Happy Holidays to everyone!

I hope everyone has a very Happy Holidays. I will be out of town for about a week. I will resume my explorations just before the New Year.

The 2010 Senate Race in Kentucky

Kentucky’s Jim Bunning will be 79 when he is up for re-election in 2010. Will he retire? Earlier this week, he said that he would run for re-election. He has also stated a fundraising goal of $10 million for this next cycle. That is significantly more than the $6.5 million he raised when he barely defeated Dan Mongiardo in 2004. Mongiardo, elected Lt. Governor in 2007, spent $2.9 million against Bunning that year. On September 30, Bunning reported having just $175K on hand. When will we know if he will retire? In the last cycle, the earliest retirement announcement came in January 2007 (Allard), although the bulk of such announcements came in the September-October timeframe.

Until this year, Kentucky had voted for the winning Presidential candidate every year since 1964. It supported Carter once and Clinton twice. This year, it went for McCain. Senate majority leader Mitch McConnell was re-elected this year by a 53% to 47% margin. He out spent his Democratic opponent, Bruce Lunsford, by a substantial margin, $21.0 million to $10.7 million. Four of the six members of the US House representing Kentucky are Republicans, as are both US Senators. However, in 2007, Kentucky elected Democrat Steve Beshear as Governor, giving him 59% of the vote. Along with Beshear, the state elected Democrats to five of seven positions in the State Government.

So, the state is a mixed bag with respect to Political Party. It is likely that a strong and well-financed candidate may fare well against Bunning. Lt. Governor Dan Mongiardo is considering a run in 2010: he narrowly lost to Bunning in 2004. He was elected in 2000 to serve in the State Senate before his US Senate campaign in 2004. He followed that with last year’s successful run as Lt. Governor tied to Beshear. Should Mongiardo opt to run for the Senate, he will start in the hole: his latest FEC disclosure reveals $600k in debt.

There is also significant discussion about 6th District Congressman Ben Chandler entering the race. He served as Kentucky’s State Auditor for four years and then as Attorney General for eight before running for Governor in 2003. He lost to Republican Ernie Fletcher in the General Election, but ran for and won a special election for Fletcher’s former seat in the US House. Chandler ran successfully for re-election in 2004, 2006 and 2008. In 2006, he had no Republican opponent. In 2008, he gathered 65% of the vote against an opponent who filed no campaign disclosures. This allowed Chandler to have over $1 million on hand as of November 24.

It is logical to think that Bruce Lunsford might be considering another run. He has not had success in three previous campaigns: he dropped out of the Primary for Governor in 2003, lost in the Gubernatorial Primary in 2007, and lost in a bid for the US Senate this year. That race for Senate against McConnell, however, gained considerable attention nationally. He wound up losing by 6%, but forced McConnell to spend his entire $20 million war chest on the race, thereby leaving him unable to assist other Republican Senate candidates. Will Lunsford run a fourth time? This is unclear, although he does not seem to be getting as much support as other potential candidates.


State Auditor Crit Luallen was given consideration as a candidate to face McConnell this year, but opted not to run. She has a long history of work in State Government, and has been elected twice as State Auditor, in 2003 and again in 2007.

Former Customs Agent Darleen Price has announced her candidacy. She served in the US Army Military Police Corps and has published a book on her experience in the Dept of Homeland Security entitled “BorderGate”. It details her battle against corruption in that agency.

Attorney General Jack Conway may have higher aspirations, but it is probably too early for him to consider this race unless the several other candidates mentioned above opt out. He did win his post in 2007 with 60% of the vote. He ran against former Rep. Ann Northrup in 2002, and helped Yarmuth defeat her in 2006.

Whether or not Bunning retires, this is likely to be a competitive race in 2010. An informal poll on DailyKos shows most support going for Mongiardo, Chandler, and Luallen. Any of these would give Bunning a challenge should he run, and perhaps be the favorite should he bow out.

More on the 2010 US Senate Elections: Is Grassley’s Seat in Iowa Vulnerable?

Chuck Grassley has served in the United States Senate for nearly 30 years. When he entered the body in 1981, he had served for 15 years in Iowa’s State House and another six years in the US House of Representatives. When he comes up for re-election in 2010, he will have served in elective office for more than a half century. In each of his last four Senate elections, he won with more than 65% of the vote. However, he will be 77 years of age when he would next need to seek re-election.

If Grassley does seek re-election, is he vulnerable? Iowa has become more and more Democratic recently. It has voted for Democratic nominees for President five of the last six elections. The top five positions in the State Government are held by Democrats. In 1998, Tom Vilsack became the first Democratic Governor in 30 years. When Chet Culver was elected to succeed him in 2006, it was the first time in 70 years that the State had elected Democratic Governors back-to-back. The State Legislature is firmly under Democratic control. Three of Iowa’s members of the US House of Representatives are Democrats. However, when Grassley last ran, his opponent raised just $136,000 for the race. I guess a pertinent question is: when has a well-financed campaign been run against him?

What Democrats may choose to challenge Grassley, or run for the open seat should he retire? Former Governor Tom Vilsack’s name seems to be highest on everyone’s list. He began his political career in 1987 when he was elected Mayor of Mt. Pleasant. He moved on to the State Senate in 1992 before mounting his successful campaign for Governor in 1998. He was re-elected in 2002. In 2005, he began a two-year term as President of the Democratic Leadership Council, a highly influential organization within the Party. He briefly ran for President in late 2006 and early 2007, and was given consideration as a Vice Presidential candidate in each of the last two elections. Vilsack would appear to be the favorite should Grassley retire. There is discussion that a Vilsack candidacy would be the first serious challenge launched at Grassley in many years, one that might even provoke the Senator to decide to retire. In any case, the nomination would seem to belong to Vilsack should he want it.

Should Vilsack not run, who else might seek the seat? Lt. Governor Patty Judge would likely to be interested. Judge served two terms in the State Senate and two as Iowa’s Secretary of Agriculture before mounting a run for Governor in 2006. She ultimately bowed out in favor of Chet Culver, and became the candidate for Lt. Governor on the ticket that was ultimately successful. She will be 67 in 2010, which certainly is not an unreasonable age to seek the post.

Rep. Bruce Braley just won his second election to the US Congress. He won in 2006 claiming the seat after Republican Jim Nussle choose to run for Governor rather than for re-election. An attorney, Braley has also served as President of the Iowa Trial Lawyers Association. Although he won the seat in 2006 with 56% of the vote and raised $2.5 million in the process, he went on to raise just $1.1 million in winning re-election this year. He did win handily, with 64% of the vote, but the “average” level of fundraising does not, perhaps, represent the effort of someone with higher ambition.

Although I have heard no rumors to the effect, one cannot overlook the possibility that Iowa Speaker of the House Pat Murphy might have the desire to seek higher office. He will be just 51 in 2010, but will have served 20 years in the Legislature at that time. He has been quite involved in recent efforts to win a majority of seats in Iowa’s delegation to the US House as well as in the State Legislature for the Democratic Party. It will be of interest to see what Murphy’s next move might be.

If Grassley chooses to retire, I imagine the Democratic candidate will be favored. In any case, Tom Vilsack seems to be the most likely challenger or favorite, depending on what Grassley chooses to do.

Another Potentially Vulnerable Republican Senate Seat for 2010: Pennsylvania

Today, I continue my examination of Senate seats that will likely have competitive races in 2010. In three previous posts, I examined Republican-held seats in North Carolina, Ohio, Missouri, and New Hampshire, and all the seats held by Democrats that may prove competitive, focusing on North Dakota and Arkansas. Today, I will consider the first of two seats held by multi-term aging Republican Senators in states that have been voting Democratic in national elections in recent years.

Pennsylvania Senator Arlen Specter is serving his fifth term in that body. At the end of the current term, he will have spent 30 years in the position. He is among the last moderate Republicans in the Senate, actually receiving a score of 60% from the Americans for Democratic Action, putting him ideologically closer to his Democratic colleagues than those in his own Party. He will be 80 years old when he would need to run for re-election. In 2004, he faced a formidable Primary challenge from the very conservative Pat Toomey: Specter barely won 51%-49%. Many believe that Toomey will mount another campaign for the 2010 cycle. In any case, the Democratic Party will set its sights on this seat.

