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Year-end pundit atonement: Where I was wrong in 2010

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Politics,Beltway Confidential,Timothy P. Carney

One of the things about internet journalism and punditry is that your mistakes are pretty accessible to the public long after you've written them. One of the things about the blogosphere, though, is that there's so much crap out there that it's easy to let your mistakes hide under a pile of content.

So in the interest of increasing blogger accountability (and improving myself as a journalist), I'm trying to launch a new tradition: At the turn of the year, bloggers should post about their biggest mistakes in the year that just ended.

This can include factual errors whose corrections didn't get the play the error made. It could include analysis you later decided was bunk. It could include bad omissions. Or it can be predictions you got terribly wrong. Matt Lewis of AOL Politics Daily was the first to take up this challenge after I mentioned the idea on Twitter. Dave Weigel at Slate has done it too. We'll see who follows, and I'm sure we'll see plenty of approaches to this.

Below, I pair my mistakes with explanations of how I was led astray, as well as lessons for the future. (I know I made others, and you may think they were worse, but these are the ones that irk me the most.)

1) Predicting Republicans wouldn't take the House.

Now, the "Predictions" segment at the end of McLaughlin Group has been the site of plenty of silly prognostications, but I think I had one of the worst this summer, when I predicted Republicans would not take either chamber of Congress (here's the link, and my prediction is at about 26:25).

Along similar lines, after I visited Ohio, I predicted limited gains there. Specifically, I wrongly predicted Democrats Zach Space and Charlie Wilson would hold on. Here was my reasoning, in Ohio, and nationwide:

Republican gains will be significant, but analysts who expect a blowout across the state and nation often aren't looking at individual races. While the national mood will matter immensely, it will be 435 individual House races that actually determine whether Ohioan John Boehner becomes speaker.

And winning "generic" races is easier than winning specific races.

I was paying too much attention to the non-existence of the RNC, but but part of my problem may have been the effect 2002 and 2004 had on my psyche. Writing the Evans-Novak Political Report in those days, I resisted the media tendency to nationalize the elections, and just went race-by-race, and as a result, we were more right than almost anyone else. This year, like in 2006, I guess, it was a national election. Also, I was bracing for Republican scandals to drag down the surge.

Lessons: Sometimes the conventional wisdom is correct. And some elections are national elections.

2) Predicting the Wall Street regulation bill would be more Goldman-friendly.

The subtitle of my late-2009 book was "How Barack Obama is Bankrupting You, and Enriching his Wall Street Friends, Corporate Lobbyists, and Union Bosses." Obama hit the game-winning RBI for TARP. Then he picked Goldman alumnus Rahm Emanuel as chief of staff, and bailout author Tim Geithner as Treasury Secretary -- and Geithner put a Goldman lobbyist in as Treasury chief of staff. Obama later renominated Ben Bernanke as Fed Chairman.

Add in Wall Street's record contributions for Obama and the fact that the top Wall Street lobbyists were Obama allies, and you can see why I was very skeptical that Obama would do anything to hurt the big banks.

Plus, we were just coming off a health-care "reform" which K Street fought like crazy to save (as evidenced by Martha Coakley's Capitol Hill fundraisers [see here and here]) and which represented a win for the drug lobby, as I had predicted all along.

So I repeatedly predicted that the final financial regulation bill would have the sign-off from Goldman and would clearly accrue to the benefit of the biggest investment banks. In person I said it more explicitly, but here I said it in print:

"If these folks want a fight," President Obama said Thursday, tossing a rhetorical barb at Wall Street, "it's a fight I'm ready to have."

But what if they don't want a fight?

To begin with the substance of his proposed regulations: Right now, all we have is a vague first draft. We know they will be fleshed out, rewritten, amended, tweaked, ping-ponged, and massaged.

All along, we know Wall Street lobbyists will be at the table. The Wall Street "fat cats," as Obama calls them, probably aren't really looking for a fight as much as a seat at the table -- and the numbers suggest they've earned that seat.

See also here.

Lloyd Blankfein was endorsing Chris Dodd's bill as late as April, but the final bill was more of a mixed bag for the big banks -- trimming their sails, but not killing them. While Blankfein later declared that Goldman "will be among the biggest beneficiaries of reform," this was probably partly a line to appease nervous partners and shareholders.

It wasn't the bonanza for them that health care reform was for the drug companies. I think hedge funds made out pretty well, but that was largely at the expense of Goldman & crew. A telling sign: how Republicans ended up outraising Dems from Goldman this election.

Where I still think I was right, though, is that the bill did not really prevent future bailouts, and its "resolution authority" (which is supposed to prevent future bailouts) acts as a subsidy to the biggest banks by providing a government guarantee on the big banks' debt. That Bank of America's CEO cut a $2,000 check to Barney Frank as Frank's race tightened, assures me this was no all-out assault on big banks, but it was not the health-care-reform-scale corporatism I had predicted.

Lesson: While some powerful lobby always benefits from big legislative pushes, it's not always the biggest lobby.

3) Counting out health-care after Scott Brown won

I wasn't alone in doing this, so I won't dwell on it, but yeah, I was wrong.

Lesson: No bad idea is ever dead in Washington.

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