State of the Union

An Amazonian Battle

Consumers so rarely get a peek into how deals are made in the retail sector, so this farewell note from the man who helped head up Amazon.com’s digital music division, and the conversation surrounding it, is eye-opening. Scott Ambrose Reilly made deals with the music labels for Amazon’s MP3 download service, which has come to be a real competitor to Apple’s iTunes. 

I am particularly proud of the last 3½ years at Amazon. 11.5 million tracks available in six countries. All DRM-free which they said couldn’t be done just three years ago. How can I not be proud of the Daily Deal that has been so successful it riled the Cupertino beast?

The story Reilly refers to was reported in Billboard last month.

In exchange for a Daily Deal promotion on a new album, Amazon has been asking labels to provide it with a one-day exclusive before street date and such digital marketing support as a banner ad on an artist’s MySpace page and messages on label and artist Web sites and social network feeds.

Apple didn’t like these deals and took advantage of its muscle as the market leader, pulling marketing on iTunes for albums that were featured in this way on Amazon. The result? Bullied record companies decided it was no longer in their best interest to participate in Amazon’s program. Apple is the winner, but there are more losers here than just Amazon. The consumer loses, because he could have gotten an album early and at a great price. And the artist loses, too, as Billboard notes.

One of the few albums to participate in an early-street-date Daily Deal promotion so far this year is Vampire Weekend’s “Contra,” which Amazon made available for $3.99 Jan. 11, a day before it was available anywhere else. The promotion played an obvious role in powering the album’s No. 1 debut on the Billboard 200, with first-week U.S. sales of 124,000, of which 60% were digital downloads, according to Nielsen SoundScan.

One wonders if this scuffle is the reason Amazon’s Reilly included these sentences in his leave-taking:

Most of you have made this journey memorable, introduced me to some great music, allowed me to try some cockamamie schemes, made a few bold bets and I will miss the characters that make up the music business. A few of you have been a total pain in the ass and really should think about trying to make this business a better place once in awhile. Maybe listen to Elvis’ “If I Can Dream” on your way into the office. The music business and the world could use more positive energy. 

Apple is in the news right now, of course, because it recently started selling its iPad. Some claim this tablet is a revolutionary device. I’m not so certain, but I do know it’s already changed one marketplace. It’s made eBooks more expensive—and not just for iPad readers. Apple has let publishers set the prices for their books in its iBooks store, whereas Amazon has always offered Amazon-set discounted prices in its own store. Popular Amazon Kindle eBooks tend to be around $9.99 for new releases. New York Times bestsellers have been almost always that price, while some books have been sold for even less—popular Swedish thriller The Girl with the Dragon Tattoo is going for just $5.50. But publishers didn’t like ceding control over pricing. You might notice that books are one of the few consumer products that have a list price printed right on the item. It’s not that publishers were making a smaller amount of money; Amazon paid the same price to publishers for its eBooks, no matter what it charged the customer. Still, publishers felt that low prices were devaluing eBooks, but there wasn’t much they could do about it while Amazon had such a large share of the marketplace. The arrival of the iPad—and the idea that behemoth Apple might be the one company that could mount a serious challenge to Amazon in this area—changed all that. Publishers got the deal they wanted with Apple and set their own prices—even though this actually means less revenue for them. They then told Amazon they’d have to settle for the same deal. Amazon at first balked, making all books published by Macmillan unavailable on the site, eBook and hard copy versions. But they noted that publishers had a “monopoly” on their own titles and they couldn’t hold out forever if they wanted to continue selling books. So Amazon capitulated:

Under Macmillan’s new terms, which take effect at the beginning of March, the publisher will set the consumer price of each book and the online retailer will serve as an agent and take a 30 percent commission. E-book editions of most newly released adult general fiction and nonfiction will cost $12.99 to $14.99.

Those terms mirror conditions that five of the six largest publishers — Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster — agreed to with Apple last week for e-books sold via the iBookstore for the iPad.

The result is higher prices for some eBooks sold for Amazon’s Kindle. As an example, I bought Hilary Mantel’s Booker Prize-winning novel Wolf Hall for my Kindle in December; it cost $8.80. Now the Kindle edition of Wolf Hall sells for $12.99. Amazon wants customers to know that it’s not responsible for higher prices, though. It cleverly puts a notice under the number: “This price was set by the publisher.”

