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This piece was originally intended as an op-ed for the Union-Leader. However, they did not pick it up. Therefore, I’m running it here.

Why did Republicans do poorly in the last state elections in New Hampshire? There is no shortage of theories, but what has been lacking is any attempt to test those theories on the evidence.

One of the most popular claims, from both Democrats and parts of the Republican establishment, is that the Republican legislature of 2011-12, particularly the state house under Speaker Bill O’Brien, was overly conservative or libertarian. Here’s what former Republican state chair Fergus Cullen had to say in the Union-Leader right after the election (“Will NH Republicans learn the lessons from Tuesday?,” November 8, 2012): “The drag on the ticket was the motley crew of insular Tea Partiers, Free Staters, birthers, Agenda 21 conspiracy theorists, and borderline anarchists calling themselves Libertarians who dominated the Republican majority in the Legislature, led recklessly by soon-to-be ex-Speaker Bill O’Brien.”

Is that true? If it were, then Republican candidates for state house would have done worse than the Romney-Ryan ticket at the top, as some share of voters decided to punish alleged “extremist” state house candidates while still voting for the moderate-conservative Republican presidential ticket. Did that actually happen?

In a word: no. But don’t take my word for it: look at the final data posted by the Secretary of State. Statewide, Republicans received 1,084,642 votes for state house candidates, 51.3% of the total – a majority! By contrast, Romney-Ryan received only 46.4% of the presidential vote in New Hampshire. Gubernatorial candidate Ovide Lamontagne won only 42.5% of the vote.

These figures might be misleading, however, because New Hampshire has many multimember and floterial districts, so some voters end up casting more votes than others for state house, depending on where they live. A better approach is to focus on single-member, non-floterial house districts, comparing votes for state house and presidential candidates in just those districts.

When we do this, looking only at the 49 house races statewide in which one Democrat and one Republican competed, we find that GOP candidates received, on average, 44.0% of the two-party state house vote in those districts. In those same districts, the GOP presidential ticket received only 42.9% of the two-party presidential vote.

Thus, Republican state house candidates ran slightly ahead of the presidential ticket, in some cases (more…)

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The Second Term Begins

Today is the inauguration and the beginning of President Obama’s second term in office.

Ralph Nader, for one, isn’t impressed with inaugurations. As he noted Sunday:

“Tomorrow I’ll watch another rendition of political bulls—- by the newly reelected president, full of promises that he intends to break just like he did in 2009.”

Nader might be a bit harsh in his evaluation. I doubt that President Obama assumed office in 2009 with the intention to break his promises. More likely, he issued his promises to build a coalition and did so before he fully understood the intrinsic complexities of the issues and the limitations of the office.  In the end, there are distinct limits to what a president can achieve given our system of separate institutions sharing powers.  Certainly, President Obama seems to have had distinct difficulties with Congress, even when there was unified Democratic control (e.g., health care, Dodd-Frank, climate change). Whether this was a product of his inexperience or his management style is the subject of ongoing debate. Certainly, things have only become more difficult in the post-2010 period with the GOP in charge of the House. The sluggishness of the recovery (in part a product of public policy and regime uncertainty) has imposed its own set of constraints.

This weekend, Ed O’Keefe provided his assessment of the past four years (WaPo), comparing the campaign promises of 2008 with the performance record. His assessment:

  1. Afghanistan: partially achieved
  2. Iraq: achieved
  3. Climate change: incomplete
  4. Health care overhaul: partially achieved
  5. Guantanamo Bay: failed
  6. The economy: failed
  7. Transparency/government openness: partially achieved
  8. Making government “cool again”: incomplete
  9. United States’ standing in the world: partially achieved
  10. Financial overhaul: partially achieved
  11. Breaking the partisan logjam: failed
  12. Supreme Court appointments: achieved

I would issue a somewhat harsher evaluation of Afghanistan, climate change, transparency and the financial overhaul.  Beyond these items, I would make more of the expansive use of drones and the carnage it has created for civilian populations (apparently, we mourn only the innocent children killed within our own borders).

Looking to the future, my guess is that some of the promises of the past will be recycled. Others (gun control, immigration) will rise to the top. The constraints imposed by our fiscal problems and the economy will continue to impose limits, both in terms of new spending programs and their crowding out other items on the policy agenda.  All in all, I can’t imagine that there will be much of a legacy emerging out of the next four years.

Do any Pileus readers want to issue their own assessment of the past four years?

Any predictions of what the next four years will hold?

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In Canada, provincial parties are totally organizationally independent of federal parties and may not even have the same names. Thus, the British Columbia Liberal Party has generally been right-of-center, and British Columbia Liberals tend to vote Conservative at the federal level. Quebec Liberals have generally been more Quebec-nationalist/decentralist than the federal Liberals. Most provinces have parties named “Progressive Conservative,” even though there is no longer any federal Progressive Conservative Party. And so on.

Of course, it doesn’t work that way in the U.S. State (and even local) elections feature Republican and Democratic candidates, except in Nebraska, where state legislative elections are nonpartisan. As a result, state election results are driven by national trends. Surprisingly, political scientists had not formalized this insight until recently. Here is a paper from Steven Rogers:

State legislative elections are not referendums on state legislators’ own performance but are instead dominated by national politics. Presidential evaluations and the national economy matter much more for state legislators’ elections than state-level economic conditions,  state policy outcomes, or voters’ assessments of the legislature. Previous analyses of  state legislative elections fail to consider which party controls the state legislature and whether voters know this information. When accounting for these factors, I discover that even when the legislature performs well, misinformed voters mistakenly reward the minority party. Thus, while state legislatures wield considerable policy-making power, elections are ineffective in holding state legislative parties accountable for their own performance and lawmaking.

Tyler Cowen calls this “the problem with federalism.” But it isn’t a problem with federalism as such. It’s a problem with U.S. federalism. In Canada, you can’t send a message to the federal government by voting against the incumbent federal party at the provincial level. (In fact, provincial elections are not held on the same days as federal elections.) Changing the perverse accountability dynamic of U.S. state legislatures may require something as simple as changing the names of state parties.

State parties may even have an incentive to do this. For instance, the Republican Party in New Hampshire could change its name to something like “New Hampshire Conservative Party” or “New Hampshire Party.” By doing so, it could help to insulate itself from the partisan swings at the national level that are beyond its control.

In the last election, New Hampshire Republicans lost majorities in the state house and the executive council. The reason for this was the (more…)

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Media are reporting the results of the Puerto Rico status referendum as if the statehood option had won. Now, it may indeed be the case that the resident commissioner will present legislation of accession to the Union in the House of Representatives, but only an oddly structured ballot devised by the pro-statehood party allowed the referendum to “succeed.” In fact, a majority of Puerto Ricans voted against statehood.

The ballot asked two questions. The first question asked voters, “Do you agree to maintain current territorial political status?” The “no” option received 54% of the vote, 934,238 votes of 1,730,245 valid votes. The second question asked voters to choose among three status options: statehood, associated free state, and independence. Statehood received 61.15% of the valid votes, 802,179 votes in all.

But note two things. First, many voters who opposed statehood in favor of, say, independence would have voted “no” on the first question. Second, 25% of the ballots on the second question were left blank, apparently out of protest at a question the pro-status quo party regarded as unfair. If you add blank ballots to the total on the second question, the statehood option received less than 45% of the vote.

This is a good example of how political leadership tries to use a cyclical majority to secure its favored alternative.

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Election Silver Linings

While a lot of folks are disappointed in last night’s most prominent election results, there are some silver linings:

  1. Colorado and Washington passed ballot initiatives legalizing possession and sale of small quantities of marijuana. This could be the thin end of the wedge that ultimately dooms the drug war, as the DEA won’t be able to prosecute everyone who engages in the marijuana business in those states. Also: citizens of Mexico rejoice.
  2. Michigan’s “Protect Our Jobs” initiative, which would have written union privileges into the state constitution, went down to defeat.
  3. California’s anti-science GMO labeling proposition was soundly defeated.
  4. Same-sex marriage was passed in Maryland and Maine. (Usual disclaimers about getting government out of the marriage licensing business altogether apply.)
  5. Several freedom-loving U.S. Reps were (re-)elected, including Thomas Massie in Kentucky and Justin Amash and Kerry Bentivolio in Michigan.
  6. In New Hampshire, Obama ran three points better than in the nation as a whole, no better than Kerry in 2004. Thus, NH’s march to the left really does seem to have halted in 2004.
  7. While Dems took the gubernatorial race and the executive council majority in New Hampshire, Republicans will keep the state senate, and the state house remains too close to call (I’ve seen differing judgments about the likely partisan majority). It looks as if GOP house reps ran slightly ahead of the top of the ticket, which is very difficult to do in this age of party-line voting. In addition, word on the street is that a dozen Free State Project participants won state house seats, the same as in 2010. It was a shame to see good, hard-working reps like Jenn Coffey and Tammy Simmons lose close races, but it was also good to see new blood come in and others return, like Democratic FSP’er Joel Winters. Also, hardcore anti-FSP statist Republican Lee Quandt was defeated. The bottom line is that NH will get a medical marijuana law in the next session and otherwise we should expect little change in policy (probably a slight spending increase and a repeal of the tobacco tax cut).

