Last updateThu, 19 Nov 2015 8pm


The Republicans are hoping for a nominee like McAuliffe for the governor’s race

Virginia Republicans won’t be voting in the June Democratic Primary.  They have already made their choice and that’s Bob McDonnell.  Surprisingly, at least so far, the Virginia GOP and its candidates haven’t offered much commentary on the Democratic nomination battle.  They’re staying out of it.  However, if you were to ask the average Republican activist who they think would be the perfect opponent in November, the one that’s easiest to beat, the answer would probably be Terry McAuliffe.  
The Democratic nomination, which will be decided on June 9, is intensely competitive. However, the dynamics have shifted considerably over what many expected just a year ago.  For most of the past four years the assumption was that the nomination battle would be between former Delegate Brian Moran of Alexandria and State Senator Creigh Deeds of Bath. 

The betting was heavily leaning towards Moran. Senator Deeds is a highly accomplished State Senator with a moderate record.  However, Moran, with his high name recognition, experience as caucus chairman, and deep ties in Northern Virginia was given the edge.  But, this simple match up was turned upside down late last year when Terry McAuliffe entered the race.  No one, and this is still the case, knows quite what to make of him or his prospect for winning the primary. 

Terry McAuliffe, unlike his two opponents, is a noted national figure.  He was chairman of the Democratic National Committee from 2001 to 2005, and before that, he was a close associate of Bill and Hillary Clinton.  And that’s still a tie, as witnessed by President Bill Clinton’s campaign swing through Virginia for McAuliffe, that’s still very strong. 

McAuliffe, most recently, ran Hillary Clinton’s campaign in 2008.  McAuliffe has also amassed a large personal fortune and through years being one of the Democratic Party’s most successful fund-raisers, has ties to donors all over the country.  He quickly put this background to work and is already vastly outspending his two opponents.  He has staff, offices all over the state, and a large media budget.  Say what you will about him, he doesn’t take on something half way.

McAuliffe’s resume is impressive, but there is one glaring gap in his CV and that’s his background in Virginia politics.  He has none.  He has never been involved in local or state politics and has never held elected office.  In many respects he is the ultimate carpetbagger.  And while that term may sound harsh, make no mistake come the November election, his lack of experience in Virginia politics is going to be an issue.  

Then there is the matter of the Clintons.  Virginia may have turned blue during the last election, but it has never been friendly territory for Bill or Hillary Clinton.  Even the Democrats aren’t that warm towards the former first couple.  President Bill Clinton lost the state in both the 1992 and 1996 elections and Hillary lost last year’s Presidential Primary to Barack Obama in a landslide.  Virginia Republicans, for their part, know that any candidate associated with the Clintons will only help galvanize their party’s conservative base.  

A McAuliffe win will also fit ideally into Republican nominee Bob McDonnell’s overall strategy.  He knows that to win, particularly in Northern Virginia he needs to cast himself as a moderate.  It’s not an easy task.  Bob McDonnell is not a moderate, he is a conservative.  But the former Attorney General’s task will be a lot easier if he can paint his Democratic opponent with a far left brush.  Or at least far left enough that it makes moderate voters, the kinds the Democrats need to win over, uncomfortable.  Thanks to the Clinton label this is going to be a lot easier than it would be with another Democrat.  

While some Democrats may be convinced that Virginia, thanks to their impressive victory in 2008, has suddenly become a hotbed of liberalism, this is probably wishful thinking.  Historically, Democratic successes in Northern Virginia have come, thanks to moderates.  This is especially true of the now lightly blue outer suburbs of Loudon and Prince William.  Tim Kaine, Jim Webb and Mark Warner all appealed to moderate middle class voters.    

McAuliffe is a vigorous and determined candidate.  He is trying to win over the Democratic Party’s liberal base while at the same time attempting to convince those a bit more skeptical that his fund raising prowess and national connections will be more than a match for the Republicans in November.  This is a good strategy, but also one that shows a lack of understanding of what it takes to win in Virginia.  

