McConnell Concedes Presidential Race

With the electors having cast their ballots, and having elected Joe Biden as the next President of the United States, Senate Majority Leader Mitch McConnell (R-KY) has decided the writing is officially on the wall. And so, on Tuesday, he announced that "The Electoral College has spoken...today I want to congratulate President-elect Joe Biden."

Normally, the opinion of someone not on the ballot—even if they are one of the highest-profile members of their party—does not matter. But these are not normal times. With Donald Trump and his underlings (e.g., Stephen Miller) insisting that this thing is not over, everyone is watching carefully for signs that the GOP establishment is ready to jump ship and move on. And now, the most establishment Republican of them all has done so. McConnell's announcement gives cover to other members of his party who wish to embrace reality, while at the same time taking cover away from those who want to keep their heads in the sand.

Now the question is: How does Trump respond? On one hand, he wants to keep collecting money for his "election defense fund," and his ego will presumably never allow him to admit defeat. On the other hand, challenging McConnell directly is something the President has never been willing to do, presumably since the Majority Leader has nearly as much pull in the Party as Trump does. The likelihood is that the Donald just pretends that he didn't hear McConnell's announcement, and continues his current approach to the election, though that will get harder and harder as more high-profile Republicans jump ship.

And as long as we're talking about Trump allies who are ready to move on, Vladimir Putin also issued a statement Tuesday congratulating Biden on his victory. Again, normally the opinion of the dictatorial leader of the United States' main adversary does not matter, but these aren't normal times. McConnell was Trump's most important domestic ally and Putin was probably his most important foreign ally (him or Benjamin Netanyahu), and now both have turned toward Biden. Oh well, at least the President still has Rep. Matt Gaetz (R-FL) and Sidney Powell. (Z)

The Grift Is Getting on Republicans' Nerves

Let's get one thing clear from the outset: Most of the money that Donald Trump is raising these days is headed straight for the bank account of his PAC (Save America PAC), for him to use on fat salaries for himself and his family, or on staging rallies, or on traveling to the Bahamas for "fact-finding" trips, or on giant portraits of himself. A small portion goes to the RNC. Very little goes to the things that Trump claims to be raising money for. And he's willing to claim just about any "cause," if he thinks it will motivate his followers to get out their wallets.

As long as Trump said he was collecting money to contest the election results, or to "save" America, or to combat "socialism," his fellow Republicans did not say "boo." But now he's using the Georgia Senate races as a fundraising tool, suggesting to followers that he needs their hard-earned money to save the Senate for the GOP. The problem, as noted in the first sentence of this item, is that virtually none of the money is actually going to the Georgia Senate races. This is leaving some Republican pooh-bahs hopping mad, since fundraising is something of a zero-sum game, and most of the dollars Trump collects in the name of "saving the Senate" are dollars no longer available to Sens. Kelly Loeffler and David Perdue (both R-GA).

In the short term, this means that the two senators are being outspent by their Democratic challengers by a large margin. For example, the two Democrats (Raphael Warnock and Jon Ossoff) are dropping $131 million on TV ads as compared to $86 million for the two Republicans. Super PACs and outside groups are making up some of that, but when we also include other areas of expense, like staffing and ground game, it's going to be hard for the GOP to keep up. If the two Republicans suffer narrow losses, this is going to be one of the things people point to in the postmortems.

In the long term, Trump is already making it clear that his post-presidential career is going to be about Donald John Trump, and not about the Republican Party. This is hardly a surprise, since he's not really a Republican anyhow, and since he's put Donald before Party on every single occasion where the two were in conflict. The question is whether the Republican leadership, knowing full well that he's a parasite, will break from him in a major way, or will just bide their time and hope his star finally burns out. Given that politicians tend to be risk-averse, we predict that it will be the latter. (Z)

It's a Matter of Economy

We don't love to get involved in judging presidents' performance on the economy, since there are so many different indicators, and they often point in different directions. That means that nearly any president's record can be spun into "great job!" or "what an idiot!" Plus, presidents get too much credit/blame for the economy, anyhow. That said, a pretty strong consensus is emerging that—despite his campaign claims to the contrary—Donald Trump was not good for the economy; and maybe even the worst of any president since World War II.

Let's start with two important things that might be raised in Trump's defense. First, there has been a pandemic that threw a giant wrench into the works, and would have derailed any president's economic gains. This is true, but: (1) every president gets a crisis or two thrown at them, and (2) Trump's mismanagement of the pandemic surely made the economic effects worse than they might otherwise have been. The second point in Trump's favor is that the stock market is doing very well right now. Again true, but mitigated by the fact that those gains are enjoyed by a minority of the population, and that much of the prosperity was achieved by unsound fiscal policy (like a big tax cut when one was not indicated).