Poor Reilly might not be done doing battle with the forces of Apple just yet—he left Amazon’s digital music division for its Kindle division.

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Ron Paul Within One Point of Obama

A Rasmussen survey of likely voters finds Ron Paul polling within a single point of Obama, 41 percent to the president’s 42 percent, in a 2012 match-up. The pollster notes that Paul does somewhat better among independents than Republicans: “Perhaps tellingly, just 42% of Republican voters have a favorable view of him, including eight percent (8%) with a very favorable opinion. By comparison, 42% of unaffiliated voters regard him favorably, with 15% very favorable toward him.”

During the 2008 campaign season, few polls gauged how Paul would have performed against Clinton or Obama. Considering that Paul represented a very different flavor of candidate than any of the other Republicans, it was a significant omission. Plenty of tests were run pitting Republican moderates (such as Giuliani) or hawkish conservatives (just about everybody else) against the Democrats, but how would a noninterventionist libertarian perform? Quite well, it turns out, if Rasmussen is to be believed. The numbers even look to me as if the GOP itself is warming to Paul — clearly there’s still a quarter to a third of the party that rigidly rejects what he stands for, but most Republicans are simply unfamiliar with him, and a slightly larger percentage than those opposed to him see Paul as a new direction for the party:

Twenty-six percent (26%) of GOP voters think Paul shares the values of most Republican voters throughout the nation, but 25% disagree. Forty-nine percent (49%) are not sure.

Similarly, 27% of Republicans see Paul as a divisive force in the party, while 30% view him as a new direction for the GOP. Forty-two percent (42%) aren’t sure.

Among all voters, 19% say Paul shares the values of most Republican voters, and 27% disagree. Fifty-four percent (54%) are undecided.

Twenty-one percent (21%) of voters nationwide regard Paul as a divisive force in the GOP. Thirty-four percent (34%) say he is representative of a new direction for the party. Forty-five percent (45%) are not sure.

Between this and his second-place finish — a single vote behind Romney — at the recent Southern Republican Leadership Conference, there looks to be a real and growing RP following within the GOP, and with so few Republicans even familiar with the Texas congressman, there’s room for much more growth yet.

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All Hail Queen Sarah!

There comes a time in every celebrity’s wispy life when, gassed on their own glorious fumes and those of the sycophantic court and peasantry all around them, break free of their earthly moorings and float away … a tiny speck in the sky, they become unrecognizable. One thinks of Barbra Streisand, Michael Jackson, Madonna, even Cher. They fancied themselves royalty — and then just became royal pains in the ass. But worse, after a while, they didn’t even seem real.

Sarah Palin talked quite a bit about “real America” in her 2008 campaign tour with John McCain. But the “real,” at least for Sarah, is wearing off. She is starting to float away. Soon, she’ll find company with pale white balloons like Newt Gingrich, whose self-serving B.S about “changing America” has long wore down even the heartiest of his conservative acolytes. His balloon drifted off somewhere in 2007 and is now  … perhaps stuck in a tree.

Know how we can tell about Queen Sarah? Take a gander at her speaking contract (pdf) delivered March 16 to her patrons at the Stanislaus Foundation at California State University by her handlers at the Washington Speakers Bureau. Some intrepid students pulled it out of a trash can after they were told they couldn’t obtain it through a Freedom of Information Act request.

This may go well beyond Diva … and let’s face it, Madonna wasn’t very good at playing Eva Peron anyway.

The list of demands is a mile long, but let’s just say our girl is getting used to the tiara. Only first class plane tickets, deluxe hotel accommodations (one bedroom suite plus two singles), all expenses paid, only SUV (or black sedan) ground transportation, and bottled water (with “bendable straws”) — to be opened at the lectern for her by someone else, prior to her performance, er, speech.

She doesn’t suffer a lack of details either: she wants the Social Security Numbers and cell phone digits of her pilots 14 days in advance of any chartered or private plane that will take her to her speaking destination (plus all of the plane’s specifications. For example, it must be a Lear 60 or larger for West Coast events; Hawker 800 or larger for East Coast, and all of it is subject to the “speaker’s approval”).