You may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

A thanks to small business

Business Appreciation Week celebrates businesses of all kinds: large businesses, medium sized businesses, and small business.  But it’s the small businesses that I think deserve a special recognition.  The big businesses, and most of the medium sized ones, have enough capital, enough of a cushion, and of course the political clout, that though things are tough for them, they will probably weather economic storm.  
However, small businesses are entirely different.
Their margins, the difference between having enough revenue, being able to make a payroll, and alternatively, not being able to pay the bills, is often surprisingly thin.  And yet, small business keeps going.  Even in tough economic times, individuals, partnerships, and small stock companies, fight the odds.  Rather amazingly, even in tough times, entrepreneurs, people with an idea, a skill, or some special service, keep starting up businesses.  
In America over half of the private sector workforce is employed by small business. But, here is a statistic that may really surprise you.  According to the U.S. Small Business Administration as much as 75% of the high tech workforce is employed by a small business.  Much of this is in information technology, but also includes small research firms and small scale high tech manufacturing.  Companies like this, often with just a few employees aren’t at all uncommon in the Northern Neck.
Also, small businesses have a different footprint as opposed to larger scale enterprises.  Over half are based at home.  However, this is often a little more than running the family business out of the garage. Many consulting companies, not having the resources for a brick and mortar office, have begun to rely on “virtual” internet-based work structures. Of course, a host of small companies, particularly in construction and services, have been home-based for years.
Unfortunately, small businesses, whether it’s one of the many retail sales outlets in  this area, or our many service and consulting companies, don’t have the margins that larger businesses have.  What this means, is that when things get tight, they don’t have much to fall back on.   Unlike the big banks, or the major car companies, no one is stepping in with billions of dollars in credit to keep them from failing.  
Sometimes, the margins are awfully thin.  A restaurant owner I was talking to last week was delighted that at last there was good weather and he had a weekend where business was strong.  However, he said that it was getting so tight, that if he didn’t see a sustained increase in business he was going to have to start laying off waitresses and kitchen staff.  
One of the sad realities for small business is that for the most part you’re on your own.  And you face a host of obstacles.  Just starting a small business can be a trial in itself.  Sometimes it seems like the whole structure of government is operating with the goal of keeping you from getting started.
Employment rules are complex.  Taxes and social security can be a bookkeeping nightmare.  Rules and regulations, both state and federal all requiring this filing, or that impact statement, seem to come at you from all sides, and usually, for most small businesses, the owner is the one who has to cope with it all.  Given all the taxes and governmental requirements it’s amazing that small business people ever find time to market their services and satisfy clients.  But amazingly, in spite of all the requirements and all the challenges, small business remains the foundation of our American economy.
When our country was founded we were almost entirely a nation of small business owners.  Usually, they were what we would today call single proprietorships.  Men and women provided products, often hand crafted, as well as services, to a mostly rural economy.  It was their spirit of independence and self reliance that fueled the American Revolution.  
However, as our economy became more complex, businesses got larger, and so did government.  The structure of our economy changed, but small business, from retail, to services, to restaurants, repair shops, and a host of enterprises too numerous to have any hope of naming in this space, thrived as well.  Today, small business is under tremendous pressure.  They are the first to feel the stress of a bad economy.  But, amazingly, often on a month to month basis, they’re hanging in there.  Surviving and providing, as they always have the very backbone of the American economy.
By David Kerr   

