Gay Marriage Update and Election Aftermath Part 3: 7 Lingering Questions and More General Impressions

In Part 1, we looked at the four victories for the gay marriage movement via three successful approvals and a defeated ban, along with how Barack Obama didn’t even wait until Election Day to abandon the gay rights movement.  In Part 2, we looked at how the general elections effectively gave us two more years of the last two years.  Here in Part 3, I have seven lingering questions that I want to look at briefly here before moving on from the 2012 election.

First, what kind of information was suppressed in the time leading up to the election?  I’m very curious to see what comes out in the coming weeks.  I’m sure we’ll see some stuff come out and it’ll be fun (or not) to see what does emerge. 

For example, we have already seen news of a delay on the next round of European aid to Greece and that Europe is officially back in a recession.  We’ve also seen the CIA director resign due to an affair, right before being scheduled to testify on Libya.  We’ve just learned that the FHA is likely to need a bailout.  Additionally, we see Israel in a military skirmish that somehow managed to be postponed until just after the election.  Do you really think any of this couldn’t have been announced or set in motion before the US election? 

Second, and probably more important, what about the fiscal cliff?  The nation needs both parties to address the fiscal cliff that they created and the self-inflicted recession that could potentially follow.  Unlike the past two years, Obama and the Senate Democrats have to actually make the effort to work with the Republicans in the House.  Also, unlike the past two years, the House Republicans have to actually make the effort to work with Obama and the Senate Democrats.  What we’ve seen so far does not inspire confidence, but I still expect a multi-month extension to get us through to the new government in January and I’m still thinking 3-6 months.  More to come on this topic later, too.

Third, with the election results, gay marriage results, and marijuana results, one might be tempted to consider America to be more liberal now than it used to be.  The quick answer for now is that it depends on definitions and demographics, but I’ll table this one for another day due to the complexity of the question.

Fourth, it’s interesting how the stock market plunged the day after Obama won and the selloff continued.  Having a shopping list of stocks to buy on weakness multi-year timeframes and cash to put to work, I don’t mind that so much.  It’s as if Wall Street wanted to send a message to Obama, perhaps a reminder of how powerful they are and/or show of disappointment in his victory.  After all, while Wall Street was a huge backer of Obama in 2008, they overwhelmingly supported Romney in 2012.  So, what’s the message?

Next, the more pro-Obama hoopla I see everywhere, the better I feel about not voting for him.  His pre-election abandonment of the gay rights movement matters, too.  Not voting for Obama was already something I felt great about to begin with given his dismal job performance in his first term.  The Obama cheerleaders doing their thing not only fail to bother me, but actually make me feel better and suspect I’ll continue to feel good about it as time passes.  At the moment, I see no signs that Obama will actually change much from last term to this term.  No rhetoric thus far has suggested a shift and he has no political incentive to do so for either himself or the Democrats as a party.  If the Senate went for and the House stayed with the GOP, we might have seen a shift, but it didn’t happen due to poor GOP candidate selection in 2010 and 2012 as detailed before.  I don’t approve of a second Obama term and have seen nothing so far that would change my opinion that Obama is a masterful campaigner and a terrible leader, but it’s a clear win for Obama and it’s time for the nation to move on because there isn’t controversy like 2000 or 2004 and we have more important issues to attend to. 

So, the fifth and sixth questions are whether the victors can win gracefully and whether the rest can lose gracefully.  For the most part, I think the answer is yes to both questions, though I have seen plenty of evidence to the contrary on both questions that I’m not going to link to.

The final question is whether Obama now has a ‘mandate’.  The quick answer is no, but I’ll save that for a future post.

The bottom line is we had four victories for the gay marriage movement via three successful approvals and a defeated ban while we also had general elections that effectively gave us two more years of the last two years.  Questions do still linger about suppressed information, the fiscal cliff, the US’ political future, Wall Street’s message, whether people can win/lose gracefully, and Obama’s supposed ‘mandate’.  We’ll just have to see what happens.

Links:

Part 1: http://timsopinionblog.blogspot.com/2012/11/gay-marriage-update-and-election.html 

Part 2: http://timsopinionblog.blogspot.com/2012/11/gay-marriage-update-and-election_18.html

Gay Marriage Update Before the 2012 Election and the Second Presidential Debate

This is going to be another one of those posts where I do multiple things.  First, we will look at key gay marriage votes this season.  Second, we will have a look at the second debate between Barack Obama and Mitt Romney.

We have four key votes on gay marriage this season.  There are votes to legalize gay marriage in Maryland, Maine, and Washington states and there will be a vote to ban gay marriage in Minnesota.  As I’ve previously detailed, the gay marriage movement is 0 for 32 in votes about the issue in the past 15 years.  I think that zero is going to go away this time around, which would be a monumental victory because, to this point, it has only been through the courts and legislative process that gay marriage supporters have managed to achieve victories. 

