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The Conservative Reader:

Should elected party officials endorse candidates before the primary?

Should elected party officials endorse candidates before the primary?

Earlier this week, I received a press release with the following redacted endorsement:
xxx, Iowa– xxx County Republican chairman xxx today endorsed xxx for the 2012 Republican presidential nomination.

This notification stirred me to think about the question “Should elected party officials endorse candidates before the primary?”. As Chairman of the Polk County Republican Party for the period 2009-2010, I made a personal decision that I would not endorse primary candidates for local or statewide offices, but my tenure did not cover a presidential cycle. Should the rules be different for Iowa’s “1st in the Nation” presidential caucus?

I don’t believe there is a clear answer to this question. The best I can do is to share some anecdotal experiences from my time as Chairman that may have relevance to the discussion.

Activist Issues – On several occasions, I received complaints from political activists that we (Polk County leaders) were favoring a candidate. Frequently these complaints were associated with our website coverage and emails related to campaign events held by or on behalf of one of the candidates. Usually the complaint was “Why did you communicate candidate x’s event but you failed to communicate candidate y’s event?”. Almost 100% of the time, our failure to communicate was the result of the campaign failing to inform us of their event. Never the less, some people remained convinced that we had undercut their candidate because we secretly favored another one.

Candidate Issues – On a few occasions, we received complaints from candidates. Usually this was associated with “setting the bar too high” for access or visibility at an event. We paid our bills by conducting these events, so we had to consider every possible revenue source. We thought we set the access fee appropriately. Some candidates remained convinced that we had intentionally set rules to favor only candidates with strong financial support.

Policy/Platform Issues – I feel very strongly that there is only one role for a Chairman when it comes to platform issues. His or her role is to run a platform development process that is broadly based. The process should include meaningful representation from the many precinct caucuses in the county. The platform discussions should be led by a strong facilitator (not the Chairman) who respects the rights of every representative to participate subject to the agreed rules of order. The Chairman should never try to force his or her personal policy views into the process. If a Chairman openly prefers one candidate, is that not clearly an endorsement for that candidates policy views? As an example, many Polk County Central Committee members knew that I supported John McCain in 2008 (before I was Chairman). I had to work hard to convince some members that my effort to broaden the platform committee was not a Trojan horse to place more moderates into the process. The reality is that my only intent was to include more of the elected platform representatives.

It is clear to me that in a local or statewide primary election, a Chairman cannot endorse a candidate without seriously aggravating the suspicions of activists and candidates? Presidential politics in Iowa tend to be fairly emotional. In Iowa we have many of our finest activists joining the fight on behalf of their preferred candidate. By endorsing a candidate, a Chairman will almost certainly alienate some people and lose their support for county activities in the general election.  I would therefore recommend that a County Chairman, or any other elected party official, refrain from making such endorsements.

The DSM Register Independence Day Weekend “Progressive Trifecta” (3rd  of 3) “Keep Social Security Safe”

The DSM Register Independence Day Weekend “Progressive Trifecta” (3rd of 3) “Keep Social Security Safe”

The Des Moines Register’s Opinion Section on Sunday, July 3, 2011 featured a “Progressives Trifecta” of half-truths and sophistry:

Richard Doak – What if the founders were around today?

Donald Kaul – My favorite 4th of July speech

Dean Baker – Keep Social Security safe from politicians who want to save it

This week I will focus my comments on Dean Baker’s article sub-titled “Real patriotism requires coming to terms with the grimmer side of American history”. Mr. Baker is co-director for the Center for Economic Policy Research (CEPR). The CEPR home page lists 10 funders, mostly far left organizations including the Open Society Foundations, which was founded by and led by George Soros.

Dean Baker-He advises the reader that two thirds of people age 65 rely on Social Security for more than half their income. He notes that “with traditional pensions disappearing and many near retirees losing much or all of the equity in their home, and also seeing 401(k) assets plummet”, hence “the next generation is likely to be even more dependent on Social Security”. He then proceeds to explain “Fortunately the program (Social Security) is fundamentally solid”. He goes on to summarize various facts about the trust fund and speculates about various ways to further improve the long term health of the program. He says “Many opponents of Social Security insist that its $2.6 trillion trust fund does not exist or that it is “just sheets of paper”. He acknowledges that “the trust fund is held in the form of U.S. government bonds, which are indeed sheets of paper. However, investors everywhere eagerly seek out these ‘sheets of paper’ as the safest asset in the world”.

