffocating America.” Laws are written to be overly complex, and they constrain government from doing a commonsense job of implementing them. We all know the stories: Social service workers routinely approve benefits that people don’t deserve, for example. Voters, especially independents, are receptive to anti-tax rhetoric because they don’t believe they get value for their tax dollars. Conservatives see the problem as fraud. That may be true, but the solution isn’t to downsize government. The solution is to empower government to take responsibility and stop abuses, without risking charges that they violated a complicated process outlined by a 1,000-page law. The benefit may be that if you empower officials to take action, make decisions about what is important and risk implementing imperfect but quick, effective solutions, selling the benefits of government is easier. The book’s thesis and argument aren’t perfect, but they’re valid.

Progressives may see this an attack on government, and bureaucrats may take it personally, but the issue isn’t them but process, one gone astray and easily attacked. Democrats must be at the forefront of government reform. We must streamline processes, even if it means re-writing some laws. Many special interests will howl.

Give bureaucrats the responsibility to carry laws out. Hold them accountable, which also means revising personnel practices so you can get rid of dead wood and incompetents. Expect pushback from government unions. The party should welcome it but sell them on the idea of greater empowerment.

A valid concern with this argument is that if you empower bureaucrats, they may implement laws in ways Congress didn’t intend. Another is that with each change in administrations, new political appointees leading bureaucracies could reverse a general direction of implementing laws. I think these issues can—and must—be overcome if we are to be a force for the proper use of government.

Second, we need to have some perspective on overall spending and address the sustainability of Medicare and Social Security programs and get behind minor reforms that will address these problems. I say “minor” because raising the retirement age to 69 for people who are now decades away from retirement, while problematic for manual laborers, is not an evisceration of the program. We should be willing to raise the salary limits on payroll taxes and means-test both programs. But if those levels are reasonably high, they can have a significant impact on the programs’ viability. But no sooner did the deficit commission leaders announce their recommendations this week, I got an email from the Progressive Change Campaign Committee with their panties in a knot over the “attacks on Social Security.” We’re talking about raising the retirement age from 67 to 69—for people who now are no older than 16. Letting them know now might be an incentive for them to aim for a desk job than one digging holes until you’re 69. The commission leaders plan also calls for increases in benefits for low-income widows and reinstates college benefits for child survivors. I think progressives will think these are good things. The elimination of the mortgage interest deductions might include only mortgages more than $500,000, though I would support complete elimination of them. Why should renters subsidize home owners? Renters can’t deduct any of their rent on their income tax return.

Bottom line is that progressives must stop knee jerk reactions to any talk of spending cuts. Some of them may be justified, and you’d wind up with more effective government, more money for truly helpful government programs, and, oh yes, more voters on your side. Reforming entitlement programs isn’t capitulation or even compromise. It’s smart politics and good for the country.

Where I think Elleithee and Gehrke were off base this morning was in their focus on better communication of Democratic programs and policies. Before we establish a communication plan or messages for our programs and policies, we must be willing to establish our overarching principles. If this election (and the 2004 election of George W. Bush) taught us anything, it is that people will vote for politicians who stand up for their principles, even if they offer no programs and policies.

Do you know what Democratic principles are? Do you think most Democrats would agree on them? Do you think they are simple enough that people can understand them? We live in an new era when it comes to communications. It may be that our brains are actually changing (See Shallows by Nicholas Carr.) We hope that people understand the policy choices, but we’re fools if we count on it. I’ll take a vote from someone who only understands my principles just as fast as I’ll take the policy wonk’s. Counts the same, and there’s more of them.

Democrats are sometimes arrogant about their message. They say, “We have principles but they are not easy to convey in pithy sound bites. That’s because the country’s problems are more complex than Republicans make them out to be?” That is a cop-out. (See “The Political Brain” by Drew Westen.) More important, having articulated clear principles makes it easy to articulate your policies.

Voting is an emotional exercise, not an intellectual one. You must connect emotionally, and that’s where principles come in. They frame your arguments. They tell the voter where your heart is.

Once articulating principles, we must be willing to campaign on them, not policies and programs. The latter are too difficult to explain in 30 seconds. You certainly can expand on your principles and explain policies in debates and longer form interviews. But even then, we need to make sure people understand our principles.

Instead of complaining about the way the GOP frames the message, learn from them and go them one better. How can we expect voters to think we will fight for them when we won’t even fight for our own principles? That also means fighting back against the media narrative. When mainstream reporters adopt the GOP frame, we need to call out reporters and be willing to incur their wrath. Republicans have been doing this for 30 years, and they’ve won the battle because we didn’t fight back. As an example, take a look at last night’s interview of a conservative on the Parker Spitzer CNN show. He was relentless in ac
cusing Kathleen Parker of a being an Obama supporter and falsely accuses her of actually endorsing him. Lesson: Push back—hard.

