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-- This week on the journal editorial.
Report the GOP is Rust Belt.
Resurgence -- down and out Republicans are charging back in states like Ohio Pennsylvania Michigan and Wisconsin.
And as the fight over tax cuts -- on in Washington.
Voters in many parts of the country are already feeling the pinch.
Thanks to historic tax hikes.
-- cash strapped states we'll tell you which ones are the worst offenders plus.
The White House exists Rahm Emanuel is just the latest Obama -- to jump ship.
What it means for the president's post election.
Welcome to The Journal Editorial Report I'm apology go call -- the Rust Belt resurgence after a decade of declining political fortunes the Republican Party is poised.
To make big gains this November in a swath of upper midwest manufacturing states that Democrats have owned for years.
Polls show Republicans have a good shot at taking back governor seats in Pennsylvania Ohio Illinois Wisconsin and Michigan.
In some key senate races are leaning toward the GOP as well including the seat of incumbent Democrat Russ Feingold.
In Wisconsin as well as president Obama's old seat in -- -- life.
Fox News contributor Michael Barone is senior political finals for the washing it to an examiner and coauthor of the almanac of American politics.
He joins me now from Washington Michael welcome back to the program.
It's very good to be with you off you know a lot of people are comparing this election in 1994 where the Republicans picked up a lot of c.s but there's one difference I know which is that.
In that year Republicans picked up a lot of gains in the south.
This year of a lot of the games they expect to get if they're gonna take back to -- the house and the senate are across the upper midwest what's going on in that part of the country.
Well I think something very important is going on that the political commentary it.
Generally hasn't really -- I figured out yet because when I was growing up in Michigan when you're growing up in Wisconsin Paul the political rule was that in times of economic distress the industrial heartland those states you just named Pennsylvania Ohio Michigan was constantly.
It in times of -- distress they move toward the Democrats what we're seeing now is that in a time of economic distress they are moving heavily toward the Republicans.
In a way that we haven't seen since 94 and I don't mean 1994 ME ET.
94 really that that that's even if it was so what explains this switch on the economy between the parties.
Well I think that voters in these states have seen the effect of heavy government spending.
Public employee unions dictating public policy and acting as in the view of Republicans anyway is parasites sucking the life out of the private sector economy.
They've -- the auto companies General Motors and Chrysler go into bankruptcy after long years of adversarial relationships with the United Auto Workers.
And instead of rallying to the labor unions for the Democrats that gave the UAW very favorable.
On those bankruptcies they are rallying towards the Republicans and they're saying look if you want to have a prosperous economy.
You need to cut spending you need to stop this pension bureau burdens on the states.
-- -- -- -- Understand that this economic arguments -- like Michigan where the unemployment rate is it is 13% -- you've had a two term.
Democratic governor Jennifer grand home who's -- not very popular but let's take a state like Wisconsin where the jobless rate is under 8% seven point 9% that.
He don't have that same impact of the auto industry they have had a two term governor who is also not very popular.
In in Jim Doyle but what about how do you explain the fact that incumbent senator like Russ Feingold is is trailing badly and in Wisconsin.
Well you've got Russ Feingold the incumbent senator he's won three times he's trailing badly.
Tom Barrett the mayor of Milwaukee the democratic -- nominee is trailing a Republican Scott Walker mr.
-- it's a very attractive candidates nice man.
I think one of the things that's happening in Wisconsin Paul is.
It's foreign policy is having some effect Wisconsin is part of -- -- a Scandinavian America was settled in large part by Germans and scandinavians Norwegians.
in historically it has been the most Darvish or isolationist or pacifist part of the country you had done.
Thirty members of the house rooting against declaration of war World War I from the upper midwest from Germany -- -- Scandinavian America.
I think a lot of those dumbest voters voted for Barack Obama and the Democrats and oh wait they thought he would immediately withdraw from -- -- Take troops out of Afghanistan abandon that effort close Guantanamo.
In you know make loving cooling devices with -- in a job and so forth it hasn't turned out that way and I think some of those voters are either.
You know dropping out of the electorate or -- voting on other issues where they are more inclined to support the Republican.
How fascinating what about the the theory that I've heard often that.
Hillary that that hope President Obama the Democrats this time are doing.
-- worse in those parts of the country that's include Ohio and Pennsylvania where Hillary Clinton.
Beat Barack Obama in the primaries that is -- among white voters middle class working class white voters.
Do you see any signs of that.
Yeah I do see signs of that I mean -- You -- on the bottom seems to have dropped out for the Democrats at least senate candidate Lee Fisher in northeast Ohio Cuyahoga County where they've got a particularly messy scandal with the we -- the democratic county chairman.
Members of the county commission there.
You know -- and Roman Catholic church and things that sort of detail that catches your attention.