  • Public reliance on Social Security-Mr. Baker is not providing a fully accurate picture in his description of the American public’s dependence on Social Security. I checked several sources for my information and found them to be relatively consistent, so I have only referenced three of them. My conclusion is that Americans who have lived within their means, saved money, invested prudently and maintained marketable skills are relying properly on Social Security as a meaningful component of their retirement. Social Security was never intended to be more than that.
  • Average U.S. Home Prices[1]
  • The median price of homes in the United States in 2004 was $221,000. It peaked in 2007 at $247,900. In 2010 it was $221,800. Baker’s statement about near retirees losing much or all of their equity would only have occurred if they leveraged their home equity for other reasons. If they had been in their home for 20 years, even the depressed 2010 prices reflect a gain of 80%.
  • Planning to Retire by Emily Brandon[2].
    • Americans age 65 and older receive most of their income from four sources: employment, Social Security, pensions, and asset returns, according to a recent Congressional Research Service report. The prevalence of each of these types of income has shifted somewhat since 1980. More Americans now continue working past age 65 and fewer people bring in income from assets. Here’s a look at how the biggest sources of retirement income have changed over the past 30 years.
    • Employment. In the 1980s and 90s about 16 percent of seniors worked, a number that steadily increased to 20 percent in 2008. Earnings now make up over a quarter (26 percent) of income for Americans age 65 and older, with the typical senior bringing in a median of $20,000 annually from work.
    • Social Security. Social Security remains the most common source of income for people age 65 and older. About 86 percent of seniors receive these monthly checks for a median of $12,437 annually. This entitlement makes up 39 percent of the typical senior’s income.
    • Asset income. Just about half of Americans (54 percent) receive some income from assets, down from 67 percent in 1980. But most Americans don’t receive very much in the form of interest, dividends, rent, or royalty payments. Interest rates and dividend yields have fallen since the early 1990s. The typical American made just $1,054 off their assets in 2008. Asset returns account for approximately 13 percent of retiree income, down from 24 percent in 1990. (Writer’s note: The Federal Reserve is “saving the economy” with 0% interest rates. Unfortunately this punishes millions of retirees who saved for their retirement and were counting on fair returns on bank deposits, CD’s etc..)
    • Pensions. The proportion of Americans with a pension from a former employer has fallen slightly from 37 in 1990 to 34 percent in 2008. Pensions payout a median of $10,800 annually which makes up about 20 percent of the typical retiree’s budget.
  • 401K Balances Moving Back to Pre-recession levels by David Pitt[3]
    • Americans who were afraid to open their 401(k) statements during the recession are finding good news inside the envelope now: For the most part, their accounts have come all the way back and then some.
    • Nine in 10 of the popular retirement plans are at least back to where they were in October 2007, the peak of the stock market. Since the bull market began in March 2009, stocks have almost doubled.
    • And many investors who kept their nerve and continued putting some of their paycheck into a 401(k) during the market’s worst months are now ahead.
  • My main issue with Mr. Baker is his insistence that the Social Security Trust Fund is secure. The current crisis over the debt ceiling now exposes that lie completely. President Obama has admitted that checks may not be issued if the U.S. Treasury cannot continue to borrow next month. If the Social Security Trust Fund held real assets, rather than government paper, they could sell those assets and pay benefits independently from the General Fund. As noted above, long term investments in real estate, stocks, bonds, commodities (gold), etc. have real value. Unfortunately all we have is paper made worthless by closet socialists like Tom Harkin and Barack Obama. I wish this were not true. I have paid into these programs at maximum levels for most of my working career. Privatize Social Security? Absolutely. Young people should demand it. The Ponzi scheme is over!

    I refer you to the following article, The Fraud of the Social Security ‘Trust Fund’ Exposed by a Most Unlikely Source by Don Boudreaux on July 16, 2011[4]

    If Americans choose to accept the misinformation of socialists like Mr. Baker as fact, then they deserve the government and fate that they choose. The Republicans have proposed a plan and until President Obama does likewise, they should be applauded for at least recognizing the problems. Mr. Baker knows better. He is simply a socialist who hopes to use the budget crisis to tax the private sector out of business, redistribute an ever shrinking American economic pie, and secure power for global elites like George Soros.

    [2] U.S. News and World Report, January 12, 2010

    [3] The Huffington Post, March 21, 2011


    Photo: Gino Santa Maria –

    The DSM Register says “Congress should be considering further economic stimulus”.