While I don’t believe that the only reason the Dems got shellacked in this election is because of poor messaging, it was a big reason.

The first step is to list in short phrases Democratic principles. We can do this for GOPers: limited government, lower taxes, traditional family values, traditional marriage, etc. I’ll suggest a Democratic straw man for you:

Middle class opportunity

Free & fair enterprise

Civic values

Fair taxes

Promote the general welfare

“For the people” government

College for all who’ve earned it

Strong, smart foreign policy

Energy independence

There could be more and there might be better ways of articulating them. Under each, we can outline not programs but goals and more detail on our principles. For example, under middle class opportunity, we talk about how we support opportunity for all Americans to achieve a secure middle class standard of living and the chance to become rich and financially secure. We do that by writing laws that offer everyone equal opportunity, instead of the rules, regulations and laws that give preferential treatment to the rich and politically connected. We must have a level playing field and repeat incessantly how the middle class has stagnated and that the overwhelming portion of income growth over the past 30 years has gone to the top 1% while the middle class has fallen behind.

Under American moral values, we should discuss what Christianity (or Judaism, Islam, etc.) teaches us: that we are our brother’s keepers. The Constitution paid homage to that ideal with the phrase “promote the general welfare.” We must reclaim the Constitution and our religions from those who would subvert their meaning.

Third, we must demand cohesion among Congressional Democrats on key issues. If they refuse, we should ostracize them from the party. You can vote against key legislation that your party thinks is critical, but expect to find yourself without a committee assignment and without any way of getting your bills considered. In this past Congress we were held hostage by Democrats who lost. What good did it do us?

For progressives, if all else fails, form a third party. If Ross Perot could do it before the web, we can certainly do it now. I guarantee you that it will focus the minds and stiffen the backs of Dems everywhere.

GOP Offers Advice It Wouldn’t Take

E.J. Dionne nails it.

In 2008, the largest number of voters in American history gave the Democrats their largest share of the presidential vote in 44 years and big majorities in the House and Senate.

How did Republicans react? They held their ideological ground, refused to give an inch to the new president and insisted that persistent opposition would eventually yield them victory. On Nov. 2, it did.

Yet now that Democrats have suffered a setback – in an election, it should be said, involving many fewer voters than the big battle two years ago – they are being counseled to do the opposite of what the Republicans did, especially by Republicans.

Democrats who stand up to say they were right to reform health care and stimulate a staggering economy are told they "don’t get it" and are "in denial." Liberals who refuse to let one election loss alter their commitments are dismissed as "doubling down" on a bad bet.

President Obama made the word "audacity" popular, but conservative Republicans practice it.

Mainstream commentary typically bends to the more audacious side. As a result, there was far less middle-of-the-road advice in 2008 urging Republicans to move to the center than there were warnings to Obama not to read too much into his victory. The United States, we were told, was still a "center-right" country. The actual election result didn’t seem to matter back then.

Funny that when progressives win, they are told to moderate their hopes, but when conservatives win, progressives are told to retreat.

Worse, Democrats tend to internalize the views of their opponents.

This is right in so many ways.  And it’s largely because progressives haven’t fought back against the mainstream media that tends to reward GOP puck by framing issues in the GOP parlance.

But there are other reason.  The principle difference between Republican and Democratic leaders is that Republicans have principles, can articulate them and defend them.  If Democrats have principles, they can’t identify them, and they certainly can’t put them in pithy phrases that pierce the media clutter.  And if they could, I’m not sure they would fight for them.

Obama No Better Than George W. Bush

George W. Bush could have given Obama’s speech last night, and the reaction would have been the same: it was all bluster.  Bush would not ask the country for sacrifice to pay for his wars and tax cuts.  Obama doesn’t want to ask people to pay for new energy and tougher regulations for a host of industries:  coal oil and financial, to name a few.  He certainly did not take my advice.

While Obama alluded to the need to build weapon systems for World War II as a time when the country faced a challenge, he did not mention that we sacrificed to do that.  Copper, sugar and other products were rationed.  The build-up of the space program after Sputnik required huge federal investment.  Alternative energy will require the same magnitude of investment and will require federal dollars that even Democrats are unwilling to raise.

The first part of his speech was mind-numbing with its lists of projects and their costs.  He continues to have speech patterns that are also mind-numbing in their repetitious inflections: regularly dropping his voice at the end of sentences.  It gives his speeches a condescending tone. 

When he talked about the lives upended by the Gulf spill, he seemed on the right track. He could have compared what the U.S. needs to do to help the fishing and tourism industries in the Gulf with what it has done to help other folks, including teachers and police officers, keep their jobs over the past two years.  He could have said to help those industries he needs their support for a new energy direction.  Oil and fishing do not mix.  But if a motel operator doesn’t want to stop oil drilling because his brother works on a rig, then they’ll both have to live with the consequences.  One of them—or both—need to sacrifice to solve our energy problems.  The oil employee needs to retrain for green energy jobs, and the motel operator needs to pay more taxes to help with that transition.

