Sunday, May 27, 2012

Updates to the 2012 Big Map, Don't Believe the "Radical" Hype, In Defense of Cory Booker, Battleground Wisconsin

2012 Presidential Projection
Days Until Election: 163
Current National Vote Projection: Obama +2.1% (-1.2% from last projection)
Current Electoral Vote Projection: Obama 303, Romney 235 (unchanged from last projection)

State Projection Changes Since Last Publish:
Delaware - From Safe Obama to Strong Obama
California - From Safe Obama to Strong Obama
Georgia - From Likely Romney to Strong Romney

Not a ton of new news this week, as both candidates hold on to all their states from last week.  It was a modestly good week for Romney, who closed by a little over a point in the national polls and enjoyed the benefit of all three state status changes, although those status changes were in states that are unlikely to be competitive come November.

Intrade currently puts the odds of the President being re-elected at 57.5%, more or less stable with where it has been for several months (it has traded in a range between 55% to 62% since February.)

Next time around, I'll take a look at the down ticket battles for the House and Senate, which are mostly flying under the radar at the moment, but will be just as meaningful as the Presidential race in terms of how the next several years go.  Control of the Senate is very much within the competitive balance, so it bears some coverage.

No Radicals Here
While the presumptive Presidential nominees fire away accusations of radicalism at each other - Obama is a socialist who would have the government take over the economy, Romney would destroy Medicare and take from the poor and give to the rich, etc., lost in all of this is that there is probably less difference ideologically between these two candidates than there has been in any Presidential election since 1992, when a center-left Bill Clinton ran against a center-right George Hebert Walker Bush.

Think about it on the major issues of the day:
On taxes - the candidates are completely aligned on tax policy for everyone making less than $250K per year (98% of the population) - they want to extend the Bush tax cuts and ultimately lower rates and reduce loopholes.  They do disagree on extending the Bush tax cuts for those making over $250K, but that is a difference between a 35% top rate and a 39.6% top rate, hardly the difference between socialism and anarchy.  And lest we forget, President Obama already extended this cut he now opposes once.

On health care - President Obama's health care plan is essentially a carbon copy of the plan Mitt Romney instituted in Massachusetts.  Romney has defended the concept of an individual mandate, a key Republican talking point against the Obama plan.  Sure, Romney opposes Obama's plan on a national level, preferring to late individual states craft solutions, but this is a question of federalism, not of core philosophy.

On foreign policy - both back the now largely completed exit from Iraq, both want to stay the course in Afghanistan.  Both are strong advocates for free trade.  Romney fires off rhetorical attacks against Obama having diminished our standing in the world, but on issues that actually matter in the foreign arena, they are more aligned than different.

On gay marriage - Mitt Romney backs civil unions but not gay marriage.  This was Obama's position until a couple of weeks ago, when he came out for gay marriage.  And both favor each state's right to make that determination for itself.

On abortion - there is a clear difference here, with President Obama backing abortion rights and Mitt Romney largely holding a pro-life position.  But even here, the last time Romney held office, his views were essentially identical to Obama's and I have serious doubts on if he would put any energy behind pushing unpopular restrictions on abortion.

President Obama has framed this election as a "choice" election.  Unfortunately, in my eyes, there isn't that much of a choice on policy.  There is no true liberal or true conservative in the race.  We have a couple of moderates arguing about the margins with over heated rhetoric.

Cory Booker - Speaking Truth
Cory Booker is probably the best Mayor that Newark has ever had.  The turnaround that he has brought to the blighted city of Newark is a modern miracle, particularly in perilous economic times.  Booker has walked the talk and at times, seemed larger than life, rescuing neighbors from burning buildings, personally managing snow-removal and emergency services during crises, and, most critically, pulling business investment into a once-forgotten city.

Booker is the kind of honest broker that we should be thrilled to have on the political scene - an Ivy-League (and Oxford!) educated man who has eschewed far higher paying fields of work to do good in a place where his intelligence, grit and determination were sorely needed.

I am therefore very saddened by the speed with which the Democratic establishment turned on Booker for - frankly - speaking a truth that wasn't a part of the Obama campaign narrative.

Booker's statement that the Obama campaign's attempt to paint Romney's association with Bain Capital in a negative light by showing clips of people who lost jobs in Bain acquired companies upset him was met with criticism and scorn.

On the substance of the issue, I find Booker to be right.  Private equity, on balance, is a good thing for our free market economy.  For those of you who don't know, what private equity essentially does is purchase public companies, take them private, attempt to improve the value of the companies, and then sell them.  This can involve lots of different strategies, from investing new capital to improve a companies operations to restructuring its operations.  Typically, companies that sell to private equity are highly troubled and at risk of going out of business.  This means that increasing their value can involve tough choices - closing factories, trimming staff, etc.  Yes, it stinks when that involves layoffs.  But a leaner company that thrives is far preferable to a company that dies.  As Mitt Romney has astutely pointed out - the role of private equity in general is identical to the role the government paid in restructuring GM - which also closed a lot of factories and trimmed staff to get back to a sustainable position.

Not that private equity is always a good force.  There have been many examples of private equity buying companies, loading them up with debt and repackaging them to investors, putting the company in a weaker position but making the private equity partners rich.  But that only works when there is a greater sucker willing to pay a higher price for a debt-laden company.  Simply put - if the markets respond rationally, it cuts that opportunity off at the pass.

Independent of your views of the merits of Booker's remarks, we should view our political discourse as being strengthened by varied points of views.  Booker should not be required to toe the party line when he disagrees.  He should be allowed to speak his mind without fear of reprisal from the Democratic Party, who should be holding Booker up as a role model.

Scott Walker Will Probably Survive
I realized today that I had not written at all about the emotional recall election taking place in Wisconsin.  Scott Walker, possibly the most conservative governor of Wisconsin in a generation, sparked a strong reaction on both sides when he moved to aggressively curtail the collective bargaining powers of public employee unions in an attempt to limit the growth of wage and benefit costs in the state.

Public employee benefit costs are a major issue facing just about every state and municipality.  The public sector has far lagged the private sector in terms of transitioning from traditional pensions to defined contribution plans like 401k's and in transferring the cost of retiree medical benefits to the retirees.

These debates invoke a lot of emotion on both sides with conservatives viewing public employees getting benefits far greater than the private sector as a betrayal of public trust and liberals viewing those benefits as core commitments that governments have made to workers.

In what may be an ominous sign for President Obama in November in Wisconsin, the people appear poised to decide, by a mid-single digit margin, that on balance, they come down on Walker's side.  He appears likely to survive a June 5 recall, up by an average of +5.7% in recent polls.

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