Governor Ed Rendell would make the most formidable Democratic candidate. If Specter retires, many believe that Rendell could walk into the post. Even if Specter does seek another term, Rendell may well prove to be the favorite in this state which has voted Democratic in the last five Presidential elections. Rendell has a long history in Pennsylvania politics. He was elected District Attorney of Philadelphia in 1977 and served two terms before opting to pursue the 1986 Democratic nomination for Governor. He lost in the Primary to Robert Casey, Sr., who was elected that November. The following year, Rendell again lost in a Primary, this time for mayor of Philadelphia. However, he was elected to that post in 1991 and re-elected in 1995. He again ran for Governor in 2002, this time winning by a margin of 53%-44%. He was re-elected four years later by a 60%-40% margin. He is term-limited as Governor, so he is likely to set his eyes on his next political goal in the very near future.

Rep. Joe Sestak has been rumored to be interested in the seat, but a recent statement from his office is being interpreted as an indication that he will not run. He served 31 years in the US Navy, achieving the rank of Vice Admiral before his 2005 retirement. Sestak came to Congress by defeating incumbent Curt Weldon in 2006, winning 56% of the vote. He also beat Weldon in fundraising: Sestak raised $3.2 million to Weldon’s $2.7 million. Sestak went on to win re-election in 2008 with 60% of the vote. Again, he was a prodigious fundraiser, accumulating $3.9 million during the campaign. As of November 24, he had $3 million on hand.

Rep. Allyson Schwartz is also likely to be eyeing the position, having run once before for the Senate. In 2000, she ran in the Senate Primary, finishing in second place with 26% of the vote. She began her political career by being elected to four-year terms in the State Senate four consecutive times beginning in 1990. When former Rep. Joe Hoeffel decided to run for the US Senate in 2002 rather than for re-election, Schawrtz ran and won his seat, gathering 56% of the vote. She won by much wider margins in the next two elections. She is also a very successful fundraiser: when she ran for Congress, she raised $4.6 million, which essentially matched the amount raised by Hoeffel in his run for the Senate. Schwartz continued to be well above average in the next two cycles, in spite of holding a “safe” seat: she raised $2.8 million in 2006 and $3.1 million in 2008. As of November 24, she has $2 million on hand.

Another current member of Congress rumored to be interested in the Senate seat in Rep. Patrick Murphy. He first ran for Congress in 2006, shortly after completing a tour of duty with the US Army in the Iraq War. He won that race, barely defeating incumbent Mike Fitzpatrick. During that campaign, he raised $2.4 million. This year, he raised an impressive $4.0 million in his successful bid for re-election. However, he currently has but $200K on hand.

Chris Matthews is well known in his role on “Hardball with Chris Matthews” on MSNBC. However, his political life began more than 30 years ago. He worked on the staffs of four members of Congress, including Maine Senator Ed Muskie. He ran for Congress in 1974, losing by a wide margin in Pennsylvania’s 4th District. During the entire administration of Jimmy Carter, he worked as a speechwriter for the President. He went on to work for six years as a top aide to former Speaker of the House of Representatives Tip O’Neill. Since 1997, he has gained considerable recognition for “Hardball”, winning several awards in journalism. He was quoted on the Colbert Report and saying, “I want to be a Senator”. This was widely construed as meaning that he is considering a run in 2010. It has been reported that he is already forming a campaign staff, although he has denied that.

Although no one has yet officially declared his or her candidacy, I doubt that condition will persist for long. My guess is that everyone is waiting for some clear sign from Gov. Rendell: if he chooses to run, it would be foolish for any Democrat to oppose him. Should he not run, it would seem that Reps. Sestak and Schwartz are poised to seek the nominations. Both have substantial amounts of campaign funds on hand, characteristic of those with higher aspirations. However, Chris Matthews has perhaps the greatest name recognition nationally, and would likely be a formidable fundraiser.

Should he choose to run, Specter would likely face very tough races in both the Primary and, if successful, the General Election. In addition, he has had significant health problems. In 2005, he was diagnosed with an advanced form of Hodgkin’s lymphoma and underwent chemotherapy. The cancer returned in 2008, although in a less severe form, and he underwent another round of chemotherapy. In the face of these health issues, and knowing that such a pool of potentially powerful opponents awaits him in 2010, this would seem to be an appropriate time for Specter to retire.

Women Governors in The United States of America

Thirty women have served as Governor in the history of this country. The first was Nellie Tayloe Ross of Wyoming. She won a special election after the death of her husband William Ross, who had been elected in 1922 and died in office. She was defeated in her re-election campaign, but remained active in politics, giving the speech seconding Al Smith’s nomination as Democratic Presidential candidate in 1928. She was later named Director of the US Mint by President Franklin Roosevelt in 1933.

Delaware’s Governor Ruth Ann Minner is the longest serving female Governor in history. She will leave office next year: she could not run for re-election due to the State’s statutory term limits. However, Beverley Perdue was elected to succeed Gov. Mike Easley in North Carolina, so the number of women in the office of Governor will not decline. Both are Democrats. However, there will be, in all probability, a total of nine next year. Arizona’s Democratic Gov. Janet Napolitano is President-elect Barack Obama’s designee to be Secretary of Homeland Security. If she resigns to take the post, the Secretary of State Jan Brewer, a Republican, will succeed her. New Mexico’s Democratic Gov. Bill Richardson has also been designated for a cabinet post: Obama has tapped him to be Secretary of Commerce. Should he resign, Lt. Gov. Diane Denish, also a Democrat, will assume the position. Should all of this come to pass, of the nine women in their state’s top executive position, five will be Democrats and four Republican. This will equal the most that have ever served simultaneously.

In all, assuming that the above-mentioned successions take place, there will have been 33 female Governors. There has been at least one women serving as Governor since 1982. The eight women that are serving now represent 16% of the Governorships, exactly the same proportion as are currently serving in the US Senate. (In an earlier post, I discussed women in the Senate.) Arizona and Texas have had three female Governors, the most among the states. However, should Arizona’s Gov. Napolitano resign to assume the above-mentioned Cabinet post, Jan Brewer will become the state’s fourth women to assume the post.

Nearly a century ago, the first women to serve in the various high offices in the United States were often appointed to fill terms of spouses. That is certainly not the case now. The longest serving Governor, Democrat Ruth Ann Minner of Delaware, was elected nine times before her first of two successful Gubernatorial campaigns. She was elected four times to the State House, twice to the State Senate, and twice as Lt. Governor before her election to the state’s top post. For 34 years, she ran for public office without suffering a single defeat.

Hawaii’s Republican Governor Linda Lingle has a similar history. Term limits will limit her tenure in office to eight years when the next election for Governor is held in 2010. At that time, she will tie Gov. Minner as longest-serving female Governor. Beginning in 1980, Lingle served five two-years terms on the Maui City Council and two four-year terms as Mayor before seeking the state’s top job in 1998. Incumbent Governor Benjamin Cayetano defeated her by the thinnest margin in Hawaii history. Nonetheless, she came back to win the first of her two elections as Governor in 2002. Whereas Gov. Minner will be 75 when her current term expires, Gov. Lingle will be just 57. Many view her as a likely candidate for Senate in the near future, as the state’s current Senators, Daniel Inouye and Daniel Akaka, will be 86 and 88 years of age when they are next up for re-election.

Now that Kansas Governor Kathleen Sebelius has officially removed herself from consideration for Cabinet posts, she too will have served eight years when she completes her current term in office. Among all of the women serving as Governors, she has perhaps received the most national attention. She was widely rumored as being given strong consideration for the Vice Presidential slot in each of the last two cycles, was chosen to give the Democratic response to this year’s State of the Union address delivered by President Bush, and has served as Chair of the Democratic Governor’s Association. She also has a long history of electoral success. She served four two-year terms in the State House and two four-year terms as the state’s Insurance Commissioner before her election as Governor in 2002. When term limits preclude her from seeking re-election in 2010, she will be 62 years old, and is widely rumored as a candidate for the US Senate.

I think there is great likelihood that Gov. Sebelius will become the first woman to serve as President of the United States.

More Potentially Vulnerable Republican Seats in the 2010 US Senate Elections: New Hampshire and Missouri

Over the past couple of days, I have begun to examine the US Senate races for 2010. On Thursday, I examined potentially vulnerable Republican seats in North Carolina and Ohio. Yesterday, I looked at all the Democratic seats that could be competitive. Today, I continue by exploring two more Republican seats that may be vulnerable, New Hampshire and Missouri.

