Democratic Party of Elites

Democratic Party of Elites

Who gives.

By Michael G. Franc

Pundits have feasted on Barack Obama’s recent musing that Pennsylvania’s rural citizens “cling” to their religion and guns out of embittered economic desperation. Thus far, they have focused on whether Obama is an elitist who views religion as a crutch and whose copy of the Constitution somehow lacks the Second Amendment.

More important, though, is whether Obama’s remarks reflect the emerging demographic transformation of the Democratic party from a bottom-up “party of the people” into a holding pen for all sorts of economic and educational elites. One way to test this is to look at who has been making presidential campaign contributions during the 2008 election cycle. Thanks to the way the Federal Election Commission collects this data, we can sort contributions according to a donor’s occupation or employer.

The Democrats’ penetration of America’s elites is evident when we look at how the two parties fare among those at the very top rungs of corporate America.

Through May 1, the Democratic presidential field has suctioned up a cool $5.7 million from the more than 4,000 donors who list their occupation as “CEO.” The Republicans’ take was only $2.3 million. Chief financial officers, general counsels, directors, and chief information officers also break the Democrats’ way by more than two-to-one margins. The Democrats’ advantage among “presidents” is a less dramatic but still significant $7.2 million to $6.1 million. And this isn’t new: In 2004 all but one of these categories of top corporate officers broke just as dramatically for the Democrats, the “presidents” being the exception.

Republicans do somewhat better further down the corporate food chain, but still lose the competition for contributions from executive vice presidents, vice presidents, and managers.

Wall Street firms, long a symbol of American elite accomplishment, also tilt decisively toward the Democrats. Employees in storied Wall Street institutions such as Lehman Brothers, Goldman Sachs, Citigroup, and Morgan Stanley have all favored the Democratic field by a large margin. Even both sides of the recent Bear Stearns/JP Morgan Chase deal choose Democratic candidates over Republicans by two-to-one margins.

Democrats also enjoy enormous fundraising advantages among well-educated professionals — lawyers, teachers, accountants, journalists and writers. They carry practitioners of the hard sciences, winning solidly among physicians ($8 million to $4 million), biologists, chemists, physicists, and plain old scientists. Republicans must settle for a slender advantage among rocket scientists.

Not surprisingly, universities offer Democrats a hotbed of support. Professors favor Democrats over Republicans by a nine-to-one margin ($3.7 million to $430,000). Their students, though presumably struggling with sky-high tuition bills, nevertheless sacrificed enough late-night pizza and chips to send $4.1 million to their professors’ favorite candidates and another $1.4 million to the GOP. The “objective” media — reporters, journalists, publishers and editors — also breaks heavily for the Democrats. But no listed occupation gives the Democrats a greater edge than the unemployed. These presumably idle folks have dropped over $14.6 million into the laps of the Democrats. Their idle Republican neighbors, in contrast, have unburdened themselves of a mere $9,775. Go figure.

Who favors the Republicans? The Democratic field, after all, enjoys an overall fundraising edge in excess of $200 million, so any pocket of Republican strength is noteworthy.

In this upside-down campaign season when populist GOP campaigners like John McCain and Mike Huckabee surprised the pundits with their primary victories or, in the case of Ron Paul, their fundraising prowess, it almost makes sense that the party of the country club set has been winning the fundraising race among the common man. That’s right. The white-shirt/red-tie brigade of Republican presidential aspirants holds a nearly three-to-one edge among janitors, custodians, cleaners, sanitation workers, factory workers, truckers, bus drivers, barbers, security guards, and secretaries. While Democrats command the financial loyalty of architects, Republicans successfully woo contributions from the skilled craftsmen who turn their blueprints into reality — specifically, contractors, hardhats, plumbers, stonemasons, electricians, carpenters mechanics, and roofers. This trend extends to the saloons, where the Democrats carry the bartenders and the Republicans the waitresses. The GOP field even secures more financial support from teamsters, steelworkers, bricklayers, and autoworkers.

That’s the good news for the GOP. The bad news is that fewer of these politically active citizens contribute to campaigns and, when they do, they contribute far less than their elite brethren.

What should we make of all this? National political parties, after all, reflect their supporters, and party leaders traditionally feel a responsibility to cater to their supporters’ whims. A party that receives overwhelming support from elite Wall Street investment firms, corporate bigwigs, and highly educated professionals may find it exceedingly difficult to raise their taxes or impose draconian new Big Government regulations on them. Similarly, a party that is losing well-educated suburban professionals and gaining support from blue-collar workers may find it more difficult to support free trade agreements and embrace globalization.

