A half dozen fallouts from the Greek election

Byline: | Category: Government, Regulations, Taxes & Spending | Posted at: Monday, 6 July 2015

Yesterday Greece said “no” to the EU in an election in which “yes” was not an option and the world treats the vote as news.  It is not news.  It is “olds” as it is long since past the time that there was ever any hope of Greece regaining solvency and paying its debts.

Now we have the spectacle of both sides yelling past each other.  Thomas Piketty takes the Hellenic side that Germany should forgive Greece’s debt while Stephen Moore says that Greece should just declare bankruptcy.  Bankruptcy is debt relief.  Whatever you call it, the creditor isn’t getting all of his money back.  But neither is the debtor going to get any further infusions of cash.

So let’s look past all the hyperventilation and see where all this is likely to lead:

1.  Greece is euphoric today about yesterday’s vote, but soon Greece is going to find what real austerity looks like.  What it called austerity before was really just not getting as much free money as it wanted.  Now it will get none.  Greece basically is the adult child without a job who rebels against his German parents, even as the child is totally reliant on an allowance.  Yelling, “You can’t tell me what to do!” may have felt good yesterday, but without access to the parents’ trust fund, they don’t have anything else to live on.

2.  Greece can’t leave the Euro.  Sure it can exit the Eurozone and go back to printing the drachma, but its past debts and future purchases are not denominated in drachmas. Gasoline is not sold in drachmas.  Neither is natural gas, iron, timber, or anything else.  Aside from some agricultural products, Greeks must import most everything they need and pay for it in a currency not of their own creation.  This is why the “let’s just devalue” crowd is always wrong about devaluation being a path to plenty.  If it were, Argentina would be  a booming paradise.  (Foreboding warning to Greece:  Argentina has a lot more natural resources than does Greece.)

3.  Socialism doesn’t die until it kills off everything else first.  Fresh off its “victory” the Tsirpas government will not bow to realists in his own country and instead will steal everything they can from Greece’s upper class.  The result will be a flight of capital and talent until there is none left.  So while ultimately it didn’t matter how Greece voted yesterday, the resounding “no” vote was the worst possible outcome since it emboldens Syriza, a party whose platform apparently is to oppose math.

4.  The EU is stronger without Greece.  This is true not necessarily because Europe would be without the dead weight of Greece, but because Greece’s exit will be a cautionary tale to the other PIGS.  When the reality sets in about how desperately out of money Greece is, when the country no longer has cheap credit available to it, when devaluation after devaluation takes its toll on the country, none of the remainder of the EU will soon seek a similar fate.  Greece is about to find that it is the bum on the street corner holding the “will work for food” sign.  (And just like the real bum on the corner, by “work” it doesn’t mean actual work until it has ran out of every other option.)

5.  There will be no rush of new EU members.  Countries on the fence about joining the common currency will see from Greece’s plight that it is much more difficult to unwind from the euro than it is to never join it in the first place.  And Europe has seen that it better be careful about whom it lets into its club.  Croatia, the Czech Republic, and Poland may soon become strong enough to become full fledged members of the Eurozone, but will Europe want them?  Britain and Sweden already are strong enough, but neither is silly enough to want it.  Bosnia, Bulgaria, Kosovo, and Montenegro are in even worse shape than Greece.  And Hungary and Romania, in addition to having economic difficulties, are beset with internal political problems–which goes without saying since internal political problems always have an adverse economic effect.  In other words, the EU is about as big as it is ever going to get.

6.  Relations between Germany and Greece aren’t nearly as bad now as they are going to get.  Starved for hard currency, Greeks, who already hate Germany, now will have to get used to being subservient to individual German tourists who are drawn there for cheap vacations while they feast inexpensively on delights that the Greeks themselves no longer can afford.  Meanwhile, the Germans are about to have even more reason to be mad at the Greeks when Athens refuses to reimburse Germany for its 2010 and 2012 bailouts that most rank-and-file German never supported in the first place. Ironically, relations between the two countries would have been much better had Germans never bailed them out five years ago.

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Devaluing our way to depression

Byline: | Category: Culture, Economy, Government, Taxes & Spending | Posted at: Friday, 23 January 2015

Imagine this scenario:  The United States, in an effort to spur exports and boost domestic producers, institutes a tax on foreign imports, some of the proceeds of which go indirectly to exporters to make their goods more affordable in international markets.  Most of Europe then retaliates with tariffs on American exports that raises the cost of American exports in Europe.  Japan does the same, erecting some of the highest tariffs in the world.  Most of China follows suit.  Britain tried to stay aloof of the customs war, but eventually caves, building its own economic borders.