New Hampshire – The New Hampshire landscape has seen a tsunami over the past two elections. This year, Obama outpolled McCain 54%-45%. The election of 2006 saw Democratic challengers upset both incumbents in the US House of Representatives. Both were re-elected this year and both expanded their margins of victory. This year, former Gov. Jeanne Shaheen defeated incumbent John Sununu in the race for a US Senate seat by a 52%-45% vote. Gov. John Lynch was re-elected with the support of more than 70% of the voters. He defeated incumbent Craig Benson in 2004, and was re-elected in 2006. The Governor is the only State Government official elected by a statewide vote. The State Legislature has shifted strongly toward the Democratic Party. Comparing pre-2006 numbers to post-2008 numbers, the State Senate went from 33% to 58% Democratic, and 38% to 56% in the State House. Women hold the top positions in both houses of the legislature.

This would seem to make conservative Senator Judd Gregg vulnerable as he seeks his fourth term. Nonetheless, Gregg is popular in the state, having won his last two elections with 68% and 66% of the vote. Gov. Lynch would seem to make the strongest candidate. Others being discussed as candidates are Congressman Paul Hodes and Portsmouth mayor Steve Marchand. Hodes has run three times for Congress, losing in 2004 before running successful campaigns in 2006 and 2008. Marchand ran briefly for the Senate nomination during this past cycle before bowing out in favor of eventual winner Shaheen. It would seem that Lynch might well be the favorite should he decide to run. Other candidates would have an uphill battle, but may well prevail given the current political climate in the state.

Missouri – The 2008 Presidential contest in Missouri was the closest in the country: it was the last state “called” when John McCain was declared winner. It was the first time in a half century that the “Show Me State” had not voted for the eventual victor. Possession of the Governor’s mansion returned to the Democratic Party when Jay Nixon won by a margin of 58%-40%. This substantial margin did not, however, carry over to the race for Lt. Governor, where the Republican candidate won by a slim margin. Democrats won all other statewide offices in the State Government. The GOP holds majorities in both Houses of the State Legislature. At the federal level, the state is almost evenly split between the Parties. In 2006, Democrat Claire McCaskill defeated then-incumbent Jim Talent in US Senate race. The State’s contingent in the US House has five Republican and 4 Democrats.

So, is incumbent US Senator Kit Bond vulnerable? Bond served one term as Governor before winning the first of four Senate elections in 1986. However, every election has been close: his average vote has been just 53%, and he garnered only 57% as a three-term incumbent in the election of 2004, a “Republican year”. His approval ratings barely exceed 50% (SurveyUSA). So, Bond might be vulnerable to a strong challenger: do any such candidates exist in the Democratic Party? The answer to this is certainly a resounding “yes”. Secretary of State Robin Carnahan just received the most votes in Missouri history in winning 62% of the electorate in her re-election bid this year. She won the office in 2004 in her first campaign for public office. She comes from a prominent political family. Her grandfather Albert served seven terms in Congress. Her father Mel held several posts including Governor, and won the 2000 Senate election posthumously: her mother Jean was appointed to fill the post but was defeated in the subsequent special election. Finally, her brother was just elected to serve a third term in the US House of Representatives. Another prominent Democrat mentioned as a potential candidate is 14-term Congressman Dick Gephardt, who rose to the post House Majority Leader during his tenure in the body. Public Policy Polling recently found than Gephardt and both Robin and Russ Carnahan polled within a few points of Bond. If any of these Democrats run, it will be a highly competitive race.

In both New Hampshire and Missouri, multi-term incumbent Republicans may be vulnerable to strong challengers, and such challengers are available should they decide to run.

The Senate Elections in 2010: Potentially Vulnerable Democrats

Yesterday, I began to look at the 2010 US Senate elections by examining two states (North Carolina and Ohio) where incumbent Republicans seem quite vulnerable. Today, I want to take a look at the Democratic incumbents who may be vulnerable, and discuss the scenarios that might lead to their re-election campaigns becoming competitive. As you all know, I really like to have objective numbers on which to base my analyses. This is often difficult. However, today I want to begin with hard and fast numbers and go from there.

There are 16 Democratic seats in the Senate up for election in 2010. Let’s start by looking at the Democratic Presidential vote in 2004 and 2008 in each of these states. Incumbent or not, those Democratic Senators sitting in states that tend to vote Republican in Presidential elections might be vulnerable against a strong candidate. I’ll begin by looking at three incumbent Democrats whose states gave Democratic Presidential candidates an average of less than 50% in the past two elections.

The Republican Party dominates North Dakota state politics. Of the 12 statewide offices in the State Government, members of the GOP hold 11. (The exception is the Agriculture Commissioner.) Republicans control both Houses of the State Legislature. This year, Governor John Hoeven was re-elected with 74% of the vote. The last time the state’s electoral votes went to a Democrat was 1964. On average, the state has given Democratic Presidential candidates only 41% of the vote in the past two elections. However, both US Senators and the state’s single member of the US House are all Democrats. This year, Congressman Earl Pomeroy received nearly 60% of the vote. Sen. Byron Dorgan, who will seek his fourth term in the senate in 2010. He has won his three previous elections with every increasing percentages of the vote (1992: 59%, 1998: 63%, 2004: 68%). His fellow Democratic Senator, Kent Conrad, has won four Senate elections, receiving 69% of the vote in 2006. So, is Dorgan vulnerable? It would appear that he is only if Hoeven runs against him. Should the Governor covet a Senate seat, some think he might choose to complete his term and then run in 2012 against Conrad.

Blanche Lincoln will be seeking her third term as Senator from Arkansas, a state that gave Democratic candidates only 42% of the vote in the last two elections. Arkansas is an enigmatic state with respect to the Parties. While voting for Republican candidates in each of the last three Presidential elections, every statewide officeholder in the State Government, both US Senators, and three of four members of the US House of Representatives from the state are Democrats. In addition, both House of the State Legislature have Democratic majorities. Sen. Lincoln, after serving two terms in the US House, has won two Senate elections with 55% and 56% of the vote. This year, when fellow Sen. Mark Pryor ran for re-election, the Republican Party didn’t even field a candidate to oppose him. None of this information suggests that Sen. Lincoln is vulnerable. The only thing mentioned that would seem to make her seem vulnerable is if former Gov. Mike Huckabee would run. There is every indication that Huckabee is setting himself up for another run at the White House, but a 2010 Senate candidacy can’t be ruled out.

Indiana is the third state to have given Democratic Presidential candidates less that 50%, on average, in the last two elections. Is Senator Evan Bayh, who will seek his third term in 2010, vulnerable? Bayh, son of former Sen. Birch Bayh, has a long career in public service. He served as Secretary of State for one term, Governor for two terms, and is serving his second term in the US Senate. In each of his last three statewide campaigns, he received more than 60% of the vote. The state is another interesting mixture of Democratic and Republican representation. Members of the GOP hold all statewide offices in the State Government. Gov. Mitch Daniels was just re-elected with 58% of the vote. Indiana’s other US Senator, Dick Lugar, is a Republican. Going into this year’s election, the state had not voted for a Democratic Presidential candidate since 1964. However, this year, the state’s electoral votes went to Obama. The Democratic Party holds a 5-4 majority among the state’s member of the US House, having picked up three seats in the 2006 election. So, is Bayh vulnerable? It would appear not. Perhaps the only one who might make a competitive run is Gov. Daniels, who has recently said in no uncertain terms that he will not run for the Senate in 2010.

Are any other Democratic seats in danger? Some say that Colorado’s Ken Salazar is vulnerable. Recent surveys by Public Policy Polling pitted him against four likely rivals. They showed Salazar with sizable leads over all four, with only former Governor Bill Owens coming close. In addition, Colorado has been trending Democratic over the last few cycles.

In California, Gov. Arnold Schwarzenegger could be competitive against Sen. Barbara Boxer, should he decide to run.

In Delaware, Ted Kaufman was appointed as a “caretaker” Senator to replace Vice-President-elect Joe Biden, meaning that he would not run for election. This seat is widely viewed as likely to be won by Biden’s son, Attorney General Beau Biden. Some think, however, that Delaware’s sole member of Congress, Mike Castle, might run a competitive campaign for the post should he run.

Finally, if Hawaii’s Sen. Daniel Inouye should retire, Republican Gov. Linda Lingle, who is term limited, might seek the post and run a competitive campaign.