And now, here are some of the dings on the Donald's record:

• Employment: Trump will leave office with fewer Americans employed than when he was inaugurated, making him the first president to "accomplish" that since Herbert Hoover. His much-ballyhooed gains in minority employment were among the first to go when the pandemic hit; for example, Black unemployment was 7.5% when Trump took office and is now 13%. Finally, last week was the 38th in a row to see at least 700,000 Americans file for unemployment.
  
  
• Industrial Production: Despite promises to revitalize the manufacturing sector through trade wars and bringing jobs back to America, industrial production is down, and has actually been in recession since 2019, well before the pandemic hit. In fact, the U.S. Real Output Index is lower right now (88.2) than it was when George W. Bush left office (90.1).
  
  
• Income: Income is up by roughly 3.3% for the average American since Trump took office. However, as with the stock market gains, this is driven primarily by the prosperity that the most elite income-earners have enjoyed. Such growth was much more evenly distributed during the Obama, Clinton, and Nixon years.
  
  
• GDP: The United States' Gross Domestic Product, prior to the pandemic, essentially continued on the trajectory set during the Obama years, growing at 2.5%-2.6% per year. Trump promised "4, 5, maybe 6%," which has proven to be the fantasy that everyone said it was back when he made the promise. Oh, and the GDP for 2020, a.k.a. "pandemic year," is expected to be down about 6.5%.
  
  
• Home Values: Another era where the trajectory of the Obama years held. Home values were up 4.9% per year, on average, during Obama's presidency. During Trump's presidency, it's been 4.8%.
  
  
• National Debt: During the Obama years, the debt-to-GDP ratio rose from 52.3% to 76.4%, with most of that coming in the first three years of his presidency, as the nation coped with the Great Recession. During the Trump years, it has leapt from 76.4% to 104%. That's 22% in 8 years vs. 28% in 4 years. Our staff mathematicians tell us the latter quantity is considerably larger.
  
  
• Consumer Confidence: When Obama took office, consumer confidence was in the toilet, scoring a 37.4 on the leading index. When Obama left, it was up to 111.6, and in the first couple years of the Trump presidency, it stayed on that trajectory, reaching the 130s. Now, however, it's down to 84.8.
  
  
• Health Insurance: During the Obama years, the number of insured Americans increased by 20 million, allowing the country to reduce the number of uninsured Americans to less than 30 million. The total number of uninsured has been ticking slowly upward since Trump took office, primarily due to his efforts to undercut the ACA without putting a replacement in place.
  
  
• Trade Deficit: Despite the tariffs and the trade wars, the lowest annual trade deficit of the Trump years is still higher than the highest annual trade deficit of the Obama years. In 2020, it projects to be $510 billion (Obama's worst was $500 billion). During the Bush 43 years, it should be noted, the trade deficit was often in excess of $700 billion.

In short, Trump inherited a good-but-not-great economy, rode that momentum for a couple of years, and then saw parts of it undermined by ill-considered policies that did not work out well (e.g., the trade wars), and other parts of it undermined by the pandemic. The very wealthy did well, yes, but somehow they always seem to do well. One struggles to point to any economic success Trump had that speaks to his unique vision, or to his unique skill in getting things done.

What this means is that Joe Biden has been handed quite the opportunity as he prepares to take office. Analysts largely agree that if his administration handles the vaccine roll-out well, and manages to get some stimulus money injected into the economy, things are primed to really take off. Some of the more cautious economic soothsayers think there might be a mini-recession wedged in there, but either way, late 2021 and 2022 are shaping up to be boom times, as the economic activity that has been bottled up in 2020 is unleashed (think: movie releases, people taking long-planned vacations, shopping, rehiring of those who were laid off, car purchases that were delayed, etc.).

Of course, whether this will work to the Democrats' benefit at the polls in 2022 (and 2024) is a different question. Although blue team presidents have been generally better for the economy than their red team counterparts, at least in recent decades, the Democrats have had a lot of trouble capitalizing on that. If they didn't, then we'd be talking about Presidents Al Gore and Hillary Clinton right now. So, once we see if Team Biden can do a better job on the economy, we'll see if they can do a better job on messaging. (Z)

Iran Nuclear Deal Looks Likely to Come Back to Life

One might be tempted to view the nuclear weapons situation in North Korea and in Iran as being fairly similar. After all, both nations were part of George W. Bush's famous (and infamous) Axis of Evil. But it's really not so. North Korea is a tiny little country that basically does not participate in the international economy, and for whose regime the nukes are the difference between safety and obliteration. Iran is a much more conventional nation with power bases/defensive capabilities beyond the nukes, and a strong desire to be part of the larger economic picture. It is impractical for them to actually consider deploying nuclear arms, since the Iranians would be promptly bombed back to the stone age by Israel, Saudi Arabia, the United States, etc.

