Friday, November 28, 2014

The Economics of Black Friday 2014

Forbes
It might be fair to call this Black Thursday-Friday, but I'll just stick with calling it Black Friday (I probably won't in the next few years depending how early they want to go). This year several stores decided to move up their openings earlier on Thanksgiving again. Macy's opened at 6 pm, Best Buy opened at 5 pm, and Old Navy at 4 pm. Many other stores followed suit to open in the afternoon, but if you think that's bad Gander Mountain, Dollar General, and Kmart take the cake by opening at 8 am, 7 am, and 6 am respectively. Black Friday is clearly moving up and it might be possible that the day could be moved up before Thanksgiving (which wouldn't be bad if it meant workers had the day off for Thanksgiving, but could cause trouble between shopping for presents and shopping for food). Meanwhile, retail stores including Costco, Nordstrom, and GameStop decided that they would proudly not be opening on Thanksgiving.

However, the concept of just one day might be dying out over giving a variety of sales throughout the month. The sign of how much of a profit Black Friday gives to retail companies is clear on the Dow Jones industrial average, which showed just how weak the day was because it only increased by 0.49 of a point and closed at 17,828.24. This is a result of retailers offering deals earlier in the month to make-up for lost sales during the year. Black Friday is slowly fading away as a day. Maybe it's better to call it "Black November." Many stores offered deals on Thursday night in order to get consumers faster, which brings an important point to our great semi-free market economy, which is always changing with new innovations. 

If consumers don't find what they want at retail stores, the internet is always the second option (and is starting to slowly become the first). Cyber Monday has been dying quickly in its own right because people are starting to realize that deals are year-round at times and don't just focus on one day. If Best Buy didn't get me into the store to buy a 64GB flash drive, then I would just get it on Amazon.com. If Target didn't get me into the store to buy Killing Patton by Bill O'Reilly, then I would also go to Amazon for that. Early November deals and the internet are the primary reason crowds during Black Friday are getting smaller

Online sales were up by 6.4 percent this year. Amazon was found to have the best discounts and deals. For example, Amazon offered a Samsung 55-inch 4K flat-screen TV for $899 and the website Dealnews.com (a website that specializes in tracking online deals) declared that Amazon's price was the cheapest for a name-brand 4K television it had ever seen. Nevertheless, the National Retail Federation predicts that sales will be up by 4.1 percent this year compared to 3.1 percent last year. Electronics were clearly the favorites this year as laptops and TVs far sold out against children's clothes where business was weak. We will all just have to see how well retailers will really do this year in the next coming weeks before Christmas and the other holidays.

Thursday, November 27, 2014

Why Police Should be allowed to have Military Equipment

Police in Ferguson, Missouri. - New York Times
Yesterday, police officer Darren Wilson was not indicted by a grand jury for any crimes related to the death of Michael Brown in August. In response, a riot broke out in the town of Ferguson, Missouri where Brown was killed. Protesters in favor of indicting Wilson decided to carry out their own form of "justice" by lighting the town ablaze. Several places were looted and some buildings were torched. More than eighty people were arrested. Whatever your opinion is about the shooting and if Wilson should have been indicted, it should be absolutely clear that this should not be tolerated:

Getty Images from BBC Article
Not this either:

Reuters from BBC Article
It is from these images that we must understand why a major police presence was needed as well as the military equipment to support them. Many people have complained that the police should not be allowed to carry this kind of equipment with them. Organizations that don't support the militarization of police like ACLU invest in reports and money to push to prevent this distribution. However, chances are the police would have more problems had they not shown up with such heavy equipment. Yes, mistakes can happen and innocent people can get mistakenly arrested and attacked by cops. The only reason we see articles come out about people getting arrested by mistake is because it is interesting. It is not typical of police to arrest innocent citizens, so it is unusual and often gains media attention. The debate over if police are overreaching their constitutional grounds is not relevant here, because I am simply focusing on the military equipment police have. It is completely legal for police to have this kind of equipment as shown by what happened in Ferguson.

The legislation behind giving police military surplus equipment is the 1990-1991 National Defense Authorization Act as a way to combat drug trafficking. There are other reasons for police to have them besides the War on Drugs though. Domestic terrorist attacks such as the bombings of the Boston Marathon in 2013 give good reason for military equipment. The 1033 program handles requests from police forces to acquire military equipment from the Pentagon. Such equipment could have been used in the Watts Riots of 1965. There's a good reason this military equipment is being given to others, especially our police forces. There is really nothing else the military can do with this older military equipment and it might as well be used for something rather than destroyed or put in some warehouse. Another option would be to send this equipment as military aid, but in unstable countries in the Middle East and Africa that equipment could end up in bad hands.

The Defense Logistics Agency manages these transfers and has to approve what is sent to police forces. Despite how notorious it might look to see police with armored vehicles and military weapons, only five percent of what is sent to the police is weapons. Another 1 percent is those tactical vehicles. Overwhelmingly, most equipment sent is simple items like blankets and computers. No, the police don't get tanks and large missiles. This equipment can be linked to the massive decline in crime that has occurred over the last twenty years. The New York Times has observed that crime fell especially rapidly in the early 1990s by half. It is around that same time the National Defense Authorization Act gave local police the ability to have military equipment. Everyone has a right to be protected and this military equipment given to help the police guarantees that right by giving stronger abilities and resources to stop crime. Just remember, the police are meant to protect American citizens from mostly other American citizens who are causing crime. They represent law and order so statements like this don't carry the day:

Sunday, November 23, 2014

Did Reagan and Bush 41 do the Same Thing as Obama?

President Ronald Reagan and then-Vice President George H.W. Bush at the 1984 Republican Convention in Dallas, Texas. - Wikimedia
President Barack Obama has decided to take executive action on immigration policy. He has decided to lift the risk of deportation on several illegal immigrants in the United States. Numbers indicate that up to four million immigration who have no documentation and have lived here for five years will be protected from deportation as long as they don't have a criminal record. Another one million could also be possibly protected by the president's plan. There has been much controversy over this plan and it has been opening many legal battles. It is possible that there are grounds for impeachment of President Obama over his actions.