Of course, I’m talking about the interwar period, when in the aftermath of the Great War, the world’s major economies played a game of tariff-one-upsmanship until global trade collapsed and the world entered the Great Depression.

But I’m also talking about today.  Let’s consider what actually happens when a country devalues its currency.  Switzerland, as we discussed last week, by pegging the franc to the dwindling euro, essentially devalued Swiss money 20%.  Swiss consumers and Swiss businesses paid 20% more on imported goods and raw materials.  Swiss exporters weren’t subject to that tax, effectively receiving a 20% subsidy for Swiss items sold domestically and being able to export at a lower cost.  In other words, Switzerland’s attempt at currency devaluation yielded the exact effect of a 20% protective tariff on imports.

Switzerland wasn’t the only major economy doing this.  In fact, the Swiss are the only major economy to have stopped devaluing its currency–to have stopped building a de facto protective tariff around its borders.  The United States has gone through three rounds of quantitative easing, and there are increasing calls for a fourth.  All signs point to Europe doing the same as early as next week.  Japan has been devaluing its currency for twenty years with the same predictable result.

This is what doesn’t make sense:  virtually every economist agrees that protective tariffs are almost always bad.  Virtually every politician knows that protective tariffs beget even more protective tariffs in retaliation.  In fact, the World Trade Organization was created to discourage trade protectionism after the mess of the Great Depression made this painfully obvious to all.  Currency devaluations and protective tariffs are exactly the same in effect.  And yet, there are still economists of all stripes who argue that currency devaluation is a means to lifting an economy out of its depths.

Actually, they are not exactly the same in one significant aspect.  When a country devalues its currency it devalues itself.  It devalues the worth of its labor.  It devalues the strength of its reserves.  It removes incentives for savings and investments, and encourages the export of capital.  Currency devaluation creates a worse outcome even than a protective tariff.

So where does today’s spiral currency devaluation end?  If the 1920s rush to protective tariffs is any indication, the answer is:  not well.

Then, deflation was the result.  Years of forcibly escalating prices to prop up exports and subsidize domestic producers ultimately resulted in a collapse causing prices to fall to where they really should have been all along.  The price of agricultural goods was the most obvious indicator of this effect.  Advances in mechanization, refrigeration, transportation, hybridization, and chemistry resulted in a surplus of agricultural goods worldwide.  Too many people were engaged in direct and indirect agricultural work around the world as a result of the worldwide subsidy effect of protective tariffs.  When it collapsed, so too did prices.  All that the years of protective tariffs did was to take what should have been a gradual de-agriculturalization of the world’s economy and delay it long enough that it became a catastrophic global shock.  In other words:  deflation wasn’t the cause of the Great Depression; deflation was the logical effect of years of misbegotten economic policies practiced by every major economy in the world.  To blame the Depression on deflation, therefore, is as ludicrous as blaming the mercury in a thermometer for causing a heatwave.

Central bankers today fear deflation unnecessarily.  So much so that the world’s bankers are doing exactly what they know the world’s politicians did 90 years ago that led to the last Great Depression. This won’t end well.

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Fences work both ways

Byline: | Category: Culture, Economy, Ethics, Foreign Policy, Government, Regulations, Taxes & Spending | Posted at: Thursday, 22 January 2015

Because we always must heed the law of unintended consequences, Americans–particularly Republicans–probably should be more circumspect in their calls for the government to erect a border fence.

We live in a time when the American economy no longer is a beacon to the world’s entrepreneurs and when members of both parties want to implement laws inhibiting American companies from relocating overseas.

It would be a shame if a border fence, once built, wasn’t necessary to keep foreigners out, but instead became a convenient means of keeping Americans in.

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Watch the Swiss

Byline: | Category: Economy, Government, Taxes & Spending | Posted at: Thursday, 15 January 2015

Thursday the Swiss National Bank gave the world a quick lesson about why a strong currency is almost always better for an economy.

It is not uncommon for economic populists to attempt to demonstrate that a falling currency benefits an economy by helping exports and by claiming that devaluation is the “normal way countries emerge from financial crisis.”  Neglected by that line of thinking is that an economy’s imports necessarily increase in price as a result of that same currency devaluation.  But even if we analyze both sides of the equation, it would seem that the two should balance out.

However, lower import costs as a result of a stronger currency are almost always better for both consumer and producer.  Here is why this is the case:  while in a global market, only a few people’s livelihoods are dependent on exports, everyone depends on imports. Even the exporters depend on imported raw materials.  This sets up a situation where the individual costs of a bad economic policy–currency devaluation–are relatively small and diffused across the entire population, while the benefactors are fewer in number but have large visible gains.

