Midterm Morning After: The Walk of Blame!

Netrootsy partisan Alan Grayson blames the weather for his loss. Why didn't I think of that? ... P.S.: At least blame a server crash, or something Webby ... 6:45 p.m.

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Annals of Corporatism:  Another $45 Billion Gift to General Motors? Any time you have a firm that's "too big to fail" you have a form of corpratism, by definition, no? The government will step in to save the failing firm, and inevitably—to avoid disruptions—be forced to keep on some of the highly paid managers who drove it into the ground. The state becomes the guarantor of inequalities that the market alone would not generate, cementing in place a division of labor in which different people are semi-permanently assigned different and unequal roles in society, the way organs have different roles in a body (or corpus). That's certainly what happened with the Wall Street and Detroit bailouts.

Next come two additional temptations: a) The tempatation for the government to protect its new ward, giving it special treatment and in effect penalizing competitors who aren't affiliated with the government. And b) the temptation for the government to use its new leverage to pursue other social objectives—which only makes the firm seem more vital to the nation and increases temptation (a).

The Obama administration appears to have given in to both of these temptations. We now learn, for example, that GM has been given not only $50 billion or outright (in exchange for stock) but also extraordinary tax treatment that will shield it from up to $45 billion in taxes on its earnings over the next 20 years. (I wonder how Ford feels about that.) It's also becoming fairly clear that GM's government ownership is one reason it fell into line behind Obama-supported policies on fuel economy and carbon emissions. Reports Politico:

Treasury officials have always argued that managers appointed by the government have acted independently, and they point out that a majority of GM’s campaign contributions have continued to go to Republicans.

GM spokesman Greg Martin said that government ownership had no impact on the company’s about-face on fuel economy, attributing it to California’s move. He said that GM, with 20 percent of the U.S. market in 2009, couldn’t have dragged nine other carmakers along in supporting the deal.

But the auto lobbyist scoffed at this. “Foreign car companies always deferred to the Big Three” U.S. automakers. “There were a lot of good reasons to make a deal then, and there will be fewer in the future, and [government] ownership is one of them.

Indeed, an environmental lobbyist notes (in Politico's words) that "the government will retain a sizable piece of GM for years," and openly "hopes this influence will deter the company from fighting to weaken the next round of fuel economy rules."

We're not near Putinism, in which companies that don't support the administration are effectively blackballed and put out of business (though Ford might reasonably disagree). But the Tea Partiers aren't crazy to worry about a slippery slope—even the upper reaches of which are offensive, at least to social egalitarians. It's one thing to have risk-taking bankers and brokers making a million a year. It's another to have their exalted place in the economic hierarchy guaranteed by government as if they were entitled members of a House of Lords.

The bigger question is whether, given that some firms really are too big to fail, this isn't a slope we'll be on for the forseeable future ... 6:04 p.m.

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Ann Coulter argues the Senate will be more amenable to Republican ideas than GOP's numbers alone suggest, given the number of Dem Senators from reddish states who will be up for reelection:

Do you think Claire McCaskill, Jim Webb, Sherrod Brown and Jon Tester of Montana -- all of whom will be facing the voters in two years -- noticed that popular, long-serving Democrat Russ Feingold just lost an election in a much more liberal state than their own?

Even Lindsey Graham is going to start voting with the Republicans!

I wouldn't be so sure on that last one. ... 5:30 p.m.

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This seems like a day-after on which both sides are disappointed and only cheer themselves up when they see how depressed the other side is ... 1:29 p.m.

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The Twisted Logic of Obama-Boehner Compromise: My colleague Jon Alter went on MSNBC last night to declare that cooperation between the new Republican House and President Obama—entitlement reform and education are two obvious areas-—would be "good for both" sides. But it's more complicated than that, alas: A presidential race is a zero-sum game—only one side wins, and everything that's good for one side is by definition bad for the other. Passing a bill, even a great bill, can't be "good for both" sides in that contest. If Republicans want to defeat Obama in 2012, the areas of win-win cooperation would seem to be slim.

Luckily, members of Congress have their own hides to worry about. At some point, GOP legislators may realize that it's in their individual interests, if they want to be reelected, to actually accomplish something, even if that means boosting Obama at the expense of whoever gets the GOP presidential nomination. This realization often takes a while to dawn, however. In 1995 and 1996, for example, Republicans initially resisted a reasonable compromise on welfare reform, preferring to have "the issue" to use against President Clinton in the Presidential race. Only at the second-to-last moment in 1996 did Newt Gingrich decide—despite pressure from the Dole campaign—to actually try to enact a piece of legislation. The resulting bill was quite radical, by conventional Washington standards—but even then the constant temptation was to pass a bill so extreme that Clinton would have to veto it (a process recounted in Ron Haskins' insider history, Work over Welfare) ... 1:24 p.m.

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Overlooked: Small bright spots (by my lights) around the country. ... 1) South Dakotans vote to maintain the secret ballot in, among other things, union organizing elections. In short, no "card check" for them. It's hard to believe this law—even though it's an amendment to the state constitution and not just a statute—wouldn't be preempted by federal legislation. But in the coming debate over whether the left and Big Labor overreached, I'd say near-80% opposition is a hint that the answer is "yes." ... 2) Arizonans pass Ward Connerly's initiative against racial preference with 60% support. If Obama wants to demonstrate his willingness to take on Democratic dogma, this is one promising avenue he's occasionally hinted he might take ... 3)By 60-40 margins, Californians reject the attempt by Speaker Nancy Pelosi, Rep. Howard Berman, and billionaire Haim Saban to revive gerrymandering in California—instead extending the reach of a non-partisan redistricting panel to cover federal as well as state races. The result might in the end be more Democrats—if races are more competitive, Dems will sweep more of them in a Dem year. But it might mean curtains for Berman (whose district is ineluctably growing more Latino) ... Saban's millions were well spent, however. Thanks to his losing initiative, voters are now much more educated than before about the esoteric threat of gerrymandering. They should be even less likely to endorse a Saban-style party power play in the future. The political immune system now has antibodies ...12:35 p.m.

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