By Alan Abramowitz
I just received the following message from a colleague at another university who is totally trustworthy:
“I have friend who is a co-chair of the Bush Cheney campaign. Rove believes that Bush needs to have a 4 point lead going into the last weekend to win given the undecideds that will break againt the president.”
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Editor’s Corner
By Ed Kilgore
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July 21: Don’t Dismiss the Power of Inflation Politics
All the talk of renewed inflation brought back some terrible memories for me, and I wrote about them at New York:
When I was a freshman college debater at Emory University in the fall of 1970, the national debate topic was not Vietnam, but the desirability of wage and price controls. Little did we know that just months ahead a Republican president would impose a wage-price freeze, long the anti-inflationary prescription of the left wing of the Democratic Party. But the surprise known in financial circles as the “Nixon shock,” nearly a half-century ago (on August 15, 1971) showed how pervasive the fear of inflation — running at just over 5 percent in 1970 — had become.
That’s ancient history now, even to those of us who remember the double-digit inflation of the late 1970s, and the particularly horrid scourge of “stagflation” (high inflation and unemployment simultaneously). Inflation seems to have been tamed by wise monetary policies. The periodic warnings from 21st-century conservatives that low interest rates and federal budget deficits would create inflation didn’t much bother me. It was like hearing an old priest chant a forgotten litany in a lost language — just one among many ritualistic arguments for the tight credit and reactionary social policies these people favored instinctively as a sort of class self-defense posture.
The current surge in consumer prices doesn’t necessarily change that picture; the current post-pandemic (we hope) economic environment was sure to produce a spike in wages and prices that cannot be projected into a future where something approaching normalcy will surely return (though the real-estate bubble is indeed troubling). But now I am beginning to hear echoes of the inflation panics of the not-so-distant past, which make me tremble.Like Tim Noah, I suspect there may be a generational lapse in understanding the politics of inflation:
“I don’t care to be condescended to by a bunch of Gen Xers and Millennials about my ’70s-bred fear of inflation. It feels too much like the condescension we Boomers directed toward Depression babies whenever they warned us that we were playing with fire in deregulating the financial markets. Poor dears, we thought, traumatized for life by the 1929 crash and one-third of a nation ill-housed, ill-clad, ill-nourished.
“The Depression babies turned out to be right, of course.”
Noah makes it clear he’s not arguing inflation per se is bad for the economy. It is, however, bad for progressive politics, and not just because “stagflation” probably killed the Carter presidency and ushered in the Reagan era far more than the Iranian hostage crisis or other better-remembered Democratic foibles. The deflationary economic strategies of the 1980s weren’t called “austerity,” but rather a corrective for undisciplined policies that fed wage and price spirals which in turned hammered the value of savings, the living standards of those on fixed incomes, and the political case for federal domestic spending.
Most lethally for progressivism, the conservative supply-side tax-cutting when combined with inflationary fears can create enormous pressure for public disinvestment and the shredding of safety nets (which is why reactionaries happily labeled the intended result “starving the beast”). We are still living with some of the long-term consequences of anti-inflationary backlash. As Noah points out, California’s Proposition 13 ballot initiative in 1978 and similar “tax revolts” were a by-product of price spirals that boosted tax assessments on property and income alike.
But sometimes lost in an examination of the right’s exploitation of inflation fears is the abiding fact that the left has no clear prescription for dealing with it, either, other than by denying its existence or significance (sometimes rightly, sometimes wrongly). Ironically, that was made most evident by the supposedly illiberal Richard Nixon’s surprising use of the great liberal instrument for taming inflation.
The veteran ex-conservative economic and political analyst Bruce Bartlett has penned an exceptional explainer on the background and consequences of the “Nixon shock,” particularly its international dimensions, and the role played by Treasury Secretary John Connally, who like his boss and ally Nixon was more focused on short-term politics than on long-term economic realities. What’s clear is that Nixon was convinced a recession induced by the Eisenhower administration and its Federal Reserve Board appointees designed to kill inflationary pressures also killed his 1960 presidential candidacy. As prices spiked in 1970, he was terrified the same thing could happen in 1972.
