Politics: Bush, The Democrat Congress & the '08 Race
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It has been a few weeks since I wrote anything on politics, but the political landscape is intensifying by the day - not only in terms of the increasing criticism of President Bush and the war in Iraq, but also with the new Democrat-controlled House and Senate rapidly pursuing their liberal agenda. Add to that the deluge of presidential candidates and we have all the ingredients for a very interesting next couple of years on the political scene.

In my view, the legacy of the George W. Bush administration is in tatters, especially now with the war in Iraq as the single most important issue of his presidency, and with the outcome in real jeopardy. It remains to be seen how the historians will depict Bush 42's presidency, but at this point I don't expect it will be pretty.

As for the new Democrat-controlled Congress, Nancy Pelosi and her fellow Dems wasted little time in passing several new bills that advance some key pieces of their promised agenda - minimum wage hike, effectively new energy taxes on Big Oil, increased stem cell research, giving the government the power to negotiate Medicare drug prices, and lowering the interest rate on student college loans.

The Bush administration is preparing for an onslaught of Democrat subpoenas into the president's reasons for the war in Iraq. The Democrats said they would not go down this road, but I assured you prior to the mid-term election that they would. Now there is no question, it's just a matter of time in my opinion. This likely explains why Bush replaced long-time lawyer and confidant, Harriet Miers, with high-powered Washington lawyer Fred Fielding as his new chief White House counsel. Bush is preparing for the fight of his political career.

Because of the legal battles that are coming, in my opinion, the second term of the Bush administration will accomplish virtually nothing, except for its handling of the Iraq war, which could turn out in the end to be marginal at best, or much worse. As noted below, many of Bush's judicial nominees are bailing out at this point, as they know they have no chance now with a Democrat-controlled Congress. Too bad!

The Democrats in Congress have a lot more long-awaited priorities on their agenda, but they also have to be very careful. If they expose themselves as the liberals they are too soon, they risk a Republican backlash in 2008. So their handlers will advise a slow, but steady, course. But the question is, can they restrain themselves long enough to get a Democrat elected president in 2008? I'm not at all sure they can.

And speaking of the 2008 presidential election, Hillary Clinton is now officially in the race. She announced what we have all known for the past two years - she's running for president. Can she get the nomination? Can she win if she does? Or does she have too much baggage?

So, this week we will surmise the political landscape, from both points of view, and then move to the 2008 presidential election. There are several things that will be unique about this presidential race that you need to know. More money, by far, will be spent than ever before. At the end, I'll tell you who I think the GOP should nominate for president in '08 - you may be surprised.

Let's get going.

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The Bush Legacy, Or Lack Thereof

There are very few fundamental truths in politics and perhaps none greater than this: ALL presidents care about their legacy. Whether they appear to or not, many presidents become obsessed with how they will be viewed through the years that follow their terms in office. George W. Bush is apparently no different. While it is impossible to say how history will treat President Bush, it doesn't appear it will be very kind.

With the GOP in control of both houses of Congress, there were very high expectations for the president and his agenda when he took office in January 2001. Conservatives were euphoric after eight years of Bill and Hillary Clinton. Conservatives expected President Bush to cut taxes, reduce the size of government, simplify federal regulations, appoint conservative judges to the Supreme Court, reform education, address immigration, rebuild the military and reform Social Security, among others.

Instead, we got steel tariffs, a bloated farm bill and other disappointments, and education reform was handed over to none other than Ted Kennedy. Government spending soared out of control, as did the budget deficits. The size of government continued to swell, including the massive new Department of Homeland Security. Virtually nothing was done on immigration, other than to encourage more of it by suggesting amnesty and a "guest worker" program.

To his credit, we have not had another terrorist attack on US soil since 9/11, and he did withdraw the US from the ABM treaty, and we subsequently entered into a new nuclear arms treaty with Russia. Bush did manage to get his tax cuts passed and reduced the so-called "death tax." Unfortunately, both the income tax cuts and estate tax cuts are temporary and are likely to be rolled back, especially if the Democrats win the White House in 2008. Nothing was done to reform Social Security or other entitlements.

Not being able to fix Social Security is understandable (no president has even dared to try in the past), but Bush did put forward a decent plan that he poorly articulated, and which was savaged by the media and Democratic special interests. However, Bush should at least be given some credit for his willingness to touch the "third rail" of American politics.

