Off-topic: 2012 Elections Analysis | Beyond the KM

This entry was posted on Saturday, September 29th, 2012 at 12:38 pm

Off-topic: 2012 Elections Analysis

Note to my regular readers, if you are not interested in U.S. politics, you may consider ignoring this insightful and interesting article. I will be posting more automotive industry analysis soon, rest assured!

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CNN's Electoral Predictions Map

It is 2012, and we are nearing the end of the election season.

Admittedly, I am sick of hearing about largely irrelevant issues like taxation and federal deficits. Both parties have had ample opportunity to reduce the federal deficit and failed to do so, even under complete control of Congress and the Presidency.

Anyway, I thought I would take the quadrennial opportunity to put my Bachelor of Arts degree in Political Science to good use. I will thank Nebraska Wesleyan University professor and elections scholar Dr. Jan Vermeer for getting me started on this whole interest in U.S. Elections analysis.

CNN’s latest polling reveals some interesting results, and shows that there are still quite a few states that are “toss ups” and don’t have a clear favorite. Of special note is my home state of Arizona, where the state has gone from the traditional solid-red Republican favorite to a “leaning Romney” status. I think this is in large part due to demographic shifts, and not-so-clear immigration stance from Romney. This election more than most is likely to bring Hispanics to the polls, after the governor signed the controversial SB1070 bill, a decidedly anti-immigrant and xenophobic piece of legislation. Even still, the state’s demographics shift very Republican in the winter months as the snowbirds head south. Perhaps a mild winter in the rest of the U.S. could decrease the elderly turnout in Arizona and deliver the state to Obama.

Of additional interest are heavy auto manufacturing states like Michigan, Indiana, and Ohio hit very hard during the recession, but which Obama has bent over backwards to support (much to the dismay of most Americans outside of the rest belt). Indiana and Ohio are of particular interest because of the GOP leadership in those states pushing anti-trade union legislation. Will that drive blue collar workers to the polls? Neighbor to the west, Wisconsin is still up in the air, a bit of a surprise considering the Republican Vice-Presidential contender is a wildly popular figure in the state. Wisconsin seems to be leaning more right-ish these days, having ousted outspoken U.S. Senator Russ Feingold in 2010.

One of the states that I am most curious about is Missouri. A fairly conservative state, traditionally favoring Republicans, the GOP candidate for this election has been a lightning rod for anti-women sentiment in the party. Democrats have earlier proclaimed a “war on women” going on in America, and you would be hard pressed to find someone more anti-women than Representative Todd Akin. His remarks deemed incoherent, revolting, and offensive by most, prompted the Republican Party to ask him to remove his name from consideration. Motivated by what one of his consultants called a [Branch Davidian Leader David Koresh]-ian “cult-like” status, Akin remains in the race. One has to think the anti-women sentiment expressed will drive Democrats to the polls, and I have to wonder if this “leaning Romney” state might just turn for Obama in the end. Regardless of whom they choose for president, the electoral would be beyond foolish to elect Akin.

The edge to Obama

CNN predictions aside, I have conducted my own “Patterson’s Predictions” for 2012. The graphic above shows a very tight race, and assumes that Romney can rebound after the debates. No doubt, he is desperate to do so after consecutive weeks of bad news. Key assumptions in my model include Obama winning New Hampshire and Florida, both tossups in the CNN poll. I believe that with proper planning and heavy spending in those two states, Obama can eek out a win. Obama could then ignore the other tossups in the country. Note that my model rewards Nevada, Colorado, Arizona, Virginia, Ohio, Missouri, and Virginia to Romney.

This election will break new records in campaign spending. Romney has raised more money than Obama according to recent reports, but he will need it. Not only does he have to take command of many tossups to win the election, he also has to beat Obama in New Hampshire and Florida spending, where Obama would smartly be pumping millions upon millions into the two states. I am sure Obama’s team would prefer to spread the wealth to other tossup states as reassurance, but my model shows that Florida and New Hampshire are really the states that count.

Conclusion: Obama needs to spend a lot of time and money in Florida right now. A win in Florida is a virtual guarantee of a second term.

Romney needs to perform one of his miraculous “turnarounds” (dipping into my MBA here), and reshape his campaign dramatically if he seeks to eek out a win. I think to do this he needs to do a few things:

-       Romney needs to reassure people about the Mormonism thing.

-       Romney needs to come clean about how he would govern, more moderate, as is typically the case after a partisan election, or more conservatively, which does not necessarily suit him given his prior governing style.

