China Marc Rotating Header Image


Is Tillis Being Shut Out of the (Tea) Party?

Some things I find truly mystifying. For example, the North Carolina Senate race is one of the closest races in the country. Given North Carolina’s recent electoral history, you would think the race would be a slam-dunk for the Republican candidate. After a brief moment of insanity in 2008, the state has since sent Republican super-majorities to the state General Assembly twice(!), replaced an incumbent Democrat governor with a Republican, flipped 4 Congressional districts from Democrat to Republican (going from 8D-5R to 4D-9R), re-elected a Republican Senator, and voted for the Republican Presidential candidate in 2012. So, why is the race so close and not a blow-out for Thom Tillis?

The primary reason appears to be less-than-enthusiastic support for Tillis from the right-wing of the party. Somewhere along the line, Tillis became branded with the “Establishment” label by party activists. In more conservative circles, “Establishment” typically translates into “sell-out” owing largely to the tendency among GOP leaders to avoid political fights in favor of appeasement of liberal Democrats. Definitionally, I suppose you could use the “Establishment” label in regards to Tillis. He is, after all, Speaker of the House. However, in this case, I believe that the “sell-out” corollary is inaccurate. A look at his tenure as Speaker will reveal that he is the type of leader that these activists want, even if they haven’t quite realized it yet.

Over his two terms as Speaker, Tillis has helped push North Carolina politics right-ward in a way that would have been unimaginable even five years ago. His list of accomplishments is impressive and includes most of the items on every conservative’s wish list. He helped push through one of the most significant tax cuts in North Carolina history, simplifying the tax code and dropping rates across the board. He helped restore balance to the state budget, restore stability to the state’s Medicaid spending, and took an axe to a variety of state programs (most notably at DENR). On the social issues side, he led the charge for the state marriage protection amendment in the House and helped pass a package of new abortion notification requirements and regulations. Under his leadership, the House also passed an election reform law, the most notable aspect of which was a new photo-ID requirement for all voters. He also facilitated passage and approval of new election precinct maps, which corrected many of the most egregiously gerrymandered districts and will provide a competitive landscape for Republican candidates for years to come.

In short, Tillis helped usher in the conservative revolution that has swept North Carolina politics over the last four years. He has accomplished what he was elected to do, namely restore the vitality of the state’s economy and scale back the size of the state government. North Carolina has become a model for conservative reformers in other states who are looking to restore government to its proper role. Indeed, with a little adaptation, the North Carolina model could easily be applied to many of the problems plaguing the federal government.

This is why it is so curious that Tillis has not attracted more Tea Party-esque support. One wonders, what more do they want? Tillis lacks the skillful oratory of Ted Cruz, but he has proven himself a very capable conservative reformer. In addition, on more than one occasion, he has stared down the Democrats and won. Prior to the Republicans’ super-majority status in the House, Tillis managed to override several important vetoes from Democrat Governor Bev Perdue. Without compromising his own position, he was able to pressure enough Democrats to switch votes that the House was able to override the vetoes on such things as the state budget and the lifting of the fracking moratorium. Tillis wasn’t abandoning his principles. He was convincing the Democrats to abandon theirs! The very existence of the weekly pity party on Jones Street (the so-called “Moral” Monday crowd) and the pathetic protests from the state’s most radical leftist groups should be a clue that perhaps Tillis is doing something right.

Tillis is exactly the type of reformer that conservative activists have been clamoring for. That these people are branding him with the “Establishment” label simply because he happens to hold a powerful leadership position is simply ridiculous. Would they abandon Ted Cruz if he happened to become Senate Majority Leader or if Karl Rove decided to cut him a check? The GOP needs leaders like Tillis, leaders who are willing to face down the opposition, push through conservative reforms, and assume leadership roles within the party and government. The country needs leaders like Tillis, and the Conservative Movement would be passing up on a unique opportunity to get one of their own into the Senate and (likely) into the party leadership.Despite the fact that he has attracted support from actual Rockefeller Republicans (looking at you, Jeb), Tillis is a proven conservative reformer who could do much good for the country and the party. A vote for Tillis wouldn’t be a compromise vote. It would be a step forward.