But we saw Barack Obama week in Western Pennsylvania right.
In northeast Ohio.
He did not score well with -- did not do well -- Dennis Kucinich is district on the west side of Cleveland.
And I think what we're seeing in the polling evidence is that.
He's not scoring well there the white working class that a lot of Democrats like to think is the demographic base of their party.
Although it hasn't been for quite a few years.
Seems to be rejecting Barack Obama in his policies.
By really wide margins mean you've got some surveys that are showing approval of Barack Obama among people that you might classify as white working class.
In the nature of 2225%.
That's dismal and he's just not striking a chord with these voters the stimulus package in these other measures not designed to.
They're not popular -- they were designed to pump money into public employees.
That doesn't do you very much good if you are a private sector employee few words you'll trades -- We've seen male unemployment go higher than female unemployment I believe this is the first.
You know recession period where we've seen that happen.
In -- -- -- -- male voters are less likely to support Democrats.
I think that's move even some warm and away from all of the Obama Democrats like we don't have a lot of time and I wanna ask you -- some talk right now about a come back a democratic comeback -- the basis coming home finally it's getting energize the democratic base it's clear president Obama's out there trying to fire them up.
Do you see any signs of that and could that actually save the day for the Democrats.
Well I see certain amount of signs the democratic candidates have been doing better in polls in California in the last ten days.
The Ohio governor's race has tightened up the -- the Republican John Kasich is still ahead.
The generic ballot question which party's vote -- I vote for in the house election.
The Republicans lead is is diminished somewhat if you average recent polls.
But over but that we're getting results in like we get a poll showing a Lari a punt -- Ahead of Mike MacIntyre in the north Carolina's seventh district this is Mike MacIntyre was a moderate Democrat who got 69% of the vote last time.
This poll showing him getting 46 now maybe that Paul's not right.
But it's one of many polls that is showing a close race a democratic incumbent endangered.
In a place where just about nobody in the political.
See -- logical insider.
Come -- that includes yet her candidacy.
Our -- had expected to see like -- some mr.
-- -- a few months ago and I thought he might pull a surprise he's a former marine and Goldman's.
With Goldman Sachs to -- to enlist in the Marine Corps after nine months.
On Michael it's going to be fascinating to watch when we come back.
Washington may have put off a decision on tax hikes until after the mid terms but across the country voters.
Are already feeling the sting -- states -- taxpayers -- record increases how does your state measure up.
Find out next.
Well as Washington continues to debate whether to extend bush era tax cuts beyond the end of this year voters in many parts of the country already feeling the sting of state and local tax hikes.
Taxes went up in 29 states in 2010 by a whopping 24 billion dollars the biggest increase since at least 1979.
So how did your state fair joining the panel this week.
Wall Street Journal columnist and deputy editor Dan -- -- assistant editorial page editor James Freeman.
And senior economics writer Steve Moore so James who are the worst offenders.
The absolute worst offenders California ten billion have a 124 billion of -- state -- and they always to a bigger than average that's right well we don't know -- -- -- -- are here are a problem that's the end of the current you have big spenders in California in the in Sacramento and also on New York.
Six billion out of that twenty force cells in -- -- elsewhere Connecticut as it is is visiting Kansas has increased taxes Maryland to increase -- quite a number something Steve what is is the figure more than a dozen states -- -- close to it.
That's right about a dozen states have raised income and sales tax and what's interesting about what James just -- is -- about this ball.
California and New York are -- -- the way on tax increases one of those two states have in common they have about the deepest recessions they tried to raise taxes on the rich -- it hasn't worked it's hurt jobs and it's caused a tax revolt among everybody not just rich people.
And yet the Democrats Steve may wind up both of those seats a California governorship.
And the and looks like they're the heavy favorite in the New York governorship -- explain that.
Take people of New York -- Gallup what you'll never let our.
I think they won't change their policies and -- -- jobless -- those states but the other thing that's going out -- a lot of these states and I want imagine if it's not just think coming sales tax that may have.
Voters so -- it's just these nickel and dime in taxes that that I see in my state of Virginia and it's all over the country everything from beer to why -- cigarettes the telephones -- powers even prostitution and gambling are getting that now.
But some of these state legislatures.
Some of these congressional candidates are having to defend their votes even in state legislatures when they when they voted for tax increase we have an ad from Indiana let's take a look.
The -- Politician you're going to meet -- and -- and his TV ads will be beautiful.
-- his record hot -- Statehouse -- then have to do -- against property tax relief.
Against saving taxpayers half a billion dollars in property taxes against reducing the average homeowner's -- -- 28%.
Captain want government to keep the money call Manhattan telling taxpayers deserve relief.
So as this -- the lesson here that if you vote for tax increase -- to defend it forever.