But Obama, like Bush, wants to make it look easy, as if all we need in determination, the same determination we need to defeat Al Qaeda.  But money and unending one’s life to take on new challenges?  No, we don’t need to go there.

He has ruined his Oval Office speech command.  The next time he schedules one, most observers will think it another bland attempt to recapture lost political momentum.  Besides, if you’re going to talk about sacrifice, better to do it when there is no live audience.  To ask for that in front of one, you risk the pundit analysis of the crowd reaction.  Since people usually don’t wildly applaud when told they need to sacrifice, the chattering class will point out that “Obama’s proposals were met with a stony silence.”

Obama may be genetically incapable of delivering passion or empathy.  But he could have said,

“Next time, government will not be able to plug the hole without massive expenditures necessary to duplicate capabilities oil companies should have. 

But government can minimize the likelihood of another disaster by instituting tough regulations and hiring tough regulators.  We need to move us away from energy sources that put the country at such risk of economic and environmental disaster. 

That will call on all of us to make sacrifices.  Oil workers will need to adapt their skills to green energy needs.  That may not be hard to do, as the manual and manufacturing jobs will not require significantly different skills.  And if the public is willing to help through higher taxes, government can help pay and deliver the necessary training. 

Furthermore, we need to jump start green energy with investments and loans to help entrepreneurs willing to invest their own money and time into the effort.  But at the end of the day, we’re not paying what oil really costs.  So right now, I’m proposing a $1.50 per gallon surcharge on gasoline to be implemented in steps over the next five years to raise the funds needed to wean ourselves from our oil addiction.  That will mean folks who rely on their car to get to work will have to tighten their belts elsewhere or find jobs closer to home or car pool or use mass transit.  These are small sacrifices for our children’s futures.

The good thing I can tell you is that if we seriously attack our addiction to oil, the price of gasoline will come down as oil companies seek to hold on to their customers.  But if we think we can fix this problem without sacrifice, we will accomplish nothing, other than give the oil industry the carte blanche they want to manacle us to their drug.”

But he didn’t go there.  He punted instead.  Obama is becoming a disappointment not only to progressives but to independents who though they were voting for a strong leader.  As of May 23, as many people think Obama is a strong leader as they did at the end of the political campaign.  His leadership reputation, except for a bump at his inauguration, has remained steady.  But if he keeps blowing chances to lead, he’ll become as feckless as Bush was in the waning years of his administration.

GOP: We Want Government!

E.J. Dionne has a nice piece today about the GOP’s inconsistency, perhaps hypocrisy.

Many tragic ironies are bubbling to the surface along with the oil. Consider the situation of Gov. Bobby Jindal of Louisiana, a Republican conservative who devoutly opposes the exertions of big government.

"The strength of America is not found in our government," Jindal declared in his response to President Obama’s February 2009 address to Congress. "It is found in the compassionate hearts and the enterprising spirit of our citizens."

But with his state facing an environmental disaster of unknown proportions, Jindal is looking for a little strength from Washington. His beef is that the federal government isn’t doing enough to help. "It is clear we don’t have the resources we need to protect our coast," he said this week, expressing his frustrations with "the disjointed effort to date that has too often meant too little, too late."

You can’t blame Jindal for being mad. But will he ever acknowledge that "compassionate hearts" were not sufficient for coping with this catastrophe? Did he ever ask BP how prepared it was for something like this? Or was he just counting on the company’s "enterprising spirit"?

A few weeks ago, I responded to a commenter on my News Commonsense blog who argued that the oil spill is Obama’s Katrina.  I asked, “Is your complaint that Obama didn’t wait long enough to let market forces work?”  There are plenty of other examples of the GOP’s forked tongue.

One is happening in my neighborhood where I have commented on our listserve about how the same neighbors who complain about local government’s lack of services or laud its quick response to a crisis are sometimes the very same people who make general and often vague criticisms about big government.

Meanwhile, I’m reading The Political Brain by Drew Westen, a 2007 book that argues for a more passionate and articulate defense of progressive principals.  Early in the book he cites the Democrats’ tendency to shy away from emotional arguments in favor of rational ones, which frequently results in their trying to decipher voters’ policy choices and then couching their arguments in those terms.  Which voters then see as pandering and a lack of core principles.  He also argues that if an articulation of core principles doesn’t alienate 30 percent of the population, the message is weak.  A third of the voters will never be with you and trying to appeal to them with a universal message is doomed to failure.

The “government is the problem” started by Ronald Reagan can and should be forcefully countered.  I hope Westen’s book lays out a clear roadmap.  I’ll let you know, but in the meantime, let’s hope more progressives start fighting back as Dionne is doing today.