Karl Rove's Legacy Died in the Desert and Was Buried On Wall Street

President Bush's approval ratings.

John McCain's standing in the polls versus the S&P 500.

Although he denies it, it is often said that Karl Rove's political idol is Mark Hanna the Ohio political boss who was the power behind the throne of William McKinley's presidency which ushered in an era of GOP predominance in the White House that lasted from the turn of the old century to FDR's election in 1932. What is not in dispute is the hope that Rove had for building an enduring Republican majority for the first part of the twenty-first century. This majority was to be built on holding onto the old Reagan Democrats on cultural issues and reaching out to potentially new GOP voters among more successful Latinos and he wanted to use big government to do it. This was to be the essence of "compassionate conservatism".

So Rove and Bush never made any concerted effort to tackle the spending side of the equation in their budgets and Bush most tellingly never saw fit to raise his veto pen when the profligate 109th Congress was porking and corrupting its way into oblivion. The Social Security reform plan was designed to appeal (as it should have) to younger voters and move them into the GOP column by allowing them to invest a portion of their FICA withholding taxes in private accounts which over a lifetime of work would have provided the basis for real wealth as opposed to the pittance returned by Treasury securities in traditional SS. The Medicare Prescription Drug Bill, the largest expansion of a federal entitlement program since Medicare's adoption in 1965, was likewise designed to expand government to the betterment of the GOP politically. And now the dream lies amidst the likely rubble that will be the results electorally for the GOP on Tuesday November 4th.

Now it is arguable that there are many reasons for this. The difficulty of any party retaining its dominance for a period of nearly thirty years as has been enjoyed by the Republicans since Reagan's first term. And most importantly an economic situation that in its severity always cuts against the party holding the White House. Yet I believe the primary reason is one thing and one thing only and that is the Iraq war. Because while Iraq is now tenuously looking much better and which as a result has taken this issue (the worst for Obama) off the table for the most part as a political issue the war itself is what drove George Bush's approval ratings into the cellar and along with them much of the GOP's as well. As Iraq exploded in 2005 any political capital the president had would remained deployed to try and shore up support in the Congress for the war and keep Iraq from turning into another Vietnam. That he succeeded in this against long odds is to his everlasting credit but it bankrupted him for the domestic arena and the attempt to reform Social Security.

How much of the failure of US policy in Iraq prior to the turnaround in '06 can be placed at Rove's feet? That's an open question that will only be answered by historians down the round but I believe a hint might be available now. Rove assumed his position as Deputy Chief of Staff for domestic affairs shortly after the president's second inaugural. In that position he was to have a policymaking role for all matters related to domestic affairs including the economy. While I have no proof to back up my suspicions it would seem to follow that instead of reasonably asking for some sacrifices from the American people from a financial standpoint in order to fund the wars in Iraq and Afghanistan, Rove's idea of a "guns and butter" approach would have been wholly in keeping in what he considered to be the key to keeping voters happy with the GOP brand. Further, how much can the Fed's disastrous cheap money policies which contributed to the inflation of the housing bubble be attributed to Rove? Again, I honestly don't know but what I do know is that this administration's penchant for borrowing has been enormous.

Unfortuntately for him, John McCain's shoehorning into the Rove box has proven an uncomfortable fit. McCain, whose instincts are more Rooseveltian (Teddy) than Rovian, in order to placate GOP mossbacks, has been forced into a schizoid general election campaign that echos as a pale imitation of the same old same old standby Bush has practiced. Instead of swinging for the fences with a truly audacious plan like calling for a broadly based carbon tax to be offset by cuts in FICA taxes that would have the dual benefit of both spurring investment in alternative energy sources and giving working and middle class taxpayers real relief from the most regressive of our taxes, McCain is losing the tax issue to a Democrat which is something unheard of for a Republican. And McCain finds himself falling in the polls virtually in lockstep with the decline in the equities markets. Maybe this was simply too much for McCain to overcome but there is no denying that he missed a signal opportunity to point the party in a new direction as I pointed out nearly ten months ago in The McCain Moment and the Future of the GOP. So in this election cycle Republicans find themselves of being in a position to hope only for classic overreach on the part of Democrats that might restore their hopes in 2010's midterm elections. It's a far cry from the high hopes that Karl Rove and George Bush believed was theirs for the taking eight years ago.

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