Well on and -- station do I -- a lot of these states have a constitutional requirement to balance their budgets right -- you know you can balance your budget in two ways you can cut spending or you can raise taxes.
And I don't doubt that some of these states have attempted to cut spending but they're spending levels of -- us from such a high baseline.
That they do what they think they're able to do on the spending side and then they make the rest stop by increasing taxes.
And I think what we have arrived as a point here in states like California and new York and Illinois.
Were the voters understand that this game cannot go on forever that big spending baseline can't just ratchet up year after year and they kind of closed -- with a little more tax increase property taxes sales factors.
It's hit the wall you can't play it.
Game and this is a strictly a partisan issue because you see in some states are Connecticut -- -- the Republican governors big big tax increase Connecticut Arnold Schwarzenegger came in as a Republican city would raise taxes in California where along with a big tax increase.
They're muddies the waters of the election is that having an impact on the ground.
This year as -- as Republicans try to make gains.
It's absolutely does and we should the -- from India.
South Jersey -- congressional race where someone is paying for their.
They're supported tax increases put in those big states I disagree would seem to say people in New York or California or never learning I think they are learning because.
I wouldn't count out Carly Fiorina or Meg Whitman bridge in those California races -- -- in his right percentage Meg Whitman for governor that's right there's there's a big reaction against the taxing in the spending feeling in particular in her senate race is offering.
A very pro market limited government message it.
Against the democratic incumbent most years this is not a not a winning idea in California but she's very competitive so I think that's how you see this is an issue but Steve.
What started as -- can say one thing I find interesting about what's happening is states a lot of governors and a lot of voters are looking at what's happened in Virginia and New Jersey we have newly elected Republican governors Chris Christie and Bob McDonnell who probably read they balance their budgets not by raising taxes by cutting spending and that's been pretty popular in -- OK but take a Maryland Martin O'Malley incumbent democratic governor big big tax increase not -- -- already heavily taxed state and yet he is.
Head so far Republican Bob -- like how do you explain that once the.
That is say ahead scratch -- that's a tough one to figure although I will say -- that tax increase was two or three years ago and I think voters have kind of incorporated is that that -- their model.
But I still think that race is gonna tighten up and I wouldn't be surprised -- -- it doesn't charge at the -- because Maryland's economy is still doing very poorly.
Callers one element here we have not mentioned -- -- -- noticed looking through some of the tea leaves here.
And that's the popularity of President Obama in the states right I mean one of that.
Governors who we gave an -- was governor Manchin of West Virginia this is the Cato Institute rating of the governors governor mansion a Democrat now running for senate now running for senate.
And he's in a very tight race Obama's approval rating is something like 49%.
In West Virginia.
And -- so he's having a tough time.
His approval rating in Maryland is over 50% in California it's still up around 53%.
It's a really low and Russ Feingold is probably gonna lose his senate race there as well I think the president's popularity and his performance is having a direct look back on these three.
As and it kind of -- in the good West Virginians can keep him and in the in the Statehouse.
And say we don't need to sentinel Washington where he'll destroy the Democrats what would keep him here all right when we come back the west weighing shake up the exodus continues of chief of staff.
Rahm Emanuel calling it quits what does his departure and the departure of most of the president's economic team.
Mean for the Obama agenda going forward.
White House chief of staff -- -- -- announcement this week that he would leave the west wing to explore.
A mayoral run in Chicago marks the latest in a string of close Obama aides to head for the exit.
With the exception of Treasury Secretary Tim Geithner the president's entire economic eighteen is gone and or going -- there's likely more departures to come with senior advisor.
David Axelrod and deputy chief of staff Jim Messina.
Expected to leave this spring to head up Obama's re election effort we're back with Dan -- her.
And Steve -- -- Washington columnist Kim Straus also joins the panel so -- let me start with a confession I thought that when President Obama pointed.
Rahm Emanuel he was appointing somebody to.
Kind of make sure that he will his agenda was -- dominated by the congressional Democrats.
Boy was I wrong about that why.
That Nancy Pelosi and Harry Reid really did write the bills that became health care in the stimulus.
So what difference is -- make that Rahm Emanuel was leaving now.
Well we we were all wrong -- you weren't alone.
I mean I think look look at all of these guys -- our -- -- -- Rahm Emmanuel you've had Peter Orszag who was the budget chiefly used it.
Christine -- with the top economic advisor Larry Summers.
What what characterizes all of these guys is.
We're liberals -- they were they were brought -- a lot about where viewed as moderate some pragmatic a lot of -- good work on things they were supposed to rain in this president and kinda keep him in check.
They have been absolutely sidelined by the political team in the White House is.
This instead made a lot of decisions folks like David Axelrod a lot of decisions that are aimed at instead.