Nixon had inherited (and temporarily extended) an income-tax surcharge from LBJ that was designed to pay for the skyrocketing costs of the Vietnam War, but its effects were limited. So with his signature televised bombshell reveal (the one he deployed a month earlier to announce his trip to China), amid great secrecy, Nixon rolled out a combo platter of initiatives to fight inflation and international economic instability. They included a suspension of fixed currency exchange rates and the convertibility of the dollar to gold (to head off a raid on gold supplies triggered by a British demand for a major conversion); an import surcharge (to prevent a worsening of the trade balance); and most significantly for most Americans, a 90-day freeze on wages and prices to be followed by an indefinite period of controls by federal panels.
As political theater, Nixon’s speech announcing a “new economic policy” was, well, Nixonian. He began with dessert: an assortment of tax breaks and job-creation incentives balanced by mostly unspecified spending cuts; only then did he mention the wage-price freeze. After promising to “break the vicious circle of spiraling prices and costs,” Nixon moved on to his international proposals, which he downplayed as “very technical,” while assuring viewers that “if you are among the overwhelming majority of Americans who buy American-made products in America, your dollar will be worth just as much tomorrow as it is today.”
Nixon’s wage and price controls were initially very popular (as polls had told the White House they would be) and did indeed hold down inflation through the reelection year of 1972, when Nixon won his famous landslide reelection over poor George McGovern, in part by goosing federal appropriations to create a mini-boom. By then the administration had moved on to a more discretionary system for regulating wage and price increases, which generated rumors of employers currying favor with generous donations to CREEP (the Committee to Reelect the President), the notoriously corrupt operation heavily complicit in the Watergate scandals that brought down the Nixon presidency. Between the suppressed and eventually unleashed inflationary pressures and the oil-price shock Nixon’s international economic policies helped create, the country paid a very high economic price for the brief respite from inflation the wage-price freeze earned him. He sowed the wind with even greater inflation, and his successors Gerald Ford (whose feckless “Whip Inflation Now” campaign was widely mocked) and Jimmy Carter reaped the whirlwind.
Before you dismiss these events from 50 years ago as irrelevant, consider how much Nixon’s short-sighted approach sounds like something President Donald Trump might have done if inflation had became a political problem during his tenure (or in, God help us, a future term). Indeed, any president mulling Nixon’s choice of recession-inducing fiscal or monetary policies might be tempted to resort to the easy-to-understand, if dangerous, strategy of wage and price controls in which the pain is mostly back-loaded, particularly in or near an election year. Old folks remember how it preceded Nixon’s landslide 1972 win, followed by a decade of economic pain and multiple decades of political misery for progressives.
Cranky Observer–
I am starting to wonder the same thing. Rove grossly underestimated the amount of money the
Democrats would raise when he laid out this campaign two years ago. I think we can definitely expect some negative tricks and meanness, but as far as having a pulse on the American people, I think Karen Hughes is more the person we should be watching out for. Has anyone else noticed that Bush has been better since she rejoined the campaign in earnest? She definitely has the emotional pulse of some of Bush’s base. Old stories here in Texas were of the rivalry between Hughes and Rove…wonder if they are true.
The Democrats just need to move quickly as these things arrive, or throw out some things of their own first, so that Bush is more on the defensive…
I think Rove’s recent appearances on talk shows, etc…shows that they are getting a little panicky.
We just need to keep working–fast and furious!
> We can be assured that Rove’s end game
> ground war will be ruthless, unethical, viscious and
> full-bore.
I have a harder and harder time accepting the “Rove as evil genius”, with the emphasis on genius, meme. As Markos has observed, Kerry managed to evaporate $200 million worth of pre-nomination spending in 90 minutes at the first debate. And if Rove has some genius-like October surprise he has exactly 16 days and ticking to pull it off, which isn’t much.