Also: it looks as if I won all three bets placed on my forecasts, for better or worse. ;-)

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Following Grover’s urging, I’m revealing my vote and my pairwise preference in the presidential contest. My vote in safely Democratic New York is for Libertarian Gary Johnson, but I do have a slight pairwise preference for Romney-Ryan over Obama-Biden. The reason is that while both sets of candidates are equally bad on all sorts of issues, as Marc notes below, the PPACA (Obamacare) really is a tiebreaker. It’s not just that the PPACA is bad policy, but also that it vitiates an important area of federalism. The feds have summarily executed all the state-level experiments in regulating and providing health insurance. The free-market option of permitting low-mandate, high-deductible, low-cost policies to expand coverage has forever been foreclosed. If Obama wins, the PPACA will go into effect and will never be repealed, and another chunk of American federal institutions will go down the drain forever.

Of course, the PPACA will only be repealed if Republicans take both the presidency and the Senate, the probability of which must hover around something like 3% at this stage. If I lived in a swing state, I might well cast my first-ever vote for a Republican in a presidential general election, but I don’t, so I won’t.

Randy Barnett’s argument that we shouldn’t vote Libertarian because it only encourages them to continue existing does not persuade me. The Libertarian Party provides a safe harbor for principled votes when both Democrats and Republicans are genuinely terrible (have we forgotten George W. Bush, Tommy Thompson, et al. so soon?). They also help keep the two parties, especially Republicans, aware of the possibility of being punished by libertarian voters for bad policy decisions, theoretically promoting good policies in the long run even if facilitating some short-run defeats of “lesser of two evils” candidates. Now, admittedly, this strategic role would work much better if Libertarian candidates were strategic about the races they enter (why in the world is a Libertarian running against Jeff Flake in Arizona?), but even so, I would regret very much the demise of the Libertarian Party as a national political option.

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Here are my prognostications for Tuesday. I agree with Alex Tabarrok that a prognostication isn’t worth much if the issuer isn’t willing to put something behind it. Therefore, I’m willing to take bets on any of these.

Probability of Obama victory: 4 to 1. Somewhere between Intrade and Nate Silver. In fact I tried to make a bet on Intrade in favor of Obama several days ago, but they wanted all sorts of private information on my identity that I wasn’t willing to give them. I will take either side of this bet at those odds.

Popular vote share: Obama 50.0, Romney 48.3, Johnson 0.7. I’m willing to take either side of these at even odds.

Electoral vote: Obama 294, Romney 244. Again, I will take either side of this bet at even odds.

Senate: 53 D (incl 2 I), 47 R. Same deal – either side, even odds.

House: Republican majority. I’ll give 13 to 1 odds against a Dem takeover.

New Hampshire Predictions

Governor: Hassan (D). I’ll take even odds against.

Executive Council majority: R. Same.

Senate majority: R. Same.

House majority: R. Same.

If you’d like to make a bet, please post in the comments and then e-mail me your contact information. My e-mail address is jsorensATbuffalo.edu (replace the “AT” with the “at” symbol). Please limit my total exposure on any one bet to $100 maximum (I’m not wealthy).

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Ilya Somin has a detailed and thoughtful post contrasting Mitt Romney and Barack Obama from a libertarian perspective. He comes down tentatively on the side of Romney overall, but acknowledges that more pacifistic libertarians might reasonably support Obama as the lesser evil. The most informative section for me was that on judicial nominations. In particular, I’m led to question my earlier view that voting GOP for the Court is pointless, in part because I trust that Ilya has some local knowledge here that I lack. My view is that the conservatives’ federalism jurisprudence has been more symbolic than substantive. On the other hand, property rights and political speech are important policy areas where the judicial right easily trumps the judicial left, an advantage perhaps not overwhelmed by the left’s superiority on wartime executive power and the rights of criminal defendants.

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Per commenter FreeDem’s request, here are some other ways to interpret Ron Paul’s primary performances in each state, building on the statistical models estimated here.

The first exercise is to simulate what Paul’s percentage of the vote would have been in each state had they all voted at the same time with the same “institutions” (candidates on the ballot, primary vs. caucus, closed vs. open, and so on). For this exercise, I assumed that all calendar and institutional characteristics were at the median for the nation as a whole. Thus, I assume a primary not a caucus, a closed primary rather than an open or semi-open one, three other candidates on the ballot, a ballot date after Mitt Romney had built substantial momentum with his Michigan victory on Feb. 28 — but before his virtual mathematical clinching on Apr. 2, and no home state advantage for any candidate.

Under these conditions, Paul would have obtained 13.9% of the vote in the average state. Here is how he would be forecast to do in each state, in alphabetical order:

State pred12
Alabama 7.39%
Alaska 15.37%
Arizona 8.70%
Arkansas 13.77%
California 12.17%
Colorado 10.81%
Connecticut 15.94%
Delaware 12.48%
District of Columbia 12.17%
Florida 10.14%
Georgia 12.20%
Hawaii 12.30%
Idaho 11.53%
Illinois 9.68%
Indiana 15.93%
Iowa 19.70%
Kansas 13.73%
Kentucky 14.82%
Louisiana 10.51%
Maine 19.48%
Maryland 13.58%
Massachusetts 17.73%
Michigan 16.80%
Minnesota 12.71%
Mississippi 6.53%
Missouri 12.76%
Montana 14.80%
Nebraska 11.26%
Nevada 10.09%
New Hampshire 31.74%
New Jersey 11.75%
New Mexico 12.29%
New York 17.28%
North Carolina 12.63%
North Dakota 15.54%
Ohio 12.80%
Oklahoma 16.45%
Oregon 15.12%
Pennsylvania 26.43%
Rhode Island 27.08%
South Carolina 16.29%
South Dakota 15.40%
Tennessee 13.42%
Texas 15.57%
Utah 5.39%
Vermont 31.41%
Virginia 24.61%
Washington 15.81%
West Virginia 12.54%
Wisconsin 13.85%
Wyoming 13.27%

The rank order of states here is of course exactly the same as in the table of residuals from my earlier post, but the presentation of the numbers is perhaps more intuitive.

The next analysis looks at why Paul improved from 2008 so much in some states and little if any in others. In my last post I found that Paul’s electoral performance in 2012 is predicted by state opinion ideology, with more left-wing states giving more support to Paul. However, 2008 LP support is not at all correlated with Paul support in 2012. I inferred that Paul received a great deal of support from voters who would otherwise go Democratic and from liberal Republicans and independents, particularly since the association between ideology and Paul support strengthened conditional on an open primary.

However, I did not control for how “pro-Ron Paul” a state was in 2008. FreeDem reports seeing some odd state-level differences between Paul’s 2008 success and 2012 success when eyeballing the data. Using my analysis of the 2008 returns, I now try formally testing whether Ron Paul’s support in 2008 was correlated with his support in 2012. I regress the log of Paul support in 2012 on the institutional variables, Democratic-Green vote share in 2008, and the log of institution-corrected Paul vote share in 2008. Here are the results:

. regress lnrp caucus12 open12 closed12 ocb clinch home demgr08 lnrp08

Number of obs =      49
F(  8,    40) =    9.67
Prob > F      =  0.0000
R-squared     =  0.6592
Adj R-squared =  0.5911
Root MSE      =  .31484

------------------------------------------------------------------------------
        lnrp |      Coef.   Std. Err.      t    P>|t|     [95% Conf. Interval]
-------------+----------------------------------------------------------------
    caucus12 |   .5744784   .1465334     3.92   0.000     .2783233    .8706335
      open12 |   .0946405   .1444686     0.66   0.516    -.1973414    .3866224
    closed12 |  -.1744016   .1367005    -1.28   0.209    -.4506836    .1018805
         ocb |  -.1192173   .0418184    -2.85   0.007    -.2037355   -.0346991
      clinch |  -.1881422   .1700441    -1.11   0.275    -.5318141    .1555297
        home |   .0832717   .2090593     0.40   0.693     -.339253    .5057963
     demgr08 |   .0091053    .004799     1.90   0.065    -.0005938    .0188044
      lnrp08 |   .4681954   .1376803     3.40   0.002     .1899331    .7464578
       _cons |  -.5945686   .6079726    -0.98   0.334    -1.823327    .6341899
------------------------------------------------------------------------------

Now I do find evidence that Paul’s support in 2012 depended on the strength of the Paul constituency in 2008, controlling for everything else. Although the statistical significance is strong, the substantive import is in a sense strikingly low. Since the dependent and independent variable are both in logs, we can interpret the coefficient on Ron Paul support in ’08 — 0.468 — as an elasticity. In other words, for every 1% more votes Paul got in 2008, he got just 0.5% more votes in 2012. That tells us that while Ron Paul’s base turned out again for him in 2012, his additional success was probably not related to picking up a bunch of semi-libertarian marginal voters who might have gone with him had his campaign been stronger in 2008. Instead, he reached a whole new constituency. Paul more than doubled his vote share between 2008 and 2012. That mostly did not come from mobilizing more libertarians. He got the libertarians to vote for him again, but most of his new votes came from people we would not normally think of as libertarians.

