Saturday, September 27, 2008

The Debate

So I apologize for not having a post up for a few days. Life has been a little hectic, but hopefully things will slow down just a tad in the near future.    

Last night featured the first of three presidential debates that are going to take place over the next several weeks (there will also be one vice presidential debate this coming Thursday). After some drama created by McCain stating that he may not attend the debate because of the need for him to be on the hill to get a compromise on the bail out bill, the debate itself went rather well for both candidates. The reason for this is that both candidates had different objectives coming into this debate and that made the result, in some ways, a non-zero sum game (i.e. that it was possible for both candidates to win and no one to lose).    

For Obama, success in the first debate was in accomplishing mainly four things: 1) being gaff free; 2) relaying that he is the candidate for change; 3) showing himself to be rational, level headed, and even keeled, while not coming across as aloof; and 4) portraying readiness to president. Obama clearly accomplished all four of these tasks by not getting frustrated when McCain made attacks and coolly refuting the claims made against him with well constructed, but simple, explanations. At no time last night did Obama become flustered and, in fact, many of his prepared responses and exchanges with McCain showed that he is deeply knowledgeable about key economic and foreign affairs issues. 

Obama's theme of the night seemed to be that we have had 8 years of impulsive executive leadership based on feelings and emotion. This leadership style lead us to the current crises we now face, and McCain embodies more of this style of leadership, while I (Obama) am collected, rational, and deliberate.    

As for McCain, success for him last night was also based on mainly accomplishing four things: 1) being gaff-free; 2) distancing himself from Bush on the economy and spending; 3) showing himself to be the candidate who could actually bring change to Washington; and 4) maintaining vigor and energy to assuage fears that his age is an issue. I think McCain pretty much accomplished all of his tasks as well. McCain drove home repeatedly that he is against spending and that he has a record to prove that he can reform Washington. His remarks were well animated  with a great deal of enthusiasm. 

In examining McCain's message of the night, it seemed to be that the voters should trust him on foreign affairs because he has been on the ground and he has surveyed the terrain on which we are going to fight, while Obama “doesn't get it” because he hasn't been there. This was an interesting attack strategy by McCain. I think it would have been very effective if Obama hadn't demonstrated each time that even though his feet may not have been on the ground, he had a very accurate picture of what needed to be done. However, I do think that this type of attack by McCain should play well with the Republican base, so I am sure we will see it used again and again.    

Thus, since both candidates accomplished what they set out to do, in some ways this debate was a win-win for both candidates. One thing to note is that unlike in recent past debates, such as Bush vs. Gore or Bush vs. Kerry, the candidates had to do a lot less to differentiate themselves on the economy and foreign affairs issues. Polls show that not only do voters recognize that Obama and McCain have different views on these issues, but approximately 65% can correctly place the candidates and their views together and provide at least one major difference between them. Thus, I think we saw a lot less time being spent on trying to say “here is how I am different from my opponent” and more time spent saying “this is why I am right.”    

The key aspect to remember of any debate, however, is that unless someone makes a gaff, very few people actually remember what was said. Rather, what people take away from presidential debates are feelings about the candidates and what the candidates represent. It is in this category that I think the edge went to Obama. It was clear from the debate last night that both candidates are for change. But, as we saw at the conventions, McCain is for change by fighting and defeating those who are resistant to change; he said he would be the sheriff of spending, veto every spending bill he deems no good, and make Washington change by bringing the fight to them. By contrast, Obama is for change by bring people together to work out differences and make compromises; he repeatedly stated that he understands that there are deep divisions, but that the president's job is to bridge these gaps, not to increase them. History has clearly shown that both strategies can be effective in the right situation.   

However, in today's political climate, the idea that voters want more division and fighting in politics seems silly. We have had 8 years of very derisive politics, and the situation created by the Bush era is unlikely to be fixed by the next president simply wielding a big stick. Rather, it is going to take carrots and compromise to really bring change to Washington. This notion of how to bring change is in many ways really the heart of the election. It could just be me, but my gut tells me at this decision node, voters don't want change through force, but through reconciliation that brings people together.    

Traditionally, debates do not have a huge effect on how people will vote unless one of the candidates makes a huge mistake. However, debates are important because they give voters a chance to not only hear the candidates’ issue positions side by side, but also their tone and message. While I don't think last nights debate will have any real impact on who votes for whom, it did reinforce what type of leadership style voters have to choose from in the next election. 

Wednesday, September 24, 2008

Political and Financial Bailout

Today Senator John McCain said he would suspend his campaign and return to Washington to work on the Wall Street bailout plan on which Congress is currently working. He also stated that he would work with Obama to make a joint statement delaying the debate on foreign policy this Friday in Mississippi. McCain said that the urgency of the situation requires that he and Obama put the campaign aside and go to Washington until the bailout is passed.

Obama later went in front of reporters to say that he and McCain had talked earlier that day - apparently Obama's campaign called McCain after Senator Coburn (R-OK) suggested it would be a good idea to give a joint statement - and their campaigns agreed to make a joint statement. Obama expressed his surprise at McCain's statement regarding the suspension of his campaign and a delay in the debate as Obama thought their campaigns would work on a statement before they went to the press.

McCain and the Republicans are saying that he is being bipartisan and that he and Obama are so needed in Washington that the debate can't go forward. On the other hand, Obama and the Democrats are saying McCain is attempting a cynical political move to delay the foreign policy debate - one he has the most likelihood of winning in the eyes of Americans - which would otherwise be lost in the turmoil of the financial crisis.

Regardless of either candidate’s political motivations, the economic crisis is extremely serious at the moment. McCain may have political reasons for wanting to delay the debate and suspend campaigning, but there is a legitimate reason why he and Obama will be returning to Washington soon and why they may even stay through the weekend.

Since financial institutions on Wall Street began to fail, starting this spring first with Bear Sterns and most recently with AIG, the financial system has been deflating. Bear Sterns Treasury Secretary Henry Paulson has been talking about governmental measures similar to taking out "bazooka" to reassure investors; by this he meant governmental intervention disproportionate enough to the problem to reassure investors such that money continues to flow into the credit markets. However, the size of the AIG failure, the lack of a recovery in the housing sector, and the constant stream of bad financial news has spooked investors to such an extent that massive government intervention is necessary to restore investor confidence.

It may seem odd to the average person that our markets are suffering from a lack of confidence; after all, business people and economists deal with money and numbers, things that have value and are absolute. Unfortunately, the market (and economics in general) is more of an experiment in social science and psychology than anything else. Value on the market is assigned by what people are willing to pay for something based on their needs and wants. When a major crisis like the collapsing housing market occurs, no investor is willing to buy a bad investment (such as a subprime mortgage backed security). This makes it difficult to value anything in the market, but it is widely known that those securities are dropping in value. Goldman Sachs and Morgan Stanely, the only significant investment banks left in existence, have been given a free pass to become regular banks in order to gain the greater security that comes with government regulation of that sector of the economy.

Investors are seeking to find the safest possible investments and hold back on lending, thereby freezing up the credit markets even for good borrowers and sound investments. Franchises of McDonald's are now finding it hard to get credit to repair their restaurants, and GM is taking out all the credit it has left for fear of not being able to find cash later. Businesses need access to credit to expand, but they also need it to pay the bills when they have no cash on hand. So not only will the economy not expand, it may contract once businesses start going under after they can't afford to pay their bills, and more importantly their employees. Even individuals with good credit may not be able to get loans for new homes, cars, or higher education tuition.

Secretary Paulson and Federal Reserve Chairman Ben Bernanke believe the situation after the AIG fallout to be so serious that they think the government must intervene and buy the bad mortgages - at a discount as they are so low in value right now - so that financial institutions can pay off their debts and prevent the credit markets from freezing up. However, the political problem here is that this will be an unprecedented bailout of incredible size. Americans are used to hearing billions of dollars being spent, but $700 billion is a massive amount of money. To put this in perspective, the Iraq War has cost $550 billion from its start through August 2008 and the entire budget for 2007 was $2,730 billion ($2.73 trillion).

Paulson and Bernanke believe that this bailout must be passed by next week or the credit markets will freeze. So far, many financial experts seem to agree. Experts also believe that this may not be a losing proposition to Americans, as the assets that are purchased - U.S. mortgages backed securities owned by U.S. or foreign financial institutions - will eventually rise again after institutions are relieved of their bad investments and credit markets begin to flow regularly again. If there is a loss, it won't be the full $700 billion, but there could be a $200 billion loss or even a $200 billion gain.

