A man of joy.

Peter Terpeluk was my friend. And he died last week.

Like gay lovers in an earlier era, Peter and I kept our relationship quiet. He was a big Republican muckety-muck, fundraiser and lobbyist extraordinaire, former Republican National Committee finance chairman. I was, he liked to tell me, his favorite Liberal.

Peter was among the most unfailingly joyful people I have ever known. An odd thing to say about a D.C. insider—it not being a place where joy would jump out of a word cloud. To watch Peter pacing in his office, however, bouncing from one call to the next to the next, was to watch a person completely and profoundly in his element. How he kept the pieces sorted out was a mystery to me. But he would laugh as he reflected on the world of his choosing. The world of his making.

Peter was appointed Ambassador to Luxembourg by W. It was the culmination of his life. From borough manager in Pennsylvania, he worked his way through the Republican ranks, until the final honorific was his for life.

Ambassador Terpeluk. It was, he assured me, a great gig. “You gotta do it,” he insisted, seemingly oblivious to the realities of the world that precluded the rest of us from applying to be, for example, Ambassador to Iceland.

Peter was a giver. He was a bundler. He knew who to call and when to call them. He introduced people. He had a sense about people. As Wayne Berman—a peer and collaborator at the peak of the Republican money world—assured me years ago, Peter was the best. Along with Bill Timmons, the best lobbyist in DC.

Peter believed in the Republican Party. Though not on any particular issue I can think of. He was a party man, not an issue man. Like most Democrats. This nation is split in half by party people, more so than issues. Don’t ask me why, I don’t get it. But Peter was unfailingly friendly. While I heard him disparage Democrats to no end—Clinton was white trash. Obama was a joke—on a personal level, I never heard him utter a mean word. It was never personal, it was strictly business. Or rather, it was strictly politics.

But there was something that mystified me about Peter jumping on early with Rick Perry. George H.W. Bush and W. were both unfailingly amiable people. And Ronald Reagan as well. They each in their own way radiated an optimism and embrace of the nation beyond its political borders. These were the people who brought Peter to politics and to the seat of power. And like Peter, their politics was played hard, but not with a mean or harsh tone.

Not so with Rick Perry. If he has a weak spot, it is not intelligence—the great Democrat blind spot—but his apparent meanness. Not meanness of policy, but of attitude. Of affect.

Among Peter’s last words to me of Perry—It could be a movement. Won't know for a long while—indicated that he saw Perry to be of Reaganesque potential, but that he was not sold yet. I suspect that it was the lack of joy, the meanness of spirit in Perry’s public demeanor that had give him pause. Perry can connect with the anger of the Tea Party and may yet, as Peter predicted, run the table in the primary season, but to win the Presidency, Perry will have to show something more, something better. America does not vote mean. Or if it does, that is when it will be time to fear for our nation.

Optimism is the touchstone of leadership. It brings out a sense of hope, and from hope comes joy. Even in the face of adversity.

And joy—deep down beneath that Republican exterior, with the tie pins and those starched, French-cuff shirts—was the defining wellspring of Peter Terpeluk’s character. I will miss him.

And so it starts.

I watched Texas Governor Rick Perry over the weekend. Gotta say, great start. Perry should rip Mitt Romney apart. He delivers a great vision speech. And the primaries lay out well for him. Iowa and South Carolina should be easy, and New Hampshire will be discounted, because even if Romney wins there, he will be viewed as a favorite son.

A Republican friend, close to Perry, demurs. "We will win New Hampshire. I have never been with a political person like this in my life. He is the best guy working a room ever. Better than Reagan. That speech went right into the living rooms like RR used to do."

My son reads this, and has the perfect new age response: "I should put some Intrade money on him while it's cheap." But the Perry contract is not cheap. He just announced and he is already at 38, eight points over Romney.

I have had two reactions. I listened to Perry's stump speech. He is delivers a great speech. He has a very strong voice. Clear vision on opportunity and the future. As my friend said, it goes right through the medium—radio, TV—to the person. Visceral. He has a power and passion that elude Romney, who is the epitome of Just Words. Seemed apparent to me that Perry can run away with the nomination. 

Then I took a look at Perry's other words. Not his record—as that really matters little, ironically, despite how it will be spun and debated—but his temperament. And boy is he out there. There is a reason Karl Rove and the Bush family have fought this guy. He is the opposite of their notion of a conservative Republican. W worked hard to convey a sense of being a unifying figure, the Compassionate Conservative and all that. In that regard, Dick Cheney really was his undoing, the Sith Lord who brought him under his wing, taught him the arts of war—domestic and international. In contrast, Perry just either says what he wants with no regard for outcomes, or says what he wants with full regard for outcomes. I suspect it's the latter.