What is the bottom line? The only real danger that the Democratic Party faces in defending its Senate seats in the 2010 election is the candidacy of Governors and ex-Governors in North Dakota, Arkansas, Colorado, California and Hawaii, and perhaps a Congressman in Delaware. Perhaps the greatest threat is in North Dakota should Gov. Hoeven run against Sen. Dorgan, and in Hawaii should Sen. Inoye retire and draw Gov. Lingle into the race. I don’t think either of these is likely. Therefore, at this early date, I don’t see any evidence to suggest that any of the races for current Democratic Senate seats will be competitive.

A First Look at the Senate Elections of 2010: North Carolina and Ohio

2008 marked the second consecutive election in which Democrats gained six or more seats in the US Senate. With one seat (Minnesota) yet undecided, Democrats have at least 58 seats, including the two independents who caucus with them. It is quite unusual to post such gains in successive years. Can it happen again? Perhaps this would seem unlikely, but it is hard not to be quite optimistic about the 2010 Senate elections. Optimistic, that is, if you are a Democrat.

Again in 2010, as was the case this year, there are few incumbent Democrats who seem vulnerable. There are some possible scenarios, of course, but by and large, 2010 is likely to be another year when Democrats may again gain seats. In the near future, I’ll examine those Democratic seats that may prove competitive, but today I want to begin to examine those GOP seats that may switch Parties in two years. While I’m not yet ready to put them in ranked order, I’ll begin today with two seats that seem to offer the greatest likelihood of falling to Democratic challengers. I’ll provide details of others in the coming weeks before finally providing my first rankings early next year.

North Carolina – Consider what has happened in North Carolina in recent years. The Governor has been a Democrat for the last 16 years, and will be for at least four more years with the election of Beverley Perdue last month. Her election means that there have now been three Democratic Governors in a row. The Democratic vote in the last three Presidential races has improved steadily (2000: 43%; 2004: 44%, 2008: 50%), and culminated with Barack Obama winning the state this year: it was the first time in 30 years that the state’s electoral votes went for a Democrat. They also hold 8 of 13 seats in the US House of Representatives. Democrat Kay Hagan just defeated incumbent Senator Elizabeth Dole by 9%. Democrats hold 8 of 10 statewide positions, including Governor, Lt. Governor, Attorney General, and Secretary of State. And finally, they won outright majorities in both houses of the State Legislature for the third election in a row.

So, the table seems to be set for the defeat of Republican Richard Burr, the very conservative (0% rating from Americans for Democratic Action) one-term incumbent. With the state so full of Democratic incumbents, who will challenge Burr? Many names can be found in the rumor mills. Let’s have a look at three that would be powerful candidates should they choose to run. At the top of the list has to be Governor Mike Easley. He is completing his second four-year term: he could not run for re-election due to the state’s statutory term limits. This followed two terms as Attorney General. In 2004, he won with 56% of the vote while John Kerry received just 44%.

Another candidate, one for whom a “Draft Coop” website has already been started, is Attorney General Roy Cooper. He just won election to his third term in the office with 61% of the vote, the highest total for any statewide office this year. Prior to his 2000 election as Attorney General, he served four years in the State House and ten years in the State Senate. A recent poll by Public Policy Polling (PPP) shows him with a 39%-34% lead over Burr.

The third strong potential candidate is Secretary of State Elaine Marshall. She just won her fourth consecutive term for the post. In both 2000 and 2004, she outpolled both Easley and Cooper. Prior to being elected Secretary of State, she served in the State Senate.

Barring a remarkable reversal in the mood of the country and the state, I think any of these can handily beat Burr, and claim this seat for the Democratic Party.

Ohio – This is a state that has seen a major shift toward the Democratic Party in just the last few years. In 2004, when Ohio was the focal point of the Presidential election, all six statewide officeholders were Republicans. However, in the aftermath of the 2004 election, and due to a major scandal surrounding then-Governor Taft, the state elected Democrats to the five top positions (Governor, Lt. Governor, Attorney General, Secretary of State and Treasurer) in 2006. In the three latest Presidential elections, the Democratic vote stepped up slowly (2000: 48%, 2004: 49%, 2008: 51%). Sherrod Brown won the open US Senate with 56% of the vote. Mike DeWine, who had received 60% of the vote in 2000, had vacated the seat rather than face what would undoubtedly have been a tough re-election battle. In the US House of Representatives, Democrats picked up one seat in 2006, and three this year, reversing a 11-7 minority into a 11-7 majority. Currently, Democrats control the State House of Representatives, while the Republican Party holds a majority of seats in the State Senate.

In 2004, George Voinovich won re-election to the US Senate with 64% of the vote, having first been elected in 1996 with 56% to claim the seat held by the retiring John Glenn. Although he currently has a 51%-39% approval-disapproval rating (SurveyUSA, October 2008), three different Democratic candidates polled at least even with him in recent PPP polls. Let’s take a look at these three candidates in the order of their popularity as indicated by these polls. Secretary of State Jennifer Brunner (leading Voinovich 42%-38% in the PPP poll) was elected to the post in 2006 by a 55%-40% margin. She had previously been elected twice to serve as a County Judge. Prior to her elected service, she had worked as Legal Counsel in the Secretary of State’s office, and in private law practice.

Lt. Governor Lee Fisher, who also led Voinovich in the recent PPP poll, by a 40%-38% margin, has a long career of public service in Ohio. He was elected to one term in the State House of Representatives before moving on to the State Senate where he served for eight years. In 1990, he was elected State Attorney General. However, he lost in his bid for re-election in 1994. In 1998, he lost the race for Governor. In 2006, he appeared once again on a statewide ticket, running successfully as Lt. Governor on the ticket with Governor Ted Strickland.

The third potential candidate, who tied Voinovich at 33% each in the recent PPP poll, is Congressman Tim Ryan. He just won his fourth consecutive election to serve Ohio’s 17th district, receiving a whopping 78% of the vote. He served one term in the Ohio State Senate prior to seeking the Congressional seat. When he took office in 2003, he was, at 29 years of age, the youngest Democratic member of the body. His interest in the Senate position is, perhaps, confirmed by a speaking engagement at a County Party event on the other side of the state from his district.

There are other potential candidates who poll very close to Voinovich. In any case, recent Democratic success in the state and the recent PPP polls certainly suggest that this is a seat that can represent a gain for Democrats in 2010.

Political Parties and Stock Market Performance

The value of the Stock Market changes as confidence in the future of the nation’s economy changes. When investors are optimistic about the future, they buy stocks and therefore cause the Stock Market indices to rise. Conversely, during time of pessimism and uncertainty, these indices decline. In the past year, we have seen a huge drop in the Stock Market. As measured by the Dow Jones Industrial Average, the Stock Market has lost as much as 40% of its value from the high reached in October 2007.

Because investors look forward, the Stock Market usually begins to rise well before the economy recovers. Let’s look at the last recession in 2001. The National Bureau of Economic Research (NBER) announced at the end of November of that year that a recession had begun in March. However, it wasn’t until March 2003 that the NBER announced that the “official” end of the recession had been November 2001.

So, the recession lasted from March through November. What did the Stock Market do? It reached a peak in May, actually several weeks after the recession began. The Market reached a minimum in September: during the drop, it lost 27% of its value. From that bottom, the Market rose rapidly, so that by the time the recession ended, it had recouped more than half of the loss.

This is not atypical. The Market often rises even after it is later determined that a recession has begun, and after it drops, it often begins to rise before the recession ends. In essence, investors are anticipating the recession’s end and begin to buy stocks.

Stock market activity, therefore, is a leading indicator of economic activity: it responds to anticipation for the future.

How has the Political Party in Power affected the movement of the Stock Market? I examined the last 20 Presidential administrations, which have encompassed 40 sessions of Congress. I assigned each Congress as either Democratic or Republican if the Party controlled both houses, or “split” if each Party controlled one of the houses. I then examined the possible combinations of Party in the White House and Party in control of Congress and determined the average change in the Stock Market during the times when each combination was in place.

First, let’s look at the Political Party in the White House. Referring to the Table to the left, you’ll see that the Stock Market went up an average of 15.6% when Democrats held the Presidency, and went up 0.9% when a Republican held the post. This is a substantial difference.

Finer analysis reveals that when a Democrat occupies the White House, the Stock Market does better when Republicans control the Congress. During such times (4 sessions of Congress), the Market went up an average of 25.8% compared to an average rise of 13.0% when Democrats controlled Congress in addition to the White House (16 sessions). At no time did a Democrat occupy the Presidency when control of Congress was split.

