PLEASE DON’T FORGET THE SENATE

Many of the 2020 Democratic presidential candidates offer intriguing policy proposals addressing income inequality, health care, racial injustice, and other things we care about so much. None of those proposals, however, will go anywhere unless Democrats win control of the United States Senate. “Moscow Mitch” McConnell, the Republican Majority  Leader who calls himself the Grim Reaper, assures that. We decided we’d take an early look at the Senate map because it means as much as the Presidential election.

The Overview

Republicans control 53 U.S. Senate seats. Democrats have 47, including the two independents who caucus with them. Assuming Democrats take the presidential election, meaning the Vice President presides over the Senate and breaks any tie votes, winning a Democratic majority means a net gain of three seats.

             

               Source: Cook Political Report

We view that “three” number with a jaundiced eye. First, Democratic incumbent Doug 

Jones, who won that odd 2017 special election, will have such a difficult time getting re-elected in deep-red Alabama. Second, a Democratic senator from a state with a Republican governor (like Elizabeth Warren’s Massachusetts) who wins the presidency or vice presidency could mean, at least briefly, another Republican senator. Control may require a net gain of five seats.

The Key Races

Prognostications at this point usually mean little, but reviewing incumbent popularity ratings, early fundraising, and profiles of possible challengers provides a hint about the direction of the 2020 campaign. Enough endangered Republicans inhabit the Senate that Democrats have a chance, but it happening will require something like an inside straight in poker.

·    Colorado – Incumbent Republican Cory Gardner has real problems. Colorado gets

bluer by the election and he’s being outraised by potential Democratic opponents. His strongest challenger hasn’t announced. Former Governor John Hickenlooper gave up his presidential campaign last week, noting calls by Democrats that he seek the senate seat. Hickenlooper has until Colorado’s March 17, 2020, filing deadline. Former Denver state Senator Mike Johnston, however, has already raised almost $3.5 million and two others, former U.S. Attorney John Walsh and former Obama State Department official Dan Baer, are also posting solid fundraising numbers. 

·  Arizona (this election fills the remaining two years of John McCain’s term) -- Appointed Republican incumbent   Martha McSally lost to Kyrsten Sinema in the 2018 race for the state’s other senate seat. McSally’s likely 2020 Democratic opponent, former astronaut Mark Kelly, husband of 2011 shooting victim, former Congresswoman Gabrielle Giffords, poses a major threat for McSally.

·  Maine – Republican incumbent Susan Collins ticked off women and moderates by voting for Supreme Court nominee Brett Kavanaugh. Already, progressive groups have raised $4.7 million for whoever Democrats nominate against her. State House Speaker Sara Gideon raised $1.1 million the week she announced. 

·  North Carolina – Republican Thom Tillis gets the nod on early prediction lists, but he has a precarious hold on this seat at best. Four current or former state senators, Cal Cunningham and Jeff Jackson of the Charlotte area, and two blacks, Erica Smith and Eric Mansfield, are all viewed as potential serious challengers.  

·  Georgia – If Stacey Abrams, a star of the 2018 cycle despite narrowly losing her race for governor, had run, most political observers would rate this a tossup. With Abrams not running, they give incumbent Republican David Purdue a slight edge. Democrats plan on contesting Georgia at the presidential level, so whoever wins the Democratic nomination should have a chance.  

·  Kentucky – Expect a nasty, expensive race between McConnell and retired fighter pilot

Amy McGrath. McGrath, the first woman who flew a Marine F/A-18 Hornet in combat, nearly beat an entrenched Republican in a House race in 2018. She raised $8.5 million for that contest and $3.5 million in the week she announced for senator. McConnell had a 33% approval rating in one poll during the spring. Still, Trump won Kentucky 62-32 and McConnell has a way of prevailing even when nobody likes him. Buckle your seat belts for this.

A Few Other Thoughts

Democrats have chances in some other places as well as in these races with apparently vulnerable Republican incumbents. John Cornyn in Texas might get a run for his money, especially if Beto O’Rourke abandons his presidential campaign and tries again for senator, but O’Rourke said last week he’s not interested. Iowa Republican incumbent Joni Ernst isn’t a shoo-in, especially since Democrats won two additional House seats there in 2018. Democrats elected a governor in ruby-red Kansas in 2018. Incumbent Republican Senator Pat Roberts isn’t seeking re-election, creating a tempting open seat.

In a few places, Democrats face mildly challenging contests for seats they must hold. New Mexico’s Tom Udall is retiring, so that’s an open seat. Jeanne Shaheen should face the usual tough fight a Democratic incumbent gets in New Hampshire,  perhaps against former Trump campaign manager Corey Lewandowski. In Michigan, Gary Peters probably must hold off likely Republican nominee John James, a former military officer who ran a spirited, if unsuccessful, campaign in 2018 against Debbie Stabenow. 

