The Republican Party's Political and Policy Pyramid Scheme

On Saturday, Tony Lee wrote a piece at Breitbart highlighting a recent speech by Pat Caddell where he discussed the reasons behind the Republican party's defeat in the presidential election. Among the many things that Caddell noted is that the Romney campaign bowed to the "consultant-lobbyist-establishment" complex. However, this is not only the GOP's political modus operandi, it is also their policy approach. This is why, although the Democrats may seem to resonate with voters more on messaging (Caddell also mentioned that voters didn't think Governor Romney "cared about them"), the differences on policy between the two parties appears to be shrinking. Of particular note, Caddell said:

“Why are Republicans not the anti-establishment party?,” Caddell asked.  

Caddell emphasized a “narrative is a story” that comes over a period of time and “not just a single message.” 

He cited Ronald Reagan as someone who knew how to speak to Democrats and “ordinary and common” Americans and bring them over to his side because Reagan had been one of them and came from regular Americans and shared their experiences. 

“That is a quality that has been missing a long time in a search for alternative candidate," Caddell said, in reference to Reagan's ability to resonate with blue collar Americans. 

[...] 

“As long as the establishment wants to preserve the establishment and their special deals, you will lose,” Caddell said.

Caddell, of course, is correct. The Republican party's political approach has been inept attempt of self-preservation of the Establishment. They have been rudderless, inarticulate, and out-of-touch. I wrote last week about the need for the Republican party to do a better job at messaging and selling the winning product of conservatism, but the keys to victory of course, goes beyond this. One of the Republican party's failures has been that they have seen politics along a single axis--right and left--between the seemingly arbitrary boundaries of political parties. In reality, politics and policy both have a vertical component to them---top to bottom--not in the terms of political party, but of political connection and personal benefit.

As Caddell notes, "why are Republicans not the anti-establishment party?". They are not because they willfully ignore their own devotion to that "consultant-lobbyist-establishment" complex. Caddell also noted:

“No presidential campaign should be run by consultants,” Caddell said. “They should be run by people who are committed to the candidate and not into making big money.”

However, the past two losing presidential campaigns has been run by people who saw they could make money even in losing. Despite running a horrible campaign in 2008, Steve Schmidt saw he could continue to make money as a consultant and later as a political analyst at MSNBC as a "Republican" who trashes Republicans. The same can be said for Nicolle Wallace who works now at ABC and has attempted to capitalized on the notoriety of defeat by writing political fiction (which is the same genre as her political commentary). Through mid October, the Romney campaign had paid  $134+ million to political firms tied to his aides, including funding a  failed GOTV software. Karl Rove's "Crossroads" group brought in and spent more than one hundred million dollars, only to have every candidate they supported lose. The GOP establishment has turned the Republican party into a pyramid scheme--where the few at the top (the Establishment and their consultants) eat well at the expense of their own base. The political game is not simply "right vs. left"; it is a game where the establishment does not care if they win politically (and the country wins on the basis of ideology and principle) so long as they win monetarily.  They eschew their own base and ignore the entire electorate to pad their bank accounts. They do not realize the need for "free market populism", which is the solution for the "vertical" political and policy problems the GOP has.

Policy must be viewed on a vertical plane as well. Cronyism and corporatism must be rejected. Both of these "isms" allow for the politically connected at the top of food chain to benefit at the expense of the taxpayers at the bottom. This goes beyond the infamous problems with Solyndra and the other green energy companies tied to political donors. This also includes political institutions like the ExIm Bank, which provides taxpayer backed loan guarantees for American companies who sell their product overseas. The ExIm bank is supported by many Republicans, and its re-authorization was one of the few things that flew through the House and Senate with ease before being signed by President Obama. The Republican party is not distinguishing themselves from the Democrats when they choose to subsidize business on the backs of ordinary Americans.