Fast-forward to Bush's second term. With his own party still in power of both houses of Congress, the president could not muster the political capital to accomplish what many considered to be one of the most important goals of his second term agenda - making the tax cuts permanent. Then there was the Dubai ports deal, which outraged conservatives, and was eventually squashed. And let's not forget the nomination of Harriet Miers, the president's long-time friend and personal lawyer, to the Supreme Court. This was the straw that broke the camel's back for many conservatives, including me.

The combination of anti-war sentiment and the flop of the second term domestic agenda in the first two years led to the landslide victory by the Democrats in the mid-term election last November. The GOP lost control of both houses of Congress in a stunning upset. Swing voters and even many conservatives concluded - If you're going to govern like Democrats, then why not vote for the real thing - and so it was that many Republicans were drummed out of office.

All of this has left the president with abysmally low approval ratings, further hindering his ability to be relevant. How low? According to the latest ABC News/Washington Post poll, President Bush's approval ratings are now the lowest for any president the day before a State of the Union speech since Richard Nixon in 1974. 65% of those surveyed said they disapprove of how Bush is handling his job as president while only 33%approve. Only Richard Nixon has been lower.

The Bush legacy is in tatters, in my opinion. It is unlikely that even decades of perspective will be kind, especially given the level of hatred of this president. It may well be that Bush will be largely remembered for years to come as a president that fractured his party and paved the way for a long period of Democratic dominance of Washington.

I know many of you will disagree, and I will no doubt get plenty of angry responses. But the report card on the president I voted for twice is not good, as much as I hate to say it.

Bush's Judicial Nominees Are Withdrawing

One of the saddest legacies of the Bush administration, in my opinion, is the failure to seat all, or even most, of its judicial nominees. This is virtually unheard of in a situation where the same political party controls the House, Senate and the White House. Just recently, four of President Bush's Appeals Court nominees have requested that their names be withdrawn from the confirmation process, and more are expected to follow. They are:

William Hayes, General Counsel of the Dept. of Defense
William Myers, a former Solicitor of the Dept. of the Interior
Terrence Boyle, a federal district court judge in North Carolina
Michael Wallace, a Mississippi attorney with extensive constitutional litigation experience

It's little wonder why these qualified professionals would take this step. After all, if they couldn't get an up or down vote when the Republicans controlled the Senate, what chance would they have with the Democrats in control? That's right - NONE.

Based on a recent article from the Judicial Watch organization, all of the four candidates are eminently qualified, but were blocked by Democrats for their conservative views on how the Constitution should be interpreted. Judicial Watch goes on to say:

Overall, the 109th Congress managed to compile one of the worst records on judicial confirmations in modern political history, refusing to vote on qualified judicial nominees who had more than enough votes for confirmation. Democrats employed the unconstitutional tactic of filibustering judicial nominees, while Republicans, led by former Senate Majority Leader Bill Frist, caved under the pressure and failed to respond.

To be fair, the Bush Administration did have two Supreme Court Justices confirmed, and also had some conservative judges confirmed as part of the compromise with the "Gang of 14" led by sometimes-Republican John McCain. However, the Republican-controlled Senate failed to address the constitutionality of the use of filibusters to block judicial confirmation votes.

With that in mind, fast forward to 2008 and beyond. Let's assume that a Democrat is elected, whether it be Hillary, Obama, or a yet-to-be-named candidate. Do you really think that the Democratic-controlled Senate will be as timid as the Republicans in seeking the "nuclear option" to restrict Republican's right to filibuster Democratic judicial nominees? I think not.

And the next president is likely to have 2-3 seats to fill on the Supreme Court. That's scary!

Democrats Are Rolling Out Their Liberal Agenda

House Democrats raced last week to the finish line of their "first 100 hours" agenda well before their 100 hours clock ran out. With more than 57 hours to spare, early Thursday evening Democrats passed the last of their "Six for '06" plan — a renewable energy measure that adds $15 billion in new fees, royalties and taxes, and rolled-back subsidies for the oil industry — turned off the clock, and raced to the media to congratulate themselves.

Republicans complained that Democrats were able to whip out the six bills in short order because they did not allow GOP involvement in the debate. And who is surprised by that? GOP leaders tried to register their objections to being shut out by motioning for the House to adjourn, a procedural trick the minority party frequently tries to employ. "We're being silenced in this process," said House Minority Leader Rep. John Boehner (R-OH). "I'm here today to ask my colleagues on the other side of the aisle to live up to the promises that were made."

I have only one thing to say to the whining Republicans: You lost, get used to it! Why any Republicans would have expected anything different from the liberal leadership of Nancy Pelosi is a mystery to me. And it's only going to get worse; it's just a question of how much worse.

