Freedom Line Blog

In October 2003, tough-talking optimist Arnold Schwarzenegger unseated bland public union yes-man Gray Davis as Governor of California in a revolutionary special recall election.  Today, Schwarzenegger departs with a depressed 22% approval rating that serves as a warning for Republican newcomers in Congress and across the 50 states against the perils of go-along-to-get-along “bipartisanship.”

During his first two years in office, Schwarzenegger maintained a confrontational demeanor that California desperately needed as it hurtled toward its current disastrous state.  In March 2004, for instance, he famously ridiculed California’s milquetoast political class as “girlie-men.”

Unfortunately, four common-sense and ultimately necessary ballot initiatives that he supported failed in November 2005.  Instead of sticking to principles, Schwarzenegger opted for “bipartisan” political expediency and personal survival.  What followed was a shameful litany of global warming bills, ObamaCare-like proposals, lack of leadership and tax hikes.  His capitulation provided a short-term payoff via reelection in 2006, but ultimately proved disastrous for himself and the state.  Today, despite Schwarzenegger’s early promise, California is in even worse shape than when he entered office.  And jaded voters witnessed yet another sad example of a politician who promised to change the political culture, only to allow the political culture to change him.

Schwarzenegger’s failure, however, provides a helpful cautionary guide for incoming Republicans this new year.  Namely, sacrificing the principles that got you elected at the tempting altar of “bipartisanship” will only deepen our nation’s current difficulties and eventually doom you politically.

This week, CFIF formally petitioned House Committee on Oversight and Government Reform Chairman-Elect Darrell Issa (R – California) to investigate the Obama Education Department’s continuing campaign against for-profit colleges.

Career colleges have flourished because of their ability to nimbly respond to our evolving economy, offer an education focusing on hands-on occupational training, and excel at serving non-traditional students who often have children, are working, are typically older and are more diverse than their peers at traditional schools.  This is particularly important during the current period of job scarcity and worldwide economic competition.  The Obama Education Department, however, seeks to foist a proposed “Gainful Employment” rule that would declare academic programs ineligible for federal aid if some specified proportion of their graduates failed to meet an arbitrary income-to-loan payment ratio.

The natural consequence of such a rule:  vital for-profit career colleges would be eliminated.

The need for Congressional investigation became even more obvious this week.  The Government Accountability Office (GAO) withdrew, then revised and republished a defective study originally released last summer in which it sent undercover “students” to several schools to capture information on recruiting policies, promises of post-graduation pay, federal and other funds for tuition and expenses, and more.  That GAO report had been cited as vital evidence for the Education Department and a Senate committee as they prepare to promulgate the Gainful Employment rule, and even the Washington Post (whose parent company owns one of the largest for-profit schools) ran an article exposing that defective report.  The GAO’s numerous revisions are all clearly slanted in one direction – the original report inaccurately cast career colleges in an unfavorable light, while the revisions indicate that the GAO’s undercover students may have intended to entrap career college admissions personnel.  By the GAO’s own estimate, only 1 percent of reports are corrected, so an inquiry into the reasons behind this particular revision – with its original report clearly biased – is justified.

That news comes on the heels of allegations that Education Department officials communicated with short-sellers to inform them of their intentions, providing certain traders with inside information potentially allowing for illegal financial advantage.  The cooperation, however, was allegedly a two-way street.  According to media accounts, these same short-sellers may have concocted elaborate schemes to cast a negative light on career colleges, helping them rationalize the proposed rule.   These allegations are sufficiently serious that Senators Tom Coburn (R – Oklahoma) and Richard Burr (R – North Carolina) have formally sought an investigation.

At a minimum, an alarming pattern has emerged that points to the Department of Education specifically working to inflict economic harm upon career colleges, while possibly collaborating in the shadows with the very short-sellers on Wall Street who would most likely benefit from such activity.

Remember how ObamaCare was furiously crafted behind locked doors, despite Obama’s assurances it would be “on C-Span?”  The public revolted against those tactics, but Obama’s Federal Communications Commission (FCC) apparently thought it all went pretty well.  Look no further than its secrecy in concocting its latest “Net Neutrality” draft, despite FCC Commissioner Julius Genachowski’s own promises of “transparency.”