When a Republican was in the White house, The Stock Market performed only slightly better with Democratic control of Congress (+ 4.8%, 11 sessions) than when Republicans controlled Capital Hill (+4.1%, 4 sessions). By far the worst Stock Market performance occurred when a Republican was in the White House and the control of Congress was split between the Parties (-10.0%, 5 sessions).

Certainly the past is not a guarantee of the future, but if the pattern of the last 80 years continues forward, we will have a robust Stock Market going forward. Let’s hope that’s true.

The Size of the Federal Budget During The Past Half Century

Last week, the National Bureau of Economic Research announced that the United States has been in a recession for a year. This made “official” what most already knew, that our economy has been deteriorating rapidly. Recent job losses in the country have been the highest in a generation. The Stock Market is down almost 40% from its October 2007 high.

In a recent post, I analyzed the historical pattern of the National Debt and found that the vast majority of it has been accumulated during the administrations of the last three Republican Presidents, and that during the last 30 years, the National Debt as a proportion of the Gross Domestic Product (GDP) has increased during Republican administrations and declined during those of Democrats.

Today, I wanted to examine what has happened to the size of Federal expenditures during the terms of the last eight Presidents. The metric I used was Total Outlays and a percentage of the GDP. Each Presidential administration was represented by this value during the last fiscal year contained wholly within the tenure of each.

I began with the administration of President Truman and went through fiscal year 2007. The table above gives these values, along with the change from the previous administration.

The pattern with respect to Political Party is not consistent. The size of the total federal expenditures as a percentage of GDP declined during the presidencies of Eisenhower, Reagan and Clinton, and increased during those of Johnson, Nixon, Carter, Bush 41, and Bush 43. For Republicans, it increased in three administrations and decreased in two. For Democratic Presidencies, it increased during two and declined in one. The greatest declines were seen during the terms of Eisenhower and Clinton.

Overall, there has not been an increase in the size of federal expenditures as a percentage of GDP during the last half century. In fact, this measure was slightly lower at the end of the Clinton Presidency than they were nearly 50 years earlier as Truman’s term came to an end.

Has “the government” been getting larger over the last half century? As measured by total outlays as a percentage of GDP, the answer is no. Is there a tendency for Presidents of one Party or the other to oversee more reduction in such expenditures? Again, the answer is no.

Cabinet Members and The Presidency

Over the past few weeks, President-elect Obama’s choices for Cabinet posts have garnered substantial attention. Perhaps receiving the most among these was the choice of Sen. Hillary Clinton for Secretary of State. Many have asked how serving in this cabinet post might affect her chances for a Presidential run in the future. All of this discussion has brought two questions to my mind.

First, what is the likelihood that a Secretary of State will become President? This is a question that has had two distinctly different answers historically. To address this, I looked at every person who has served in the Cabinet to see how many of them were subsequently elected President. In turns out that the list is not so long: only eight people who have held a Cabinet position went on to become President. Put another way, of our 42 Presidents, just 19% had previously served in the Cabinet.

Of the Cabinet posts in which future Presidents had served, Secretary of State was by far the most common: six former Secretaries of State went on to the oval office. In fact, in the early years of this nation, this pattern was the norm. Five of the first seven Presidents for whom this was possible served as Secretary of State before their tenure in the highest office. (As our first President, obviously Washington could not have previously served in any capacity in the government.) These were Presidents Jefferson, Madison, Monroe, John Quincy Adams, and van Buren.

However, since 1850, no Secretary of State has risen to the Presidency. James Buchanan was the most recent to serve in both capacities, having served as Secretary of State from 1845 to 1849. The only other Cabinet posts to have been previously held by Presidents were the Secretaries of War (Monroe and Taft) and Commerce (Hoover).

Has a cabinet post been a stepping-stone to the oval office? Apparently not, unless you were around in the first several decades of our nation’s history…

The second thing that has struck me is the number of Obama’s nominees who will have to resign elected office in order to serve. Of his first seven nominees for the Cabinet, three will have to resign from a Congressional office or Governorship in order to serve. Sen. Hillary Clinton will have to resign, as well as Governors Janet Napolitano and Bill Richardson. If the list is expanded to include Cabinet-level posts, the list includes Vice-President-elect and Sen. Joe Biden and White House Chief of Staff designee Congressman Rahm Emanuel.

Fully half of these Cabinet-level nominees and designees are currently serving in Congress or as Governor.

Is this the norm? To get a quick look, I examined the first appointments to the Cabinets of our last two Presidents. Only 14% (4 of 29) of the first appointments to the Cabinet of Presidents Bill Clinton and George W. Bush had to resign an elected office to serve. These included two Governors and two members of the House of Representatives. Another seven had served as Governor or a member of Congress prior to their appointments, making the total that had served a bit more than one-third.

So, Obama seems to be staffing his Cabinet with more people who currently hold elective office. I think this is a good thing.

Money and Politics: A First Look at Campaign Funding in the 2008 Senate Races

Can money buy an election? I’m not sure it’s possible to answer this question, although I’m sure that there are many people who think they have the answer. A related question that we can examine is this: do candidates who spend more money win?

It’s been a bit more than a month since Election Day 2008. On that day, 35 of the 100 seats in the United States Senate were up for election. This included the 33 that would normally come up in this year of the Senate’s six-year cycle, plus the special elections in Mississippi and Idaho brought about by a death and a resignation during the past two years.

In the near future, I’ll be taking a look at the money in Senate campaigns over the past several elections, but today I want to take a look at this most recent election, and I want make my examination at a point three weeks before Election Day. What can we learn about the spending that occurred up to that point, and its relation to what happened when the votes were cast?

Among these 35 races, five are not really suitable for this kind of analysis. One race (Minnesota) has yet to be decided. In once race (Arkansas), the incumbent did not face opposition. In the three others, one of the candidates did not file federal campaign documents.

So, let’s look at the money involved. Keep in mind that this information is as of October 15. In these 30 races, the two candidates (combined) spent an average of $9.9 million. However, is it meaningful to look at such averages when they involve states whose populations vary from just over a half-million to nearly ten million? Perhaps it’s better to look at expenditures per person in each state. Together, the two candidates in each race spent $3.86 per inhabitant. For the rest of this piece, the amounts will refer to dollars per inhabitant.

In 25 of these races, an incumbent ran for re-election. These incumbents spent $2.63, while their challengers spent $1.23. In every case, the incumbent out spent the challenger. In the other five races, the incumbent did not run for re-election. On average, the 10 candidates in these races for open seats spent $1.71. We can examine these open-seat races further by looking at the Political Party that previously held the seat. The incumbent Party’s candidates spent $1.56, whereas the “challenger” Party’s candidates spent $1.87.

So far, there is nothing surprising: incumbents out spent their challengers, while candidates for open seats were intermediate between the spending levels of incumbents and their challengers, and were fairly even between the Parties.

What happened on Election Day? Among the 25 races where incumbents sought re-election, 21 were successful. Because all incumbents out spent their challengers, we cannot disentangle money and incumbency in predicting these outcomes. However, we can ask if challengers who spent the most were the most successful. There is certainly some evidence of this: the highest spending challengers were in New Hampshire and Alaska, each spending more than $4.00. They both won. Challengers who were successful spent $2.70 compared with their unsuccessful colleagues who spent just $0.56. All four successful challengers were among the top nine (among the 25) spenders. However, there were exceptions: the challenger in Maine spent nearly $4.00 and lost by more than 20%, and the challenger in North Carolina spent just $0.66 and won.

Perhaps the most insight can be found in the races for open seats, although the small number of these precludes making generalizations. In all open seat races, the candidate who spent the most money won the election. This is true in spite of the fact that in three of these races, the Party of the incumbent lost.

As I said earlier, this represents a first look at money in US Senate races. Let’s be careful not to draw cause-effect relationships where none are warranted. While those who spent more money tended to win, we shouldn’t overlook the likelihood that early polling numbers actually generated more money and more victories.

With that in mind, there does seem to be a relationship between money spent and electoral success. Challengers who spent the most tended to be successful, and in the open seat races, the candidates who spent the most invariably won.

These results suggest a few things for future analyses. First and foremost, polling numbers need to be part of the analysis. In addition, although dollars per inhabitant has some merit as a measure of spending, perhaps an adjustment could make for a better number. After all, it takes some initial money just to have a campaign regardless of the population of the state. I welcome other suggestions for investigations I’ll do in the near future.