Take, for example, the recent National Conference For Media Reform held in Memphis on January 12-14. The main agenda of this liberal group is to lobby the government to empower the FCC to stifle conservatives in the media. Over 3,500 liberals (they call themselves "progressives") showed up for this conference, including numerous Democrat politicians, George Soros (a huge sponsor of the event), Bill Moyers, Jesse Jackson and Hollywood celebrities such as Jane Fonda, Danny Glover, Geena Davis and others.

This group wants to revive the so-called "Fairness Doctrine" in order to get more media time for liberal issues. But the real purpose in proposing a fairness doctrine is not to offer different points of view but to silence viewpoints liberals regard as unsound or unpopular. This group is especially focused on talk radio which is largely dominated by conservatives.

The Media Reform groups are clearly on the left fringe of the Democratic Party, and I suggest that the Democratic leaders are too smart to try and silence conservative commentators like Rush Limbaugh, for example, at least for the time being. But assuming a Democrat is elected president in 2008, this could well be where the leaders want to go in 2009.

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Rahm Emanuel's "Vulture Politics"

Rahm Emanuel, Democrat Representative from Illinois, and former top political adviser to former President Bill Clinton, is one of the most powerful operatives in the Democratic Party. Emanuel recently granted an extensive interview with Washington Post columnist David Ignatius. In the interview, Emanuel said something that he may wish he had never said after it was published in Mr. Ignatius' column. I will quote the last two paragraphs of the column:

"And here's what Emanuel doesn't want to do: fall into the political trap of chasing overambitious or potentially unpopular measures. Ask about universal health care, and he shakes his head. Four smart presidents —Truman, Johnson, Nixon and Clinton — tried and failed. That one can wait. Reform of Social Security and other entitlements? Too big, too wooly, too risky. If the president wants to propose big changes to entitlements, he can lead the charge.

The secret for the Democrats, says Emanuel, is to remain the party of reform and change. The country is angry, and it will only get more so as the problems in Iraq deepen. Don't look to Emanuel's Democrats for solutions on Iraq. It's Bush's war, and as it splinters the structure of GOP power, the Democrats are waiting to pick up the pieces." [Emphasis added: GDH.]

Emanuel's position in the first paragraph - that the Democrats don't want to tackle the big problems such as healthcare financing and entitlements - is typical of liberal politicians today. Talk about change and reform but carefully avoid doing anything about it. In fairness, the Republicans have done about the same thing in recent years, but President Bush did at least make an unsuccessful effort to revamp Social Security.

But it is Emanuel's comments in the second paragraph that are the most revealing and the most troubling, especially with America at war, with our soldiers dying every day, and with the constant threat of terrorist attacks on our soil. Mr. Ignatius sums up Emanuel's remarks as: "Don't look to Emanuel's Democrats for solutions on Iraq. It's Bush's war, and as it splinters the structure of GOP power, the Democrats are waiting to pick up the pieces."

Emanuel's position, and advice to his party, is absolutely irresponsible, unpatriotic, negative and void of leadership! The fact that Emanuel made the comment in the Washington Post smacks of the new arrogance among many Democrats. Emanuel is apparently one of those liberals that believes the worse things are in America, the better it is for the Democratic Party. It sounds as if he would be happy if things worsen in Iraq - just waiting to pick up the pieces.

Conservative columnist Tony Blankley called it "Vulture Politics."

Will The Democrats Overplay Their Hand?

The Democrats' landslide victory in the mid-term election, coupled with President Bush's falling approval ratings, has the Dem's feeling pretty cocky these days. No doubt Rahm Emanuel would not have said what he did to Washington Post editor David Ignatius, as noted above, were that not the case. Of course, it is worth noting that Emanuel is well aware that editorials in the Washington Post are not regular reading for rank-and-file Democrat voters, and thus his comments must have been intended as "talking points" for his fellow politicians.

Such comments lead us to wonder if the Democrats will overplay their hand between now and the 2008 presidential election. Will their confidence lead them to reveal to the voting public how liberal they really are? That remains to be seen, especially in light of some comments made last week by House Speaker Nancy Pelosi. In an interview last Friday with Good Morning America anchor Diane Sawyer, Mrs. Pelosi said:

"The president knows that because the troops are in harm's way, that we won't cut off the resources. That's why he's moving so quickly to put them in harm's way."

