George H.W. Bush was the accidental catalyst that built the new Republican Party

It was a statement designed to jump-start budget talks that had been stalled for months. It did that and more, providing the catalyst that changed the Republican Party into an aggressive and hard-edge brand of conservatism that would hold sway for two decades.

The statement was a renunciation of one of the most famous campaign promises in modern American politics: Bush’s declaration of “no new taxes,” which he made as he accepted the Republican nomination in 1988. The pledge was a bow to conservatives, who always regarded him with suspicion, if not outright hostility. When he reneged on the promise, they exacted revenge.

.. As president, Bush proved that experience matters, that knowledge of the world is an asset, that careful and methodical can be more effective than big and bold, that responsibility to country takes precedence over loyalty to party, even if sometimes it comes at great cost, that compromise is not a dirty word.

..  If Reagan’s presidency hastened the end of the Cold War, it was left to Bush to manage the decline and fall of the Soviet empire and to do so safely and without bloodshed. He accomplished that with skill and strategy, aided by Secretary of State James A. Baker III, a longtime friend, and trusted national security adviser Brent Scowcroft.
.. After the war ended, with U.S. forces ordered to stop short of Baghdad, Bush’s approval rating soared close to 90 percent, scaring away veteran Democrats who were thinking of challenging him. Twenty-one months later, he was driven from office by the voters. A transition inside the Republican Party that was already underway accelerated.
.. Two years after that, the House was in Republican hands for the first time in 40 years, and the dominant figure in the party was House Speaker Newt Gingrich, who was the antithesis of the defeated president in so many ways. The party began to shift from a philosophy of smaller government to one of anti-government, particularly anti-Washington.
The statement that appeared on the bulletin board in the White House pressroom on that morning in June 1990 showed Bush to be a president who was prepared both to compromise with the Democrats, even if it meant breaking a campaign promise, for what he believed were the best interests of the country and to take personal responsibility for his actions.

.. The statement that appeared on the bulletin board in the White House pressroom on that morning in June 1990 showed Bush to be a president who was prepared both to compromise with the Democrats, even if it meant breaking a campaign promise, for what he believed were the best interests of the country and to take personal responsibility for his actions.

.. The conflicting interests of Bush and the Gingrich forces continued for the duration of Bush’s presidency. Gingrich’s wing saw conflict with the Democrats as essential to creating sharp differences between the parties; Bush saw cooperation with congressional Democrats in the name of effective governing as essential for the country and, he hoped, for winning reelection as president. On that, he proved mistaken.

.. As other Republicans lamented the fall of a president whom they much admired, those in the forefront of creating the new Republican Party were relieved that Bush had been defeated.
.. Tom DeLay, who would become House majority whip, later told me of his feelings on the night Bush lost in 1992. “Oh, man, yeah, it was fabulous,” DeLay said in a 1995 interview. DeLay admitted then that he had feared that, if Bush were reelected, it would mean “another four years of misery” for House GOP conservatives. He acknowledged mixed feelings about seeing the White House fall into Democratic hands but added, “If we had another four years of this [Bush], we’d never take over the Congress.”
.. Bush’s eldest son, George W. Bush, sought to restore something of his father’s sensibility to the GOP when he ran for president in 2000 and won the White House as a “compassionate conservative.” But he could neither remake nor retrofit the party. Though he was more conservative than his father, he nonetheless drew the ire of those on the right on issues such as immigration and spending.
.. The end of George W. Bush’s presidency further accelerated the changes within the Republican coalition, including the rise of a tea party movement that brought an even more unyielding form of anti-government conservatism. Today President Trump is redefining the party in his own image, moving it ever further from the GOP over which George H.W. Bush presided.

President Trump Bashes the Fed. This Is How the Fed Chief Responds.

Jerome Powell’s playbook includes making allies outside the Oval Office, never talking politics and sticking to the economy.

Federal Reserve leaders for the past quarter-century have made decisions about interest rates without being pressured by the president.

President Trump has broken that streak, calling the central bank “crazy” for raising rates and more than once saying the Fed is damaging the economy. That has prompted Fed Chairman Jerome Powell to update playbook rules for dealing with a president annoyed by America’s central bank.

Rule 1: Speak not of Mr. Trump.

Rule 2: When provoked, don’t engage.

Rule 3: Make allies outside the Oval Office.

Rule 4: Talk about the economy, not politics.

.. Mr. Trump blamed the Fed for October’s stock market selloff, calling the central bank “out of control.” The president told The Wall Street Journal Oct. 23 that Mr. Powell seemed to enjoy raising rates.