The key to the current bailout plan, and the reason McCain wants to claim a need to suspend debates, is the need for a speedy government reaction to stop the credit markets from freezing. So far, Republicans have been the more resistant to a bailout because of their faith in the free market and dislike of government spending or intervention. Regardless of what either candidate or party says, the politics of this crisis and the election will always be a major consideration in any decision that has to be made. Fortunately for Americans, both candidates and a majority of Congress agree with the Administration that bailout plan must be passed within the week. Hopefully this will be a big enough "bazooka" to stave off economic collapse such that future intervention of this scale will not be needed.

Monday, September 22, 2008

The Need For Speed?

Today, President Bush announced that the whole world is watching to see if we can act quickly to resolve/contain the U.S. finical crisis. The message he was trying to deliver was not directed at the American public, but at Congress, to act quickly in passing his 700 billion dollar bank bailout proposal. Bush felt that this was necessary as many congressional democrats and a fair number of republicans have questioned the wisdom of the Bush bailout in its current form.    
It is clear that Bush wants to react quickly to this financial crisis, but a key question to consider is whether speed at this juncture creates more problems down the road. In other words, while waiting to take action in the short term main cause additional drops in the stock market, if we take the time to work out a compressive rescue and correction for what went wrong in the financial markets, will we be better off in the long term?    

I am not an economics expert, so it is difficult for me to offer a real analysis of this inherent economic tradeoff. However, from a political standpoint, the current situation is rife with potential political gains and losses. To understand the likely outcome of this situation, it is important to take a look at the different political motivations for several key players: President Bush, congressional democrats, the Republican Party, McCain, and Obama.    

For President Bush, a large part of his legacy as president will be affected by how this economic crisis unfolds. If the crisis leads to another great depression, then regardless of any good he has done in his political career, he will always be remembered as the president who failed to prevent a great depression. President Hoover’s legacy supports this point of view. Hoover was an extremely accomplished public servant before he became president, and he was an immensely popular president until the economic downturn in 1929. The result of his presidency coinciding with the start of the great depression is that his legacy is forever tied to that event.  Thus, beyond any personal conviction Bush has regarding  the best present course of action, from a political motivation stand point, Bush is best served by having a short-term solution rather than a more long-term comprehensive fix.    

Congressional democrats have competing political interests. From one perspective, they should be in favor of a short-term fix because if it temporally rights the economy, they can go back to their districts and say "see I was there to protect you. I saved the economy." However, initial responses by the democratic base have been very negative towards the Bush bail out plan. Thus, if they were to fast track the bill with just an up or down vote with no amendments, they risk being seen as weak to these key supporters.    

In addition, congressional democrats don't want to be seen as obstructionists (because they held up necessary legislation at a critical juncture) or partisan (since conventional wisdom argues that economic downturns favor the party out of power for the presidency), as it could result in an electoral backlash from voters who are hurt by an increasingly worsening economy. A key fact to remember is that even after the election, the new president will not take office till the end of January. If no action at all is taken, a lot could go wrong in those four months. As a result, if we weigh all of these pressures, it appears that the motivation for congressional democrats would be to pass some package to rescue the economy, but likely some altered form of the Bush Plan.    

As for the Republican Party, its motivation is quite similar to that of President Bush. Survey research has shown that up until Carter, the Democrats were consistently rated as more competent in handling the economy. When experts studied this empirical regularity in detail, they found that this opinion was the result of the Republican Party's association with control of the White House at the start of the Great Depression. For voters who lived through the Great Depression, the Republican Party was, in their minds, inextricably linked with economic failure. Thus, the Republican Party should do everything in its power to make sure we do not enter another depression while it holds the presidency. Therefore, republicans should also be in favor of quick action to ensure that the economy doesn't slide into recession or depression while they are in control.    

The last two actors to take a look at are the two presidential candidates. As both are senators, they are both going to have to cast votes on the Bush Plan. This is one of the few opportunities that voters are going to get to see how both candidates act at the same time and at the same level of policy making. Both candidates are running on a message of change. Well, I can almost guarantee that the bail out plan is going to get spun as more of the same in Washington. So the question becomes whether both candidates can take the comprehensive change approach and vote against a simple bailout of the banks and get away with it with their supporters.    

In looking at Obama, he clearly cannot support a simple bailout; that would go against all of the themes of his campaign about reform in Washington. However, he cannot be seen as not working to find a solution for the crisis. The problem for him is that he is not the President of the United States in the senate. Thus, he is just one of 100 and it would be difficult for him to dictate a completely different plan. As a result, it would appear that Obama's best course of action would be to vote against the Bush Plan, but support any modification that provides some regularity reform. This way he can say "I have fought for reform in good and bad times and if you elect me, you will keep seeing reforms coming."   

In the case of McCain, he is in a much tighter spot than Obama. If he is truly a candidate for change, then how can he simply vote for the Bush Plan? He has tried so hard to distance himself from Bush, and there is no way he could cast a “yea” vote for the Bush Plan and win the presidency; in the minds of most voters that would be the same as saying he endorses how Bush has handled the economy for the past eight years.    

However, McCain also could not easily vote for a Democratic Party sponsored bill that calls for reforms and regulations. If he were to sign on to the bill, he would look like a follower of the Democratic Party and a deserter of the Republican Party. In addition, a lot of his support comes from fiscal and small government conservatives who are outraged over the level of government spending and intervention that democratic reform plans for the finical markets call for. As a result, McCain is stuck in a hard position of not being able to support the Bush Plan, but also being equally unlikely to support a democratic reform bill. His best bet is to try to sponsor a bill himself, but in a democratically controlled senate, that is very unlikely to happen.    

Taking all of this analysis together, it seems that the likely outcome of this crisis is that the democratic controlled Congress will write their own bill that incorporates large aspects of the Bush Plan (so that they can move quickly), but that also provides for additional regulation and protections for the taxpayers (thinking more long term). I am not sure this is the best outcome as it may rush the passage of critical reforms for the finical markets, but given the nature of the crisis, it is probably the best-case scenario.   

Sunday, September 21, 2008

Ah, What A Mess

I don't have much time for a post today so this one is going to mostly be posing a question for everyone to ponder for the remainder of the weekend. Feel free to post your thoughts on the matter below. 

On Friday, President Bush announced that he wants congress to pass a 700 billion bailout of the financial markets. The basic idea is that the government will buy all the bad loans and mortgages that banks have on their balance sheets from homeowners defaulting on their loans. Most analysts agree that if all of these bad loans were taken off the hands of the banks, then they would once again be able to turn a profit.

There are two key points to notice here. First, when Bush says the government is going to use 700 billion to buy these loans, the government doesn't just print more money, it has to generate it from somewhere. To raise this amount of money, it can do three things. One, it can raise taxes to cover the cost (very unlikely in this case). Two, it can cut current spending levels in social programs or a war effort to off-set this new cost (again very unlikely in this case). Three, it can take very high interest foreign loans to finance the deal (most likely option). In essence, this last option is how the Bush administration has financed the wars in Iraq and Afghanistan without raising taxes at home. The take home point is the money doesn't just appear, it has to come from somewhere.

The second point to note is that there is another way to solve this crisis that hasn't been discussed. The Bush plan focuses on saving the banks, but does nothing for the home owners who have these loans. A viable alternative would be to have the government either help homeowners make their payments, or restructure of all floating loans that have been made in the last five years to fixed rate loans with affordable monthly payments (i.e. lower fixed interest rates and perhaps extending payment periods beyond 30 years) so that people can make their payments. The effect would be that banks would not be making big profits (and perhaps might even be taking small losses as opposed to their current huge losses), but they also would be able to remove the bad debt off their books, since payments would be coming in. 

So, the big question is which plan is better? I personally come down on bailing out homeowners over bailing out banks, or at least having a combination of bailing out both.  The idea that only the banks should be bailed out with my money seems both morally wrong and financially unsound. I completely agree with idea that these banks can't simply be left to fail. They are too integrated into the financial system. However, that doesn't mean the solution to the problem has to let the banks completely off the hook, while individual homeowners get nothing and are led to financial ruin themselves. It seems to me if you are going to use taxpayer dollars to solve this problem that the solution better address both sides of the crisis. 

In the end, the question comes down to who should get rescued: the banks, the homeowners or both? Both banks and homeowners are guilty of greed and have both made mistakes, but why should only one side get bailed out?