The White House responded quickly to Mrs. Pelosi's remark by calling it "poisonous." I agree. Now you would think that such a vicious charge against the nation's Commander-In-Chief would be met with much more than a simple one-liner from the White House press office. But I had trouble even finding the Pelosi quote to reprint for you above. Likewise, I found not a single editorial about it in RealClearPolitics.com since Pelosi leveled the charge last Friday.

Apparently Mrs. Pelosi is getting a pass on this one. Yet remarks like those of the new House Speaker and Rep. Emanuel could come back and bite the Democrats in the 2008 presidential election.

Bush Names New White House Counsel

On January 9, President Bush announced the resignation of long-time friend and White House Counsel Harriet Miers and the appointment of Washington insider and high-profile lawyer Fred Fielding as his new chief counsel. While the White House tried to position this change as simply the result of Mrs. Miers wanting to retire, it was clear there are other reasons for such a change. Specifically, that the president is going to be the focus of new investigations by the now Democratic-controlled Congress. Even the Washington Post noted:

The White House plans to announce the appointment today, just days after longtime Bush loyalist Harriet Miers was eased out as the president's top lawyer in preparation for the anticipated struggle with a new Democratic Congress eager to investigate the administration.

Fielding, 67, brings the experience and political heft that White House Chief of Staff Joshua B. Bolten has been seeking to counter any aggressive moves to probe the most controversial decisions of the Bush presidency. Smooth and soft-spoken yet battle-hardened, Fielding is considered a Republican ‘wise man' who Bush aides believe will be able to negotiate compromise without surrendering on the most important priorities.

Fielding served as White House Counsel to Ronald Reagan in 1981-1986; he was President Bush's transition attorney in 2000; he was a member of the 9/11 Commission; and he was most recently a partner at a high-profile Washington law firm.

As suggested above, it certainly appears that the President is preparing for the fight of his political life. So it should not be long before we start hearing rumblings of investigations, even though Speaker Pelosi has said such investigations were "off the table." As I have stated previously, I never believed her.

The Presidential Free-For-All

Let's see, care to make a guess how many legitimate candidates are going to announce that they are running for president in 2008? My bet is that it will be at least two dozen! On the Democratic side, we have Hillary (more below), Barack Obama, John Edwards, Tom Vilsack (former Iowa governor), Dennis Kucinich (Rep. OH), Bill Richardson (Gov.NM) and Mike Gravel (Fmr. Gov. AK). In addition, we cannot rule out John Kerry, who says he's thinking about another run, Joe Biden and of course, Al Gore. It will not surprise me if Gore decides to run as the far-left candidate.

On the Republican side, there's John McCain, Rudy Giuliani, Mitt Romney, Tommy Thompson, Duncan Hunter (Rep. CA), Sam Brownback (Sen. KS), James Gilmore (Fmr. Gov. VA), Tom Tancredo (Rep. CO) and Ron Paul (Rep. TX), with more to follow I'm sure.

The 2008 presidential race is going to be very interesting, and probably unprecedented, for several reasons. First and foremost, we are going to see more money spent on the 2008 presidential race than ever before, and by a longshot! The Center For Responsive Politics estimated that at least $1.2 billion was spent by presidential candidates alone in the 2004 election. Keep in mind that in 2004, there was only President Bush running on the GOP side.

This time around, I estimate that we will see a record $2 billion or more spent on the 2008 presidential election from beginning (and it's already started) to end.

Second, along this line, the serious contenders in the 2008 presidential race will have to forego federal matching funds because that's not nearly enough money to win the nomination, much less the actual election. Most of the serious candidates will have to raise in the neighborhood of $100 million in order to be competitive. That is sad as it means many of the candidates will have no chance.

Third, two very large, very critical states - California and Florida - are seriously considering moving up their primaries to dates earlier in the schedule, in order to be more relevant. Currently, CA's Democratic primary is late in the schedule, on June 3, and Florida's Democratic primary is on March 11, also late in the process. Both states are considering moving these primaries up in the schedule to have more of an impact on choosing the respective nominees. From the candidates' perspective, if CA and FL move up their primaries, that simply means they have to raise a lot more money a lot sooner. This is one reason why the 2008 presidential race is starting so much earlier than ever before.

Next, the 2008 presidential race is going to be the most energized and polarized election campaign in history, in my opinion, for several reasons. By energized, I mean that it will be a media blitz like we've never seen in light of the record amount of money that will be spent - and sadly, the blitz will start earlier and last longer than ever before - especially for those of us who live in key electoral states.