A party switch and the future of the GOP

   Last week, Senator Arlen Specter, the senior Senator from Pennsylvania switched parties and became a Democrat.  This was a serious blow for Senate Republicans and for that matter, Republicans all over the country.
    In a way, it was as if they were still losing the election of 2008.  Some Republicans immediately called him a traitor and others, worried at what was behind it, expressed concern that it was a sign the GOP was losing touch with the mainstream of American voters.
    One of the most immediate impacts of this switch will be in the Senate itself.  The Democrats currently have 58 seats in the Senate locked up.  However, with Specter’s defection and the likely seating of Minnesota Democrat Al Franken, this will give the party 60 seats in the upper chamber.  
   This number is important.  Under the somewhat arcane rules of the Senate, it takes more than a majority to pass a piece of legislation.  If opponents want to, they can, using the filibuster, talk a bill to death.  They talk, and they talk, and they talk some more, and finally the other side, even though they have a majority, just give up and pull the bill from the Senate calendar.  This mechanism was designed to avoid what Thomas Jefferson called the “tyranny of the majority.”  
   However, there is a way around it, but it requires that a bill’s supporters have sixty votes.  Then, they can invoke what’s called “cloture,” bring debate to an end, and pass a bill with a simple majority.  That’s why 60 is the magic number for the Democrats.  With Specter, and assuming they can hold their caucus together, passing Democratic legislation, and in particular President Obama’s bills, is going to get a lot easier.
   Specter’s decision to leave the Republican Party was based on two factors.  One was ideological and the other a bit self serving.  Specter’s support for the President’s stimulus bill enraged conservative Republicans.  GOP Chairman Michael Steele even vowed to help defeat Specter in a primary.   Such a statement is unusual from a national chairman. Not to mention reckless. However, perhaps the real reason was that Specter wants to stay in the Senate and that’s not going to happen if he stays a Republican.  
   Pennsylvania GOP voters are a lot more conservative than Specter and overwhelmingly they were ready to support his opponent in the GOP primary, former Congressman Pat Toomey.  Toomey nearly beat Specter in 2004, but in a strange twist, it was President Bush and the Washington conservative establishment that saved the Pennsylvania Senator.  Now, Specter, looking at certain defeat, decided to throw his lot in with the Democrats.
   High profile party defections, while getting lots of press, aren’t all that rare.  Senators Ben Nighthorse Campbell and Richard Shelby, both Democrats, chose to become Republicans during the Clinton years.  Each of them, arguably, decided they would do better under the majority Republicans than the then minority Democrats.  
   In 2002, Vermont Senator Jim Jeffords, formerly a Republican, decided to become an independent.  However, he chose to caucus with the Democrats and in an evenly divided Senate that gave them a short lived majority.  
   Another notable party switcher was Phil Gramm of Texas.  He was elected in the 1970’s as a Democratic Congressman (he went on to the Senate later), but in 1983, resigned, and ran in the special election as a Republican.  It was an honorable way to handle the situation.  He let the voters decide if they wanted him to stay their representative given that he had switched parties.  
   Specter’s defection however represents more than just one Senator looking for a way to stay in office.  Specter is by no means a starry eyed liberal.  His voting record is considered by non-partisan evaluations as moderate to conservative.  
   However, Republican conservatives have labeled him a RINO.  That stands for Republican in Name Only.  It’s a common barb used in attacking moderate Republicans, or even conservative Republicans with an independent streak, who veer away from conservative orthodoxy.  
   The only problem is that mainstream Republicans, people like my generally conservative neighbors, small business people, and just responsible middle of the road voters, are sometimes uncomfortable with the most strident conservative views.  What’s more, they often like independent minded politicians.  Right now for example, like it or not, the majority of Americans think that President Obama is most in touch with their needs.  
   Unfortunately, the Republicans, who could have used the recent debates in Congress as an opportunity to champion an alternative strategy, have mostly focused on being passionate opponents of everything the President wants to do.  For some voters this is just fine, but for others, apparently the majority, it doesn’t look like good government.
   What’s worrisome if that if the GOP, following its loss in 2008, decides that the way back to power is by becoming more and more conservative, they’re in for a big disappointment.  Their success has always rested on the support of America’s moderate to conservative mainstream voters.  If they lose this base, as they appear to be doing, they may be in for a long stay in the political wilderness.  And as much as I not a Republican, the absence of a strong and viable Republican Party isn’t good for anyone.