Those who defend the president say he is launching a similar policy to that of Presidents Ronald Reagan (1981-1989) and George Herbert Walker Bush (1989-1993), both happen to be Republicans. Is President Obama doing the same thing as Reagan and Bush? It's time to examine what both men did when they were in office. I want to be clear that in terms of numbers of immigrants the scale is similar between Bush and Obama, but the more important issue is how both men as well as Reagan proceeded with their actions on immigration. Before showing what Reagan and Bush did, I would like to note that Obama's opinion on if he has authority to do this policy has changed. Previously, Obama said he had no legal basis, according to FactCheck.org, but now he says he does. It seems odd to me that a "constitutional law professor" has had to quickly change his views on immigration policy.

When Ronald Reagan was president, he did not sign an executive order, but actually did his presidential duty as the country's executive officer by signing the Immigration Reform and Control Act of 1986 and making it the law. Arguments made by most liberals on the issue are already defeated here. Reagan and the Department of Justice were supposed grant amnesty to some illegal immigrants. In addition to that, others got to stay "to assure family unity." This was interpreted by the Department of Justice as the members of a "family group" which includes a spouse and children who are unmarried, under the age of 18, and who are not members of some other household. As attorney Paul Mirengoff of the American political publication Power Line and the Claremont Institute points out: "This regulation was not an exercise of prosecutorial discretion or the assertion of a generalized right to suspend 'oppressive' immigration laws. Rather, the administration made it clear it was carrying out the direction of Congress."

When Reagan's presidency was coming to an end, Vice President George H.W. Bush ran for president to replace him. He was elected in the 1988 election over Democratic Governor Michael Dukakis of Massachusetts. While Bush's actions for helping illegal immigrants are relatively on the same scale as President Obama in terms of numbers, Bush has set no legal precedent either for the current president. Like Reagan, Bush followed the Immigration Reform and Control Act. The only difference is that the DOJ at this time reinterpreted "family unity" to include all spouses and children, but they were still following the same act Reagan was. Obama, on the other hand, is not following any congressional mandate to interpret a new statute. Therefore, Obama's actions will be highly unlawful, which is why there are possible grounds of impeachment.

On amnesty for illegal immigrants as a policy, it is actually questionable whether or not this plan really reforms immigration. While Obama is planning on legalizing immigrants at a scale a little bigger than the elder Bush, the actual policy Bush implemented was not all that successful according to editor David Frum of the The Atlantic. As much as I love both Reagan and Bush, these policies were more for compromises than anything else and they didn't even work. Statistics from the federal government and the Center for Immigration Studies have found that while Bush was looking to legalize some 1.5 million illegal immigrants, only 50,000 actually got citizenship because of the slow, bloated, and unproductive government bureaucracy.

What Obama is doing isn't just unlawful, but it is actually more of a "kick the can" strategy that past presidents have done due to little time left to actually deal with immigration policy. Obama doesn't have much time left to pass an immigration law (nor is he likely to with a Republican Congress on the way), so he has decided to pretend to and has passed the issue to the next president. When both Reagan and Bush tried it, the amnesty policies for illegal immigrants didn't work and the situation has just been getting worse. Even if Obama's policy is held up as legal, it will not work.

Thursday, November 20, 2014

What can the Republican Congress do?

US News
Now that the Republicans won, it is time to see what they can achieve in legislation once they are in Congress in January 2015. Obviously with majorities in both houses, it is easier for them to pass bills now than it was with just the House of Representatives. Recently, future Senate Majority Leader Mitch McConnell and Speaker of the House John Boehner have outlined several goals for the new 114th Congress:
  • Pass the Keystone Pipeline
  • Repeal the Patient Protection and Affordable Care Act (Obamacare)
  • Boost veteran employment in the economy
  • Pass more international trade agreements
  • Pass tax reform, specifically corporate taxes
  • Stop potential executive action on immigration, instead find common ground in Congress
  • Expand American energy by reining in regulations of the Environmental Protection Agency (EPA)
  • Support "innovative charter schools around the county."
This is the agenda for the new Congress once all members are in their offices next year, but in reality how much of this is likely to pass? A few of these might, some of them may just fade away, and others will no doubt be vetoed by President Obama (with no probability of an override). What are the easiest bills Congress can get through? I think there's three. 

Tax reform has been argued about by both parties. Generally there seems to be a consensus to lower the corporate tax rate and cut some deductions, which will overall give the federal government more tax revenue and expand economic growth. When pundit Eric Bolling said on Fox News that the U.S. has the highest corporate tax rate in the free world, Politifact found his statement as mostly true. In addition to having the highest corporate tax rate (which has caused global businesses in the United States to move elsewhere), companies that are here can get away with a variety of tax shelters. In other words, because of the high corporate tax rate the United States has at 39.1 percent, corporations hide their revenue or move to avoid pay for lower taxes thus lowering economic and government revenue growth in the United States. A list of corporate tax rates created by the Tax Foundation backs up this statement.

Yevgeniy Feyman, a fellow at the Manhattan Institute for Policy Research, wrote on Forbes recently that one big problem that is scaring away corporations to countries like the United Kingdom is that the United States taxes all global income on corporations. In Britain however, the story is much different because the British government only taxes British income. Twenty-two companies have moved from the United States since 2011 in order to expand their business from the American tax rate that has slowed growth. President Obama has responded by calling these actions "unpatriotic" and shows that they are against economic nationalism. This rhetoric plainly reminds me of when Presidents Herbert Hoover and Benjamin Harrison tried to invoke economic nationalism by "protecting" the American economy with tariffs which ended in both men losing when they ran for second terms as a result of economic depression. In this globalized world, we don't rely on economic nationalism anymore, what we need to do is embrace the free market and compete with other countries.

