Gross Domestic Product Falls 3.8% in 4th Quarter of 2008

The Bureau of Economic Analysis released its first estimate of change in Gross Domestic Product (GDP) for the fourth quarter of 2008. Real GDP (adjusted for inflation) fell 3.8% in the 4th quarter compared to the preceding quarter. GDP fell 0.5% in the 3rd quarter. This represents the fifth quarter during the Presidency of George W. Bush when the GDP has fallen. This is the first time we’ve experienced back-to-back quarterly declines since the presidency of George H. W. Bush.

Today’s estimate is called the “advance” estimate. In about a month, a revised “preliminary” estimate will be released, with the final number coming about a month later.

These numbers continue to indicate that the nation is experiencing its worst economic condition since 1982 during the second year of the administration of President Ronald Reagan. In late 1981 and early 1982, real GDP fell 5.0% and 6.6% in consecutive quarters. Yesterday’s initial jobless claims number also represent the worst numbers since this same period over 25 years ago.

Jobless Claims Continue To Rise

Initial jobless claims for the week ending January 24 were 588,000, up slightly from a revised 585,000 recorded last week. The four-week running average stands at 542,500. Continuing claims reached continued to rise, reaching 4,776,000. The four-week running average is 4,630,000. All of these figures represent the highest levels since 1982 during the severe recession of the Reagan administration. The complete Department of Labor press release can be found here.

The So-Called “FairTax”

A couple of years ago, I wrote a column on the so-called “FairTax” for one of our local newspapers. In it, I pointed out some of the major claims of its proponents, and then tried to point out that they are, in many cases, unfounded.

This proposal has gathered a rather small army of supporters who can certainly be called “enthusiastic”. Why they are so enthused about a proposal that does not benefit most of them is a puzzle to many. This “enthusiasm” was made clear by a letter to the editor written by one of them shortly after my previous column. Rather than simply trying to point out flaws in my reasoning, it began with a demeaning personal attack on me. I’m hoping that any replies to this piece will be focused on the facts.

So, what is this so-called “FairTax”, who is promoting it, and how are they doing so? In a nutshell, the legislation would eliminate essentially all Federal taxes and replace them all with a single tax on all new goods and all services. In essence, it is a sales tax, but would apply to services as well as goods. The proponents say that a tax rate of 23% would be sufficient to raise the same amount of revenue as do all of our current Federal taxes and the payroll taxes combined.

This number has provoked a lot of discussion. Let’s look briefly at this before proceeding. Under the plan, an item that would cost $1.30 to the consumer would, in its price, contain $0.30 of tax. They say that since 0.30/1.30 = 23%, that the tax rate is 23%. That math is correct. However, when we typically pay sales tax, we look at the price of the item BEFORE the tax is added and then add a set percentage on top of that. So, this item cost $1.00 to which $0.30 tax was added. We would call this tax rate 30%: 0.30/1.00 = 30%. This is actually just a definitional difference, but it is important because the so-called “FairTax” is often called a “national sales tax” or a “consumption tax” and these are usually computed such that the tax rate above should be viewed as 30%. Let’s not dwell on this – let’s just recognize that, depending on how it is computed, the tax rate is either 23% or 30%.

Who are the proponents of the so-called “FairTax”? Apparently, it has its origin within a group of Texas businessmen who did not like the current taxation system for a variety of reasons. They formed a group called the “Americans For Fair Taxation” and formulated the plan. It became known as the “FairTax”, and has been introduced in Congress every year since 1999 by Georgian congressman John Linder. The most vociferous proponent of the plan is, perhaps, Atlanta radio talk show host Neil Boortz. In fact, Boortz and Linder have published two books on the subject. For short, I will refer to these books by the initials of the authors “B&L”.

Several of the early candidates for President in 2008 expressed support for the so-called “FairTax”, although neither Party’s nominee did so. Among these, perhaps Mike Huckabee was the most vocal supporter. Because it is widely thought that Huckabee is already running for President in 2012, it is likely that the so-called “FairTax” will receive considerable attention over the next few years.

