ImageLast week I described the election of November 7 as a hot-tempered bust-up and said the next two years would be a "morning after" in which voters will realize the implications of putting Democrats back in control of Congress. I listed the war in Iraq, immigration, the economy, federal spending and Social Security as issues voters said they were most concerned about (according to exit polls). This week we’ll discuss the morning-after affects of these last three. As a bonus, we’ll add corruption, since it also got a lot of voter- and media-attention in 2006.

The Economy.

Exit polls affirmed that many voters were upset about the economy. Analysts scratched their heads until they had no hair left, trying to understand why an economy as good as ours in 2006 was anything but positive. Unemployment is lower than it has been for at least a decade; taxes are low; and the stock market hit new all-time highs just before the election. Real incomes and pension funds are up for many workers. What is the problem?

In earlier columns I suggested that voters were disquieted by non-resolution of the war and by high gas prices. By objective measures the economy was strong, but these related factors unsettled voters. The stall in housing prices during 2006 also didn’t help voters feel prosperous. Certainly, the media have hammered the perception that economic times are "bad". If you hear "hard times" often enough, you might start believing it.

Unfortunately, perceptions can’t usually be defeated by data. A strong economy actually hurt the party in power because voters didn’t "feel" good about it. This delighted Democrats, and enabled their win, but it is now a political hot potato for them. The economy probably can’t be improved much, so what can Democrats really do to change voters’ perception?

In my experience, Democrats excel at the "perception" game. They have been playing it successfully for years, while data-minded Republicans stink at it. Dems know you counter a perception with actions that will be perceived as effective – even if they’re not. Thus, Pelosi & Co. will come out of the box with an immediate boost in the minimum wage. This won’t do diddly for the economy – and might actually hurt small businesses and low-wage workers – but it will be widely hailed for "empowering" working people. (Score 1 for the D-Team.)

Another early Democratic move will be to (try to) increase tax rates on the highest incomes and on dividends and cap-gains, so rich people will "pay their fair share". Again, zip for the economy, but perception is all. Not too many Democrats will be hit, since Hollywood liberals and other rich Democrats (like Teresa Heinz Kerry) have their megabucks in tax-sheltered investments. In a best-case scenario, the Dems’ move will actually fail, giving them an opportunity to flail the GOP for being the "party of the rich" – even though that moniker legitimately fits the Democrats.

Far-left Democrats would love to repeal the Bush 2001 tax-cuts, but they won’t have to. They need only to run out the clock until the cuts expire in 2011. This will stall the economy and might even crash the stock market. If it does, Democrats can depend on Big Media to help them sell the story that evil Bush policies were really the cause. (Remember, it’s all perception.)

Millions of voters will soon learn that they bought a pig in a poke with Democrats on the economy and taxes. Emotional votes for "change" were cast by many people who should have known better. This included my neighbor, who thinks Democrats will reduce Big Government, cut spending, and empower the states. (Oh Brave New World, that has such people in it.)

Federal Spending…

… has received so much Democratic attention that visitors from Mars might reasonably conclude that Dems are the historic party of fiscal discipline. But only people born after 1990 should buy that whopper. Democrats spent like drunken sailors from 1933 to ‘94. They made spending into a political art form by convincing Republicans to collect the taxes and be the "responsible" party, while they handed out the goodies and won elections. (Such a deal.)

Ronald Reagan was the first Republican to junk this idiotic arrangement. He never had a fully Republican Congress, but Mr. Bush did. Republicans made the most of it – surpassing even New Deal and Great Society Democrats. Unfortunately, they didn’t know when to stop. Profligate earmarks disgusted fiscal conservatives who wanted the GOP to restrain federal expenditures. Republicans probably deserved the butt-kicking they got from voters on this score. Yet studies consistently show that most communities quietly covet their federal grants, even as they denounce overall federal spending – a conundrum first mentioned in the Dead Sea Scrolls.

Of course, Democrats shared in the largess of earmarks, too, so they should share some guilt for the Congress’s spending benders. Why didn’t they get some of the blame? Because Republicans were supposed to "lead" on this issue. Voters punished them for not doing that.

So now Democrats are in the driver’s seat. Those same voters who booted Republicans for not leading might expect Democrats to lead on spending-restraint. But I wouldn’t hold my breath on this. Liberal Democratic leaders have no plans to decrease spending. They only have different ideas on where that spending should go. Any reductions will be indirect, since President Bush can be expected to veto some of the more wasteful Democratic proposals. This is spending-control by "gridlock". It produced a balanced budget under President Clinton (with a Republican Congress). Maybe it can work the other way. Don’t count on it, though.