Supporting employment for veterans is a no-brainer too. With Obamacare being so expensive, Congress is considering exempting veterans from the system. The Hire More Heroes Act of 2014 has been proposed by Republican Representative Rodney Davis of Illinois and his decision to exempt veterans from healthcare requirements is likely to boost employment among businesses who want less healthcare costs. Allen Smith of the Society for Human Resource Management has noted that while swift enactment is unlikely, it does have nearly unanimous support in the House of Representatives. After all, who doesn't like supporting veterans?

The final issue that I find easy to pass is the authorization of the Keystone Pipeline. I actually think Obama would veto it, but Congress would overrule. Remember that as of now, there are going to be 53 Republicans in the new Senate and 244 in the House. Passing the House will be easy and in the Senate eleven Democrats have written a letter saying that they would so at the start of the year. Some of these senators signed because they were up for election and three of them lost (with a fourth still in jeopardy). If the fourth senator (Mary Landrieu) wins anyway, then there will be 53 Republicans and 8 Democrats who want it passed. That's 61 votes. Just recently, Landrieu tried to pass the bill to save her skin, but it only got 59 votes.

This issue has torn the Democrats apart. Democratic Governor Brian Schweitzer of Montana has called those against the Keystone Pipeline "jackasses." Schweitzer himself is actually considering a run for president. According to the State Department, the Keystone Pipeline will support 47,000 more jobs for the American economy, which somehow has led Landrieu to round it up to "millions." It would also not be as damaging to the environment as some liberals like to think. Right now oil is transported down via train or truck, which is far more dangerous than through pipe. An argument against the pipeline that it is simply some big benefit for the Koch brothers (the two random rich guys that liberals like to use as a punching bag) is completely not true. Also, 60 percent of Americans support the Keystone Pipeline according to a USA Today poll. Obama hasn't made a major decision on the pipeline yet, but under pressure from both the American people and Congress he might be compelled to say yes. At the same time, even if he did veto it would not be that difficult for the Republicans to negotiate with Democrats to get six extra votes to override.

These three I think are easiest to pass, but they will all take time (especially the pipeline). No Congress has been truly able to pass everything it wants, issues on things like education and international trade are simply going to be dropped over more important issues (or passed with little media acknowledgement). Immigration and repealing Obamacare are just going to be a big mess that won't get sorted out. For these issues, there is no hope for anything to get resolved. I just hope Congress and the president work on more productive issues like the three I listed above rather than the issues that will easily create deadlock.

Monday, November 17, 2014

Republican Dominance: A Historical Look at Midterm Elections

David Horsey
This political cartoon is obviously meant to be humorous in showing the extremes of both parties, but idea is very real by demographics. It is a fact that Republicans had their people coming out and the Democrats did not. In the midterm elections, where only 36.3 percent of Americans turned out to vote this year, Republicans got their Tea Party conservative base energized while the Democrats could simply not bring their far-left liberals to the polls. The turnout is the lowest in 72 years, but voting turnouts in midterm elections is nothing new. It has always been low primarily because some states are left off these elections and voters are not simply as interested in comparison to the more dominant presidential elections for candidates who run for the nation's highest office. Yes, it is a referendum on President Obama and a Republican mandate based on those who voted. If you didn't vote, tough luck. As someone interested in politics, I communicated with my friends to urge them vote, but some of them obviously didn't. All my friends are young and likely in college, which has the worst demographic for people voting in any election. Here's exit polling data from NBC showing the demographics:

Gender
Men (49%): 57% Republican, 41% Democrat - Republican +16
Women (51%): 51% Democrat, 47% Republican - Democrat +4

Age
18-29 (13%): 54% Democrat, 43% Republican - Democrat +11
30-44 (22%): 50% Democrat, 48% Republican - Democrat +2
45-64 (43%): 53% Republican. 45% Democrat - Republican +8
65 or over (22%): 57% Republican, 41% Democrat - Republican +16

Race
White (75%): 60% Republican, 38% Democrat - Republican +22
Black (12%): 89% Democrat, 10% Republican - Democrat +79
Hispanic/Latino (8%): 62% Democrat, 36% Republican - Democrat +26
Asian (3%): 50% Republican, 49% Democrat - Republican +1
American Indian (1%): 52% Republican, 43% Democrat - Republican +9
Other (2%): 52% Democrat, 44% Republican - Democrat +8

Ideology
Liberal (23%): 87% Democrat, 11% Republican - Democrat +76
Moderate (40%): 53% Democrat, 45% Republican - Democrat +7
Conservative (37%): 85% Republican, 13% Democrat - Republican +72

Income
Under $30,000 (16%): 59% Democrat, 39% Republican - Democrat +20
$30,000-$49,999 (20%): 51% Democrat, 47% Republican - Democrat +4
$50,000-$99,999 (34%): 55% Republican, 44% Democrat - Republican +11
$100,000-$199,999 (23%): 57% Republican, 41% Democrat - Republican +16
$200,000 or more (7%): 57% Republican, 42% Democrat - Republican +15

For comparison purposes, I'm going to use the 2012 presidential election statistics from the Roper Center at the University of Connecticut. To start with my age group first, most young people are liberal but it is clear this advantage for Democrats can only be counted on in presidential elections. Democrats still won this group, but there was clearly more interest among young Republicans. Obama won 60 percent of young voters in 2012 and was up by 23 points (their part of a percentage of the electorate in 2012 was greater too at 19 percent). In this election the Democrats did not get out as many young people as needed as they won them by 54 percent. Young people represented 13 percent of the electorate. 

At UW-Waukesha, me and other members of the College Republicans decided to conduct a survey. Of the 69 people who were interested, 69 percent were going to back Scott Walker and the Republicans while 24 percent were going to back Mary Burke and the Democrats. This is the sign of a clearly Republican student body in the heart of a very Republican county. 

Among the electorate by race, Republicans are always able to get white voters on their side by comfortable margins. This advantage won't go away anytime soon. It works very well in midterm elections, but while it may help the GOP at the presidential level it does not guarantee victory. Democrats have always done strongly with blacks, especially in the case of sociological voting with the first African-American president. Republicans have always had low poll numbers among blacks, but it is always more important to look at how many blacks vote for Republicans. In 2012, 6 percent voted for Mitt Romney and in 2008 4 percent went for John McCain. Before Obama, we see where blacks traditionally voted for the GOP at 11 percent in 2004 and 9 percent in 2000. This is more in-line of where they voted in these midterm elections for Republicans at 10 percent. Political analysts have rightly credited Obama for his coalition of blacks, Hispanics, young people, and single white women. In the two presidential elections, he has been able to hold strong majorities in both groups and get them out in droves. The question is if this coalition will stick once he has left office. 