Given the 0-32 record, it’s easy to argue that this time will be no different and history will repeat itself, but I disagree.  All the supporters need is one victory to erase the zero.  Anything beyond that would be a bonus.  A clean sweep for either supporters or opponents is possible, but highly unlikely, in my view.  My prediction is 2-2, with Washington and Maryland going decisively to the supporters, but Minnesota and Maine going narrowly to the opponents.  Let’s see how right or wrong those predictions turn out to be. 

And we are onto the second Obama-Romney debate.  I found this to be a very difficult debate to watch and score for several reasons.  The main reason involves the moderator, Candy Crowley.  Simply put, I’ve never seen such a poor job moderating a debate.  Why was her performance so terrible? 

First, the role of a moderator in a town hall debate is little more than that of a timekeeper and announcer of the name of the person asking the next question.  It is not the moderator’s role in a town hall debate to ask questions of the candidates.  That is the role of the person the moderator announces and only that person at that moment.  Crowley violated this repeatedly. 

Even more inappropriate than that was Crowley’s actions during the Libya question in which she failed to act as an impartial moderator.  She involved herself in the debate by explicitly stating that Obama was correct and Romney was wrong on the Rose Garden speech.  It was literally a real-time fact check and this is absolutely unacceptable conduct by a moderator during a debate.  The intervention was bad enough, but number two is that she was factually incorrect.  Additionally, though I’ll admit I did not keep track of time on each question, I will say that the Libya question felt very rushed and was clearly something that Obama wanted to avoid like the plague.  With Crowley’s intervention, he was largely able to do so as she managed to create a distraction and take up time.  This was truly deplorable conduct on her part and I truly hope she is never allowed to moderate a debate ever again due to this miscarriage of justice.

I think Crowley’s antics, both on the Libya question and her repeated follow-up questions, clearly stacked the deck against Romney to such a degree that objective scoring of this debate is extremely difficult to do.  I’m still going to try, though. 

Regardless of the moderator, Obama had a much stronger and aggressive performance this time around than last time.  He was also clearly the beneficiary of lowered expectations given the previous debate.  Romney’s performance was not as strong as the first outing, but was not terrible by any means.  He got visibly flustered toward the end, but his final answer was very solid and he managed to use that to regain composure.  I must say I was impressed by the ability of both candidates to pivot the assault rifle question into discussions of culture.  This was masterfully done by both candidates and makes perfect sense, seeing as how Romney’s gun record isn’t strong enough for the GOP base and Obama’s anti-gun record isn’t strong enough for the Democrat base.

Given Obama’s lowered expectations, Romney’s elevated expectations and momentum surge, plus the deck being stacked so heavily against Romney by the moderator, I can absolutely see why the initial reaction and consensus were that Obama won.  It is noteworthy that such a significant portion of the viewer base still believes Romney won in spite of it all.  I can’t fault people for thinking that because, given the tailwinds Obama had going for him, Obama should have decisively won that debate.  Realistically, I can’t fault anyone for saying Obama won this debate, either.

However, I reject that conclusion that Obama won.  My view is this debate is a pyrrhic victory for Obama, which I suppose means I ultimately see it as a victory for Romney.  What this debate did is it provided powerful and high-profile evidence to bolster the (compelling) case that the liberal media is pulling out all the stops to help Obama win.  This is important because the criticism that the liberal media (correctly) levies against the conservative media for bias is effectively nullified.

This controversial second debate definitely sets the stage for an interesting third debate on Monday.  I'll actually watch that one live, but refrain from live commentary.  I find it too hard to focus. 

A Vice Presidential and Senate Debate

I want to look at two things in this post.  One is the debate between Vice Presidential candidates Joe Biden and Paul Ryan (no Libertarian candidate…imagine my surprise).  The other is the debate for the Connecticut senate seat between Linda McMahon and Chris Murphy.

I didn’t watch either debate live and thus wasn’t on Twitter.  Instead, I watched football, as the Steelers lost on a last-second field goal to the Titans.  To be perfectly honest, the football game was better even though my team lost. 

Biden-Ryan was still an interesting debate.  In the first debate between Barack Obama and Mitt Romney, the general consensus was that Romney clearly won (maybe or maybe not decisively depending on who you ask, but Romney was generally the clear consensus winner).  Romney was clearly the more energized and aggressive in that debate.  Obama was too passive, plain and simple.

When we fast forward to this debate, you see Biden was the one who came out energized and aggressive while Ryan was more passive.  The moderator had even less control in this debate than last time.  The Democrats were clearly demanding energy from their guy and Biden did deliver that.  Biden spent a bit too much time laughing, snickering, and grinning like a Cheshire cat for my taste.  The GOP was simply looking to maintain the momentum. 