Social Security…

… is still a "stealth" issue. Voters are vaguely troubled about it because all the publicity of Mr. Bush’s attempts to correct the system registered with them at some level. In a previous column I described the complex political dynamics surrounding this New Deal relic (1). Retired (or near-retired) people want no changes, so they’ll get their pension-checks. Workers age 30-50, occupied with career and family, hope the system will be sound when they retire. But they don’t really know the score. The youngest workers, whose future stretches over the horizon, haven’t a clue.

Meanwhile, the numbers march inexorably out toward the "crossover" point (2018), when payroll taxes will no longer cover benefits being paid, and finally to Trust Fund depletion (2041), when the Trust Fund will be gone and no other funds will be available (under current law). My children and grandchildren will be embroiled in the huge political battles that will occur when the bill for this riotously under-funded program finally comes due, if changes haven’t been made. An unspoken reason for legalizing illegal workers is the new money they will pour into the system.

Democrats are caught on the horns of a dilemma about Social Security. For decades, they have joyfully bashed Republicans with it and hurt them in elections. Whenever Republicans called attention to looming fiscal problems in the system, Democrats accused them of trying to rob poor seniors of their benefits and called them heartless. This Democratic tactic – known as "Lucy and the football" – has been successful beyond the wildest dreams of FDR and his Brain Trust.

Indeed, it has worked so well that Democrats could not resist using it again in the recent election. President Bush’s 2005 initiative to repair Social Security was like a gift from heaven. Dems instinctively bashed him and the GOP, as usual. But in their gleeful frenzy, they forgot about their traditional strategy of always letting the GOP take the heat for the system’s painful changes. They could have achieved this last year, thus wounding Republicans for a generation. However, GOP leaders like Speaker Dennis Hastert –aware of the game – refused to play unless Democrats played too. When Democrats wouldn’t help fix the system, Republicans let the issue go.

Thus, although Dems got political mileage out of Social Security one more time, they might have outsmarted themselves by winning a majority. Now they have the ball. If voters see them do nothing, Dems might pay a price in future elections. But if they tackle the problem and actually accomplish something, they’ll take heat for afflicting younger voters with higher payroll taxes and lower benefits. Social Security isn’t called the "third rail" of American politics for nothing.

Corruption…

… is so much fun for politicians to run against. You simply cannot go wrong. Of course, everyone thinks corruption is bad. (Who could think otherwise?) The problem is that corruption isn’t localized to one party. In 1994, Republicans pretended it was. They got elected in great numbers – although not solely due to Democratic corruption – then spent twelve years showing that corruption shops both sides of the aisle.

In the Bible Jesus said, "You always have the poor with you." (2) On the occasion when he said that, critics had cluck-clucked over an act of worship involving some expensive perfume, saying its price could have been better spent on "the poor". Jesus’ answer tells us that the poor shouldn’t be used as a convenient club to hammer someone’s spending or lifestyle.

The same could reasonably be said of political corruption. It’s always around because the money involved is irresistible to some politicians. This doesn’t mean we should tolerate corruption – any more than we should tolerate poverty – but that we should not regard it as something unique that has never happened before. Many voters seem to have forgotten that on November 7th.

We got a quick tutorial on corruption’s ubiquity right after the election. After announcing that she would preside over "the most ethical and open Congress in history", House Speaker-elect Nancy Pelosi (D-CA) threw her support behind John Murtha (D-PA) for House Majority Leader. Mr. Murtha has been a vocal critic of the Bush Administration’s war policies – arguing strongly for immediate return of the troops and abandonment of Iraq. Some politicians – evidently including Mrs. Pelosi – believe Mr. Murtha’s criticism of the war keyed the Democrats’ electoral success. The Speaker-to-be wanted to reward Mr. Murtha for his role in their victory.

Since many voters can’t remember back twenty-five months, let alone twenty-five years, perhaps Mrs. Pelosi thought Mr. Murtha’s status as an "unindicted co-conspirator" in the Abscam scandal of 1980 was long-forgotten. But her fellow Democrats showed that they remembered. In a stinging rebuke to Mrs. Pelosi, they chose Stenny Hoyer (D-MD) over Mr. Murtha, 129-86.

Thus does corruption continue to strike, viper-like, at those who ignore it. We haven’t seen the last of it in our future governments. This, too, is part of the "morning after" of the glorious new Democratic Congress of 2007.

Good luck, Democrats. You (and the country) are going to need it.

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(1) "Secrets of Social Security"; 23 December 2004. http://www.ahherald.com/atlarge/2004/041223_soc_security.htm

http://www.ahherald.com/atlarge/2004/041223_soc_security.htm

"The Real Social Security Problem"; 15 December 2005. http://www.ahherald.com/atlarge/2005/051215_soc_security_problem.htm

http://www.ahherald.com/atlarge/2005/051215_soc_security_problem.htm

(2) Matthew 26:11.