The bit about Texas and secession is notable. When Texas joined the union, it had the right to choose to divide up into six states—to have more senators. It did not have the right to exit. Yet secessionism remains such a visceral touchstone of American Nativism, something that Perry has played well. Does it matter that Texas has no such right? Does it matter that we fought a long civil war over the this issue? Of course not. This is politics, not political science.

Playing the secession card is directly linked to Perry's comments on the Fed.  "If this guy [Bernanke] prints more money between now and the election, I don't know what y'all would do to him in Iowa, but we—we would treat him pretty ugly down in Texas." His unwillingness to acknowledge those comments as grossly inappropriate—and instead to simply retort "Look, I'm just passionate about the issue"—tells you exactly why he is cut from a different bolt of cloth than the Bush clan. He also knows that they—Karl Rove and others—have no choice but to come around. Perry knows well that, in the famous words of Toby Ziegler, "They'll like us when we win."

I had my own personal, visceral reaction to Perry's attack on Ben Bernanke, rooted in my own family history in Alabama, where by grandmother taught me that the rules by day were different than the rules by night. Filtered through my own rendering of family and national history "I don't know what y'all would do to him in Iowa, but we—we would treat him pretty ugly down in Texas," translated into "I don't know about y'all —but we know how to handle Jew bankers down in Texas."

I know, I need to have my filters cleaned. But even if this reaction was unfair and unreasonable, it reflected my larger reading of Perry. As a politician who can reach out and grab his audience by the jugular, he is head and shoulders above the rest of the pack.

So, if my first reaction was that he can run away with the nomination, my second reaction is that he may well run away with it. At 38, the Perry contract on Intrade may still be cheap.

Never before could I imagine that monetary policy could generate such heat. I mean, does any politician really understand the workings of monetary policy and the mechanics of money creation in a digital age? I don't think many people do. But Perry's words, like his words on secession, had nothing to do with the facts of the matter, but rather the roots of popular distrust of federal institutions, to say nothing of Wall Street and bankers.

And never before could I imagine that a leading presidential contender could verbally threaten a high public official—much less a thoroughly decent man of his own political party. Virginia Governor Bob McDonnell—who governs a state where one must understand history and language and code, provided an understated assessment of Perry's words—"I thought the remarks probably were something that could have been said differently."

But McDonnell was speaking to a different time, before Tea Party anger swept away the Republican Establishment as it was, and before all notions of temperance and self-restraint were swept out of the public square. Today, Rick Perry is in perfect alignment with his audience. His words are pitch perfect. He will not be admonished by Bob McDonnell or Karl Rove for intemperance. Intemperance is his brand.

It is particularly odd to see Karl Rove and the Bush loyalists so far outside the mainstream of their own party, unable to channel the currents of conservative opinion in a direction of their choosing. But this is indeed a different time, and so far they have found themselves powerless to stop it.

Questions of character.

One week after the downgrade of the United States bond rating, the markets have returned a verdict of sorts. In a week of staggering volatility, stocks declined by 2% while money flooded into the downgraded U.S. Treasury market, reducing yields on the 10-year by 0.30%. While the S&P action certainly amped up the already-white hot political climate, the actual report offered little new insight. By the end of the week it was evident that the correction in the equity markets that had been underway since July was continuing, as was the global flight to quality that continues to favor U.S. Treasury bonds.

The dramatic rally in bonds was more notable than the stock market decline. After all, S&P's pronouncement was supposed to cast a pall over U.S. Treasuries and send investors scurrying to the sidelines. Of course, if global investors have learned nothing else, it is that there are no sidelines. The near-death experience of the world financial system in 2008 showed that in a pinch the United States Federal Reserve remains the back-stop and liquidity source of first and last resort, and since 2008 the universe of "risk-free" investment alternatives has dwindled. The very concept of a united Europe is under assault, much less the notion that the euro would emerge as the reserve currency alternative to the dollar. Even keeping holding cash in a bank has become problematic for institutional investors, as banks are beginning to charge fees for accepting large deposits rather than paying interest.

At the end of the day, the markets shrugged off the S&P downgrade because it was a non-event. Is the United States facing significant financial challenges? Certainly. Was this news? Certainly not. Does U.S. sovereign debt now rated AA+ constitute a greater default risk that any number of triple-A rated corporate bonds? That would seem to be a silly question, yet S&P seemed to be saying yes, while the markets this week said no. In the world today—a world where risks abound—the U.S. Treasury remains the benchmark for very simple reasons. In a crunch, there is nowhere else to go.