All electronic devices must be turned off during her performance, er, speech, and not even autograph-seeking will be permitted (unless she agrees to it beforehand). All audience questions must be heavily pre-screened and asked only by the moderator (no town halls here!). All promotional materials, including advertisements and press releases for the event by the “customer” are subject to approval (and expect a five-day turn around on such approvals). Oh yeah, and any media coverage of the event is subject to Ms. Palin’s approval, on a case-by-case basis (expect some blackouts). She even provides helpful diagrams for how to manage the long queue of fans eager to snap a photo with her afterwards. As for receptions — if she agrees to attend one — she must pre-screen the list of attendees and if there are more than 100, the contract “highly recommends” rope and stanchions to assist with “attendee control” and to ensure that the attendees with be able to greet Speaker “during the allotted reception time.” Anyone hear a moo?

Oh yeah, and this contract is confidential, and any disclosure, “negligent or intentional”  shall be “deemed a material breach” and the “breaching party may be held liable.” Because, you see, the disclosure of said demands would “cause irreparable harm to (Washington Speakers Bureau) and to the Speaker.”

Ya think? Perhaps the royal subjects, I mean, “real Americans” might find it difficult to sympathize with her gratuitous demands, particularly after finding out that while they are worrying about paying bills and getting through the next pay period, she pulled in a healthy $12 million since quitting her job in July as governor of Alaska. And if you figure she spends most of her time flying from one such engagement to another with this doozy of a contract tucked under her arm, she’s spending very little of her own money on overhead. What a life.

Here’s a suggestion: dial it back a bit, Queen Sarah, and maybe you won’t float right out of our patient, adoring embrace — just yet.


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Pruning the Garden State

It’s not so uncommon for two columnists to address the same issue on the same day. People tend to talk about a limited number of subjects at a time, after all, especially in political circles. But it’s not often you see a pair of columnists write not just about the same thing, with the same opinion of it, on the same day, but also both start their pieces by referring to an MTV reality television show.

Here’s William McGurn in The Wall Street Journal:

If you think that Snooki getting socked in the kisser during an episode of “Jersey Shore” epitomizes life in the Garden State, you haven’t been paying attention. The best reality show on television today isn’t running on MTV. It’s in Trenton, where Gov. Chris Christie is offering the voters a dose of Reagan Republicanism—with a Jersey twist.

And here’s Gene Healy in The Examiner:

My native New Jersey has long been a national punch line, a status recently reinforced by MTV’s hit show “Jersey Shore,” featuring Mike Sorrentino, the guido extraordinaire nicknamed for his impressive abs (they’re “a Situation,” apparently).

Recently, though, I’ve been holding my head high, thanks to Jersey’s new governor, Republican Chris Christie, a man who hasn’t seen his abs since the “Born to Run” tour — if ever. In the 2009 race, our last governor, Jon Corzine, ridiculed Christie’s weight, then left him with the gruesome political challenge of closing an $11 billion deficit, the largest gap per taxpayer in the U.S.

As Sorrentino put it in another context, “This situation is indescribable. You can’t even describe the situation that you’re about to get in.”

That’s not the only similarity between their columns. They both have the same view of Governor Christie’s tough talk. McGurn writes:

If he is to survive the headlines about budget cuts and pull New Jersey back to prosperity, Mr. Christie knows he needs to put the hard choices before the state’s citizens, and to speak to them as adults. He’s doing just that.

Healy writes:

Christie’s running a bold experiment: treating voters like adults, telling them what’s needed to get out of their predicament.

Two men writing the same day using an MTV reality series about young and all-too-stereotypical Jersey partiers to make a point about raising the tone of political debate—it’s quite a coincidence. That said, both do a service in letting the rest of the country know what Governor Christie is trying to accomplish. New Jersey is facing one of the country’s biggest fiscal messes, and he’s trying to clean it up with what McGurn calls Jersey-style Reaganism. McGurn’s piece has a nice collection of quotations from talks given by the governor explaining why he’s getting serious about what McGurn notes is “a $10.7 billion gap on a total state budget of $29.3 billion” by cutting back to “a smaller government that lives within its means.” To give one example, he responded this way to critics of his budget cuts:

The special interests have already begun to scream their favorite word—which, coincidentally, is my 9-year-old son’s favorite word when we are making him do something he knows is right but does not want to do—’unfair.’ … One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life, and nearly $500,000 for health care benefits—a total of $3.8 million on a $120,000 investment. Is that fair?

