Washington watch

Hillary's challenger
September 24, 2005
ong>Hillary Clinton vs Evan Bayh
Hillary Clinton is not going to have it all her own way in the presidential primaries of 2008. Her campaign team has already been out-manoeuvred in New Hampshire, where pride of place at the local Democratic party's big Jefferson-Jackson fundraising dinner has been snapped up by her most serious rival, Evan Bayh, senator for—and former governor of—Indiana. Hillary, as a liberal from a northeastern state, is going to face most of the problems that sank John Kerry last year, and the most important thing about the Democrats in 2008 is that after eight years out of the White House and 14 years in the minority in Congress, they desperately want to win again. And so the hit item on the Democrat circuit this summer has been Evan Bayh's two charts of Indiana. The first shows the sea of red—all the counties won by Bush last November. The other chart shows the same counties all blue—having been won by Bayh last November in his Senate re-election landslide. Bayh's message is that as a midwestern centrist and Christian with a strong family background and experience of running a state, he can get elected in the Republican heartland. As the son of Birch Bayh, also an Indiana senator, young Evan started in national politics back in 1976 when he took time off from college to help organise Iowa for his father's presidential bid. Bayh, as likeable as Hillary is prickly, has also followed the other Clinton's example of getting elected chair of the centrist Democratic Leadership conference. (Another little problem for Hillary is that a recent poll found that 59 per cent of New Yorkers said they think she should pledge to serve her full six-year term if re-elected to her Senate seat next year.)

Karl Rove's best friends
Even if George Bush wanted to ditch his loyal retainer and political guru Karl Rove—and he doesn't—the man with the formal title of deputy chief of staff at the White House has some powerful allies. And they don't all come from Texas. Wall Street turns out to have its own influential backers of Rove as the man they count on to keep Bush focused on the supply-side economic agenda. It was Rove who sold Bush the ploy of reforming social security with personal savings accounts, a feature of Bush's campaign speeches in 2000 as well as 2004. Naturally, Wall Street loves this, as a way of getting its fingers into the vast honey pot of the US pensions system. Rove has long been saying that the most important fact in modern US politics is that most of the people who turn out to vote are members of the investing classes—even if they don't all know it yet. As a result, Rove has pushed hard for those nostrums dear to the hearts of all supply-siders, like tax cuts, more tax cuts and extra tax reductions on capital gains and dividends. Lawrence Kudlow, who used to be part of the supply-side chorus in the Reagan administration, bluntly calls Rove "Bush's top economic adviser." When the entire US media covered Rove's speech to the New York Conservative party by focusing on his claim that Republicans were brave patriots and Democrats a bunch of appeasing poltroons, the supply-side mafia saw the speech in a wholly different light. What they heard was Rove's economic pledge of allegiance—"Conservatives believe in lower taxes; liberals believe in higher taxes. We want few regulations; they want more. We believe in curbing the size of government; they believe in expanding the size of government." Two things really thrill the true believers. The first is that Rove likes to quote the free-market guru Ludwig von Mises on the glories of capitalism—and did so most recently at the supply-siders' shrine, the Ronald Reagan library in California. The second is that Rove has no time for that boring old conservative thinking about cuts in spending and balanced budgets. Just like Reagan, Rove doesn't see why the Democrats should have all the fun of spending money, even when the tax cuts mean it has to be borrowed.