There are a number of claims made by this proposal’s supporters. Over the next several weeks, I’ll be looking at them in some detail. To begin this process, let’s look at what I think may be the most attractive aspect of the so-called “FairTax”. It would be the most attractive, that is, if it were true. This claim deals with the idea of “embedded” taxes and what will happen to the prices of goods and services and to the take-home pay of Americans should this plan be enacted.

From here on, I will refer to this proposal as the “FT” for short. In their initial book, B&L claimed that with the FT, the prices that people will pay for goods and services after the imposition of the tax will be essentially the same as they were before its enactment. They also claimed that everyone would get to keep 100% of their paychecks. So, quite pointedly, they claimed that prices would remain constant and everyone would get to keep their gross pay, thereby yielding an increase of, say, 25-30% in their take-home pay.

Who wouldn’t like such a scenario? I would, too, if it weren’t fantasy.

In reality, the relationship between prices and take-home pay will remain the same after the FT in put in place. Perhaps both would remain the same – perhaps both would increase by about the same amount. But the fantasy that everyone would have 25-30% more money to use on goods and services that had not increased in prices is just that – fantasy.

The claim is so far-fetched that B&L have backed off of it to some degree, even seeming to claim that they never really said it. I will take this up next, now that I have introduced this proposal to readers. You will be able to look at the quotes that I will supply and then decide for yourself what B&L said and what they meant.

Weekly Jobless Claims Match Recent High

The Department of Labor released the weekly jobless claims data this morning. The initial claims number for the week ending January 17 was 589,000. This matches the high reached four weeks ago, and represents the highest total since 1982. The four week running average remained constant at 519,250 and is down from the high reached four weeks ago. Continuing claims for the week ending January 10 rose to 4,607,000. This is slightly lower than the high reached two weeks earlier.

Jobless Claims Climb to 524,000 for Week Ending January 10, 2009

The Department of Labor (DOL) released the weekly jobless claims report this morning at 8:30am EST. Seasonally-adjusted initial jobless claims for the week ending January 10, 2009 were 524,000. Those for the preceding week were revised upward by 3,000 to 470,000. The four-week running average was 518,500, a decline of 8,000 from the previous week. This represents the fourth week in which this value declined. Seasonally-adjusted continuing claims for the week ending January 3 were 4,497,000. The four-week running average continued to climb, reaching 4,497,750.

Recently, I did an analysis of the historical pattern of jobless claims in an effort to find signals that might mean the end of the recession is at hand. The numbers for this week offer no such evidence. Go here to read this.

For the complete DOL press release, go here.

December Retail Sales Decline

Advance retail and food services sales estimates for the month of December, adjusted for seasonal and holiday-related differences, dropped considerably from month ago and year ago figures. Numbers from the U. S. Census Bureau indicated that sales were off 2.7% from November and 9.8% from December 2007. These numbers are not adjusted for inflation. Total sales for 2008 were down 0.1% from a year ago.

The data helped send the Dow Jones Industrial Average down 248 points for the day.

For the entire story, go here.

January 20, 2009 – Thank Goodness!!

Next Tuesday at 11:30am, President-elect Barack Obama will assume the Presidency of the United States of America. What a wonderful moment that will be! We cannot know for certain what the future will bring, but once again we can be hopeful that the future will be better than the past.

Our country faces the most severe economic crisis in three generations. Rather than working to solve these problems, President Bush has chosen to spend his last days in office in an attempt to polish his legacy.

For many, it is difficult to remember where we were eight years ago and what these years have meant to the average citizen of this country. Let’s take a look at some of these aspects of our national economy.

The Gross Domestic Product (GDP) is the measure of the total value of all goods and services produced in the country. During the eight years of the President Clinton, when adjusted for inflation, it grew at an annual rate of 3.6%. During the past eight years, it has grown 2.2% per year. When you factor in the fact that our population grows at about 1% per year, these figures become 2.6% vs. 1.2% in terms of the amount of goods and services produced, and therefore available to, each citizen.