In this way, “Net Neutrality” imitates ObamaCare beyond the broader fact that it seeks to commandeer 1/6 of the American economy.  Like ObamaCare, it is strongly opposed by the public and judicially suspect, and proponents know that exposing its manufacturing process to the sunlight would only help doom it.  Accordingly, Chairman Genachowski appears intent on concealing his “Net Neutrality” proposal as long as possible before dumping it on the public later this month.

Why all the secrecy?  What do Chairman Genachowski and “Net Neutrality” proponents fear so much?  Instead of secrecy, they should follow Commissioner Meredith Attwell Baker’s call to immediately make the draft public.  Apply the same “openness” that you claim to desire for the Internet, Chairman Genachowski.

Susan Ferrechio, Chief Congressional Correspondent for the Washington Examiner, shares her thoughts on the final weeks of the current Congress and what is in store for the 80 new Republicans entering the House.

Listen to the interview here.

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Join CFIF Corporate Counsel and Senior Vice President Renee Giachino today from 4:00 p.m. CST to 6:00 p.m. CST (that’s 5:00 p.m. to 7:00 p.m. EST) on Northwest Florida’s 1330 AM WEBY, as she hosts her show “Your Turn.”  Today’s star guest lineup includes:

4:00 pm (CST) Virginia Scharff, author of “The Women Jefferson Loved”

4:30 pm (CST) Susan Ferrechio, Chief Congressional Correspondent for The Washington Examiner, New Congress

5:00 pm (CST) Sheriff Larry Dever, Immigration

5:30 pm (CST) Timothy Lee, Center for Individual Freedom, Deficit/Economy/Judges

Please share your comments, thoughts and questions at (850) 623-1330, or listen via the Internet by clicking here.  You won’t want to miss this!

At least outgoing House Speaker Nancy Pelosi (D-CA) can claim credit for creating one job during her tenure.  According to The Hill, Pelosi – the frontrunner to become Minority Leader when the defeated Democrats give up power next Congress – has a novel idea how to decide which of two people gets one available job: create a new position.  (Title and portfolio TBD)

How perfect.  Rather than let Reps. Steny Hoyer (D-MD) and Jim Clyburn (D-SC) compete for the position of Minority Whip, Pelosi is proposing to create a federal job that spends more taxpayer money.  (Unless, unlike all other congressional leadership positions, the new post comes without staff, office, and an expense account; a situation that would hardly appeal to anyone gunning for a job with real power.)

Even in the face of a 60 seat rebuke that cost her the Speakership, San Francisco Nancy is still following the same liberal formula of growing the federal government.  If this is the kind of in-the-box, hidebound thinking House Democrats want to pursue over the next two years, Republicans should get ready to win even more seats in 2012.

Ashton makes a good point about the geographic diversity of the GOP House leadership in comparison to its Democratic predecessor. Another interesting addition may be Kristi Noem, the incoming freshman who will serve as the At-Large Representative for South Dakota and who looks to be in line to fill a new position being created to give some leadership representation to the burgeoning ranks of Tea Party-affiliated conservatives. Noem is attractive, articulate, and has a compelling biography. She looks to be a definite rising star in the party.

I think the mix of the two parties may be reflective of what caused the Democrats to go astray in the past few years. Looking at the new Republican leadership, only Texan Jeb Hensarling comes from a state where Republicans are reliably strong in both federal and state elections. Democrats, on the other hand, populated their leadership ranks with figures from the deepest of the deep blue states. They governed that way too. And in so doing, they forgot all the lessons that gave them control of the Congress.

In the 2006 and 2008 election cycles, Rahm Emanuel in the House and Chuck Schumer in the Senate gave considerable flexibility to their recruited candidates, allowing them to run with conservative positions on a host of issues that allowed them to escape being tarred as liberals in the Midwest, the South, and the Mountain West. While they succeeded in getting a large percentage of those candidates elected, the Obama-Pelosi-Reid agenda then lurched so heavily to the left that the new members had to run for reelection in the shadow of a record that undermined all their pretensions of moderation.