But just how “small” are those costs?  On Wednesday a hundred Swiss francs bought about 83 Euros.  By the end of the next trading day it bought a hundred euros.  As a result, everything priced in Euros fell in real terms for the Swiss consumer:  Italian vegetables, German cars, French wine.  And as the franc increased by a similar amount against the dollar once Switzerland removed its artificial peg to the euro, the cost of oil, metals, and most commodities likewise plummeted.  It takes a lot of export losses to make up for the fact that the cost of almost everything Swiss consumers buy fell nearly 20% in a single day.

Under normal circumstances currency interventions are incremental and thus difficult to tie to precise costs.  That’s what makes them fun targets for government interventionists.  When gains are concentrated and losses are dispersed, it is the perfect scenario for central bankers and politicians to embark on policies that are decidedly not in the interest of the general welfare, but are in the specific interests of organized benefactors.  But the SNB’s surprise move demonstrated just how big the costs of currency manipulation really are when governments and central bankers conspire to devalue money.

Unfortunately, consumers don’t have well organized and vocal advocates, so you’re not likely to hear from most quarters that what happened Thursday is good news in the long run. (“In the long run” being defined as the amount of time it takes for the Swiss economy to readjust to an unsubsidized natural state).  Instead you’ll hear  plenty from groups like Swiss watchmakers, who by the way, are an anachronism tethered to a technology made obsolescent 50 years ago by quartz crystals.

And that’s the point.  The Swiss watch industry has much to lose only because the SNB’s artificial intervention in the currency market subsidized a larger existence these last four years than their business model deserved.

Just how large the subsidy had been is evident in today’s currency climb.  Effectively, Swiss citizens were paying a 20% sales tax on almost everything they bought so that Swatch could still churn out cheap watches for overseas markets.

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This is what war looks like

Byline: | Category: Culture, Economy, Ethics, Government, Taxes & Spending, Uncategorized, wine | Posted at: Friday, 5 December 2014

Mayor Michael Bloomberg promised New York City a war on smoking.  War is what they got.



While it didn’t do so explicitly, New York’s progressive government decided that smoking was so bad that it was worth killing over.  You may accuse me of hyperbole, but consider that when government passes and enforces any law, it has taken the decision to use the State’s coercive powers against the non-compliant.  Above is a picture of what the law’s coercive powers look like, what a war on smoking looks like.  The “war” in this picture does not look like hyperbole to me.

The law that led to Eric Garner’s death was a prohibition on the selling of loose, untaxed cigarettes.  In other words, Eric Garner was a bootlegger.

Any time that government restricts a willing buyer and a willing seller from agreeing upon a price, a black market will develop.  It is a rule as old as mankind.  During the first Progressive era, the rule was Prohibition and the black market was big.

Eighty-eight Christmases ago sixty New Yorkers lay violently ill in the hospital.  Eight already had died.  The culprit was poisoned alcohol.  But the criminal mind behind the culprit was the government itself.

During Prohibition, alcohol still could be produced.  It was needed in the manufacture of paints and solvents.  So to legally produce it, the government required it to be “denatured”.  Usually that was done with the addition of poisonous methyl alcohol.  But it was a simple chemist’s trick to turn methyl alcohol into ethyl alcohol, which could then be drunk.  By 1926, thousands of amateur chemists were performing that trick and thereby skirting Prohibition’s rules. They had to be stopped.  It was the law, after all, and the law had to be enforced.  So the federal government required the addition of toxic chemicals in industrial alcohol.  The additives included kerosene, strychnine, and formaldehyde.  All are highly poisonous if ingested.  By Prohibition’s end an estimated ten-thousand drinkers were dead.

The ten-thousand were collateral damage.  Nay, they were actively violating the law.  They weren’t just innocent bystanders, but were enemy combatants in the war on drink.  They deserved to die.  After all, they were violating the law.  And if we shrink from enforcing the law, people will cease to have respect for it.

Over the last dozen years, New York City was the central front in the second progressive era’s war on smoking.  Mayor Bloomberg was that front’s field marshal.  He raised the legal age to purchase cigarettes to 21, prohibited smoking in all restaurants, attempted to prohibit it in parks and even apartments, and both he and his successor increased taxes step by step to an absurdly high$5.85 per pack.  At that price the black market is big.  But all this was necessary, Bloomberg and Deblasio have said, because 6,000 New Yorkers die every year from the effects of smoking.

In the war on smoking Eric Garner was an enemy combatant.  And for that offense, the supporters of New York’s war on smoking determined that he deserved to die.  I trust they’re happy with the result.

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Progressivism defined

Byline: | Category: Government, Health Care, Progressivism, Regulations, Taxes & Spending | Posted at: Monday, 17 November 2014

Jonathan Gruber, a paid White House Obamacare consultant, said that “Seniors do a terrible job choosing health care plans.”  A slide deck he circulated in 2013 claimed “12 percent of seniors allegedly picked the lowest-cost Medicare Part D plan and could on average save up to 30 percent more.”

