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Cantor’s Loss Reflects Image of a Divided America 

Peter Lefkin 

 

8/5/2014 

Peter Lefkin, head of government and external affairs at Allianz of America, explains the implications of Eric Cantor’s election loss and the rise of factionalism in American politics.
Like many people in Washington, D.C., I was stunned by House Majority Leader Eric Cantor’s (R-Va.) loss in the June 10, 2014 Republican primary. Cantor was seeking re-election in Virginia’s 7th Congressional District.

I have known Cantor since 2001, and I developed a constituent relationship with him through my lobbyist work with Allianz Global Assistance USA, an Allianz subsidiary located in Richmond, Virginia. Not only is the company in Cantor’s district, but also it’s where a majority of its employees live.

Cantor is a serious man and a hard worker who moved up fast in the leadership ranks. Although affable in private, he is not known for small talk. Like past congressional leaders, he may have paid a political price at home for his high profile on the national stage. Voters are fickle. Plain and simple. But sometimes they just want a congressman who will make it his business to focus solely on constituent issues.

Cantor was often in the spotlight and in the thick of hot-button issues, including the Troubled Asset Resolution Program (TARP), immigration reform and various debt-ceiling and spending resolutions. He tried to uphold the obligation of elected people to govern the country responsibly. But to put it mildly, the voters didn’t fully appreciate his fame.

Factions Leads to Inaction
There are a number of reasons why he lost. All echo what the Sunday talk show hosts said—and this time, they may be right. Whether Republican or Democrat—or even if you disagreed with or disliked Cantor—you should get no joy from what happened. Why? Because it represents a breakdown of the political order that goes beyond just “sending a message to Washington.” To me, it reveals the tremendous growth of factionalism—a very real, unhealthy problem for the United States.

A political structure that degenerates into factionalism is not healthy and leads to stalemate.”
Throughout its 200-plus-year history, the United States has had a unique system consisting of three branches: executive, legislative and judicial. This system has worked very well up until recently. To make it work, compromise was crucial. It was probably helped along by a robust two-party system, which, while flawed, fostered a reasonably effective national government. The United States is a large and complex nation, and it takes the emollients of compromise, restraint and sometimes good old-fashioned horse trading to keep it working. A political structure that degenerates into factionalism is not healthy and leads to stalemate.

Republican factionalism seems to have gotten the most attention. But Democrats have their problems as well. In the Republican Party, the conservative majority of its caucus is being pushed by its hard right. Meanwhile, the Democrats have the same problem with their left, which seems to have grown as intolerant as some of the conservative ideologues who they abhor. Both extremes have no interest in governing, it would appear. They seem to have lost sight of the fact that talented politicians such as Ronald Reagan and Bill Clinton were successful because they persuaded the persuadable to come along. And this meant that they worked outside of the echo chamber of only talking to people who shared unyielding and probably unachievable goals.

While they were gifted politicians, Reagan and Clinton also faced an electorate that was different than today’s electorate. Thirty years ago, voters implicitly understood the importance of ideological restraint. Even if some did not like it, most of the time they at least accepted it. I can’t say that about today’s voters.

Politicians should and will accept responsibility for the breakdown of the government, with most politicians blaming the failures on the opposing party. A rare few are magnanimous enough to take their share of the blame.

Gut Check for Voters
But it’s not just politicians that need more self-awareness. Voters lament the mess, yet they probably should reassess how they approach politics in light of the paradigm shift we’ve seen. The Pew Research Center just released its “Political Polarization in the American Public” report, which is a survey of 10,000 Americans regarding their voting habits and attitudes toward current political issues. The poll affirmed that polarization is not unique to Washington. Sadly, it reflects the electorate itself.

A few things stood out: The percentage of Democrats who have consistently liberal views has jumped to 24% from 5% during the last 20 years. For Republicans, those holding consistently conservative views rose to 20% from 6%. Nearly twice as many Republicans express an unfavorable opinion of the other party as they did two decades ago. Making things even worse, at least from my perspective, is that both sides—but even more so with consistent conservatives—say that almost all of their closest friends share their views.

Cultural differences are wide, too. Consistently liberal voters, by an almost 4-to-1 majority, place a higher value on living in a diverse racial and ethnic community. Meanwhile, conservatives, by a 3-to-1 margin, place an emphasis on living near people who share their religious faith.

What explains all of this? It’s a confluence of factors. If you choose social media, talk radio, social segregation and a cultural war on social issues, then you’re probably right. But there are other contributing factors, including the fact that the last 15 years has not been an easy time for the United States. It has endured the Sept. 11, 2001 terrorist attacks, two long and unresolved wars, two stock-market crashes, one financial collapse, massive government deficits and a very contentious 2000 presidential election.

Wages for the middle class have been stagnant. People are worried about their future—and their children’s future. With these circumstances, it’s no surprise that the country is splintering.”
In 2000, 15% of the workforce was employed in manufacturing. Today, it is 10%. The nation has absorbed a large increase in immigration. Wages for the middle class have been stagnant. People are worried about their future—and their children’s future. With these circumstances, it’s no surprise that the country is splintering.

You might be tempted to say that 20% of voters on the fringes of each side means that the much larger number of those in the middle should hold the power. However, it’s not that simple. The ideological wings are dominating their parties, largely because they’re the sources of volunteer efforts and campaign contributions. As Eric Cantor learned, you ignore them at your own peril.





The material contains the current opinions of the author, which are subject to change without notice. Statements concerning financial market trends are based on current market conditions, which will fluctuate. References to specific securities and issuers are for illustrative purposes only and are not intended to be, and should not be interpreted as, recommendations to purchase or sell such securities. Forecasts and estimates have certain inherent limitations, and are not intended to be relied upon as advice or interpreted as a recommendation.

 


Allianz Global Investors Distributors LLC, 1633 Broadway, New York, NY 10019-7585, us.allianzgi.com, 1-800-926-4456.

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