Part-Time Pundit

Democrats will have Buyers’ Remorse over Specter

This morning the political world was abuzz with news that Senator Arlen Specter left the Republicans to become a Democrat. Effectively, once Al Franken is likely crowned the junior Senator from Minnesota, the Democrats will have a de jure filibuster proof majority.

Republicans, for their part, were celebratory more than anything else. Speaking with Scott Wheeler of National Republican Trust this afternoon he said, “It’s a great day for Republicans and a great day for conservatives. The integrity of the Republican Party just went up.”

For his part, Wheeler takes credit for pushing Specter out of the party. After issuing a challenge that any Republican who supported the unpopular stimulus package would have a primary opponent, Specter took him up on the dare. Unfortunately for Specter, once he saw that he would be trounced in the Republican Party by challenger Pat Toomey, he picked politics over principle and sold himself to the Democrats.

Sold is the right word and in the coming days we will likely see what concessions he extracted. For starters, President Obama has promised to campaign for him next year which is no small token of support. However, in so doing, he has lost a powerful political role he (rightly or wrongly) held.

So-called moderates in the Senate are a powerful bunch. For instance, the “Gang of 14” wrote the policy on judicial appointments once the filibuster threats came out. Because of the hyper-partisanship (that still persists in the Obama post-partisanship era), moderates often are the key votes and can extract huge concessions for their votes. Those days are over for Specter because Republicans simply will not work with him again.

Democrats believe they now have a filibuster-proof majority, but likely what they gained on paper will not be that much in reality. If Specter wanted to side with the Democrats (as he is often prone to do), his party affiliation has never stopped him before. He’d cross party lines to break a filibuster. Now that he’s a Democrat, it certainly won’t give the Democrats any more filibuster-breaking votes.

Specter is also against “card check”, the unions’ top legislative priority, a stance that will hurt him in the primary if the party establishment can’t muscle whatever challenger may appear. He’s for judicial restraint and likely his positions on judges won’t change much. In short, the Democrats got a mere symbolic victory and inherited a vulnerable Senator up for re-election next year.

Whatever support Specter may have had in the Republican Party among voters is likely to vanish. Voters simply do not respond well to party switching. He will also likely face a Democratic primary challenge because the left wing of the Democrats will not embrace him either (remember how they treated Joe Lieberman?).

More importantly, while Obama is moderately popular, his policies are not. Come mid-term elections, his unpopular policies will be a weight around the Congressional Democrats shoulders. While many areas of the country do not necessarily have strong Republican farm teams, Pat Toomey is no amateur. Combine that with a candidate who obviously lacks principles and Specter faces real trouble come November of 2010.

Or as Wheeler put it, Specter showed he will “hold on to political power above considering principles, party and even the people.” In 2006 and 2008, voters threw out Republicans across the country for appearing slimy and unprincipled. Specter just put himself in that category for 2010.

So can conservatives win in Pennsylvania and elsewhere? Much depends on how Obama’s Administration goes (and it is not going well so far). However, the voters are fed up with the financial shenanigans of Congress and of the States, a symptom of that frustration being the popular Tea Parties. If Republicans can convince voters they’ve learned their lesson on fiscal conservatism (and Pat Toomey is the exemplar of that idea), the voters may well welcome them back to power; certainly after the radical expansion of deficits proposed by Obama.

May 2nd, 2009 Posted by John Bambenek | Columns, Congress, Elections, Politics | no comments

Seller’s Remorse: Banks Regretting Acquiescing to “Good Enough Nationalization”

We’ve all seen the story of banks lining up to get “free” money from the federal government in an attempt to pump up the economy. The reality is, the money hasn’t pumped up much of anything except the national debt. One trend, however, is that banks are regretting taking the money in the first place and some are even trying to give it back.

Take, for instance, Bill Cooper who is the CEO of TCF Bank. His bank took the bailout money even though they didn’t really need it. Cooper reports that regulators actually tried to pressure them to take the funds. On top of that, when the federal government came in with their money, many traditional lenders to banks suddenly walked away from the business that dried up the conventional source of capital for banks.

The reason for the drying up of conventional capital is that the federal government has imposed a “shareholders get nothing” approach to bailouts. If you, in good faith, invested in banks, your equity gets wiped out first. This has led to many institutional players simply not wanting to take the risk. While there is merit in protecting consumer accounts from a run on the bank, targeting shareholders has led to almost all traditional flows of capital to banks disappearing overnight.

As a result, some banks were pressured to take federal money they did not need and others had to take federal money when traditional capital would have been available in any other circumstance. The take away from this is that the law of unintended consequences strikes again. By propping up bad banks, the federal government has created a cycle of drying liquidity that forces other banks onto the federal dole.