Saturday, September 20, 2008

The Six States To Election Victory

Recent polling that has come out in the last two days has capped off quite an impressive shift in both the national and state polls for the presidential election. In essence all the gains that McCain made after the republican convention have been wiped out and even more impressive, Obama is leading by larger margins in most swing states than he was before either convention. 

While this may cause many democrats to celebrate and republicans to be concerned, this interpretation of the polls is not quite accurate. If one inspects the polls carefully, it is easy to understand why we are seeing such movement in polls trying to project electoral vote counts. 

The first aspect to remember is that the president is not elected by a national popular vote. Thus, national polls that do not control for likely voter location are not incredibly useful in determining likely electoral vote outcomes beyond overarching trends. Since most states are winner take all systems, as soon as a candidate gets 50%+1, all of the extra votes a candidate gets in that state are wasted. So for example, in New York, even though Obama will likely win the state with about 70% of the vote, 19% of this vote is wasted. Thus, when national polling is done, it is hard to weed out this wasted vote effect. In my opinion, national polling is pretty worthless unless you have a candidate up by more than 15 percentage points. 

So, since the president is elected via the electoral collage, when trying to project the outcome of the race, the key statistic to look at is how candidates are doing in individual states. Luckily for us, most polling outfits agree with me and this election marks an unprecedented amount of state polling. 

Before we go to the analysis of the seesawing projections of who is going to win the election, it is important to remember there are 538 electoral votes and that to win the presidency, a candidate needs 270.

So with our electoral math hat on, let's take a look at state polling numbers.  The most striking result is that of the 538 electoral votes, about 459 (or 85%) electoral votes are immovable. These are electoral votes from states that are strong supporters of the respective candidates, and have showed no signs of moving since June, with very high poll numbers in favor of a respective candidate by at least 12 to 15 percentage points. States in this category include NY, CA, TX, AL, GA, etc. When we break down these 459 electoral votes by candidate, we find that Obama has 259 electoral votes, while McCain only has 200. 

This is where things get interesting. The remaining 79 electoral votes are split between only six states: CO-9, FL-27, NM-5, NV-5, OH-20, and VA-13. Every time one of these states moves back and forth between the candidates, it drastically affects who is projected to win the presidency. Hence, the seesawing that we are getting in the polls and projections is not because the nation as a whole is really changing its level of support for the different candidates, but rather, is the result of small movements in these six states where split between support for both candidates is very close. 

The net result of this is to interpret polls that keep showing drastic shifts in the outcome not as drastic shifts in levels of supports for the candidates, but rather as an artifact of how we elect a president in this country.  Very small amounts of support shifting in very few states can have a drastic impact on the outcome, which is what the polls are picking up. Thus, if Obama falls behind by a large margin in a outcome projection, it is not because he has lost vast amounts of support, but rather that a very small number of people in one of the six states has sifted their support. 

This volatility is likely to continue until actual election day because the numbers needed to switch one of these six states to either candidate is around 1-3%. 

Now, an astute mathematician who has been following the math may have noted that based on the safe electoral vote count, Obama is in a much stronger position since he has to win far fewer of the six swing states than McCain does (Obama only needs 11 more electoral votes to get to 270, compared to McCain's 70). I think that this line of reasoning is spot on and is why you have see Obama and Biden shifting away somewhat from their 50 state strategy to focusing on these six key states in this critical period of the election. For those that want to know the current break down in these six states, Obama leads in NM and CO, while McCain leads in VA, OH, FL, and NV. Under that scenario, Obama would win with 271 electoral votes. 

Friday, September 19, 2008

111th Congress Senate Forecast: Overcast With Chance of Gridlock

As the 2008 election looks good for the Democrats in the Senate, who, as we said yesterday, will probably pick up between 4-5 seats and enlarge their majority to 55 or 56 (and likely enlarge the majority in the House of Representatives to 242 from the current 233), it would seem that Democrats might actually be able to pass significant amounts of legislation. This would be even more likely if Obama wins the presidency, eliminating the veto threat and negating the need to broker as many deals with Republicans.

Despite the almost certain increase in Democratic majority in the Senate, Democrats will likely still face an uphill battle against Republicans in trying to pass legislation. Even Democrats admit that Republicans are masters of parliamentary procedure and excel at putting the procedural brakes on legislation. They also aren't timid about using that power in the current political environment.

Republicans set a new record for filibusters in the Senate during the 110th Congress measured by the number of cloture votes (a motion to cut of debate and vote on a bill or amendment). The Republicans set the
record at 62 in December of 2007, only halfway through the Congressional term. That surpassed the 107th Congress's 61 votes between 2001-02, when Democrats had just regained control of the Senate and Bush had just defeated Gore for the presidency.

Republicans may be on track to have over 100 cloture votes this Congress, and they are open about their strategy of obstruction. According to the
New York Times, Senator Mitch McConnell (R-KY), the Senate Minority Leader, said in December "I think we can stipulate once again for the umpteenth time that matters that have any level of controversy about it in the Senate will require 60 votes." This strategy has two basic levels: win over the Republican base by stopping Democrats; and (more incredibly) blame Democrats for not accomplishing anything while being in charge for the first time in 12 years. This is indeed a demonstration of dramatic irony as up until this Congress, Republicans lambasted Democrats for using the filibuster and threatened the so-called "nuclear option" of eliminating it altogether.

It may not make sense—or even be valid—for Republicans to blame Democrats for a slow down in legislation; but it is effective as a message to the average American who does not follow Congress’s daily proceedings. Even McCain has called this Congress the "do-nothing" Congress, despite the fact that he and his party are the ones slowing down legislation.

Many Democrats are hoping a greater majority in the Senate and House, along with a Democratic president, will allow them to pass a great deal of legislation that has so far languished as a result of the use of the filibusters, procedural maneuvering, and presidential vetoes. However, even if the Democrats gain 56 seats, the largest number they are most likely to achieve in 2008, they would still need 4 Republican votes to pass any legislation. Democrats have, at times, been able to gain up to 6 or 7 Republicans to vote for their cloture motions to cut of debate and end a filibuster, but Republican discipline is remarkably tough.

However, the Democratic gains would most likely replace the moderates that vote with them already; this still means the Democrats come up 4 votes shy of the necessary 60. On the
ideological spectrum, the most moderate Republican Seats Seats are Gordon Smith of Oregon, Norm Coleman of Minnesota, Susan Collins of Maine, Olympia Snowe of Maine, and Arlen Spectre of Pennsylvania. This leaves 5 Republicans more likely to work with Democrats than not, which would seem to allow the Democrats to achieve 61 votes in the Senate when needed.

One problem with this scenario is that Democrats are unlikely to always get all five of these moderate Republican votes. Another problem is that Joe Lieberman of Connecticut not only actively supports John McCain, but he attacked Barrack Obama at the Republican convention and, according to, either wildly exaggerated the truth or simply lied about Obama's record in order to undermine the Democrats. Lieberman will likely lose his chairmanship of the Homeland Security Committee, and it is also quiet possible that he will be booted out of the Democratic caucus; he is already an Independent, which would cause him to caucus with Senate Republicans.

This puts Democrats back at 55 seats, meaning that they would have to get every single moderate to vote with them on any piece of legislation with which Republicans have even the slightest disagreement (which would be a majority of legislation). Democrats would likely pass far more legislation than they have so far, and with a Democratic president things would be even easier (relative to the current stand still), but this still presents a huge uphill battle against Republicans who hold the advantage when it comes to procedural maneuvering.

In order to truly advance their own agenda without any significant Republican interference, Democrats would need to pick up 6-7 seats in the Senate, creating a 57-58 majority, as well as with winning the Presidential race. This means they need to pick up
Senate seats in States like like North Carolina, Mississippi, Minnesota, and Oregon, which are close, but have consistently polled in the Republican candidates’ favors.

This does not mean Democrats won't be in a far better position than they are now, where the Republicans can often effectively dictate their own agenda while halting the Democrats and simultaneously blaming them for the slow down.
Polling has tightened up in all 2008 elections, after swinging in the Republicans’ favor for the last few weeks, but it remains an uphill battle with momentum still with the Democrats.

Thursday, September 18, 2008

When The Music Stops Will There Be 60 Democrats Sitting?

Today we will take a break from the presidential race and take a look at the Senate races that are occurring this fall. While they have garnered far less attention in the national media, the break down of Senate members is a critical factor in the ability of a president to get anything done.   

