Saturday, January 22, 2011

Early Thoughts on 2012 Senate Races

I can't remember when the upcoming Senate contests have begun to take form as quickly after the last cycle ended as I have this year. Incumbents are declaring their retirements and contenders are declaring their candidacies months before the usual timeline. As is often the case more than 18 months before the next election, it's very hard to determine what the political climate will be by the time election day rolls around. Conventional wisdom says that even in a neutral climate, the Democrats are likely to lose control of the Senate given that they're defending 23 seats to the Republicans' 10 next year, with a loss of four seats ensuring GOP control.

I'll admit it's odds-on that the Republicans take over the Senate next year, but I still think it's too early to write the Democrats' obituary yet as I suspect the majority of a Presidential year electorate won't like what they see coming out of a Republican House, and perhaps even more so in the Republican-dominated statehouses, in the next two years. On the other hand, Obama is still the guy with the most culpability for the state of the nation in the eyes of the electorate, meaning that the nation's continued economic struggles could be another referendum against him much as 2006 and 2008 were both referendums against George Bush, with 2008 being an even bloodier year for Congressional Republicans than 2006.

Looking at it from a state-by-state perspective....

Arizona--There are murmurs that incumbent Republican Jon Kyl may retire, which would at least put Democrats in the game in this race, but their top prospective candidate, Gabrielle Giffords, has just been put out of commission for any 2012 Senate race. Beyond her, the Democratic bench is pretty thin in Arizona. Perhaps Harry Mitchell could be a credible statewide candidate, but I still can't envision a scenario where a Democrat is anything but a huge underdog in any Arizona Senate race in the foreseeable future.

California--The safe money is that 78-year-old incumbent Democrat Diane Feinstein will retire next year and the safe money says that she'll be replaced by another Democrat, particularly in a Presidential year. Certainly the odds are 90% or better for the latter, but don't underestimate voter anger towards the postapocalyptic state of affairs that will be occurring next year in California's state government, controlled entirely by Democrats. While it's still hard to see a Republican winning a federal statewide race in California, particularly with Obama at the top of the ballot, if a charismatic critic to the California status quo catches on, one can't rule it out. And I'm not coming up with any obvious heir apparent to Feinstein should she retire.

Connecticut--Voters in Connecticut have to be feeling a little down this week, never getting the chance to vote out Joe Lieberman now that he's declared his retirement. Congressman Chris Murphy is getting all the buzz on the Democratic side and it would require a masterstroke on the Republican side to beat him in modern-day Connecticut. The only Republican I could envision winning in Connecticut is former Congressman Rob Simmons.

Florida--The political climate in Florida was so toxic in 2010 that horrible candidates Rick Scott and Allen West were both victorious simply because of the (R) next to their name. There was zero chance Bill Nelson would have won reelection there if he was on the ballot in 2010, but 2012 could be another story. I'm not sensing that he's ever fully connected with Florida voters but he is a pretty good fit for the state and should win in a neutral political climate with an average GOP challenger, which would include former appointed Senator George Lemeiux. A bigger headache for Nelson would be if recently retired Congressman Mario Diaz-Balart decided to run.

Hawaii--The Republicans have a bench of one, or possibly two, in Hawaii. In a neutral year, that bench consisting of former Republican Governor Linda Lingle and possibly Republican Congressman Charles Djou would be formidable, especially for lukewarm Democratic incumbent Daniel Akaka, provided the 86-year-old Akaka chooses to run again. But 2012 will not be a neutral year in Hawaii because favorite son Barack Obama will be on the ballot, presumably with coattails. Whoever the Democrats nominate seems very likely to prevail even against Lingle.

Indiana--The state's brief dalliance with Democrats in 2006 and 2008 was fun while it lasted but definitely over, at least for the near term. Richard Lugar will run again, and my sense is that Tea Party fever that would have defeated him in a primary in 2010 will be on the downsurge by 2012. With that said, it's not out of the question that a wingnut Tea Partier could upset Lugar given the state of today's Republican Party, but my money's on Lugar surviving. Either way, the Republicans have a distinct advantage in holding this seat given that the Democrats' top Senate prospect, Brad Ellsworth, squandered his political capital and got crushed in 2010. Now theoretically if Ellsworth, Donnelly, or Baron Hill ran against a Sharron Angle-style Tea Party candidate in 2012, they'd have a chance, but it's hard to imagine things playing out that perfectly for Dems. The safe bet is that Lugar wins the primary and another term by a massive margin.