Republicans were able to get more Hispanics than in 2012. Romney won 27 percent in 2012 and 36 percent in the midterm elections. Back in 2004, George W. Bush won 44 percent of Hispanics. The Republicans have been aiming to get back to that number and the 2014 elections have laid the groundwork for 2016. While Asians are not as significant, the Republicans made a major improvement in comparison to both 2012 and 2004. Republicans lost Asians in both those elections. In these elections they won them narrowly. Obviously there is some differences here as this is a midterm election with a lower turnout than recent decades, so we can't say all these conditions among ethnic groups will remain the same in 2016.

Income hasn't changed, except by how much of the middle class voters the GOP can get on their side. The poor will always back Democrats because Democrats back welfare and demand-side economic policies. The rich will always back Republicans for their supply-side tax cuts and efforts to reduce economic regulations. The middle class have generally backed Republicans, but it's always important to look at how much the GOP has an advantage. The middle class of the America finds taxes and economics as the most important issues. They obviously favor low taxes, but can tolerate some cases of tax increases. This election wasn't one of them. These elections were a clear revolt over taxes, especially new taxes from Obamacare. 

This goes into the historical aspect of the recent midterm elections: Ronald Reagan. The white middle class blue-collar electorate of the United States is what we would have called the "Reagan Democrats" in the 1980s. Ronald Reagan's conservative agenda of across-the-board tax cuts and limited spending resonated with these people. Once, John F. Kennedy and the Democrats had passed major tax cuts. Now it was Reagan and the Republicans. By the time he left office in 1989, most of the middle class in southern, western, and midwestern states had been converted into Republicans. In this election, tax hikes concerned many middle class voters again.

To take a look at how important this is, let's look at every election year for Congress in the last twenty years (not all of these elections were resolved or occurred on the same day, some midterm elections may have happened as early as a year before the date, for example in the 1996 Senate midterms the Republican gained two seats on that date, but there had been a Senate election earlier which gave them another gain and that is considered part of the midterms):

1994
Senate: 52 Republicans (Bob Dole), 48 Democrats (Tom Daschle) - Republican +8
House: 230 Republicans (Newt Gingrich), 204 Democrats (Tom Foley) - Republican +54

1996
Senate: 55 Republicans (Trent Lott), 45 Democrats (Tom Daschle) - Republican +3
House: 227 Republicans (Newt Gingrich), 206 Democrats (Dick Gephardt) - Democrat +2

1998
Senate: 55 Republicans (Trent Lott), 45 Democrats (Tom Daschle) - No Change
House: 223 Republicans (Newt Gingrich), 211 Democrats (Dick Gephardt) - Democrat +5

2000
Senate: 50 Democrats (Tom Daschle), 50 Republicans (Trent Lott) - Democrat +5
House: 221 Republicans (Dennis Hastert), 212 Democrats (Dick Gephardt) - Democrat +1
Note: for the Senate in this election, the Democrats technically got the majority because Vice President Al Gore acted as a tie-breaker. They lost the majority later when Gore left and Republicans got Vice President Dick Cheney to be their tie-breaker.

2002
Senate: 51 Republicans (Trent Lott), 48 Democrats (Tom Daschle), 1 Independent - Republican +2
House: 229 Republicans (Dennis Hastert), 204 Democrats (Dick Gephardt) - Republican +8

2004
Senate: 55 Republicans (Bill Frist), 44 Democrats (Tom Daschle), 1 Independent - Republican +4
House: 232 Republicans (Dennis Hastert), 202 Democrats (Nancy Pelosi) - Republican +3

2006
Senate: 49 Democrats (Harry Reid), 49 Republicans (Mitch McConnell), 2 Independents - Democrat +5
House: 233 Democrats (Nancy Pelosi), 202 Republicans (Dennis Hastert) - Democrat +31

2008
Senate: 57 Democrats (Harry Reid), 41 Republicans (Mitch McConnell), 2 Independents - Democrat +8 
House: 257 Democrats (Nancy Pelosi), 178 Republicans (John Boehner) - Democrat +24

2010
Senate: 51 Democrats (Harry Reid), 47 Republicans (Mitch McConnell), 2 Independents - Republican +6
House: 242 Republicans (John Boehner), 193 Democrats (Nancy Pelosi) - Republican +64

2012
Senate: 53 Democrats (Harry Reid), 45 Republicans (Mitch McConnell), 2 Independents - Democrat +2
House: 234 Republicans (John Boehner), 201 Democrats (Nancy Pelosi) - Democrat +8

2014
Senate: 53 Republicans (Mitch McConnell), 45 Democrats (Harry Reid), 2 Independents - Republican +8 
House: 244 Republicans (John Boehner), 186 Democrats (Nancy Pelosi) - Republican +12
Note: One Senate election is still in play. Louisiana has the run-off, which by the poll numbers as of now looks like another Republican pick-up.

Too understand just how big these midterm elections were in 2014, take note that this is the GOP's biggest majority in the House of Representatives since 1928. As for the Senate, Republican gains are currently tied with the 1994 midterms twenty years before. However, if they win the last Senate election in Louisiana their gains will tally it to nine, their fourth biggest gains in the party's history tied with 1942.

The political geography from 1980 is quite different though. That was the year many Democrats who consider themselves moderates or conservatives dumped the more liberal President Jimmy Carter for former California Governor Ronald Reagan's conservative campaign. Let's say you were a career politician from Tennessee who was a Democrat and first elected in 1964 along with Lyndon Johnson's landslide. You generally consider yourself a conservative on social issues like abortion and gay marriage, but you are center in terms of economics. You generally support Johnson and enjoy advantages through compromises with Richard Nixon and Gerald Ford. However, Carter's liberalism alienates you and you find you can get a lot more done with Reagan, who has made many traditional Democrats look to the Republicans. By the time you retire in 1994, your district has became so Republican that the only reason you stayed in power so long was because you were highly respected and could make deals. A Republican easily wins your district in 1994.

