By FRED BARNES

Democrats across the country are celebrating the re-election of President Obama and the pickup of two seats in the Senate and eight in the House. But in two formerly Democratic states, Republicans have much to be joyful about.

The GOP victory in North Carolina included the governorship, veto-proof majorities in the state Senate and House, control of 54 of the state’s 100 counties, three new U.S. House seats, and a pivotal seat on the state Supreme Court. All this lifted Mitt Romney to a narrow victory in a state that Mr. Obama won in 2008.

It is premature to declare North Carolina a reliably red state, but Republicans are “positioned to be the dominant party in North Carolina for at least a decade if not beyond,” says GOP consultant Marc Rotterman.

The same is true in Arkansas, the second-best state for Republicans in last month’s election. Both states offer Republicans an opportunity to unseat Democratic senators in 2014. In Arkansas, the GOP trend has moved so quickly that Sen. Mark Pryor, who had no Republican opponent in 2008, is now considered highly vulnerable. In North Carolina, Sen. Kay Hagen, when matched against an unspecified Republican challenger, led just 45%-41% in a Public Policy Polling survey last month. The last Democratic senator to win re-election in North Carolina was Sam Ervin in 1968.

Republicans in the Tar Heel State were unified, with all elements of the party, including social conservatives, engaged with the various campaigns. The GOP ticket was ideologically balanced, with moderate gubernatorial candidate Pat McCrory at the top. The party, Republican campaigns, and GOP-oriented groups joined in a massive turnout operation. Republicans exploited every opening that Democrats gave them—and there were plenty.

Associated PressPat McCrory

The administration of incumbent Democratic Gov. Beverly Perdue—though not Ms. Perdue personally—was marked by scandals. The John Locke Foundation, a conservative think tank, uncovered numerous instances of misconduct and reported them in its publication, Carolina Journal. Gov. Perdue’s job approval sank to 25%, making her the second-most unpopular governor in the country (behind Pat Quinn in Illinois). (more…)

By SARA MURRAY

Mitt Romney reiterated this week his belief that government shouldn’t be “picking winners” in the private sector, and his campaign is pounding away at the argument that the Obama administration did exactly that in its failed investment in the Solyndra solar panel company.

But as the Solyndra debate rolls on, that line of attack is being shadowed by a vestige of Mr. Romney’s own history: his championing of green-energy investments, some of which also went belly up, while he was governor of Massachusetts.

Boston HeraldAs Massachusetts governor in 2003, Mitt Romney, above at right, spoke to leaders of Konarka Technologies.

The $15 million Mr. Romney set aside for the Massachusetts Green Energy Fund when he was governor was a fraction of the $535 million in loan guarantees the Department of Energy gave Solyndra before it went bankrupt, part of an overall $16 billion fund. Still, the campaign of President Barack Obama is now citing the Massachusetts fund in an attempt to undercut the Romney argument that the administration has wrongly meddled in the private sector. The Democratic message is simple: The Republican contender did pretty much the same thing.

The green-energy tiff is an example of a broader trend emerging. The Romney campaign is seeking to keep the spotlight on the Obama presidential record. Meantime the Obama campaign is trying to use Mr. Romney’s own record as a public official to show that on a series of issues—job creation, government debt, abortion rights and global warming—his gubernatorial performance is at odds with his campaign posture. (more…)

What happened in Wisconsin signals a shift in political mood and assumption. Public employee unions were beaten back and defeated in a state with a long progressive tradition. The unions and their allies put everything they had into “one of their most aggressive grass-roots campaigns ever,” as the Washington Post’s Peter Whoriskey and Dan Balz reported in a day-after piece. Fifty thousand volunteers made phone calls and knocked on 1.4 million doors to get out the vote against Gov. Scott Walker. Mr. Walker’s supporters, less deeply organized on the ground, had a considerable advantage in money.

But organization and money aren’t the headline. The shift in mood and assumption is. The vote was a blow to the power and prestige not only of the unions but of the blue-state budgetary model, which for two generations has been: Public-employee unions with their manpower, money and clout, get what they want. If you move against them, you will be crushed. 

Mr. Walker was not crushed. He was buoyed, winning by a solid seven points in a high-turnout race.