So, who won?  Really, I think it was a draw in that both candidates did what they had to do.  However, if I had to pick a winner, I would say Ryan won overall because my vibe was that he was handling Biden’s energy better than Obama handled Romney’s.  Obama seemed to wilt during the first debate, but Ryan didn’t really wilt for the most part.  I also don’t think expectations were set very high for Ryan (nor were they very high for Romney), so he exceeded expectations in my opinion.  The GOP appears to have maintained their momentum, as well. 

That said, Biden put in a much stronger performance than Obama did in his first debate and I think he succeeded in igniting a spark within the Democrats’ base.  He didn’t lose clearly (and/or decisively depending on who you ask) like Obama did.  I think Biden may even have exceeded expectations.  My call of a draw looks reasonable given the divide about who actually won.  I don’t see people from the left saying their guy lost like I did after the first debate, and I don’t see people from the right saying their guy lost, either. 

I’m seeing more states shifting toward Romney in polls than toward Obama.  Some states that were leaning for Obama are becoming toss-ups and some that were toss-ups are now leaning toward Romney.  I don’t see much movement in the other direction in the swing states.  I still see Obama having the inside track for the win, but Romney is closing the gap considerably and quickly.  This is shaping up to be another close one like 2000 or 2004 rather than the decisive win Obama had in 2008. 

And we’ll move onto the McMahon-Murphy debate.  This was their second debate.  I missed the first one, probably also because of football.  I’m an American guy and I have my priorities. :-p To me, this was a nasty debate to watch.  Both candidates went negative early and stayed negative throughout most of the debate.  Neither candidate really went into much substantive policy discussion, so if you were looking to learn about their actual positions, you were probably very disappointed.  They were also very repetitive in their attacks on each other.  If the first was anything like the second, I didn’t miss anything of value.  If the third is anything like the second, I’ll probably skip it.  There was just no value in watching it.  I’ve never seen a worse debate, to be honest.  I’m glad it was only an hour.

Next up is the second Obama-Romney debate, which is Tuesday.  I’ll watch it live, but will refrain from tweeting and such during the debate.  I find it too difficult to focus on the debate when I do.

The Nobel Peace Prize Goes To…The European Union?!

The European Union (EU) was recently awarded the Nobel Peace Prize.  I thought this was a joke at first, but I was wrong and they actually got one.  I also didn’t think that the Nobel Committee could make a worse mistake than when they awarded Barack Obama a Nobel Peace Prize in late 2009.  I was wrong again. 

I don’t want to make this post too much about Obama’s prize, but it is important to briefly look at it before we discuss the EU’s prize.  Realistically speaking, I thought Obama’s prize was a huge mistake to begin with, as it was for little more than big promises and dazzling rhetoric rather than actual results given that it was awarded less than a year into his first (and hopefully only) term.  In other words, it was little different than Obama’s actual election and the committee, like the American people, got caught up in Obamania.  Even three years later, I think the case for giving him the prize is virtually nonexistent, but this is out of scope here. 

Basically, Obama was awarded the prize for promises and rhetoric, but little real action, either positive or negative.  Even diehard Obama supporters agree on this.  As I said above, the question of whether or not he deserves it now three years later is irrelevant here.  I contend that the EU’s award is a greater lapse in judgment because, though it was also awarded given a colossal amount of promises and rhetoric (even more than Obama), it was awarded even knowing how drastically the negative action outweighs the positive action.  Thus, the EU deserves it even less than Obama did.  Let’s explore why this is such a huge mistake by the committee.

One need only look at the sorry state of Europe to see why this prize is not deserved.  Europe has soaring unemployment, soaring debts and deficits, stagnant or negative growth, riots and poverty all through the continent (“advancement of peace and reconciliation,” indeed), and so on.  It’s hard to decide which is in worse shape between Ireland and Greece, both of which are well on their ways to becoming failed states.  Spain is not far behind.  Portugal and Italy aren’t as far along as Spain, but are facing similar issues.  Additionally, I think France is the big fiscal powder keg waiting for a spark that nobody is watching.  There are movements toward secession involving various sections of Spain, Italy, and Belgium.  Efforts to address these problems have all fallen short.  Yes, Europe has had several consistently uncompetitive economies and dysfunctional governments like Greece, but that alone doesn’t explain why Europe is such a mess right now.

Fundamentally speaking, none of these economic and fiscal symptoms can be solved until Europe addresses the real underlying root cause of the problem, namely their flawed currency structure.  The Euro, in its present form, is a failed currency.  Do not let anybody tell you otherwise.  In a nutshell, the problem is they sought economic and fiscal unity via a common currency without political unity, the logic being that fiscal unity would lead to political unity.  That logic has proven disastrously flawed.

The only way the crisis in Europe will be solved is to fix their currency structure, which can be done in exactly one of two ways.  Either Europe can become more integrated to become a United States of Europe with a stronger, centralized European-level government or they can revert to the pre-Euro state of affairs with a European Union, but each country returns to its own currency and no common currency exists.  I previously compared the US and EU here. 