Not since the 1990s has a president leaned so hard on the Fed chief and never so publicly. On Monday, Mr. Trump told the Journal: “I think the Fed right now is a much bigger problem than China.

.. The Fed’s benchmark interest rate is now in a range between 2% and 2.25%, well below long-run averages. The central bank is expected to raise rates by a quarter-percentage-point at its Dec. 18-19 meeting.

Mr. Powell says he is raising rates to return them to a more normal setting and avoid the type of boom-and-bust economy that ended in past recessions.

.. Mr. Trump has said he doesn’t plan on firing Mr. Powell, and it isn’t clear he could. The Federal Reserve Act states a Fed governor can only be removed for cause, a high bar that courts and legal scholars have interpreted to mean malfeasance or neglect.

.. The Fed’s credibility could suffer

  • if investors believe its commitment to guard against inflation has been compromised by politics, or
  • if Mr. Trump’s attacks sour the public’s view of the central bank.

“At some point, it becomes very damaging to the institution to be perceived as not acting in the best interest of America,” former Fed Chairwoman Janet Yellen said in an interview.

.. Mr. Powell has told others that he knows the president’s criticism could make his life unpleasant, but that he wouldn’t respond to political pressure. People close to Mr. Powell said he understood that history would judge him on policy decisions made over his four-year term.

  • President Lyndon B. Johnson once summoned Fed Chairman William McChesney Martin to his Texas ranch to berate him for raising interest rates, saying it was despicable, according to Mr. Martin’s account.
  • One low point for the central bank came when President Richard Nixon privately pressured Fed Chairman Arthur Burns to keep rates low before the 1972 election, according to Oval Office recordings. Mr. Burns kept rates low and inflation accelerated.

.. Shortly after President Reagan’s inauguration, a White House staffer asked Fed Chairman Paul Volcker if he wanted to host the new president at the Fed. Mr. Volcker declined, but replied he would be happy to meet the president anywhere else. They settled on the Treasury Department as a neutral ground.

Top Reagan administration officials frequently criticized Mr. Volcker, who presided over rate increases that triggered recessions in 1980 and 1981. But President Reagan refrained. “He just never did it,” Mr. Volcker said in an interview last year.

.. President George H.W. Bush’s Treasury Secretary Nicholas Brady cut off regular breakfasts with Fed Chairman Alan Greenspan to show his disapproval of tight-money policies in 1992. Mr. Brady stopped inviting Mr. Greenspan to dinner parties and golf dates at Augusta National.

One of Mr. Brady’s deputies at the time was Mr. Powell, who served as an appointee in the Treasury’s domestic policy office. Mr. Powell, 65, graduated from Princeton and Georgetown University law school.

.. In 1994, President Clinton was upset that Mr. Greenspan’s rate increases threatened a delicate deficit-reduction plan that Mr. Clinton had guided through Congress.

Mr. Clinton’s unhappiness “never was communicated to me,” said Mr. Greenspan, who added he heard about it much later. Economic adviser Robert Rubin convinced the president it was best to lay off the central bank to show investors that the Fed was apolitical.

.. While Mr. Trump complains loudly, his top economic advisers conduct business as usual with Mr. Powell; that includes Treasury Secretary Steven Mnuchin, National Economic Council director Lawrence Kudlow and Council of Economic Advisers chairman Kevin Hassett.

Mr. Kudlow and Mr. Powell have bonded over their back troubles. Mr. Powell shared the name of his doctor, “who’s been a terrific help to me,” Mr. Kudlow said in an interview. “I’m not kidding.”

.. Before he became chairman, Mr. Powell was the Fed’s point person on bank regulation, just as the Trump administration took shape. That put Mr. Powell in regular contact with Mr. Mnuchin, a newcomer to Washington. Mr. Mnuchin later backed Mr. Powell for the chairman job.

Mr. Trump has since taken out his frustration on Mr. Mnuchin, according to a person familiar with the matter, saying recently, “I thought you told me he was going to be good.

.. After Mr. Trump publicly complained about Mr. Powell this summer, Mr. Mnuchin said in a TV interview that he was “a phenomenal leader at the Fed.”

 .. In fact, Mr. Powell is the kind of Fed leader the White House wants, Mr. Kudlow said, because he is skeptical of traditional economic models that say inflation rises when unemployment falls.

With an unemployment rate of 3.7%, near a half-century low, traditional models suggest the Fed engage in aggressive interest rate increases. Mr. Powell, who isn’t a trained economist, views the models with greater skepticism than some macroeconomists.

.. “Jay is questioning a lot of the traditional Fed dogma with the board staff and their models,” said Mr. Kudlow.