He’s not popular among the teachers’ unions—he wants instructors to accept a one-year wage freeze and complains that local governments and school boards are hiring at high levels while the private sector is shedding jobs during a recession. Healy refers to a memo sent by one union, but doesn’t say just what was in it:

Dear Lord this year you have taken away my favorite actor, Patrick Swayze, my favorite actress, Farrah Fawcett, my favorite singer, Michael Jackson, and my favorite salesman, Billy Mays. I just wanted to let you know that Chris Christie is my favorite governor.

Those are rather uncivil words to come from the people that teach New Jersey children. Governor Christie must be doing something right.

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Walter Russell Mead’s Wars

Firing the first shot is almost always a mistake. If President Bush had thought about this more carefully and handled his crisis with Iraq as wisely as Abraham Lincoln handled the Fort Sumter issue, the war in Iraq might have been much less costly and divisive both at home and abroad.

Normally even when I disagree with Walter Russell Mead I find his remarks thought-provoking, but this aside in a piece about the Civil War is staggeringly wrongheaded. Besides the appalling notion that getting Saddam Hussein to fire on U.S. troops would have been a “wise” way to take the country to a war, it isn’t even true that this would have made the campaign and subsequent occupation less divisive at home: the Gulf of Tonkin incidents that propelled the U.S. to full-scale (but still undeclared) war in Vietnam were presented to the American public as a case of “they started it,” but that didn’t make the conflict any less polarizing over the long run. And in the short term, Bush’s war wasn’t divisive at all, it was overwhelmingly popular not only among Republicans but with Clinton Democrats and foreign-policy nabobs like Mead. The American Conservative was founded because there were so few outlets opposing the war.

The rest of the piece is terrible as well. Mead writes of “honor[ing] the moral and political complexity” of the Civil War, but instead of doing that — by, say, acknowledging that Southerners were fighting for self-government along the same lines (and with the same stain of slavery) that the American revolutionaries had fought for — he invokes Nazi Germany and Apartheid South Africa, the most effective thing imaginable to preclude nuanced discussion. The trouble here is not the belaboring of familiar Southern evils but the refusal to allow any possibility of Southern virtue (but for isolated exceptions like Mead and his family), coupled with absolute obliviousness toward the sins of the North (which of course has its own racial hatreds and problems with civil rights and liberties) and of the country as a whole. The national conscience is continually assuaged by the sacrifice of dead Southerners, who must be rendered ever less human as time goes on.

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Katyn and “The Good War”

The decapitation of the Polish government last weekend, including President Lech Kaczynski and the military leadership, on that flight to Smolensk to commemorate the Katyn Massacre, brings to mind the terrible and tragic days and deeds of what many yet call the Good War.

From Russian reports, the Polish pilot waved off four commands from air traffic control to divert to Moscow or Minsk. The airfield at Smolensk was fogged in. There is speculation that Kaczynski, fiercely nationalistic and distrustful of Russians, may have defiantly ordered his pilot to land, rather than delay the 70th anniversary of Katyn. The symbolism is inescapable.

For it was Polish defiance of Adolf Hitler’s demand to negotiate the return of Danzig, a German town put under Polish control after World War I, that gave birth to the Hitler-Stalin Pact, which led to Katyn.

After the German invasion on Sept. 1, 1939, ignited the war, Joseph Stalin attacked Poland from the east on Sept. 17, capturing much of the Polish officer corps.

In April 1940, on Stalin’s order, the Soviet Secret Police, the NKVD, murdered virtually the entire leadership of the nation, including 8,000 officers and near twice that number of intellectuals and civilian leaders. Some 4,000 were shot with their hands tied behind their backs in Katyn Forest.

The Germans unearthed the bodies in 1943 and invited the Red Cross in to examine the site. Through newspapers found on the corpses, the date of the atrocity was fixed as more than a year before the German Army invaded the Soviet Union.

When Polish patriots, whose sons had flown with the Royal Air Force in the Battle of Britain, went to Winston Churchill to demand that he get answers from Stalin about the atrocity, he brushed them off. Read More…

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Owning the Extreme

It’s not just banks and government agencies whose work encouraging subprime lending left people with bigger homes and mortgages than they could afford. We can give reality television a small share of the blame, too.