This is the dilemma of the Democratic Party. When calculating the average gains made by Republicans in midterm elections, they have won an average of three Senate races and seventeen for the House. The GOP simply has a better base now than they have before because they are so reliable to come in midterm elections. As for the presidential level, Democrats have on average made a gain of 1-2 seats in the Senate and six gains in the House. Yes, their voters can come out in presidential elections, but they can't get the same gains in midterms with a group a conservative group as energized and organized to get votes out like the Tea Party. So far, this Republican advantage has repeated and shows no signs of stopping. This midterm election is significant, but it also continues the six-year curse. Every six years a party holds the White House, it losses in the midterms (but not necessarily enough for them to lose their majorities. To look at this, here is a video from former Bill Clinton campaign manager Dick Morris:

Saturday, November 8, 2014

Candidates and Money: The 2014 Elections

US News
The debate over money in politics has always been a heated one. It is often true that people get sick of the countless campaign ads and more specifically the attack ads. However, how much money was spent in the 2014 elections is actually quite small compared to other things people spend their money on, as listed by The Washington Post. There was precisely $3.7 billion spent on this election, but while Americans complained about this spending on the most important part of their lives they have no problem spending on others things like $7.4 billion on Halloween, $10.9 billion on movies, $20.5 billion on video games, $73.9 billion on soda and many other countless products that are easily out of range of the 2014 elections. Here's a chart from The Washington Post below:

The Washington Post
A complaint made by most people and political pundits is that the candidates who spend the most money wins. I'm going to put that to the test. One of the great ways to find out how much money every candidate spent in every election is a website called OpenSecrets. OpenSecrets has been doing great work on what organizations spend the most money and the total amount of money each candidate raises and is spent on elections. Now, who do you think has spent the most money of all-time on campaigns going back to when the information was first tracked in 1989? Is it the evil Koch brothers who the Democrats complain spend an outrageous of money to control the GOP in order to pursue their own interests? Actually, according to the list made by OpenSecrets, as of now it is ActBlue, a political action committee (or PAC) that has spent 99 percent of their funds on Democratic candidates and 0 percent to Republicans (total spent is $124.1 million). In second place is the National Education Association, the largest and oldest teachers union in the country, that has spent $73.8 million and has donated 47 percent of the funds to Democrats and 3 percent to Republicans. The American Federation of State County and Municipal Employees comes next spending $67 million and giving 77 percent of it to the Democrats and 0 percent to Republicans. The National Association of Realtors (a trade organization for the real estate industry) has given 37 percent of their $63.8 million to Democrats and 39 percent to Republicans. Rounding up the top five is AT&T Inc. which has spent $59.5 million and given 41 percent of it to Democrats and 58 percent to Republicans.

If we look a the top five overall, the Democrats generally have a huge money advantage there. In fact, more unions following in the top 10 often have their donations lean or overwhelmingly go to Democrats. The infamous Koch Industries is actually ranked way down the list at 42nd and has spent $24.7 million with 6 percent  of it going to Democrats and 76 percent going to the Republicans. I want everyone to keep mind that the reason most of these figures don't add up to 100 percent is because the rest of the money spent is either going to third party and independent candidates or super PACs. Based on how these organizations have donated though, it is easy to see what kind super PACs they would support. It is clear unions are actually spending far more money and are more politically active on elections to Democratic candidates than major corporations do to Republican candidates. Businesses also often give a nice portion of their funds to Democratic candidates, while unions only give slim portions to Republican candidates. Often, the GOP is at a money disadvantage. Consider this when you know the Republicans just won a landslide in 2014. Now let's look at individual elections. Did the candidates who spent the most money really win their elections? Here's ten races for the Senate, they are ranked by how much money was spent total on them:

Senate

Kentucky
Mitch McConnell (R, incumbent): $25 million - winner
Alison Lundergan Grimes (D): $15.2 million

Georgia
David Perdue (R): $11.1 million - winner
Michelle Nunn (D): $13.2 million

Minnesota
Al Franken (D, incumbent): $28.7 million - winner
Mike McFadden (R): $5.8 million

North Carolina
Thom Tillis (R): $7.9 million  - winner
Kay Hagan (D, incumbent): $21.9 million

Colorado
Cory Gardner (R): $9.2 million - winner
Mark Udall (D, incumbent): $17.7 million

Louisiana (no winner, run-off in December)
Mary Landrieu (D, incumbent): $15.2 million
Bill Cassidy (R): $7.9 million
Rob Maness (R): $2.3 million

Arkansas
Tom Cotton (R): $10.2 million - winner
Mark Pryor (D, incumbent): $13.5 million

Iowa
Joni Ernst (R): $7.7 million - winner
Bruce Braley (D): $10.1 million

Massachusetts
Ed Markey (D): $17.3 million - winner
Gabriel Gomez (R): $4.4 million

New Hampshire
Jeanne Shaheen (D, incumbent): $12.7 million - winner
Scott Brown (R): $6.3 million

According to these elections, the candidates who actually spent less money won the most elections (five) than the candidates who did (four). The run-off in Louisiana is likely to be a Republican win, despite the fact that Mary Landrieu spent more money than both Republican candidates combined. Little is likely to change as she faces Cassidy in the run-off, so if he does win that means six candidates actually won elections with a money disadvantage. Now in many cases donors give money to competitive elections where they think their favored candidates have chances. This was not the case for Minnesota and Massachusetts, where the Republicans decided to not spend money because strategically they knew what states do go after. If you get rid of these two noncompetitive elections, then out of the battleground states only two candidates won who spent more money.