.. Mr. Trump’s economic advisers have helped Mr. Powell cement control of the central bank, securing a cast of Fed deputies and governors who appear to be allies. All three rate increases this year have passed by unanimous vote of the Fed’s rate-setting committee.

.. The president, on the other hand, sees no reason to continue with rate increases because inflation is modest, he has said. He wants rates low to foster fast growth.

.. Several people who know Mr. Trump say his long career in real estate informs his view of rising interest rates, which have put a damper on his businesses. Mr. Trump’s firms sought bankruptcy protection after borrowing costs rose in the early 1990s and in the mid-2000s.

Mr. Trump told the Journal in October the Fed chief has surprised him, because he thought Mr. Powell was a “low interest-rate guy.”

.. Mr. Powell, a Republican and Washington native with a 40-year career spanning government, finance and law, recognizes that Fed authority depends more on Congress than the White House

“Our decisions can’t be reversed by the administration,” Mr. Powell said earlier this month in Dallas. “Of course, Congress can do whatever it wants.”

.. Messrs. Coons and Sen. Jeff Flake (R., Ariz.) later decided to send Mr. Trump a letter telling him to lay off the Fed.

“You appear to be telling the Fed what to do with interest rates, which we believe is unconstructive and dangerous,” the senators wrote the president.

.. In his new memoir, Mr. Volcker described how White House chief of staff James A. Baker III, with President Reagan watching silently, ordered the Fed chairman not to raise interest rates before the 1984 election.

Mr. Volcker, who wasn’t planning to lift rates anyway, didn’t tell colleagues or lawmakers about the episode. Mr. Baker has said he didn’t recall that.

 

David Axelrod: James Baker (Episode 176)

Worked for Gerry Ford, ran 2 Campaigns against Reagan

Treasury Secretary under Reagan (tax reform)

Chief of Staff for Reagan

Dissolution of Soviet Union under Bush

Campaign operative for George W. Bush, etc

Slogan: Don’t start any fights you can’t win.

Florida Recount

It was a political event with legal elements

The Willy Horton Ad:

I told them to stop running it (after several weeks)
I don’t know if it was Identity politics.

Scapegoating

After Reagan did poorly, people were looking for a whipping boy and they wanted to fire __________.

After the Soviet Union, don’t know why the relation soured, but maybe it was good local politics to blame the US.

The Quiet American

Paul Manafort made a career out of stealthily reinventing the world’s nastiest tyrants as noble defenders of freedom. Getting Donald Trump elected will be a cinch.

Mar-a-Lago, Donald Trump’s palace, is impressive by the standards of Palm Beach—less so when judged against the abodes of the world’s autocrats. It doesn’t, for instance, quite compare with Mezhyhirya, the gilded estate of deposed Ukrainian President Victor Yanukovych. Trump may have 33 bathrooms and three bomb shelters, but his mansion lacks a herd of ostrich, a galleon parked in a pond, and a set of golden golf clubs. Yet the two properties are linked, not just in ostentatious spirit, but by the presence of one man. Trump and Yanukovych have shared the same political brain, an operative named Paul Manafort.

.. “Manafort is a person who doesn’t necessarily show himself. There’s nothing egotistical about him,”

.. The late Washington Post columnist Mary McGrorydescribed him as having a “smooth, noncommittal manner, ” though she also noted his “aggrieved brown eyes.” Despite his decades of amassing influence in Washington and other global capitals, he’s never been the subject of a full magazine profile.

.. As Roger Stone has boasted about their now-disbanded firm: “Black, Manafort, Stone, and Kelly, lined up most of the dictators of the world we could find. … Dictators are in the eye of the beholder.” Manafort had a special gift for changing how dictators are beheld by American eyes. He would recast them as noble heroes—venerated by Washington think tanks, deluged with money from Congress.

.. he remade Ukrainian politics and helped shift the country into Vladimir Putin’s sphere of influence.It

.. The genesis of Donald Trump’s relationship with Paul Manafort begins with Roy Cohn. That Roy Cohn: Joe McCarthy’s heavy-lidded henchman, lawyer to the Genovese family.

.. It was Roy Cohn who introduced Stone and Manafort to Trump.

.. Dirty tricks came naturally to Stone. He assumed a pseudonym and made contributions on behalf of the Young Socialist Alliance to one of Nixon’s potential challengers. He hired spies to infiltrate the McGovern campaign.

.. Manafort had a very different mentor. He studied under the future secretary of state, James A. Baker III, who wielded his knife with the discipline of a Marine and the polish of a Princetonian.