The magical number that is required to get anything real done in the senate is 60 votes. This is because it takes 60 votes in the Senate to invoke cloture and end debate. As the Senate is designed to be a more deliberative body than the House, the rules for debate in the Senate are much less structured than in the House. Consequently, a single senator can prevent all senate business from occurring by refusing to yield the floor. If 60 of his/her colleges disagree with the filibuster, they can vote to end debate by invoking cloture.   

The net result is, in order to get any major or controversial piece of legislation to a vote in the Senate, the majority party needs to have 60 reliable votes so that it knows it can end debate and get a vote on a bill. Based on the current breakdown in the Senate, if the democrats can take nine seats currently held by republicans in the fall, they will reach the magical number of 60.   

It is important to note that the democrats actually have only 49 members in the Senate currently, but the two Senate independents caucus with the democrats, which give them 51 votes on procedural matters. On top of this, one of the independents is Joe Lieberman, who has angered many democrats for his support of Bush and McCain. Thus, in reality while the math may say nine seats, there is the chance that the democrats will really need ten seats to switch party lines, without losing any of their seats that are up for grabs.   

So the $64,000 question is can they do it?   

There are several factors to consider. First, only a third of the Senate is up for election at a time. So only 34 seats are actually up for grabs (the extra seat is a special election in WA). Second, of these seats, 22 are currently held by republicans, and 12 by democrats. Thus, more republicans are up for reelection this time around than democrats. With such a high number of republicans up for reelection it is unlikely that all 22 seats will remain republican.   

A third factor to consider is the number of incumbents that are rerunning in these 22 republicans seats. The incumbent advantage is well documented in the Senate. According to latest data, about 85% of incumbents win reelection. So, while it is not impossible to knock off an incumbent in a reelection, the odds of the democrats winning a previously held republican seat drastically improve for elections in which a republican incumbent is not running. In examining the 22 republican seats up for election, seven do not have incumbents (CO, ID, MS, NM, NE, VA, WY). Of these seven, only CO, NM, and VA are states that are not solidly republican.   

The last aspect to consider is in what states the 22 republican seats are from. Clearly, it should be easier for a democrat to be elected to the senate from a “blue state” than a “red state,” where blue and red are defined in how they voted in the 2004 Election. Taking a look at the 2004 Election map, of the 22 republican seats, only two (MN and ME) are from blue states in 2004.   

Taking all of this together, while it seems that the democrats will pick up seats in the Senate, it is unlikely to be the nine (or ten) needed to reach 60. It is much more likely to be 3-5 seats. The reason for this is simply that while there are vastly more republicans up for election and a lot of republican retirements, these seats are predominantly safe republican seats from states that reliably vote republican. Of the 22 republican seats, 14 are very safe for republicans, with polling numbers all above 90% that a republican will be elected.   

This is not to imply that it is impossible, just highly unlikely. The current polling, while not as frequent as for the presidential race, backs up this analysis. If the race was held today, based on current polls, the democrats would hold on to all of their existing seats and gain seats from CO, AK, NH, NM, and VA. Thus, they will shift their majority from 51 to 56. Between these five pick-ups and the 14 safe seats, this only leaves 4 other races (NC, MN, OR, MS) out there. While republicans in these races are not up by the 90% mark, they are all leading by about 70%. Since the democrats would have to win them all to get to 60, it seems unlikely to happen.  

Thus, while the democratic majority in the Senate will increase, it will still be short of that magical number 60.  

Wednesday, September 17, 2008

Let's Play a Word Association Game

The continued bad news from the financial markets has clearly shoved the economy into the limelight as one of, if not the key issue in this election. Many pundits believe that this has the potential to shift the race in Obama’s favor. I happen to agree with this sentiment, but it is important to understand why; the reasoning is not as simple as it may seem.   

The traditional logic of the economy and presidents is that since the president is the only nationally elected official, he is held (rightly or wrongly) accountable for the overall wellbeing of the national economy. In many ways, the president is kind of like a quarterback in football: when things go right he gets too much credit, and when things go wrong he gets too much blame. The key fact to remember is that while a president is a critical player in the health of the economy, he is still only a single person among many other players in the game. Thus, he can make all the right choices and still get stuck with the blame for other players’ poor performance.   

Rather then trying to actually assess how much blame we should attribute to the Bush administration for the current economic crisis versus mistakes made by key finical institutions, it is more important to examine how the current set of events is likely to be interpreted by likely voters in November. Intuition may suggest that if people are personally feeling the pinch of a bad economy (i.e. they suddenly have less in their purses or wallets than they did previously), they should hold the party in power of the presidency responsible and vote for the opposing party’s candidate.    

However, most reputable research disputes this theory. Rather than voting based on ones own economic situation, the vast majority of voters tend to vote based on what they perceive as the general condition of the economy as a whole. This raises several important questions regarding the current election.   

The first is that for the first time in the history of the United States, most adults have some stake in the stock market. Either as a result of personal stocks or retirement funds, peoples’ well-being is much more closely tied to the welfare of the stock market than ever before. The result is that even if the overall fundamentals of the economy are strong, if people perceive that the overall stock market is in crisis, then the nation is in a national economic crisis. Thus, using the same logic as before, if people perceive a national crisis in the stock market, which I think most currently do, they will likely vote democrat in November.   

The second aspect that is unique to this financial market crisis situation is that in some ways the republicans are guilty of their own image success. In terms of associations, if you asked most people which party they associate with big business or Wall Street, they will say republicans. Thus, even though the Republican Party is not probably directly responsible for the current finical situation, republicans are guilty via association.   

If this association theory is correct, then all Obama should have to do to win on this key issue is to hammer on this association and pose the question “who you would rather have clean up this mess: the people who are in bed with big business or an outsider who knows what is right?”  

The third aspect to take note of is that in terms of the abilities of the candidates, McCain will be hard pressed to win an election that is based on the economy. McCain’s best chance of winning this election is to keep the agenda on national security, experience, and social conservative issues. He has almost no experience with economic issues and his age, race, income (via his wife), and own statements on the economy all make him ill suited to play the understanding white knight to the rescue.   

This is not to imply that Obama would actually do a better job at attempting to resolve the situation. That question will largely be the result of what kind of economic teams are put in place by the respective candidates. But actual chance of success is much less important in the economic arena of politics than association with ability. On this count, Obama is clearly far out ahead of McCain. 

Monday, September 15, 2008

Back To The Future

The Iowa caucuses not only marked the beginning of this election season, but also ushered in what was to become the theme of the election: Change. In Iowa, all the candidates from both parties saw that the two candidates that campaigned on a message of change did incredibly well (Obama and Huckabee).

Since then, the theme of change has remained a constant in the campaign. Obama has stayed with his message of "Change We Can Believe In," while McCain has attempted several different change themes prior to the republican convention (remember "The Change You Deserve" back in May).

After the convention, an interesting development occurred. Somehow Obama lost control of the theme of Change. All of a sudden McCain was all about Change. He had taken what Obama had been saying, and started campaigning as the Maverick team that could bring change to Washington. Instead of trying to come up with an original theme he simply used the media spot light of the republican convention and flatly stated, as if no one had ever thought of this idea before, that he was the candidate for change.

What happend next was quite surprising, it caught on. All of a sudden McCain, who remember is from the party who has controlled the presidency for the last eight years, as well as the House and Senate for the first six of those eight years, was the Change man. It appears to me that he was able to pull off this transformation because the base of the republican party has never embraced him (and in fact still haven't--remember they really only got on board once Palin was on the ticket), so he was able to sell himself to moderate republicans (and perhaps independent leaning republicans) that he is different than the last eight years. He can bring Change. Not the Change the democrats want, but he can bring a different kind of republican control to Washington.

With such a high level of success on the overarching theme of Change, McCain started very slowly to adopt a lot of the exact same language that Obama has been using over the last year. If you examine McCain's speeches post convention with Obama's remarks, there is no mistaking that McCain has become somewhat of a mimic or echo of Obama.

McCain has been able to pull of his copy cat nature of Obama's messages, in essence by using the same language and ideas, but in slightly different patterns and cadences. The result has been quite remarkable in the short term. McCain's national and swing state polls have shot way up. This development however has clearly made many Obama supporters quite angry. The claim is that McCain has usurped Obama's issues and is a charlatan or a wolf in sheep's clothing.

What is interesting is that this is not the first time the strategy of co-opting your opponent's popular ideas and messages as your own has occurred in a presidential race and it is not even the first time it has been done by a republican presidential candidate.