Economic ideas must not be the "pro-government" ideas of the Democrats, nor the purported "pro-business" ideas of the Republicans. Rather, they must be "pro-market" ideas. Pro government ideas are founded in expanding government at the expense of the taxpayers' money and liberty. Pro business ideas are founded in expanding government and some businesses at the expense of both other businesses and taxpayers. Both of the ideologies empower either government or specific businesses or industries, but "pro market" ideas empower the consumer as their purchasing power, not government taxation, bailouts, or subsidies, drives the market. Take, for example, ethanol subsidies. The EPA refused to ease ethanol mandates for fuel following a year of drought which negatively affected the corn harvest. What does this do? It makes fuel more expensive, and it has even made livestock farmers resort to feeding candy to their animals because increased corn prices have made livestock feed more expensive, which continues to occur in part because corn is being used for ethanol in fuel rather than in livestock feed. What does this have to do with the Republican party? Again, ethanol subsidies have bipartisan support, and the Republican party has not distinguished themselves from Democrats.

The concept of populism is not often seen as a conservative concept, and to some, free market populism may seem like an oxy moron. However, it is not the populism of liberals who pit Americans against each other through class warfare. It is a populism that desires to wage a war of sorts against the permanent political class (and the "consultant-lobbyist-establishment" complex) through a new brand of policy and politics. It is a brand guided not by the clinched fist of socialism, nor the hand-in-hand relationships of business and government, but of the invisible hand of the free market where the individual is empowered by lower taxes and smaller government.

In order to win elections and subsequently support for policy, the Republican party must realize that the battle lies in their message and the directionality of their focus, not in the hands of establishment consultants. If they ignore the vertical plane of their political and policy battles, they will lose not only their political base, but the electorate as a whole, and their pyramid scheme will come crashing down.


Crossposted here and here.

Under the Maginfying Glass: A Tale of Two Vice Presidential Candidacies

In the weeks following the election, Republicans are assessing what went wrong that led to their defeat. Much to the criticism of some in the party, Governor Romney has hypothesized that President Obama won because of the "gifts" that he offered minorities. Others have speculated that the GOP was not able to effectively reach out to the changing demographics of America or that the party misinterpreted polls and got cocky. Others have pointed to poorly designed and implemented GOTV technology.Compared to the 2008 election, there is one reason for defeat that is conspicuously missing from the "Wednesday morning" political strategizing -- blaming the GOP choice for vice president.

Paul Ryan, of course, was not the reason for Mitt Romney's defeat. His nomination provided a spark for many in the Republican party. He was an articulate voice for the GOP ticket and a seemingly good fit for a Romney campaign nearly singularly focused on the economy. He is an intelligent Congressman who has shown leadership in the House on the budget and making strong stances against Obamacare, particularly the IPAB---the unelected board of bureaucrats tasked with managing how Medicare pays. Ryan has served as a Congressman in Washington DC since 1999 and worked for House members for several years during the early and mid 1990s as well. However, despite his strong stance against the Obama administration's profligate spending, he also supported  the TARP bailout during the Bush administration and the auto bailout set in motion during the Bush administration. He has been a good Republican soldier in Washington D.C. for nearly twenty years, which made him ideal for Romney, especially as someone from the same state (a swing state too) as the current RNC chair.

In 2008, Sarah Palin was quite the opposite in some respects. She was the governor of Alaska--about as far away from Washington D.C. as one can get. She had garnered a reputation for bucking her own party-- calling out the Alaska GOP chair for doing party business on state time, taking on and defeating an incumbent governor in her own party, cleaning up the ethical mess caused by that incumbent she defeated, and even suing a GOP presidential administration to enable energy development in Alaska. During the campaign, she wanted to abandon the micromanaging of her handlers and speak on passion and principles rather than talking points. She was the embodiment of the feminist ideal--a great family, a successful career, not to mention a state basketball championship and the ability to shoot a moose and cook it up for dinner. This proved to be a perfect target for the media, the Democrats, and GOP Establishment to go after Governor Palin, not only for the blamecasting loss, but also the treatment and coverage throughout the campaign, which was much harsher than what was shown Paul Ryan.

