Wednesday
Apr232008

Hillary's Odd Choice

Yesterday Senator Clinton avoided elimination by winning the Pennsylvania primary by an impressive 10 percentage points.  Then IMHO she wasted her 10 minutes of free nationwide (cable) news coverage.  Why? 

Senator Obama got quickly and graciously through the obligatory congratulations and thanked and praised his supporters in Pennsylvania.  Then he segued into courting voters in the next elections with a short version of his standard stump speech (which is pretty good BTW).  In contrast, Clinton made her whole speech a victory celebration for herself, her family, her supporters, the Pennsylvania voters, etc. and really devoted no attention to courting voters in the next elections. 

In the sports world, we would think it odd that a team down 3-0 or 3-1 in the World Series or Stanley Cup series would celebrate so heartily after winning the next game.  Instead, we would expect it to focus immediately on the problem of winning 2 or 3 games straight to take the championship. 

All the pundits say raising money and corralling superdelegates are more urgent problems for Clinton than getting votes in the upcoming primaries.  But I don't see how she advanced either of those goals by using precious free air time the way she did.  Odd. 

Saturday
Apr192008

Car of the Future

If you're interested in how automobile technology may change to reduce energy consumption and reduce greenhouse gas emissions, don't miss The Car of the Future on NOVA Tuesday, April 22 on PBS.  It is hosted by NPR's "Car Guys," and they did extensive interviews with Joe Romm who really knows what he's talking about.  Even better advice, if you're interested in these issues, follow Joe Romm's blog

PBS has posted on its website 30 clips of "Romminations" about this.  His bottom line seems to be this:  Hydrogen fuel cell cars commercially viable?  Not in your lifetime and probably never.  Plug-in hybrids?  Definitely, while I'm still young enough to drive.  Oh, and you could review my early post showing one reason why the hydrogen car can't pass the plug-in hybrid. 

Now I'm going back to trying to understand if corn-to-ethanol is a good thing or a bad thing.  (I'm already pretty sure it's not an absolutely terrible thing, which was my hypothesis when I started that project.) 

Monday
Apr142008

There's a problem with the economy.

Paul Krugman’s Crisis of Confidence column today is excellent. Recent polling shows more Americans feel their economic circumstances declining more than at any time in 44 years. He points out that the traditional measure of American prosperity, rate of change in GDP, masks the fact that the Middle Class is declining even when GDP is rising. I made this point in an earlier post and presented some graphics showing the trend started in 1973 and is getting worse.

PK points out in one of his recent blog posts that changes in the traditional “unemployment rate” mask a long term, persistent increase in underemployment and working age Americans who have given up looking. PK commented favorably there on a similar Floyd Norris blog post with a better graphic. Open the Norris graphic and notice that among men 25-54 the rate of joblessness (i.e. those who for whatever reason are not working) used to fluctuate around a mean of about 7 percent. From 1973 to 1983 it climbed to 15 percent and since then has been fluctuating around a mean of about 12 percent. Something broke in the 1970s and never got fixed.

High joblessness rates and declining median real household incomes may overlap a bit, but one does not fully explain the other. More middle class Americans are without jobs and those who are working are earning less on an inflation-adjusted basis.

Wednesday
Apr092008

Another milestone on American Have-Nots' journey to having less

For the first time since WWII, inflation-adjusted median family income will be lower at the top of a cyclical expansion than it was at the top of the previous cycle.  The New York Times has the full story and a graph here.  That means that more than half of American families were worse off at the end of the economic recovery that ended in 2007 than they were in 2000. 

As I pointed out in an earlier post, the decline of the American Middle Class started in 1973.  It is now plain that in families with $60,000 of annual income the children should expect their lives to be no better and probably worse income-wise than their parents'.  Can we use the phrases "great nation" and "declining middle class" in a sentence that doesn't make us blush? 

Saturday
Apr052008

This is weird.