Who exactly were these new Paul voters? We can find out more, I think, by looking at individual states where Paul improved or did not improve between elections. Here are some states where Paul did badly in both years (adjusted vote shares from 2008 and 2012 in parentheses): Alabama (2.9%/7.4%), Utah (3.0%/5.4%), Mississippi (1.9%/6.5%), Arizona (4.4%/8.7%), and Illinois (5.4%/9.7%). These are states without many libertarians and also without many social and foreign policy moderates and liberals. We could throw in West Virginia (2.9%/12.5%), Florida (3.8%/10.1%), New Jersey (4.9%/11.8%), Delaware (4.2%/12.5%), and California (6.3%/12.2%) as also being of this type.

Then we have states like Idaho (10.8%/11.5%), D.C. (7.8%/12.2%), Montana (7.8%/14.8%), North Dakota (7.1%/15.5%), South Dakota (8.6%/15.4%), and Washington (8.2%/15.8%), where Paul did well in 2008 but did not improve much in 2012. He seemed to hit a ceiling in places like these. My hypothesis is that these states have a lot of libertarians but not many social and foreign policy moderates who are willing to take a Republican ballot. In all the states I just mentioned except perhaps D.C., social conservatives tend to dominate the state Republican party. Washington may be a partial exception, but only a partial one. Washington certainly does not have the tradition of moderate Republicanism that, say, Massachusetts and Connecticut do.

Then there are states where Paul underperformed in 2008 and then improved significantly in 2012: Connecticut (4%/15.9%), Indiana (4%/15.9%), Iowa (3.8%/19.7%), Kentucky (3.8%/14.8%), Massachusetts (3%/17.7%), Oklahoma (4%/16.5%), Rhode Island (6.1%/27.1%), South Carolina (4.3%/16.3%), and Vermont (6.4%/31.4%). New York (6.7%/17.3%) is a state where Paul went from slightly above average to well above. What at least some of these states have in common is a lot of former Republicans and independents who are moderate to liberal on social and foreign policy issues. (I can’t explain Oklahoma, but South Carolina’s improvement might have to do something with a bounce from New Hampshire, and Kentucky with Rand Paul’s prominence.) In Vermont, especially, I will bet my bottom dollar that most Ron Paul voters were centrists or even progressives ticked off at wars, banker bailouts, and civil liberty infringements, but not necessarily signing onto Paul’s whole economic program. His outstanding improvement there may also have something to do with spillover from New Hampshire.

Finally, there are only a few states where Paul did very well in both years: Maine (6.9%/19.5%), Michigan (7.2%/16.8%), New Hampshire (11.2%/31.7%), and Pennsylvania (7.8%/26.4%). These seem like states with both quite a few libertarians and lots of moderates and progressives willing to take a Republican ballot. While economic insecurity might be another hypothesis for the increase in Paul support, that wouldn’t explain why Paul did so poorly in Nevada (10.1% adjusted), New Jersey (11.8% adjusted), or Georgia (12.2% adjusted), all of which have suffered more than the national average from the bursting of the housing bubble.

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After the 2008 primary season, I analyzed Ron Paul’s performance in each state to see how institutional factors such as caucus and primary form affected his electoral success. This exercise turned out to be useful for estimating the size of the pro-liberty electorate in each state. In this post, I do the same with the 2012 results.

The dependent variable in this analysis is the percentage of the vote obtained in each state’s statewide primary or caucus. If a state held both a primary and a caucus or convention, I used the primary results. The independent variables are as follows. (All variables were taken from Dave Leip’s Atlas of U.S. Presidential Elections.)

First, I use a dummy variable for whether the state had a caucus or convention versus a primary. As an outsider candidate with a committed band of activist supporters, Paul tended to do much better in caucuses than primaries.

Next, I also included dummy variables for who is eligible to vote: a dummy for an open caucus/primary, in which all voters are allowed to vote, and a dummy for a closed caucus/primary, in which only registered Republicans are allowed to vote. The excluded category consists of “modified-open” elections, in which independents and Republicans are allowed to vote. Since Paul was more popular among self-identified independents than among self-identified Republicans, it stands to reason that he would do best in open primaries and worst in closed primaries.

I also tried variables for the number of other candidates running active races and appearing on the ballot. In this regard, I counted only “significant” candidates that might have had a chance of winning, that is, the following six (other than Paul): Mitt Romney, Rick Santorum, Newt Gingrich, Rick Perry, Jon Huntsman, and Michele Bachmann. Bachmann dropped out of the race after Iowa and Perry and Huntsman after New Hampshire. Thereafter, Santorum withdrew only after the April 10 primaries and Gingrich held on until May 2. However, in many states – almost entirely primary states – candidates that had withdrawn remained on the ballot and often received significant support. We should expect both of these variables to have a negative influence on Paul’s vote share (for instance, in Virginia, where only Romney and Paul were on the ballot, Paul benefited from tactical voting by supporters of other candidates and received 40%), but in fact the number of candidates in the race had a statistically significant, positive association with Paul’s support (candidates on the ballot has the expected negative association, as shown below). This result is theoretically implausible and apparently simply captures Paul’s otherwise unexplained success in Iowa and New Hampshire. Therefore, in the estimations reported here, I have included solely the variable for number of non-Paul candidates on the ballot.

Next, I included a three-point variable for the extent to which Mitt Romney had clinched the Republican nomination when the primary in question was held. After February 28, it became very unlikely that Romney would lose, as Nate Silver noted here. After April 3, it became a near mathematical certainty that Romney would win. Therefore, the “clinching” variable takes on values of 0.5 for contests held after February 28 through April 3 and values of 1.0 for contests held after April 3.

Finally, I include a variable intended to capture home-state effects for active candidates. It is coded zero for all states except Massachusetts, Georgia, and Texas. For the former two, home states of Romney and Gingrich, respectively, it is coded -1, and for the last, Paul’s home state, it is coded 1. (Santorum dropped out of the race before the Pennsylvania vote, for which reason it is coded zero.)

The dependent variable is rather skewed, as the following histogram shows:

As a result, statistical analysis with this variable revealed the presence of heteroskedasticity, which violates the assumptions necessary for Ordinary Least Squares regression. Therefore, I transformed the variable using the natural log, which gave it a roughly normal distribution and eliminated heteroskedasticity in the regression analysis:

The results of the regression analysis are reported below the fold:
(more…)

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A colleague of mine pointed me to this anti-Romney ad, adding that he thought it was “effective” because of its focus on one compelling story. Have a watch:

I did not find it effective. It does focus on one story, and it does make it sound like this person was made worse off by Romney. But capitalism is about creative destruction—and you cannot have creation without destruction. The computer I am writing on now (and that my colleague wrote on to send me that link), for example, came into being in part by destroying the manual typewriter manufacturing sector. How many plaintive stories were there about displaced manual typewriter workers? How many people lost jobs when their companies went out of business because of the success of the phone on which I first viewed the ad? Similar stories could be told about countless other cases.

That is not to say that the person (the people) whose story is told in this ad did not suffer displacement, disappointment, anxiety, or frustration. But they are much, much better off overall for living in a place where capitalism’s creative destruction is allowed to continue. What car does he drive? What medical care does he receive? What medicines does he take? How is his home heated and cooled? How fast is his home internet connection, and how many channels does he have on his high-definition television? Do we suppose he, or we, would be able to enjoy such things if we did not allow capitalism’s creative destruction?