The Romney campaign was, of course, smart enough not to hire the likes of Steve Schmidt and Nicolle Wallace (unlike MSNBC and ABC), so the source of much of the redistribution of blame of the 2008 campaign was missing from the 2012 campaign. Ryan was not a threat to the GOP machine, because in many ways, he was already a part of it. There was no need for Romney campaign staffers, some of whom had trashed Governor Palin during the 2008 general election, to send out emails to coordinate a strategy to shield themselves from blame if they lost, as Steve Schmidt had done.So far during the 2012 election fallout, Romney advisers are blaming strategy and messaging, not directly their own candidates.

The media and the Obama campaign, however, did go after Paul Ryan with spurious attacks. Prior to the campaign and during the campaign, they tried to portray his budgetary roadmap as one that would throw grandma over the cliff. The Obama campaign tried to conflate Todd Akin's comments on rape with Paul Ryan's stance on abortion. The media and Democrats both turned a visit by Ryan to a soup kitchen into a ridiculous mini-scandal. However, this was nothing compared to the barrage that Governor Palin received four years ago from within her campaign, the Democrats, and the media. Like Ryan, Palin also had false accusations launched at her regarding who rape--specifically who paid for rape test kits when she was mayor. However, with Governor Palin claims seemed more pointed and numerous. Ridiculous claims were made that she wasn't the mother of Trig, her youngest son. False claims were also made regarding Palin's associations with the Alaska Independence Party (AIP), which has succession as part of its platform. This supposed AIP-Palin connection was also falsely cast onto to Governor Palin by an employee of a Democratic PR firms. Claims were made that she cut funding for special education when she actually increased spending for special education substantially.She even was falsely reported to have banned books like Harry Potter when she was mayor--before the books were even written.

For Governor Palin, it went beyond false claims surrounding policy and into false charges regarding her character-- charges that she abused her power by pressuring a commissioner to fire a state trooper who once was Palin's brother-in-law. State senator, Kim Elton launched a legislative inquiry into the matter, deeming it an “October surprise”(i.e. he intended it be political). During the inquiry process, the Obama camp even made contact with the troopers’ union of Governor Palin’s former brother-in-law.Ultimately, the politically motivated legislative inquiry found her as abusing power, while the personnel board, who were all appointed by Governor Murkowski, no friend of Governor Palin, exonerated her. Following President Obama’s election, Kim Elton was given a cushy job in President Obama's Department of Interior. Elton had also allowed former chief of staff to then Senator Obama and once interim chief of staff to President Obama, Pete Rouse, to use Elton’s Alaskan address so that  Rouse could vote in Alaska even after he hadn’t lived there for more than twenty years. Democrats sought to destroy her character, not solely mislead on her policy.

During the campaign, Governor Palin was criticized for being held back from the press--a poor campaign move by operatives like Schmidt and Wallace. Prior to her becoming the VP pick, emails obtained by the Anchorage Daily News noted that she was to be a McCain surrogate across several networks, yet the campaign held her back when she was picked. When she did talk to media embeds, she was criticized for "going rogue". Meanwhile, Paul Ryan only spoke to the traveling press corps four times during the campaign and never gave formal press availability. Ryan's limited press interaction never became a major story, however, only the subject of a singular tweet from a member of the traveling press corps.

Not only was Governor Palin more harshly covered by the media, her family was as well. Todd Palin's voter registration became a huge news story when he inadvertently checked the box for the Alaska Independence Party (AIP) when he simply intended to note he was an independent (he later corrected this). However, Paul Ryan's wife was not placed under the same intense scrutiny--despite the fact that she had been a congressional staffer and a corporate lobbyist in the past.  During their respective campaigns,  Governor Palin's children was the mother of a four school aged (or younger) children and a son in the military while Congressman Ryan's children were all under the age of 10. The young age of his three children and a busy campaign schedule were never a reason for faux concern from the media, as it was for Governor Palin.  Not to mention how Bristol Palin was put under the spotlight by the media and the Left during her concurrent pregnancy.