Maine--Either the best or second prospect for the Democrats to pick up a seat, victory in Maine requires the primary ouster of moderate Republican incumbent Olympia Snowe. While I think Lugar will survive a primary next year, Snowe is a different story, but if the Tea Party loses some momentum in the next year, Snowe could still pull this out the same way Lincoln Chafee did in the 2006 Rhode Island primary. Now Maine's Republicans are more conservative than Rhode Island's, but given that very conservative Republicans now dominate every level of Maine's state government, I'm sensing there will be a push back to the center and a recognition that Snowe is probably the only Republican who can win a Senate race in Maine in a Presidential year. There are a lot of variables in this race, but without a standout candidate on their bench, it still seems odds-against for Democrats getting this seat...because after all, if Snowe prevails in the primary, she wins the general election in a walk.

Maryland--Seems like Democrat Ben Cardin should have a cakewalk into a second term. Hard to envision a scenario where this race becomes competitive.

Massachusetts--Republican Scott Brown is gonna vote like a Democrat for the next two years and win a full term to the Senate quite handily in my opinion. It required a political climate as toxically anti-Republican as 2006 to get rid of Lincoln Chafee in demographically similar Rhode Island, and I suspect it would take a similar scenario to convince Massachusetts to vote out Scott Brown, and whatever the political climate is in 2012, I don't think it'll be that bad for the GOP.

Michigan--The economy is horrible in Michigan and will continue to be horrible next year. In 2006 and 2008, that helped Democrats big-time in the state. In 2010, it was equally beneficial for Republicans. Hard to see what the Michigan electorate will be thinking in 2012 in regards to a third term for Debbie Stabenow, but she has an excellent campaign narrative to run on regarding her party's insistence on bailing out the Detroit industry while the Republicans insisted on letting it be destroyed. Seems like any Republican challenger would have his or her hands full trying to defend their party's role in cheering on Detroit's collapse, so I'm leaning towards Stabenow hanging on here, particularly without any obvious GOP challengers on the horizon.

Minnesota--Democratic incumbent Amy Klobuchar crushed her opponent in a 20-point landslide for an open seat race. She's an extremely skillful campaigner who comes across as a likable moderate, and has thus maintained robust approval ratings even as those of her colleagues have plummeted. Particularly given that all top-tier Republicans are likely to be sharpening their knives for Franken in 2014, I'm guessing Klobuchar skates into a second term with another landslide victory and only token opposition.

Mississippi--If the Democrats couldn't beat Republican Roger Wicker in 2008, they definitely won't beat him in 2010. Now the Democrats have three potential top-tier candidates to run in the state with Travis Childers, Gene Taylor, and Mike Moore, but I doubt any of them would run and with Obama at the top of the ticket there's still virtually no chance they'd win.

Missouri--In my opinion this is the second most vulnerable Democratic-held seat. Even in the perfect political climate of 2006, Claire McCaskill won by a meek 51-49 margin. The tide has turned against Democrats significantly since then in Missouri and McCaskill's close ties with Obama almost by itself renders her unelectable for a second term against any generic Republican challenger. Expect her to be the Blanche Lincoln of 2012, losing by several points.

Montana--The odds are probably better that one-term Democratic incumbent Jon Tester will be defeated next year than of him winning a second term, but I'd rate his chances as better than McCaskill's. And part of what may work to his advantage is the GOP's threats to nix agriculture subsidies. With Tester being a farmer himself, there's good potential of him being a compelling figure to Montana voters who see the Tea Party as a bridge too far. There are number of Republicans who would be top-tier opponents to Tester, but the caliber of the opposition seems unlikely to be the difference in Montana next year. My guess is it will all hinge around how strong of a campaign Tester runs in a difficult state.

Nebraska--As vulnerable as Claire McCaskill is in Missouri, she's still infinitely better off than worthless right-wing corporate Democrat Ben Nelson in Nebraska. My guess is rotten poll numbers will nudge Nelson to retire. Whether Nelson stays or goes, any generic Republican will win by double digits next November.

Nevada--From the most vulnerable Democratic seat to the most vulnerable Republican-held seat, it's hard to imagine scandal-plagued Republican incumbent John Ensign could win either a primary or general election, so expect him to retire when a flurry of polls come out showing him in disastrous shape. At that point it will become a generic Democrat versus Republican contest. Conventional wisdom holds that Republican Congressman Dean Heller would be formidable if he ran for Senate, but given that Heller's district is entirely outside of Las Vegas, I'm not convinced of Heller's inevitability in the general election. Democrats have a fairly weak bench in Nevada, but I get the sense that very few people have come to terms with just how much Nevada has changed in the last couple of decades, and particularly with Presidential year turnout, Democrats should poll better than expected as they have been for about 20 years in Nevada.

