Evan Bayh Retiring From Senate, What Are The Implications?

[Conan71]

Evan Bayh D-Indiana, much to the chagrin of the White House, announced today he's not running for another term in the U.S. Senate.

http://news.yahoo.com/s/afp/20100215/pl_afp/uspoliticsbayh

He waited pretty late in the game considering candidate registration closes on Friday.  I was a little surprised the President could not talk him into running again, he'd even been rumored as a possible running mate to President Obama.

[RecycleMichael]

It is hard being a centrist in a blinding partisan world.

I wasn't a big fan. He pushed to water down the health care bill (his wife is a lobbyist for big Pharma) and voted with the Republicans too often during the Bush years for me.

I think it would be hard to run for re-election in Indiana. The unemployment rate there was 10% a year before the rest of the country.

[Conan71]

Unlike others who are stepping down, his lead over Coats, the GOP opponent is claimed as in the 20's which is shockingly high for any incumbent right now. Do you think there should be more a shift to the center or should everyone be shifting further left with the problems we are facing as a country?  Just curious your opinion, not baiting, honest

[RecycleMichael]

There needs to be a reason to shift. I am a centrist on certain issues, but far left on many more.

As to the countries ills...

President Clinton raised the minimum wage and helped create a strong economy and low unemployment. The two Bush Presidents gave tax cuts to high income earners and the country's economy went the other way.

Bait eaten.

[Hoss]

There needs to be a reason to shift. I am a centrist on certain issues, but far left on many more.

As to the countries ills...

President Clinton raised the minimum wage and helped create a strong economy and low unemployment. The two Bush Presidents gave tax cuts to high income earners and the country's economy went the other way.

Bait eaten.

You sound like me, Michael.

My left leaning ideologies:

Allow women their right to choose.
Keep religion out of government.
Right to FAIR health care insurance for all.

My right leaning ideologies:

Smaller government (but some social services are needed)
No amnesty for illegal immigrants

I've asked Conan if he'd like to join me in the Modern Whig party.  I was only half-joking.  My assertion that some social services funded by government are needed puts me at odds with those who identify as Libertarian I think.

[Conan71]

You sound like me, Michael.

My left leaning ideologies:

Allow women their right to choose.
Keep religion out of government.
Right to FAIR health care insurance for all.

My right leaning ideologies:

Smaller government (but some social services are needed)
No amnesty for illegal immigrants

I've asked Conan if he'd like to join me in the Modern Whig party.  I was only half-joking.  My assertion that some social services funded by government are needed puts me at odds with those who identify as Libertarian I think.

Hoss, Modern Whigs are probably a better fit for my leanings.  I keep thinking about changing my voter registration to unaffiliated but I really hate giving up the right to vote in GOP primaries which is important in this red district and state.  I've voted probably for as many Democrats as I have Republicans in local, county, state, and U.S. Senate races but still have yet to vote for a Democrat Presidential candidate.  There have been a few I could have voted for, but they never made it as far as nominee.

No one seems to be able to adequately explain to me the mechanism by which tax cuts cause unemployment and recessions.  I can Google around and find plausible arguments for and against this theory.  Some suggest the Bush II tax cuts were coincidental to a normal recovery period, others suggest somehow that rising government deficits caused the recession.  

Several things we know because the data is tangible: tax reciepts rose from 2003 to 2007, unemployment was reduced, and GDP grew.  Was that a result of Bush tax cuts or coincidental?  

If government spending were the key to pulling out of a recession, then we should be in great shape now considering how much spending increased under Bush II and in the first year of the Obama Admin.  The pace of government spending under Bush II simply out-paced revenues.  Revenues kept rising until the bottom started to fall out of the economy.

During the Bush years:

Military spending increased 61%, Non-defense total 23%, and payments to individuals 32%

Payments to individuals are retirement and entitlement programs.  The theory espoused behind popular tax give-aways was stimulating the economy, yet does government putting money in the hands of individuals really stimulate the economy?  If it did, how did we find ourselves in a recession after a period of record growth in government spending?