Gruber seems to be saying that if one-in-eight adults make (what he perceives to be) a bad choice, then the government should step in and dictate what eight out of eight adults should choose.

Shorter version:  You’re too stupid to know what’s best for you.

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Who you calling stupid?

Byline: | Category: 2008 Presidential Election, 2012, Environment, Ethics, Government | Posted at: Friday, 14 November 2014

Jonathan Gruber is right.  The American people are stupid.  But not all Americans.

Take the President’s much recently heralded “climate change” agreement with China as an example.

Al Gore  says that the joint announcement “demonstrates a serious commitment” to combating global warming.

Brad Plumer at Vox says, “This is a significant shift in climate politics — and possibly a first step toward a broader global climate agreement.”

James West at Mother Jones enthusiastically announces, “The announcement between the two biggest emitters deals a blow to the oft-stated rhetoric that the US must wait for China before bringing domestic climate legislation.”

The Washington Post’s Stephen Stromberg gushes, that this “landmark agreement . . . does not merely commit the countries to trajectories they are already taking. It will require both nations to push harder toward cleaner energy.

According to these reports, the agreement with China was, what one Vox headline writer called, a BFD.

But was it?  What exactly was agreed to?

Nothing actually.  The United States and China both made non-binding pledges to reduce greenhouse gasses.  However, neither side agreed to an enforcement mechanism.  There is no treaty agreeement to be submitted to the Senate for ratification.  There are no laws that Congress will consider.  There are not even any proposed steps that the EPA could take.

Not everyone was fooled by the Administration’s announcement and the breathless fawning of his media sycophants. RedState’s Erick Erickson nailed it:  “Like so much of President Obama’s decisions over the past six years, this is another photo-op with a compliant press that does not matter and will do little.”  David Harsanyi says that “there are two problems with treating the deal as big news. 1) We’re not really doing anything we weren’t going to do anyway. 2) Neither is China.”  Senator James Inhofe (R-OK) called it a “non-binding charade”.

If you understand anything about the American Constitutional system and have any inkling about the current political situation in Washington you must conclude that Inhofe is right.  This entire hullabaloo is a charade.  International agreements can only receive the imprimatur of law by being subjected to Senate ratification requiring a two-thirds agreement.  Now that the new Senate will contain only 46 Democrats, this would require that 21 Republicans join all Democrats.  In fact, there isn’t even a treaty for submission to the ratification process.  And the last one (Kyoto) was never submitted, because then-President Clinton knew it would fail.  Laws restricting carbon consumption must go through the House that is more Republican than at any time since Calvin Coolidge was still alive.  The Supreme Court has already limited what the EPA can do without additional authorizations from Congress–which is not going to happen at least before the end of the Obama Presidency.

So any objective reading of the recently announced agreement between China and the United States should be met with no more than a shrug.  President Obama can announce anything he likes, but without a valid enforcement mechanism, it’s just words.

But let us get back to Gruber who called it “the stupidity of the American voter” who could easily be misled by promises grounded in economic lies and obscured by a lack of civics knowledge.  That worked to get Obamacare passed, and it apparently is working in getting the Left thrilled about the President’s war on carbon.  But it is not all of the American voters who are so easily duped.  It apparently is only the stupidity of the President’s supporters who are so easily misled by words without substance.

In other words, the Left might want to keep in mind that Jonathan Gruber wasn’t calling all Americans stupid.  He was calling the President’s supporters stupid.

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Progressivism cannot win without useful idiots

Byline: | Category: Ethics, Government, Regulations, Taxes & Spending | Posted at: Wednesday, 12 November 2014

Ron Fournier doesn’t like being lied to:

Appearing on an academic panel a year ago, [Jonathan Gruber] argued that the law never would have passed if the administration had been honest about the fact that the so-called penalty for noncompliance with the mandate was actually a tax.

“And, basically, call it ‘the stupidity of the American voter,’ or whatever, but basically that was really, really critical to getting the thing to pass,” Gruber said.

He called you stupid. He admitted that the White House lied to you. Its officials lied to all of us—Republicans, Democrats, and independents; rich and poor; white and brown; men and women.

Liberals should be the angriest. Not only were they personally deceived, but the administration’s dishonest approach to health care reform has helped make Obamacare unpopular while undermining the public’s faith in an activist government. A double blow to progressives.

Right up to the last sentence I made the same point in March of this year:

Progressives believe that they know better than others how others should live their lives.  That makes Progressivism inherently anti-democratic and requires that its adherents subvert truths and manipulate rules to advance their ends.