    The DSM Register says “Congress should be considering further economic stimulus”.

    The Des Moines Register’s Editorial on Monday, June 27, 2011 was titled “Steep budget cuts now could harm economy”.

    Summary – The Register’s Editorial group pointed us once again to the “nonpartisan fiscal agency”, the Congressional Budget Office (CBO).   They quoted the CBO’s “dire warning about unsustainable federal deficits”, but cautioned that the report also “warned that steep cuts right now could make the nation’s fiscal condition even worse by kicking the legs out from under the economy”.   Also on June 27th, The Wall Street Journal’s front page led off with an article titled “Debt Hamstrings Recovery”[1].   The WSJ’s Tom Lauricella notes “Around the globe, the inability of governments and households to reduce their debt continues to cast a shadow over Western economies”…”Unlike the aftermath of typical recessions, simply lowering interest rates hasn’t been enough to get growth back on track…Quite the opposite has been the case…  The lowered cost of borrowing has enabled individuals and government to delay taking measures to change the way they spend and save.”

    Comment on the DSM Register’s Selective Reporting – I have noticed a pattern of inconsistency in the DSM Register’s and WSJ’s reporting.   Many featured articles in the WSJ, arguably a far more competent source of economic analysis than Gannett’s network, are minimized or never presented in the DSM Register.  In addition to the “Debt Hamstring” analysis, another recent example would be the study released by management consultant McKinsey.  They surveyed 1,300 companies and found that one third (1/3) of them will “definitely” or “probably” stop offering health insurance after 2014.  Since candidate Obama guaranteed us that we would be able to keep our current insurance, this seems like a worthwhile piece of news.  If the DSM Register featured it, I must have overlooked it.  I wonder if the nonpartisan CBO is aware of it?

    Analysis of the “Spend Now, Save Later Strategy”  -  If we were in the position of China,  over $3 trillion in foreign exchange reserves[2], I would not have a big issue with spending some of those reserves to shore up a short term slump in the economy.   However Government debt as a % of GDP has increased from 30% in the early 2000’s to 35% by the end of the Bush presidency (increasing under both Republican and Democrat congresses).  During the Pelosi-Reid-Obama era, that % is now approaching 60%.   Meanwhile consumer debt and mortgage debt has more than doubled since 2000 (from $10 to about $20 trillion combined).  Given the state of our debt, any increase in interest rates (almost a certainty the way the Fed has increased the money supply) will quickly multiply the consequences of our excessive debt.    For my entire adult life I have heard politicians claim that we will “save later, when the economy is stronger”.  That day never comes.  The Clinton-Gingrich era budgets were a nice anomaly but were not based on sustainable structural changes.  The Register is wrong.  We must cut government spending substantially and quickly.

    [1] WSJ 27 June 2011, Debt Hamstrings Recovery

    [2] WSJ, 26 June 2011, “China Pledges Continued Support for European Debt”

    The DSM Register Independence Day Weekend “Progressive Trifecta” (3rd  of 3) “Keep Social Security Safe”

    A New Year, A New Congress

    Out with the old, in with the new, goes the standard cliche every year about this time.  No, this is not a reference to Nancy Pelosi’s age, although incoming House Speaker John Boehner is 9 years younger.  Speaker Boehner does represent a new attitude and the resulting optimism is being reflected in the markets and the broader economy.


    • Retail sales, Christmas sales, were up significantly over 2009
    • Consumer and business confidence for November and December have inched higher
    • Jobless numbers are moving downward, evidenced by today’s ADP employment report that suggested 297,000 new private sector jobs were created in December (this is a big number!)

    This is not a coincidence.  This is, however a direct result of increased optimism in the country due to the November election and subsequent Republican control of the House.  It is a direct result of Congress extending the Bush tax cuts in November.  It is a direct result of the repudiation of the Obama/Reid/Pelosi economic agenda.  Republicans have a huge opportunity to make the economy and employment the primary issue in 2011.  In the words of that great philosopher James Carville, “It’s the economy, stupid”.

    In addition to repealing the two collosal and horrid pieces of legislation, (ObamaCare and Financial Institutions Reform), Congress needs to deal with several other hangovers from the Pelosi/Reid years.  First, Julian Assange should be tried and convicted of being the cyber-terrorist that he is, and he needs to be treated like any other terrorist.  Second, the federal government needs to be starved into submission.  Follow the model Chris Christie has set in New Jersey.  Get the unions under control (and with it, the unfunded pension liabilities).  Finally, any free trade agreements with valued allies and trading partners, such as Colombia and South Korea, should be ratified and signed as soon as possible.