Do the candidates with more money always win elections? No. In fact, not even usually. This shows that voters aren't swayed easily by the amount of money a candidate spends on ads. Chances are they are likely deciding based on the debates and how they are personally doing. Debates have always been critical in deciding who wins the election in competitive races. Based on this data, the idea that a candidate can easily win an election by spending more money is false.

Thursday, November 6, 2014

Is Mary Burke the Worst Gubernatorial Candidate in Wisconsin History?

Mary Burke gives her concession speech - Fox 11
The 2014 Wisconsin gubernatorial election was an outright disaster for the Democratic Party of Wisconsin. Not only did their candidate for governor lose, but the Republicans still control the state government positions of attorney general and treasurer. Republicans continue to control the State Senate and the State Assembly with higher majorities in both houses as well. It is one of the most decisive victories for a state party. The results for these elections are:

Attorney General
Brad Schimel (Republican) - 51.6%
Susan Happ (Democrat) - 45.4%

Treasurer
Matt Adamczyk (Republican) - 48.4%
David L. Sartori (Democrat) - 44.8%

State Senate
19 Republicans (+2)
14 Democrats (-1)
There was one vacancy, that is why the Republicans won two seats.

State Assembly
63 Republicans (+3)
34 Democrats (-4)
2 Independents (+1)

Here's Burke's concession speech:


This election really means something important strategically. Since Scott Walker has been elected, the Democratic Party of Wisconsin has continued to bomb in just about every election. The only state executive who won an election as a Democrat was Doug La Follette, who has been secretary of state of Wisconsin for 36 years and wins more on the fact that he is from Wisconsin's prominent political family:

Secretary of State
Doug La Follette (Democrat) - 50.0%
Julian Bradley (Republican) - 46.3%

On the federal level, the GOP holds five of the eight congressional districts. With the exception of Senator Tammy Baldwin, the Democrats have no major positions under their control other than La Follette's. The Democratic Party here is in a huge mess. In a state that is generally considered a battleground, but hasn't voted for a Republican president in every election since 1988, the state Democrats have little power whatsoever. The defeat of Mary Burke shows just how incompetent the state Democrats are. In many ways, she seems to be the worst gubernatorial candidate in Wisconsin history. To understand this, I will give previous recent candidates (both Democrat and Republican) who have run for governor and see their achievements.

Scott Walker had experience in politics for a long time by serving in the Wisconsin Assembly from 1993 to 2002 and then managed Milwaukee County by serving as the county executive from 2002 to 2010 before becoming governor. He had strong experience and implemented some of his reforms that he would later pass as governor. His 2010 and 2012 opponent, Tom Barrett, has been the mayor of Milwaukee since 2004 and previously served in the House of Representatives from 1993 to 2003. Jim Doyle, the Democratic governor before Walker, had served as the state's attorney general while Republicans won landslide elections under Governor Tommy G. Thompson in the 1990s. Doyle's opponent when he was running for his second term in 2006, Mark Green, served in the House of Representative from 1999 to 2007. He lost the gubernatorial election in 2006, but his interest in foreign affairs impressed many in Congress that he became an ambassador to Tanzania. He is currently the CEO of the Initiative for Global Development. The Republican incumbent Doyle defeated in 2002, Scott McCallum, had served competently under Governor Thompson. Thompson proved himself by being Wisconsin's longest serving governor (1987 to 2001). His reforms during his tenure led George W. Bush to make Thompson his first health and human services secretary.

Does Mary Burke fit in with her own achievements like all these other candidates, some victorious and some not, do? A flat no. The fact that she was fired from Trek Bicycle Corporation in a business run by her own family shows just how little she has achieved in her life. If she really wasn't fired, she could have got the numbers and official reports from Trek to prove it. She did not do that, which further damages her credibility. Instead, her response was to go after one of the former Trek executives who said she was fired. This was Gary Ellerman, a Republican, who was attacked for images and comments on his Facebook page that make him look like a Nazi in order to make Walker look bad:


I'd like to mention Godwin's Law here:

"As an internet discussion grows longer, sooner or later someone will compare someone or something to Hitler or Nazism."

In this case, the attempt is related to internet postings made by Ellerman. However, the point the Burke campaign was trying to clearly make is that Walker is somehow linked to Nazism. Instead, the postings by Ellerman on Facebook weren't advocating Nazism, but actually against it. If you look at the ad, the image with the Swastika is meant to attack Obama. Ellerman is clearly someone who is on the hard-right and really thinks of Obama in a similar evil to Hitler. His political views might be quite outrageous and out of the mainstream, but Ellerman is certainly not a Nazi.

What about her record as Wisconsin secretary of commerce? As the Wisconsin economy started to slow and Doyle had failed to bring it out of deficit, he felt (for whatever reason) that Burke would do great to ignite the commerce of Wisconsin and bring jobs and businesses to the state that would increase revenue. The only problem is that she failed at this. I don't see how a woman who blew off $12.5 million in tax dollars on a vacant lot to a company that had no plans to bring jobs to Wisconsin and had already laid off 800 workers in the state is a good leader. There is still no plan from them to create jobs eight years later. Another factor in looking at growth is the unemployment rate. It's always good to see unemployment go down and for a state to be under the national rate. Let's see how Burke stands here. These are the unemployment figures from Burke's time working for Doyle (January 2005 to November 2007):


Well, I guess there's a reason Burke's predecessor called her "a disaster" in an email conservation. The unemployment rate in Wisconsin went barely down by 0.2 percent (or from 4.8 percent to 4.6 percent). While the U.S. unemployment rate was being driven down at a national level (under President George W. Bush), decreasing by 0.6 percent (from 5.3 percent to 4.7 percent), Wisconsin was stuck in a stagnant position. This means unemployment reduction in Wisconsin was flat while she was commerce secretary. In fact, if you look at the unemployment rates, this is the only time Wisconsin's unemployment rate was higher than the U.S. unemployment rate. 

When people run for a political office, they usually have several ideas. Often they might need help to put their ideas into actual forms of policy, so they hire political economists and campaign aides to put their ideas into ways that they can be used in policies. Mary Burke is not one of those candidates. Most parts of her jobs plan were literally plagiarized word-for-word by her economic aide from previous Democratic gubernatorial campaigns in other states. In other words, she had no real ideas. 