How can you justify giving a prize to this dysfunctional collective known as the EU?  Why should the EU be rewarded for making one of the greatest policy blunders of the modern era by creating the Euro? 

On a side note, leave it to the Europeans to blame the US for their dysfunctional currency union.  Thorbørn Jagland, the head of the Norwegian Nobel Committee, had this to say in a supreme display of pure ignorance, arrogance, and intellectual dishonesty.  Per the WSJ:

“We don't have a position on how to solve the economic crisis, but we believe it will be important to solve it and that European unity can be kept so that Europe can move forward. There are many things to say about the economic crisis—where it originated, for instance. Actually, it started in the U.S. and all of us had to deal with it."

 

It’s not the fault of the US that the European banks had even greater leverage than ours had.  The US was not responsible for various European governments running their economies into the ground.  Most importantly, the US had no role in Europe deciding to form a completely dysfunctional currency and political structure.  Also, this was a nice display of blaming somebody else for your problems and offering no solutions.  What a joke.

Here’s the bottom line.  The committee, having done tremendous damage to its credibility by awarding Obama a prize, has done even more harm to its already-damaged credibility by awarding a prize to the EU.  It should be rewarding positive results, not promising rhetoric, not performance without results, and certainly not negative results.  The committee also needs to recognize that, though other parties do bear some responsibility, Europe’s present crisis is mostly a self-inflicted problem that they continue to perpetuate and exacerbate with half-hearted “solutions”. 

Links:

http://online.wsj.com/article/SB10000872396390444799904578051960191363312.html

http://www.nytimes.com/gwire/2009/10/09/09greenwire-obama-wins-nobel-prize-in-part-for-confronting-55250.html?pagewanted=all

http://timsopinionblog.blogspot.com/2011/09/comparing-eu-and-us.html

A Libertarian Argument for Voting for Romney and the First Presidential Debate

I’d like to do two things with this post.  First, I’ll present one of the better arguments I’ve seen for why Libertarians should vote for Mitt Romney over Barack Obama.  Second, I’ll look briefly at the debate earlier this week.

The argument for why Libertarians should vote for Romney can be found here.  It’s a very short, but very insightful read.  The basic premise of Ted Frank’s argument is that, if Obama is reelected, he will be able to appoint a successor to Kennedy and/or Scalia on the Supreme Court, who are both in their late 70’s and likeliest to leave the court.  The author argues that if that happens, then it is game over the for the Libertarian movement because of the present composition of the court.  Per Frank:

·         “There are four justices on the Supreme Court ready to hold that the First Amendment does not bar Congress from regulating political speech against incumbents.

·         There are four justices on the Supreme Court ready to hold that the Second Amendment does not create any individual rights against the government.

·         There are four justices on the Supreme Court ready to hold that the Commerce Clause creates no constraint on Congress's regulatory powers.

·         There are likely at least four justices on the Supreme Court ready to hold that the government can choose to discriminate on the basis of race if "diversity" is at issue.”

I view these as very legitimate concerns, as we’ve already seen these come to fruition with opinions held by Obama’s two appointees, who are among the justices mentioned above.  The 5-4 rulings that are upholding personal rights would consistently morph into 5-4 (or worse) rulings cutting those rights down.  Remember, these are lifetime appointments.

One natural counter to this argument is that Romney has already held up Bork and Roberts as examples of the kinds of justices he would nominate.  Frank is not concerned about this, but I see it as an important counterpoint.  The problem here is that Bork, and Roberts to a degree at times, are advocates of Supreme Court deference to the will of the elected majority.  Here’s the thing, though.  The Supreme Court was designed to uphold the Constitution and as a check against the tyranny of the majority over the minority.  In other words, it has to be able to make unpopular rulings to honor the principles of the Constitution that defend the rights of the people against the power of the government. 

While another Roberts could not be counted on as a reliable vote as Scalia or Thomas at checking government power, one of them would be more reliable at doing so than another Obama appointee based on everyone’s rulings to this point.  Kennedy is a wild-card on a lot of rulings and Scalia consistently limits government power.  Roberts still generally limits government power, but is much more of a wild-card in the wake of his Obamacare ruling.  The Obama appointees consistently uphold government power over the people.  There is no reason for us to expect Obama to change his philosophy in future appointees. 

So, here’s the bottom line on Frank’s argument.  I think it’s a very compelling case that Libertarian-minded voters should seriously consider in swing states (I’ll explore why I single out swing state voters in a future post).  The importance of the Supreme Court is highly underappreciated.  I understand that a vote for the lesser of two evils is still a vote for evil, but I also think Obama appointees replacing Kennedy and/or Scalia on the Supreme Court would present an existential threat to the Libertarian movement.  Conceding the battle against the two-party monopoly in 2012 in the swing states to allow the war continues into the future may indeed be the best course of action here.  I don’t like the idea, but life is full of choices, some without appeal. 

