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A Day at the Races

As we head into the final stretch of the election season, the presidential debates and accompanying horserace are the focus of the upcoming two weeks.  They will prove interesting, as they always do for political junkies, but they are unlikely to significantly change at this point.  They may, however, change the races further down the ballot, possibly in strange and unpredictable ways.  It’s worth some time getting to know what to look for ahead of time.

The Bump – Romney is so far behind, especially in key states like Ohio and Florida, that he will certainly get a bump from the debates (barring a major gaffe).  He has been so thoroughly demonized for the video of him deriding the peons of the nation that simply getting up there and looking like a real human will probably swing a few people his direction.  It’s unlikely to be enough momentum to overcome the huge hole his campaign has, but it will be talked about.  The press likes a horse race that closes at the end, so expect a lot of ink about it.

The Senate – Nothing will change this week in what is about to become the developing story, control of the US Senate.  As big money donors and strategists see the Presidential race closing down, resources will be diverted into major Senate races across the nation.  More Democrat seats are up than Republicans, with a total of 33 seats up for grabs in the 53/47 split, 23 are Democrats.  But as it stands now, the Democrats have a pretty solid hold on 7 of those, with another 11 looking pretty good.  Real Clear Politics has 9 seats in the “toss up” category, and the Dems have to win 5 of them to hold on to the lead they have.  It’s very unlikely that they could possibly hit a filibuster proof 60.  This one is tight and will soon receive a lot more attention even if the Presidential race can be spun as closer than it really is.

The House – Control of the US House is also unlikely to change, but it could swing slightly more Democrat.  Dems need to pick up 24 more seats to take the House back, and few think this is likely.  The ray of hope remains the unreliable “Generic Congressional Ballot” poll, which asks people in the abstract which party they will vote for.  It’s completely deadlocked right now, suggesting everything will be very close.  One analyst believes that, after looking at trends from 2010, the US House is very much up for grabs and possibly leaning Democrat.  This will be hard to spot weeks in advance.

Attention will likely remain on the Presidential horserace, no matter how much it seems over, but the Senate races will certainly gain in stature.  It’s probably not worth paying attention to, either.  The real race is later on the card, for the US House, although we have very little guidance to predict it in advance.

What should we look for?  In general, Obama will certainly do his best in the debates to look Presidential and not screw up.  But if we see an attack on the Republican plans and actions from him we will know that his people are going to try to win back the House.  If Obama is worried about his legacy as President, secure in re-election, it is the logical thing to do.  A Democratic House is probably essential for him to be able to get anything at all done in the next two to four years.

Romney is less likely to worry about the down-ticket races, which could put even more distance between him and the Republican leadership that is poised to abandon him.  What we need to look for is solidarity and a clear commitment to the party, with a solid defense and exposition on the Republican platform.  That would signal that he is indeed a team player, a move that is probably his best bet at this stage of the game.  If Obama should stumble somehow, it would put Romney in a much better position to capitalize on it.

Overall, the debates are unlikely to define the races by themselves.  But they will enclose the paddock where the serious bettors go to gawk at the steeds before each race.  If the House, or even the Senate, is really up for grabs we will know over the next two weeks.  Even if you like the horserace of politics more than the policy stuff, you have to remember not to bet everything on one race.  It’s a full day of racing ahead if you plan it right.

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19 thoughts on “A Day at the Races

  1. Great analysis, thanks. Do you think there is any real evidence that people deliberately split their ticket and vote the opposite party for house & senate? I do that a lot but it is not on purpose. I heard some time ago that it may be on purpose by some people but I never saw anyone really discuss it. Thanks!

    • Thanks!
      I’ve never seen anything I thought was credible written on deliberate “ticket splitting”, and I doubt that many people do it consciously. It seems a bit too elaborate to be likely. But you never know.

  2. It’s all going to be about the same when the election is over meaning the sheep-ple are happy going to the slaughter.

    • It seems strange that people are likely to vote Obama in pretty big numbers but return a Republican House. I know that people often vote “for the best person”, but given how polarized everything is you would expect more ideological / party voting, I’d think. Perhaps voters, or at least a decent number of swing voters, aren’t as polarized as our press is? Or perhaps it’s deliberate, as Anna said? Dunno.

  3. I honestly wonder what Romney will say. He has to talk about his plans to revive the economy a lot more & I want to hear them. I don’t think he can win but if he has a few ideas who knows? People are hungry for new ideas and I have heard he has some but they never seem to be discussed. Maybe there is a liberal bias in the media? Or are his plans too complex to put into sound bites?