One of my early posts was titled "The Recession Is Coming! The Recession Is Coming!"  Now I hear these words coming out of the mouth of a Presidential candidate.  No, I don't think she reads my blog. 

Monday
Mar242008

Innovations in Financial Engineering

The decades-long push to the nearly complete deregulation of banking was supported rhetorically by the idea that regulation was stifling innovation in finance.  Now that we've had a chance to dig through the wreckage of Enron, Bear Stearns, and many others, a couple of things seem obvious about financial innovation.  One, in a broad sense there isn't any financial innovation--it's all about leverage and obfuscation of risk, just like it's always been.  Two, although innovations that get adopted in other fields generally displace permanently something inferior and ultimately lead to something even better, in the financial field "innovations" often fail and have to be replaced by the "way we used to do it." 

Monday
Mar242008

A good explanation of the sub-prime mortgage melt-down and the very big implications.

Those trying to understand what's going on in the financial markets and financial institutions--the sub-prime mess and beyond--will find this interview very helpful.  Paul McCulley is an economist and managing director of PIMCO, the leading debt fund manager.  Read the whole thing if you have the time, but here are some of his views in brief. 

Financial markets and institutions must be regulated because (as George Soros and others have previously said) the nature of these markets is to go crazy first in one direction and then the other.  The granting of authority to banks to regulate themselves (in other words de-regulation) has been been a disaster.  Instead, the Fed should have been extending its regulation to non-banks, as it has the power to do and is now about to do too late. 

The carnage will continue and get worse unless the federal government steps in with taxpayer money to assume some of the risks.  His portrayal of what's happening at the kitchen table and neighborhood level to drive headlines is very helpful.  Abhorrent though it is to allow home "owners" who took zero-down loans to get their debts reduced in size, not doing that will be much worse for the equity their neighbors may still have.  Chaiman Barney Frank is working on a bill to do this and other important things, but the White House and Senate Republicans are in opposition (and denial). 

Investors fleeing collateralized debt obligations have gone into commodities (like oil and gold) in a big way, pushing those prices above sustainable levels.  Commodities may be the next bubble to burst. 

To see these views from a self-described optimist is pretty scary.  Not quite Ann Coulter scary, but pretty scary.  BTW, as best as I can tell from looking at the PIMCO website, it does not invest in home mortgages or derivatives based on them.  PIMCO manages at least one large mortgage backed securities fund.  (Corrected 5/15/08.)

Monday
Mar172008

Exclusive Interview with Donald Rumsfeld about Iraq

Realitybase has obtained this exclusive transcript of an interview of Secretary of Defense Donald Rumsfeld in late May 2003 about the Iraq war plan and the dismantling of the Iraqi army.

Rumsfeld was interviewed by his dentist, Dr. Painless, while sedated with sodium thiopental. Not a lot of dentists use this drug anymore, but Painless likes it because patients don’t feel pain and because the “truth serum” properties let him elicit candor while he’s literally pulling teeth. Fortunately, long-time dentists like Painless can understand what a patient is saying with two hands in his mouth. Nevertheless, Realitybase regrets that there a few places where even Dr. Painless could not decipher the audio recording.

Painless: Congratulations on your victory in Iraq. That was a great picture of the President standing on the carrier deck in front of the big “Mission Accomplished” banner.

Rumsfeld: Thank you.

Painless: By the way, what was the mission exactly?

Rumsfeld: Regime change. Kill or capture Saddam and his family and top lieutenants, install Ahmed Chalabi as the head of a new government, and come home. That’s it in a nutshell.

Painless: What about the weapons of mass destruction? We were all really worried about those. Did we find them and get them under control?

Rumsfeld: No need to. The Iraqi army has them.

Painless: That doesn’t sound good. Wasn’t the purpose of the invasion to prevent the Iraqi army and Al Qaeda from threatening other nations with those weapons?