You may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

Interest rates only a mobster could love

   I have two credit card accounts and for the most part I pay them off whenever they’re due.  I would like to think I am a good risk.  I pay my bills, have very little in terms of debt, make a decent salary, and oh yes, always put some money in the bank.  
It’s the model of middle class responsibility.  
So, I was surprised when I got a letter from the Bank of America.  They decided that based on my credit history, my Visa credit limit needed to be lowered.  Since I can’t think of when I have ever charged near the amount of the new limit, let alone the old one, I wasn’t that distressed.
  But, I was annoyed.  
I am a good customer, have been for years, and while they didn’t begin the letter with “Dear Deadbeat” I can’t say I appreciated it.   
   At that point, in something of petulant huff, I decided to study my bill in more depth.     That’s when I got the big surprise.  I know credit interest rates are high. That’s one of the reasons I try to never keep a balance.  However, I had no idea how high the interest rate had gone.  
   The new rate, for any outstanding balance, which fortunately I didn’t have, was a staggering 33.89%.  I don’t think that even the Mafia charges that much for a loan, but not having any contacts in the Mob, I can only guess.  
   Apparently my experience with a credit card company isn’t all that different from what other people in our area are experiencing.  The banks are facing a sea of bad loans and this has prompted them to take a new look at their credit card accounts.  They want to limit their exposure and at the same time get as much out of their paying accounts as they possibly can.  This means lowering credit limits and upping interest rates.   However, once again, in yet another public relations disaster for the financial industry, they carried it too far.  
   When it comes to credit limits the banks want to make sure that customers don’t carry more debt than they can service.  This, after years of easy credit and letting almost anyone open an account, represents a new approach for these guys, but at least it makes sense.  
   One mechanism for determining a credit limit is past usage.  If you are always borrowing to the limit, this is a cause for concern.  Also, so are customers who pay off their accounts and don’t keep a balance.
   The credit card companies figure that extending a big limit to these customers it represents an unnecessary exposure.  To some extent, that all makes sense. However, other practices leave a bit to be desired. For instance, if you shop at stores where the customers have a high default rate, then that too is a prompt to lower your credit limit.  
   Since I make it a practice, being a good Scotsman, to shop at discount stores whenever I can, Big Lots being one of my favorites, this probably has had an effect on my account.  
   At the same time, the banks and credit card companies need cash.  They’re losing money hand over fist so they’ve turned to credit card borrowers for an additional source of revenue.  The rules on this are lax and all they have to do is increase the rates.  It’s all legal, but responsible borrowers don’t like the idea of suddenly being told that their interest rates have doubled or worse.  
   What’s more, in most cases, no one ever told them their rates were going up in the first place.
   For many, this sudden increase in interest rates is nothing more than an organized effort to gouge the consumer.  This would be bad enough, but many of these banks are still receiving billions of dollars in federal aid and it just doesn’t sit well.  
   The President even had the CEO’s of the major credit card companies in for a chat at the White House.  He made it clear, and this has strong Republican support, that he was supporting legislation to require them to notify customers before they change the terms of their credit card account.  
   If they raise interest rates or change a limit, they have to notify you ahead of time.  That’s encouraging, but unfortunately, it’s unlikely that there are going to be any caps on interest rates.  So, perhaps the best advice is to do your best to make your payments on time, and if you can, pay off the debt as much as possible.  There is no need giving these guys any more business than they already have.

You may reach David Kerr This email address is being protected from spambots. You need JavaScript enabled to view it.