These things being the case, it isn't too much of a surprise that Iranian President Hassan Rouhani has announced that he is open to resuming the nuclear deal that Donald Trump abandoned, and to do so without preconditions. Since Joe Biden has said the same, it looks like it's just a question of the diplomats getting together and working out the finer points. Iranian irritation with Donald Trump, followed by the assassination of Iran's chief nuclear scientist Mohsen Fakhrizadeh, strengthened the hardliners in that country and raised the possibility that further diplomacy would not be possible. However, it would appear that moderate elements have now reasserted themselves.

Actually, Team Biden has something of a decision to make. Although Donald Trump's policy toward Iran has actually hastened that nation's progress toward the development of a viable nuclear device, the shifting geopolitics of the region has weakened the Iranians' position relative to where it was in the Obama years. And so, the incoming White House could just re-establish the Obama-era deal and call it a day, reasoning that halting nuclear arms development is paramount. Or, they could push the envelope a bit, and try to extract more concessions from the Iranians, like promises not to engage in state-sponsored terrorism. Undoubtedly, this will be among the first things on Secretary of State-designate Antony Blinken's to-do list, assuming he is confirmed by the Senate. (Z)

It's Buttigieg for Transportation...

As expected, President-elect Joe Biden chose former presidential rival and South Bend, IN, mayor Pete Buttigieg as his Secretary of Transportation-designate. As a former intelligence officer, corporate consultant, and mayor of a medium-sized town, Buttigieg has no directly relevant qualifications for the job. However, he's clearly a brilliant fellow, and sometimes that's good enough for government work.

There have undoubtedly been LGBTQ cabinet secretaries in the past (ahem, James Buchanan), but if he is confirmed, Buttigieg will be the first to be out of the closet. The President-elect will make the Secretary-designate the point person on an ambitious $1 trillion infrastructure renewal plan. How much headway Buttigieg makes depends on how quickly he learns the ropes in Washington, how willing the Republicans are to play ball, and whether or not the Democrats win the two runoff elections in Georgia.

As to Buttigieg, this was far and away his best option for keeping the momentum going on his political career. After 8 years, he's gotten as much mileage as he's going to get out of the mayoralty of South Bend. Indiana is probably too red for him to win a Senate seat or the governor's mansion, and all those jobs are locked up for the next 4 years, anyhow. Only one person (James Garfield) moved directly from the House of Representative to the White House, and that was due to an unusual situation in which his party was badly split and he was a compromise nominee. A Cabinet gig keeps Buttigieg in the headlines, gives him another item for his résumé, and allows him to keep rubbing elbows with Democratic movers and shakers. VP Kamala Harris can't be too happy about the possibility of competing against him in 2024 or 2028, though a Harris/Buttigieg ticket is certainly conceivable if Buttigieg does well in the 2024 primaries. (Z)

...and Granholm for Energy

Joe Biden was apparently in an "announce my cabinet" kinda mood on Tuesday, as he waited a few hours for the Buttigieg news to settle in, and then promptly unveiled another pick: former Michigan governor Jennifer Granholm will be his Secretary of Energy-designate.

As chance would have it, we had just finished writing up our Secretary of Energy preview when the President-elect made the announcement (we're talking two minutes before, the jerk). And we're not too big to admit that while we had a governor on our list (Jay Inslee, D-WA) and a Michigander (Rep. Andy Levin, D-MI), we did not have anyone who has served as governor of Michigan. At very least, we can still use the job description we wrote before throwing the rest in the garbage. And so: World War II begat the Manhattan Project (1942), which begat the Atomic Energy Commission (1946), which begat the Department of Energy (1977). As that lineage implies, the Secretary of Energy has substantial responsibility for all things nuclear, including managing the country's nuclear weapons, overseeing the construction of nuclear reactors, and handling radioactive waste disposal.

Rick Perry, Donald Trump's first Energy Secretary, was disappointed to learn that the job did not involve selling oil to foreign customers. And indeed, it does not. Fuels beyond those that are nuclear are part of the Secretary's purview, but the focus is almost exclusively on fuels that are more efficient and/or produce less pollution than current options. So, the Secretary is ten times more likely to make a deal for a new solar farm or a new windmill installation than for anything involving oil. Consistent with the "find better fuels" part of the department's mission, it also funds a great deal of research into the physical sciences, sometimes involving itself in things that might seem far removed from "energy." For example, the Human Genome Project began as a DoE initiative.