Now when candidates get desperate they often turn to national figures to help them. Burke is one of those candidates. Senator Elizabeth Warren, First Lady Michelle Obama, former President Bill Clinton, and President Barack Obama all came to Burke's aid. It's odd to see so many Democrats who complain about low taxes on the rich campaigning for someone who is rich. Then again, hypocrisy has always followed most rhetoric Democrats have made. In comparison, Scott Walker only had New Jersey Governor Chris Christie, who invited himself. No matter how many speakers Burke brought in, all of it was for nothing when she lost on election day. 

Here's the recap: Mary Burke was fired from her own family's business, she saw low economic and job growth when working as Wisconsin commerce secretary, she had no real ideas for the state, and she still lost despite bringing a load of national figures to campaign for her and energize the base. For these reasons, I think Mary Burke is the worst gubernatorial candidate in Wisconsin history. 

Walker wins Wisconsin, GOP captures Congress

Scott Walker's victory speech - The Fresno Bee
Tuesday was a major blow dealt to the Democrats and President Obama's agenda. Republicans won in a huge wave on all levels of government. Here in Wisconsin, Scott Walker won his third victory in four years over Mary Burke. It is no doubt a great moment for him. This election was highly important because it cemented his reforms in Wisconsin. The longer Act 10 remains in place, the longer and more expensive it will be to change the law. Secondly, Walker is now in a very strong position for the presidency. Many analysts noted that his speech sounded like it was being addressed at a national level, not just a state level. If you want to see his speech, I will put it down below.


Before the election, I predicted:

Scott Walker - 52.6%
Mary Burke - 46.4%
Others - 1.0%

The actual result was:

Scott Walker - 52.3%
Mary Burke - 46.6%
Others - 1.1%

I'm happy with the prediction I made, as it was pretty close to what exactly happened. Here's the election map:


If you look at the map, you will see that Walker did what he needed to do to win. Fox Valley (the Green Bay area) went strongly for him as did the WOW counties (Waukesha, Ozaukee, and Washington). These were the areas Walker needed his turnout as well as the many rural conservative areas in northern Wisconsin. In order for Burke to win, she needed to match Walker's votes with ones from liberal Dane and Milwaukee counties. That did not happen, obviously. This much is clear for the political implications; Walker has been able to enact largely conservative reforms in a battleground state that has voted for the Democratic candidate in the last several presidential elections and at the same time win comfortably in what were generally thought to be tough situations in 2012 and 2014. Walker himself has to know what he has done, many Republicans know what he has done, and many Democrats do too. People will have their eyes on Walker now for the 2016 presidential election.

Before I go into the elections for Congress, I want to briefly talk about some other key gubernatorial elections. Republicans were able to over-perform in these elections. Democrats did believe they could have potential here, but the GOP were able to hold on and add a few more to their majority which helps back up how big this year was for them. Florida was huge. Incumbent Republican Rick Scott has never been a popular governor down there, but his opponent Charlie Crist isn't liked by anyone either. Crist was a Republican governor in Florida, who then became an independent for a 2010 Senate election, and now decided to go all the way to the left of the spectrum as a Democrat. Not only does this show a lack of true identity on his part (which hurt him on election night), but now he has little political credibility after losing three elections under three different parties in the last four years. He's basically the opposite of Scott Walker. 

A referendum on the Republican Party's economic views was held in Kansas along with that big Senate election. Democrat Paul Davis fought a strong campaign against Governor Sam Brownback, the most pro-free market capitalist governor in the nation right now. However, Brownback was able to prevail showing that conservative supply-side economics has won the day over liberal demand-side economics. Republicans won major victories in states that were thought to be highly liberal and supportive of the Democrats. These states were Massachusetts, Maine, and Maryland. As if to add insult to injury, Obama's home state of Illinois elected Republican businessman Bruce Rauner over Democratic Governor Pat Quinn.

Senate Minority Leader Mitch McConnell will be the majority leader in just a few months - CNN
In the Senate, I predicted that it would be 53-47 once the Louisiana election is over (because no candidate has over 50%, they are going to do a run-off where Republican Bill Cassidy will likely be victorious). The only election I was incorrect on was North Carolina, where I was surprised Thom Tillis could get as many Tea Party supporters as he could to win. Assuming Louisiana goes to the GOP, that means there will be 54 Republicans in the new Senate. The Republicans did do better than expected with eight gains tonight (nine with Louisiana). It was clear at the start of the night that this would not be good for Democrats when Virginia started to get close. Virginia was thought to go easily Democratic because Republicans didn't bother spending much money there. Obama had won it both in 2008 and 2012 and it seemed to have been turning into a battleground state. Shockingly, conservatives came out in droves to vote for challenger Ed Gillespie, who was thought to be unpopular because he represents an ultimate political insider. Instead, he came so close to Senator Mark Warner that Virginia has to do a recount. Warner might hold onto his seat barely, but this proves that there is still a huge conservative force in Virginia. If it can be exploited further in the next few elections, then it will be going back red. 

Kansas did not end up being as close as people thought it would be. Roberts won quite easily, but I would recommend this be his last term since this election year clearly wasn't a good sign for his future. Mitch McConnell won the first election of the night in Kentucky against Democrat Alison Lundergan Grimes. He will soon be the Senate majority leader. Maybe now she won't have to hide who she voted for in 2008 and 2012:


No one thought there would be any major gains in the House of Representatives. Maybe a few seats for the Republicans, but districts have become so politically aligned to one party and ideology that it was unlikely there would be much change. That didn't happen. Instead, the Republicans won a significant 13 more seats and now have their highest majority since 1928. A historic victory. If you think that's impressive, then maybe you haven't learned yet that Democrats also have control over the least state legislative chambers since before the Great Depression. According to the report I linked, there are 65 Republican chambers, 23 Democratic chambers, 1 tie, and 4 undecided. 