Governors and local leaders will now have help in controlling budgets. Down the road there will be fewer contracts in which you work for, say, 23 years for a city, then retire with full salary and free health care for the rest of your life—paid for by taxpayers who cannot afford such plans for themselves, and who sometimes have no pension at all. The big meaning of Wisconsin is that a public injustice is in the process of being righted because a public mood is changing.

Political professionals now lay down lines even before a story happens. They used to wait to do the honest, desperate, last-minute spin of yesteryear. Now it’s strategized in advance, which makes things tidier but less raggedly fun. The line laid down by the Democrats weeks before the vote was that it’s all about money: The Walker forces outspent the unions so they won, end of story.

Money is important, as all but children know. But the line wasn’t very flattering to Wisconsin’s voters, implying that they were automatons drooling in front of the TV waiting to be told who to back. It was also demonstrably incorrect. Most voters, according to surveys, had made up their minds well before the heavy spending of the closing weeks.

Mr. Walker didn’t win because of his charm—he’s not charming. It wasn’t because he is compelling on the campaign trail—he’s not, especially. Even his victory speech on that epic night was, except for its opening sentence—”First of all, I want to thank God for his abundant grace,” which, amazingly enough, seemed to be wholly sincere—meandering, unable to name and put forward what had really happened.

But on the big question—getting control of the budget by taking actions resisted by public unions—he was essentially right, and he won.

Associated PressWisconsin Gov. Scott Walker. (more…)

This week the Obama campaign debuted its attack on Bain Capital, the private-equity firm Mitt Romney founded. Its two-minute ad purports to tell the story of GS Technologies, a Kansas City-based Bain investment that went bankrupt in 2001.

To hear the Obama campaign, this is a tale of greed: GST was a healthy, happy, quality steelmaker until Bain plundered its worth and stripped its 750 workers of their due. “It was like a vampire,” laments one former employee in the ad. “They came in and sucked the life out of us.” 

GST is a tragic tale, though in a different way. The real story of GST is that of a private-equity firm trying to spark some life into a uncompetitive, over-unionized industry. Bain’s crime here—if that’s what you call it—was giving a dying steel plant an unexpected eight-year lease on life.

When Bain bought the Kansas City mill in 1993, steel was a scene of carnage. Global players were pouring out cheap products, and America’s high-cost steel plants couldn’t compete. The industry had lost 200,000 jobs in preceding years. In 1992 alone, the six largest U.S. steel mills had lost a combined $3 billion. Armco, the company Bain would buy the plant from, would lose $641 million in 1993.

The Kansas City plant was itself dying. At its 1970 height it employed 4,500; by the late 1980s it was down to 1,000. A year before acquisition, Armco had laid off another 75. Its equipment was old; it faced fierce competition at home and abroad.

B.C. Huselton, a vice president of the business at the time, tells me that in 1990 the Armco CEO held a meeting. “He told us, ‘Look, we either try to sell it, or we’ve got to shut it down.'” Armco had shut down another Kansas City facility, Union Wire Rope, only a few years before.

The Kansas City plant had two product lines—high-carbon rods and grinding media (used in mining)—that it felt could give it a competitive edge. But it needed investment, and Armco was tapped out. Bain nonetheless saw some potential and in 1993 joined other investors to acquire it for $80 million. Management renamed it GS Technologies (which would become part of a larger GS Industries) and poured an additional $100 million into modernization.

The strategy worked for a time. The market firmed up and GSI became a U.S. leader in steel rods. In 1994 it felt confident enough to distribute a dividend to investors. In both 1996 and 1997, GSI would realize $1 billion in revenue.

Getty ImagesMitt Romney as chief executive of Bain Capital in 1993 (more…)

In his January 2011 inaugural address, California Gov. Jerry Brown declared it a “time to honestly assess our financial condition and make the tough choices.” Plainly the choices weren’t tough enough: Mr. Brown has just announced that he faces a state budget deficit of $16 billion—nearly twice the $9.2 billion he predicted in January. In Sacramento Monday, he coupled a new round of spending cuts with a call for some hefty new tax hikes.

In his own inaugural address back in January 2010, New Jersey Gov. Chris Christie also spoke of making tough choices for the people of his state. For his first full budget, Mr. Christie faced a deficit of $10.7 billion—one-third of projected revenues. Not only did Mr. Christie close that deficit without raising taxes, he is now plumping for a 10% across-the-board tax cut. 

It’s not just looks that make Mr. Brown Laurel to Mr. Christie’s Hardy. It’s also their political choices.