The facile interpretation of this trend is that a party always has to govern from the center to keep its majority. That’s also the rationale for liberals like  E.J. Dionne, who hope that the new conservative majority’s stand on principle will alienate them from the electorate. In his most recent column, Dionne writes:

Give Republicans credit for this: They don’t chase the center, they try to move it. Democrats can play a loser’s game of scrambling after a center being pushed ever rightward. Or they can stand their ground and show how far their opponents are from moderate, problem-solving governance. Why should Democrats take Republican advice that Republicans themselves would never be foolish enough to follow?

This is what happens when a static mind attempts to comprehend a dynamic landscape. The problem with Dionne’s analysis is that he assumes the left and the right are equidistant from the center. This is false. When Gallup polled the question in June, 42 percent of Americans identified as conservative, 35 percent said they were moderate, and 20 percent said they were liberal. That means the self-identified center-right represents an astonishing 77 percent of the country. By contrast, the center-left at its theoretical apex is only a slight majority of Americans. When you then factor in that 56 percent of independents broke for Republicans this year — and that that represented a 36 point swing from 2006 — you see how steep the hill is for Democrats.

Dionne and his counterparts in Congress need to learn the lesson: in a center-right country, it’s more important for Democrats to moderate than Republicans. If you doubt that, ask Bill Clinton — he might remind you that he’s the only Democratic president to be elected twice since FDR.

With Rep. Michele Bachmann (R-MN) announcing the end of her campaign to be Republican Conference Chairman, the likely top four House GOP leadership spots look like this:

(1)   Speaker – Rep. John Boehner (R-OH)

(2)   Majority Leader – Rep. Eric Cantor (R-VA)

(3)   Majority Whip – Rep. Kevin McCarthy (R-CA)

(4)   Conference Chairman – Rep. Jeb Hersarling (R-TX)

It’s always interesting to see where leadership team members are from because it indicates where the strength of the party lies.  Since leadership positions are sought and won by members with multiple terms in office, it’s intriguing to see four Republicans representing each corner of the country.

Contrast this with the locations represented by the outgoing top four House Democrat leaders:

(1)   Speaker – Rep. Nancy Pelosi (D-CA)

(2)   Majority Leader – Rep. Steny Hoyer (D-MD)

(3)   Majority Whip – Rep. James Clyburn (D-SC)

(4)   Caucus Chairman – Rep. John Larson (D-CT)

Aside from Clyburn, all the Democrat leaders come from deep blue coastal states (e.g. California, Maryland, and Connecticut).  Counting Clyburn, the Democrats’ claim to a “southern” voice is tied to a gerrymandered district designed to elect a liberal African-American.  If Hoyer beats Clyburn for the Minority Whip post, even that fig leaf of regional diversity will blow away.

The House Democratic caucus lost 29 of 57 “blue dog” members last Tuesday, making the remaining chamber membership much more liberal.  It also wiped out the Democrats’ claims to represent regions other than the high-tax, morally bankrupt coasts.  That, combined with Nancy Pelosi’s likely retention as caucus leader, will make it substantially more difficult for the party to recruit viable candidates in 2012.

Conservatives shouldn’t count on gifts like this forever, but for now, we’ll gladly take them.

A new Rasmussen Reports poll shows that most voters want the new House Republican majority to investigate the spending impact of ObamaCare.  The survey found that 55% of respondents support a close look at the costs and implications of the health care “reform” bill jammed through Congress earlier this year.

With the tentacles of ObamaCare reaching far beyond the purview of “health” don’t be surprised if House committees like Budget, Oversight and Government Reform, and even Commerce (among others) open investigations into the most drastic government power grab since LBJ’s Great Society.

In this week’s Liberty Update commentary “2012 May Be Even Brighter for Conservatives Than 2010,” we note that there are reasons why 2012 might bring even more conservative change than this week’s results regardless of the political climate two years from now.  In the Senate, Democrats must defend 23 seats, many of those in red states like Montana, whereas Republicans need only defend 10 (most of which are in red states like Wyoming, Utah and Texas).  And in the House, post-census redistricting in states that elected Republican governors and legislatures this week may add even more seats to the 60+ they won two days ago.

Here’s another encouraging (and related) factor for conservatives.  The same post-census realignment that will facilitate more conservative wins in the House will also alter the Electoral College, thereby affecting the 2012 presidential race.  How significant that effect will be one cannot yet say, but every point will count if that White House contest is as close as two of the previous three have been.