How and why did this happen? It's hard to say the president wasn't on the ballot. Midterm elections are often referendums to see how the people are thinking of the party that's in control. The Democrats were in control and they lost due to poor leadership from President Obama on a variety of issues from the economy to Ebola. When the voters went to the polls to decide, they were thinking of how the country was going under the president. The midterms were a clear vote against him. As a result, Congress now has the opposition party in full control to put a check on his power. It was, after all, President Obama himself who said his policies were on the ballot. The Republicans' strategy wasn't simply to play moderate, but expand conservative ideals that could fit in each state. They promoted moderate, more secular conservatism to some liberal voters and at the same a strong conservative case to the conservatives themselves and the independents. This is victory is similar to Dwight Eisenhower's presidential win in 1952. Ike appealed to everyone and didn't just pretend to be a center-right man who wouldn't bring major reforms to the country. That is why he won decisively in 1952 and again in 1956. There's a it of conservative Calvin Coolidge here too, as bringing back the Democrats to Roaring Twenties-era seats also marks a new possible era of GOP dominance like the 1920s were.

The questions now are:

1. What will the Republican Congress do?

2. Will President Obama work with them?

3. How does this change the 2016 field of candidates?


Monday, November 3, 2014

Final Prediction for the Gubernatorial Election Tomorrow

Walker or Burke? - Fox 11
This is the final rundown of a hard fought campaign between Governor Scott Walker and businesswoman Mary Burke. Both sides spent a lot of money and traveled across the state to get as many votes as possible. It now all comes down to one important day. Walker, backed by businesses and private sector workers, wants to keep his reforms in order for Wisconsin to stay on track and pass more tax cuts to spur further economic growth. Burke, with her union supporters, wants to send the state in a different direction through more government intervention in the economy that she thinks will make the recovery go faster (although, it has been noted that her plan was plagiarized from other Democratic campaigns, so little if it is original or anything she considered). Who will prevail?

Obviously polling is a key indicator and the RealClearPolitics average provides that. As of today Walker is ahead by 2.2 points. The advantage is clearly to him as he has been able to energize his base better than Burke has. Here are the four polls the average has included:

YouGov (10/25-10/31): Walker 45%, Burke 43% - Walker +2
Marquette University (10/23-10/26): Walker 50%, Burke 43% - Walker +7
Rasmussen Reports (10/20-10/21): Burke 49%, Walker 48% - Burke +1
WPR/St. Norbert (10/18-10/21): Walker 47%, Burke 46% - Walker +1

It is important to analyze that more weight should be put on the most recent two polls, as the older two conducted by Rasmussen and WPR/St. Norbert are fairly old. In a possible later post regarding the 2016 presidential election when there will be more polls, I will explain how this is actually a weakness of the RCP average and how it does have its faults. There is actually another poll after Rasmussen conducted by YouGov that is not included in the average because YouGov has published their latest one. Basically, the RCP average does not follow every poll, but every pollster. The basis of my analysis is the Marquette Law School poll, which is by far Wisconsin's most accurate poll. In 2012, it came closest to predicting Democrat Tammy Baldwin's victory margin over Republican Tommy Thompson in the Wisconsin Senate election. During the vigorous 2012 Republican Senate primary that former Governor Thompson had to deal with, Marquette was the only exit poll to predict his victory over the other three candidates. It was also the most accurate in the 2012 recall. It is clear that this is the most credible poll of the four we have.

According to the Marquette poll, 93 percent of Republicans intend on voting, 82 percent of Democrats, and 75 percent of independents. In the previous Marquette poll (which showed a 47-47 tie), 82 percent of Republicans intended to vote as well as 80 percent of Democrats and 80 percent of independents. This is critical because it means that Walker has been able to energize Republicans and more specifically the conservative base of the party to vote for him. In addition, most Republican supporters have been more active in getting their friends and family to vote. I attended a rally in Mukwonago recently where the local GOP put together a set of good speakers that included Representative Paul Ryan as the highlight. This footage was filmed by me:


Other speakers included secretary of state candidate Julian Bradley and attorney general candidate Brad Schimel. This is a big problem for Mary Burke because while she has tried to energize the base by bringing in several national figures, it is clear that hasn't happened. The source I linked, a liberal website, says that Walker is "on the ropes" in its title. They obviously haven't done much political analysis as it is clear no boost has been given to Burke. 

If we look at the history, we see that Walker won in 2012 with 53.1 percent of the vote and in 2010 with 52.3 percent of the votes. Here's 2012:


Here's 2010:


If you look at the election by county, little has changed in both years. Republicans over the last few decades have traditionally done well in suburbs and rural areas like Waukesha County, Ozaukee County, and Washington County while the Democrats are able to hold their majorities in counties with major cities such as Milwaukee County and Dane County. Overall, what we have generally seen over the last few elections is clear enthusiasm for the Republican Party. The GOP has been able to get their base out here primarily because of Governor Walker's reforms, which have been important in the state's budget and economy along with national attention that gives other governors the possibility to enact similar reforms. Winning this election could propel Walker to the spotlight of the presidential election. Burke has never held an elective office and her old boss Jim Doyle was never a popular governor

Finally, the last major analysis should be on any sudden issues that have come up over the campaign trail. Most recently, Burke has been in trouble because it has been confirmed that she was fired by her own family while working as an executive for Trek Bicycle in the company's European market. Originally stated by several executives, it was finally confirmed true by former Trek COO Tom Albers in a radio interview on News/Talk 1130. In quick fashion, Burke gave an incredibly weak response saying that her position was technically "eliminated." Among one of the former Trek executives to say she was fired was Gary Ellerman, who is the chairman for the Republican Party of Jefferson County. In a rapid response and act of desperation from Burke's campaign, an ad has been made which has shown that Ellerman has had some pretty nasty political pictures posted on his wall. However, the Burke campaign's intention is to brand Ellerman a Nazi in order to link Walker to Nazism. Obviously the attempt is to shock voters into voting for Burke, but it is unlikely to work in such a short amount of time. 

Through this analysis I believe the election will be:

Scott Walker - 52.6%
Mary Burke - 46.4%
Others - 1.0%