Rumsfeld: No, I just told you. The mission was regime change. Of course, the Iraqi army will tell us where all that stuff is, and we’ll keep tabs on it. Not to worry.

Painless: So is that why the Iraqi military and police are not stopping the looters? They’re all guarding the weapons of mass destruction?

Rumsfeld: The media are being so irresponsible in exaggerating that stuff! Besides, US and coalition troops are all over the only strategically important places—the oil ministry and oil facilities.

Painless: I’m just a dentist, but wouldn’t it make more sense for coalition troops to be “all over” the weapons of mass destruction—as well as the stockpiles of conventional arms—and have the Iraqis secure the infrastructure and prevent all that looting?

Rumsfeld: [Undecipherable.]

Painless: I heard we’re only going to have about a third as many troops in Iraq as General Shinseki said we would need to secure it. How are you going to make that work?

Rumsfeld: Shinseki was right that we don’t have enough troops in all of the Army, Marines, and National Guard to run the place. But we’re not staying. We never planned to stay. We’re turning security and reconstruction over to the Iraqis as fast as we can. Tommy Franks is retiring, and General Whats-His-Name will supervise the redeployment home, starting in less than 90 days.

[Editor’s note: That this was the plan was confirmed in the New York Times, Fateful Choice on Iraq Army Bypassed Debate: “The plan was outlined in a PowerPoint presentation that Douglas J. Feith, a senior aide to . . . Rumsfeld, gave a National Security Council meeting that Mr. Bush convened on March 12, eight days before the invasion began. Republican Guard units, the forces deemed most loyal to Mr. Hussein, were to be disarmed, detained and dismantled. But the rest of the army would be retained. Three to five of the divisions would be used to form the ‘nucleus’ of a new Iraqi Army, according to a copy of the slide, which was obtained by The New York Times. Other Iraqi troops would be used as a reconstruction force to rebuild the nation.”]

Painless: But aren’t Saddam Hussein and dozens of his top officials still on the loose? If we leave, won’t they just come out of hiding and take over the army, the WMD, and the government again?

Rumsfeld: Well, that is a problem, and we’re working on it.

Painless: So, what was the contingency plan for this—in case Saddam and his henchmen were not rounded up during the battle and it was necessary to stay for a while and try to run the place without enough troops?

Rumsfeld: As you know, you go to war with the war plan you have. It’s not the war plan you might want, or wish to have at a later time.

Painless: So, what are we going to do?

Rumsfeld: Already done it. Jerry Bremer issued orders on May 23 dissolving the Iraqi army and throwing all the Baathists out of the Iraqi government.

Painless: Yeah. I heard about that. Tell me, what did the President think about that big change in plan so soon after “Mission Accomplished?”

Rumsfeld: Jerry told him he was going to do it, and the President agreed. The President believes in delegating everything to his field commanders.

[Editor’s note: The President’s prior approval was also reported in Fateful Choice on Iraq Army Bypassed Debate.]

Painless: But Bremer issued those decrees before he had been in Iraq for even two weeks. Did the President think he was already an expert? And what did our generals in Iraq think about that?

Rumsfeld: [Undecipherable.]

Painless: Just one more question. If the Iraqi army doesn’t exist anymore, who’s controlling the weapons of mass destruction?

Rumsfeld: Not to worry. We have really good intelligence on that. We know right where they are, and our troops will secure them.

Painless: OK, all done here. Take some Tylenol if you have any discomfort. I need you back here in a week.

Rumsfeld: Why do I have to come back? I already had my wisdom teeth out years ago.

Painless: Obviously. I need to do a little more work on your chewing teeth. I’ll use laughing gas next time.

Thursday
Mar132008

Skeptic is on geek leave.

Sorry I haven't been posting.  I've been installing a new computer and wireless network.  Transferring data and programs.  Learning new software.  Triumphing over adversity.  Back soon. 

