Heard on the Street Posted: Thursday, January 21st, 2010 Tuesday`s special election felt here in North Carolina
Not only are Democrats in Washington reeling after the loss of the Massachusetts U.S. Senate seat to a Republican but North Carolina politicians are scrambling to determine how it might affect the 2010 elections. This special election was a game changer and woe to the candidate who doesn`t understand this to be the case. Political parties are becoming irrelevant. Unaffiliated and Independent voters now recognize that they have the power and can bring on change. They were a big factor in the election of Barack Obama, but so far Obama hasn`t delivered the changes he promised as a candidate. Instead, he has let liberal Democrats and special interests dominate. Massachusetts responded, but voters in other states will likely do the same. For more discussion on this subject read My Spin, “Lessons Learned from Massachusetts.”
Supremes change elections
Not only was Tuesday`s special election a game-changer but the Supreme Court today ruled that corporations can spend as much as they like to purchase ads on behalf of federal candidates. This also opens the treasuries of labor unions to get in the game. The court declared the previous ban on corporate spending was a restriction of free speech.
The whole spectrum of campaigns just changed again. Now large corporations and unions can buy elections.
Perdue looking for money
Governor Perdue and her team of advisors holed up in Raleigh last weekend to look for ways to cut the budget. We were told Perdue told her team to find more than 1 billion dollars to cut, no mean feat when you consider that 80 percent of state spending comes from education and health and human services expenditures. Because of some very good efforts by the Department of Revenue, the state budget is ever so slightly in the black as of the end of December, but recurring revenues don`t look bright and few expect good news from April`s personal tax returns. We could easily end this fiscal year with a 200 million dollar deficit.
And the news for our economy doesn`t look bright. Many commercial real estate investors who borrowed money during the good times are having loans come due. They are awakening to the reality that they are upside down in their properties, meaning they owe more than the property is currently worth. Banks are calling loans due to gain liquidity or they are demanding that borrowers pay large sums to ensure the properties are worth what is loaned. Over the next few months we will be seeing major real estate properties selling for bargain basement prices. For instance, a friend relayed a story about an investor who owned a residential apartment complex, which was more than 90 percent leased.
The bank decided to call the 6 million loan on the property and put it up for auction. The investor went to the auction and bought his property back for just 3 million dollars.
All of this portends continuing bad news for our state`s struggling economy. Hear more discussion on the state budget issue on this week`s NC SPIN.
Governor Perdue is also looking for campaign cash, hosting a fund raiser tonight to retire campaign debt. Some are questioning the wisdom of fund raising in the midst of a terrible economy. We understand it will cost $1,000 per person to attend the Governor`s Birthday Party.
At the same time it was announced that her chief of staff, Zach Ambrose, is departing after a year in the position. Ambrose is a smart political operative but rumors abounded about lack of unity within the close circle of Perdue advisors.
Grand Jury meeting
The Raleigh Federal Court House is expected to be a busy scene today as the federal Grand Jury is meeting. We are told that the matter under consideration today will be the Mike Easley investigation and we should expect one or more indictments before week`s end. Recent interest has focused on former legal counsel Ruffin Poole so it will be interesting to see what comes from this week`s Grand Jury.
Dickson succeeds Rand
As we reported earlier, Representative Margaret Dickson has been picked by the Cumberland County Democratic Executive Committee to replace Tony Rand, who retired from the Senate. The only other candidate was David Boliek, Jr., who is strongly suggesting he will challenge her to a primary in May.
This, of course, opens a spot for someone to replace Dickson. Names we`ve heard include former Fayetteville Councilwoman Val Applewhite and former House member Bill Hurley. After Dickson takes office, the executive committee of the Cumberland Democratic Party will meet to make that recommendation.
Basnight is running
We learned this week that Senate President Pro Tem Marc Basnight is indeed running for re-election.
Basnight has to run again if Senate Democrats stand any chance of retaining control in 2011. But there has been a sea change in the Senate. The loss of key Democrats like Hoyle, Rand, Soles, Albertson and Boseman is having an effect on fund raising for Senate Democrats. Businesses, major donors to previous campaigns, are skittish about the impact of losing David Hoyle, their go-to guy who ensured their voices were heard. They aren`t thrilled about having Martin Nesbitt instead of Tony Rand, remembering that Nesbitt wasn`t a great friend when he was in the House. Agricultural interests worry about the loss of Albertson.
Basnight has been able to raise more than one million dollars for Senate Democrats in each recent election cycle and to maintain control they need to be able to spend the bucks to buy contested seats. Without the money the odds are narrowed. It always comes down to money, doesn`t it?
Cooper got warm welcome from realtors
Attorney General Roy Cooper spoke to the state realtors meeting this morning, telling them what his office was doing to help consumers with foreclosures. He reported that he is cracking down on foreclosure scams and credit card scams, saying that his office had received more than 400 complaints from consumers about credit counseling firms. North Carolina has passed a law prohibiting up front payments to credit counseling firms. Cooper says that Wall Street might be improving but that Main Street isn`t and he wants to help consumers. The new President of the Realtors Association will be Mary Edna Williams from Raleigh.
Edwards comes clean
It wasn`t really a surprise that former Senator John Edwards finally admitted his paternity of Quinn Hunter. Here`s the quote: “I am Quinn`s father. I will do everything in my power to provide her with the love and support she deserves. I have been able to spend time with her during the past year and trust that future efforts to show her the love and affection she deserves can be done privately and in peace.
“It was wrong for me ever to deny she was my daughter and hopefully one day, when she understands, she will forgive me. I have been providing financial support for Quinn and have reached an agreement with her mother to continue providing support in the future.
“To all those I have disappointed and hurt, these words will never be enough, but I am truly sorry.”
Michaels` premiere successful
Cash Michaels, by day a journalist with The Carolinian and The Wilmington Journal, has premiered his new movie “Obama in NC: The Path to History.” We had to see this moving presentation last weekend and would urge you to view how North Carolina progressed to the point of selecting an African American as president. You can see it for yourself by visiting the website
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