The house at 10512 Baldy Mountain Rd. in Sandpoint, Idaho, looks like just another vacant foreclosed home. Some appliances, a bathroom mirror and even the hot tub are missing. The dining room of the three-bedroom house has water damage.

But this isn’t your run-of-the-mill problem house. Call it an Extreme Foreclosure. The 3,678-square-foot McMansion is a product of the popular “Extreme Makeover: Home Edition” reality television show. It isn’t the only “Extreme” home to fall on hard times.

Each week, an average 9.4 million viewers tune in to ABC-TV for what, over seven seasons, has become a classic formula: Find a struggling family with a heart-tugging story and send them on vacation as an army of volunteers work frantically to replace an existing home with a much nicer and bigger one in just 106 hours. Each episode ends with a dramatic tear-filled tour of the new home, packed with donated furnishings, and outsize extras like a carousel or bowling lanes.

Those huge homes, often plopped into the middle of modest neighborhoods, might have come free, but the property taxes and utility bills did not. Some owners even tapped into the equity and ended up with large mortgage payments they eventually couldn’t afford to make. The series producers have taken note. We might need to take the “Extreme” out of “Extreme Makeover,” as the houses built on the (really!) tear-inducing series get smaller. “It can be extreme without being the biggest house you’ve ever seen,” one interior designer who works with the show insists. Not in America!

Changes are being made, though, and one in particular caught my eye: “A swimming pool is no longer a must, unless it could be used for therapy.” The piece doesn’t explain what sort of healing requires its patients to swim in an Olympic-sized pool. It seems most of us get by without one. But I hope that these downsized homes don’t result in a slew of financially stable but psychologically troubled homeowners in the future.

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New Media

The Pulitzer Prizes were announced today, and The Washington Post and The New York Times, as usual, added a stash of trophies to their collections. The National Enquirer was nominated but did not get an award for going where no mainstream publication would go and ruining the career of former presidential candidate John Edwards. You don’t look to the Pulitzers for surprises, but there was a new sort of winner in this year’s list of those given journalist’s highest honor. ProPublica, a self-described “non-profit newsroom,” won its first Pulitzer, less than two years after it began publishing pieces. Sheri Fink shared a win in the investigative journalism category for a report on a hospital’s doctors trapped by Hurricane Katrina that was published in The New York Times Magazine. As the newspaper industry dies day by day, some observers think that one way to save the sort of investigative journalism newspapers used to excel at, before they began turning into celebrity tabloids, is to take the profit problem out of it. ProPublica has a team of reporters, funded to the tune of $10 million a year by philanthropist couple Herbert and Marion Sandler, who do their work and then get it published in the traditional media. It’s sad that newspapers no longer seem interested in keeping a staff of their own investigative reporters, but I suppose it’s nice someone else is doing the job for them. One wonders how long such an organization can survive, though—there aren’t many following their lead, and the nation’s philanthropists have many demands on their money.

Journalists who are being let go from an industry that’s slowly but surely shrinking aren’t just finding reporting jobs elsewhere, however. Some are becoming owners, albeit of small publications. Monocle has a report on “the new media moguls”—journalists who are buying or creating small papers in small towns.

Robrish is about to begin his third month as the founding editor, publisher, and only employee of The Elizabethtown Advocate, a weekly community newspaper he launched in Elizabethtown, a town of 12,000 people in Pennsylvania.

He may own his own newspaper but Robrish’s is not quite the glamorous life of a media mogul. He had spent the morning hand-delivering copies to stores and the two functioning coin boxes where his newspaper is sold. Robrish writes nearly everything except high-school sports coverage in the assiduously local newspaper. He was speaking from a late-afternoon Amtrak train to Philadelphia, where he was heading for a dinner party, able to leave Elizabethtown only because he had the confidence that a new college intern would be able to cover that evening’s Borough Council meeting.

Some critics—such as Apple’s Steve Jobs, now touting an eBooks store—have declared that people are no longer reading. But this new “media mogul” didn’t buy it.