Despite claims made by McCain campaign staffers even prior to the campaign's end, Governor Palin was not reason for the McCain-Palin ticket's defeat. In fact, she helped the ticket. Among those who noted Palin's presence on the GOP ticket affected their vote, 56% voted for McCain-Palin compared to 43% for Obama-Biden. John McCain and Sarah Palin received 59,934, 814 votes while  Mitt Romney and Paul Ryan received 59, 142,004 votes--a more than three quarters of a million vote difference in favor of McCain-Palin. This was despite the fact that the Romney campaign made more contacts with voters on a grassroots level than the McCain campaign. These vote differences are in no way an indictment of Paul Ryan's candidacy, nor does an indictment lie in the context of solely a presidential campaign. The indictment lies with the GOP Establishment, Democrats, and the media who all seemed to have the same goal of destroying Governor Palin--a goal they haven't achieved despite continued efforts. Revisiting the 2008 campaign is not an attempt to rehash the past, but to put it in greater perspective. This month's election now provides an even bolder contrast to further reveal how much the media, the Democrats and even her own party wished to smear and discredited Governor Palin--and how much they continue to do so.

During this election cycle, GOP Establishmentarian, Karl Rove disingenuously represented Palin's effect on the ticket by saying McCain was leading prior to picking her as VP and he poo-pooed the effect of her endorsement as "not worth snot". In the end, Rove's endorsement successes were non-existent while Governor Palin had great success. The Democrats still reference Palin, in attempts to diminish her, but their reference to her only shows her influence and their fear. John Kerry referenced Governor Palin  in his speech at the Democratic convention when discussing Mitt Romney's policy on Russia. Obama campaign manager, Stephanie Cutter, referenced Palin in response to Rudy Guliani questioning Joe Biden's mental capacity. This past week, the head of Obama's SuperPAC and former deputy White House press secretary, Bill Burton took a shot at Palin in response to John McCain's criticism of Susan Rice's comments on the attack on the American consulate in Libya.She still remains a target for and a threat to both parties.

A willingness to serve in the capacity of vice presidential nominee means that your record, your family, and your character will be put under a magnifying glass--as it should. With Governor Palin, however, the GOP establishment, Democrats, and the media used (and continue to use) the magnifying glass the same way a mean kid uses it to direct sun's rays to an ant hill--to destroy. A magnifying glass can be revealing for objects on either side of it though, and thankfully, Governor Palin has used the magnifying glass to further reveal the corrupt nature of the very people who seek to destroy her.

Crossposted here and here.

Rejecting "Crystal Pepsi" Conservatism and Embracing People and Principle Centered Conservatism

"It was a tremendous learning experience. I still think it's the best idea I ever had, and the worst executed. A lot of times as a leader you think, "They don't get it; they don't see my vision." People were saying we should stop and address some issues along the way, and they were right. It would have been nice if I'd made sure the product tasted good. Once you have a great idea and you blow it, you don't get a chance to resurrect it."  

Those were the words of Yum Brands CEO, David Novak, . His "great idea" was that  of revamping Pepsi as a clear soda called Crystal Pepsi. Crystal Pepsi was introduced to the market in the early 1990s and proved to be a massive flop. Why did it flop? Because they tried to change a winning product. However, Novak and Yum Brands took Crystal Pepsi off the market because it failed. They knew they could not get customer buy-in on a poor imitation of a solid product. Perhaps the Republican party could learn a lesson from those in marketing. When you match a good product with the right messaging, the product sells.