As Bastiat pointed out in the nineteenth century (and Adam Smith pointed out in the eighteenth century), production of wealth is not only about the “seen,” but also about the “unseen.” So we see that this man and his co-workers lose their jobs. But what is done with the wealth that is thereby saved, and put to other uses? If Romney and Bain Capital made a profit in this transaction, what did they do with that money? Put it in a coffee can and bury it in the backyard? Carry it around in great big fanny packs? No, they reinvested it elsewhere, in places where it was put to better use, where it was more highly valued.

We could create a lot of jobs by outlawing farm machinery. Just think of how many people would have to be employed by farms, doing with their hands what far fewer people can do today with machines. If you think that would be a good idea, then you are not taking a full view of the situation. You are focusing only on the seen, the jobs people will have working on the farms; you are not considering the unseen, all the things those people would have been doing if they did not now have to work with their hands—all the productive labor in which they would otherwise have engaged, all the wealthy they would otherwise have created.

We should not discount the pain and suffering of people who lose their jobs. It is real, and those of us who can help them, should. But condemning the system that has given rise to the greatest increase in prosperity in human history because it involves displacements and disappointments would be like condemning modern medicine because many treatments hurt.

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I’ve been seeing all kinds of abuse being hurled at Rand Paul for his endorsement of Mitt Romney in this year’s presidential election. He doesn’t deserve any of it. Let’s recapitulate some facts for the benefit of blinkered Ron Paul devotees abusing Rand:

  1. Ron Paul can’t win the GOP nomination. I don’t care what Alex Jones told you. Get over it.
  2. Someone named either Barack Obama or Mitt Romney will win the election. I don’t care who does; I’ll be voting for Gary Johnson. Regardless, Rand’s endorsement won’t make a bit of difference. He did something nice for the people (Republicans) he will have to work with and get to support him for the next several years. It was purely symbolic.
  3. Let’s recall what Rand has done in the Senate:
    1. Singlehandedly killed a terrible amendment to the indefinite-detention provision that would otherwise have passed on a voice vote;
    2. Held up the Iran sanctions bill until an amendment was included to specify that it does not authorize force against Iran (remember how Bush abused that UN resolution to declare war on Iraq illegally?);
    3. Has gone on a crusade to abolish the TSA;
    4. Has won grudging admiration from his colleagues for his ability to use Senate rules and personal relationships to advance his agenda.

The man has our back in the Senate. I don’t agree with him on everything, but he’s a damn sight better than anyone else in that cesspool. I could now go on a rant about how libertarians continue to lose the fight for liberty with a weakness for prioritizing symbolism over substance, but I think I’ve made my point.

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One keeps hearing that the euro crisis could doom Obama’s chances for reelection. (Because, after all, that’s the reason we should be concerned about the economy: its effects on politics.) I’m not so sure. Voters are hardly well informed, but if the Eurozone goes into deep recession and the U.S. into a mild one, won’t voters discount economic performance a great deal by looking at the cross-national difference? U.S. GDP growth of about 2% (annualized) right now is mediocre, but compared to Eurozone growth of about zero, it looks pretty good. Powell and Whitten (1993) and Whitten and Palmer (1999) find just this in their cross-national analyses of economic voting: the models do better when you assume that voters deduct OECD growth from national growth when assessing incumbents. No one in the U.S. presidential forecasting game seems to talk about these papers.

So here’s the bleg: Has anyone actually tried doing standard-issue presidential forecasting models with a cross-national growth adjustment? If so, what are the results? I’d find it hard to believe that U.S. voters are all that different from European voters in this respect. If no one’s looked at this, it seems to me that we need to put a firm thumb on the scale in favor of Obama when assessing the forecasts being released now.

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Economic Muddle

Each week when I get the Economist, I usually go straight to the Lexington column. This week it addresses the “war over class war.” The final paragraph is a keeper:

Mr Romney is fond of saying that Mr Obama has no idea how the economy works and how jobs are created. The way the Obama campaign talks about Bain Capital suggests that his criticism is correct. Mr Obama, as noted above, likes to insinuate that there is a conflict between pursuing profits and creating jobs. In the long run, however, in a competitive economy, that is nonsense. Only profitable firms can sustain any jobs, and the more profitable they are, the more money they have to invest in new ventures with new workers. Mr Obama is guilty not of rhetorical excess but of economic muddle. That is far more worrying.

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Regulations

I don’t often share memes, but when I do, it’s this one.

HT: The Whited Sepulchre

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A new Washington Post-ABC poll focuses on voter perceptions of whether Obama or Romney would do more to improve the economy (poll results here, discussion here).

When asked “Who would do more to advance the economic interests of middle-class Americans,” Obama wins over Romney, 50% to 44%.  When asked who would do more to advance the economic interests of financial interests, Romney wins 56% to 33%. When asked who would do the most to advance the interests of the wealthy, Romney wins 68% to 21%.

Thus far, a win for Obama. The take home message: there is a strong class division at play. To the extent that Obama can exploit class divisions, he will be successful (after all, we are a middle class nation and as the poll reveals, the majority believe that Obama will advance the interests of the middle-class).

But this lesson seems to be the wrong one to glean from the poll results. When white voters are asked “Who would do more to advance the economic interest of you and your family?” the poll reveals the following results:

  •  Working class: Romney 44%, Obama 42%
  • Comfortable in current class: Romney 49%, Obama 41%
  • Middle class: Romney 53%, Obama 38%
  • Struggling to remain in current class: Romney 55%, Obama 32%
  • Laid off/knows someone whose been laid off: Romney 56%, Obama 32%
  • Upper middle class/better off: Romney 61%, Obama 29%

This raises an interesting question: how could a majority believe that Obama would advance the interests of the middle class when members of the middle class (and working class, and upper middle class, etc) believe that their best bet is Romney?

Public opinion is interesting and frustrating. In one of the classes I teach (environmental policy) I provide students with some data that shows two things: (1) a majority believe the environment has gotten worse, and (2) a majority believe that the environment, as they experience it, has improved. Both can’t be true simultaneously. I use this example to explain that people tend to gain their impression of macro-conditions via the media, which focuses on sensational stories, even if the larger story stands at odds with their own experiences. As a result, a majority thinks the environment has improved for them but has become worse for everyone else–an impossibility, to be certain.

The media seems committed to a distinct meta-narrative:  Obama will promote the interests of the middle class whereas Romney will cater to the 1 percent. To some extent, it appears, voters have accepted this portrayal. Yet, in their own assessment of how the candidates would impact on the economic welfare of themselves and their families, they depart from the meta-narrative.

This is not good news for the Obama campaign, particularly if voters will decide in November  based on their projections of how a given candidate’s victory will impact on them and their families. This is the big lesson.

 

 

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The last week has brought a fair amount of attention to the Obama campaign attacks on Romney and Bain Capital, most of which might have been lifted straight out of the “vulture capital” meme started by the Rick Perry campaign. It all started with Corey Booker’s rejection of the Obama strategy on Meet the Press ( a decision that is reportedly paying off quite nicely). It then spread quickly, ultimately finding an expression in Romney ads.

Steve Ratner, former Obama car czar and financier, has an interesting piece in the NYT that is worth a quick read.  A few quick quotes:

In fact, Bain Capital — like other private equity firms — was founded and managed for profit: ideally, huge amounts of gain earned legally and legitimately. Any job creation was a welcome but secondary byproduct.

The language in one prospectus seeking Bain Capital investors was clear: “The objective of the Fund is to achieve an annual rate of return on invested capital in excess of the returns generated” by other investments. Any job creation was accidental. …

That’s not wrong; it’s part of capitalism. Whatever its flaws, private equity has made a material contribution to sharpening management. But don’t confuse a leveraged buyout with job creation.

Ratner chastises Romney for claiming responsibility for all jobs created, even after he left Bain, while deflecting any responsibility for jobs lost. It seems that Ratner has a point.

Yet, if this was Romney’s mistake, he is not alone. All we have heard in the past 3 years and 5 months is that every job lost since inauguration day was the product of Bush’s policies whereas every job created (and/or saved) since inauguration a product of the Obama policies. There is no honest accounting, no recognition that some jobs have been lost or created in spite of public policy decisions.

The President seems to have altered his tone—only slightly—and now claims that there is nothing wrong with private equity firms. But even successful management of a private equity firm does not qualify you to be president where you must make jobs.