Democratic governments follow where their people lead.  Progressive governments—those led by people who see popular opinion as wrong—lead their people in a direction that they do not want to go.  When the subterfuge is discovered, or when the unpopular project spectacularly fails, popular opinion turns viciously against the Progressive.

What Fournier gets wrong is that he de-links the lying from progressivism.  They can’t be separated.  That is because progressivism cannot survive without the lies–at least not in a democratic society.

Definitionally, progressivism is the belief that an enlightened elite knows better how people should live their lives than the people know themselves.  The progressive views government as a tool for leading the populace toward change, whereas the democrat (small “d”) views government as responsive to what the people want.  In other words: a democratic government does what the people want it to do, while the progressive government demands that the people do what it wants them to do, whether they want it or not.

When a minority wants the government to do what a majority does not wish to do, the minority has a choice:  it can make the case to persuade, or it can lie.  Since progressivism requires that the majority subvert its will to what its leaders want, its only option, if progressivism is to succeed, is to lie.

Even as he supported the intent of the law, Fournier finally admits “Obamacare was built and sold on a foundation of lies.”  If he takes a step back, he will have to see that it is not just Obamacare that is built on a foundation of lies; it is progressivism itself.

So, contra Fournier’s assertion, the progressive will not be bothered  at all by Gruber’s lying–except for his having been caught.  The question facing Ron Fournier going into the future, is that now that he has found himself duped by the Administration and its allies’ lies, will he allow himself to play the part of the useful idiot the next time?


Here’s another “Kinsley Gaffe” from Herr Gruber:

Obamacare was “a very clever, you know, basically [sic] exploitation of the lack of economic understanding of the American voter.”

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2014 Predictions, Part I

Byline: | Category: Government | Posted at: Thursday, 30 October 2014

This is a long post, so recharge your glass before you start.

The order of states might seem a bit odd, but when you read the second post in this series (with updated numbers) it might make more sense.

Let’s start with Mississippi.  With the largest black population of any state in the Union, you would think that Mississippi is ripe for a Democratic takeover.  You would think wrong.  The white vote in the Magnolia State is so red that even when nearly half of those Republican voters are left fuming after the dirty tricks that the incumbent Senator Thad Cochran used to win a primary runoff, the Democrat Travis Childers still will be swamped by a red tide.

West Virginia.  You know how ex-smokers become even more sadistically anti-smoking than anti-smokers who never smoked?  That’s what happens when a long-blue state turns red. Shelley Moore Capito will crush Natalie Tennant and the GOP will take the state house and all three US House seats by the end of the night.

South Dakota.  Have you ever locked yourself out of the house?  Once you realize what you’ve done, you panic and start scrambling around the house in the hope that some window somewhere might be left unsecured.  That’s what happened a couple weeks ago in South Dakota.  Democrats saw that all the doors were locked–doors, being those purplish states that they might be able to walk through.  South Dakota was a window, that by some magic set of circumstances might yield entry to their goal of not being locked out of the Senate’s leadership. Sorry, but the window is locked.

In Arkansas the name Pryor won’t be enough to save the seat.  Mark Pryor has been in a steady descent since Independence Day when he last led Tom Cotton by a single point.  Falling from 45.5 his RCP average of 1 July, Pryor is now  four points lower.  In retrospect, the result will have been obvious and smart political followers will wonder why they ever thought that Arkansas was really in play.

Kentucky was never quite as bright blue as some as its neighbors.  Hence it is not quite so red now.  Like Mississippi, Kentucky is far more conservative than is its senior senator. However, unlike Mississippi, it is not so red that it could bleed away Tea Party votes and still cruise to a GOP victory.  A better Democratic candidate might have been able to exploit a divide within the GOP to win a Kentucky Senate Seat. Allison Lundergan Grimes is not that candidate.  Her campaign has been so horrendously bad that were it not for Wendy Davis, Grimes would be a bigger national punch line.  Since the beginning of September, Grimes has flat-lined at 42 percent. Mitch McConnell’s support is anemically low for a likely Senate Majority Leader, but he will still pull out a win.  I’ll explain more in a later post, but Kentucky will likely give us our first real glimpse in how the rest of the night is going to unfold.  Grimes is going to lose.  But if she keeps it close–ie, under five points–the GOP may come away disappointed for the third election in a row.  If McConnell manages to come close to Rand Paul’s 2010 margin of 55-44, then even MSNBC correspondents will bemoan the President curse on his party before midnight.