Leadership on Cruz Control

The various responses to Ted Cruz’s Defund ObamaCare campaign are as enlightening with regard to their content as they are for who’s responding. For example, take Senator Richard Burr’s (R-NC) March 13th endorsement of the defund strategy and compare it to his more recent suggestion that “it’s the dumbest idea [he’s] ever heard of.” Also consider McCain aides leaking the fact that their boss “f-ing hates” Cruz. But note that McCain doesn’t hate Cruz for his policies, but rather for his “style” (read: the freshman needs to learn his place). Top Republicans also sent opposition research to Fox News host Chris Wallace in advance of his Sunday interview with Cruz so that he could “hammer” Cruz.

After their performance in the last election, it was easy to believe that the GOP didn’t have any fight left in it. It turns out that wasn’t quite true. They really know how to roll out the big guns when the target is one of their own. Think about it. When was the last time John McCain really went after somebody who didn’t have an R after his name? The reason for this isn’t so much a clash between the more liberal and more conservative wings of the party, but rather because the party lacks leadership.Ted Cruz Smile AP

The current “leaders” of the Republican Party have been in office for 20, 30, 40 years. Tenure in office isn’t necessarily a bad thing, but it becomes detrimental when it causes the office-holder to become complacent. You fall into a rut. You run a token campaign every two or six years, get your cushy office with a staff to attend to your every need, lots of people like you, and every now and then you get to sit for a TV interview. Not a bad life. Maybe you’re not in the majority party, but that’s ok because it means you don’t have any actual responsibility for anything. You can just put your life on cruise control, and ride off into the sunset a wizened, old statesman who never really accomplished much but was able to live pretty comfortably.

But then along come these new kids who actually want to do something. You don’t necessarily disagree with their policy aims, but accomplishing those aims would involve doing some actual work. You would actually have to take a stand on something (rather than just taking a series of meaningless symbolic votes whose only purpose is to provide content for your auto-pilot re-election campaign) There’s even the possibility that some people may not like you if you stake out a position. You might not get as many TV interviews and a couple angry people might call your staffers (your staffers would actually bear the brunt of whatever decision you make, but receiving their reports would make you really uncomfortable). There’s also the fact that most of your other Senator friends feel exactly the same way you do (the fact that Cruz is basically doing this by himself is often presented as a reason not to do it). So, even if you do decide to do something, you’ll likely be doing it alone (and who wants to do that?). In short, you’re afraid to lead. So what do you do? Take down the kids (or “wacko birds” to borrow McCain’s parlance) that are rocking the boat. Publicly oppose their efforts in Congress. Leak incriminating evidence to the press. Have your aides run around and say lots of nasty things about them. Then you can go back to living your dull, safe, comfortable life.

In his defense, McCain probably meant "Angry Birds"

In his defense, McCain probably meant “Angry Birds”

There’s nothing wrong with feeling this way, but then you probably should have thought about that before you signed up for a job where the only job requirement is to be a leader. You were elected to make hard decisions. You were elected to stand alone. You were elected to bear the burdens that elected representatives must often carry. Ted Cruz understand this. Mike Lee understands this. Rand Paul understand this. Most of the rest of the party does not. To put it in context, the Founding Fathers risked everything they had (“[their] lives, [their] fortunes, and [their] sacred honor”) for an idea that had a significantly smaller chance of success than today’s Defund movement. Today’s representatives are simply being asked to make a vote that makes them a little uncomfortable. Is that really asking too much?

The core of the Republican Party’s problems do not involve its outreach efforts to Hispanics or its stance on social issues. Its problem is that it doesn’t know how to lead. Until the party is willing to take bold, principled risks, it won’t win another election. Having members of the party running around sabotaging each other does nothing but reinforce the image of the GOP as a ship without a captain. It wouldn’t be that hard to change this and, the effect would be more powerful than the millions of dollars Crossroads sank into its really effective 2012 ad campaign. The old guard simply has to let those who want to lead, lead. The irony is that the harder the GOP tries to make people like it, the faster they will abandon it. If the party wants to become electorally viable again, it must stake out controversial positions and be willing to take risks. Moderates don’t make history.