I don’t want to spend too much time talking about the debate because you’ve no doubt heard a lot about it already and I’ve already gone on for a while, but here are my impressions.  Expectations for Romney were set very low by just about everyone, myself included.  Romney was overall the clear winner and surprised a lot of people.  He stormed out the gate and caught Obama off-guard, putting Obama into a hole that he was never quite able to get out of.  Obama managed to prevent the debate from turning into a total landslide, but he clearly lost.  On an absolute basis, Romney performed very well, but his performance looks even better when viewed in a relative context to both expectations and Obama’s performance. 

All that said, the impact of Romney’s debate victory has been dampened considerably with the news of a drop in U3 unemployment under 8%.  Note that U6 did not change, but that’s not what’s getting headlines.  I will be very interested to see how the future revisions come in, as I expect large and negative revisions…after the election.  We also saw an increase in food stamp recipients after the market close on Friday (when nobody was paying attention), which was decidedly less friendly to the Obama case.  The Obama camp did a masterful job of using the press as a tool and highlighting the good while downplaying the bad.  This should be no surprise.

There’s still a month to go to the election with two more presidential debates, a vice-presidential debate, numerous economic data releases, and a lot of global tension.  The race is tight and it should be a wild one. 

Links:

http://www.pointoflaw.com/archives/2012/10/the-libertarian-case-for-romney.php

The Looming Fiscal Cliff, 2012 Edition Part 2

In Part 1, we explored what the fiscal cliff is.  In a nutshell, it’s a bunch of tax increases and spending cuts that could have a very sharp impact on people, businesses, and the economy as a whole.  If the government fails to take action, the fiscal cliff will hit.  It is an entirely self-inflicted wound because all of this was put in place by the government.

Here is a brief update and a look at how I think it will play out.

To the surprise of very few, none of the presidential candidates are really talking about this.  None of the politicians are and neither is the media (aside from the business/economic/market media), even though people and businesses are starting to freak out about it.  In essence, there really isn’t much of an update from before.  The only thing worth noting is that we got some weak economic numbers over the past couple weeks and the Federal Reserve engaged in a bigger (but likely equally ineffective) round of Quantitative Easing. 

I’m hoping the candidates will be forced to address this at one of the debates.  We have a debate coming this week, so I have hope.  I doubt they’ll give much in the way of useful answers, but I think they will at least address it.  The reality is this is starting to show up in the economy.  People and businesses are starting to plan their budgets for next year.  This is a tremendous source of uncertainty, much more so than usual. 

On a side note, to those who say that uncertainty is part of the normal business environment, I agree.  However, stop saying that this degree of uncertainty is somehow normal and/or acceptable.  It’s a flawed line of thinking I hear far too often and, frankly, I’m tired of hearing it.  The Federal Reserve Bank of San Francisco recently put out a paper estimating that uncertainty has increased unemployment by 1-2%, so what we have now as 8-9% would be 6-7% with a more stable tax and regulatory landscape.  I think their method here is sound.  It’s better than anything I’ve come up with so far to quantify economic uncertainty.  I think it’s hard to say uncertainty is a moot point after reading this five-page paper.       

Back to the fiscal cliff.  When looking at how this could play out, we need to focus on the results of the election because we know the government’s putting off everything they possibly can until after the election.  We also need to focus on how the economy does in the next couple months because it is clearly weakening lately.  Lastly, we have to consider where the debt ceiling situation is at and whether the government has been able to handle it, either by keeping us under it or raising it. 

In the shorter term, regardless the election and economy, I expect a brief, temporary extension of everything.  I’m thinking three months or so here, similar to what they did with the Social Security tax to end 2011 and start 2012.  It could be as high as six months, in my opinion.  This would set a deadline for the end of March (or as late as June) to come up with something.  This is my way of saying that we shouldn’t expect this to be truly resolved this year and we’ll be dealing with this well into 2013.  I simply cannot envision them voting to dodge the entire fiscal cliff this year by abolishing the law and extending all tax rates.  The uncertainty grows and drags on. 

After the extension is when things will really get interesting and this is when it will matter who wins in November.  What will also matter is whether the economy continues to slow down as it has in recent months.  I don’t see any value in exploring potential scenarios beyond an extension until we see how the economy handles the last quarter of 2012, we see how the election pans out, and we see how effectively the government handles the debt ceiling (or not).  There are just too many moving parts right now.  As I said before, we’ll be revisiting this.

Links:

Federal Reserve Uncertainty Paper: http://www.frbsf.org/publications/economics/letter/2012/el2012-28.html

Fiscal Cliff Part 1: http://timsopinionblog.blogspot.com/2012/09/the-looming-fiscal-cliff-2012-edition.html

47% and How Political Operatives Think Part 2

In Part 1, I provided the links to Mitt Romney’s “47%” remarks and an overview of why I generally don’t explore gaffes (short half-life, negligible outside voter impact, a quick shot-in-the-arm to the base, calculated intent, and no real value in doing so).  I’m breaking my general rule because this is a very revealing exercise regarding the state of the campaign and how political operatives think and act.  There are two key questions to consider, namely why the Democrats chose now to play this ace-in-the-hole and why the GOP acted the way they did.