Thursday
Feb282008

The Democrats' Choice: Manager or Visionary

That's the title of Ezra Klein's article analyzing the difference between Clinton and Obama.  I had posted something like this earlier, but Klein deals with it at greater length and sums it up more precisely. 

After pointing out that there appear to be only subtle differences between Clinton and Obama on key economic issues, Klein says:

"Which gets to the real difference between the two candidates, . . . how they conceive of the president's role . . . .

"Where Obama speaks of trends and values, situating his policies within the broader forces shaping our culture as well as our society, Clinton speaks of individual problems and solitary obstacles, offering her proposals as discrete solutions to identifiable challenges. . . .  'The next president,' she said [in Knoxville, Iowa], 'will be a steward of our economy at a time when the bills from eight years of neglect and mismanagement will be coming due.' 

. . . .

"Obama's advisers, by contrast, are likely to point you toward his speech at the NASDAQ, which highlighted his desire to transform our economy through the application of moral leadership.  There, Obama went before an audience of bankers and stockbrokers and spoke, not of our growth numbers or our credit problems, but of our economic values . . . ."

[long, illustrative quotation from that speech omitted here]

. . . .  Clinton, as steward, promises to better manage our economic policies.  Obama, as moral leader, promises to better our economic politics.

. . . .

. . . [S]he largely accepts the circumstances [of prevailing economic principles and beliefs], or at least her inability to change them through the application of her own charisma.  Obama, by contrast, focuses more on changing the circumstances in which the legislation is made.  The promise of his presidency is less its capacity to change our policies than its capacity to change our politics." 

According to Klein, Obama seeks political transformation and quite overtly models himself on Franklin Roosevelt and Ronald Reagan, both of whom led transformations.  In contrast, Klein says, Hillary's plan is to be a somewhat more liberal Bill Clinton, who, "in a sense, was the progressive steward of the Reagan Revolution."  For example, it was Clinton, not Reagan, who declared, "The era of big government is over." 

I think Klein's piece is brilliantly insightful about this.  I take it a bit further. 

A visionary can potentially rely on others for implementation, but the opposite division of roles absolutely doesn't work.  Only the President can get into the bully pulpit, get national media coverage, and sell a vision.  It can't be done by the Secretary of the Treasury, the National Security Advisor, by an ex-President living in the White House, a Vice President, or a mere Senator from Illinois.  So, with Obama we could possibly get vision and implementation, but with Clinton what we see is what we'll get. 

So what's my choice here? 

I'm so fed up with "voodoo economics" (as it was accurately labeled by George H. W. Bush), which became Reaganomics, and large parts of which became today's conventional wisdom, that the prospect of another transformation is very appealing to me.  But transformation to what?  Visions are inherently general, value-laden and unprogrammatic.  Consider these Reaganisms:  a shining city on the hill, smaller government, a world free of the threat of nuclear weapons, personal responsibility, family values. 

Obama's economic vision is also--well, visionary--in his NASDAQ speech, where he borrowed heavily from the words of FDR in 1932:  We should not sit idly by and let our economic problems consume us.  Every American has a right to live comfortably.  Government must favor no small group at the expense of all its citizens.  Responsible heads of finance and industry, instead of acting each for himself, must work together to achieve the common end.  A renewed trust in the market and a renewed spirit of obligation and cooperation between business and workers.  A new social contract.  (Reportedly, this audience was able to contain its enthusiasm.)  Nothing specific here about NAFTA, WTO, globalization, tax policy, balanced budgets, regulation of financial institutions, Social Security and Medicare reform, health care, education spending, or any other program. 

A visionary creates discomfort because, although greater change is possible, we can't confidently foresee what the new programs will be.  Many Democrats will be more comfortable with the idea of just getting back into power with sufficient majorities to ram through specific programs they have in mind.  I voted for the visionary. 

Thursday
Feb282008

The best argument for "free trade"

You won't get that from me.  I am Skeptic. 