Mark Sanford’s Congressional Affair

Things are going well for would-be-ex-former-Congressman Mark Sanford. Despite his campaign having one of the most predictable collapses in the history of American politics, the former governor still trudges on. Fresh off his debate with Nancy Pelosi (whose responses were as enlightened as ever), Sanford finally managed to debate his actual opponent last night. In between discussions of Sanford’s decision to abandon his gubernatorial duties to run off to another country with his mistress, his subsequent divorce, and his more recent trespassing charge (filed by the same ex-wife who was dropped in favor of “foreign relations”), the candidates managed to discuss issues of real importance. Such things as whether Mr. Sanford flip-flopped on his support for a harbor dredging project in Charleston 20 years ago and what Ms. Colbert-Busch hoped to accomplish by writing a check for Sanford’s gubernatorial campaign are of prime importance to the voters and really serve to demonstrate how the two candidates would represent the district on such matters as immigration reform, taxes,  and ObamaCare.

But never fear! Sanford nearly has the election clinched. Only half of the district’s voters hate him and, he’s only down by nine points, in a district that gave former Rep. Tim Scott 62.4% of the vote. Luckily, Sanford has the situation completely under control. He’s even managed to drum up some support from local businesses that have started buying billboards for him, like this one:


Have an affair, and you, too, can be a congressman.

Have an affair, and you, too, can be a congressman.

With such impressive polling numbers and unmatched local support, the local GOP establishment has really picked a winner this time. It’s clear now what the GOP’s path forward should be. The base should just sit down, shut up, and let the party elites pick the winning candidates.

Stupid is as Stupid Does

Given the beating the GOP took in the last election, you’d think the party would have learned a few things, namely that running damaged candidates for Congress doesn’t usually work out so well (looking at you, Todd Aiken). However, the lesson doesn’t appear to have sunk in and, South Carolina Republicans appear ready to nominate someone (to fill Tim Scott’s old seat) with so much baggage that he gets nailed with those excess luggage fees every time he hops on a plane down to Argentina. I am, of course, referring to disgraced former governor, Mark Sanford, whose most distinguishing act in office was inspiring a state-wide game of Where’s Waldo for a week while he engaged in some foreign relations in Argentina. The only redeeming feature of a Sanford candidacy is that he’s already on-board with the GOP’s new Hispanic outreach plan, that is if the GOP’s idea of outreach is abandoning your wife and children to go have a sexual romp on the other side of the world. forrest-gump_40570

However, despite Sanford’s questionable moral and ethical choices, he appears ready to coast to an easy primary victory. For reference, in November 2012, Tim Scott won his election with 62% of the vote. Recent polling suggests that Sanford will defeat Curtis Bostic in the April 2 primary 53-40. However, in a hypothetical match-up, Sanford is currently losing to the Democrat’s nominee, Elizabeth Colbert-Busch (yes, that Colbert) 47-45, while Bostic ties Colbert 43-43. Meanwhile 58% of the district’s voters have an unfavorable view of Sanford. So, in much the same way that the GOP nominated perhaps the only candidate who could lose to Barack Obama (i.e. Romney), they appear ready to nominate the only candidate who could quite possibly lose a solidly red district in solidly red South Carolina. Why? Because the same base voters (Evangelicals and other Social Conservatives) who are currently fueling Bostic’s campaign will simply stay home on Election Day if Sanford wins, the same factor (if you’ll recall) that cost ol’ Mittens the election. Their options will be between a typical, toe-the-line Democrat and a (possibly insane) scandal-plagued former governor who cheated on his wife. So, they’ll just opt to sit this one out. And you can hardly blame them.