New Jersey--Seems like it would be quite a feat to topple Bob Menendez in New Jersey, particularly with how weak the Republican bench is in the state. The political climate would have to be at least as bad as it was in 2010, and I don't see it happening.

New Mexico--If long-time Democratic incumbent Jeff Bingaman runs, he wins. If Bingaman retires, I'd still give the Democrats an advantage in a higher-turnout Presidential election year, but a hypothetical Heather Wilson candidacy for the Republicans would be formidable.

New York--If Republicans couldn't beat Kirsten Gillibrand in 2010, it's hard to see how they could beat her in 2012. A Rudy Giuliani or George Pataki candidacy could make things interesting, but I'd be surprised if either of those guys would bother with a Senate contest at this stage of their lives and/or careers.

North Dakota--Virtually everybody is conceding this seat to the Republicans after Kent Conrad's recent retirement announcement, but I'm not so sure. If former Democratic Congressman Earl Pomeroy chooses to run in what's likely to be a less toxic political environment than 2010, I'd rate him something close to a frontrunner. If Pomeroy doesn't run, then it's definitely odds-on for Republicans, but again, keep your eye on farm subsidies. If the Tea Party takes it on with any level of seriousness, the hypothetical "small government" advocates in states like North Dakota might discover they're not as big of advocates of free-market fundamentalism as they first suspected.

Ohio--There's no question that one-term Democratic incumbent Sherrod Brown is vulnerable, but my money is that he'll hang on. Ohio's economy has been ground into dust and I suspect that after two years of Republican-controlled government at the state level making things worse by cutting off services to devastated communities, the populist message of Sherrod Brown is gonna sound pretty darn good by comparison. I think he's more likely to win than lose.

Pennsylvania--In a state demographically similar to Ohio, Bob Casey seems like a pretty good fit and is less ideologically left than is Sherrod Brown. On the other hand, he's hardly an electrifying personality and if he finds himself running against a charismatic challenger, he could hypothetically be in some trouble. But my bet is the pendulum swung further to the right than is natural for Pennsylvania in 2010, and that re-electing Casey will be the state's most practical correction.

Rhode Island--Without a Lincoln Chafee rematch likely, it seems pretty likely that freshman Democrat Sheldon Whitehouse will get a second term. There are some plausible Republican challengers, but it's hard to see them prevailing in a Presidential election year.

Tennessee--In theory, Democratic Congressman Lincoln Davis might make a credible Democratic candidate in a perfect political climate for Democrats, but with Obama running for re-election, it's hard to see that climate materializing for Democrats in Tennessee next year. Republican freshman Bob Corker's biggest risk is a right-wing primary challenge, but it's hard to make the case that Bob Corker has been insufficiently right-wing so I expect him to prevail in both the primary and the general election. Tennessee has simply become impossible turf for Democrats over the last decade.

Texas--Whoever has the (R) next to his or her name wins. Let's not kid ourselves. No matter who the Democrats run, even someone as generically appealing as Chet Edwards, won't be able to overcome the fierce partisan tide in Texas. We keep hearing how demographics will render the GOP unelectable even in Texas in a generation, but as conservative as even as the state's Latino population is, I wouldn't count on that.

Utah--I suspect Orrin Hatch will be prematurely retired by Tea Party wingnuts in his state's relatively exclusive nomination process that will deem him too "liberal". Of course in the state of Utah, it doesn't matter how big of a wingnut replaces Hatch as the GOP nominee, he or she will still win a Senate race by at least 20 points.

Vermont--My suspicion until I hear otherwise is that independent socialist Bernie Sanders will run for a second Senate term, and if he does, he'll win.

Virginia--It's no sure thing that quirky Democratic freshman Jim Webb will even run for a second term, but if he doesn't, former Governor Tim Kaine is waiting in the wings and will probably make for an even better Democratic nominee. My sense is that Virginia has turned a corner to a state that is more Democratic than Republican. Recent polls confirmed that even Obama is still reasonably popular there and leads prospective Republican challengers. With that in mind, I suspect either Webb or Kaine has a slight advantage heading into 2012, but if any wind at all is at the Republicans' back, that advantage will fade in an instant.

Washington--Democrat Maria Cantwell is always mentioned as potentially vulnerable, and she very well may have been ousted if she ran in 2010, but it seems like a stretch to believe she'll be beatable in 2012. The Republicans can't very well run Dino Rossi again, and their bench strikes me as incredibly weak.