The choice of Granholm—who, by virtue of her gubernatorial tenure, has an awful lot of experience dealing with automakers—strongly implies that she will be expected to work with the Fords and GMs of the world on fuel economy and on hybrid/electric vehicles. She may also get involved in the Iran nuclear negotiations (see above), which were first consummated with significant effort on the part of Obama-era Secretary of Energy Ernest Moniz. And if Biden pries loose some of the $1 trillion he wants for infrastructure improvement, Granholm will have a hand in that, too. All in all, then, she figures to be very busy in the next four years. For Granholm, a job in the cabinet is a bit of consolation prize. As a woman, an excellent public speaker, and the former governor of one of the larger swing states, she would have been presidential material—except that she was born in Canada. (Z)

The Biden Cabinet: Secretary of Education

And so it concludes. There are 15 cabinet departments, and today will be writeup #12. Since Joe Biden scooped us on three positions, that means we've reached the end of the line.

• Secretary of State (Nov. 11)
• Secretary of the Treasury (Nov. 13)
• Secretary of Defense (Nov. 17)
• Attorney General (Nov. 18)
• Secretary of the Interior (Nov. 20)
• Secretary of Agriculture (Nov. 24)
• Secretary of Commerce (Nov. 27)
• Secretary of Labor (Dec. 1)
• Secretary of Health and Human Services (Dec. 2)
• Secretary of Housing and Urban Development (Dec. 4)
• Secretary of Transportation (Dec. 15)

And now: Secretary of Education.

• The Job: The United States, as you may have heard, is a federal system. And there are few areas where citizens are more touchy about federal interference than education. Blue staters don't want their kids taught that humans and dinosaurs co-existed or that Christopher Columbus was a heckuva guy; red staters don't want their kids to hear about birth control or Islam or not-so-nice things the Founding Parents might have done (like keep slaves). So, in contrast to most nations, the U.S. Dept. of Education exerts relatively little influence over curricula. They also, again in contrast to most other nations, have no role in the establishment of new schools. Further, because of the many and varied incarnations that Education has gone through, not to mention other departments' desires to protect their turfs, a large number of educational functions are not actually a part of the Dept. of Education. For example, Headstart belongs to HHS, overseeing Native American schools is the purview of Interior, and vocational training and education are handled by Labor.
  
  So what does the Dept. of Education do? Well, most of its relevance comes from the roughly $70 billion in funds it distributes each year in the form of Pell Grants, Title I Grants, student loans, and other support for schools and students. Deciding exactly what schools, and what students, get those funds affords the Secretary a fair bit of soft power over the educational system, particularly universities. The Secretary is also responsible for administering existing students loans, and so has a fair bit of impact on the lives of indebted graduates. Finally, the Secretaryship affords its holder a platform to advocate for reforms they would like to see, as current holder Betsy DeVos has done, pushing hard for "school choice."
  
  
• Considerations: Like Transportation, this is a department where a president or president-elect can stash someone they would like to have in the Cabinet for whatever reason, and that they can't find another spot for. Since the Department of Education became an independent cabinet department during the Jimmy Carter presidency, less than half of the secretaries had an education background.
  
  It is not likely that Biden will use the seat in that way, however. The President-elect tends to follow in the footsteps of friend and mentor Barack Obama, and both of Obama's education secretaries (Arne Duncan and John King Jr.) had an education background. Further, Biden has promised to appoint a public school teacher to the job. While he could certainly try to squirm out of that promise, it would not be a good look. It is also the case that the next secretary will have some rather sizable items on their plate. Student debt is out of control and was, of course, a major topic of discussion during the campaign. Another, more immediate, problem is what to do about standardized testing given that the last year of schooling has been profoundly affected by the pandemic. Biden might just like to have someone who knows what they are doing as they engage with these thorny problems.
  
  
• Candidate 1, Lily Eskelsen García: Eskelsen García checks an awful lot of boxes. She's got an inspiring story, having started as a "lunch lady" and then worked her way up to becoming Utah's "Teacher of the Year." She was president of the National Education Association, one of the two main teachers' unions, and so not only knows education policy at a macro level, but would also please organized labor if she was selected. She's a Latina (specifically, Panamanian), and would be the first Latina to hold the position if she is nominated and confirmed.
  
  It's hard to find too many downsides here, unless there are things that present themselves in a background check or an interview and that would not be publicly known. Biden has shown a preference for folks he knows, and he doesn't know Eskelsen García all that well, although she did campaign for him in 2020, including playing a big role in securing the NEA's endorsement.
  