The mode of federal spending always tends to be to hook a target into relying on federal money, turning them into a captive recipient and then imposing rules after-the-fact, when the entities have no choice but to capitulate. It was the same way with New Deal highway funds. The federal government pays to build and maintain the interstates and now that states are hooked on that money, they can impose almost any terms they want on receiving that money.

Even a better example is federal title 1 money for schools. The money was created to “level the playing field” between rich states and poor states, and rich districts and poor districts. Of course, every state got some money also. Now that the schools are hooked because of the constant upward pressure of education spending (rightly or wrongly), the districts and states can no longer say no to title 1 funds. In comes No Child Left Behind.

It’s hard to argue that No Child Left Behind (and by extension, the federal government) is the primary driver of educational policy, not parents or local school boards. Accountability is all well and good but the question is, accountability to whom?

The same is now true of bailout money. After banks have accepted the cash and have no choice but to hold it, the federal government is imposing terms after-the-fact to control the banks. This is, in effect, “good enough nationalization” (where the government controls the aspects of a business it cares about and leaves the mundane details it doesn’t care about to the business). Bill Cooper, for instance, wants to give the money back.

Rep. Barney Frank wants all recipients of federal money to be subject to end-to-end wage controls on all employees. That’s the most flagrant example of overreach to date. Of course, banks got desperate and held out their hands. Now the federal government is calling the tune.

The result is that an ever-widening portion of a major industry will fall under federal control (in part because no one wants to invest in financials anymore). As with most things, it will be the consumers and citizens who have to pay the ultimate tab but never seem to reap any of the benefits. Hopefully the banks can give back the money before it is too late.

April 2nd, 2009 Posted by John Bambenek | Columns, Congress, Economics, National, Politics | no comments

Trusting Faceless Republican Insiders Will Ensure Defeat in 2010

As the saga of Governor Rod Blagojevich seems to be behind us with his removal from office, it seems Republicans are salivating at the prospects of a sure win of the Governor’s mansion in 2010. However, the path to victory is not nearly as certain as many believe it to be and certainly not on the present path the Illinois Republican Party is taking. The path they are trying to take will guarantee yet another cycle of brutal election losses.

As usual, the same people responsible for the Illinois Republican Party’s precipitous decline are once again returning to their “traditional” role in selecting the nominee. It seems incongruous to protest the backroom dealing of the Blagojevich Administration by engaging in that same kind of backroom dealing. The last time the Illinois Republican Party selected the nominee for the rest of us they brought in Alan Keyes. We all know how well that turned out. Maybe they learned their lesson, so let’s take a look at which horse they are backing.

Currently, it appears that this has resulted in coalescing support for Bruce Rauner as the salvation of the Illinois Republican Party. At this moment, perhaps he does have the policies that will bring the Republicans out of the wilderness. We don’t know mostly because he was selected in a star chambers audition in front of the party’s finance committee (basically a Cook County millionaires club).

While he has done impressively with his investment firm, he is a political unknown. What is know is that he has given far more to Democrats than he’s ever given to Republicans. With the exception of the 2008 cycle, most of his donations are to Democrats. If the secret Republican committee can’t do basic vetting of candidates, they are profoundly ill-suited to pick nominees.

For instance, he has given $200,000 to Democrat Mayor Daley, $150,000 to Democrat Forrest Claypool and can even boast of having given money to Democrat Rahm Emanuel (who’s signature accomplishment was the 2006 Democratic takeover of the House of Representatives). Skipping past the absurdity of the aristocracy of the party telling all of us that they know better than the voters, what, if anything, has Rauner gotten for those donations?

While I do agree that the “self-funding” candidate model of the Republican Party has been abysmal at producing solid candidates, it does not follow that having a secret tribunal of insiders who take no input from anyone (much less anyone south of I-80) is somehow the only other option. The only difference is that Bruce Rauner greased all the right palms before he formally announces his run.

There is a better way to finding good candidates and that is finding people with a solid record of political accomplishment and supporting them. Bruce Rauner’s sole accomplishment seems to be his investment company. Good for him but that doesn’t make him a good politician.

Candidates like Senator Bill Brady have years of political leadership under his belt. He’s run for office, he supports the party platform and has 16 years of political experience. He may not be well-liked among the ivory tower limousine Republicans from the North Shore, but he’s at least trying to win support of the voters not demanding their support from regal perches.

If the Republicans are to recover from the drubbing they have received in the last few election cycles, royal proclamations from on high are not the way to go. Self-funders are no either. What is needed are politicians with a record of accomplishment and a set of principles to take their message to the voters and engage them.

After 6 years of Blagojevich and Democratic corruption, the answer is a candidate who can convincingly stand up to corruption and who is willing to be transparent and open. We need candidates who will serve the people, not be beholden to nameless committeeman. Perhaps its time to trust the voters instead of letting unaccountable insiders pick our nominees.