He first visited Elizabethtown in late August and saw all the prerequisites for community-newspaper success. There were three major employers he considered recession-proof: Elizabethtown College, a large nursing home and a sweet factory owned by Mars. The downtown was filled with independent retailers who represented a base of potential advertisers. And the city had, despite tough economic times, recently finished construction of a new library. “When I saw that, I thought: this is a town that values reading,” Robrish says. “You see a town this big that has no paper and you think, here’s an opportunity.”

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Joe Lieberman Strikes Again

“The Conscience of the Senate” Joe Lieberman is at it again.  He is predicting that the Senate will not ratify the new START treaty that Obama negotiated with Russia which will reduce the number of US nuclear warheads to 1,500, which is more than enough to incinerate the entire planet.  And it also left open the option of preemptive nuking Iran and North Korea, both of which are regarded as non-compliant with the Nuclear Proliferation Treaty.  One would have thought that Lieberman would find the agreement much to his liking.

Not so.  Per Lieberman we need “to make absolutely clear that some of the statements by Russian President Medvedev at the signing in Prague that seem to suggest that if we continue to build the ballistic missile defense in Europe that they may pull out of this treaty — they’re just unacceptable to us.  We need that defense to protect our allies and ourselves from Iran.”

Ah, those crafty Iranians.  Threatening to destroy the world yet again.  Thank God Joe is around to remind us over and over and over again about the global threat coming from the Mullahs.

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A Tory Party and a Tea Party

You see polling data that says a “tea party” or something like that would poll just as well if not better than the major two parties. While it is true that right now the “tea party” is a movement rather than party in of itself, perhaps such party could exist on its own or be its own entity.

There was an interesting comment to a TAC post I recently wrote (Taking Cindy Sheehan to a Tea Party) that said that Tea Partiers weren’t necessarily against all forms of federal intervention, just those that they weren’t “culturally” against. That would me a tea partier would be against a national healthcare system because he or she feels it doesn’t benefit them personally or within the culture they live in, unlike say government institutions like the military, the Department of Agriculture, NASA or federal law enforcement for example.

When you put this thought in the context of my latest post “What’s the Matter with Tennessee?” then it makes perfect sense. For many Tennesseans (and Republicans who live in rural areas) farm subsides at least keep their lands farms instead of shopping malls or subdivisions. Having a military engaged overseas means (besides natural patriotic support for the U.S. soldier) a need for soldiers. A military in a Ron Paul Administration probably wouldn’t be as large and that would mean fewer career opportunities in the military itself for many young men and women in such areas of the country (and imagine the unemployment situation then.) The TVA may very well be a federal institution but it also means middle class jobs for those employed with it.

Fine then. But that still leaves us with the rhetoric the party has adopted for itself (after conveniently forgetting it during the Bush II Administration) that the federal government is too big and we need smaller government. Yes, someone else’s federal government but not the one that either benefits me or culturally identify with. Thus the spectacle of Republican Congressmen and women attacking the stimulus plan and then bragging to their constituents how much they made out in federal loot. How long can one get away with this cognitive dissonance? Granted the major political parties have always been held-together jumbles of contradictions but more often than not these contradictions will eventually tear those parties apart until a new coalition can be formed. Perhaps it’s time the same thing happened now.

Perhaps the GOP should split with the tea partiers, and become a Tory Party, one that drops the anti-government rhetoric, accepts the fact that their constituencies they represent benefit from said federal largess, and simply exists to either improve upon efficiency and fight against ideology, leaving social questions to one’s own conscious but would against radicalism and Cultural Marxism of the lefty. A Tory party could be conservative in mindset instead of ideology or promote communitarianism or distributism envisioned by the Front Porchers. Such a party could attract those “conservative Democrats” for good and leave the regular Democrats a hollow, leftist minority shell in place such as the South.

Let the Tea Party be the anti-big government, big labor, big business, juts anti-biggness in general party. Let them be the populists running against the establishment.Let them be the decentralist party in the spirit and tradition of Anti-Federalists, John Randolph and the Old Republicans, William Jennings Bryan, Barry Goldwater and George Wallace. Would not such a tea party be able to attract a broad coalition of libertarians and left paleos, even some Greens if it was not seen as tied to the regular Republican Party and the “conservative movement”?

Our political system is due for a good bit of realignment and reorganization. If a Tory Party and a Tea Party could emerge from such a shake-up, it will also become more honest as well.

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