Ayotte Wins in New Hampshire     Permalink

The establishment avoided a second disaster when Attorney General Kelly Ayotte (R) managed to pull off a very narrow victory of about 1600 votes over tea party candidate Ovide Lamontagne (R). He conceded yesterday and will not exercise his legal right to a recount. However, she damaged herself badly in the process of winning by moving far to the right during the primary. Her endorsement by Sarah Palin also probably did more harm than good for her in libertarian New Hampshire. A new PPP poll shows Democratic Rep. Paul Hodes closing in on her. Her lead has dwindled from double digits to only 4%: 47% to 43%. It is fairly late in the season already and repairing the damage from a contested primary always takes time.

NRSC Now Supports O'Donnell     Permalink

After blasting her all day Monday and disowning her after she won, NRSC chairman John Cornyn has now sent GOP Delaware senatorial nominee Christine O'Donnell a check for $42,000. What happened? In a phrase: the tail wagged the dog. When the tea party movement got started in the summer of 2009 (financed by FreedomWorks, which in turn, got its money from various behind-the-scenes billionaires like the Koch brothers) the Republican leadership egged it on because it was then mostly railing about Obama the Socialist destroying the country. The tea party rallies were saying things the Republicans would be pilloried for saying, so it was a win-win situation for them: the stuff got said and they didn't get blamed. But when the tea party began primarying Republicans, things began to get uncomfortable. The game plan was that the tea party people would scream at the Democrats, not scream at the Republicans, but it didn't turn out like that. In Delaware Tuesday, the tea party turned a certain GOP victory into a certain GOP defeat. In Nevada earlier, it turned a likely GOP victory into a likely GOP defeat. In Colorado, it turned a possible GOP win into a possible Democratic win. So instead of the GOP harnessing the energy of the tea party to pull its wagon, it now has a runaway horse on its hands. Or maybe a better analogy is a hostile takeover. Either way, the proof is that Cornyn felt obliged to waste $42,000 better spent in Colorado or New Hampshire on a race he knows very well he can't possibly win, just to placate the tea party folks. If the Democrats hold the Senate by 1-3 seats, which now seems likely, this will all boil over after the election and it won't be pretty. The LA Times has a good story on the tension between the Republican leadership and the tea party.

If the tea party movement survives into 2012, which it may or may not depending on how well its candidates do this November, it could have ramifications for the presidential election. Politico has a piece on how the movement may impact the GOP's longstanding system of primogeniture. Mitt Romney is next in line for the nomination, but if the tea party can coalesce quickly around one candidate, be it Sarah Palin, Mike Huckabee, or someone else, Romney will have a lot of trouble and there could be bitter ideological warfare within the GOP ranks, never a good thing while taking on a sitting President.

2010 Looks Like a Good Year for Incumbents     Permalink

Despite Delaware and studios full of pundits saying the voters are furious and 2010 will be a terrible year for incumbents, the reality is that 98% of incumbents have won their primaries. Only seven incumbents have gone down, but the media are completely consumed by those seven and have ignored the hundred of incumbents who have survived challenges. "Man bites dog" makes for better news than "dog bites man" but the latter is still a lot more common, despite the odd headline about the former. Whether the incumbents can also win their general-election races remains to be seen, but over the past decade, House reelection rates have been about 94-98%. While the Democrats are likely to lose a few dozen seats in the House (the President's party always loses in the midterms) all this talk about the Democrats losing 60, 80, even 100 seats is fantasy. Beating an incumbent is tougher than it looks on paper.

Obama Names Warren as Interim Head of Consumer Agency     Permalink

President Obama has named Harvard professor Elizabeth Warren as a special advisor to himself and Treasury Secretary Timothy Geithner to help set up the new Consumer Financial Protection Agency. As interim head, she does not need Senate approval, but the real head will need it down the road. Warren is a strong consumer advocate and the banks are violently opposed to her appointment. The key problem is all those mortgages the banks gave to people who have no chance of ever paying them back. They are still on the banks' books as assets, but in reality they are worth perhaps a few pennies on the dollar. So, in some spreadsheet of a bank's net worth, a $200,000 mortgage counts as a $200,000 asset, but if the owner fled and the house was abandoned and vandalized months ago, how is the bank going to get its $200,000 back? Geithner's long-term plan to make the banks healthy again was to allow them to nickel and dime consumers with a load of small fees ("You want to speak to a teller? Of course, no problem. That will be $2, please"). Multiplied by millions of customers, these fees can add up to enough money to allow the banks to write off the worthless mortgages and still be in the black. Warren probably won't allow these fees, setting up a potential fight between Warren and Geithner.

Depending on how astute Obama and Warren are, her interim appointment could also affect the midterm elections. She could roll out tough new restrictions on the banks very quickly, which would be popular but which Republicans would denounce. She has the power to force the Republicans to take sides in battles between consumers and the banks, something they would rather not do just before an election. Whether she will use this power remains to be seen, of course.

Today's Polls: CO FL NV OH OR PA WA WA-03     Permalink

New Senate Polls

New House Poll

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