    Movement in these directions will reinforce the current optimism prevailing in the country, promote private sector job growth, encourage banks to lend again, and as a result, generate revenues for not only the federal treasury, but state and local governments as well.  The last two years nearly ruined us as a nation.  We have an opportunity to correct the damage.  2011 is a new year.  Let’s hope the new Congress can build on it.

    The Big Spanking

    The Big Spanking

    Our grandchildren were over last weekend–two boys ages 5 and 3.  At one point the 3-year-old was telling me about being disobedient and how Daddy had to give him a big spanking.  Now I know my son and I’m sure that he was providing gentle discipline, but the point wasn’t lost and can be applied to last week’s election.

    Much has been made of the Republican’s gains in the House and Senate, and their effective control of Congress.  This was clearly a repudiation of the Obama, Reid, and Pelosi policies of economic stagnation.  Make no mistake about it, this was about the economy.  The Democrats insistence on spending taxpayer’s money ineffectively, squandering it, actually, passing huge and unpopular bills, and their complete lack of caring about the taxpayer and the cumulative effect on the economy led to their downfall.

    Part of this is due to their arrogance. Part is due to the Democrats’ lack of understanding of how our economy works.  America is and always has been a capitalist society.  Government control and planning is an anethema.  Our economy works best when businesses and individuals are confident and can make plans to invest, spend, hire and borrow with a degree of certainty.  America has not had any level of confidence in over two years, since the collapse of Lehman Brothers in September 2008.  The Democrats, and President Obama, Harry Reid and Nancy Pelosi specifically, have done everything they could to ensure a lack of confidence by ramming through legislation designed to further their agenda and in the process, scaring the living crap out of people.  Hence the rise of the Tea Party, and the big spanking.

    Everything the Democrats have done has suggested higher taxes or significantly additional costs and fees.  First, they’ve managed to pass a “stimulus” bill that has to be paid for somehow, and that has failed to stimulate much.  Second, they passed Obamacare that will raise the cost of doing business for everyone, and I mean everyone, and must be paid for with additional taxes.  Third, they passed a “financial reform” bill that will raise the costs of banking and lending, with the net result of limiting access to credit.  Finally, their failure to extend the Bush tax cuts raises everyone’s taxes, regardless of income, by a minimum of $2,000 next year.  All of this money has to come from somewhere.  And so people are nervous and nervous people do not spend money.  Nervous businesses do not hire and invest in infrastructure and equipment.  And the cumulative effect of all of this is a lack of revenue flowing into the US Treasury.  You cannot have 9.6% unemployment and expect treasury tax revenues to increase.  And this is why the Democrats got spanked.

    Republican leadership now has to lead or they’ll get spanked.  They need to undo the uncertainty and instill confidence in the electorate and business.  This means revising all of the poor legislation that was passed the last two years, if not repealing it altogether.  This is what they were elected to do.  If they pass legislation and President Obama vetoes it, then in two years, the voters will have another chance to spank.  And despite all of his rhetoric, I don’t believe that the President truly gets it.  There is still an incredible lack of humility emanating from the White House.  Even this week in Seoul, the President got spanked by the Europeans and Chinese, and he refuses to acknowledge his policies aren’t working; rather, his policies are ”misunderstood”.

    On a separate but related topic, The Federal Reserve and Chairman Ben Bernanke has decided to print another $600 billion and buy back US Treasury securities in a process known as Quantitative Easing (QE).  Flooding another $600 billion into the economy over the next six months is like pushing on a string.  Until the government gets its fiscal act together, it won’t do anything other than increase the money supply with no increase in aggregate demand for goods and services.  This money has to go somewhere, and investors will search for a place where they can get a reasonable rate of return.  So, after the election, there was a rally in the stock and bond markets, but this week, stocks and bonds sold off, but commodities rallied–specifically oil, cotton, soybeans and gold.  On Friday, even commodities weakened.  The stock markets have generally rallied since September 1 because corporate earnings have been solid.  But earnings are a result of sales, and in order for sales to increase, people have to want to risk spending the money, which brings us back to fiscal policies.

    So the next month will determine whether or not the resurgent Republicans and spanked Democrats can and will work together.  The amazing thing about our economy is that it hasn’t collapsed despite collosal mismanagement in our nation’s capitol.  Stay tuned.  Things are about to get very interesting.

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