Issue and message co-option was the bread and butter of the republican party in presidential elections of most of the 1930s and 1940s. The most famous example is probably the election of 1948, in which the republican party took Truman's entire campaign platform and passed it through congress during the election in an effort to take the issues away from Truman.

The good news for Obama, is that in each historical case when the republican party attempted to take a democratic platform as their own they have lost the election in November. The historical argument for why this is the case is that in the end, issue co-opting by a rival candidate signals to the voting public that there are really only one set of options for moving forward. So when forced with a choice, why would you choose the imitator over the real Mccoy?

What has generally happened is that while issue co-optation can cause short term excitement by the partisans of the candidate that co-opted the issue, because there is no previous record of the candidate having such a position the candidate cannot make a credible commitment to actually carrying through on the co-opted issues once elected. Thus, faced with a choice between candidates that are saying the same thing, voters choice the candidate who is more likely to actually carry out those issues as promised.

As a result, issue co-option helps with popularity in the short term, because the issues themselves garner attention, but in the long term, results in the original candidate being elected. Of course there is no way to know for sure if the same will happen in this election. It is up to Obama to ensure that he remains the authentic choice by showing that McCain is merely echoing his ideas. But it cannot be denied that Obama has history on his side in this development.

Sunday, September 14, 2008

Why Tell a Lie?

Today may mark the first and only time in history that Karl Rove and I agree on something. In a recent interview with Fox News, Rove stated that "McCain has gone in some of his ads one step too far...and sort of attributing to Obama things that are, you know, beyond the 100 percent truth test."    

I find several aspects of this development quite interesting. First, let me put it in writing that I do agree with Rove. Several recent ads that have been put out by McCain have been quite nasty and border on actual slander.    

A recent example is an ad, released in areas with high latino populations, that stated that Obama voted against immigration reform and was instrumental in stalling the creation of any guest worker program or a path to citizenship. The problem with this ad, of course, is that Obama and McCain actually worked together on this bill, each voting to end the filibuster in the senate; in fact, they voted identically on the procedural and final passage votes.    

All political ads lie to some extent, and to pretend that Obama hasn't produced negative ads either would be a mischaracterization. However, Obama has not been foolish enough to create an ad that states a lie that can easily be verified and shown to be untrue. What is more startling, however, is when one examines where the nastiest attack ads are being run, it is pretty clear that the demographic groups that are being targeted are those containing individuals who are statistically on the lower end of the income and education scales.    

This tactic is about as low as it gets as it amounts to directly lying to confuse people who will not be able to gather complete information about the candidates due to limitations regarding time, resources, and language ability. Candidates launch such attacks because they can be very effective since these voters are not constantly tuning in to see what is occurring in the campaign, and reserach has shown that first impressions of a candidate are very important in deciding who to vote for among voters with lesser educations.    

The decision to go negative is not a surprise, but the manner in which is has occurred is highly questionable. It raises questions about McCain's ethics that I myself would not have thought possible. It is clear though that the straight-talking express has broken down.    

I think it is silly to argue that campaigns should always be positive; that’s not how the world works, and it isn't how campaigns are won. We may all hate negative ads, but they are really effective. I don't deplore McCain's choice to go negative, but the degree to which he has done so has the potential to backfire in a big way. 

Saturday, September 13, 2008

Is the Tide Turning?

Quick post tonight, as with Hurricane Ike going full force there is not much election coverage.  Over the last few days an interesting set of events has been set in motion that may set the stage for a poll reversal this week. 

The first is that, unlike the relatively unsubstantiated attacks that were leveled at Palin, the media has actually started to find cracks in the Palin armor that cannot be whisked away. Neither crack is that large, but both highlight an odd trend on the McCain/Palin ticket: to lie about information that can easily be fact checked. 

One, claimed earlier in the week, is that Palin had visited Alaska troops in Iraq. This has been disproved quite easily by the media, who got access to her travel record. Another is her claim that she brought in both republican and democrats to work in the executive branch in Alaska when she was elected Governor. The New York Times is reporting that this claim is false and that the appointment and civil service records show otherwise.

The other event is that the Obama campaign has learned that it needs to stop going after Palin, as it makes her an issue. Instead they have returned to attacking McCain. In my opinion this is the correct course of action. Palin appears vastly more popular than McCain. Obama's best bet is remind voters that they aren't voting for Palin, but McCain. In addition, McCain has a much longer record to defend, which clearly shows it is hard for him to be a candidate for change. Remember, before Palin came on the ticket, people were not excited about McCain. This is probably still true and Obama needs to remind them who is running for president on the republican side.

Lastly, as a poll update, the numbers still look terrible for Obama in both national polls and key swing states. We still have a long time to go, but if we don't start to see some halting to the McCain gains in swing states by the end of the week it may be time to start getting concerned. 

Friday, September 12, 2008

Two Steps Forward, One Step Back?

Taking a brief break from the election today, I want to talk about some of the other political news in the world. The Russian invasion of Georgia caught many in the West by surprise. What is even more of a concern, beyond the actual invasion, is the pretext for why it occurred and some of the direct events it caused.   

First, Russia claims that it had to protect ethnic Russians who were living in Georgia. I do not have enough information to know whether or not there is any validity to this claim, although I am personally very skeptical. Second, since the partial Russian withdrawal, there has been a clamoring in many Eastern Europe states for NATO to finally extend membership to Georgia and Ukraine (another state that does not have great relations with Russia and has a sizeable ethnically Russian population).   

Since the end of the Cold War, NATO has been searching for a reason to exist. Its alliance structure is designed to defend Europe against a communist invasion force from the then USSR and calls for each member nation to commit to the defense of any other member nation that is invaded or attacked. In the interest of full disclosure, I am about as strong a supporter of international institutions as one can find in the United States. I am not against NATO, and in fact, I think NATO has the potential to be the military force that other international organizations, such as the United Nations, need.   

What strikes me as disturbing however, is how similar these current events are to those surrounding the outbreak of World War I. For starters, NATO represents a fixed alliance structure that contains some states with moderate to large ethnic Russian populations.  

There is a good chance that based on latest Russian actions, the membership of Georgia and Ukraine in NATO will be considered very seriously. In both cases (WWI and now), the alliance structures call on their member states to defend any member state that was attacked as if that state was its own homeland.   

Next, in many ways, World War I began because Tzarist Russia felt that it had to protect Slavic populations in Serbia. As a result, when attacks in Serbia began, Russia felt obligated to become involved to protect those populations. In many ways, Russian claims at the outbreak of WWI are very similar to their claims over Georgia today.   

I am not suggesting that we are heading towards another world war centered in Europe, nor am I claiming that the West will be going to war with Russia; however, I don’t think the similarities can be ignored either. The key in WWI was that many believed that any war would be short, and no one had then seen the destructive power of all-out war with the power and horrors of modern weapons. I think these are important lessons that could prevent the outbreak of a new world war.   

Mark Twain is famous for commenting once that history doesn’t repeat itself, but rather it rhymes. I don’t think for any reason that we are in immediate danger of facing another world war, but I do think now is a time to remember the lessons of history to ensure we don’t head any farther down that path that would lead to such a terrible end.  After all, as Albert Einstein once stated, “I do not know with what weapons World War III will be fought, but World War IV will be fought with sticks and stones.”

Thursday, September 11, 2008

Together Forever?

Parting ways can be difficult, which would be one explanation for why McCain and Palin are still campaigning together now that the convention is behind us. That explanation would be wrong, but it makes for a nice lead in for today’s post.   

Traditionally, after the conventions, the newly foraged party candidates for President and Vice President head off and do about 3-4 days of heavy campaigning together. After that, they bid each other ado and separate. The logic in separating is that two people can cover far more ground than a single person, and since a party ticket is usually designed to appeal to different types of voters, the splitting of the two candidates allows each to go and campaign separately to court these voters. It is not unusual for the ticket-mates to meet back together for large events, big fundraises, or meet for rallies in swing states, but generally each will spend the month of September campaigning alone.   

Obama and Biden have followed this traditional form to the letter. After the convention, the two drew huge crowds at several joint events and have since separated to court voters individually.  Since separating, Obama and Biden have done several big events together, but by and large they have been keeping separate travel schedules, events, and hotels.   

Over on the republican side, the original plan coming out of the convention was for something very similar for McCain and Palin. They would do a few events together and then separate to hit their respective bases of support. However, this has not occurred. Rather, they have repeatedly added joint events and have not really separated yet (take today’s joint campaign stop in northern VA).   

