February 24, 2008

Tuke vs. Alexander

In a story about former Tennessee Democrat Party chairman Bob Tuke running for the U.S. Senate against Republican Lamar Alexander, Tennessean writer Bonna Johnson says Tuke hopes "to ride a wave of Obama-mentum and an electorate fed up with a failing economy."

The economy isn't failing. Has it hit a rough patch? For certain. The subprime mortgage crisis, though it affects about 2 percent of all current mortgages, has put a dent in the housing market. But employment remains strong and inflation remains low. Nationally, the economy has not yet suffered one month of negative growth, much less the two consecutive quarters (six months) that are required before the economy can be said to be in recession. In Tennessee, most economic signs remain reasonably healthy.

Most economists predict the national economy will continue to grow in 2008, albeit at a slower pace than in the five previous years of the economic boom that started with the passage of the first of the Bush tax cuts.

And therein lies Tuke's primary weak spot. He's an Obama supporter. Obama is promising all sorts of new spending that will require big tax increases. If Obama wins the White House, the Bush tax cuts - which slashed taxes for all taxpayers including the middle class and removed tens of millions of lower-income taxpayers from the income tax rolls entirely - will expire. The resulting tax increases will make it all the more difficult to keep the economy growing.

It will also make things more difficult, economically, for taxpayers who are most definitely not "the rich" that Democrat rhetoric will target.

If the Democrats do not extend the Bush tax cuts, a single mother of two children making $40,000 a year will have her income tax burden increase by $1,800 annually. That's $150 a month, which might equal that mother's day care bill for one child, or her electric bill or the cost of putting fuel in her car.

In short, Tuke is likely to campaign claiming the economy is collapsing and the solution to fixing it is big tax hikes. Neither is true. Most folks know that. And that's why Lamar is going beat Tuke like a drum.

Tuke knows he's going to lose, of course. The mere mention in the Tennessean story that he's aiming to raise $5 million for the race tells you he isn't expecting to win. It would take at least $10 million to make a serious race. But Tuke isn't running to win. He's running to keep Alexander from rolling up a huge victory margin, in order to boost Obama's thin chances of winning Tennessee and also to try to prevent an Alexander landslide from carrying Republican candidates to victory in other races on the ballot, especially in state legislative races.