I’ll try to move on to other topics directly, but wanted to do one more post about politics in my home state of Georgia. There was good news and bad news today for embattled incumbent Rep. Cynthia McKinney, who was surprisingly forced into an August 8 runoff by Dekalb County Commissioner Hank Johnson. The good news was her endorsement by Andrew Young, who remains a Georgia icon, and who cited a national police union contribution to Johnson (presumably motivated by her recent run-in with a Capitol Hill cop) as angering him into supporting McKinney. The bad news was a post-primary poll from Insider Advantage showing Johnson leading McKinney among likely runoff voters by a 46-21 margin.Figuring out who’s actually going to vote in this kind of runoff is obviously very tricky, so the IA poll should be taken with several grains of salt. But you have to wonder how much room for growth in support the highly polarizing incumbent really has. Aside from her national notoriety, she’s been in Congress for twelve of the last fourteen years, most of it representing pretty much the same district.On another front, I received an email from a Georgia observer who suggested the rumor I repeated earlier this week–about Johnson raising a ton of dough, especially from Jewish Democrats–is actually disinformation being circulated by the McKinney camp in an effort to fire up her base and to depict Johnson as a puppet of shadowy outside forces (not a new tactic for her, based on past races). I have no idea who’s right about this; we’ll have to see whether Johnson suddenly starts appearing on Atlanta metro television screens.The 4th congressional district runoff could have a big effect as well on two statewide Democratic runoffs, since turnout every where else is likely to be infinitesimal. In the contest to succeed Secretary of State Cathy Cox (who lost her gubernatorial race to Mark Taylor), the likelihood of a relatively high turnout in the majority-black 4th is giving new hope to second-place finisher Darryl Hicks, who is African-American, against Gail Buckner, who is white.In the other statewide runoff, for Lt. Gov., former state Rep. Jim Martin (who edged former state sen. Greg Hecht 42-38 in the primary) is running radio ads touting his endorsement by Atlanta mayor Shirley Franklin, who is very popular among Democrats of all races. You have to feel a bit sorry for Martin and Hecht; they were able to draw a lot of attention and money on the theory that they would be facing Ralph Reed in a race that would have overshadowed everything else in Georgia politics. Running against Casey Cagle is a whole ‘nother thing, though Cagle’s own right-wing record, and perhaps residual anger over the harsh ads he ran against Reed, could provide some traction for a Democrat. More immediately, you wonder if either Martin or Hecht held some money back for the runoff. If not, Georgians may soon see them selling boiled peanuts on the side of the road to raise enough moolah for that last-minute runoff push.In non-runoff Georgia political news, DKos reports that a new poll for Republican candidate (and former Rep.) Max Burns shows him trailing Democratic incumbent John Barrow by one percentage point (44-43) in the always-tight 12th congressional district which runs from Augusta to Savannah. The district was originally drawn to favor Democrats, but Burns was able to beat ethically challenged Champ Walker in 2002; he then lost to Barrow 52-48 in 2004. The notorious Georgia re-redistricting of 2005 didn’t reduce the Democratic advantage in the 12th, but it did remove Barrow’s home town of Athens, which means he’s having to solidify name ID elsewhere.Barrow’s race is of national import because he is one of just a handful of incumbent Democratic House members considered vulnerable this November. Another is also from Georgia: 3d district Rep. Jim Marshall. After easily dispatching a heavily financed Republican in 2004, Marshall had to deal with a new map that significantly boosted the Republican vote. He also drew a serious challenger in former Rep. Mac Collins, who lost a Senate primary in 2004. But Marshall has had good leads in all the public polling, and like Barrow, is narrowly favored going into the general election.All in all, the politics in my home state will be as hot and sticky as the weather over the next couple of months.
TDS Strategy Memos
Latest Research from:
By Ed Kilgore
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.