Contrary to popular belief, Romney didn’t actually make these statements six weeks prior to the election.  We’re first hearing of it now, but this was actually from May 17.  What does that tell you?  It should tell you that the Democrat machine has probably been sitting on this ace-in-the-hole for weeks, more likely months, and chose to play it now.  Why now?  My theory is two-fold. 

One, Obama’s post-convention bounce is fading/stalling.  The GOP will say the former and the Democrats will say the latter, but however you slice it, the bounce has clearly failed to continue higher.  The daily Gallup poll on Obama’s approval numbers shows this, found here.  It peaked at 52% for the Democrat convention, but has backed off materially since, to 47% as of this writing.  Democrats thought and hoped it would go higher.  Interesting side note – Obama’s approval rating, though well off the lows of last year in the upper 30’s, still has not been above 52% in over a year.  So, there is an effort here to jumpstart the approval rating both from an absolute view because a high of 52% is disconcerting for Democrats and Obama’s odds of victory (52% is also pathetic and shows a lack of popular confidence in Obama’s leadership, but that’s beside the point) and from a relative perspective as an effort to maintain the momentum.  We can also see this by looking at the Obama versus Romney polling that Gallup does, found here.  As of this writing, it is a 47-47 tie, but it was 50-43 in favor of Obama at the beginning of September.

Two, aside from the loss of post-convention momentum and dismal absolute level, I think the events of the past week have hurt Obama in the short-term.  A lot of negative attention has been put on Obama over the past week, specifically all of the violence at various US embassies (in Libya, Egypt, Yemen, Tunisia, etc.) and the Federal Reserve’s announcement of essentially indefinite Quantitative Easing (QE-infinity, as I call it).  The violence creates the appearance, rightly or wrongly, that Obama’s foreign policy isn’t working and QE-infinity creates the appearance, rightly or wrongly, that Obama’s economic policy isn’t working.  The Obama camp was thus in need of something that, at the least, shifts negative attention away from Obama.  Ideally, that something would also give Obama positive attention and give Romney negative attention, too.  This video did 2/3 for Obama.  It failed to give positive attention to Obama, but it did give a shot-in-the-arm to energize his base. 

On the GOP side, note Romney’s reaction.  He more or less owned up to his statements, even embracing them.  Though he said he may not have phrased them as well as he would’ve liked, he certainly didn’t deny or apologize for them.  Yes, you’ve seen some GOP members criticize the statements, but most have stood by Romney and what matters here is what Romney himself does.  Why would Romney embrace these statements?  Simply put, the ‘makers versus takers’ narrative plays very well with the GOP base.  If these statements were estimated by his operatives to hurt him in the polls, would he embrace them?  Methinks not.  Said another way, it gives Romney positive attention and a shot-in-the-arm to energize his base. 

One quick side note is this also explains why there have been so many stories in the media about internal strife, turmoil, and dysfunction within the Romney camp.  If they can portray Romney as imploding, this takes the heat off Obama for the week’s events and boosts his numbers because it makes Romney, rightly or wrongly, look like he’s falling apart.  On the flip side, if Romney looks to be in dire straits, he can react by using that perception to create a sense of urgency for his base. 

Democrats contend that my “conspiracy theory” doesn’t add up because they say Obama is winning and these aren’t the actions of a comfortable winner, but someone who is tied or even behind.  I agree about the actions, but that means we have a paradox.  If these actions happened and are truly the actions of somebody who is tied or trailing rather than someone who is winning, then Obama can’t be comfortably winning.  I contend that, if Obama truly is winning, it is by an uncomfortably slight amount.  These actions and the data support that statement.  I think the Democrats need to reevaluate their assessment about Obama winning.

Ok, back to the gaffe.  We have two slightly more energized bases for an event that, realistically speaking, won’t make many people change their votes or non-votes (if somebody decides to change their vote or non-vote strictly because of this incident, please come forward).  We have a story that has probably already faded from the headlines.  We have clearly intentional action by the Democrats and reaction by the GOP.  We also have a largely worthless media circus.

What we also have is a great example of why this kind of thing is generally not important in the grand scheme of things and of how political operatives think and act.  This is as close to real-time as I can get here.  I hope these concepts stay in your mind as you watch the political circus. 

Links:

Part 1: http://timsopinionblog.blogspot.com/2012/09/47-and-how-political-operatives-think.html

Obama Gallup: http://www.gallup.com/poll/113980/gallup-daily-obama-job-approval.aspx

Obama vs Romney Gallup: http://www.gallup.com/poll/150743/Obama-Romney.aspx

Update: It looks like this maneuver worked for the Democrats.  Obama’s Gallup approval is back up to 51% and the head-to-head is now at 48-46 Obama.