The pundits have noticed this occurrence, but have attributed it to the fact that when McCain was campaigning alone before the convention, he was pulling crowds in the 100s, whereas after the convention, he and Palin together have been attracting thousands. Thus, the two have not split yet because they want to ride the wave.   

While there is clearly merit in this explanation, I have trouble with it because logically it doesn’t make sense. It is not the fact that they are campaigning together that is drawing larger crowds, but that the republican convention really energized republicans. So whereas the support for McCain was luke-warm before the convention, that indifferent sentiment has been completely replaced by an air of excitement and enthusiasm.   

Now some will claim that if Palin wasn’t with him, he wouldn’t get the crowds. So what? If Palin is the reason they are getting crowds, then her campaigning on her own would still pull the large crowds and McCain could be working a different, if smaller, group of people at the same time. To me, the republicans’ strategy here makes no sense if the explanation is to ride the Palin wave to bigger crowds for McCain.

However, there are two alternative hypotheses that do explain why the republicans have not yet shifted to the split campaigning. The first is that the McCain staff is very afraid that if they separate, Palin will pull more people to her events than McCain will to his. Such an event would clearly be covered in the media and make McCain look weak. Obviously, the VP candidate should not pull more than the boss.   

The second alternative hypothesis is that the McCain camp is afraid to have Palin campaign by herself on the national stage at this point. It is clear that she can be very powerful when she is protected and in a controlled environment, but if she is on her own at her own events, the McCain campaign will have little control over what she says or how she answers questions.   

In both cases, these alternative hypotheses are good news for Obama. The longer McCain and Palin campaign together, the more ground they will lose as Obama and Biden each individually reach out to voters. Plus, McCain and Palin will have to separate at some point, and in terms of having something embarrassing happen, the farther it is from November 4th, the better off it will be for the campaign that makes the mistake.     

Wednesday, September 10, 2008

The Power of Lipstick

Well who would have thought that lipstick on a pig would cause such a ruckus? For those who are not following the constant news feed of the campaign, here is the back-story before we get into some analysis.   

In a recent speech (I believe it was yesterday), Obama said that McCain’s economic plan is like putting lipstick on a pig. The phrase was supposed to imply that one cannot make a bad plan better by simply dressing it up. Thus, Obama saying McCain’s economic plan was like putting lipstick on a pig was the equivalent of saying that McCain’s economic plan is worthless and tries to fix the economy by making only cosmetic changes.   

Obama’s comments immediately caused outrange in the McCain/Palin camp, but not exactly as one might expect. Rather than being upset that his economic plan was called into question, McCain responded that Obama’s remarks were an unjustified sexist attack on Palin.  

The connection, for those who are lost and wondering why the McCain campaign would react the way it did, is that during Palin’s acceptance speech, she said that the difference between a pit bull and a hockey mom is that one wears lipstick. Thus, the McCain/Palin ticket reacted believing that the swipe was at Palin and not the economic plan.   

It will never be known what Obama intended, but to be honest, whether it was planned or not, the move by Obama was absolutely brilliant. Since the end of the republican convention, all that has been talked about is Palin and how strong she is, what a good selection she was, etc. She has been caught in a very powerful and positive media cycle. Since there hasn’t been anything else for the media to really cover since her speech, she has stayed in the news. However, McCain’s response seems to have ended that by giving the media something new to cover.   

Now, you might ask, why is this comment by Obama good? Because McCain’s response is completely irrational based on what was said. Palin’s name was never mentioned and Obama was talking about economic plans. It shows that McCain can’t talk about real issues, but would rather talk about unrelated aspects of the campaign. It feeds into the image of the republicans that the democrats are trying to build: republicans are out of touch, they have no new ideas, and they can only win by relying on platitudes.   

Luckily for Obama, McCain took the bait, and the resulting news cycle has done two important things. First, the post-convention positive coverage of Plain has ended. This is possibly the most important change the democrats could hope to effectuate. They had to find a way to shift the focus without attacking Palin directly because doing so would just add to the media frenzy. Second, they were able to once again show that McCain/Palin would rather talk about lipstick than real issues. Obama attacks an economic plan and McCain responds by calling the attack sexist. I think I can see the campaign ad already.   

Clearly, this is not going to be remembered as a key turning point in the election, and for the vast majority of people, it will remain completely unknown. But in reality, this little comment has once again shifted media focus back to Obama and gotten Palin’s name out of the positive news cycle. For this to really be a turning point, Obama now needs to capitalize on McCain’s mistake and really drive home that McCain would rather talk about lipstick than issues that matter to Joe America.   

As one final note on this story, McCain’s response becomes even more bizarre when you take into account that he was actually the first person in this election to make the comment that someone’s ideas were like putting lipstick on a pig. He was referring to a plan by Hillary Clinton in the early primaries. Don’t think that that aspect won’t make it into the news cycle as this story passes. 

Microbes: Solution to the Energy Crisis?

For those who haven't been paying attention to the news, paid a utility bill, or tried to fill up their car at the pump recently there is an energy crisis at the moment.  Not only in America, but around the globe as developing countries like China, India, and Brazil slowly rise to 1st world nations and consume more.  Higher demand has increased prices in the U.S. and spurred the public to demand offshore drilling (thanks to to some clever marketing).

There are numerous problems with drilling, not least of which is the fact that it would take a decade for it to have any impact on prices.  Another important drawback most Americans don't think about, justifiably because they can't afford to, is that the more we drill now the less we will have in the future when the scarcity of and demand for oil are both even greater than now, hence when prices are highest our domestic supply will have been drained.  Another question arises as to whether domestic supply will actually affect domestic prices or whether this simply increases global supply which would have a smaller impact on domestic prices.  This says nothing of the environmental consequences of more drilling, or if the push for more leased offshore drilling rights is simply an attempt to make the financial assets of oil and gas companies look more impressive to investors.

Most worrying about our current energy system and needs is that global supply is limited.  Eventually the oil, coal, and natural gas will simply run out.  This may take decades or centuries, but many scientists believe that we are already reaching the peak of oil production and it will begin to decline in the next decade or two, this as demand for energy rises with along with the economies of the developing world.  Once the supply runs out everything about modern society shuts down.  No fuel for trains, planes, or automobiles and more importantly the ability to create plastics becomes severly limited.  Everything in modern society needs plastics, from medicine, defense, clothing, computers, buildings, etc.   Without plastics the world we have to revert methods of constructing goods employed prior to World War II.

All of this could potentially become irrelevant with new developments in biotechnology.  Not within the next century or even the next half century, but within the next decade.  J. Craig Venter, instrumental in the mapping of the human genome, and his company Synthetic Genomics, stated in a recent interview with Newsweek that he believes that within two years that can create a bacterium that will consume CO2 and produce fuel, with mass production occuring within the next five.  All of this would work within existing infratsructure.

The potential consequences of this are astounding.  It could solve or reduce three major threats facing the entire planet in the form of current environmental, security, and economic crises related to oil:
  1. By using CO2 as the means to creating fuel there is the potential to drastically reduce carbon emitions and other emitions which cause environmental degradation and climate change.
  2. The ability to produce oil (or natural gas and hydrogen) would not be limited to areas of the world with natural reserves, solving a geopolitical crisis where the West and developed nations transfers billions every year to unstable countries.
  3. The cost of the fuel  could also potentially be reduced drastically, because supply would not be limited by natural reserves and the cost of extraction (this would also depend on how expensive it is to produce bacteria versus drilling miles under the earth and sea, but logic and intuition would suggest it would be cheaper).
Synthetic Genomics recently won a top industry award for its work in developing green fuels and a scientist at the company also testified before Congress before the U.S. House Select Committee on Energy Inpendence and Climate Change.

Hopefully this is more than just a pipe dream as it has not garnered great media attention as of yet.  But this is probably a good thing until Venter's company reaches the point where they are simply tackling production problems rather than creating bacteria itself, and if Venter's estimate is right this could be by 2010 or sooner.

Tuesday, September 9, 2008

Emerging Trends

Today will be a brief post because I have a mound of reading ahead of me. Today, two trends have emerged in the wake of the conventions that will be very important to watch. The first is that at campaign events at which both McCain and Palin appeared, the campaign drew thousands of people; on the other hand, where McCain previously appeared alone, he only brought people out in the hundreds. There is no question that the addition of Palin has caused a lot of excitement in the republican party. What will be really interesting to see is if McCain can continue to pull in such large crowds once he and Palin separate to campaign on their own. If not, I think this will be a telling sign regarding the actual level of support for McCain.   