Recessions, as defined by the National Bureau of Economic Research, are periods of reduced economic activity: GDP declines and unemployment rises. During the past eight years, two recessions have begun. During the eight years under President Clinton, there were no recessions. This has been a repeating pattern in recent years: of the past 11 recessions, 10 began with Republicans in the White House.

Despite what President Bush has said again and again, he did NOT inherit a country in recession. The recession of 2001 began five months after his election. It was also not caused by the attacks of 9/11: it began five months prior to that terrible day.

The years of President Bush have been particularly hard on working Americans. Although he will boast that three million jobs were created during his two terms, over 14 million jobs were needed just to keep up with our increasing population. This means that there was a “jobs deficit” of over 11 million during his Presidency. There has been a deficit in five of his eight years. In contrast, there were 23 million jobs created during President Clinton’s term in office, far more than the 13 million needed to keep up with growth in the work force. In every year of the Clinton Presidency, there were more jobs created than were needed to employ our growing population. In my lifetime, two Presidents have overseen periods of “jobs deficits”, and their names were Bush.

The Stock Market is also an indicator of economic growth, although it is not solely due to activities within our country: most large corporations do business around the world. During the past eight years, the Dow Jones Industrial Average has declined by 17%. In contrast, this value rose 229% during President Clinton’s years. The Market declined in each of President Bush’s terms. All of us are acutely aware of recent Market losses: it has dropped 40% in a little over a year. The last eight years represent the worst Stock market performance of a Presidential administration since that of President Herbert Hoover.

Perhaps of greatest consequence to the long term health of our country is the massive debt that has been accumulated during the past eight years. Today, the National Debt stands at $10.6 trillion. $4.9 trillion of that has been accumulated during the last eight years. 46% of the National Debt has been accumulated during the Presidency of George W. Bush. In fiscal year 2008, we spent $412 billion just on interest payments on our debt. Since half of that was accumulated during the past eight years, we can thank President Bush for saddling us with these interest payments. And they will be with us for years to come.

At this point, every American’s share of President Bush’s debt is over $16,000. Every year, each of us will have to pay an additional $630 in taxes just to pay interest on the debt he has accumulated. On average, we will each have to pay taxes totaling $16,000 to eliminate this debt accumulated under this President. Where will President Bush be when we have to make this sacrifice?

We can’t know what will happen during the Presidency of Barack Obama. But as we move into this next phase of our country’s history, let’s be crystal clear on what has happened over these past eight years. Economically, it has been a true disaster. Let us all hope that better days lie ahead economically, and in all of the other aspects in which this country has been tarnished of late.

Is There Any Good News in Recent Jobless Claims Numbers?

Last Thursday, the Jobless Claims numbers released by the Department of Labor were pretty grim. The weekly Initial Jobless Claims were 467,000 representing 0.35% of those workers covered by unemployment compensation (i.e., insured work force). These numbers are down a bit from those reached two weeks earlier (586,000 and 0.44%), which were the worst since 1992, late in the administration of President George H. W. Bush. The continuing unemployment claims came in at 4,611,000, the worst since 1982 during the second year of the administration of President Ronald Reagan. This number represents 3.4% of the insured work force. This is the worst since the fall of 1983, when this value had been dropping since a peak of 5.4% late in 1982.

So, the initial jobless claims have dropped for two weeks, while the continuing claims are still rising. Is there any room for optimism in these numbers? Based on recent historical patterns, is there any reason to believe that the current recession, now 14 months old, is at or nearing an end?

Let’s look at the initial claims first. Is a drop for two straight weeks indicative of the end of the recession? No. In fact, this has already happened six times in this recession. In fact, there is so much “noise” (short term up and down movement) in this number that any consistent change of even three or four weeks isn’t really a signal of anything. At the end of the recessions that have occurred since 1970, there is still a great deal of noise in the individual weekly numbers. This is why this number is often presented as a four-week running average. This has the effect of smoothing out some of this week-to-week volatility.