    • He may try to get wonky on us and talk about plans – that could be a good strategy, and his (complex!) plans have not been discussed at any length in the press, it’s true. That would be a good strategy, IMHO.

  4. Kudos for your writing style here as well as for your pithy analysis. I love the framing as a horse race and your ability to carry through in your writing as though you are the announcer.

    • Wow, you got the announcer schtick! That’s funny. I was watching Sunday Night Football as I wrote, and that’s where the idea came from. Funny, and a good call on your part!

  5. Youth is sometimes an attractive factor for a candidate.

    The other English speaking nations:

    Julia Gillard, Prime Minister, Australia, b. 1961
    David Cameron, Prime Minister, Britain, b. 1966
    Stephen Harper, Prime Minister, Canada, b. 1959
    John Key, Prime Minister, New Zealand, b. 1961

    “The torch has been passed to a new generation, born in this century, tempered by war, discplined by a hard and bitter peace, proud of our ancient heritage…”

    • Yes, that is very true. Times like these any hope people have will be vested in youth and energy – that’s where someone like Paul Ryan comes in. However, if you buy the K-Wave business cycle analogy, someone very old is exactly what you need – someone who remembers the last cycle like this. It’s what makes Alan Simpson, for example, so compelling IMHO.

  6. I would like to address one substantive point of economic policy that crops up in some form in presidential electgions: what should be the tax rate on capital income. When you sell a real estate asset, or a financial asset. Supposedly in a neutral tax system you would tax capital gains at the same rate of labor. Personally I don’t think capital should be taxed at the same rate as labor. The reason is the property tax and business taxes. A piece of real estate has already been producing taxes for the public sector during the life of holding the thing. The piece of real estate will continue to owe property taxes. A business has already been paying myriad business taxes during the life of the business. When you sell your financial ownership in a company, I don’t see why you have to pay again.

    Now rich people have a lot of capital. They put their money to work. If the rich person is doing legal things with their money, the question is really whether their income flows should go more to the private sector or public sector.

    Now Romney screwed up big time. The portion of the public who work but don’t owe federal taxes is an achievement, it is a sign we have a progressive tax system.

    • This is an age-old question, and I don’t have a good answer. I will say that in practical terms, the simplest tax system is likely to be perceived as the “fairest”, and that is important in a Democratic-Republic.
      If the rate is low enough, the relative “unfairness” that comes in due to (excessive) simplicity is small, so that should probably be a goal as well. And it is probably best to generally have one system that covers just about everything.
      So I’ve long been in favor of a “Flat Tax” with a zero rate based on the poverty line (times 1.5 or so?) and a flat rate on absolutely everything after that. This may be too simple, but taxing everything the same helps keep the marginal rate low.
      The US Government received about $920B in income tax last year, which is just 7% of all household income (!!). If you allow $20k tax free per household, you’re still looking at really low rates on what is left over.
      So that’s the approach I’d take to start with and see where it goes. I did all the math on this a long time ago and it seemed to be less than 20% for a rate after a high standard deduction no matter what you do.
      Should most Americans making the median income pay no taxes at all? Eh. A small amount sounds reasonable, and given the payroll taxes everyone that is working pays something into the system. Romney’s comments are ones I’ve heard from other Republicans, and they confuse me no end. Wasn’t this done rather deliberately with tax cuts through the 2000s? Hello? There’s not much to complain about no matter what, IMHO.
      Whether or not it’s a good idea I’m not so sure. Payroll taxes are starting to really bother me (gee, can you tell I’m self employed? :-) ).

  7. One of the triumphs of the welfare state is that homemakers who didn’t work much out of the house receive a social security benefit and a medicare benefit. Widows receive a portion of their spouses. There was an understanding that those who raised children and took care of their husbands and the housethose years made a contribution to society. They wouldn’t need to depend on their children if they lived longer than their savings. But public finance is not magic and the money most come from people.

    • Yup. There has to be a way to take care of the people who do the things that make the world go ’round but don’t necessarily earn a “salary” doing it. We have something in place that’s pretty darned good, and it would be a shame to lose it. But we have to pay for it somehow.
      It seems to me that after 50-80 years there is a time where an overhaul is necessary – something that reflects the changing nature of the economy. But wow, having that discussion now is nearly impossible.

  8. I don’t think Romney is finished yet but it does look bad. It may take an incident somewhere else in the world to do it but there are always things. Look at the Libyan embassy & how badly he is handling that. There could be more to come esp from Europe.

    • That’s always a possibility, but keep in mind that many such incidents are a chance to look more “presidential” than anything. It’s a tough road for Romney no matter how you look at it.

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