By polarized, I predict that the 2008 presidential election will be the most negative that we have ever seen. I say that for several reasons, but primary among them is the fact that Hillary Clinton is now officially in the race - no surprise, of course. And that means that Bill and Hillary are in the race, along with their enormous political machine. Whether you love or loathe Bill Clinton, he is the best campaigner and political operative of my generation, maybe ever. If he really wants to be America's "First Man" (which I still wonder), his backing of Hillary will be an enormous boost.

Finally, it occurs to me, now that Hillary is officially in, that we are going to see the most "handled" candidate in US political history. By ‘handled' I mean that her every word, speech and move will be meticulously calculated, poll-tested, focus-grouped and scripted. Unlike her husband who could wax eloquent without notes or a script on just about any issue, Hillary is not a particularly good speaker without a script.

I don't know if Hillary can get the nomination, but her presence alone means this will be one of the most interesting presidential races in history, in my opinion. It should be no secret that it is definitely NOT my wish that Hillary wins; I think that would be a disaster, frankly. Fortunately, her approval numbers have been falling recently, and I believe that is one reason (along with Barack Obama) that she had to declare earlier than planned.

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Who I Think The Republicans Should Run

In the Introduction, I promised that I would tell you who I think the Republicans should nominate for president in 2008. My first choice would definitely be Rep. Ron Paul (R-TX). I have been a huge fan of Ron Paul for years. I believe Ron Paul would be a fabulous president but unfortunately, I don't think he has a chance of being elected.

In that case, my second choice is - drum roll please.....

White House Press Secretary TONY SNOW!

Other than Ron Paul, I am not enamored with any of the Republican candidates, and I don't have confidence that any of them can beat the Democrat nominee, whoever that turns out to be. But I like Tony Snow very much! Seriously.

I know the chances of him running are probably zero. I know the liberals would label him a "shill" for the president; they already have, in fact. But I think Tony Snow would make a great president. He's been involved with US politics since the first Bush administration, except for his stint on FOX News. He has more Washington experience than Barack Obama! He's certainly proven that he can handle the media. And he has strong convictions, in my opinion. See his bio at the link below:


I am not naïve enough to think for a second that my influence could make a Tony Snow nomination happen, but we know a lot of you regular readers are active in politics. So, I would suggest that you consider this idea and spread the word on Tony Snow. Those of you who are liberals probably think this idea is the dumbest thing you've ever heard, so maybe you should be spreading the word as well!

Think about it and let me hear from you.

Very best regards,

Gary D. Halbert

Gary Halbert is the president and CEO of ProFutures, Inc. which produces this E-Letter. Mr. Halbert is also president and CEO of Halbert Wealth Management, Inc., an affiliate of ProFutures, Inc. Both firms are located in Austin, Texas. Halbert Wealth Management is a Registered Investment Advisor that offers professional investment management services to a nationwide base of clients, and specializes in risk-managed investments and its recommended programs include mutual funds, managed accounts with professional Investment Advisors and alternative investments. For more information about the programs offered, call 800-348-3601.


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Copyright © 2007 ProFutures Capital Management, Inc. All Rights Reserved.


"Gary D. Halbert, ProFutures, Inc. and Halbert Wealth Management, Inc. are not affiliated with nor do they endorse, sponsor or recommend any product or service advertised herein, unless otherwise specifically noted."

Forecasts & Trends is published by ProFutures, Inc., and Gary D. Halbert is the editor of this publication. Information contained herein is taken from sources believed to be reliable, but cannot be guaranteed as to its accuracy. Opinions and recommendations herein generally reflect the judgment of Gary D. Halbert and may change at any time without written notice, and ProFutures assumes no duty to update you regarding any changes. Market opinions contained herein are intended as general observations and are not intended as specific investment advice. Any references to products offered by Halbert Wealth Management are not a solicitation for any investment. Such offer or solicitation can only be made by way of Halbert Wealth Management’s Form ADV Part II, complete disclosures regarding the product and otherwise in accordance with applicable securities laws. Readers are urged to check with their investment counselors and review all disclosures before making a decision to invest. This electronic newsletter does not constitute an offer of sales of any securities. Gary D. Halbert, ProFutures, Inc. and all affiliated companies, InvestorsInsight, their officers, directors and/or employees may or may not have investments in markets or programs mentioned herein. Securities trading is speculative and involves the potential loss of investment. Past results are not necessarily indicative of future results.

Posted 01-23-2007 5:06 AM by Gary D. Halbert