National Economic Growth and the Political Party of the President

Economic factors seem to play a major role in elections. It’s hard to argue against the notion that poor economic times during election years tend to lead to a change in the Political Party that holds the White House. However, there is a larger question. How many times have you heard from pundits that this Party or that Party is better for the economy? What is the truth about this issue?

There are a number of different measures of the health of the economy at any point in time. Perhaps the most widely used is the Gross Domestic Product (GDP). This is a measure of the market value of all good and services produced in the country. There are valid arguments to be made about other measures being more valid, such as those that reflect the condition of a majority of Americans, for instance. Here, I’ll examine GDP.

I obtained the historical values of GDP from the Bureau of Economic Analysis (BEA) website. The BEA is part of the Department of Commerce, and therefore part of the Executive Branch of our government. The available data set begins with 1929 and consists of annual values. I chose data that were adjusted for inflation, so the annual changes I computed would reflect change in “real GDP”. I then examined these annual changes in relation to the Party of the President. The data set included information through the GDP of 2007, so annual change values were available for the years 1929 through 2006. This period was divided almost evenly between the Parties: Democrats held the White House for 40 of these years, while Republicans held it for 38.

The average annual change in real GDP was greater when Democrats held the Presidency (+5.2%) was much greater than when a Republican was in the White House (+1.8%). The difference was nearly a factor of three and is statistically significant (1).

There are at least two problems one might have with this analysis. First, perhaps it’s inappropriate to attribute GDP growth for a year to the incumbent of the White House during that year, particularly during the first year of a term. In fact, one could argue that if one is going to attribute GDP to a President, perhaps it’s best to give credit (or blame) to the President in the previous year, when policy decisions were being made that ultimately affected the GDP growth. This suggests “shifting” the data by one year before performing the analysis, or perhaps even two years.

With a shift of one year, the difference between the two Parties is still quite large: when Democrats were in the White House, the real GDP change (+5.1%) was still 2.7x greater one year later than the same value when the GOP held the Presidency (+1.8%). This difference was still quite pronounced when a two-year shift was used (Dems +4.7%, GOP +2.2%).

There is also a purely statistical problem (1). However, I think one can avoid both the time shift problem and the statistical one by extracting only one number from each Presidential term and performing the analysis. What number should be used? Let’s avoid any “time lag” problems by focusing on only the last two years of a Presidential term. Further, let’s use and average of the last two years of each term. So, the data set used is the average change in real GDP for years three and four of each of the Presidential terms since 1929. The result is that real GDP grew by nearly twice as much in Democratic (+4.9%) than in Republican (+2.6%) administrations. This difference was highly significant statistically (2).

One has to conclude that in the entire data set available from the Bureau of Economic Analysis (1929 on), the real growth of the United States’ Gross Domestic Product was much greater in Democratic administrations than in those of Republicans.
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(1) An analysis of variance (ANOVA) resulted in a value of F = 9.47 with 1,76 df, p<0.003. Yes, I know that there are questions about the independence of the data.
(2) ANOVA resulted in F = 16.3 with 1,17 df, p<0.001. I don’t see any problem with data independence here.

Women in the United States Senate

On November 21, 1922, Rebecca Latimer Felton of Georgia became the first woman to serve in the United States Senate. She was appointed to fill out a term, and although she served just one day, she made history. On Election Day this year, Kay Hagan became the first woman to defeat an incumbent woman, Elizabeth Dole, when she won election in North Carolina. During this 86 year period, women steadily achieved one milestone after another as they assumed a greater role in this most distinguished of legislative bodies. Today, there are 16 women in the Senate, the most to have ever served together at one time. (Were Hillary Clinton to remain in the Senate when the newest members are sworn in next January, there would be 17. However, she is President-elect Barack Obama’s pick for Secretary of State and is likely to resign before then.)

Although Felton was the first to serve, it was Hattie Caraway who was first elected to the body. Although she had been first appointed to fill the unexpired term of her husband, she subsequently won a special election and two general elections during her tenure. She served as Senator from Arkansas for 14 years before losing a re-election bid to the legendary J. William Fulbright.

The first woman elected to the Senate without first being appointed was Gladys Pyle of South Dakota. She won a special election in 1938 to fill an unexpired term, and served for a little more than a year. She did not seek re-election.

In 1992, California’s Dianne Feinstein became the first woman to defeat an incumbent Senator: she defeated John Seymour, who had been appointed to fill an unexpired term. Since then she has been re-elected in three general elections. In 2000, Michigan’s Debbie Stabenow and Washington’s Maria Cantwell became the first women to defeat previously elected incumbent Senators.

Both Maine and Louisiana have been represented in the Senate by three women, and while two of those from Louisiana were appointed to their posts, all three women from Maine first assumed their positions after being elected. Currently, there are three states being represented by two woman: California’s Dianne Feinstein and Barbara Boxer, Maine’s Olympia Snowe and Sue Collins, and Washington’s Maria Cantwell and Patty Murray will all be serving together when Congress reconvenes early nest year.

The majority of women who have served in the Senate belong to the Democratic Party. Including those who will first take their seats next year, there have been 24 Democrats and 13 Republicans. There are 13 Democrats and 4 Republicans who have been elected to serve together next year, although, as mentioned above, Democrat Hillary Clinton will likely resign before then.

Eight women won on Election Day in 2006, the most to win Senate seats on a single day. Maine’s Margaret Chase Smith was the longest serving female Senator: she served for 24 years before being defeated in 1972. Current Senator Barbara Mikulski of Maryland will likely equal or surpass that mark: she is up for election in 2010 when she will have also served for 24 years.

Many women in the Senate have served in other elective positions. Among these, both Olympia Snowe and Debbie Stabenow are the only women to have served in both houses of their respective state legislatives and both houses of the US Congress.

Surely there are a large number of other milestones worthy of mention, but I’ll close with just two more, two occasions when the same thing happened on two Election Days here in the decade of the 2000’s. In 2000 and again in 2008, two women defeated incumbents to earn seats in the Senate on the same day: in 2000, it was Maria Cantwell and Debbie Stabenow, and in 2008 it was New Hampshire’s Jeanne Shaheen and Kay Hagan. As women gain more and more seats, such occurrences will soon become commonplace.

The Jobs Report for November 2008: The Worst Situation in a Generation

The Jobs Report for November 2008 was released at 8:30 EST this morning. It is bleak. Here are the major numbers. The unemployment rate went from 6.5% to 6.7%. The jobs number for November was –533,000. That is, there are 533,000 fewer jobs than a month ago. However, the previously released numbers for September and October were revised downward. The preliminary number for September of –284,000 was revised down to
-403,000. For October, the preliminary –240,000 is now –320,000. Taking just these revisions together, the numbers indicate 732,000 fewer jobs than we thought there were just yesterday. The total job loss has been 1,256,000 in three months. The November number was the worst in at least 34 years, when the data set I use began.

Over the last two days, I have discussed these two major parts of the Jobs Report. That is, the unemployment rate and the jobs number. On Wednesday, I talked of how the jobs number is misleading because it doesn’t account for population growth, and therefore the number of jobs the should be created by a growing population, and that are needed in order to keep our employment level stable. These days, that number is about 156,000 per month. I termed this number the “Jobs Expected”. So, when we hear that the jobs number was –533,000, that really means –688,000 fewer than the “break even” level. Compared my Jobs Expected number, this economy has fallen 1,725,000 jobs short in just the past three months.

Yesterday, I discussed the unemployment rate, and why I (among many others) think that the official number is a substantial underestimate, because the number of those wanting employment is underestimated, and the number of those employed is exaggerated. I discussed, in particularly, how this discrepancy has been much greater during the current administration that at any time in over a generation. I developed a simple “Adjusted Unemployment Rate”. The official number was 6.7%. My Adjusted Unemployment Rate stands at 8.7%, the worst in over 25 years. (It reached over 11% during the Reagan administration.)

Recent Underestimation of the Unemployment Rate

Tomorrow, the Department of Labor (DOL), as part of its monthly “Jobs Report”, will present the “unemployment rate” for November. At this time, it is expected to jump to 6.8%. Last month, it was 6.5%. Yesterday, I discussed some simple reasons why I think the “Jobs Number”, also part of the monthly report, is used in a misleading way. Today, I want to talk about why the “unemployment rate” can be a misleading statistic.