Social Security and Railroad Retirement 19

Federal Employees Retirement and Insurance 16

Unemployment Insurance 28

Medical Care 54

Student Assistance 129

Housing Assistance 12

Food and Nutrition Assistance 43

Public Assistance and Related Programs 17

Other Transfers to Individuals 10

http://www.aier.org/research/briefs/750-big-government-under-the-bush-administration

Is it possible this recession was caused by a trend of over-borrowing, over-spending, and over-employing finally coming to a head and that government taxation and expenditures have far less to do with recessions and growth than some are led to believe?

[we vs us]

So Bayh got out by all accounts at his own volition and very very suddenly.  He was way ahead in the polls, had a substantial bank account, and up till just last week was supposedly going full steam ahead for reelection.  So it does make me wonder if something was/is up.  'Cause, seriously, he flat out bailed.

If it's as advertised, and he bailed because of congress's dysfunction, I can't say as I disagree.  On the other hand, as a card-carrying member of the Blue Dogs, I'd say he wasn't really helping the problem, either.  

My new theory is we've moved into a period in American politics where there is no value to being a centrist.  Or rather, there is value to your constituents (who themselves may very well be centrist), but to the _______-wing of your party, which is looking for faithfulness to orthodoxy, and to the media which is constantly looking for simple, oppositional story lines to pimp, your centrism is without value.  And in fact it may be more of a liability than ever, because as you're searching for compromise it will LOOK like you're betraying the foundational ideals of your party.  You'll be branded a ___-INO.  Your search for compromise might even keep your party from achieving some of its long-cherished goals, and then you'll find yourself in Bayh's position.  Not a man without a party, necessarily, but definitely a guy whose convictions and positioning don't serve his party well in their current position.  

Who knows if this is true, though.  

[TURobY]

Several things we know because the data is tangible: tax reciepts rose from 2003 to 2007, unemployment was reduced, and GDP grew.  Was that a result of Bush tax cuts or coincidental? 

I do want to point out that tax receipts rising could have something to do with the increase in home values (leading to increases in property taxes and sales taxes as people used the equity in their homes to make improvements and buy high end electronics and appliances). Additionally, unemployment was reduced, but notice that one of the first sectors hit with the economic slowdown was construction (esp home construction).

Obviously doesn't explain the entire picture, but it is still very important in understanding the period of time.

Is it possible this recession was caused by a trend of over-borrowing, over-spending, and over-employing finally coming to a head and that government taxation and expenditures have far less to do with recessions and growth than some are led to believe?

I would actually agree. We've seen tax cuts both stimulate and hamper economic growth. We've seen spending stimulate and hamper economic growth. So... what is the answer?

[Conan71]

So Bayh got out by all accounts at his own volition and very very suddenly.  He was way ahead in the polls, had a substantial bank account, and up till just last week was supposedly going full steam ahead for reelection.  So it does make me wonder if something was/is up.  'Cause, seriously, he flat out bailed.

If it's as advertised, and he bailed because of congress's dysfunction, I can't say as I disagree.  On the other hand, as a card-carrying member of the Blue Dogs, I'd say he wasn't really helping the problem, either.  

My new theory is we've moved into a period in American politics where there is no value to being a centrist.  Or rather, there is value to your constituents (who themselves may very well be centrist), but to the _______-wing of your party, which is looking for faithfulness to orthodoxy, and to the media which is constantly looking for simple, oppositional story lines to pimp, your centrism is without value.  And in fact it may be more of a liability than ever, because as you're searching for compromise it will LOOK like you're betraying the foundational ideals of your party.  You'll be branded a ___-INO.  Your search for compromise might even keep your party from achieving some of its long-cherished goals, and then you'll find yourself in Bayh's position.  Not a man without a party, necessarily, but definitely a guy whose convictions and positioning don't serve his party well in their current position.  

Who knows if this is true, though.  

Great post, you are right it's incredibly sudden.  It's easy to think there's got to be a scandal brewing or sudden rift with him and the WH because that's what we are used to hearing when something like this happens. Perhaps he's simply someone with a conscience who just can't play this frustrating game any longer and the jobs bill was the proverbial straw for him, representing a state with 10% UE.

Interesting gallup poll data (newest I could find from June '09)

21% identify themselves as liberal, 35% as moderate and 40% as conservative. 

http://www.gallup.com/poll/120857/conservatives-single-largest-ideological-group.aspx

[Red Arrow]

One of the usual reasons given for increased tax revenue after a tax cut is that it is less expensive for the wealthy to pay the tax than to pay the accountants to avoid it.