47% and How Political Operatives Think Part 1

As you probably heard, a video of Mitt Romney taking questions at a closed-door fundraiser from mid May has caused a little stir.  It was leaked by Mother Jones, which has a clear liberal bias.  The age of the clip and source will be important later, so just keep them in the back of your head.  Here’s the video and here’s the quote that’s getting attention.

 “There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe that government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what.”

 

I don’t generally wade into the realm of political “gaffes” here, but I will here.  This will be a two-part post.  In Part 1, I will explore why I don’t usually look at these.  In Part 2, we will look at what this particular incident can tell us about the race and how political operatives think and act.  In any event, let me lay out the five main reasons I generally don’t. 

First, they usually have a very short life in the media due to short attention spans and selective memory.  Think about it.  Unless it’s a really big story, it doesn’t stay in the news cycle for very long.  By the time this post gets published, it will probably be largely out of the news cycle because they’ll be onto something else.

Second, usually a negligibly small number of voters would be persuaded to change their vote or non-vote due to a single incident. 

Third, somewhat along the lines of the second reason, they are usually little more than a quick shot-in-the-arm for the base of both the person who commits the gaffe and the person running against the person who committed the gaffe. 

Fourth, accidents and coincidences are rare things in the political world.  There is almost always a calculated reason for a politician to do or say something.  Truly unintentional mistakes like Weinergate are very rare.

Finally, and this is probably the biggest one, there is generally very little value to be gained by discussing them. 

That’s why I don’t generally look at gaffes.  The reason I’m going to make an exception this time around is I think the way this thing played out is very revealing of not only the general state of the campaign, but also how political operatives think and act.  I’m not getting into the merit or lack thereof in the statements themselves because that’s a whole other topic.  

My belief is that if the general public understands how political operatives think and act, we’ll be better equipped to not fall for their trickery and see beyond their smoke and mirrors.  I want to take people behind the curtain, so to speak.  I think this exercise will also lay out why this event really isn’t a big deal in the grand scheme of things and represents little more than a calculated, short-term action by the Democrats and reaction by the GOP.  There are two key questions we have to look at.  The first is the Democrats’ timing and the second is the GOP reaction.  We will consider these questions in Part 2.

Links:

Romney video: http://www.youtube.com/watch?v=XnB0NZzl5HA&feature=player_embedded

  

Weinergate: http://timsopinionblog.blogspot.com/2011/06/lee-versus-weiner.html

The Looming Fiscal Cliff, 2012 Edition Part 1

Lost in the shuffle of the election and the recent escalation of violence (in Libya, Egypt, Yemen, Tunisia, etc.) is the looming fiscal cliff.  There are a lot of bad economic policies that are slated to take place at the end of 2012 without government action.  In Part 1, I’ll detail the changes and the impacts.  This is a long one because it has lots of tables and graphs.  In Part 2, I’ll lay out what I think is going to happen. 

First and foremost, the 2001 and 2003 tax cuts (most often referred to as the Bush tax cuts, but I call them the current tax rates) are in danger.  The current federal income rates are shown below in real 2011 dollars. 

	Married Filing Jointly
Marginal	Tax Brackets
Tax Rate	Over	But Not Over
10.0%	$0	$17,000
15.0%	$17,000	$69,000
25.0%	$69,000	$139,350
28.0%	$139,350	$212,300
33.0%	$212,300	$379,150
35.0%	$379,150	-

	Married Filing Separately
Marginal	Tax Brackets
Tax Rate	Over	But Not Over
10.0%	$0	$8,500
15.0%	$8,500	$34,500
25.0%	$34,500	$69,675
28.0%	$69,675	$106,150
33.0%	$106,150	$189,575
35.0%	$189,575	-

	Single
Marginal	Tax Brackets
Tax Rate	Over	But Not Over
10.0%	$0	$8,500
15.0%	$8,500	$34,500
25.0%	$34,500	$83,600
28.0%	$83,600	$174,400
33.0%	$174,400	$379,150
35.0%	$379,150	-

	Head of Household
Marginal	Tax Brackets
Tax Rate	Over	But Not Over
10.0%	$0	$12,150
15.0%	$12,150	$46,250
25.0%	$46,250	$119,400
28.0%	$119,400	$193,350
33.0%	$193,350	$379,150
35.0%	$379,150	-

These are the 2000 tax rates adjusted into real 2011 dollars via the CPI, which is roughly what we would revert to.

