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January 24, 2010
David Warsh, Proprietor


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A Road Not Taken

So a Republican won Ted Kennedy’s Senate seat last week in Massachusetts.  Scott Brown defeated Martha Coakley by a solid margin. Before you file away the result as the inevitable consequence of widespread revulsion at health care reform, let me suggest an alternative and, to my mind, much more plausible interpretation.

The Democrats would have won if they had nominated the candidate who came in second to Coakley in the December 8 primary, Congressman Michael Capuano. Capuano, 58, represents the Eighth Congressional District, the constituency which sent John F. Kennedy and Tip O’Neill to the House of Representatives.

Scrappy, sophisticated, politically experienced, Capuano almost certainly would have recognized the threat posed by the little-known Republican challenger and, in all likelihood, turned it aside through a combination of offense and defense. I can’t prove this, naturally, but my sense is that most political sophisticates around the Bay State would agree (Tea Party enthusiasts excepted).

So why didn’t Capuano get the nomination? A combination of identity politics, a short campaign, and the presence in the race of two other long-shot male candidates: private equity magnate Steven Pagliuca, and City Year founder Alan Khazei.

Coakley inherited the determined support of women’s groups that had campaigned hard for Hillary Rodham Clinton the year before. (Clinton won the Massachusetts primary but lost out at the convention.) In December, Coakley handily won the Democratic nomination with 47 percent of the vote, compared to Capuano’s 13 percent for Khazei and 12 percent for Pagliuca.

A prosecutor for more than twenty years, Coakley turned out to lack strong political instincts, and in any event was unable to  bridge the gap between various traditionally Democratic constituencies.  Former Boston Globe columnist  Mike Barnicle complained on talk radio, “There’s 22 percent unemployment in the construction trades and Martha’s talking about abortion.” Meanwhile Brown ran a strong campaign, comparing himself to John F. Kennedy as a tax-cutter, and last week defeated her, costing the Democrats their supermajority in the Senate and dramatically altering expectations among members of both parties.

So what’s the moral? Obama should recognize the role that chance played in the event. If the nomination somehow had gone the other way, the election could just as easily have been a victory for him. Certainly he must now make a number of adjustments. But rather than make a slew of concessions, he should seek to stay the course on health care in Congress, where the Democrats still have solid majorities in both houses.

For citizens of Massachusetts, it means staying alert. Conservative Republicans have won several state-wide elections in the last thirty years, as political consultant Mark Horan pointed outlast week in The Boston Globe. Perhaps the most interesting election in the present instance occurred in the Democratic primary in 1978, when supply-sider Edward J. King upset first-term Gov. Michael Dukakis in the early stages of what came to be known as the Tax Revolt. The state then voted narrowly for Ronald Reagan in 1980, but Dukakis returned to oust King in 1982, towards the end of a deep recession. King became a Republican after leaving office.

Brown must stand for re-election in 2012 (two and a half years is the remaining portion of Kennedy’s term). Like Ed King before him, Brown is not an old-style moderate Republican, like former Sen. Edward Brooke; nor does he present himself as social liberal in the mold of Mitt Romney and Bill Weld, each of them repudiated by voters in Senate campaigns, in 1994 and 1996.

The unexpected up-for-grabs conditions that governed this year’s Democratic primary campaign won’t obtain in 2012. It will be a very interesting year.

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Sometimes you only have to ask.

Barely had last week’s piece on the opposition between the guardian and commercial sensibilities moved out into the world before former Federal Reserve chairman Paul Volcker was standing there next to Barack Obama at the White House, as the president announced plans to separate commercial banks from their trading arms — the “Volcker Rule,” he dubbed it, after the world’s foremost financial guardian.

The administration says it has ben working since the fall with the House Financial Services Committee on plans for legislation that would prohibit banks from investing in or sponsoring hedge funds or private equity groups. The idea is to prevent the formation oof financial behemoths considered too big to fail.

Jonathan Weisman, of The Wall Street Journal, n Policy Pivot on Banks Followed Months of Wrangling, pursued the behind-the scenes maneuvering that led up to last week’s announcement. And Krisha Guha and Gillian Tett, of the Financial Times, gave a lively account of Volckler’s ups and down in the Obama administration in The Scourge of Wall Street.

Such was the alarm in Congess engendered by the news from Massachusetts that the nomination of Ben Bernanke to a second four-year term as chairman of the Fed appeared or several days to be in trouble, despite widespread recognition that in October 2008 he prevented a bad situation from becoming much worse. Two Democratic senators up for relection joined the opposition to him and markets sold off on the news.

By the weekend, however, the Obama administration said it was confident that he would be confirmed.

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