Thursday, August 5, 2010

Elena Kagan and a Reminder of the Consequences of Elections, A Checkin on Obama's Scorecard, Still Stimulating?, My Apologies to Arthur Laffer

What Elena Kagan's Confirmation Reminds Me Of
This afternoon, the Senate confirmed Elena Kagan to serve on the Supreme Court by an unambiguous vote of 63-37, with 56 of 57 Democrats voting in favor (moderate Ben Nelson voted "no"), both Independents (the sometimes liberal Joe Lieberman and the always liberal Bernie Sanders) voting in favor and 5 of 41 Republicans voting in favor (moderates Collins, Snowe, Graham and conservatives Lugar and Gregg.) It was not a particularly close vote, even by the defacto 60 vote threshold that we have come to know and hate in the US Senate.

Her joining of the court will not much change the ideological make-up, given that she replaces the most liberal member of the court, John Paul Stevens.

In Kagan, the country gets a great legal mind, but one with limited judicial experience. Depending on your perspective and the year, that is either a good thing or a bad thing.

I was reminded by a liberal friend of mine the other day just how much Supreme Court seats punctuate how much consequence each Presidential election holds. He reminded me of the closeness of the 2004 Presidential race (3 points nationally, less than a hundred thousand deciding votes in Ohio) and the fact that the seat, in effect, decided two Supreme Court seats, those now held by Samuel Alito and John Roberts, probably for at least a generation.

How different would the nature of court decisions be if there were a solid 6-vote liberal majority versus a moderate/conservative 5-4 majority?

Is He Keeping His Promises?
There's been a lot of discussion in the space lately about President Obama's declining approval ratings, but I haven't updated in a while how he is tracking on actually doing what he said he would do, that is, keeping his campaign promises.

From our friends at politifact, here is their latest accounting:
Promises Kept: 120
Promises Partially Kept (aka compromises): 38
Promises Broken: 20
All other promises (ones in the works, not yet rated or "stalled" - meaning that they are not progressing at the moment): 327

So, of the 505 things that President promised to do in the 2008 campaign, if I give him full credit for kept promises and half-credit for partially-kept promises, he has completed 27.5% of his promises, or given that his term is 38.5% completed, he would be on pace to fulfill 71% of his promises. Not a bad average, except that the promises get harder the further you get along, since early on you generally get all the early stuff done.

In terms of the promises in which he has taken definite action (the 178 rated), he has been 78% true to his word.

All of this leads me to conclude...we largely got what Obama said he would be. If we are disappointed, it is largely because we took it upon ourselves to believe he might be something he never said. I included myself in the deluded.

How About That Stimulus?
Quietly, having faded from public attention long ago, the American Recovery and Reinvestment Act continues to return tax dollars and spend money on infrastructure and entitlements. This is the problem with 3-year economic programs, like the stimulus bill -- people forget they are working long before their full effects are known.

By the latest government accounts,
Tax Cuts: $223B out of $288B spent (77% complete)
Spending: $268B out of $499B spent (54% complete)

The tax cuts largely expire at the end of this year, so those will be 100% complete by December. The infrastructure spending will certainly extend into 2011.

The ARRA, combined with the balance-sheet actions of the fed, have largely shaped economic policy in this country for the first Obama term. The results in 2012 will largely reflect whether these policies ultimately succeed or fail.

There have been some great pieces published of late that show just how closely Presidential results track to election-year income growth. I'll publish a recap of this work in my next blog, but suffice it say, it shows the Clinton campaign of 1992 was right, "it's the economy, stupid"

I Was Wrong on Laffer
In a recent blog about the history of the Laffer curve, I stated that Arthur Laffer now supported raising taxes as he believe that we were not past the optimal revenue point for taxation. My remarks were based on my recollection of a Newsweek article from several months ago. As I have been unable to locate the original source, and Mr. Laffer has made it clear in a subsequent Wall Street Journal commentary piece that he does not support raising top marginal tax rates, I apologize for misconstruing his views on present taxation.

I stand by my belief that tax rates need to be increased, but did not mean to misrepresent Mr. Laffer's view as being supportive of mine.

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