A Los Angeles Times editorial today again urges us to "embrace" free "trade," which is the misleading term they and others use to imply that when barriers to international movements of goods, services, and capital are eliminated everything will be in balance.   The New York Times also regularly exhorts us to "embrace" this globalization.  Indeed, this is the view of so many other elites that it can be fairly called conventional wisdom.  I wrote this letter to the LATimes, and I invite anybody else to help me "embrace" the conventional belief with evidence and analysis. 

Clearly the Times believes every agreement that encourages movement of goods, services, and capital across all international borders is good for America.  What’s your best argument why we should believe that? 

Can you make the case with real-world data?  If you don’t know how much the winners won or the losers lost, how can you say the net was positive? 

If you make the theoretical argument that trade benefits both nations, how do you deal with the fact that trade theory assumes full employment in both nations and no cross-border movement of capital?  The most significant effects of our “trade” agreements are freer capital flows, and there is no full employment anywhere. 

And what exactly is our retrained and better educated work force going to make here and export?  Even traditional export powerhouses like Boeing and Caterpillar are manufacturing more abroad and less at home. 

BTW, I wouldn't normally put this letter on my blog until after the LATimes rejected it, but I am highly confident they will not print it, in part because they did print my letter on another subject less than 2 weeks ago. 

Sunday
Feb172008

Bush has caused more HIV/AIDS than he has cured. (Guest Blogger)

There is no administration in history that has done more to spread STDs [sexually transmitted diseases], including HIV/AIDS in this country, than George Bush’s. No funding for family planning, no funding for STD clinics, no funding for sex education in school UNLESS ONLY ABSTINENCE IS TAUGHT. Can't teach the use of condoms to prevent STDs, oh no!! This all was brought up in keynote address at our Infectious Disease Society meeting by King Holmes, professor of Medicine, U. of Washington, Seattle, who has studied STDs all his career, and he got a 5 minute standing ovation from 10,000 Infectious Disease specialists. Now GW wants to take credit for helping AIDS victims in Africa. ID docs all over the country are puking up their breakfasts as they read the Sunday morning paper.

Posted by ID Doc

Friday
Feb152008

How Obama can beat McCain

If Obama is the Democratic nominee, he should argue that a vote for McCain is a vote for George Bush's third term.  Not only would this turn centrists against McCain, but it would also split the GOP base if McCain tries to distance himself from Bush. 

Rhetorically, this could be done with examples like this:  Do you want a federal government of checks and balances and power shared with Congress and the judiciary, or do you want a third term of George Bush's imperial presidency?  Do you want a federal government that will respond immediately to natural disasters or a third term of George Bush's incompetent presidency?  Do you want a government that speaks the truth to the American people or a third term of George Bush's lying and document-destroying presidency.  Do you want a government that realizes that too large a share of the costs of government has been shifted by the Republicans onto the Middle Class, or do you want a third term of George Bush's elitist presidency?  Do you want a federal government that awards contracts to the best-qualified and lowest-cost bidders or a third term of George Bush's crony presidency?  Do you want . . . or a third term of George Bush's . . . presidency? 

This strategem wouldn't work for Hillary because she is already portrayed as the candidate for Bill's third term.  Emphasizing that would diminish Hillary and help McCain unify and energize his base. 

Friday
Feb152008

More Pete Peterson obliviousness

Pete Peterson will fund a tax-exempt organization to increase public awareness of his economic theories, according to this NYTimes piece.  Based on his previous statements, these will be the simple-minded laissez faire theories he imprinted on in the 1950s, comporting less with today's economic realities, or with current economic understandings, than they do with, say, creationism. 

In looking up the link for the article reporting this today, I noticed that the New York Times has a series of articles, Age of Riches, which explores the effects of wealth concentration to a degree not seen in America since the 1920s.  According to an earlier story,

"The new titans often see themselves as pillars of a similarly prosperous and expansive age [comparing to the Gilded Age before WWI], one in which their successes and their philanthropy have made government less important than it once was." 