I think what’s really amusing about this whole situation is that the Democrats don’t really have to do anything to win elections anymore. They just have to wait for the Republicans to nominate the least inspiring candidates they can find, and otherwise unwinnable elections for the Democrats suddenly become wide-open. There are a lot of Republicans in South Carolina. Is Mark Sanford really the best person the party can put forward? Forget all this minority outreach baloney. The party needs its base to turnout in order to win elections. And the longer the GOP thumbs its nose at the base by nominating buffons like Mark Sanford for Congress, the faster it will slide into irrelevance.

Is Chinese Currency Manipulation a Bad Thing?

One of the most striking features of the last two Presidential Debates was the rather strident, bipartisan China-bashing. While it’s relatively easy (and quite popular) to bash the Yellow Man for his purported economic misdeeds, I think the topic requires thoughtful consideration and a little more attention than either candidate appears to be giving it.

Currency manipulation came up a lot in the debate. Apparently, the Chinese are deliberately under-valuing their currency (shocking, I know). First, I think it’s useful to gain a basic understanding of how the Chinese yuan operates. For the last 20 years or so (the exact date eludes me), the Chinese government has maintained what is known as a “peg” on the US Dollar. So, as the dollar appreciates in value (becomes “stronger”), so does the yuan. As the dollar depreciates (“weakens”), the yuan also depreciates. This ensures a fixed exchange rate between the yuan and the dollar and theoretically eliminates some of the currency risk between the US and China. So, if an American wants to invest in China (or a Chinese in America), he can be reasonably sure that the value of his currency holdings won’t change over time and, in theory, this makes it easier to conduct business in both countries. This is in contrast to something like the Euro, which maintains a floating exchange rate. So, the value of the Euro via the Dollar changes daily. The Chinese government sets the value of the peg (currently set at about 6.3 yuan to the Dollar) and actively trades in the currency markets to maintain that value. Every now and then the government may opt to change the spot of the peg (they are currently allowing for some appreciation), but this is the only time you see any real change in the value of the yuan. Pegs are nothing new and nothing unique to Communist governments. The US Dollar was pegged to gold until Nixon severed the peg in the 1970’s. So, that’s how the yuan works.


The yuan is generally believed to be valued at about 20% less than what it would be were the government to allow the value to float. This is the heart of the currency manipulation concerns. So, what does this mean? All else being equal, something priced in yuan whould be cheaper than something priced in dollars. But of course, everything else isn’t equal. People like to claim that China’s economic competitiveness is due largely to its intervention in the currency markets. However, there are other domestic factors that make China a hot-bed for manufacturing and industrial growth. One of the largest is labor costs. A recent report by the Bureau of Labor Statistics indicates that when compared to the United States, labor costs in China are 97% lower. In other words, if an employer pays an American $10/hour to do a job (make iPhones or something), he can pay a Chinese worker $0.30/hour to do the same job. Clearly, the employer is going to produce his goods in China. With such extreme differences in labor costs, a little currency manipulation isn’t going to change the equation much. There are other factors that make China a desirable place for businesses to set up shop (i.e. its rather lax attitude towards regulation and enforcement among others), but I think labor costs are key. With such low labor costs, even if the yuan traded at a “fair” valuation, China would still be the cheaper place to do business.

This then raises the question, what is the effect of the manipulation of the yuan on the average consumer? The answer is that the consumer gets a discount every time he walks into Wal-Mart, courtesy of the People’s Republic. So, on the consumer side, he can buy more things (things made in China, that is) for less money. Not too much to complain about there. Labor, of course, will complain about Chinese price advantages driving jobs overseas, but the fact of the matter is that those jobs were probably headed overseas anyway. Technically, I suppose this is a form of government welfare, with the PRC indirectly subsidizing American purchases of Chinese products. Conservatives generally take issue with any form of government subsidy, but is it really my place to complain if a foreign government wants to give me a subsidy? Really, instead of getting all over China for undervaluing their currency, we should be thanking them.

It looks impressive until you realize she’s only holding about $150.