Washington Democrats have already adapted their Big Government instincts to this new reality. They have designed government guarantees, subsidies or handouts to address the insecurities of middle- and upper-income American families. Think of the new subsidies proposed on Capitol Hill for higher education, more generous flood insurance for vacation homes, bailouts for homeowners with mortgages as high as $730,000 and welfare-style health coverage for kids in middle-income families, and you get the idea.

Their Republican counterparts, meanwhile, have struggled over how best to sell the benefits of limited government, lower taxes, and free markets to the elites who used to love them or their new, more populist constituent base. Addressing this new reality may be the most important challenge both major parties face in the months and years ahead.

— Michael G. Franc is vice president of government relations for the Heritage Foundation.

http://article.nationalreview.com/?q=N2I4ODc3MGY4ODY1OGEyYTQ0OTBhYzc1OTQzYTM5ZmY=

Rudy’s the One

Rudy’s the One
The free-market leader of the GOP field.

BY STEVE FORBES
Friday, March 30, 2007 12:01 a.m.

Rudy Giuliani is the real fiscal conservative in the 2008 presidential race. That’s why I’m endorsing him for president.

Most Americans know that Mr. Giuliani turned around America’s largest city. They know he cut crime and welfare in half; they know that he improved the quality of life from Times Square to Coney Island and everywhere in between. And they witnessed his Churchillian leadership following the terrorist attacks on 9/11.

Less well known is the mayor’s fiscal record. Nonetheless, conservatives will find it impressive. He built New York’s resurgence not just on fundamental police work, but also on a foundation of fiscal discipline. He cut taxes and the size of government and turned an inherited deficit into a multibillion dollar surplus.

Mr. Giuliani entered office in 1994 with a $2.3 billion budget deficit handed to him by his predecessor, Mayor David Dinkins. Liberal conventional wisdom held that the only way to close the gap was to raise taxes while cutting back on basic city services such as sanitation. The new mayor rejected this advice–in fact, he famously threw the report recommending tax hikes in the trash!

Instead, he set out to restore fiscal discipline to the “ungovernable city”–and achieved results that Reagan Republicans can applaud.

In his first budget address Mr. Giuliani explained that he would “cut taxes to attract jobs so our people can work.” While lots of politicians make promises about cutting taxes Mr. Giuliani delivered, overcoming the initial resistance of the overwhelmingly Democratic City Council. He ultimately prevailed 23 times, including cuts in sales, personal income, commercial rent and hotel occupancy taxes. He understood that these taxes were not revenue producers, but counterproductive job killers.

When he left office after eight years, New Yorkers had saved over $9 billion, while enjoying their lowest tax burden in decades. The private sector, which had been hemorrhaging hundreds of thousands of jobs in the years before he took office, produced over 423,000 new jobs. Meanwhile the unemployment rate was cut in half. Businesses responded to Mr. Giuliani’s reforms by returning to the center of city life.

So when he talks about his belief in supply-side economics, its not just theory, it’s a plan he has already succeeded at putting into action. He’s seen the results of supply-side economics first hand–higher revenues from lower taxes.

Controlling government spending is another pledge often made by politicians. Conservative voters now know to be skeptical of such claims. But Mr. Giuliani has a record they can have confidence in. His first budget cut spending for the first time in the city since the fiscal crisis of the 1970s–and over the course of his administration he controlled the city’s spending while federal government spending grew by over 40% and average state spending ballooned by over 60%. Mr. Giuliani always made fiscal discipline a priority: instructing city commissioners to cut agency budgets even when the deficits had turned to surpluses.

Mr. Giuliani set out to cut the size of city government, insisting that New York should live within its means. New Yorkers saw their quality of life improve with more effective delivery of services while the bureaucratic ranks were being thinned by nearly 20,000–a near 20% decrease in city headcount, excluding police officers and teachers. He increased the number of cops and teachers because he understood that public safety and quality education are what we expect in return for our tax dollars, not partisan job protection or union featherbedding. As mayor, he proved that government can be smaller and smarter–more efficient and more effective.