Alaska is a tricky place to predict.  Polling is usually off by more than the national average.  But it is also off in the same direction every time.  Historically, polls favor Democrats by between 3 and 12 points. Mark Begich has stayed between 42 and 43 points since the beginning of October.  The only variation has been the result of a single, unreplicated poll by a highly-partisan analyst who released the results on Facebook because he has no website, included no cross-tabs, and also found that Dan Young is ahead by only a single point.  There are so many red-flags about this poll that it’s worth betting against.  That said, Nate Silver posits that there is a 15-point spread in the margin of error in Alaska, and who is to say that Mr. Moore’s poll isn’t the correct one and everyone else is off by 15 points.  Meanwhile in the Frontier State’s gubernatorial race, Independent (D) Bill Walker is leading Republican incumbent Sean Parnell by less than two points.  But . . . the spread between the four most recent polls that make up that prediction are Parnell +5, Parnell +3, Walker +6 and Walker +9.  In order to have a meaningful of average of polls, you must have a normally distributed sample of polls.  It’s only four data points, but these polls do not appear to be normally distributed.  Which means that the average Walker lead of 1.8 is bunk.   Two of them are right and the other two are very wrong. He’s either leading by five or trailing by just as much. History tells us that Parnell and Sullivan win their races by more than the average would predict. There will come a year when this history changes.  Just not this year in America’s ultimate libertarian state when America’s ultimate anti-libertarian President is underwater by a solid double-digit amount.

Louisiana.  Mary Landrieu has survived close races before.  But this year there has been only a single public poll since Independence Day showing her with over 46% in a race between her and Bill Cassidy.  And that one poll still had her losing by three points.  If the race were November 4th, she would lose a head-to-head race.  But the race isn’t November 4th.  The primary is.  The runoff is on December 6th.  The trick for her next week is to keep it close.  If she can exceed 45% in the initial contest she has a chance to get within the margin of fraud of a win.  (In Louisiana, the margin of fraud is larger than in most other states.)  If she is barely able to break 40% in November, then absent a cataclysmic change in the political environment, the only thing she gains is a one-month reprieve before she is voted out.  She won’t reach the amount she needs.

If you’re keeping score, along with Montana, this brings us to a Republican pickup of 5 Senate seats and a 50-50 split.  The loss of another Democratic seat would flip the upper chamber to the GOP.  Except that, there are two GOP seats that shouldn’t be in play, but are.

Kansas is our second example of the Locked Door Syndrome.  Only this window might be open. When one party completely dominates, it ultimately divides into two competing wings, one of which combines with the party out of power in a new coalition.  Governor Sam Brownback leads the tax-cutting government-slashing wing, while Kansas state senate Republicans are big business crony capitalists who do quite well under big government.  Senator Pat Roberts is representative of the latter wing.  These two wings cannot co-exist long in one party and thus, the logical coalition is for the party of big business to join with the party of big government under one banner.  In this sense, Kansas is on the cutting edge of what is to come nationwide.  The division is stark enough that in a more neutral political environment, it would be likely that neither wing would achieve a majority and both Brownback and Roberts would lose.  In fact, it was probably going to be the case that, had national Democrats not tried to force open a window in Kansas by supporting Greg Orman, that Brownback was going to lose this year.  The only thing now saving Brownback is that some small government Republicans who otherwise would have stayed home, will instead hold their noses to vote for Roberts in order to ensure that Republicans take the Senate. Talk about blowback.

Georgia is interesting.  You have to read Sean Trende’s analysis of eight decades of voting patterns in the Peach State in order to understand its idiosyncracies.  One of the most puzzling enigmas is its racial characterization of voters.  Trende points out that “unknown” is the fastest growing race in the state.  And nobody knows who they are.  So when you look at early vote counts and see that the zip codes with the highest proportion of early votes comes from areas with larger non-white populations, you have to remember that some of those non-whites are unknowns.  Strange.  Also strange is that, aside from Alaska, Georgia is the only state in the nation where the Democratic Senate candidate has a demonstrable trend of higher numbers since October 1st.  In fact, among the closest governor’s races in the nation, Pat Quinn in Illinois and Dannel Malloy are the only Democrats to show significant improvement over the last month. Jimmy Carter’s grandson is mired at the same 44% where he was at the end of September and where he peaked at the end of July.  So whatever is happening in the Perdue-Nunn race is not showing up in the other Georgia statewide race.

Let me digress about this point because it bears repeating:  There are only four Democrats in closely contested state-wide races who have shown an improved level of support during the month of October.  This is an enormously important point–especially this year.