At least Ratner et al are directing attention back to the fact that capitalism’s primary function is not to generate an endless stream of jobs, even if this is one of the beneficial byproducts.

One only wishes we could apply the same lesson to government. Government’s primary job is to defend life, liberty, and property rights. If it restricts itself to these functions, there may be a stream of new jobs. But as with private equity, it is one of the beneficial side effects, not its primary function.

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Now that the press has ratcheted up the pressure on the President to clarify his ever evolving position on gay marriage, President Obama has agreed to “a hastily scheduled interview just a day after voters in North Carolina approved a state constitutional amendment defining marriage as a union between a man and a woman.” See Politico coverage here.

This should prove interesting. Supporters seem baffled at the slow pace at which the President’s thinking has evolved. They should be far more surprised with how quickly it has evolved on the closing of Guantanamo and the use of military tribunals, the extensive use of drones, the urgent need for climate change legislation, the Employee Free Choice Act (card check), the Bush tax cuts, etc., etc., all of which were central to the promise of “Hope and Change.”

Of course, Mr. Obama is not alone (I think we can all recall the 2000 election season and the promises of a humble foreign policy, an end to nation-building, and reducing the government to 16 percent of GDP; if you need a refresher, James Bovard stands ready to assist you). And Mitt Romney has certainly evolved, devolved, and re-evolved in recent years.

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The Bucket of Warm Spit

FDR’s first Vice President, John Nance “Cactus Jack” Garner, once noted that the office was “not worth a bucket of warm spit” (note: the contents of the bucket vary based on the source). Given his opposition to the court-packing scheme, I will accept his judgment as sound.

The question of who will be selected to carry the bucket is always an interesting one. At present, attention is turning to Mitt Romney. Who should he select? As the Hill reports, two new polls on this question have provided different responses.

CNN/ORC poll provides the following rank order:

  1. Condoleezza Rice: 26 percent
  2. Rick Santorum: 21 percent
  3. Chris Christie: 14 percent
  4. Marco Rubio: 14 percent
  5. Paul Ryan: 8 percent
  6. Bobby Jindal: 5 percent
  7. Bob McDonnell: 1 percent

Quinnipiac only reports two results: Christie (31 percent) and Rubio (24 percent).

Assuming that the vice presidency is worth more than a bucket of warm spit, are there any names that the pollsters have missed that might prove more attractive, particularly to those of us who find so little attractive in the presumptive nominee?

Note: I am not certain that any selection could convince me to participate in the binary.

UPDATE:  Marco Rubio and revealed preferences.

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I’ve never voted for a Democrat or Republican for president at a general election. I’ve always voted for a Libertarian (in 2008 I voted for George Phillies, who was on the ballot as a Libertarian in New Hampshire in addition to the official candidate, Bob Barr), and I’ve never had reason to regret my vote. Throughout my adult life (I first voted in 1996), every U.S. president has been worse than the one before, and the major-party candidates they defeated would almost certainly have been just as bad.

One common argument I hear from Republicans is that libertarians should vote for Republican presidential candidates because of the Supreme Court. And indeed, libertarians generally share conservatives’ enthusiasm for the prospect of the Supreme Court’s overturning at least part of the PPACA. However, the recent 5-4 Supreme Court decision authorizing invasive strip searches of all arrestees shows us the other side of the coin: the Supreme Court’s conservatives are disturbingly willing to defer to the executive branch on issues of non-economic personal liberties. Most of the politically controversial cases with which the federal judiciary deals have to do with civil liberties and civil rights. Major Commerce Clause cases come around only once every few years — and even there, Scalia and Kennedy are unreliable.

How will the current Court (more…)

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…Making taxpayers foot the bill for your campaign events.

Obligatory disclaimer: Republican presidents did this too, I’m sure.

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Political scientists are an odd bunch. They get excited by the establishment of political authority and by its dissolution, by good governance and bad. Every political scientist undoubtedly has a list of things that he or she would find fascinating.  It looks like this year I may be able to check off another item.

Collapse of the Soviet Union (1991)

Death of an entitlement (1996)

Presidential impeachment (1998)

Balanced federal budget (1999)

Presidential election decided by the Supreme Court (2000)

Presidential selection by House of Representatives

Brokered convention (2012?)

Constitutional convention

Rediscovery of 10th Amendment

 

I’ll note that Newt was involved in several of the crossed out items (1996, 1998, and 1999). Given his seeming insistence to stay in the GOP nomination contest, it looks like he will be involved in another.

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James Fallows has an interesting piece entitled “Obama, Explained” in the new Atlantic. I strongly recommend the article. It is insightful, relatively evenhanded, and illustrated with some excerpts from interviews with a broad array of sources.

An important question frames his analysis:

This is the central mystery of his performance as a candidate and a president. Has Obama in office been anything like the chess master he seemed in the campaign, whose placid veneer masked an ability to think 10 moves ahead, at which point his adversaries would belatedly recognize that they had lost long ago? Or has he been revealed as just a pawn—a guy who got lucky as a campaigner but is now pushed around by political opponents who outwit him and economic trends that overwhelm him?

Fallows examines in some detail several standard complaints, including Obama’s inexperience, his personal coldness, and complacency about the talent of those he appoints. Overall, there seems to be a good deal of substance to these complaints. He finds Obama’s greatest strength in foreign policy.  In the end, of course, the question of whether Obama is remembered as a chess master or a pawn will depend on what happens in 2012.

As Fallows concludes:

 If Barack Obama loses this fall, he will forever seem a disappointment: a symbolically important but accidental figure who raised hopes he could not fulfill and met difficulties he did not know how to surmount. He meant to show the unity of America but only underscored its division. As a candidate, he symbolized transformation; in office, he applied incrementalism and demonstrated the limits of change. His most important achievement, helping forestall a second Great Depression, will be taken for granted or discounted in the dismay about the economic problems he did not solve. His main legislative accomplishment, the health-care bill, may well be overturned; his effect on America’s international standing will pass; his talk about bridging the partisan divide will seem one more sign of his fatal naïveté. If he is reelected, he will have a chance to solidify what he has accomplished and, more important, build on what he has learned. All of this is additional motivation, as if he needed any, for him to drive for reelection; none of it makes him any more palatable to those who oppose him and his goals.

 

 

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A Touch of Pragmatism?

George Will (today’s Washington Post) has apparently concluded that a Romney or Santorum presidency is unlikely. Fear not: the field of candidates for 2016 is deep and impressive. In the interim, he makes an argument for pragmatism:

conservatives this year should have as their primary goal making sure Republicans wield all the gavels in Congress in 2013.

While a lack of a supermajority in the Senate and Obama’s veto pen will prevent conservative legislation from passing, a GOP majority in each chamber could limit the damages:

Beginning next January, 51 or more Republican senators, served by the canny Mitch McConnell’s legislative talents, could put sand in the gears of an overbearing and overreaching executive branch. This could restore something resembling the rule of law, as distinct from government by fiats issuing from unaccountable administrative agencies exercising excessive discretion.

Perhaps.  But one would have to go back to the 1990s to discover a GOP that would act as Will hopes and serve as a genuine barrier to the expansion of executive power and state power more generally. The track record since 2001 has not been very encouraging (think No Child Left Behind, the Patriot Act, the Medicare Modernization Act, preemptive war, and the embrace of seemingly endless deficits).

A question to ponder: Is it too early for conservatives to abandon all hope for the 2012 presidential election?

A second question: Is there any reason to believe that a GOP victory would produce results that were altogether different from what occurred the last time it held unified control?

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John Heilemann has an interesting essay on the 2012 GOP primaries (“The Lost Party,” in New York Magazine) Core argument: Regardless of who the GOP nominee is (and here the choice is Romney and Santorum), a loss to Obama will and important implications for the future of the GOP.  If Romney wins—and then loses—the lesson will be clear: moderates can’t win. The party will gravitate toward the charismatic populist right. If Santorum wins—and then loses—the lesson will be equally clear, and would open the door to more moderate conservatives (e.g., Jeb Bush, Daniels, Christie).  For the first case, the historical analog is the shift from Ford to Reagan; for the second, the analog is Goldwater to Nixon.  One might disagree with the article’s characterization of Bush, Daniels, Christie et al as moderates–in fact they seem far more conservative than Mr. Romney.  But the overarching argument is nonetheless interesting and the article is a delight to read.

Heilmann ends on an interesting note, suggesting that those who believe that two credible governing parties are vitally important should wish Santorum luck.

A Santorum nomination would be seen by many liberals as a scary and retrograde proposition. And no doubt it would make for a wild ride, with enough talk of Satan, abortifacients, and sweater vests to drive any sane man bonkers. But in the long run, it might do a world of good, compelling Republicans to return to their senses—and forge ahead into the 21st century.