February 9th, 2009 Posted by John Bambenek | Columns, Elections, Illinois, Politics | no comments

I have a new book out: grep Pocket Reference

Around January 29th my second book, grep Pocket Reference was published and released by O’Reilly. You can see the link to the book image to the right to purchase your copy.

I’m not sure the significance of the frog… they actually pick the animals used. I had asked for a lemming… just because I think lemmings are funny.

February 7th, 2009 Posted by John Bambenek | Politics | no comments

Latest On Suit To Remove Blagojevich

We’re working fast and furious to get it done, and word that we’re working on it has spurred many state “leaders” into action, we’ll see how things fall today.

Important note that I got from a friend. We’re $4B in the hole with backlogged bills (Medicaid payments, payments to people who provide services to the state, etc). We were working on getting a $1.4B bond deal to alleviate the pressure because without any change the state will be insolvent in March. That bond deal is now dead because we have had a negative credit rating apply to us because of the governor’s legal situation. This political freak show needs to end… now.

December 12th, 2008 Posted by John Bambenek | Illinois, Politics | 2 comments

Bambenek v Blagojevich: Duel of the Daily Show Guests

Right now, have a team of people working around the clock to finish up our Rule 382 suit to remove Blagojevich for being unable to continue as Governor (as reported here at Illinois Review and mentioned at Capitol Fax. Wanted to write up a quick note… we’re planning to file tomorrow and a press release will come when details are firm. Interesting fun fact though, both Blagojevich and I were on the Daily Show on different occasions. Here’s some clips for those interested.

December 12th, 2008 Posted by John Bambenek | Illinois, Politics | 2 comments

Column: Financial Mismanagement Caused Illinois’ Backlog of Bills

The following was an op-ed I wrote and was printed in about a half dozen Illinois papers in the last couple of weeks

Last week, state Comptroller Dan Hynes reported that the backlog of state bills has reached over $4 billion. Several vendors have threatened to stop providing services to the state if they cannot be paid on timely basis. Many Medicaid patients are finding fewer and fewer providers are willing to give them health care. Illinois is in a full-blown fiscal crisis that puts IndyMac to shame.

In the wake of this crisis, only two solutions are presented: to unleash draconian cuts to essential human services spending or massive tax increases in the wake of the largest global economic downturn in decades. There is apparently not a dime of waste in the state budget. There isn’t even any money spent on corrupt purposes to be cut. Yeah… and I’m a Chinese fighter pilot.

The fact is the state has been wasting money for decades. Remember the Loop Lab School that got a special $1 million check from the governor? What about the $25,000 checks from Sen. Hendon for educational programs that didn’t exist? And then there are the legislative pay increases. But that doesn’t even scratch the surface of the waste, fraud and corruption that permeates the closed-door budget process.

Earlier this year, Judicial Watch filed a Freedom of Information Act request on $2 billion worth of spending. This spending was the “member initiative” (basically Illinois’ equivalent of earmarks) spending of just the Senate Democrats. The interesting part of this request wasn’t that there was $2 billion in spending on “pet projects” but that the Illinois Senate and the state government refused to disclose what this money was spent on.

In a parting stiff arm to the taxpayers of Illinois, Senate President Emil Jones not only refused to disclose what the member initiative money was spent on, but he even outright rejected the Freedom of Information Act request. If you thought the Freedom of Information Act was supposed to allow taxpayers to find out what government officials were doing with their tax dollars, apparently you are mistaken.

What does this have to do with the backlog of bills? Everything. Each and every year the legislature wastes billions one these special member initiatives. In some cases they even hide those expenditures from the voters. This little 2 billion adventure in wasteful spending would cut our backlog of bills in half the first year. In two years, the backlog would be gone.

More importantly, it shines the light on the real problem, that is the legislature and governor who have pushed through unbalanced budgets each and every year with the problem coming to a head now. They may try to blame the economic downturn, but the reality is that after years of deficit spending, eventually the chickens come home to roost.

Governor Blagojevich, for his part, has done well in pump-priming the idea that any budget cut would result in drastic cuts to essential human services. He close state parks even though it would require forfeiting federal funds and provide only a meager savings to the state funds. He cut alcohol and substance abuse treatment programs. Never has he tried to actually cut the spending glut due to corruption or waste.

Politically, this means that taxpayers can expect a large tax increase to be proposed as the “only solution” out of this fiscal mess when the General Assembly convenes in January. It is time that voters and taxpayers stand up and demand that wasteful and corrupt “member initiatives” by cut, wasteful and duplicate programs be eliminated and empowering the state’s Auditor General to seek out and find where Enron-style book-keeping is occurring in the state government.

The emerging financial crisis of both unpaid bills and an inability to craft a balanced budget has been a long time coming. It is time for the General Assembly to learn to tighten their belt before they tax even more families into foreclosure or poverty.

December 3rd, 2008 Posted by John Bambenek | Columns, Corruption, Illinois, Politics | no comments