A Democratic takeover of the Senate could happen. Many things would have to fall in

place. Addressing the issues we’ve been writing about the last three years depends as much on such a takeover as winning the Presidency. After all, lots of House-passed legislation now languishes on Mitch McConnell’s desk.     

      

                              

INCOME INEQUALITY: SOME BASICS

We recently began discussing income inequality in America. We focused our first post on poverty

and who bears the most significant responsibility for attacking the problem of people in our society who don’t have enough for a respectable existence free of want. More recently, we identified and fleshed out barriers to freedom from poverty and income inequality. 

We look now at some of the policy reasons for the divide between those at the top and the rest of the population. A real gap exists between the wealthiest Americans and even the middle class, a circumstance producing anxiety and political instability that feeds our destructive partisan divide. In time, we’ll consider solutions and evaluate proposals offered by the 2020 presidential candidates and others. We think it important we help voters separate real, viable solutions from noise and platitudes.

The Depth of the Problem

We hear much about the “one percent” and how they’ve done better than everyone else.  The numbers tell a disturbing

story of a growing wealth gap in the United States. According to a report by scholars associated with the Roosevelt Institute, since 1980, the share of national income earned by the top 1% doubled, to 20% in 2014, up from 10%. That hasn’t happened in all western democracies. In Denmark, for example, the 1%’s share went up only from 5% to 6%. 

Governmental policies and actions affecting both the top and bottom parts of the economy contribute. At the top, reductions in tax rates gave the wealthy a windfall.  At the bottom, policies negatively affecting wages and job growth suppressed lower income individuals.

Most “tax reform” has benefited upper income tax payers, including the 2017 tax bill the Trump administration touts as its major achievemet. In the

1980s, the top marginal tax rate dropped from 70% to 28% and has remained below 40% since. Capital gains tax changes also heavily favored the wealthy, with 65% of the benefits going to the top 20% of tax payers. More than lower tax rates help the wealthy. Half of tax expenditures – deductions for 401K retirement accounts, mortgages, and the like – go for things from which only the top 20% of tax payers benefit.

Meantime, 80% of job growth has come in low wage service and retail jobs. Worker power through collective bargaining decreased as union membership declined. In 1960, 30% of U.S. workers participated in unions. That dropped to 20% in 1984 and to just over 11 % in 2014. Wages and other compensation stagnated with this development, rising only 19 % between 1973 and 2013, despite a 161% increase in worker productivity. 

 

Government Complicity

Politicians of all ideological stripes like saying government shouldn’t “pick winners and losers” in the economy. Fair enough as a theory, but the idea does not comport with reality or history. In addition to tax policy, government has long been in the business of picking economic winners and losers. Start, for example, with the racially discriminatory housing policies so devastatingly described by Richard Rothstein in his path breaking book The Color of Law: A Forgotten History of How Our Government Segregated America. We exhaustively detailed Professor Rothstein’s findings in a series of posts in 2018 and need not repeat them here in making the point that many governmental agencies frequently pick economic winners and losers. 

The Federal Reserve’s hyper focus on fighting inflation has had the same kind of effect. By tightening the money supply through higher interest rates at the first sign of upward price pressure, the Fed has stopped or reduced the job creating opportunities of large and small businesses and stymied start-up activity by making credit less available. Most progressive economists agree this made returning to full employment slower and more difficult, particularly impacting lower wage earners who have more difficulty insulating themselves from the whims of the business cycle. 

Then there’s the matter of the federal minimum wage. It stands now at $7.25 per hour and hasn’t gone up since July 2009. Opponents of a

higher federal minimum wage, mostly  Republicans, argue raising it kills jobs, despite evidence to the contrary developed by economists like Columbia’s Joseph Stiglitz, a leading income inequality scholar. Whatever the reality on that issue, keeping the minimum wage low disadvantages a large segment of the American economy, giving employers a victory and wage earners a loss. No basis exists for arguing the government hasn’t had a major role in creating our current measure of income inequality.  

Why?

Income inequality exists for many reasons. Some are purely political, like the election of Ronald Reagan and implementation of his tax cuts in the 1980s. Some emanated from fears based on historical events. The inflation of the 1970s, partly sparked by upheavals in international energy markets, helped start the Federal Reserve on its anti-inflation crusade. Some have roots in personal greed, “rent seeking” as economists call the efforts of manipulative players in the economy who extract financial advantage through exploitation.

The reasons for income inequality bring into play a variety of individual and societal factors. The good news is that more people, including some running for president, now think we should do something about the problem. We see paying attention to them in the coming months as a good idea.                    