  
• Candidate 2, Randi Weingarten: Like Eskelsen García, Weingarten is a former teacher (high school history, in her case) turned labor organizer, having served as past president of the United Federation of Teachers and serving currently as president of the American Federation of Teachers. She would also please labor, then. Weingarten's not a person of color, but she is much leftier than Eskelsen García is, and is closely associated with Sen. Elizabeth Warren (D-MA), in particular. So, if Biden decides he needs to throw a bone to progressives, he could go with Weingarten.
  
  Weingarten's biggest problem—again, beyond anything behind the scenes that might present itself—is that saying the phrase "outspoken lefty" is like waving a red cape in front of the Republican members of the Senate. If Biden wants someone with the teacher-turned-labor-organizer profile, Eskelsen García seems far more probable, especially since it would be very hard for Sen. Mitt Romney (R-UT) to vote against the Utah "Teacher of the Year."
  
  
• Candidate 3, Linda Darling-Hammond: If Biden decides he wants someone he knows, then he could well settle on Darling-Hammond, who served as an adviser to Barack Obama, and has been serving on Biden's transition team for the last several months. She's also got a very impressive résumé; a professor emerita of education at Stanford, Darling-Hammond is the author of 25 books and has been president of the American Educational Research Association and a member of the National Board for Professional Teaching Standards. If Dr. Jill Biden is consulted on the pick, Darling-Hammond is the sort of candidate she might favor.
  
  That said, Darling-Hammond does have some weaknesses. She doesn't bring diversity to the cabinet, nor any sort of ties to organized labor. Further, she's taken some unpopular stands on the issues of the day (for example, she's been critical of Teach for America). And finally, she technically fulfills Biden's promise to pick a public school teacher, but the last time Darling-Hammond set foot in a public school classroom, Richard Nixon was in the White House. So, picking her would honor the letter of the promise, but not necessarily the spirit.
  
  
• Candidate 4, Donna Shalala: Shalala has an extensive educational background, dating back to the early 1970s, and mostly made up of stints in university administration (president of Hunter College, chancellor of the University of Wisconsin-Madison, president of the University of Miami). She also knows the song and dance in Washington, having served as Bill Clinton's Secretary of Health and Human Services, and then more recently as a member of the House of Representatives. She's also available, as she lost her reelection bid in November to Maria Elvira Salazar (R-FL).
  
  All of this said, Shalala seems an odd fit for the Biden cabinet. If she is chosen, she would almost certainly be the only member of the Cabinet to be older than Biden himself (she's currently 79). Also, she's a Clinton (and Carter) person, not an Obama person (though she's known Biden for years). And you have to squint and stand on your head to get to the point that she checks the "public school teacher" box, even more so than with Darling-Hammond, since Shalala's only service of that sort came when she taught at a public university (Baruch College) in the early 1970s.
  
  
• Candidate 5, Rep. Jahana Hayes (D-CT): Hayes' bio reads similarly to that of Eskelsen García. The Representative, as a Black woman, would also bring diversity to the cabinet. Further, Hayes also has an inspiring story, growing up in public housing projects, working her way through school, and eventually winning Connecticut and national "teacher of the year" awards in 2016. If Biden determines that the Congressional Black Caucus needs a bit more patronage, Hayes would be an excellent pick.
  
  However, of all the folks on this list, Hayes is the one Biden knows the least. Further, while she clears the "public school teacher" bar, Hayes has little experience in setting policy, so she wouldn't be able to hit the ground running like the other candidates on this list. Oh, and her district is D+2, and so while it's likely she'd be replaced by a Democrat in the special election that would be prompted by her resignation from Congress, it's not guaranteed.

And there you have it. Once Biden makes all of his announcements, we'll go back and see how we did. We've also got another series in mind, which will likely begin next week. Here's a hint: "This way to the great egress." (Z)

Today's Senate Polls

There haven't been a lot of polls of the two Georgia runoffs and all of them say that both races will be close. As we have said before, everything depends on turnout. If two-third of the Democrats and half the Republicans vote, the Democrats win, and vice versa. The large number of absentee ballot requests so far suggests a decent turnout for Democrats (who like absentee voting better than Republicans do), but these races are simply impossible to call until all the votes are in. (V)

State	Democrat	D %	Republican	R %	Start	End	Pollster
Georgia	Jon Ossoff	48%	David Perdue*	49%	Dec 14	Dec 14	Insider Advantage
Georgia-special	Raphael Warnock	48%	Kelly Loeffler*	49%	Dec 14	Dec 14	Insider Advantage

* Denotes incumbent

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