Rudy Giuliani can unite the Republican Party and restore our traditional claim as the party of fiscal conservatism. He has already proven he can stand up to liberal special interest groups and achieve tax cuts, even with a Democrat-controlled City Council. That’s the kind of leadership we need in Washington. That’s the kind of leadership that will inspire the next generation of the Reagan Revolution. And that’s why America’s Mayor should be America’s next president.

http://www.opinionjournal.com/extra/?id=110009873

Promises They Can’t Keep

Promises They Can’t Keep

By Robert J. Samuelson
Wednesday, January 9, 2008; A15

The big lie of campaign 2008 — so far — is that the presidential candidates, Democratic and Republican, will take care of our children. Listening to these politicians, you might think they will. Doing well by children has now passed motherhood and apple pie as an idol that all candidates must worship.

“We will do whatever it takes to make America a better country, to give our kids a better future,” says Mike Huckabee, winner of the Republican Iowa caucuses.

“We will deliver for our children, our grandchildren and our great-grandchildren,” claims Sen. Barack Obama, the Democratic winner in Iowa.

“We’re going to reclaim the future for our children,” says Democratic Sen. Hillary Clinton.

Actually, these are throwaway lines, completely disconnected from reality.

Our children face a future of rising taxes, squeezed — and perhaps falling — public services and aging — perhaps deteriorating — public infrastructure (roads, sewers, transit systems). Today’s young workers and children are about to be engulfed by a massive income transfer from young to old that will perversely make it harder for them to afford their own children.

No major candidate of either party proposes to do much about this, even though the facts are well known.

Social Security, Medicare and Medicaid — three programs that go overwhelmingly to older Americans — already represent more than 40 percent of federal spending. A new report from the Congressional Budget Office projects that these programs could easily grow to about 70 percent of the budget by 2030. Without implausibly large deficits, the only way to preserve most other government programs would be huge tax increases (about 40 percent from today’s levels). Avoiding the tax increases would require draconian cuts in other programs (about 60 percent). Workers and young families, not retirees, would bear the brunt of either higher taxes or degraded public services.

Similar pressures, though less ferocious, exist at the state and local levels. Schools, police, libraries and parks will be squeezed by the need to pay benefits for retired government workers. A study by the Pew Charitable Trusts found that states have promised retired workers $2.7 trillion in pension, health care and other benefits during the next three decades. Only about $2 trillion has been set aside; the rest would come from annual budgets.

Medicaid, a joint federal-state program with states paying about 40 percent of the costs, represents another drain; about two-thirds of its spending stems from the aged and disabled. Roads, water and mass transit may also be shortchanged. States and localities pay about three-quarters of their costs.

But facing these facts would expose candidates to three daunting problems.

First: Lightening the burden on the young requires cutting retirement benefits for the old — raising eligibility ages, being less generous to richer retirees and making beneficiaries pay more for Medicare. Simply increasing taxes or cutting other programs won’t work. The problem is not just closing the budget deficit.

Second: We can’t wait. Ideally, prospective retirees would have received several decades’ warning, but we’ve delayed too long. We need to cut benefits for baby boomers and even some existing retirees. They are the source of mounting costs.

Third: Even if retirement benefits were cut, pressures for higher taxes and lower public services would not disappear. Social Security and Medicare are part of the nation’s social fabric. Although individuals’ benefits can be responsibly trimmed, the growth in the elderly population (a doubling by 2030) and rapidly rising health-care costs would still expand total spending. The increases would simply be smaller.

A moral cloud hangs over our candidates. Just how much today’s federal policies, favoring the old over the young and the past over the future, should be altered ought to be a central issue of the campaign. But knowing the unpopular political implications, our candidates have lapsed into calculated quiet.

They pay lip service to children but ignore the actual programs that will shape their future. The hypocrisy is especially striking in Obama. He courts the young, promises “straight talk” and offers himself as the agent of “change.” But his conspicuous omissions constitute “crooked talk” and silently endorse the status quo.

The insidious nature of this problem is that because the spending increases for the elderly occur gradually, the pressures on taxes and other government programs will also intensify gradually. A crucial moment to clarify the stakes and compel politicians to make choices probably won’t occur until it’s too late.

The longer we delay — and we’ve done so now for several decades, because the strains created by an aging society have been obvious that long — the more likely that eventual “solutions” will be unfair to both young and old. To acknowledge that and to come to grips with it would constitute genuine “change.”

http://www.washingtonpost.com/wp-dyn/content/article/2008/01/08/AR2008010803488.html?hpid=opinionsbox1