This four-week running average has now declined two weeks in a row. Is this good news? Not by itself – this has already happened seven times in this recession alone. In fact, we have seen four straight weeks of decline in this number early during the current recession.

What has happened historically in this value? The pattern has not been consistent. At the end of the last five recessions, the longest “runs” of consecutive weeks where the four-week running average of weekly initial claims declined were four weeks (in 2001) and six weeks (in 1970). During recent recessions, there have been runs of five, six and seven weeks that did not occur at the end of those downturns.

So, even a consistent decline in this four-week running average of initial claims doesn’t seem to provide much information about the end of recessions. Perhaps we need yet more “smoothing” of the data? Let’s look changes in this four-week running average over more than a one week period. I examined the historical patterns of the past six recessions (those since 1970) and found that only by looking at the eight-week change in four-week running average of initial claims was there a pattern at the end of recessions that was not found within them.

That was quite a mouthful! Let me explain what I did in a bit more detail. I created a data set of the four-week running average of the weekly initial jobless claims. I then looked at the change in this value each week compared to the value from a point in the past. Finally, I looked to see if there were consistent periods in which this difference was declining, and that these periods were longer at the end of recessions than at any time during but NOT at the end of recessions.

The critical time period over which to examine the change in four-week running average of initial claims turned out to be eight weeks. That is, lets’ look at the four-week running average now compared to what it was eight weeks ago. Let’s call this the 8-4 number. At the end of the last six recessions, there are consecutive periods where the 8-4 number declined at least 17 weeks in a row – the average was 21 weeks. During, but no at the end of, any of these recessions, the longest consecutive period where the 8-4 number declined was 11 weeks – usually, it occurred no more than five weeks in a row.

This means that we need to see the 8-4 number decline every week for about three or four months. So far, it has not declined even one week. To get the first decline in the 8-4 number, we’ll need to see initial jobless claims this Thursday of no greater than 483,000. Then we’ll need to see it continue to decline for three or four months.

Next, I’ll look to see what kind of “signals” might be deduced from the continuing claims numbers.

December Jobs Report Bad – Revisions, Adjustments Make It Even Worse

The Employment Situation Summary, often called the Jobs Report, was released this morning by the Department of Labor (DOL). The numbers are bad for December. However, revisions to the two preceding month’s data make it even worse.

The headline jobs number was a loss of 524,000 jobs during December. These data are from the “Establishment Survey”, officially called the Current Employment Statistics survey, which is conducted on 150,000 businesses and government agencies. Last month, the DOL reported that 533,000 jobs were lost. However, this month’s report also includes a downward revision for each of the last two months totaling an additional 154,000 jobs. So in reality, there are now 678,000 fewer jobs that were indicated by last month’s report. During 2008, nearly 2.6 million jobs were lost.

This is the worst, by far, than any year since 1975 when the currently available data set begins. As bad as these numbers sound, in reality they are even worse. As I pointed out in an earlier post, the country needed almost 1.9 million jobs just to keep abreast of the growing population. In fact, this growing population should create this number of jobs due to increased demand. So, in fact, the “job deficit” for this calendar year is nearly 4.5 million. This is more than a million worse even than the severe recession of the Reagan Presidency.

The Unemployment Rate reported this morning was 7.2%, up from a revised 6.8% last month. The initial report from last month was 6.7%, so this month’s reading is actually 0.5% worse than last month. These data are from the Household Survey, or Current Population Survey, which is conducted on 50,000 households each month.

Many have argued that this official unemployment rate is a deceptively small number as it does not count those who have given up looking for work. A number of alternative numbers have been proposed to reflect a more accurate picture of our employment situation. In an earlier post, I explained one such alternative value, which I called the Adjusted Unemployment Rate. This now stands at 9.4%, which is again the worst since 1982 during the Reagan recession.