You know getting to the -- among the base that's not them focused on Smart economic policy or Smart domestic -- -- I think.
But doesn't matter now that and and that that that a -- -- -- leaving disease did he have any impact on policy.
People have to views -- say at least he was there making the argument that.
You know and and and I was arguing for example for incremental Health Care Reform.
That didn't pan out he was arguing for for example that you shouldn't have the terror trial for how -- Sheikh Mohamed in Manhattan.
That didn't work out either lost that went to.
Yet most like I said most of these guys have been silently again the argument is that they were there making it but but he didn't actually have much effect in the -- so the question now is going to be -- -- they get as a replacement.
And is as president going to be any more willing to list of those people so far the signs are -- Well Peter repeat Rouse who's a former Tom Daschle chief of staff on Capitol Hill on the deputy chief of staff in the White House now looks to be.
The unlikely -- candidate on interim basis and may be a permanent.
That's not gonna change the so called insularity of this White House he's ultimate insider.
Well insularity is hardly the word -- I mean if it's about inside inside Cleveland Park not just inside the beltway -- it it's the Oval Office the president sits at the Oval Office in that desk.
And that man are running the country and its policy doesn't matter I don't think it matters look.
Rahm Emanuel gave note you know that he is no shrinking -- as I've seen this is he is the work force bull new meaning.
He has had in your -- personality he's not going -- was not reluctant to tell the president what he thought.
If he was he failed no one could succeed I don't think in that role because the president has proven himself to be inflexible.
When he went into those back yards this week to talk about economic policy and talked to people who were unemployed.
He was basically repeating to them the same agenda that he was talking about the first week of his presidency such as his -- clean technologies agenda and things like that.
And you know the reason -- Democrats are out there running having done nothing on the tax cut is because Barack Obama will not allow taxes to fall for what he calls the wealthiest Americans.
Steve do you think that this wholesale exodus -- the economic team I can't remember.
When we had announcements like this before a mid term election.
But you do and they're going to be changing the guard there on economic policy any chance it'll make a difference.
Well let me say -- I'm from Chicago start hyperventilating about this idea that Rahm Emanuel is gonna leave the White House to go run for mayor of Chicago god forbid that he does for Chicago what -- what he's done for the country.
But let's have this issue but I've said this consistently.
You know that study that was done a few months ago that showed that.
Barack Obama has fewer people private sector business experience in his cabinet that in any -- president and a hundred years not I think that's been -- -- it's been a total -- -- I think nobody really knows how to -- meet a -- run a business and you see that in the policies -- so I would -- Obama I would bring in somebody who was a CEO of a company who knows how to run things and by the -- -- somebody who can say no to Barack Obama for the very reasons stand just -- and nobody will stand up to him on the white.
-- -- there's been mentioned in reference to Mulcahy the former -- Xerox CIO who I've seen she said herself that she didn't think -- -- a good set.
But if you're there while these political actors and you just have no choice I mean -- are really gonna make a difference particularly and -- this is seems to me to be the key point that Dan makes -- If Barack Obama the president and he's the boss if he sets the direction here he is a wanna make a change it doesn't matter who -- who we brings him.
Well I think that's -- that's right.
Yeah yes sorry yeah you've got people like.
And Mulcahy saying she's not a -- but I mean no doubt some of these guys are looking at the way the prior economic team with street and things are really wanna do that and this is very much driven this argument what we're gonna get a business executives to in order to love.
-- to make the business community happy and we'll see if he does all right we have to take one more break when we come back our hits and misses of the week.
Time now for hits and misses of the week -- first to you.
They hit to China's wealthiest man is on rushing home.
Who was invited to this dinner at which a warm Buffett and Bill Gates tried to convince Chinese tycoons to pledge some of their fortunes to charity.
-- you -- did not attend he is however on record as saying he's skeptical of philanthropy as a tax dodge.
And he thinks real charity is creating wealth and jobs for society.
Now obviously charity does matter but it was really great to see a business and out -- talking that just tell fundamental capitalism is to the general well being of average people.
-- use a few more guys like this in the US.
Yes the Communist capital capital -- -- chance.
This is a big -- to your federal -- federal government at work which is forcing New York City do you change the fonts and move some.
Capital letters to lower case letters on -- street signs.
Costing the state in New York 27 point six million dollars and he can't blame it on President Obama this is a bush regulation why are they doing this.
That's -- good question the F theoretically.
It is meant milliseconds before you turn that you can read this font.
Better quick -- but erratic play OK okay all right Steve.
-- this morning -- -- choked on my Cheerios when I saw that the postal rate commission and actually does not.
Hide the Postal Service.
I dream I'm Steve okay that set for this week's edition of The Journal Editorial Report thanks to my panel and all of you for watching I'm Paula you go we hope to see -- right here.
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