So what is the official unemployment rate? It is computed from a monthly survey (the Current Population Survey – CPS) of 60,000 households. Persons are classified as employed, unemployed, or not in the labor force. People are considered employed if they worked as a paid employee at any time in the previous week, worked in their own business or on their own farm, worked without pay at least 15 hours in a family business or farm, or were temporarily absent from a job due to sickness, weather, vacation, a strike, or a personal reason. People are considered unemployed if they did not meet the above criteria, were available for work, and made some effort to find work in the preceding four weeks. The unemployment rate is simply the percentage of those in the labor force who are unemployed. People who are not classified as employed or unemployed are not considered part of the labor force.

There are many potential problems with this number, and they fall into two categories. First is the problem with excluding people from the labor force. People who are not employed or are not actively seeking employment are not considered part of the labor force. In a poor economy, many people give up seeking employment. Some effort is made by the DOL to further categorize such people, calling them “discouraged workers” or “marginally attached workers” depending on how they respond to the survey. However, it is easy to imagine that such people might be less than honest about such assessments – surely no person who has been unsuccessfully looking for work for a prolonged period will feel good about him- or herself. They are more likely to say that they are not employed for some other reason. The bottom line is that, especially during a bad economy, the number of people in the labor force as calculated by the DOL is an underestimate of those who would truly like to have a job.

The second category of problems concerns those who are categorized as employed. If someone can’t find a job and resorts to “volunteering” in a family business, they are considered employed. If a person is seeking full-time employment and yet can only find a few hours employment per week, they are nonetheless considered employed. If a person cannot find work and starts a home business, they are considered employed even if the business does not produce any income.

All of these problems suggest that the unemployment rate is an underestimate of what we think of when we hear the term. Further, this discrepancy is probably greater during poor economic times.

So, is it possible to easily come up with a more reliable measure of the unemployment rate? A number of people have tried to do so by using the aforementioned numbers of “discouraged worker” and such. I suggest a simpler approach. Let us assume that at some point during the best of economic times, everyone who wants a job is either employed or looking for a job. That would mean they are all considered part of the labor force.

The DOL, as part of the CPS data series, gives historical data on the civilian non-institutional population over 16 years of age. Let’s call this TOTAL. I computed the labor force (as presented by the DOL) as a proportion of TOTAL for each month for the past several decades. Let’s call this value PROP. I assume that a “good” economy occurs at least once in a decade, and therefore PROP reaches a maximum. So, at any point in time, a better estimate of the labor force can be found by multiplying the current TOTAL by the maximum value of PROP that has been observed over the most recent 10 years. Let’s call this the Adjusted Labor Force.

A better estimate of the number of unemployed persons is the difference between the number employed given by the DOL, and the Adjusted Labor Force. We’ll call this the Adjusted Unemployed. An Adjusted Unemployment Rate is then simply the percentage that the Adjusted Unemployed is of the Adjusted Labor Force.

So, where are we now? As I mentioned, the reported unemployment rate last month was 6.5%. The Adjusted Unemployment Rate is 8.2%. This is a substantial difference. The table at the beginning of this post gives the average of the monthly values for the DOL’s unemployment rate and my Adjusted Unemployment Rate. A couple of things stand out. First, the highest average DOL unemployment rate was seen in the Reagan years. It was a full percent above the administrations both before (Carter) and after (Bush 41). The lowest unemployment was during the Clinton years.

The most interesting, and important, thing about the current Bush administration is that while the DOL unemployment rate is as low as during the Clinton years, the Adjusted Unemployment Rate is much higher. Note the final column of the table, the difference between these two measures of unemployment rate. While the difference is similar during the Carter, Reagan, Bush 41, and Clinton administrations, it is much higher in the current administration. The unemployment rate in recent years seems to be substantially underestimated. The unemployment during the current administration has been much worse than what is reported each month by the Department of Labor.

Which Presidents Have Been Good For Job Growth?

This Friday, December 5, the Bureau of Labor Statistics will release its monthly jobs report. The key pieces of information contained in the report will be the Jobs Number, which is the change in nonfarm payroll employment, and the Unemployment Rate. As presented, both of these pieces of information are somewhat misleading. By this, I mean that the public gets a false impression of what is going on in the economy. Today, I will go into the first of these two numbers, the so-called jobs number. Tomorrow I will continue with some analysis of the unemployment rate.

The “jobs number” is presented as the number of jobs created by the nation’s economy during the previous month. It is “seasonally adjusted” to avoid the drastic changes that occur due to the annual cycle of jobs in various parts of the economy. So far, so good – the number presented does in fact represent the net number of jobs that exist this month that didn’t exist last month. This is, of course, unless jobs are being lost from the economy, in which case the number is negative. Lets refer to the jobs number as Jobs Created.

However, when the number is positive, that is jobs are being created, the officials in the Department of Labor talk as if any job creation reflects successful economic policy. However, it ignores one very important factor: it ignores population growth.

If the number of jobs created doesn’t keep up with population growth, then in reality, the employment situation is getting worse. Our population is growing by very nearly 0.1% per month, and has been doing so for about three decades. Our current labor force is about 155 million workers. Currently, that means that we need about 155,000 new jobs each month just to stay “even”. This might suggest that we need aggressive policy to create these jobs. However, a growing population should “automatically” create jobs. What do I mean by this?

More people means more demand for everything – more housing, more food, more cars, more energy, more everything. So, a growing population creates growing demand that will fuel the economy to create jobs. This growing population that is fueling demand and economic activity should create a growing number of jobs. In fact, the work force should increase by about the same percentage as the population as a whole. Let’s give this automatic and needed job growth a name – let’s call it the Jobs Expected. A true measure of the efficacy of national economic policy is whether or not the economy is creating sufficient jobs to employ the growing population. That is, whether Jobs Created is greater than or less than Jobs Expected.

Let me put this succinctly. At this point in time, a “good” economy is one that is producing more than 155,000 jobs each month. Anything less than that is not a good economy. Good economic policy should produce a good economy. If the economy is not producing 155,000 jobs each month, then this indicates bad economic policy.

So, how has an employment fared under policy put forward by recent Presidential administrations? First, we must know what the expected job growth was during each of the past five administrations. Each month, this is equal to 0.1% of the current work force. Then we simply sum up all the jobs number data from all the years of the administration and see how it compares. That is, we are comparing the Jobs Created and Jobs Expected for the entire period of the President’s administration. The difference between these is an effective Jobs Surplus or Jobs Deficit.

The table at the beginning of this entry represents the data for the last five administrations. As we can see, the Carter years produced a job surplus of over 5 million, and in just four years. The Reagan years produced a similar amount, but over an eight year period. The best years by far were those under President Clinton, when we produced a job surplus of over 10 million.

This is in contrast with both of the administrations of Presidents Bush. The years of Bush 41 saw a jobs deficit of 3.4 million jobs. The worst performance by far has been the current administration. While they often claim to have overseen a vibrant healthy economy, the truth is that they oversaw a jobs deficit of nearly 10 million. Further examination reveals that during five of the eight years, there was a deficit: in only three years was there sufficient job growth to employ our growing population. It’s really even worse than that: in only 24 of 94 months during the Presidency of George W. Bush was there sufficient job growth to employ our growing population.

Compare this to the previous administration: in 81 of 96 months of President Bill Clinton’s administration, our economy produced a surplus of jobs. Let’s hope that President-elect Barack Obama can follow in Bill Clinton’s footsteps and oversee a economy characterized by strong job growth.

The National Debt, Political Parties and the “Budget Deficit”

Budget deficits seem to be a way of life in the United States. But what is a budget deficit? Does it reflect the increase in total debt in the Country? That would seem to be the most logical definition. If I told you that I owed $5,000 at this time last year and I owe $10,000 now, wouldn’t you naturally assume that I ran a $5,000 deficit over the past year? What if I told you that “my budget deficit” was only $2,000? Would you conclude that I was telling the truth? I hope not.

What is the National Debt? This is the total amount that the country owes. We sell Treasury bills, notes and bonds to raise this money. What is our National Debt? For current and some historical information, go to: http://www.treasurydirect.gov/NP/BPDLogin?application=np As I write this, the most recent date for which there is data is November 28, 2008. The debt was $10,661,174,903,807.68. That’s over $10 trillion, for those of you who get dizzy counting the digits. That’s a lot of money. The census bureau website has a current estimate of the country’s population. Right now, its 305,787,480. The National Debt is currently $34,864.65 per person. We have to pay interest on this debt. During fiscal year 2008, we paid $451,154,049,950.63 in interest. That’s $451 billion.