December Jobs Report – Unemployment Rate 7.2%, 524,000 Jobs Lost

The Department of Labor released the monthly Employment Situation Summary (often called “The Jobs Report”) at 8:30 EST this morning. In December, 524,000 jobs were lost. The Unemployment Rate stands at 7.2%, up from 6.8% last month

Initial Jobless Claims – Week Ending 3 January 2009

At 8:30 EST this morning, the Department of Labor released the weekly initial jobless claims numbers, also called the unemployment initial claims. For the week ending 3 January 2009 on a seasonally-adjusted basis, there were 467,000 new claims for unemployment benefits. This was 24,000 lower than the revised number from last week, and was lower than most predictions. This represents 0.34% of the insured workforce (those eligible for unemployment compensation). That figure is down from the 0.44% reached a month ago, which was the highest since the administration of President George H. W. Bush.

Seasonally-adjusted continuing claims for the week ending 27 December 2008 came in at 4,611,000, which was 101,000 greater than a week earlier. This represents 3.4% of the insured workforce, and is the highest level since 1983 during the severe recession during the administration of President Reagan.

Initial Jobless Claims

In earlier posts, I discussed two important indicators of the national economy in terms of employment. The first was the monthly “jobs number”, or the number of jobs created/lost. The second was the unemployment rate. Both of these are presented by the Department of Labor (DOL) on the first (or sometimes the second) Friday of the month. The December numbers will come out this Friday.

Today, I want to look at the “Initial Jobless Claims”. This number is presented by the DOL each week: the report on each Thursday represents the data for the preceding calendar week. Tomorrow, we’ll get data for the week ending on 3 January. The number represents the number of persons who first file for unemployment compensation.

Clearly, this has some relation to the jobs number (inversely) and the unemployment rate (presented as a percentage). However, these pieces of data come from three separate sources. The unemployment rate comes from the “Current Population Survey”, also referred to as the “Household Survey”. It represents data collected on a monthly basis by contacting homes directly and posing questions about the employment status of those in the home, and is conducted by the Bureau of the Census on behalf of the Bureau of Labor Statistics.

The jobs number is constructed from the “Current Employment Statistics” survey, often called the “Establishment Survey”. It is also compiled by the Bureau of Labor Statistics. These data are collected by contacting businesses directly and posing questions about their employment situation.

The initial jobless claims number, actually called the “Initial Unemployment Claims”, is the most current employment information available. It is certainly important in its own right – it represents a large fraction of the actual number of Americans who have recently become unemployed. It doesn’t really reflect the actual number because many who do not have work do not apply for benefits, and many who have lost their job do not qualify for unemployment compensation. Nonetheless, it is a useful indicator. However, for comparisons across time, it can be misleading because it is important to view this number in light of the size of the current population and workforce. Therefore, the BLS also presents the number of workers covered under the unemployment compensation system. Using this as a base, the current numbers can be computed as a percentage, aiding comparisons across time.

So, where are we? Over the past couple of months, the weekly initial jobless claims have exceeded a half million every week except last week when they came in at 492,000. These data are the worst in over 25 years: they are the highest since the recession that occurred during the early years of the Reagan administration. However, when taken as a percentage of the number of insured workers, the data are now reaching levels that were seen during the administration of Bush-41. The recent peak was 0.44% observed week before last. A value of 0.54% was seen in the middle of 1992.

We have no idea whether we have seen the worst numbers in this current downturn. Tomorrow we will get more information. At that time, I’ll provide some more historical information, and some insight into whether the initial jobless claims can give us any insight into whether this recession is nearing an end.

Happy New Year!

I hope everyone had a good break over the Holidays. I’ll be posting every day going forward. I wanted to start by giving you a couple of updates on what I’m doing. First, I’ve created a blog that will be devoted to the US Senate. It’s called “Senate Numbers”, and the URL is www.senatenumbers.blogspot.com. I’ll still post some things here of a more general nature, but will do most writing on the Senate there. I’ll put a brief post here every day or two telling you what I’m posting there, and vice versa. Second, as I imagine you noticed, I switched this to a 3-column layout. I’ll be putting some current information and numbers in the left sidebar. (I thank www.threecolumnblogger.com for the code. If you are interested specifically in this layout, which is “Rounders 3”, and the code to make it 3 columns wide, instructions can be found here.)

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.