All of the major poll aggregators focus on the head-to-head spread.  But not all spreads are the same.  The Democratic candidate with steady 2-point lead who is ahead 49-47 (Shaheen) is in a substantially better position going into the last few weeks of campaigning than is the Democratic candidate leading by two points but who has less than 45% support (Hagan and almost everybody else with a “D” after their name).  Barack Obama in 2012 struggled to hit the 50% mark.  But he was close enough to it that all he had to do was to demonize his opponent enough so that enough of the undecideds stayed home and 49% was enough to win when it came time to count those who actually showed up to vote.  You aren’t likely to succeed by employing that same demonization strategy when there are 14 percent undecideds in the last few weeks of the race. That’s like trying to run out the clock in football with a three-point lead and fifteen minutes left. All summer long we have seen a substantially greater number of undecideds than in years past.   By the end of October one of two things were going to happen:  undecideds were going to break for one party or the other, or they was going to stay home.  We now have a month’s worth of data showing no evidence of a break toward Democrats in 16 of the 20 most hotly contested statewide races in the country.  However, in over half of those races (11 out of 20) the GOP candidate is up over the last four weeks and/or the Democrat has noticeably declined.  (AR-Gov, AR-Sen, CO-SenGA-Gov, IA-SenKS-Gov, MA-GovMI-Gov, NC-SenNH-Sen, and NH-Gov).

(As an aside to my digression, the movement we’re seeing undercuts Nate Cohn’s argument that the polls are biased in the GOP’s favor.  Even if that were true, a consistent skew won’t disguise movement.  October’s polls clearly have shown movement in a Republican direction.)  However, even though we see movement now, doesn’t mean that it will continue (Nate Silver’s point). What it does mean is that in the next five days, absent a massive change, in all but three races Democrats have already persuaded all the voters that they are going to persuade, while Republicans have some potential upside still remaining. (This BTW, is how a “wave” forms causing almost every race to “tilt” in the same direction.)  In a later piece I want to explore this strange year and expand on what I discussed regarding Kansas and tell you what I think it portends for the future alignment of the parties.

End of digression.

When it comes right down to it, Michelle Nunn has to force a runoff if she expects to win.  If she does, January 6th is a long way away.  Since control of the Senate won’t be at stake by then, this could very well be the year when Georgia Democrats end their streak of losing runoff races.

Colorado.  Wow, did Mark Uterus, I mean, Udall, blow it.  And I predicted it two years ago:

” . . . pinning your party’s hopes on the most vocal advocates of a highly controversial social issue, when there is near universal agreement that other issues are more important, gives your party’s megaphone to those who are both extreme and irrelevant. Sandra Fluke is this year’s Terri Schiavo. For every already-Democrat she inspires to vote, she turns off at least one independent for the crime of insulting them by ignoring larger issues. Karl Rove’s plan to drive up Evangelical turnout in 2004, while it worked then, gave rise four years later to Mike Huckabee, who is perhaps the most demagogic and dangerous major presidential candidate to have run for office since William Jennings Bryan beclowned himself and his party in the late 19th century.”

Barack Obama won with the “war on woman” sword in 2012 and Mark Udall will die by that same sword this year.  The desperation NARAL radio ad preposterously postulates that in “Cory’s [Gardner’] world” there will be condom shortages and a ban on birth control. Again, if it weren’t for Wendy Davis,Udall and Grimes would be fighting for the “2014 I am not a witch award.”  Both sides should study the Colorado race, but especially Democrats, as Colorado was the most winnable race that they didn’t have to lose.  Oh, BTW, Udall flames out so spectacularly that he takes down Hickenlooper with him.

Iowa.  You do not say that lawyers make better legislators anywhere.  You especially do not say that lawyers make better legislators than do farmers when you’re trying to win a race in Iowa.  This election was over the moment that recorded remark hit the news.  B.C. (Before Catastrophe) Joni Ernst was five points down and never over 36% in the polls.  Since then Bruce Braley has never been higher than he was the day he made that stupid remark. Braley too is a strong contender for the “I am not a witch” award.  Aided by Braley’s collapse and Terry Branstad’s large margin in the governor’s race, three of the Hawkeye State’s four US House seats end the night red.

North Carolina and New Hampshire are worth discussing together.  Prognosticators have been lumping them that way because both female Democratic incumbents have clung to one or two-point leads even as their male GOP opponents have gained noticeably over the last month of the race.  But for reasons I discussed in my digression above, having the same spread does not mean that they are in the same place.  Kay Hagan is stuck at +/- of one point of 45% since Labor Day, which is exactly where she was on the Fourth of July.  Feminists could say that Hagan has hit a glass ceiling.  Jeanne Shaheen is bounded by a similar +/- one-point range.  The difference is that her range is +/ one point of 48%.  Another difference is that North Carolina is a shade more red than is New Hampshire.  This is especially true in midterm years.  Hagan’s supporters will point to early voting totals that show that compared with 2010, Democratic turnout is up two-percent, while Republicans are down six.  What they overlook, however, is that Republican Richard Burr beat his Democratic opponent by nearly 12%.  So Hagan’s apparent eight-point improvement over Elaine Marshall’s early numbers four years ago is good, but it is not good enough.  Kay Hagan and Jeanne Shaheen end the night on the opposite sides of  their races:  Shaheen wins hers while Hagan loses.