I haven't researched the raw data.  I just remember having seen that at more than one source.  

[Conan71]

I do want to point out that tax receipts rising could have something to do with the increase in home values (leading to increases in property taxes and sales taxes as people used the equity in their homes to make improvements and buy high end electronics and appliances). Additionally, unemployment was reduced, but notice that one of the first sectors hit with the economic slowdown was construction (esp home construction).

Obviously doesn't explain the entire picture, but it is still very important in understanding the period of time.

I would actually agree. We've seen tax cuts both stimulate and hamper economic growth. We've seen spending stimulate and hamper economic growth. So... what is the answer?

I wish I knew the answer to that.  It seems to be purely a philisophical difference and not scientific.  I've believed and stated for a long time that a President's greatest impact on the economy is his public faith in it or lack therof.  I'm really not sure how much Presidential policy can guide an economy or at least how much more impact it can have over the actions of the FED and the effects of Congressional legislation.

As far as tax reciepts this was strictly Federal income and employment taxes rising which I was referring to and would not have taken into account property or sales taxes.  Most definitely the burst in the housing bubble and unemployment trends are battering state and local governments all over the country since many of them are reliant on both of those methods for tax revenue.

[RecycleMichael]

I think that tax cuts for the higher income brackets used to work. The top 10% became wealthier and they then spent that money on luxury items or as entreprenuers creating new businesses and jobs.

Something changed. Now the rich travel, keep lots of cash on hand or invest in gold then hire temps to work for them. Maybe it is the fault of all the employee lawsuits or maybe union threats...something is making businesses cautious about real hiring.

I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.

[we vs us]

I think that tax cuts for the higher income brackets used to work. The top 10% became wealthier and they then spent that money on luxury items or as entreprenuers creating new businesses and jobs.

Something changed. Now the rich travel, keep lots of cash on hand or invest in gold then hire temps to work for them. Maybe it is the fault of all the employee lawsuits or maybe union threats...something is making businesses cautious about real hiring.

I am a firm believer that rising the lower class better invests our money. They won't invest it in travel or precious metals. The poor will turn that money over often within their own neighborhoods and communities.

I think two things happened.  The American upper classes have transitioned into consumers and passive investors, just like most Americans have; at the same time, we've seen the rise of the corporate form to facilitate investment. 

You rarely see someone make direct investment in businesses any more -- like, from your savings account into the business itself.  Instead, we have LLCs and C and S corps to protect groups of investors; our local, regional, national, and international banks have lending arms, effectively bundling funds from all of their depositors to support business.  Not to mention funds and investment banks and professionally managed pools of money the world over, looking for good bets. 

This is why I think the tax-cuts for the rich model is flawed; the rich don't invest directly anymore.  Here and there, sure, but by volume alone the financial system is the direct actor nowadays.

This is why fixing our banking system now is so crucially important.  Small business needs it to get by.

[Conan71]

I think two things happened.  The American upper classes have transitioned into consumers and passive investors, just like most Americans have; at the same time, we've seen the rise of the corporate form to facilitate investment. 

You rarely see someone make direct investment in businesses any more -- like, from your savings account into the business itself.  Instead, we have LLCs and C and S corps to protect groups of investors; our local, regional, national, and international banks have lending arms, effectively bundling funds from all of their depositors to support business.  Not to mention funds and investment banks and professionally managed pools of money the world over, looking for good bets. 

This is why I think the tax-cuts for the rich model is flawed; the rich don't invest directly anymore.  Here and there, sure, but by volume alone the financial system is the direct actor nowadays.

This is why fixing our banking system now is so crucially important.  Small business needs it to get by.

Huh?  By far the majority of LLC's and S-corps are people investing directly into business and they are the largest source of private sector jobs in the American economy. 

Banks and investment houses have always bundled funds from various depositors to lend to support business via commercial loans directly and they help support consumption in the economy which supports business by making personal loans and property loans (i.e. homes & cars).  Banks have always made money by essentially re-distributing wealth in the form of loans and making interest for being the broker of the transaction.  You make it sound as if passive investment is simply money evaporating from the economy into rich people's bank accounts that's simply not true.

[Red Arrow]

With CD rates and Money Market rates like they are, no one is going to get rich quick using them.