Sanford 2008

If there were any doubts that Gov. Mark Sanford will run for president, he certainly erased them with his State of the State address before a joint session of the General Assembly.

Veteran political observers said it sounded more like a State of The Union address.

“Did you hear that speech? “ asked state Rep. Jim McGee, R-Florence. “Looks like to me he’s running.”

House Majority Leader Jim Merrill, R-Charleston, who worked for Sanford when he was a congressman, is more certain. “He’s definitely running.”

No evidence is offered to refute the predictions, and the governor is saying nothing to discourage the speculation.

Sanford consistently downplays talk about a White House bid, noting he has all he can say grace over in trying to push his agenda through an ornery Legislature. That’s his focus now, he insists, not a run for national office.

However, the governor and his staff have had every opportunity to spike the speculation. They have declined to do so. No Sherman-esque statements have been issued, and the State of the State served only to add fuel to the talk about a presidential run.

• The rising cost of the war in Iraq, saying it “spreads a gray cloud” over the economy

• Ballooning federal deficits and a dollar “that’s on increasingly shaky ground”

• A global trading system that has become less cohesive and more threatening to American jobs

The governor didn’t home in on state matters until a quarter of the way through the speech.

That was a mistake, putting more focus on Sanford’s possible national ambitions, says Rep. John Graham Altman, R-Charleston.

Sanford’s staff says pundits are reading too much into the speech, making more of it than it is.

The governor always has been interested in the global economy and how it might impact the state, explains spokesman Will Folks, adding Sanford was on the Joint Economic Committee and the international relations panel while in Congress.

During the Republican National Convention in New York last fall, there was a steady hum about future candidates. Sanford’s name was among those mentioned.

He was busy making the rounds, seeing all the right people and meeting with folks who have deep pockets. He spoke to a group called the Club for Growth, whose members meet with potential candidates, grade them and decide whether to support them with money.

One evening Sanford invited the state GOP delegation to a reception at a friend’s home on the Upper East Side. When the governor silenced the assembled gathering to thank businessman Howard Bellin for the use of his home, the host said, “I fully expect to be his guest at the White House in another four years.”

The 2008 presidential race is a ways off. Sanford may not run. If he does, he has two hurdles to scale to be considered a viable candidate.

He also needs to stop having to put big zeroes on his legislative score card. He must have some accomplishments to point to. Today, he would go to the nation’s voters empty-handed.

Some context on Sanford's comments: http://www.scgovernor.com/interior.asp?SiteContentId=68&NavId=284&ParentId=74

"Let’s first look at our economy, and I think if you look beyond our borders to the national and international landscape, there are substantial threats looming that necessitate change.

One, we’re at war.

I don’t know how the situation in Iraq sorts itself out, but I do know the war spreads a gray cloud over what happens next in any economy until it is settled. Wars are expensive, both to the soldier and the taxpayer. On the taxpayer front, we’re now spending $6 billion per month in Iraq, this state’s budget for the entire year, and for the soldiers in the field, the costs are far greater. Twenty-nine South Carolinians have now been killed in the fighting overseas.

I’ve asked Staff Sgt. Charles K. Boone to join us for the State of the State. He returned from Iraq in December and was awarded the Purple Heart for the injuries he sustained as he was fired upon while pulling fellow soldiers from a burning vehicle that had been hit in their convoy. I ask that he stand and be recognized for his valor and that you applaud his service, along with the service of every soldier, sailor, airman and marine.

Two, our federal government seems to have lost its ability to simply set priorities.

The federal deficit was $422 billion this year. Add to that, the United States’ current account deficit is on its way to more than $650 billion this year – about six percent of the country’s GDP and that’s relevant because a five percent reading for any third-world nation normally is enough to trigger an IMF intervention.

Our net international debt is approaching 300 percent of annual exports. Again relevant because countries like Brazil and Argentina saw their net indebtedness rise to only
slightly more, around 400 percent of their national exports, at the height of their financial crisis.

As a consequence of all of this, we’re seeing a dollar that’s on increasingly shaky ground.

Those are just the current events facing our national economy. More disturbing, frankly, are the longer trends. Robert Samuelson of the Washington Post recently wrote a fascinating column talking about four long-term trends, all of which negatively impact the driver of our national economy, consumer spending. His points were the following:

One, the economy is bound to lose the stimulus of rising consumer debt.

Household debt, which ranges from home mortgages to credit cards, now totals about $10 trillion, or roughly 115 percent of personal income. In 1945, debt was about 20 percent of disposable income. For six decades consumer debt and spending have risen faster than income. Debt, as we all know, can’t permanently rise faster than income, and given their age, baby boomers must at some point soon begin to repay mortgages and save for retirement, which will mean less consumer spending.

Second, the benefits of defeating double-digit inflation are fading.

In 1979, inflation peaked at 13 percent. Now it’s 1 to 3 percent, depending on the measure. The steep decline led to big drops in interest rates and big increases in stock prices. Stocks are now 12 times higher than their 1982 level, and with that some people felt wealthier and spent – others were able to borrow and spend – but mortgage rates can’t fall again from 15 percent, which means once again, lower consumer spending.

Third, the welfare state, what I call government transfer payments, at the federal level is growing costlier. It’s been covered in the past by defense shrinking as a share of the federal budget, but now as baby boomers retire and we look at higher defense spending based on global engagements, paying for future benefits will require higher taxes, bigger budget deficits or deeper cuts in other programs, all of which could hurt economic growth and consumer spending.

Four, the global trading system has become less cohesive, and, in many ways, more threatening.

Let me just make this point: the end of the Cold War – and the addition of the former Soviet Union, India and China into the trading system – has effectively doubled the global labor force from 1.5 billion to 3 billion. Ask any textile worker in the Upstate about this, and they’ll tell you it’s not at all an abstract concept.

This is not a commentary on global trading, but it is a commentary on the fact that there are four major economic pressures, each of which will likely slow consumer spending in the future, and that could produce a dramatic drag on the state’s economy. All of these things point to the need to put our financial house in order rather than fall to the political temptation to spend every new dollar that comes into Columbia.

I can’t emphasize enough how important I think it is we start paying back money borrowed from trust funds before we add new and additional spending. For this reason we proposed that new spending not increase at a faster rate than inflation and the growth of our population, and this allows us in our budget to pay back about $200 million of the $400 million owed to trust funds.

I’d ask you do the same because it is a time for choosing, and if we don’t choose to hold this line on spending our government in South Carolina will be growing faster than the people who pay for government."

Read the whole thing if you get a chance. I just bought the book "A Life Well Spent" Gov. Sanford mentions at the end of his speech and absolutely loved it. I would recommend it to anyone.

Best,

Stephen Prather

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