-       Romney needs very simple, yet specific plans for a wide variety of issues from education to taxes to Medicare to deficit reduction.

-       Romney needs to take a refresher course in foreign relations, and probably an intensive training course in how to appeal to foreign leaders and their populations (á la “Mitt the twit” debacle in the United Kingdom during the Olympics).

-       Romney needs to release his taxes so that he stops bringing the issue up. Release of tax information is not a huge deal, let us be honest. Romney is wasting precious minutes by rehashing the issue repeatedly. Indeed, I am sure I have blown two plus hours of my life just listening to political pundits babbling on about it!

One thing we can be certain about – even if he does read this and execute my list flawlessly – is that he will not win in a dominating fashion, even if Obama announces he’s pulling out of the race (unlikely, I’d guess ;-) ).

Obama, as the incumbent, has a much more straightforward task. He only needs to outline a specific proposal for creating jobs. We already know he is principled in diplomacy and strong in national security (a rarity for Democratic candidates). He has had a strong cabinet ranging from Hillary Clinton in the State Department to Arnie Duncan in the Education Department to Republican Ray LaHood in the Transportation Department.

In my view, a strong job-creation proposal from Obama (or Romney for that matter) would seal the deal. It ought to include, but not rely solely on the following key steps:

-       Lower the threshold for banks to supply startup capital to intelligent and ambitious entrepreneurs who have little or no start-up capital. People with MBAs and business degrees as well as advanced science and technology degrees should be given special consideration. Even purely on bank capital, a working entrepreneur has a hugely significant impact on the economy versus the unemployed one.

-       Lower the corporate tax rate, but make it based on the amount of expenditures spent on U.S. employees and R&D as well as U.S. retained earnings. Corporate tax rebates or deductions are ok, but only if the deduction comes as a 1-for1 expenditure on new employees (new employees meaning U.S. worker headcount above December 31, 2012 levels.

-       Penalize, via taxation, companies for each employee they hire abroad to bring per capita employee expenses slightly more on par between the U.S. and lower wage countries, or countries that do not provide basic benefits.

-       Promote apprenticeships. A model based on the German apprenticeship system is long overdue and sorely needed. America does not always get it right.

-       Work to increase the achievement of basic knowledge in high school so that we can reduce the time spent on it in the more expensive university system. E.g., composition is a class every high school student can master in high school, but often ends up taking in University.

-       Provide lower tax rates to small businesses that cannot benefit from economies of scale as large corporations do.

-       Encourage hiring full-time permanent employees versus contractors.

-       Provide strong benefits to those who dare work as freelance employees. Ensure that employers pay their freelancers by strengthening unpaid wage laws.

-       Eliminate the payroll tax paid by the employee so that W-2 and 1099 employees are on par with regard to the amount of tax they pay on their earnings.

-       Require universities and technical schools to provide clearer marketing and conditional guarantees for their graduates assuring working after they finish their degree. University marketing departments currently get away with murder now, and do not spend much ink on the post-graduation realities.

-       The Labor Department needs to devise a publicly commented formula for distributing funding throughout the economy based on the need for workers in certain areas. E.g., there are far too many people walking around with MBAs right now, and far too few family medicine doctors in the country. Federal funding needs to spend marketing and other funding dollars to meet employment demand not oversupply or undersupply the economy.

-       Establish a clear strategy to coordinate the various governmental departments (I really hesitate to use any lingo like taskforce or intergovernmental panel here) to coordinate efforts to create and maintain demand and supply for jobs in the economy. The President must act as Economist and Job Creator-in-Chief in addition to Commander-in-Chief.

Tie?

What if both of these candidates take my advice and the election comes out terribly competitive. There is always a possibility of a tie, as I have outlined here. It is unlikely, of course, but if there was a tie, the decision goes to the next group from the House of Representatives. Many argue that the GOP will retain the House, and if that is the case, the election would assuredly go to Romney. There is precedent for a House vote for President, but no modern incident. The L.A. Times has outlined one scenario, but I think mine is slightly more plausible if Obama puts many resources in Florida as I would advise, and wins only three of four electoral votes in Maine. Even this scenario serves only to reinforce my analysis that Florida is key to this election.

On a final note, I may provide some additional analysis after the debates, but do not count on it. I love debate, and have been involved in high school debate one way or another for more than half my life, but I might not bother if these two candidates put me to sleep. Then again, if they do, maybe I’ll be writing about Green Party candidate Jill Stein or Libertarian Party candidate Gary Johnson, both of whom could still play a small role in this election.

Images courtesy of CNN.com

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