BROKE, AND DAMNED PROUD OF IT – AT 9:35 A.M. ET:  In a very astute column in the Washington Post, former Bush speechwriter Michael Gerson writes of a looming crisis for the Obama administration...the financial wreckage in the nation's largest Democratic states:

Having experienced the revolt of red America, Democrats must now deal with the fiscal crisis of blue America...

...The states doing worst are the ones, such as California and New York, that had irresponsible budgets going into the recession. States that were fiscally responsible during good economic times, such as Indiana, have had a softer landing.

And...

What are the political effects of the blue-state budget crisis? In Washington, it will set up a conflict between desperate governors and the new Republican House. States will seek federal help and pressure their congressional delegations for support. But there is little chance that conservatives will add a new state bailout to all the bailouts that have come before. Any additional economic stimulus would probably be in the form of tax relief, perhaps a payroll tax holiday, not in cash payments to state governments.

And...

Most significantly, the blue-state financial misery continues and deepens the ideological crisis of American liberalism. Few politicians in traditionally liberal states now speak about the expanding promise of progressive government and the welfare state. New Jersey is already in conservative revolt. New York's Democratic governor-elect, Andrew Cuomo, campaigned on a promise of budget cuts without tax increases. The New York congressional delegation shifted significantly in a Republican direction. While California remains in denial - even after a budget crisis that has lasted for a decade - that could rapidly change as well...

...All these calculations change, of course, with a dramatically growing economy, providing states with additional revenue and the president with political breathing room. But absent that desired development, Obama's political challenges, and the backlash against liberal government, are only beginning.

COMMENT:  Very well stated.  But remember, Americans aren't rushing to embrace rigid conservatism.  As usual, they generally prefer the center right.  Republicans must maneuver carefully.  Reagan was a genius at espousing conservative principles in a human, decent way.  No ideology-spouting disciple was he.  We need the Reagan touch.

November 12, 2010