POLITICS 2020: An Early Look at the Candidates

Anyone following this blog should know we covet the 2020 presidential election as  an opportunity for ridding the country of Donald Trump and all his administration symbolizes – capitulating to Putin and Russia, racism at home, xenophobia about people of color in other countries, economic insensitivity, and many other transgressions. We doubt Trump faces a serious Republican primary challenge, so we’re closely watching the Democratic field for his opponent.

We began discussing the 2020 race in late 2017 and early 2018 when we offered a six-part American Political Agenda. In posts on October 7, October 20, November 4, November 22, December 11, and January 10 we presented issues we hoped 2020 presidential candidates would address, a code of conduct they should follow, how they can revive our atrophied government, and ways of repairing America’s alliances and standing in the world. We presented these ideas at a high level of abstraction, taking care we not promote any individual’s prospective candidacy.

We continued that trend after the 2018 mid-terms. On November 30, we described our ideal candidate, again not naming names. We emphasized electability, especially in the Midwest where Hillary Clinton failed in 2016, issue discipline, preserving the coalition that won those mid-terms, women’s rights, and the need for personal traits like charisma and a sense of history.

With the turn of the calendar to 2019, the time for abstraction has passed. Like everyone wanting a change at 1600 Pennsylvania Avenue, we must now evaluate the strengths and weaknesses of real people.  So, we note who’s in and offer a sense of their early prospects.

The Top Tier

*Elizabeth Warren (second term senator, Massachusetts, 69) – the first “name” candidate in the race with her January 2 announcement, she made waves with big crowds on her first Iowa trip. A ferocious advocate for consumers and economic fairness, she’s grabbed early attention with a proposal for taxing the wealth – though not the incomes – of the rich.

*Kamala Harris (freshman senator, California, 54) – a January 21 entrant, even before she reached the Senate was viewed as a potential first tier candidate with a chance at being nominated. Her January 27 kick off rally in her hometown of Oakland drew an estimated 20,000 people. She favors Medicare for all, an assault weapons ban, and a $15 minimum wage. With California moving its primary from June to March, she could benefit from next year’s electoral calendar.

*Kirsten Gillibrand (third term senator, New York, 52) – long rumored as a candidate, she jumped in January 15 and also got a positive reception on her first Iowa trip. Gillibrand has $10 million in the bank from her New York campaigns, giving her staying power. She’s been known mostly for crusading against sexual harassment in the military. Though now positioned as a liberal, she might have trouble with progressive Democrats who remember her conservative record as an upstate New York congresswoman.

Left to Right: Elizabeth Warren, Kamala Harris, Kirsten Gilibrand

The Middle

*Julian Castro (former housing secretary and former San Antonio mayor, 44) — Castro, who announced January 12, has an uphill climb because he lacks name recognition.  He could work his way into the top tier with a strong

showing in an early primary or caucus.  With Democrats anixious for a big Latino general election turnout, Castro may have a better shot at the vice presidency. 

*Cory Booker (second term senator, New Jersey, 49) - having gotten in on February 1, he already must do some catching up.  Though he supports Medicare for all and teh $15 minimum wage, some liberals remain skeptical of him, partly because of friendly past comments about Wall Street. 

Long Shots

*Peter Buttigieg (seven-year mayor of South Bend, Indiana, 37) – a Navy veteran who announced January 23, Buttigieg promotes his executive experience, military background, and says he symbolizes generational change. He is the first openly gay Democratic presidential candidate.

*Tulsi Gabbard (four term congresswoman, Hawaii, 37) – the first Hindu member of Congress and an Army veteran, she’s seen now as a progressive because she supported Bernie Sanders in 2016. Upon announcing on January 11, her record on LBGTQ issues came under fire. She once supported conversion therapy and opposed same-sex marriage. She says her time in the military changed her mind. 

*Andrew Yang (New York entrepreneur, 44) – without a record in public office, he’s staked his campaign on a universal basic income proposal.

*John Delaney (former Maryland congressman, 55) – after three terms in the House, he left Congress for a presidential bid focusing on education, improved treatment for veterans, and infrastructure.         

Others

This list will soon get longer. Former New Orleans Mayor Mitch Landrieu, billionaire and former New York Mayor Michael Bloomberg, Ohio Senator Sherrod Brown, Minnesota Senator Amy Klobuchar, and former Texas Congressman Beto O’Rourke, a rock star because of the astounding amount of money he raised on-line in his close 2018 senate race against Ted Cruz, have all hinted they’ll run. The closest thing in the party to real heavyweights, former Vice President Joe Biden and Vermont Senator Bernie Sanders, can’t put off announcing much longer. The train might leave the station without them.

So, the wild ride has begun.  We hope Democrats won’t try tilting the race toward any candidate, but will let the voters decide policy prescriptions and candidate virtues and drawbacks on the merits. That’s the best way for finding a winner.