West Virginia--Given that he's a comfortable fit for his state (or at least his shape-shifting ideological persona of the moment is), you have to give Democrat Joe Manchin at least a 50-50 chance of re-election. He'll dodge a bullet if the state's top Republican, Congresswoman Shelley Moore Capito, chooses not to run. Also likely to work to his advantage will be no new climate change legislation floating through Congress in the next two years that will intensify sentiment that the Democratic Party is trying to destroy the state's coal industry. Still, Obama will be at the top of the ballot working as an anchor on Manchin's campaign, and re-election will be challenging even if he lucks out and gets a lousy challenger.

Wisconsin--Like Pennsylvania and Ohio, I suspect Wisconsin swung so far to the right last November that it will more likely than not vote Democratic again in 2012 to restore the center of gravity. Whether that Democratic candidate is current incumbent Herb Kohl or recently defeated Russ Feingold, I'd give the Democrat odds here. Then again, perhaps I shouldn't underestimate the prospects of a permanent ideological shift for the state.

Wyoming--Republican John Barrasso will win a full-term with a solid 70% majority.

Breaking down these races, I'm only inclined to give Republicans about four or five pickups, just barely enough to win back the Senate. They could certainly win a few more than that, but they could also just as easily find themselves on the short end in Montana and North Dakota and come up a seat short of winning the Senate back. Time will tell, as always, but at least right now, I don't have the feeling of impending doom for the election cycle ahead that I had at this time in 2009.

Sunday, January 09, 2011

Will Any Economic Growth That May Happen in 2011 Be Felt on Main Street?

The consensus opinion by just about everyone is that the economy is poised to experience measurable growth in 2011 for the first time in several years. It's not out of the question. With as far as we fell in 2008, the business cycle is overdue for a growth spurt. I'm skeptical that even that will happen though. Early in 2008, only 2% of economists surveyed projected we'd be in a recession by the end of the year. The expert opinions seldom prove beyond reproach, or in some cases even in the same light year as reality. There are plenty of anchors out there that could easily produce a double-dip recession.

First and foremost, the problem of toxic mortgages is far from solved. The debt associated with those foreclosed homes is not accounted for, and the numbers of foreclosures is still rising as the bad loans are still catching up to millions more underwater homeowners. Until the job market produces jobs capable of paying these underwater homeowners' mortgages, expect the debt to continue cycling through the economy. Even if the worst is behind us, we're nowhere close to being out of the woods.

Secondly, energy prices. As predictable as the sun rising in the east, the first signs of life in the American economy and the global economy is causing a surge in oil prices. It's not as if nobody could see this coming, but here we are nonetheless, poised to suffer through prices at the pump of at least $4 a gallon, and possibly as high as $5. Aside from raising the cost of doing business, it was also crimp already fragile consumer demand. There are no easy answers on reducing energy costs, but the political right has the most sellable talking points on the issue and will win the argument with more drilling, even after the Gulf Coast disaster.

Also, where are the jobs? It's hard to imagine a scenario where enough jobs are gonna be created to even measurably reduce the unemployment rate let alone create any upward momentum for wages. As jobless benefits get cut off for millions of Americans who will most likely never work again in our postglobalization economy, there's no telling what impact it will have in terms of rising crime and children unable to afford the pursuit of higher education because of their parents' long-term unemployment.

And along those lines, the continued budget shortfalls in the state will force austerity upon the economy and likely produce a combination of soaring tuitions and a loss of even more middle-class state jobs that currently offer almost single-handedly the purchasing power propping up consumer demand. So even if the jobs numbers appear good at various points in 2011, be sure that the jobs replacing those of well-paid government employees will be part-time temp jobs. In November 2010, 85% of the new jobs created were part-time temporary.

Add all this together and its hard to see how any economic surge in 2011 will be felt on Main Street. Expect the year to end with an unemployment rate of no lower than 9.2%, gas prices at near $4 a gallon (gas prices will likely peak in the summer as they usually do), and people who've run out of unemployment benefits moving back in with family or sleeping under bridges (the latter of which is the great underreported story of this recession....the hyperexpansion of the homeless). And none of this even accounts for the fallout if the deranged Tea Partiers who just took over the House make good on their promise not to raise the debt limit.

Perhaps we'll weather the storm with a better economy in 2011 than what I see as possible, but I think a little healthy cynicism is more than warranted here. And even in the best-case scenario of robust economic growth every month of 2011, the working class and what's left of the middle class will still end the year worse off than they started it. That's just the way the restructured post-NAFTA economy will roll for the foreseeable future.