One of the selling points for “universal” health care is the notion it carries of making treatment available to everyone.  That’s (somewhat) true, but when government-run health care displaces private companies, something else gets tossed out too: privacy.

According to a notice published in the Federal Register last month, President Barack Obama’s Office of Personnel Management (OPM) will be launching a new health-related database that adds to new data sets to one representing federal workers: private citizens who report pre-existing health conditions or use one of the newly created regional exchanges for pooled health insurance.  That information will be made available to any government agency, law enforcement group, or third party researcher that shows a need for it.

What gives OPM the right to collect and disseminate such sensitive health records?  The passage and implementation of ObamaCare.

Charles Krauthammer’s recent column heralding the demise Obama’s legislative agenda contained a paragraph that deserves mention:

Over the next two years, the real action will be not in Congress but in the bowels of the federal bureaucracy. Democrats will advance their agenda on Obamacare, financial reform and energy by means of administrative regulation, such as carbon-emission limits imposed unilaterally by the Environmental Protection Agency.

No doubt, there will be many battles to fight in Congress against enactment of more freedom-killing policies, but voters, activists, and politicians should remember that the threat to liberty only accelerates once the federal bureaucracy gets involved.  OPM is just the most recent example.

By all accounts, American voters have regained sobriety and will deliver resounding victories for conservatives today.  This date in history, however, provides a cautionary tale for anyone even thinking of not voting because they assume that victory is in the bag.

Today in 1948, political pundits were so certain of a Thomas Dewey victory over Harry Truman that the Chicago Tribune prematurely published its infamous “Dewey Defeats Truman” headline.  Need another cautionary tale?  How about the 2008 Minnesota Senate race between Norm Coleman and Al Franken?  There, Franken and his election attorneys somehow contorted an election night deficit into a narrow recount victory, possibly with the help of felon voters.  Nobody’s laughing now that the chronically unfunny Franken routinely makes a mockery of his Senate seat.

So don’t take anything for granted.  Too many people have fought and died to protect your right to affect this nation’s course, and too many people have worked too hard to provide alternatives to the bland “same ol’, same ol'” choice.  You don’t want to be kicking yourself tomorrow.

In an interview with the Wall Street Journal’s John Fund, retiring Rep. Brian Baird (D-WA) shares some thoughtful insights about what went wrong for Democrats the last two years.  From appallingly bad advice from so-called strategists (e.g. “voters don’t care about deficits”) to an “authoritarian” leadership that demanded blind loyalty from members, Baird’s interview could be read as a warning to the incoming Republican majority.  Common sense in rules and policy is a non-partisan winner.

Most revealing are the ideas Baird has for tackling entitlements:

In his new book, “Character, Politics and Responsibility,” Mr. Baird argues that in order to afford caring for the needy, liberals will have to challenge “unsustainable entitlements.” “I would eliminate the concept of entitlements and move to needs-based social insurance,” he says. “The key is to both promote personal responsibility while lowering expenditures by not promising or giving money or other benefits to those who don’t need it.”

Too bad Baird won’t be around to make that case inside Congress.

Barack Obama has consistently failed to gain political traction with unseemly attacks against everyone from former President Bush to Fox News to John Boehner’s tan.  So Obama redirected his aim using illogical and baseless attacks against business groups whom he accuses of attempting to “sway elections” through sinister election spending.”  David Axelrod, Obama’s top political guru, has labeled election spending a “threat to our democracy,” and when pressed to identify a shred of evidence supporting Obama’s allegation of illegal foreign campaign spending benefiting Republican candidates could only reply, “do you have any evidence that it’s not?”

So which group has actually spent the most to influence this year’s Congressional elections?  The American Federation of State, County and Municipal Employees (AFSCME), a 1.6 million member union of public employees.  According to The Wall Street Journal, AFSCME has now spent $87.5 million, which outdistances the demonized Chamber of Commerce by a cool $12.5 million.  Of the top five spenders, in fact, three of them are big labor unions (the other two being the Service Employees International Union (SEIU) and National Education Association (NEA)).

One would hope for more ethical behavior from a President who based his entire 2008 campaign on bringing “change” to our toxic political discourse.  What will be his campaign theme in 2012?  Instead of “hope and change,” he’s building a legacy of “hypocrisy and impropriety.”