The what-might-have-been states:  Minnesota, New Mexico, and Virginia. All three could have been won with the right candidate and the right message.  Instead of finishing with 53 or 54 Senate seats (depending on Georgia’s January outcome), Republicans could have seized as many as 58 seats.  That they played defense while Democrats shot themselves in the foot made short-term sense, but was a lost major long-term opportunity to remake the Republican brand.

There’s still a few days left and thus time or a few more shoes to drop.  More to follow after a few more polls.

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Why Republicans have to get out of NOM

Byline: | Category: 2nd Amendment, Culture, Government, Taxes & Spending | Posted at: Thursday, 30 October 2014

Carl DeMaio is a Republican former San Diego city councilman.  Among his many “conservative” proposals, he supported pension reforms that would eliminate defined benefits for public employees.  In California where defined benefit pensions burden the state with huge amounts of looming debt, this kind of reform is absolutely necessary in order to avoid a fiscal crisis that is sure to come.  DeMaio had a viable plan to fix San Diego’s pension problems by reducing spending elsewhere in the city’s budget.  Two years ago he narrowly lost the race to be San Diego’s mayor.  It wasn’t his pension reform plans that got him; he was weathering that assault by fiercely opposed teacher and public employee unions.  No, what kept him from getting more than 47.5% of the vote was the fact that DeMaio is gay.

DeMaio is now locked in a toss-up race for the US House seat held by one one-term incumbent Scott Peters.  One week before election day the National Organization for Marriage endorsed the Democrat Peters.

There is nothing odd about an advocacy group endorsing candidates from the party it usually opposes.  The National Rifle Association endorsed several pro-gun Senate Democrats in 2010 who then went on to win, including Max Baucus, Mark Begich, and Harry Reid.  Successful advocacy groups advocate positions, not parties, thus enabling the groups to have allies no matter who wins control.

That is not what NOM has done.  DeMaio’s Democratic opponent is very pro-gay marriage.

In the case where both party’s candidates are on the same side of an issue, a successful advocacy group supporting the other side would either have saved its political capital for another race and declined to endorse, or it would have asked its supporters to hold their noses and vote for the candidate from the party it usually supports in order that it would have a vote with the leadership of the party in control of the chamber.

What NOM has done is to demonstrate that it doesn’t want a vote at the Republican table; it wants a veto over the GOP.

If it hasn’t already, gay marriage is coming to a town near you.  You can’t stop it.  And over time, you’re going to look like a fool for having tried.  Here is why:  At most, no more than one-percent of the American people will ever want to enter into a gay marriage.  One percent.

A jobs crisis that has reduced the percentage of Americans working to its lowest level in three decades, sixteen-trillion dollars of unsustainable debt, a sabre-rattling Russia, a European Union that is one shock away from setting off a fiscal calamity, an anti-entrepreneur and freedom-crushing federal bureaucratic apparatus that is simultaneously omnipresent and incompetent . . . and in the face of all that you’re going to vote on the basis that one percent of the population might be enjoying the horizontal mambo with someone you don’t approve of?  If that’s really your highest priority, you’re an idiot.

If that’s you, you’re also not on the side of freedom.  That is because you stand opposed to the small businessman stymied by bureaucratic cronyism.  You stand opposed to Europeans who have struggled for decades to get out from under the Soviet shadow.  You stand opposed to your own children and grandchildren who deserve to be born without soul-crushing debt that will forever limit their futures.  That you would deny all that freedom just to impose your will on those with whom you disagree makes you a totalitarian no better than the “progressive” who gleefully would do the same to you.

You don’t have to support gay marriage.  But you do have to tolerate it.  Of course, that’s what freedom really means:  allowing someone to do something with which you disagree so that in return someone can’t stop you from doing what they disagree with.

There has never been a more intolerant movement than the progressive movement that in the name of “tolerance” forces you to bend to their will.  If you want to take a gay marriage position that you can win, then support the freedom to opt out of it instead of having the government force you to participate.  Even many gay-marriage supporters balked when Coeur d’Alene, Idaho tried to force a wedding chapel to perform gay weddings.  No lover of freedom could ever support such a rule, but that is what progressives want.

And that is what the National Organization for Marriage wants.  They want to force the Republican Party to bend to its will.  If Republican candidates in close races demonstrate that they can win without NOM’s support, then NOM has no power at all.

Which, come to think of it, is a pretty good reason for a gay marriage supporter to cross the aisle and support a gay Republican, thus putting an end to NOM once and for all.

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