.. “Paul modeled himself after Baker,”

.. Despite his Yankee stock, Manafort ran Reagan’s Southern operation, the racially tinged appeal that infamously began in Philadelphia, Mississippi, the hamlet where civil rights activists were murdered in 1964.

.. Manafort and Stone pioneered a new style of firm, what K Street would come to call a double-breasted operation. One wing of the shop managed campaigns, electing a generation of Republicans, from Phil Gramm to Arlen Spector. The other wing lobbied the officials they helped to victory on behalf of its corporate clients.

.. he began with his rote protestations of friendship. “Nobody likes Indians as much as Donald Trump.” He then proceeded to worry that the tribes would prove unable to fend off gangsters. “There is no way Indians are going to protect themselves from the mob … It will be the biggest scandal ever, the biggest since Al Capone … An Indian chief is going to tell Joey Killer to please get off his reservation? It’s unbelievable to me.”

.. Trump poured money into a shell group called the New York Institute for Law and Society. The group existed solely to publish ads smearing his potential Indian competition. Under dark photos of needles and other junkie paraphernalia, the group asserted, “The St. Regis Mohawk Indian record of criminal activity is well documented.” (It wasn’t.) “Are these the new neighbors we want?”

.. Later, they lured Lee Atwater, the evil genius who would devise the Willie Horton gambit for George H.W. Bush.

.. Black would later boast that the firm had schemed to gain cartel-like control of the 1988 Republican presidential primary. They managed all of the major campaigns.

  1. Atwater took Bush;
  2. Black ran Dole;
  3. Stone handled Jack Kemp.

A congressional staffer joked to a reporter from Time, “Why have primaries for the nomination? Why not have the candidates go over to Black, Manafort and Stone and argue it out?

.. He took on clients and causes that even most of his colleagues on K Street considered outside the usual bounds. Black, Manafort, and Stone hired alumni of the Department of Housing and Urban Development then used those connections to win $43 million in “moderate rehabilitation funds” for a renovation project in Upper Deerfield, New Jersey.

..  Local officials had no interest in the grants, as they considered the shamble of cinder blocks long past the point of repair.

.. Two years later, rents doubled without any sign of improvement. Conditions remained, in Mary McGrory’s words, “strictly Third World.” It was such an outrageous scam that congressmen flocked to make a spectacle of it. Manafort calmly took his flaying. “You might call it influence-peddling. I call it lobbying,” he explained in one hearing. “That’s a definitional debate.”

 .. Strangely, the HUD scandal proved a marketing boon for the firm. An aide to Mobutu Sese Seko told the journalist Art Levine, “That only shows how important they are!”
.. Indeed, Manafort enticed the African dictator to hire the firm. Many of the world’s dictators eventually became his clients. “Name a dictator and Black, Manafort will name the account,
.. The client list included
  1. Philippine strongman Ferdinand Marcos (with a $900,000 yearly contract) and the despots of the
  2. Dominican Republic,
  3. Nigeria,
  4. Kenya,
  5. Equatorial Guinea, and
  6. Somalia.
When the Center for Public Integrity detailed the firm’s work, it titled the report “The Torturers’ Lobby.”
.. Indeed, the firm was an all-purpose image-buffing operation. As the Washington Post has reported, Manafort could book his clients on 60 Minutes or Nightline—and coach them to make their best pitch. He lobbied Congress for foreign aid that flowed to his clients’ coffers.
.. Manafort understood the mindset of the dictator wasn’t so different from his corporate clients
.. Despite his client’s Maoist background, Manafort reinvented him as a freedom fighter. He knew all the tricks for manipulating right-wing opinion. Savimbi was sent to a seminar at the American Enterprise Institute, hosted by the anticommunist stalwart Jeanne Kirkpatrick, a reception thrown by the Heritage Foundation, and another confab at Freedom House. (Kirkpatrick introduced Savimbi, who conscripted soldiers, burned enemies, and indiscriminately laid land mines, as a “linguist, philosopher, poet, politician, warrior … one of the few authentic heroes of our time.”)

.. His lobbying helped convince Congress to send Savimbi hundreds of millions in covert aid. Indeed, every time Angola stood on the precipice of peace talks, Manafort, Black worked to generate a fresh round of arms—shipments that many experts believe extended the conflict.
.. “So the war lasted another two more years and claimed a few thousand more lives! So what? What counts to a Washington lobbyist is the ability to deliver a tangible victory and spruce up his client’s image.”
.. Like Henry Kissinger, Manafort can claim that he merely “consults” with foreign governments, relieving him of the legal burden of announcing his benefactors.