However, the Republican Establishment and Beltway campaign operatives think that the way to improve conservatism is to change it, rather than to do a better job of marketing conservatism. This kind of "Crystal Pepsi conservatism" is pushed by Establishmentarians like Governor Jeb Bush who wrote a piece at the National Review this past summer indicating that Republicans need to become the "Grand Solutions party" and abandon the "black lines of ideology". However, in Governor Bush's attempt to make the GOP big tent, he has tried to drive the ideological pegs into the swampy ground of moderation, rather than the solid ground of principle. Following the electoral loss last week, Republicans like John Boehner and conservative pundits like Sean Hannity have called for immigration reform. Bill Kristol is encouraging the GOP to give in to tax increases. All of these men are trying to re-package a failing "Crystal Pepsi conservatism" that betrays principles. Instead, the party ought to follow the advice of Governor Sarah Palin that she shared following the 2010 GOP victories, " a winning conservative message must be careful crafted" just as Reagan changed his messaging between his 1976 and 1980 campaigns. The message may need to be re-crafted, but the conservatives principles need to remain. 

The Republican Establishment would be well served to replace their high investment, but low return DC/NYC political strategists and operatives with conservatives who are in the field of marketing. Those in marketing don't change good products; they only seek to provide the product with the right message in the appropriate media so that it sells. Conservatism is a great product. Individual freedom, free men and free markets are marketable to every demographic. It just needs to be messaged appropriately to our diverse American melting pot. Those in marketing and advertising use market segmentation research to reach our diverse popularity by tailor the message by race, income, education, urbanicity and other factors. Just as Pepsi isn't sold to baby boomers using the same commercial advertising and advertising platforms as millennials, so conservatism shouldn't be marketed to white empty nesters in the same manner as it is marketed young Hispanic business owners. Free market conservatism is the product, but the message to empty nesters might be one of reduced capital gains taxes to protect their retirement while the message to young Hispanic business owners might be one of reduced corporate taxes and fewer government regulations that provides a better life for their family. This enables conservative coalition building, and is something that would have served the Romney campaign well. However, Hispanic and black conservatives approached the campaign with coalition building ideas that were turned away.  The campaign did not effectively engage the consumers of conservatism. There is no need for pandering, but there is a place for engaging all segments of the electorate a candidate ultimately aims to represent. 

 Our Republic was founded on "we the people", and that is what conservatism's messaging should be founded upon as well. This is a  messaging concept that Margaret Thatcher understood an ocean away and nearly 40 years ago, when in 1975, the Tory party suffered considerable political defeats. She wrote (emphasis added):

Politicians should not be either professional efficiency experts or amateur industrial consultants. Their concern is with people, and they must look at every problem from the grassroots, not from the top looking down. 

[...] 

My kind of Tory party would make no secret of its belief in individual freedom and individual prosperity, in the maintenance of law and order, in the wide distribution of private property, in rewards for energy, skill and thrift, in diversity of choice, in the preservation of local rights in local communities. 

Size is not all, any more than economic growth is all. Even efficiency is not enough. People come first—their needs, their hopes, their choice, their values and ideals. We have to understand these first—to be seen to be listening with sympathy and concern. It is important to be able to lead, certainly. But you cannot for long lead people where they do not want to go.

Conservatism must be framed in the context not in the white papers based theory of policy, but in the reality and application of those policies in individual's lives.People must come first, and as Thatcher said, politicians must look at problems not from the top down, but from the grassroots--the people, not the consultants. The message medium has changed as well, and the Republican Establishment must adapt. Texas conservative grassroots activist Michelle McCormick characterizes the current GOP as " Blockbuster in the age of Netflix". Both the brick and mortar Blockbuster and Netflix have the same product of "rentable" movies, but Netflix acts within the framework of the internet while Blockbuster operates in the last century framework of tangible DVDs. Conservatism must operate in a new media, entertainment age. As Andrew Breitbart famously emphasized politics is downstream from culture, and this is something the Republican party must capitalize upon. 

