Republicans scored a major victory last night and that is very good news.  Although Democrats managed to keep the Senate, it was only by the skin of their teeth.  There are 21 Democrats up for re-election in 2012 and only 10 Republicans.  I expect a lot of conservative Democratic Senators from red states to start to quickly distance themselves from Obama and the left wing of the Democratic party.  The only Democratic Senators who survived were hard core left wing liberals from states with major Democratic machines. 

This election literally tilted both parties.  The Democrats tilted significantly to the left and the Republicans tilted to the right.  Because all of them were on the ballot last night, conservative Democrats in the House tended to slide right out of office.  Those 21 Democratic Senators, particularly the ones from red states, up for re-election in 2012 can see the handwriting on the wall.  The only reason Democrats did not lose control of the Senate last night is because only 18 of them were up for re-election. 

Obviously, my analysis of Delaware was way off.  I should have known better, because Christine O’Donnell was a train wreck of a candidate.  But, I was basing this on a single poll and it is now obvious that the poll was nonsense.  She lost by 17 and that was with better than expected Republican turnout.  This is one case where the Tea Party did us no favors, because they simply did not vet her as a candidate.  The only recent major candidate with a worse resume was Barack Obama and he at least did graduate from Harvard.  We also weren’t well served by running a WWE Diva on a family values platform in Connecticut.  There were similar problems with Joe Miller in Alaska.  Fortunately, Lisa Murkowski appears to have saved that seat for the Republicans.

But, Marco Rubio and Rand Paul are major victories for the tea party and more importantly, for the conservative wing of the Republican Party.  They proved that major elections can be won by people who run on solid conservative values.

Contrast that with California where neither Carly Fiorina nor Meg Whitman did that.  Meg Whitman spent over $140 million trying to get elected by repeating over and over again that she is not Jerry Brown.  She never mentioned cutting taxes or cutting spending or a return to core conservative values.  Ultimately, a lot of people saw very little difference between the two.  Carly Fiorina ran a similar race, where once again her main argument was that she wasn’t Barbara Boxer.  Then she had absolutely no response to the attack ads saying she had shipped 30,000 jobs overseas as CEO of HP.  She also did not talk very much about cutting taxes and reducing spending.  She never mentioned that she would stop Obama, she just wanted to replace Boxer.

Frankly, Republicans should have won both races, but until the Republican Party learns to unite behind a Candidate with something resembling a personality and the ability to explain the conservative agenda, we are going to continue losing every election.

Did anyone notice that Democrats dominated a 30 mile strip along the entire length of the California coast.  The rest of California has turned deep red.

The election for the country was great, for California it was a disaster.  Republicans only won one statewide office, Attorney General, and that was only because it was patently obvious that Pamela Harris was embarrassingly incompetent.  To make it worse, voters passed Prop 25, which now allows Democrats to pass a budget with only a simple majority vote.  The only thing that has kept California from taxing and spending itself into oblivion has been the ability of the Republican minority to block irresponsible budgets.  There is no longer any guardrail protecting California from going over the cliff.

Since no California Democrat currently in office, other than Bill Lockyear, has demonstrated a shred of common sense, it is always difficult to predict what they will do.  It is clear that they desperately need new tax revenue, because the unions who bought the election for them are not going to let them cut many more public sector jobs.  So the real question is what Democrats will do to raise money.

They will try to raise taxes, but taxes are so high now and the economy is so bad that this may not be possible.  So, they will still raise taxes, but they will call it something else.  I fully expect them to legalize marijuana, because then they can tax it.  Democrats view marijuana solely as a very attractive source of desperately needed new revenue so they can continue spending.  The fact that Proposition 19 was voted down is just an inconvenience, kind of like Proposition 8 and gay marriage. 

They will raise energy taxes, inspired by the California Green energy goals.  In some cases they will be disguised as fees, but they will really be a tax.  They will also increase car license fees, because they don’t like cars anyway.  They probably will come up with other new and exciting ways to raise taxes, but they will definitely raise taxes and small business owners will be hit the hardest.

Barbara Boxer said that her solution to California’s financial problems was to tax all the money made by California based companies from foreign operations.  In other words any company currently domiciled in California that makes profits anywhere else in the world, is going to be taxed by California.  Any CEO of a California based company who heard this brilliant idea or who learned about it later is probably developing plans to leave the state.  This is utter nonsense.

But perhaps the most dangerous result was the election of Dave Jones as Insurance Commissioner.  He is a hard core left wing political activist who thinks all problems can be solved by increased regulation of the insurance industry.  He has already proposed legislation allowing him as Insurance Commissioner to require prior approval of health insurance rates.  If you think the health insurance industry in California is bad now, just wait six months.  Many insurance carriers are already skittish about California in general because of the long history of the Democratic controlled legislature passing ridiculous regulations that make it impossible for insurance companies to make a profit.  At one point nearly all workers’ compensation insurance in California was underwritten by the State Compensation Insurance Fund, because private companies had withdrawn completely from the state.  I can remember many conversations I had personally with top executives who told me flat out that they would never again write business in California because they did not trust the California State Legislature.  That changed when Arnold Schwarzenegger was elected, but my hunch is that many of them are already developing an early exit strategy.  I can’t blame them because California just turned over the insane asylum to the inmates.

So, one must ask, how do you create jobs in an environment that is so hostile to business owners?  One answer, already proposed by Democrats, is to create great new jobs with government money.  For example, California could build that coveted high speed rail line between San Francisco and Bakerfield.  In addition, they will require all engines and passengers cars to be built in….California.  This is progressive utopia.  High speed mass transit, massive spending and all those delicious union jobs.  Of course the fact that we have no money to fund this, that this has no chance of ever turning a profit and that the coveted federal funds are non-existent will not slow them down.  I predict they will issue bonds so that lots of people can help fund this marvelous idea.  This is very similar to how the French financed the Panama Canal.  That worked out really well.

Hurray, for the U.S.A., but for California, too bad, so sad!

TDM