Perhaps.

Santorum and Romney most certainly differ on their overt religiosity and their level of comfort in rallying the culture warriors (although I suspect that Santorum is being somewhat mischaracterized by a press intent on repeating a very selective sample of his statements, quite aware that they are repellant to many moderate and independent voters). But on another dimension, both of the top candidates are quite similar: both are statists and neither makes anything more than a rhetorical case against social engineering and aggressive foreign policy. To the extent that this is the case, they have more in common with the incumbent than they do with libertarians who once again seem to find little of interest in the GOP.

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My original forecasts for Ron Paul’s primary performances are here. Those forecasts were based simply on the Iowa result, so it was quite possible that there would substantial error, and indeed there has been. Paul significantly overperformed his forecast in New Hampshire and South Carolina, the forecast was dead on in Florida, and then Paul underperformed significantly in Nevada. In yesterday’s elections, Paul did significantly worse than expected in Colorado, slightly worse than expected in Minnesota, and slightly better than expected in Missouri. In general, he seems to be doing worse than expected since Florida.

Why is that? It could be that my forecast model was an unbiased model at the time, but that circumstances have changed unfavorably for Paul’s candidacy. Certainly, recent good economic news probably doesn’t help an antiestablishment candidate like Paul. Perhaps his poor Florida performance, although it should have been anticipated, demoralized some of his supporters. On the other hand, my forecast model could have been wrong, particularly in assuming that Paul’s vote shares would continue to feature overdispersion. It’s possible that with a broadening voter base, Paul’s caucus advantage has declined. Thus, Paul should improve on his 2008 performances everywhere, but not in a manner proportionate to his 2008 performances: there will be some apparent regression to the mean.

To see how Paul’s 2012 performances are stacking up against his 2008 performances, I ran a regression on the states with results so far. First, I regressed 2012 performance against 2008 performance linearly. Here are the results:

Call:
lm(formula = vote12 ~ vote08)

Residuals:
    Min      1Q  Median      3Q     Max 
-5.0465 -3.8563  0.8463  2.0316  6.8799 

Coefficients:
            Estimate Std. Error t value Pr(>|t|)  
(Intercept)   6.9290     3.4156   2.029   0.0888 .
vote08        1.1807     0.3632   3.251   0.0175 *
---
Signif. codes:  0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 

Residual standard error: 4.444 on 6 degrees of freedom
Multiple R-squared: 0.6378,     Adjusted R-squared: 0.5775 
F-statistic: 10.57 on 1 and 6 DF,  p-value: 0.01745

These results suggest that for every 1% in 2008 vote share in a state, Paul is now receiving 1.2% in 2012, in addition to a base of 6.9% everywhere – so getting 5% in a 2008 primary would be associated with a forecast of about 12.9% in 2012. With these eight data points, the simple model explains 63.8% of the variance in 2012 performance.

Next, I turn to a log-linear model, which would be more appropriate if Paul’s performances continue to experience overdispersion. Here are the results:

Call:
lm(formula = lnvote12 ~ lnvote08)

Residuals:
     Min       1Q   Median       3Q      Max 
-0.36483 -0.22250  0.06901  0.15519  0.35117 

Coefficients:
            Estimate Std. Error t value Pr(>|t|)   
(Intercept)   1.5376     0.3628   4.238  0.00545 **
lnvote08      0.6086     0.1768   3.442  0.01377 * 
---
Signif. codes:  0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1 

Residual standard error: 0.2805 on 6 degrees of freedom
Multiple R-squared: 0.6638,     Adjusted R-squared: 0.6078 
F-statistic: 11.85 on 1 and 6 DF,  p-value: 0.01377

Although the coefficient estimate is not so easily interpreted, this model actually does a slightly better job than the simple linear model. (I also test various transformations of the independent variable to get at other nonlinearities, but none of those models improves significantly over this one.) So I use these estimates to get new forecasts of the remaining contests. Here they are:

State Date Forecast
Maine 11-Feb 27.2%
Arizona 28-Feb 11.3%
Michigan 28-Feb 14.2%
Washington 3-Mar 15.8%
Alaska 6-Mar 26.4%
Georgia 6-Mar 8.9%
Idaho 6-Mar 32.0%
Massachusetts 6-Mar 8.4%
North Dakota 6-Mar 29.9%
Ohio 6-Mar 12.2%
Oklahoma 6-Mar 9.7%
Tennessee 6-Mar 13.3%
Vermont 6-Mar 15.4%
Virginia 6-Mar 11.6%
Kansas 10-Mar 20.2%
Alabama 13-Mar 8.6%
Mississippi 13-Mar 10.9%
Illinois 20-Mar 12.5%
Louisiana 24-Mar 13.1%
District of Columbia 3-Apr 16.6%
Maryland 3-Apr 13.8%
Wisconsin 3-Apr 12.0%
Texas 3-Apr 12.5%
Connecticut 24-Apr 10.9%
Delaware 24-Apr 11.2%
New York 24-Apr 14.4%
Pennsylvania 24-Apr 25.1%
Rhode Island 24-Apr 15.1%
Indiana 8-May 16.1%
North Carolina 8-May 15.5%
West Virginia 8-May 12.4%
Nebraska 15-May 22.2%
Oregon 15-May 23.8%
Arkansas 22-May 12.1%
Kentucky 22-May 14.9%
California 5-Jun 12.9%
Montana 5-Jun 17.6%
New Jersey 5-Jun 12.1%
New Mexico 5-Jun 23.2%
South Dakota 5-Jun 25.7%
Utah 26-Jun 8.9%

In general, these new forecasts are lower for Paul in his best states and higher in his worst states. (So yes, his support is less overdispersed this time around, suggesting that his new support is less enthusiastic than his core support – not really surprising.) With the new forecasts, it’s looking unlikely that Paul will win any states outright, although Idaho, North Dakota, and Maine present possibilities.

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The Consistency of Ron Paul

There is an interesting portrait of Paul by David Halbfinger in the NYT. The piece focuses on his consistency overtime and the formative events that shaped his political and economic commitments.

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While most of the GOP presidential aspirants are content talking about the mundane and rarely (with the exception of Ron Paul) the most serious problems facing the nation, Newt once again elevates the debate—and this time literally. Enjoy the quotes of Gingrich from a recent campaign stop in Florida:

“By the end of my second term, we will have the first permanent base on the moon and it will be American…I will, as president, encourage the introduction of the northwest ordinance for space to put a marker down that we want Americans to think boldly about the future and we want Americans to go out and study hard and work hard and together, we’re going to unleash the American people to build the country we love.”

And, of course, this is only the beginning:

 “When we have 13,000 Americans living on the moon, they can petition to become a state.”

Sahil Kupur (TPM) has aptly labeled Newt a “Space Keynesian.” One can only imagine–in some parallel universe where Gingrich actually wins the presidency–Paul Krugman writing endless columns arguing that no matter how large the moon colonization program, it  provides an insufficient stimulus to the economy.

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My first impression of Obama’s SOTU: it was an interesting combination of contradictory materials (transcript here).  Obama appealed to Lincoln:

“I’m a Democrat. But I believe what Republican Abraham Lincoln believed: That Government should do for people only what they cannot do better by themselves, and no more.”

If he truly believes this, then he has a rather jaundiced view of what the American people can “do better by themselves,” given that the SOTU was full of calls for additional government intervention.

There were plenty of populist appeals (ahem, not class warfare) but like the populist appeals of the President’s new Progressive Era idol, Teddy Roosevelt, it was a thin populism that only makes the case for social engineering. Thus the president presented his “blueprint for an economy that’s built to last – an economy built on American manufacturing, American energy, skills for American workers, and a renewal of American values.”

How should we respond to the President’s “blueprint”? Here is where the military metaphors come into play:

“At a time when too many of our institutions have let us down, they [America's Armed Forces] exceed all expectations. They’re not consumed with personal ambition. They don’t obsess over their differences. They focus on the mission at hand. They work together.

Imagine what we could accomplish if we followed their example.”

Yes, just imagine. And I wonder who would serve as commander of this mission-focused nation, free of personal ambition and blind to their differences?

The military metaphors that provided bookends to the SOTU reminded me of that other Roosevelt who deployed them artfully in his first inaugural.