William F. Buckley famously noted that he'd rather be governed by the first 400 names in the Boston phone book than the faculty of Harvard. In the same way, conservatism would be well served to employ conservative marketing strategists instead of beltway strategists and blue blood politicians who insist on single minded and poor imitations of the winning product of conservatism. 

Obamacare Insurance Exchanges Are Corporatism Disguised as "Competition"

Earlier this week, I noted how Cook County board president and Obama mentor Toni Preckwinkle secured a $100 million Obamacare waiver to implement Medicaid expansion in the county a year early and cover a gap in the county budget. The conflicts of interest in Obamacare adds yet another layer as insurance exchanges are in the process of being implemented before the 2014 deadline. The Hill Healtwatch reports:

The fast-approaching deadline gives the administration little time to scrutinize private-sector partners for conflicts of interest. 

The purchase of one of these contractors, Quality Software Services, Inc. (QSSI), by UnitedHealth Group, a major healthcare conglomerate, has sparked concerns about a potentially uneven playing field. 

QSSI, a Maryland-based contractor, in January won a large contract to build a federal data services hub to help run the complex federal health insurance exchange. 

It will be working with several other contractors, including CGI Federal, Inc., to create the technological architecture for the exchange. 

The quiet nature of the transaction, which was not disclosed to the Securities and Exchange Commission (SEC), has fueled suspicion among industry insiders that UnitedHealth Group may be gaining an advantage for its subsidiary, UnitedHealthcare.

 The article aptly compares these health insurance exchanges to websites like Travelocity or Expedia where consumers can pick and choose the best deals for airline tickets or hotels. With the potential conflict of interest in the health care exchange, it would be akin to Travelocity or Expedia owning American Airlines or Marriot Hotels and thus potentially driving consumers to purchase their product based upon how that company portrays the available options.  As the article goes on to note:

If an insurance company had influence over the information technology architecture used to run the exchange, it could interpret federal standards in a way to exclude competitors or make it more difficult for them to win approval, say some insurance experts. Or it could have an inside track on knowing how to design plans that meet the standards.   

The contractors working on the exchange will also have responsibility over payment calculation for risk adjustment. 

This program is intended to redistribute funding from plans that attract younger and healthier participants, and thus have lower costs, to plans that attract people with more chronic diseases.   

The draft statement of work for the contract shows QSSI will also work on technical requirements to deliver financial management services, such as payment calculation for risk adjustment. 

The prospect that a subsidiary of UnitedHealth Group could have a role in calculating the reallocation of federal funds among rival health plans has unnerved some industry insiders.

In mid October, Senator Orrin Hatch sent a letter to DHHS Secretary Kathleen Sebelius asking for a full accounting of who received federal Obamacare contracts and what government officials signed off on those contracts. Sebelius has not responded. Hatch has also asked if Steve Larsen, a former official at HHS played a role in this contract:

Larsen left the Center for Consumer Information and Insurance Oversight, the office tasked with crafting rules for the national exchange, in July to take a job with Optum. It is not clear how long Optum was in consultation with QSSI prior to purchasing it. 

Shields Britt, the spokeswoman for HHS, said Larsen would have to comply with stringent rules. 

“Former HHS employees are subject to the strict ethics policies put in place at the start of this administration, which are some of the toughest ethics rules ever imposed on executive branch appointees, and those standards certainly apply here,” she said.

Optum, whom Larsen currently works for, is the subsidiary of UnitedHealth Group that bought QSSI, the company who would provide the information infrastructure for the exchanges.How's that for a revolving door between government and industry? What are those strict "ethical" standards? Those words ring hollow from an administration whose first choice for HHS Secretary, Tom Daschle, was a "policy adviser" (newspeak for lobbyist) at the firm that lobbied for United Health.

The rhetoric behind the Obamacare insurance exchanges is one of competition and consumer choice, but the truth behind it is nothing more than continued corporatism and conflicts of interest.

Crossposted here and here.