It’s become a commonplace observation to note that the 2008 presidential race, particularly on the Democratic side, is already achieving an unusually frantic pace. And perhaps the best evidence of that hypothesis is the fact that each of the Big Three Democratic candidates, Clinton, Obama and Edwards, has already been described, by the Conventional Wisdom of the Washington chattering classes and key elements of the blogosphere, as undergoing a potentially fatal “swoon.”HRC was the first to be thusly described, especially when Barack Obama entered the race and predictably started building support among the African-American voters who had previously tilted heavily to Clinton, erasing much of her early, big lead in the polls. The fact that this trend coincided with a MSM and blogospheric obsession with her refusal to apologize about her vote for the Iraq War resolution, compounded by her lukewarm appeal to independent voters, led some smart people to predict her early demise.Just a few weeks ago, of course, John Edwards had to put up, however briefly, with reports that he was actually about to drop out of the race, and/or would be capsized by public concerns about his wife’s health, and/or couldn’t raise any money.And now Barack Obama is suffering from a bit of a drop in support in the polls, explained by many as the result of his refusal to get specific on policy ideas, and/or to give Democratic audiences the red meat they expect. As a new and relatively balanced New Republic article by Noam Scheiber reflects, the emerging CW is that Obama’s buzz factor is fading (just as many Obama-skeptics in the punditocracy had long predicted), leaving him in a downward trajectory unless he changes course.Taking all these “trends” together, the lesson is that you shouldn’t pay much attention to the early CW on any of these three candidates. The best bet is that the Big Three are all viable and tightly bunched, which is mainly bad news for the Little Three (Richardson, Dodd and Biden) who need some oxygen to get taken seriously by the media, the activists, and the money folk.What’s more interesting to me is the extent to which the Big Three have taken varying courses in laying out a rationale for their candidacy.When you boil it all down, our last two presidential nominees, Al Gore and John Kerry, were rich in policy proposals and Shrumian “fighting” rhetoric, but largely bereft of any overarching message (Gore, to be more precise, had several messages, but couldn’t settle on one for any length of time).Nobody needs Bob Shrum any more to convey an intention to “fight” Republicans. Obama is all message (the same message of beyond-polarization and reform that John Kerry rejected and Wesley Clark botched in 2004), and part of his early appeal is that he scratches a long-standing itch among message-starved Democratic and independent voters. It also enables him to simultaneously run to the left and right of his main rivals.HRC, so far, stands in the Gore-Kerry all-policy, no-message tradition, assuming that “I’m in it to win!” is a short-term, tactical slogan designed to deal with doubts about her electability.Edwards is the one candidate so far to put together both a clear message (an updated version of his “Two Americas” theme from 2004) and a lot of policy detail. But I strongly suspect that Obama and Clinton will soon catch up on that front, and then we’ll begin to see some real and congruent competition. The other thing that’s likely to happen is that George W. Bush will find a way to make moot the current tactical arguments among the Democratic presidential candidates over Iraq, which will make their opinions on other topics more visible and politically relevant.Each of the Big Three has a distinctive set of strategic issues to navigate.HRC is clearly the least vulnerable to mood swings, media narratives, or gaffes; she’s already suffered the most important setback, the loss of her overwhelming African-American support. She’ll be fine if none of her rivals, Big or Little, catch fire.Obama needs to overcome the current negative buzz about his campaign; continue, through heavy and broad-based fundraising and competitive poll numbers, to solidify his status as a national candidate who doesn’t have to win early; and unfold a policy agenda that satisfies the critics without pigeon-holing him ideologically.And Edwards, aside from getting past the rumors about the impact of his wife’s health on his candidacy, needs to continue his interesting tandem strategy of becoming the preferred choice of the activist Left, while maintaining his appeal as a regional Southern candidate, which could be very important after New Hampshire. So far, he seems to be pulling it off, as evidenced by his recently unveiled and impressive endorsement list in South Carolina (no, endorsements aren’t all that important in themselves, but in this case they do show he hasn’t in any way become toxic in his home region. He should say a prayer every night in thanks for Mark Warner’s noncandidacy). Unlike HRC and Obama, Edwards really does need to win or at worst finish a strong second in Iowa, but if he does, he could be in very good shape.This post does obviously reflect the CW in focusing on the Big Three, as opposed to Richardson, Dodd and Biden. But in this case, the CW may well be accurate, given the front-loaded caucus and primary schedule, the strength of the Big Three in the early states, the Little Three’s money disadvantage, and the absence of any issue on which the Little Three–with the possible exception of Biden’s relative hawkishness, which doesn’t look like a winner among Democratic voters in 2008–could distinguish themselves.The most likely dark horse is Bill Richardson. The good news for Richardson is that all the rumors over the decades about his alleged “zipper problem” are probably just bunk; we’d have almost certainly learned otherwise by now if it were otherwise. The bad news for Richardson is that he almost has to win in Nevada to have a prayer, and even then, he’s not well-positioned to win in Iowa, New Hampshire, or South Carolina.So: get used to the idea that the Democratic nominee will likely be named (to list them alphabetically) Barack, Hillary or John, and that you can ignore a lot of the daily buzz about the Big Three until people start voting, which will be soon enough.
TDS Strategy Memos
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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.