The GOP’s quest for new ideas

   Losing an election is always tough on a political party.  There is the sudden stab of defeat at the polls, followed by watching your opponents take on the trappings of power, and finally the recognition that you no longer are the ones making policy.  
   However, what follows that can seem even worse.  And that’s the realization that at least for the time being no one even wants to listen to your opinion.  This, rather sadly, is the state of the Republican Party at the moment.  They are still a prominent national party, still have a sizable number of congressmen, senators and governors and could very well come riding back in full force in 2012.  
   But for the moment, with the Democrats grabbing all the headlines, and setting the agenda, they’re left, mostly talking to themselves.
   This is proving to be a hard transition for the GOP to make. With the exception of a short two-year period after Bill Clinton was elected in 1992 and when the Republicans took control of Congress in 1994, the Republicans, have, since 1980 controlled either the White House or the Congress or both.  
   Now, they’re in the unfamiliar position of being on the outside looking in.  However, while that’s difficult enough, what’s worse is figuring out a way to get the public to pay attention to you.  The Democrats have President Obama.  He is in the limelight all the time.  As for the Democrats in Congress, since they have the majority they get a lot of attention as well.  As for GOP, with no national campaign to rally around, their only rallying points are their leaders in Congress, some out-of-office former legislators, and the prospective nominees for 2012.  None of this makes for compelling reading.  
   However, perhaps their biggest challenge is on the idea front.  True, with the exception of Fox television, it may be hard to get much attention at the moment, but, it’s more than that.  
   The real problem is that the party is having a tough time coming up with anything new to say.  This is going to matter more than they realize.  The GOP will have a shot at taking control of Congress in 2010.  But, at the moment, the only thing they have to offer is that they have opposed, rather uniformly, just about all of the President’s programs.  
   They may be making some good points, particularly about spending, but with the country facing some deep problems, they need to do more than crow about how they managed to cast almost all no votes on the stimulus package.  
   To someone who just lost their job, is afraid of losing their house, or worried about the state of the nation’s healthcare, that just doesn’t do it.
   Interestingly enough, at one time, it was the GOP that was claiming to have the new ideas.  The entire Republican revolution, starting with Ronald Reagan, and carrying on through the GOP takeover of Congress in 1994, was based on an entirely new political agenda.  They were running against something, yes, but they were also offering up their own set of ideas.  
   These included reducing the role of government, deregulation, and greater reliance on free market solutions to national issues.  For almost three decades it was the Republicans who successfully made the argument that they were the party of ideas.    
   Now, things have shifted.  The Democrats, offering an entirely new approach to government, one that’s activist in character, are the ones claiming the high ground when it comes to new ideas.  Some people may not like their ideas, but at the moment, the other side isn’t offering much when it comes to alternatives.
    But that doesn’t mean the Republicans aren’t trying.  
There is some movement, gradual at the moment, towards reenergizing the Republican Party’s idea machine.  Virginia Congressman Eric Cantor, the House Whip who engineered the GOP’s unanimous “no” vote against the stimulus, started his own idea website.  It’s not that original, it doesn’t address many of the larger issues, but at least it’s a start.  Trying to focus the Republican minority in Congress, he proposes tax relief for working families and small businesses, opposes any long term increase in spending, and supports a home buyer’s tax credit.    
    Cantor, however, isn’t alone in this endeavor.  Newt Gingrich, one of the party’s most compelling personalities, is also trying to develop a new Republican agenda.  American Solutions for Winning the Future, Gingrich’s “think tank” has written “The Platform for the American People” and it’s surprisingly comprehensive.  This is particularly true when it comes to the environment, technology, and social security.  It’s a little weak on detail, but it is a step in the right direction.
   The GOP wants to regroup, and wants to start winning elections again. And while it may be hard for them to get much coverage during what are the opening years of the Obama era, they’ll find getting it a lot easier if they have something new and creative to offer.
   You  may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

Can a primary be bought?