But in S&P's view, there was a material change. In the old rating agency adage, bond ratings reflect both an issuer's ability to pay and its willingness to pay. What had changed was the casual willingness of some debt ceiling combatants to embrace default as an acceptable outcome, even as others wielded the threat of default for leverage. This Friday, a senior director for S&P confirmed that the factor that led to the downgrade of the U.S. credit rating was not a material change in the financial circumstances as much as evident changes in the willingness to pay, or, more frankly, the willingness to not pay. “People in the political arena were even talking about a potential default... That a country even has such voices, albeit a minority, is something notable. This kind of rhetoric is not common amongst AAA sovereigns.”

It did not used to be this way. In fact, until recently such rhetoric was inconceivable—in old Yankee terms, credit was a point of moral character. This dramatic shift in acceptable political speech emerged earlier this year when Newt Gingrich advocated the use of bankruptcy by states as a strategic option. Gingrich's argument—which sent the municipal bond market reeling—established the principle that it is now acceptable for national political figures to disavow our moral and legal obligation to pay our debts, if it serves the interest of the pursuit of partisan political advantage.

A lingering question about our political system has been whether we are able to face up to long-term fiscal challenges and make needed changes in advance of market pressures forcing the issue. In some respects, we would seem to be making progress. After all, for the first time in the twenty years since the creation of the Concord Coalition, the issues of the long-term fiscal health of the United States and the affordability of entitlement programs are now active subjects of debate in the public square. The problem evidenced by the debt ceiling debate, however, is that for all of the debate and sense of urgency, there appears to be almost no willingness in Congress to taking the next step: Owning the problem, and doing something about it.

The debt ceiling bill that finally emerged—with the oxymoronic title The Budget Control Act of 2011—was a perfect Congressional compromise: It cut no spending and raised no revenues. For the only fiscal year over which this Congress has authority, Fiscal Year 2012, it reduced the deficit by a grand total of $21 billion. After talk of $4 trillion here and $2 trillion there, the final legislation—with apologies to Everett Dirksen—did not even add up to real money. The rest was in the out-years. Or kicked over to a debt commission which may or may not achieve its purpose—time will tell.

Congress has a well-established tradition of being long on rhetoric and short on action when it comes to dealing with budget issues. Dating back to the Gramm-Rudman-Hollings Act a quarter century ago, Congress prefers to set out-year targets but never actually specify what and how to cut. It is notable that Gramm-Rudman had the same 50-50 automatic cuts in defense and non-defense programs in the event targeted cuts were not achieved. It is also notable that none of those spending cuts ever materialized.

Now, once again, the arguments are high on rhetoric and devoid of substance. As a follow-up to the debt ceiling debate, John Boehner and Eric Cantor are pushing for a balanced budget amendment. Yet—like so many demagogues before them—neither Boehner nor Cantor have proposed how they would balance the budget—which, it is important to point out, the Paul Ryan Plan did not do. And this week, at the Republican presidential debate, Michele Bachman reasserted her stance in opposition to raising the debt ceiling, but none of the moderators saw fit to ask how Bachman would have proposed to allocate the limited federal resources if the debt ceiling bill had not passed.

At the Republican debate, only Ron Paul made a substantive point on this issue, when he advocated ending our war policy and spending. But every candidate, particularly if they choose to ride the balanced budget amendment wave, should be obligated to describe the specific choices they would make to actually balance the budget. It is not hard to do, as there is abundant data about choices and trade-offs readily available. The Congressional Budget Office provides detailed data for evaluating alternative policy choices, and weighing the long-term budget impacts. And earlier this year, this easy online tool was created that allows anyone to build their own budget solution.

We now have a window of several months before the commission created by the debt ceiling bill is obligated to put its recommendations on the table—and Congress is obligated to vote up or down—or automatic cuts are supposed to go into effect. The question is whether we ever get there, as both political parties are itching to make 2012 the showdown election, and both believe that they will be in a better negotiating position after that election. Republicans believe that Obama is beatable, and they can win the Senate with a continuation of the 2010 election trend. Democrats believe that the younger, more diverse electorate of 2008 will turn the tide away from the 2010 turnout that was uniformly older, whiter and richer. Therefore, both parties will be willing to kick the can a few more years down the road, and avoid once again making those choices that Congress has proven, time and time again, that it is loath to make.

The question remains whether this is our political system working as it should—as the more optimistic observers have concluded—or whether S&P's observation is correct, that our political rhetoric is evidence of a deeper weakness—that political imperatives now trump all other considerations—and that Congress is no longer be capable of making serious budgetary choices that are necessary for the long-term well-being of the nation.