Cranky
Like Teresa, I’m a little concerned. After reading the NYT Bush profile by Suskind, I’m also fearful that this info from Rove could be a strategic sideways leak. There was some scary talk in that article about volumes of new registrations coming from churches, and a figure of 4 million adamantly pro-Bush evangelicals who WERE NOT registered in 2000.
We can be assured that Rove’s end game ground war will be ruthless, unethical, viscious and full-bore.
Let’s not let ourselves be lulled by ANY Kerry numbers’ strength into not giving our fullest GOTV effort — and then some.
I think the 4 point margin to protect against the expected uncommitted/independent break for the challenger makes great sense. It’s just logical given the well established pattern among late deciders.
We must be on the look-out for whatever Rove has in mind to get himself a 4 point margin in the next two weeks. Right now he is either tied or down a couple of points.
It seems clear that Rove needs an actual lead and an average turnout. My only question is, what day will the inevitable terror alert come out—-1, 2, or 3 days before the election? And will it specifically involve Ohio? This seems the most likely October surprise.
The question everybody needs to be asking is where is Bush going to get any NEW voters?? Remember he lost the populat vote in 2000 and there hasn’t been any announcements about any voting block that has changed their minds about him since 2000.. Its just not in the numbers and he know its.. I do believe, millions of republicans will crossover and vote for Kerry..
Sounds like classic Rove disinfo.
My read is the opposite: the Republican campaign on Kerry has sowed enough doubts in swing voters’ minds, that unless Kerry is at least 2 points ahead going into election day then he might well lose.
Also there is the Ralph Nader factor.
It seems to be coming down to Pennsylvania, Florida and Ohio. Of which Kerry seems to be closing the deal with PA, but losing OH and Fla. W. Virginia seems to already be gone.
WI is the other likely defector to the Bush camp: that remark about Lambert v. Lambeau field has cost Kerry big time with Green Bay fans, apparently (Kerry got it wrong).
I hope I am wrong, and I sense real disquiet about Bush amongst the (Republican) parents of my American friends (in London) but the world opinion is so solidly against Bush (except in Israel) that I think it blinds us to the reality.
I wait for Rove’s October Surprise, and expect it will be a doozy.
Does anyone know why http://www.pollingreport.com only reports the “likely voters” poll numbers on their website and not the “registered voters” poll numbers?
Dear Alan,
My first reaction was to this inside scoop that the Bush campaign believes it needs a 4 point lead going in was elation. My second was to suspect that that this was a rumor purposely placed by the Bush campaign. Mr. Rove is famous for this type of tactic. Please don’t let hope distract us from working our tails off for the next three weeks!
Ruy, very interesting comment from Rove.
Check this out…
Oct 17, 2004
John Kerry for President
http://www.nytimes.com/2004/10/17/opinion/17sun1.html?oref=login&pagewanted=1&hp
Voting for president is a leap of faith. A candidate can explain his positions in minute detail and wind up governing with a hostile Congress that refuses to let him deliver. A disaster can upend the best-laid plans. All citizens can do is mix guesswork and hope, examining what the candidates have done in the past, their apparent priorities and their general character. It’s on those three grounds that we enthusiastically endorse John Kerry for president.
Was it not Rove who, way back in 2000, raised eyebrows when he said that Bush would, “win in a walk”? What a difference four years make, eh?
That’s really not clear enough. If Bush has a 4 pt lead in the nat’l head to heads, but less than that in the swing states that give Kerry 270, then Bush won’t win.
Apparently Rove doesn’t want to talk about the “T” word (turnout) either. Consideriing the margins Bush had in 2000 in the last week, what he really needs is fairly consistent margins across polls, and possibly one of 5-8 points.
Question on polls.
The campaigns seem to have sharper, and perhaps different, polling results. I infer this from comments such as that which this post attributes to Karl Rove. It must mean that Rove/BC04 have a different idea of who the “likely voters” are than that of the nationally published pollsters.
Why is that so?