Let’s also not pass over the sheer hypocrisy of the China-bashers. When the Chairman of the Federal Reserve is promising to pump $85 billion per month into the money supply indefinitely (thereby devaluing the dollar), it’s a little brazen for the federal government to get its nose out of joint over China’s effectively doing the same thing. Indeed, while the yuan has appreciated about 24% against the dollar since 2005, the Federal Reserve has spent the last four years printing off as many dollars as they can. The peg will help mitigate some of the effect of this unprecedented currency-printing on trade between the US and China, but for other American trading partners (Europe, for instance), the FED is effectively slashing the value of the dollar.

So, Chinese manipulation of the yuan isn’t quite so bad as people make it out to be. In all likelihood, it works out to be a kind of economic “stimulus” (if I may dare to use the word). It makes Chinese products a little bit cheaper, which allows consumers and businesses to buy more goods for less money. While there are some legitimate concerns about job losses, such concerns are overblown in light of China’s sharply lower labor costs and the FED’s Quantitative Easing program (look up Competitive Devaluation). There are some areas of legitimate concern in Sino-American relations. Threatening China with a trade war over its currency manipulation is a little ridiculous.

Becoming the Most Hated Man in America

If one has any doubts that bipartisanship is dead in America, he need look no further than the controversy swirling around Rep. Todd Akin. Last week, an obscure Congressman few people outside of Missouri had ever heard of, he is now the most hated man in America, with both Democrats (with the notable exception of Sen. Claire McCaskill– his opponent in the Senate race) and Republicans in an apparent bidding war to demonstrate to the American people just how much they despise Rep. Akin. Never fear, bipartisanship is alive and well.

I will admit to finding the reaction among Republicans somewhat curious. While the good Congressman’s comments were rather stupid, the harshest reaction to them appears to be coming from within his own party. Such diverse members of the party as Sarah Palin, Karl Rove, and the usual party brass have all publicly announced that Akin should withdraw from the race. Indeed, one has trouble finding any Republican publicly supporting the embattled candidate. This, I think, is the problem. While Akin certainly did himself no favors with his little detour into biological insanity, the party hasn’t exactly helped things very much. One could argue that the GOP has, in effect, taken what should have been a bad case of the flu and turned it into Stage 4 Cancer. All of these public denunciations do nothing to advance the position of the party (or conservatism, or however you like to phrase it), but only serve to undermine an increasingly weak candidate. The Republican reflex that makes party leaders run for the nearest microphone or camera every time a scandal breaks out only hurts the cause. Conversations regarding a candidate’s withdrawal from a race ought to be held behind closed doors and out of the public eye, not on the front page of the New York Times. This way, if the candidate decides to remain in the race, the party doesn’t lose face and isn’t left in the awkward situation of having to concede a very winnable seat to the Democrats. It’s not as if the RNC can publicly disavow a candidate, withdraw all financial and logistical support, and then come back the next week and change its mind. To be honest, I’m not even sure what these people (from Romney on down) were trying to accomplish. Publicly abandoning the party’s nominee to the wolves is just as stupid as Akin’s decision to play scientist on TV.

In a related vein, what happened to all of the talk about party unity? For months, the GOP bigwigs have been chastising the base about the need to unify behind Romney, even if they (the base) really don’t like him. The message has been more or less, “Put up or shut up” and “At least he’s not Obama.” Where is this unassailable need for unity as it concerns Todd Akin? Where is all the talk about “winning the country back” and “saving America”? Where is the focus on the big picture?While Akin may have seriously damaged his prospects for the Missouri Senate seat, the party establishment has pretty much blown it. It would have been difficult for Akin to win the seat as it were, the party’s decision to play the role of Brutus has made it all but impossible. I smell a pretty awful double-standard here and, I think this episode raises a lot of questions about just how devoted the party is to winning. The GOP could have played this a lot better, but they panicked. Absent a major change of heart by someone, the mutually reinforcing thoughtlessness of both Rep. Akin and the party pretty much guarantees Sen. McCaskill’s re-election.