Tuesday, February 15, 2005

Democratic Death Spiral

I worked for a real estate development company between 1989 - 1992. It was a great job, as I had responsibility for control work on all office building development in California. I was able to travel from Chicago to LA, SF and SD about once a month, which was a pretty good perk during the winter months. But I digress.

I bring this story up, because anyone who knows anything about real estate development during that time knows that the industry headed into the tank in the early 90's and a lot of people ended up pursuing "alternate career paths". The company I worked for began in 1990 to lay-off people, sell long held assets and do anything they could to create profits and pay bonuses. As we observed this activity it soon became clear that the firm was in a death spiral. They could only cut expenses a short way until they hit bone. There was only so much in assets that they could sell until they were left with a portfolio of bad properties with little or no appreciation. As a young exec I learned from this experience to watch out for organizations in these death spirals. More importantly, I learned to not be the last guy out.

I see the same situation today with the Democratic Party. Since the 1968 elections they have only won three Presidential Elections to the Republican's seven. They now have lost the House and the Senate. Most Governors are Republican. Clearly, something is wrong.

Yet the Democratic response is bizarre in it's denial of the obvious. The party faithful, those who haven't left, respond that vote totals are close, the electorate is blind, and an evil president is tricking foolish yokels into supporting causes that are against their own self interest. They accuse Bush of being a theocrat, yet he is responsible for bringing democracy to Islamic people in the face of historic resistance from the "liberals" in the Democratic party.

The recent elevation of Howard Dean to the head of the Democratic party continues this "cover our ears and scream everything is ok" strategy. Howard Dean, represents the extreme left of the party. Supported by Move-On.org he is quite open in his desire to raise spending, raise taxes, limit military funding, and leave Iraq immediately. The very issues that were just defeated in the recent election. In fact, Howard Dean's appeal is so marginal, he couldn't even win the Presidential nomination of the party that just elected him as its leader.

Death Spiral anyone? The remaining members of the party increasingly find themselves represented by the most shrill of the party's leaders. They've got terrific jokes - How many Bush Cabinet members does it take to change a light bulb? None, there is nothing wrong with the light bulb, blah blah blah - great insults about the Chimp in Chief, but nothing of value to offer to those who count the most, voters. This is the same situation as my little real estate company. Leaders make themselves feel good with false advances and rhetoric, while those of us on the outside recognize the disaster for what it is.

The tragedy is that alternatives for a return to national prominence exist. On issues of Social Security and Medicare reform, the Democratic party has failed to offer one credible idea. The party that invented these programs that have improved the lives of millions, refuses to do anything except to say "no". Not very inspiring is it?

Economic policy is another target of opportunity. Bush has done a decent job of beginning to reform taxes through marginal rate reductions, long-term capital gains reductions and death tax reform, yet he avoids the real issue. Spending must be brought under control. This is a once in a generation opportunity for Democrats to change their image as big spenders. Sadly, their only criticism is that taxes are too low and that we need to spend more - everywhere....except on defense.

In the article linked above, Horace Cooper Head of the Centre for New Black Leadership does an excellent job of telling Democrats what they need to do. The question is, are they listening?

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