The White House has asserted that the budget deficit for fiscal year 2008 (ending September 30, 2008) is a bit over $400 billion. During that period, however, the National Debt increased $1.017 trillion. I’ll let you decide whether you think that this is being honest.

Why is there such a discrepancy? Well, there are two major reasons. First, the Social Security system currently produces a huge surplus. These are funds that come into the government that will someday be needed to pay out benefits to retirees. Do we set it aside? No, we spend it. But, we pretend that this doesn’t really constitute “a deficit”. The second main reason is “off budget” items. A huge amount of the money spent on the Iraq War came from “emergency appropriations”. They aren’t part of the budget. So, they don’t add to “the deficit”.

The National Debt increased over $1 trillion, but the Bush White House says that the Budget Deficit is a bit over $400 billion.

Who is responsible for this debt? Well, that’s a complex question. However, perhaps there is some truth to President Harry S. Truman’s statement that “the buck stops here”. If you attribute the debt to the President who was in office when a fiscal year begins, some interesting patterns emerge.

During the first seven years of President George W. Bush’s term, $4.2 trillion was added to the National Debt. President Bill Clinton’s term saw $1.4 trillion added to the debt in eight years. President George H. W. Bush oversaw an addition of over $1.5 trillion in four years. President Reagan oversaw a $1.8 trillion increase in the debt during his eight years. Over $9 trillion of the $10.6 in total debt was accumulated during these last four Presidencies. The administrations of Presidents Reagan, Bush, and Bush have seen the accumulation of more than ¾ of the total National Debt.

However, this may be somewhat misleading as this does not account for historical inflation. Dollars were worth more in the past than they are now. Therefore, perhaps the most useful way to look at the National Debt is as a proportion of Gross Domestic Product (GDP – the total value of all goods and services produced in the country during the year). It is then possible to look at the total National Debt in relation to GDP. This is like looking at your personal debt as it relates to your salary.

Here is the total National Debt at the end of the last fiscal year that began during the Presidencies of our last six Chief Executives:

Nixon. . . . . . . . 34.0%
Carter. . . . . . . . 32.5%
Reagan. . . . . . . 51.0%
Bush 41 . . . . . . 64.1%
Clinton. . . . . . . 57.8%
Bush 43 . . . . . . 65.2%

Notice that during each Republican administration, the National Debt, as a percentage of GDP, increased, and during the Democratic administrations, they declined.

Occurrence and Duration of Recessions in Relation to the Political Party in Power

As the eight-year administration of President George W. Bush comes to an end, we are almost certainly in a recession. We won’t know for sure until we get fourth-quarter GDP numbers early next year, but most believe that we are well into a financial crisis that is the worst since the Great Depression. The current presumed recession will be the second in the eight years of President’s Bush’s two terms. This follows the eight-year administration of President Bill Clinton when the country did not go into recession. This prompted me to ask these related questions. 1) Is the country more likely to go into a recession when a Republican or a Democrat is elected President? 2) Do recessions last longer when they occur during a Republican or a Democratic Presidency?

The longest data set I could find on the timing and duration of recessions in the United States came from the National Bureau of Economic Research (NBER) and can be obtained at www.nber.org/cycles. It encompasses the period from the beginning of 1857 to the present. This interval contains 32 recessions. The Political Party in the White House can be found from any number of sources and is certainly not in dispute. The data set with which I started was a month-by-month record of the Party occupying the Presidency and whether or not the country was in recession. Because we don’t yet know whether and when a recession has begun in 2008, I used a data set that ended in 2007.

The first question I posed was this: given that a Republican is in the White House, what is the probability that the country is in recession? I then posed the same question about a Democrat. The answers were that 37% of the time that a Republican was in the Oval Office, the country was in recession. This was almost one and a half time more likely than when a Democrat was in office: the country was in recession 26% of the months when a Democrat was in office.

So, this seems to answer the first question: the country is more likely to be in recession when a Republican is President than when a Democrat holds the post. However, I’m sure that a number of people would immediately point out that if I am really interested in assessing responsibility for recessions, perhaps it’s best to look at who was President at some point prior to a recession, rather than at the same time. If the country is in recession when a new President takes office (as will almost certainly be the case for President-elect Obama), does it make sense to attribute the economic downturn to him or her? I don’t think so.

What is the appropriate time lag to use when trying to investigate cause and effect for a recession? I doubt there is much agreement about this. National Budgets are for one year. The time between Congressional elections is two years – one could argue that pertinent economic policy decisions might follow this interval in some way. I suppose one could also argue that the full term of a President might be needed before the full impact of policy would be manifested in the national economy. I doubt many would argue for a longer time lag, but who knows?

I decided to investigate two- and four-year time lags. Therefore, I reconstructed my data set, but this time I shifted the Political Party in the White House ahead two and four years in two separate analyses. In effect, this allows one to ask if the Party in power at a point in time has an effect on whether or not the United States is in recession two (and four) years later. These two analyses reduced the longevity of the data set I could use: I could not use 2006 and 2007 for the two-year time lag assessment, and had to further exclude 2004 and 2005 from the four-year analysis.

The results are almost identical to those with no time lag. With a two-year lag the probabilities become 37% and 25% for Republicans and Democrats, respectively. For a four-year lag, the numbers become 38% and 24%. With no time lag or with a time lag of two or four years, the probability of the country being in recession is one and half times more likely when a Republican is President. This difference is statistically significant.(1)

This still leaves a question unanswered: is this increased likelihood of recession with a Republican President due to the greater chance of a recession starting with a member of the GOP in office, or is it because recessions associated with Republicans last longer?

Excluding the current term, which I will not include for reasons stated above, my data set consists of 37 Presidential terms. Of these, Republicans were in office 22 times and Democrats 15. As I mentioned earlier, this timeframe encompasses 32 recessions. Republicans were in office when 20 of these began, while Democrats occupied the White House when 12 recessions started. This may seem like a substantial difference, but recall the prevalence of GOP Presidents during this time (22R, 15D). The ratio of 20 to 12 is not significantly different from that of 22 to 15. The ratios of “Republican” to “Democratic” recessions vary little when a two-year (16R to 15D) or four-year (17R to 13D) time lag is incorporated into the analysis. Therefore, we can conclude that recessions are not more likely to begin when one or the other Party is in power.(2)

This suggests that the enhanced proportion of years in recession associated with the Republican Party is not due to increased frequency of Republican-associated recessions. However, when I examined the length of recessions, I found that Republican-associated recessions were substantially longer: the difference was similar if no time lag is introduced (R: 21.0 months, D: 14.3), a two-year lag is used (R: 23.9, D: 12.7) or a four-year time lag is examined (R: 22.9, D: 13.5).

The recession that in all likelihood began earlier this year is clearly associated with the Republican administration of President George W. Bush. If history is a guide, it will be one that is far longer than average. Let’s hope that is not true.

Statistical stuff:
(1)When analyzing this data, there is a problem with the lack of independence of data. Clearly, each month does not represent an independent assessment of the relationship. At what interval of time are they independent? I’m not sure there is an “answer”. I decided that yearly intervals were sufficiently independent, so I restricted my statistical analysis to January of each year. I used a 2x2 contingency table analysis evaluated by chi-square. The results for zero time lag as well as two- and four-year time lags were all significant (p<0.05). The chi-square values were 4.6, 4.2, and 4.4 for these three analyses, respectively.
(2) A 2x3 contingency table analysis with “Political Party” and “Number of Recessions” as factors did not even approach statistical significance (0.8 < p < 0.7). Clearly, these numbers are not independent and therefore violate the assumptions of the test. I include it only to underscore that there is not even a hint of a difference here.

Welcome!

Welcome to my new blog! For several years, I have used publicly available data in the realm of macroeconomics and politics to gain understanding about what is really going on in our country and world, and to convey this information to others in a simple and straightforward manner. I have been a columnist, primarily in the Carroll Star News, and have spoken at a number of meetings in West Central Georgia. I have decided to create this blog to continue this process. I hope you will find my entries useful. I welcome the opportunity to answer questions that arise in the minds of readers – feel free to contact me if there is something you’d like me to investigate.