Well, less important to them certainly, but not unimportant because who but government could set the tax rate differentials that create profitable arbitrage opportunities to change one form of business organization to another and then back again?  Peterson can put gazillions behind his propaganda mission in large part because his income at the Blackstone Group was taxed at only 15% as a "carried interest."  He concedes other tax rates might have to go up but not that one. 

Before he decided on this particular "philanthropy," Mr. Peterson should have spent time in a Wal-Mart store, where 90% of Americans shop, and followed a few customers home to see how their families live and find out what would improve their lives.  If he were promoting economic theories that would help them--and not just the already super-rich--move ahead, that would be philanthropy. 

Attention, Wal-Mart shoppers:  Government is not less important for you. 

Friday
Feb082008

Clinton succeeds Edwards as champion of the downtrodden and hopeless?

In a previous post, I presented a chart showing that real incomes for the bottom half or more of American families have been stagnant since 1973 and have declined markedly since 2000.  In his column today, David Brooks describes the endemic problems and pessimism of the non-college educated.  (Lack of education is strongly correlated with lower incomes.) 

"High school grads are much less optimistic than college grads.  They express less social trust.  They feel less safe in public.  They report having fewer friends and lower aspirations.  The less educated speak the dialect of struggle; the more educated, the dialect of sef-fulfillment."

But they are grounded in reality, are they not?  If the past 35 years, and especially the last 8, are any guide, there is no American dream for them:  They should not expect to rise higher economically than their parents or that their children can do so.  Their incomes are stuck, public K-12 education is declining in quality, higher education (even "public" colleges and universities) is increasingly unaffordable, as is health care, energy, and recently food. 

Brooks makes the interesting observation that many more of these folks support Clinton than Obama.  Apparently, Obama's hopeful message does not resonate because they have given up hoping for something better and simply want a champion to help them struggle to keep what they have.  Could be, but then why did Edwards not do better with his much stronger champion-of-the-little-guy message?  Maybe it was not the message but the messenger. 

Thursday
Feb072008

Subprime loans like investments in the Third World?

I reacted to some of the comments to this post on Paul Krugman's blog by posting my comment.  It's #21.  I point out there that increased inequality of income and wealth is likely contributing to our economic malaise by constraining consumption, a point that is more germane to this earlier Krugman post, Third World America.  PK briefly discusses there a recent paper by others that shows how petrodollars pumped into the economies of developing countries led to the financial crises of those nations in the 1980s.  The paper suggests that a trillion foreign dollars have recently been invested in a "developing economy" within the USA--undersecured housing loans that are sure to generate major losses, raising the question whether the resolution of this will also involve a financial crisis.  Several comments to that post are insightful. 

Thursday
Feb072008

Universal health care using vouchers instead of mandates?

Peter Fuad has posted as comment #5 to this Paul Krugman post a very clever idea to improve and reframe the Democratic proposals for universal health care.  In addition to improving the workability of "mandates," it co-opts the Republican language of "vouchers."  Fuad points out that what is at stake is not a socialized medical delivery system but a socialized medical payment system. 

Tuesday
Jan292008

Why has the Bush economy been so lousy?

This is the title to a recent post on Paul Krugman's blog raising the questions of what has gone bad and how much is Bush's fault. 

I commented (#13 by Roger Chittum) that PK can indeed blame Bush for the recent tripling of oil prices because the range of world oil prices is politically administered by the governments of producing nations (except during times when demand is so slack that they can't maintain production discipline amongst themselves).  In a later post, PK indicates he is not impressed by non-market factors in oil pricing.  I respectfully disagree and think, on this narrow issue, I may have better information than he does. 

Another comment (#22 by Karl Smith ) is a very thoughtful and apparently informed discussion of the difference between the real economy and the financial engineering economy and why the latter has recently done much better than the former.  I want to know more about the two economies. 

Saturday
Jan262008

Obama is the only Democrat running for President.