“if we are to go forward, we must move as a trained and loyal army willing to sacrifice for the good of a common discipline, because without such discipline no progress is made, no leadership becomes effective. We are, I know, ready and willing to submit our lives and property to such discipline, because it makes possible a leadership which aims at a larger good. This I propose to offer, pledging that the larger purposes will bind upon us all as a sacred obligation with a unity of duty hitherto evoked only in time of armed strife.

With this pledge taken, I assume unhesitatingly the leadership of this great army of our people dedicated to a disciplined attack upon our common problems.”

Of course, the SOTU did not have the elegance of FDR’s address, but President Obama’s appeal to military unity and discipline combined with the claim that he is in possession of the “blueprint” to the future certainly draws attention back to 1933 (as do the attacks on the role of financiers in the old order and the threats of unilateral action should Congress not prove sufficiently compliant).

There were many other odd components that deserve comment, including the aggressive comments about trade, the statements about regulation, the lack of attention to the debt and the larger fiscal crisis, and the claims of the success of the auto bailout (I doubt that the disaster in Japan that destroyed Toyota’s supply chain was part of some “blueprint” for the auto industry).

In the end, the “blueprint” for the future will likely be stored on a shelf next to last year’s plans for “winning the future” as the 2012 elections pass into history.

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Ryan Lizza presents an interesting portrayal of President Obama in the New Yorker (“The Obama Memos”) that is well worth a read. Some samples:

The premise of the Obama campaign was unusual. “Change We Can Believe In” wasn’t just about a set of policies; it was more grandiose. Obama promised to transcend forty years of demographic and ideological trends and reshape Washington politics. In the past three years, though, he has learned that the Presidency is an office uniquely ill-suited for enacting sweeping change. Presidents are buffeted and constrained by the currents of political change. They don’t control them.

And

Predictions that Obama would usher in a new era of post-partisan consensus politics now seem not just naïve but delusional. At this political juncture, there appears to be only one real model of effective governance in Washington: partisan dominance, in which a President with large majorities in Congress can push through an ambitious agenda. Despite Obama’s hesitance and his appeals to Republicans, this is the model that the President ended up relying upon during his first two years in office. He had hoped to use a model of consensus politics in which factions in the middle form an alliance against the two extremes. But he found few players in the center of the field: most Republicans and Democrats were on their own ten-yard lines.

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There is little excitement about the current field of GOP presidential aspirants (with the possible exception of the always entertaining and quickly marginalized Ron Paul). What is somewhat striking is the extent to which Perry and Gingrich have framed the core debate, playing right into the hands of Obama’s 2012 campaign.

I think Charles Krauthammer (todays WaPo) has correctly diagnosed the current state of affairs. He notes that the President’s efforts to frame the debate as an issue of economic inequality seemed to get little traction.

Then came the twist. Then came the most remarkable political surprise since the 2010 midterm: The struggling Democratic class-war narrative is suddenly given life and legitimacy by . . . Republicans! Newt Gingrich and Rick Perry make the case that private equity as practiced by Romney’s Bain Capital is nothing more than vulture capitalism looting companies and sucking them dry while casually destroying the lives of workers.

He continues:

Now, economic inequality is an important issue…in a stroke, the Republicans have succeeded in turning a Democratic talking point — a last-ditch attempt to salvage reelection by distracting from their record — into a central focus of the nation’s political discourse.

The end result of “the GOP maneuvering itself right onto Obama terrain”:

The president is a very smart man. But if he wins in November, that won’t be the reason. It will be luck. He could not have chosen more self-destructive adversaries.

Given the way the GOP presidential aspirants have framed the debate, can they make any principled argument against expanded efforts at redistributing income and regulating business post 2012?

Can they make principled arguments at all?

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That’s right; in addition to the 23% of the Republican vote he took, Paul took 4% of the Democratic vote as a write-in candidate, good for second place, according to the NH Secretary of State. (Note: the NH SOS website is down right now, so I’m relying on descriptions of what it says given to me by my colleagues in New Hampshire.)

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I love to spend time with opensecrets.org, a website sponsored by the Center for Responsive Politics. It delivers data on contributions and lobbying in a user friendly and searchable format.  After reading a blog posting by Vox Day decrying Romney’s financial ties with Wall Street, I did a quick comparison of the top contenders. As Open Secrets notes, the figures reflect the money came from the organizations’ PACs, their individual members or employees or owners, and those individuals’ immediate families.”

Mitt Romney’s top three: 1. Goldman Sachs ($367,200), 2. Credit Suisse Group ($203,750), and 3. Morgan Stanley ($199,800).  A majority of Romney’s top 20 donors are financials.

I don’t find this particularly surprising given that many on Wall Street have turned on Obama and the Democrats. Indeed, while Goldman Sachs invested far more heavily in Democrats that Republicans in 2008, this time around its PACs and employees have invested a rather paltry $50,124 in Obama—less than 14 percent of what Romney has received. Note: in 2008, Goldman Sachs (PACs and employees) provided over $1 million to candidate Obama–the second largest source of funds.

Ron Paul’s top three: 1. US Army ($24,503), 2. US Air Force ($23,335), and 3. US Navy ($17,432). There are also several donations from individuals in defense contractors, the US government, and the Department of Defense—which I presume involve former members of the service.

This is far more interesting than Romney’s appeal to Wall Street. While several Republican candidates and pundits decry Paul’s foreign policy positions as irresponsible and naïve, no other candidate has members of the military in their list of top twenty donors.

I don’t want to draw too many conclusions given the limits of the data (e.g., it could be the case that members of the military give to each of the candidates but Paul’s relatively modest fundraising allows members of the military to rise to the top of the list). However, I do find it encouraging that members of the military constitute the largest donors to the only candidate who wants a radical break from the status quo in foreign policy. Perhaps they have the greatest stake in the outcome of the 2012 election.

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Results are still coming in, and Ron Paul is at 24% with 58% reporting, but it’s not too early to say that my forecast was wrong. When you examine the town-by-town results, the towns that have reported are exactly average for Ron Paul, according to their 2008 results. So I predict Paul will finish with 24%, perhaps 23.5%, when all votes are counted. All in all, this result is outside the margin of error of most polls and suggests either that Paul had undetected last-minute conversions, or that pollsters systematically undercounted Paul supporters, who tend to skew young (and toward cellphone-only households). I think Huntsman has to be disappointed with being so soundly beaten back into third place, Romney’s somewhat anemic 14-point victory has to be disappointing to him as well, and obviously Paul supporters will be thrilled with the results.

Update: My friends in NH are reporting anecdotes of registered Democrats trying to vote for Ron Paul, only to find that they had to be registered Undeclared. Write-ins in the Democratic primary are running at about 10% right now. How many of those are for Ron Paul? One story of shenanigans at a polling place (caution: this is second-order hearsay):

A friend just relayed his experience at ward 2 Manchester. He is a new registered voter. He brought his registration slip to the man with the ballots. The man took his registration slip and then asked “Are you sure you aren’t a Democrat?” to which my friend replied “yes”. Then the man said “you know you can be independent, right?” and again my friend said “yes”. Then the man said “you’re absolutely sure you want to vote Republican?” My friend said “Yes, I’m Ron Paul Sure!”. The man turned bright red, hesitated, then placed the Republican ballot on the table rather than handing it to my friend!

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Jon Huntsman is having a mini-surge in New Hampshire, at the expense of Ron Paul and Mitt Romney. While a week ago Paul was routinely breaking the 20% barrier in the polls, he is now down to about 17-18%, a small decline, but when replicated across a number of different polls likely to reflect a real change. If you dig into the last PPP poll’s cross-tabs, you’ll find that Huntsman and Paul are fishing from the same pool to some degree. Paul is the second preference of only 8% of GOP voters, but is the second preference of 15% of Huntsman voters, more than any other candidate’s supporters except the marginal Rick Perry and Buddy Roemer. Likewise, Huntsman is the second preference of 13% of GOP voters, but 15% of Paul supporters (Romney is the only better-liked candidate from Paul’s supporters, with 20%).

In general, I would not expect Paul to do as well in New Hampshire as he did in Iowa, even though the libertarianish percentage of the electorate is much higher in New Hampshire than in Iowa. The two reasons for that are that New Hampshire has a primary rather than a caucus, and Paul’s support is far, far higher in caucuses, where candidates with highly motivated voters outperform, and that Huntsman was a total nonentity in Iowa. Were it not for the Huntsman surge, I would have forecast Paul at over 20% in New Hampshire; now I suspect 18% is the best forecast. I would be very surprised to see him fall below 16%.