    It’s a question that gets asked from time to time.  Is it really possible to “buy” an election?  
    There is plenty of evidence that money, whether it’s the result of good fundraising, or tapping a personal fortune, can do wonders for a candidate’s political prospects.  But can it really change the outcome of an election?  Right now, in Virginia’s Democratic gubernatorial primary, that question is being put to the test.  Terry McAuliffe, until just a few months ago, was a complete outsider to Virginia politics.  But starting just after the 2008 election he has unleashed a daunting national fundraising effort and has launched an ambitious campaign for the Democratic nomination for Governor.  Its scale, in a primary campaign, is almost unprecedented in Virginia politics.  According to the most recent financial disclosures, his fundraising prowess leaves his opponents in the dust.  During the first three months of this year McAuliffe raised a staggering $5.2 million while former Delegate Brian Moran raised $800,000 and State Senator Creigh Deeds (Deeds wasn’t allowed to raise money while the legislature was in session) $600,000.   That’s better than a five-to-one advantage over his nearest opponent.  This primary looks like it will be the ultimate test of whether or not an election can be bought.
     McAuliffe was, at least until recently, an outsider when it comes to Virginia politics.  He took almost no interest in the goings on of the Commonwealth.  He has never held elective office in Virginia, and for that matter, has never been actively involved in Virginia politics.  He has lived in Virginia for years, but his focus, with his residence in McLean, was always on the goings on of political Washington, not Richmond.  McAuliffe served as Chairman of the Democratic National Committee, and most notably, was a longtime friend and fundraiser for President and Mrs. Clinton.  He is also a highly successful businessman with a considerable fortune of his own.  He may not have ties in Virginia, and he has been an easy target for the label of carpetbagger, but he is also no slouch.  Even with his liabilities he is a formidable contender.
     Just what propelled McAuliffe to run for Governor still isn’t entirely clear, but it almost doesn’t matter.  He is clearly giving it everything he’s got.  However, for all the money he can bring to bear, and this includes 10 campaign offices statewide, and nearly 100 staffers, the question remains.  At this late stage in the campaign can he pull together enough Democratic support to win the primary?  Both of McAuliffe’s opponents have been traveling Virginia for years now.  They have gone to coffees, have helped local candidates for everything from Sheriff to Delegate and have gotten to know the rank and file.  In the process they have piled up lots of IOU’s.  Moran and Deeds both have been just a phone call away for Democratic chairs and campaign managers who wanted a statewide figure at an event.  And until recently, if they knew him at all, to most Democrats McAuliffe was a distant national figure.
     But it would be a mistake to consider McAuliffe as having been completely disinterested in Virginia politics.  In 2005 he played a decisive role in making sure that Tim Kaine, then in a tight race with Mark Early, got an extra $5 million from the National Party.  Make no mistake it made a big difference.  Kaine is staying neutral, but a lot of people, no matter what they think of this race, or McAuliffe, are still grateful for the help.
     The Primary is just a little over two months away and according to the most recent poll it’s still an extremely fluid election.  Brian Moran, for most of the campaign viewed as the frontrunner, has 22% of the vote.  McAuliffe has 18% and Deeds 15%.  The rest of the voters, a staggering 45% haven’t made up their minds yet.  This means it’s wide open and for McAuliffe offers some possibilities.  Because he has the ability through paid phone banking, TV ads, and sophisticated internet (borrowing on President Obama’s efforts) to reach the parties liberal base (the ones most likely to turn out in a primary) his fundraising advantage might make a big difference.
     There is also a school of thought that whoever wins will face the well funded Republican nominee former Attorney General Bob McDonnell in the fall.  McAuliffe’s almost unlimited treasury would be an advantage.  However, there are some sobering points to make in countering this argument.  McAuliffe, though personally likeable and energetic, has absolutely no experience in elective office or large scale government management.  Bob McDonnell will almost certainly make this a major campaign theme.
    However, at the moment, the contest isn’t about November.  It’s about who can motivate the Democratic Primary voters in June.  Right now, McAuliffe’s money is a definite advantage, and though it might not buy him an election, it might be enough for a primary.
You may reach David Kerr at This email address is being protected from spambots. You need JavaScript enabled to view it.

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