The second trend is that Palin’s name is being mentioned with Obama’s in the media almost as often as McCain’s name is being so mentioned. This is certainly a result of the media attention Palin received prior to and during the convention. The key for Palin is whether she can convert all of this excitement and momentum surrounding her nomination into voter turnout. Two months is a long time to ride this initial burst of support, but barring some huge gaff, it is hard to see how she doesn’t turn at least some of her current support into higher republican turnout in November.   

The bright side for the democrats regarding Palin’s success is that it is being driven in large part by her attacks on and derisiveness towards Obama. The result has been an energizing of support on the left for Obama. While this is true, it is clear that this is a glass-half-full reading of the current situation. The Obama campaign has to find a way to respond to Palin’s attacks that simultaneously rebut what she is saying and defuse her media impact. Clearly this is a tall order, but if they are able to strike that balance, the Palin star will fade quite quickly. 

Sunday, September 7, 2008

Today's Polls and Campaign Strategy

Not much has really happened campaign-wise today. I should note, however, that we are starting to see a lot more robust polling that is showing a nice convention bounce for McCain. Tuesday's numbers should be interesting, but as they currently stand in the national polls, Obama is holding on to a narrow lead of about an 1-3 points if we take an average of all major polls. 

What is more interesting and probably more important is the swing state polls, which have not really showed a convention bounce. So far, I have seen reliable polls for about half of the swing states. When we look at the swing state polls, we see that we are almost exactly where we were at the start of August. If this trend was to hold up, Obama would have approximately 305 electoral votes. As I have said before, Tuesday's numbers will be the most telling, but so far what I am seeing seems to indicate that the conventions essentially canceled each other out. 

The next big event will be the first presidential debate on September 26, 2008, which will be held at the University of Mississippi. This debate will be moderated by Jim Lehrer and will focus on foreign policy and national security. Between now and then I don't expect to many planned fireworks from either campaign. However, both campaigns will clearly be hard at work in swing states trying to win voters. 

What is interesting is that this election marks the first time that Democrats are stealing a page out of the Karl Rove playbook. We hear constantly on the news that independents will decide the election. In 2000 however, Karl Rove argued that republicans could win the election by getting conservatives, who don't normally follow politics, out to the polls (this was also a claim first made by Barry Goldwater in his unsuccessful 1964 presidential bid versus LBJ). Rove's argument was forget the middle and win without them by getting people who normally don't vote, but are on the right side of the political scale, to vote for republicans. While it can be argued whether or not this strategy works (remember Bush actually lost the popular vote in 2000), it was used again in 2004, which saw perhaps the most sophisticated voter mobilization program by republicans in the history of elections. 

While democrats are clearly not conceding the middle, Obama has already used Rove's strategy during the primary. Obama built his constituency based on two subgroups on the left that traditionally have low turnout: Young People (18-29) and African Americans. Had these two groups not come out in droves, exit polling shows that Hillary would have had the nomination by Super Tuesday. Obama's level of success in November will, in large part, be contingent upon his ability to expand, as he did in the primary, the size of the voting left. 

What is interesting to note is that both candidates are using the Rove strategy, but in slightly different ways. On the democratic side, Obama is the part of the ticket that is trying to enlarge the base, while Biden should appeal to the more moderate part of the party and independents. On the republican side it is just the opposite; McCain is working the moderate side of the party with Palin working the base. 

In my opinion,  this election is not going to be decided by independents. This is because I think they are by and large going to be split between McCain and Obama. In the end, whoever can get the most nontraditional voters to the polls will win this election. Given Obama's unbelievable ground campaign, and McCain's total lack of field offices in most key states, I think the edge has to go to Obama for now. 

Saturday, September 6, 2008

Republican Contradictions

McCain praises himself as a maverick who bucks his party, the democrats, and the "Washington" establishment even though he has been a part of the Republican and Washington establishment for over two decades. While his Maverick title may have made sense in 2000, in the last eight years, McCain has not only been a loyal member of the Bush Republican party, but in many way he defined it. In his acceptance speech for his party nomination for president of the United States he spoke openly of his experiences during Vietnam to highlight how he realized how is maverick tendencies had got him in trouble. Yet this is the very quality he seeks to demonstrate to the American people as necessary to bring "real change" to Washington.

It appears that the the McCain strategy is that Americans should vote for him because we can trust him because he represents "real" change. He, a Washington insider for over 20 years, makes his platform on virtually all of the same policies that Republican's have run on for decades and claims that he and his party can reform Washington from the people who created a mess in Washington - which is those very same people and those very same policies.

For the past six months McCain's campaign has been harping on the lack of experience as the reason why Obama is unqualified to be president. Yet McCain decided to pick a running mate with little to no experience. His campaign has pointed out that Obama had no executive experience and highlighted the almost two years Palin has as a Governor. Some Republicans have even stated she has more executive experience than Biden as he has only served in the Senate, overlooking the fact that this would mean she also has more experience than McCain, who has also only held office in the Senate. According to Palin and the McCain campaign they are going to change Washington, yet she is unwilling or unable to participate in an interview and discuss exactly what her and McCain's plans are for the country beyond generic rhetoric.

The biggest contradiction, as it appeared to me during his speech, was John McCain's accusation of Democrats as the "me first, country second crowd". Yet at the same time he asks for more tax cuts, despite a large national debt and an overstrecthed military, among other economic issues (and the argument for tax cuts is not based on economics but on fairness). According to an analysis by the non-partisan Tax Policy Center, which analysed both Obama's and McCain's tax proposals, McCain's tax proposal leaves little relief for working class Americans in terms of after tax income compared to those in the highest marginal incomes.

A majority of the money that would be spent on the tax cuts (around 51%) would go to those in the $65,000 to $139,000 income range. However, the primary benefactors of after tax income increases will be the upper middle class and the upper class - the top one fifth would get the largest percentage increase in income at over 6% and the top one percent would get nearly a 10% increase, while those in the lowest income range would recieve a less than 1% increase in after tax income and the next two income brackets recieve around a 3% increase respectively. To put this in perpsective, according the U.S Census Bureau the current income quintiles (fifths) range as follows: Botttom 1/5th $0-$20,300, 2/5th $20,300-$39,100, 3/5 $39,100-$62,000, 4/5th $62,000-$100,000, top 5/5th $100,000 and over, top 5% (top 1/20th) $177,000 and over.

The Tax Policy Center fairly points out that neither candidates plan would create significant increases in economic growth without either spending cuts or, more suprisingly, tax increases (probably assuming greater government expenditures and a lower deficit level). What appears as a contradiction to me is the idea that those who benefit the most from our system of government and society would claim to put the country first, but then demand that they pay less for the benefits they have recieved (and a lowering of their tax burden corresponds to an increased tax burden on the lower and middle classes which are the backbone of both the workforce and the military).

Much of my criticism may be unfair and the result of personal bias, but if McCain and Palin would put out some specific and concete policy porposals rather than running on slogans and rhetoric intended to inflame passions (it inflames as much passion on the left as it does the right, so the benefit of their strategy may be dubious) it would be possible to make a fairer assesment of what a McCain-Palin administration would be like and their campaign would not seem so full of contradictions.

Friday, September 5, 2008

Polls Post the Republican National Convention

Today marked the first full day after the republican national convention, which means today's polling numbers are the first time we get a chance to see what kind of impact Palin's speech has had. We will need another day to see the effect of McCain's speech and will probably need to wait until next Tuesday to see what kind of bounce McCain/Palin get from the convention. 

So, for everyone who was either frantically excited or upset regarding Palin's speech you all appeared to have canceled each other out more or less. Of the four major polls (I don't use polls that are done by the DNC or RNC as they are partisan polls and notoriously unreliable) that were put into the field (CBS/Rasmussen/the Economist/and Gallup) we have a 1-6 point lead for Obama. While this clearly shows a reduction of the 6-10 point lead that Obama had coming out of the Democratic convection, this reduction is more of a statistical correction than a big bounce McCain/Palin. 