What to watch for in the returns… I would see whether Paul is outperforming Huntsman in areas where he should do well and that have a lot of votes, like Hillsborough and Rockingham counties. In towns like Derry (Rockingham), Franklin (Merrimack), Claremont (Sullivan), Hudson (Hillsborough), Littleton (Grafton), Moultonborough (Carroll), and Belmont (Belknap), you would need to see Paul consistently hitting at or above 20% for him to have a good prospect of clearing 20% statewide. These were more or less average towns for him in 2008.

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A piece by Steven Shepard (National Journal) reports the surprising findings of  a new CBS News poll.

Romney posts a two-point lead over Obama, 47 percent to 45 percent, within the poll’s margin of error of plus or minus 2.8 percentage points. He leads Obama, 45 percent to 39 percent, among independent voters.

Obama’s lead over Paul is just one point, 46 percent to 45 percent, as Paul leads among independents by 7 points.

I am not surprised that Romney and Obama are in a statistical dead heat. It is the second point that I find a little surprising. Does anyone really believe that Paul is essentially tied with Obama?

There are a lot of things I find attractive about Paul (in particular, his consistent critique of the bifactional ruling party’s fiscal irresponsibility, crony capitalism and war mongering). But I can’t imagine that he would ever be electable to a national office.

Perhaps Paul is attractive to many because he reaffirms what they believe in their guts about the failure of the system.  As James Hohmann and Charles Mahtesian note (Politico), Paul provides a “thousand-points-of-darkness jeremiad” when describing the current state of affairs:

It’s a nation that permits the assassination of private citizens, a place where the military can arrest you at will. The unemployment rate is higher than officials let on. The economy is careening toward crisis. Violent street demonstrations are on the horizon. The government edges toward tyranny and dictatorship.

They note: “in a moment when voters’ own optimism has faded, Paul’s message is clearly resonating.”  While Paul is correct far more often than not (in my opinion), I wonder if the “thousand-points-of-darkness” will motivate people to vote. So much of Obama’s appeal in 2008 was his optimism (Hope and Change). Certainly, much of that optimism has been severely tested in the past three years and I doubt that the President will be able to recreate that magical moment in 2012. But I assume that after the critique of the status quo has been issued, most voters long for a positive message and a claim that our best days are ahead of us, not behind us. Paul seems incapable of moving beyond the critique.

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Hit & Run is reporting that Jon Huntsman (audio link) is saying that he would have signed the NDAA, the recent bill authorizing indefinite detention. Couple that with his comments on Iran, and he’s looking more and more like just another Bush Republican.

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The ACLU has just released a candidate report card on certain civil liberties issues. It includes all Republican candidates, Barack Obama, and Gary Johnson. It doesn’t provide an aggregate score, but it scores all candidates on the issue areas of “humane immigration policy,” “closing Guantanamo Bay and indefinite detention,” “gays and lesbians serving openly in the military,” “ending torture,” “ending a surveillance state,” “freedom to marry for gay couples,” and “reproductive choice.”

I have some issues with the scoring on some of these. For instance, opposing torture, including waterboarding, is apparently not enough to get you full marks on torture. More importantly, I would differ from their scoring of “reproductive choice.” My views are similar to Gary Johnson’s: Roe v. Wade was wrongly decided law and should be overturned, states should be able to make their own laws on abortion, but generally I favor legal abortion before viability and a strict ban with the only exception for the life of the mother after viability, as well as a ban on taxpayer funding for abortions.

Nevertheless, it may be a useful tool for Pileus readers in making judgments about whom to support in the primaries and beyond. In general, the only candidates the ACLU gives reasonably good marks on civil liberties are Johnson and Paul, with Huntsman and Obama clocking in at mediocre. The other Republicans are truly abysmal.

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Last night, Ron Paul increased his percentage of the Iowa caucus vote from 10.0% in 2008 to 21.4%. If we can expect this same kind of increase from Paul in the remaining states, what would we expect his performance to be? I have found that Ron Paul’s primary vote shares are best modeled logarithmically, due to overdispersion in the data. Put another way, Paul increased his vote share from 2.3 log points to 3.1 log points last night, an increase of 0.765 log points. What if Paul experienced that same gain in the remaining states in the primary calendar?

I’m going to do something pretty simple here. I’m going to add that figure to Paul’s 2008 performances for each state and then convert back into percentages. However, Montana has switched from a caucus to a primary, which should hurt Paul, so for Montana I’ve subtracted from Paul’s score the estimated benefit he received from caucus states in 2008. I’ve arranged the list according to each state’s place in this year’s calendar.

State Date Forecast
New Hampshire 10-Jan 16.4%
South Carolina 21-Jan 7.8%
Florida 31-Jan 6.9%
Nevada 4-Feb 29.5%
Colorado 7-Feb 17.8%
Minnesota 7-Feb 33.7%
Missouri 7-Feb 9.6%
Maine 11-Feb 39.2%
Arizona 28-Feb 9.3%
Michigan 28-Feb 13.5%
Washington 3-Mar 46.4%
Alaska 6-Mar 37.3%
Georgia 6-Mar 6.3%
Idaho 6-Mar 51.0%
Massachusetts 6-Mar 5.7%
North Dakota 6-Mar 45.7%
Ohio 6-Mar 10.4%
Oklahoma 6-Mar 7.2%
Tennessee 6-Mar 12.0%
Vermont 6-Mar 15.4%
Virginia 6-Mar 9.6%
Kansas 10-Mar 24.0%
Alabama 13-Mar 5.9%
Mississippi 13-Mar 8.7%
Illinois 20-Mar 10.8%
Louisiana 24-Mar 11.8%
District of Columbia 3-Apr 17.5%
Maryland 3-Apr 12.8%
Wisconsin 3-Apr 10.3%
Texas 3-Apr 10.9%
Connecticut 24-Apr 8.7%
Delaware 24-Apr 9.1%
New York 24-Apr 13.8%
Pennsylvania 24-Apr 34.2%
Rhode Island 24-Apr 14.9%
Indiana 8-May 16.5%
North Carolina 8-May 15.5%
West Virginia 8-May 10.8%
Nebraska 15-May 27.9%
Oregon 15-May 31.4%
Arkansas 22-May 10.3%
Kentucky 22-May 14.6%
California 5-Jun 11.5%
Montana 5-Jun 18.3%
New Jersey 5-Jun 10.4%
New Mexico 5-Jun 30.2%
South Dakota 5-Jun 35.5%
Utah 26-Jun 6.3%

I think that this forecast underestimates Paul’s support in next week’s New Hampshire primary, because it does not take into account the increase in Free State Project activists in that state. Nevertheless, it should be clear what a daunting task Paul faces. Even if he hits 20-22% in New Hampshire, he is not likely to be competitive in South Carolina and Florida, both of which are dominated by socially conservative defense hawks in the former case and older voters in the latter, and both of which are primaries, where Paul has usually done far less well.

However, if Paul can manage to beat expectations there, he stands a decent chance of winning the Nevada, Minnesota, and Maine caucuses and placing second in Colorado. A string of strong performances just might set him up to beat these forecasts in the next few states, especially if he becomes the anti-Romney anti-Santorum by default. After Super Tuesday, Paul faces a potential long dry spell of primary states in which he does not do particularly well. It’s hard to see how he does not get eliminated from contention for the nomination during this period, unless he really manages to build momentum out of New Hampshire and the early February contests.

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The results from the Iowa caucus reflect how well established the divisions are on the right. As the NYT described the outcome:

Republicans entered the campaign divided into three strains that are now personified by the three men who led in the last polls before the caucuses: Mr. Romney representing the moneyed, establishment chamber of commerce wing; Mr. Santorum representing the classic social conservative bloc and Mr. Paul the libertarian, noninterventionist, small-government wing.

Of course, these divisions are nothing new. As detailed in George Nash’s opus The Intellectual Conservative Movement in America, these factions were vying for influence in the immediate postwar decades.  There was something of a peace treaty (fusionism), but it was always quite fragile.  Absent the existential threat of communism (no, terrorism could not take its place) or, alternatively, a leader who can forge a message that appeals equally to the various factions on the right (e.g., Ronald Reagan), fusionism seems to be an ever more elusive goal.

Each of the top contenders in Iowa represent a distinct faction. None seemed capable of constructing the foundations of a new fusionism. Republicans have to hope  that disdain for Obama is sufficient to forge a working alliance in 2012.

I am not confident that Obama will (or should) serve this purpose nor am I confident that it would be in the national interest that he did, given that two of the top contenders and the factions they represent offer no principled opposition to the ongoing expansion of the state or genuine support for the kinds of reforms that would be necessary to return the nation to a path of fiscal sanity.

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