	Married Filing Jointly
Marginal	Tax Brackets
Tax Rate	Over	But Not Over
15.0%	$0	$57,137
28.0%	$57,137	$138,055
31.0%	$138,055	$210,372
36.0%	$210,372	$375,725
39.6%	$375,725	-

			Married Filing Separately
Marginal			Tax Brackets
Tax Rate			Over			But Not Over
15.0%			$0			$28,569
28.0%			$28,569			$69,027
31.0%			$69,027			$105,186
36.0%			$105,186			$187,863
39.6%			$187,863			-
			Single
Marginal		Tax Brackets
Tax Rate		Over			But Not Over
15.0%		$0			$34,204
28.0%		$34,204			$82,807
31.0%		$82,807			$172,780
36.0%		$172,780			$375,725
39.6%		$375,725			-
		Head of Household
Marginal	Tax Brackets
Tax Rate	Over			But Not Over
15.0%	$0			$45,801
28.0%	$45,801			$118,314
31.0%	$118,314			$191,609
36.0%	$191,609			$375,725
39.6%	$375,725			-

In addition, capital gains and dividend taxes would rise.  The current and potential changes are shown below.

Capital Gains Taxation in the United States from 2003 forward[1]
2003–2012					2013–
	2003–2007		2008–2012		2013–
Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	Ordinary Income Tax Rate	Short-term Capital Gains Tax Rate	Long-term Capital Gains Tax Rate	5-year Capital Gains Tax Rate
10%	10%	5%	10%	0%	15%	15%	10%	8%
15%	15%	5%	15%	0%
25%	25%	15%	25%	15%	28%	28%	20%	18%
28%	28%	15%	28%	15%	31%	31%	20%	18%
33%	33%	15%	33%	15%	36%	36%	20%	18%
35%	35%	15%	35%	15%	39.6%	39.6%	20%	18%

And dividends are detailed here.

Dividend Taxation in the United States: 2003 - [3]
2003–2012					2013 -
	2003–2007		2008–2012		2013 -
Ordinary Income Tax Rate	Ordinary Dividend Tax Rate	Qualified Dividend Tax Rate	Ordinary Dividend Tax Rate	Qualified Dividend Tax Rate	Ordinary Income Tax Rate	Ordinary Dividend Tax Rate	Qualified Dividend Tax Rate
10%	10%	5%	10%	0%	15%	15%	15%
15%	15%	5%	15%	0%	28%	28%	28%
25%	25%	15%	25%	15%	31%	31%	31%
28%	28%	15%	28%	15%	36%	36%	36%
33%	33%	15%	33%	15%	39.6%	39.6%	39.6%
35%	35%	15%	35%	15%

These are massive tax increases.  But, wait, there’s more. 

The Alternative Minimum Tax (AMT) is going to become an issue again.  The AMT was designed to force wealthy people to “pay their fair share” (however you define ‘fair’, I guess), but it was poorly designed, as it was never indexed for inflation, so more and more people are getting snared by it.  It gets patched repeatedly, but never truly fixed. 

I’m not done yet on the tax side, either.  The 2% reduction in personal Social Security taxes that has been in effect for the past two years will expire, too. 

Do the math for yourself and you can see what kind of impact this could have on you.  For me personally, Social Security goes up 2% and federal income goes up 3%.  The AMT doesn’t apply to me, nor do the dividend and capital gain taxes because all my stock activity takes place in my IRA and 401k.  My concerns about the current tax-exempt and safe status of these accounts are another story for another day.

On top of all of that, there is the dreaded sequestration plan, which would mandate spending cuts.  I’ve written previously about this.  Defense and social programs would both be cut aggressively.  But, wait, there’s more.  At least on the defense side, there’s another problem.  The law was written such that it effectively prevents the Pentagon from actually eliminating programs and instead forces them to cut more or less equally across the board from all programs.  So, if the Pentagon had 10 programs of equal size and had to cut the equivalent of one full program, it has to cut 10% from each of the 10 programs rather than fully eliminating one full program.  I suspect this was put in place to blunt the economic impact on the districts of individual members of Congress and I suspect this is also in place for the social spending cuts. Ask yourself how these spending cuts affect you.  The targeted industries are terrified of these impacts. 

Last, but not least, note the lack of impact to Medicare and Social Security (outside of the 2% tax increase).  If we really want to get government spending under control, everything has to be on the table.  Social Security and especially Medicare cannot be exempt because they are the real problems. 

All told, this is a big deal.  This chart from Goldman Sachs tells the story and lays out a couple scenarios.  This could push the US back into recession or deeper into it, depending on whether you believe we ever exited the collapse.

This story is, in my opinion, underreported in the media because they are so focused on…well…everything else like the election, global violence, sports, etc.  It’s not on their minds, but it is on the minds of people and companies as they try to plan for next year.  Anybody who tries to tell you this isn’t a big deal doesn’t understand how households and businesses plan and doesn’t understand how Washington DC works.

Links:

Complete Guide: http://www.zerohedge.com/print/453134

Capital Gains: http://en.wikipedia.org/wiki/Capital_gains_tax_in_the_United_States

Dividends: http://en.wikipedia.org/wiki/Qualified_dividend  

On Defense Spending: http://timsopinionblog.blogspot.com/2011/08/debt-ceiling-deal-and-downgrade-that.html