Without giving a long and complicated explanation of how modern polling is done, the basic gist is that polls are constantly in flux. Taking a look at the sample size on the polls done right after the Democratic convention and the standard errors, there was a good chance that these polls had a little inflation in them. So, if there had been no republican convention at all, Obama's numbers should have come down to about a 6 points lead. Thus, the fact that 36 million people saw Palin's speech (Obama had 37 million) and they only got what amounts to a two point bounce, most likely means that Palin's speech energized both bases at once. She may have won a lot of social conservative hearts, but she also made a lot of liberals mad and energized to work for Obama.

Anecdotally, such a reading of the poling numbers is supported by the fact that after Palin's speech McCain claims to have raised 10 million, while Obama claims they had an influx of donations amounting 9 million, without a huge effort on their part to solicit. 

In addition, it is important to note that the CBS poll is the only poll that has Obama and McCain tied in a national poll, while the other polls have the race a little more separated (remember that national polling is not the best measure of who will win the election since we have electoral votes). Also, when the stats on the CBS poll are examined in detail it is important to note that it has a party ID distribution that is not the same as the other three, which may have lead it to overstate McCain's strength. We will have to watch this poll over the next week, but I am willing to bet as the sample size is increased, we will see the race separate between Obama and McCain again.

Also, what is even more interesting in today's polling than the national polls are some polls of likely voters in swing states. First, while some had believed prior to Palin that Alaska might be in play this year with the republican senate scandals of good old Ted, polling now shows the McCain/Palin ticket to have a 19 point lead. However, there wasn't much movement in key swing states, such as Indiana (McCain still leads by about 3 points), Penn (Obama by 2 points), Ohio (Tie), Florida (McCain by 5 points), and Colorado (Obama by 2 points). The key take away point here is that Palin's speech didn't really do much to move anything where it mattered. 

As we get a little farther away from the Republican Convention we should be able to see exactly what the bounce will be, but if these numbers are any indications, it appears that all Palin has done is to increase support in already red states that McCain was going to win anyway. 

Thursday, September 4, 2008

John McCain

So I just finished watching John McCain's speech and I have to say that I think overall he did a good job. While he is clearly not as strong a speaker as Obama, I felt that his speech struck the correct balance between civility, attacks, personal story, and base energizing. And to his credit he even handled a protester acting up inside the convention hall about five minutes into the speech well. In addition, so far, no matter how many times I hear McCain's war stories they never cease to amaze me. That doesn't mean he should be president, but you can't deny that his personal story isn't powerful. 

As for the actual content of the speech, I was not very impressed from a substance point of view. McCain pulled out the regular republican tricks of democrats will raise taxes, enlarge government, and take away all your choices. Just to note, the size of the federal government has increased since WWII at essentially the same rate under both democrat and republican administrations. Republicans may claim to like smaller government in the abstract, but the data shows they have increased the size of the Federal government just as much as the democrats when they are in power. 

There were two aspects in McCain's speech tonight that I think were fairly telling of McCain's fall campaign strategy for winning the middle. The first is to run against a "do nothing Washington" that must be changed. Obama is running on essentially the same idea, but the difference is Obama hasn't been in Washington for over 20 years. I am not sure how McCain is going to pull off running against the Washington establishment, when he a fixture of it. I can almost already seem the Obama campaign's response to this approach by McCain: The ad fades to a somewhat odd picture of McCain in black and white and the announcer says "he says he wants to change Washington, but what has he been doing the last 20 years". I know his overarching theme is he is a maverick, but I am not sure he can pull off running against a system he has been a part of for more than two decades. 

The second aspect was that there was very little mention about the economy. McCain did talk about some tax cuts and that he feels our pain, but there were no new ideas. In fact, almost all of his remarks tonight about the economy sounded like democratic platforms from 1992 (job retraining for the new economy and better unemployment insurance). I don't know if McCain just took a pass tonight, but eventually he is going to have to put some real ideas about turning around the economy out their if he wants to win the middle. 

Overall though, McCain made a solid speech tonight. I think he is showing that he can be a very strong candidate and any democrats that expected this election to be a cakewalk should take note.

Palin's Speech

Today will hopefully mark the last time I have a post about Palin for awhile. Personally I am kind of tired reading about her as I don't think all the attacks on her have been fair, nor in the end do I think she will actually matter when people go into the voting booth. When push comes to shove, the vast majority of people will vote for the name on the top of the ticket when they pull the lever (punch the chad, push the electronic check mark box, or how ever you vote in your state). 

I have just finished watching Palin's speech and my initial reaction is mixed. Overall, I think she delivered her speech well, there were no real speaking mistakes, and it only seemed one time that she went off script with telling a joke about the difference between a hockey mom and a pit bull (the punchline is that hockey moms wear lipstick). I am not sure how those types of jokes play in small towns in America, but I am willing to guess that the McCain campaign advisers will make sure we don't see that again from her. 

The positives of speech were that she attempted to clearly define who she is, how she got to where she is today, and how her story is a lot like Obama's in that she started small and is now in the big time. I think it is hard to question that she hit that part out of the park. She also clearly showed herself to be the champion of family values and not just talking the talk, but walking the walk on social conservative issues by trolling her family in front of the crowd. 

Where I think mistakes were made was in making her the attack dog. Her speech was incredibly negative and loaded with personal attacks on Obama, as opposed to attacks on his ideas/polices. I was keeping rough track during her speech and I counted 14 interruptions when the audience gave supportive boos to her remarks versus 11 cheering interruptions. While the speech was strong in many ways, it was extremely negative and I think incorrectly frames her in negative terms. If the goal of having her on the ticket was that she is like your next door neighbor and can pick off independents, why would you have her give a speech that was very hostile, negative, and derisive? Was a speech like that needed? Absoultely. But I am surprised they had Palin give it at the same time that she is introducing and defining herself to the public. 

I am not saying that Obama and Biden didn't take their shots at McCain. However, their speeches in almost all cases said, I respect McCain, just not his ideas. This type of civility was completely lacking in Palin's speech and for me and was the most disappointing part. Her speech demonstrated that republicans want to win the election by dividing the country, where as the democrats want to win by uniting. I know that this is a vast and unfounded generalization, but the tones of the speeches so far between the two conventions seem to fall that way. 

In the morning, the fact that is going to be most remembered of Palin's speech is that she aggressively attacked Obama personally. Perhaps she felt that she had to show she had a tough side based on the media backlash she has received. Maybe she was right and that this will get the critics off her back. But, I don't think the McCain/Palin ticket can win by running on a platform of "we are not Obama" or "Obama is not good". To win a presidential election you need to define yourself independently of your opponent, not merely attack your opponent and I feel Palin did little of that tonight. 

In the end, I think Palin did fine tonight, but if this marks the tone of how she will campaign, I think she will find little support from independents or disappointed Hillary supporters because she is doing little to reach out to them. Instead of trying to reach across the aisle, tonight was a speech that widened the divide. Palin proved she can be tough, but she did it at the expense of showing she could be a uniter, which I think the republicans are going to need if they are going to win in November. 

Wednesday, September 3, 2008

Palin Pros & Cons

John McCain's pick of Governor Palin may have created a brief sensation, but the lingering question is will it last. The clear reason for this pick, as even Republican pundits admit it is a very cynical political choice (especially for John McCain), is to gain some of the disaffected Hillary supporters. Simultaneously, McCain hopes to quiet some concerns Christian conservatives have with him, as Palin is opposed to any form of abortion and has advocated teaching creationism in schools.

McCain may very well pick up some Hillary supporters, and the right wing of the Republican Party may be put somewhat at ease, but are the supposed advantages Palin brings worth it? McCain may lose more credibility as a maverick, despite what his campaign describes as a maverick decision, for picking an underqualified vice presidential candidate with the clear intent of making a political play for disaffected women who supported Hillary. The move does not exactly excude the mantra of the "Straight Talk Express", if anything it sends the message of a desperate political move to gain votes.

McCain also now has great difficulty with the only attack on Obama that had real resonance - lack of experience. Even worse for McCain's campaign, Obama picked the most qualified Vice Presidential candidate with Biden right before McCain picked one of the least experienced candidates. Undoubtably McCain's campaign will keep at the experience issue, but it will be much more difficult with Palin being his choice, and Biden as Obama's.

Republicans are saying the party is excited and ready to go, but this doesn't seem to show much at their convention, which is already composed of the base of the party and elected officials. Even if there is a great deal of excitement, as they insist there is, they must maintain it until November while avoiding any gaffes or major mistakes on the part of the Governor who has little experience on the national media stage.

Polling after the Republican Convention will tell whether there is any immediate impact of the Palin decision, and whether McCain's choice was worth the sacrifice.