I just watched the results of the South Carolina Democratic primary, Obama's victory speech and the non-concession speeches of Clinton and Edwards.  Suddenly the essential meaning of the whole campaign emerged--they are running for three different jobs.  Obama is running to be head of state, Clinton is running to be head of government, and Edwards is running for a job that doesn't exist (unless he's running for Vice President or his old Senate seat). 

In corporate terms, Obama talks like a chief executive officer, and Clinton talks like a chief operating officer with the job of making sure the organization efficiently implements the boss's vision.  Obama is about vision, inspiration, and working together, while Clinton is about tactics, overcoming obstacles, and enforcing discipline.  Obama inspires like Jack Kennedy and Ronald Reagan, and Clinton sounds like a cautious and competent George H. W. Bush.  There are only ten days left, and television advertising is a poor way to communicate these differences, but if Super Tuesday voters see it this way, Hillary is toast. 

Friday
Jan252008

Business people abandoning the Republican ship?

Many business people are abandoning the GOP because most businesses, especially small and medium sized firms, historically have done better when the Democrats were in power, according to John Dean.  He explains that many business people do not like Mr. Bush's War, deficit spending, focus on abortion and gay marriage, exclusion of immigrant labor, spiraling health care costs, and environmental deterioration.  To this I would add that many business people hate incompetence and passivity; see for example this excerpt from Lee Iacocca's new book.  Dean notes that the Wall Street Journal, in GOP Is Losing Grip On Core Business Vote, has described this as an "elephant stampede."

This does not necessarily mean Happy Days Are Here Again for the Democratic Party.  More likely the opportunity presented by the Republican unraveling means intensified struggle for control of the Party's agenda, soul, and direction of growth.  Democrats are conflicted about which of those fragments to court and what expanding its coalition might do to the Democratic agenda. 

Although he updates the specifics to 2008, Dean's observation that Democrats can appeal to a significant part of the Republican coalition by having economic policies that work better is not new.  A core idea of the 1980s Democratic Leadership Council was to enlarge the Democratic Party tent in that direction.  President Clinton pushed through NAFTA, which had been negotiated by a Republican administration, embraced welfare reform, and declared that "the era of big government is over."  Rounding up the stampeding elephants continues to be a goal of the Clinton wing or "business Democrat" wing of the Party.  This may partly explain why House Democrats agreed this week on an economic stimulus package heavy with business subsidies that will enhance after-tax bottom lines but not stimulate domestic investment or consumption.   

Other Democrats feel that the Party cannot deliver on the needs of its labor and economically disadvantaged constituents if it has to compromise much with a business constituency.  This would be "the Democratic wing of the Democratic Party," as Howard Dean described it in 2004.  John Edwards makes the point more starkly when he refuses lobbyist and PAC money and says he will not negotiate America's new national health care plan with insurers and drug companies but will, instead, fight to overcome them on behalf of working people. 

The "Democratic wing" would prefer to enlarge the Party tent in different directions.  For example, they see that many religious conservatives share the Party's social and economic justice agenda and cannot abide the laissez faire capitalist ideologs who control the GOP's economic agenda.  (Recall Mike Huckabee's recent criticism of the Club for Growth by name.)  It seems the aging Moral Majority part of the GOP coalition does not speak for younger evangelicals, who have, instead, been receptive to the Democratic economic and environmental messages.  Naturally, the pro-choice, gay-rights, and secularist groups in the Party are concerned that expansion in this direction will sacrifice their dearest issues to a broader social and economic justice agenda. 

At least the Democrats have choices about which parts of the Republican Humpty Dumpty to try add to the Democratic Party omelet.  The Republican challenge is to try to make up their losses by creating new fault lines among independents and Democrats.  So far, they're trying fear of terrorism and nuclear-armed rogue nations, xenophobia, and some other wedges of dubious effectiveness.  It's the Democrats' game to lose this year.