We’re now exactly two weeks from the long-awaited 2010 Congressional midterm election and report card for President Obama.  By now, the question is simply how high the expletive decibel level will ascend on election night inside the White House.

On that front, a Gallup poll brings news every bit as chilly and cloudy for Democrats as today’s Washington, D.C. weather.  In fact, the poll shows a high for Republicans that even 1994 didn’t bring.  According to polling completed this past weekend, Republicans now possess a 5-point lead in voter preference, 48% to 43%.  And here’s the really bad news for Democrats:  that’s not among likely voters, but among registered voters.  (Among likely voters, the GOP lead expands to 11% or 17%, depending on whether the “high turnout” or “low turnout” polling model is applied.)

Let’s put that historic lead in perspective.  In 2002, the party holding the White House hadn’t added both House and Senate seats in its first mid-term since 1934, but the supposedly failed President Bush broke almost 70 years of precedent by adding 8 House and 2 Senate seats.  Even that year, however, Democrats held a 9-point polling lead in mid-October among registered voters.  And during the famous 1994 election season that rejected two years of Clintonian rule alongside a Democratic House and Senate, Republicans only held a 3-point lead on October 18-19, which switched back to a 3-point Democrat lead by October 22-25.  If this is any indication, Democrats aren’t going to need seat belts this year, they’re going to need airbags.

Check out this Fox Business interview with Eric Singer, the founder of Congressional Effect Management, an investment firm that only gets into the stock market when Congress is out of session.  The key to Singer’s strategy is avoiding ‘political risk’ – the damage to wealth creation that Congress causes through taxes and regulation (real or threatened).

Read this CFIF profile of Congressional Effect Management for a more in-depth discussion on Singer’s time-tested, data-driven approach.

Earlier, CFIF profiled Eric Singer of Congressional Effect Management as the foremost proponent of avoiding political risk by investing in the stock market only when Congress it out of session.  In his own commentary, Singer blasts Speaker Nancy Pelosi’s (D-CA) do-nothing-right caucus for failing to address the budget crisis they created:

As the nation watches in horror as its debt begins to grow beyond the point of no return, the Congressional Budget Office continues statically scoring all legislation.

It assumes that if tax rates are raised, taxes received by the Treasury will go up proportionately. It disregards the impact of the extra 10 billion hours it now takes to figure out our taxes.

It ignores the fact that in the face of 1,400 new regulations from health care and financial overhauls (Sarbanes-Oxley had only 16), virtually all businesses will slow down and hoard cash as they try to understand what the new rules might be.

Static scoring assumes that the uncertainty created by the presence of new laws and new regulations does not affect behavior or taxes collected. Static scoring assumes some sucker will always be available to buy our debt no matter how much we waste. Worst of all, it assumes no one will change behavior to reduce taxes.

Every assumption of the static scoring model is demonstrably false. Higher tax rates usually result in lower revenues as people change their actions to reduce their tax burden. This will certainly happen if some or all of the Bush tax cuts expire and the economy continues to sag as a result. The time, cost and restraints of new regulations can choke businesses.

The kind of rampant uncertainty caused by the explosion in federal regulations will continue to slow America’s economic recovery.  Riffing on Singer, maybe after passing CFIF’s ‘One More Vote’ initiative, the country can pass a constitutional amendment to limit the amount of congressional work days.

H/T: Investor’s Business Daily

Below is one of the latest cartoons from two-time Pulitzer Prize-winner Michael Ramirez.

View more of Michael Ramirez’s cartoons on CFIF’s website here.

Conservative reaction to the House Republicans’ “Pledge to America” varies.  Whatever one’s views toward the plan, however, it did omit an item high on conservatives’ agenda:  a proposed Constitutional balanced budget amendment.  Enter CFIF’s “One More Vote,” which refers to the fact that Congress fell just one vote short in the 1990s of passing a balanced budget amendment and sending it to the states for ratification.  Our “One More Vote” initiative, which readers are urged to sign, would not only require a balanced budget, but prevent that from becoming a convenient excuse to raise taxes by requiring a 60% supermajority to create or increase taxes, or to raise the nation’s debt ceiling.

Party change won’t be enough this time around.  With “One More Vote,” we can collectively create something more lasting for America’s future generations.