Saturday, November 03, 2012

Betting on Silver.

The contrast is striking. Rush Limbaugh and Grover Norquist led the Republican band with surety and bravado. Not so much the Democrat masters of the universe, Nate Silver and Jon Stewart.

It is safe to say that some significant percentage of progressive partisans get most of their campaign news and analysis from these two nebbishy Jews who strutted their stuff a few weeks ago on the Daily Show. It is just one more aspect of the stratification of America as we recede into our gated communities--physical, digital and metaphorical--and see the world only through our own eyes. The right interprets reality through the lenses of Fox News, Rush Limbaugh and Scott Rasmussen. The left has MSNBC, Jon Stewart and Nate Silver.

Based on Silver's assessment, with three days to go, Barack Obama has an 84% chance of winning. Faced with an onslaught of Silver backlash from the left and the right of his opaque methodology, Silver sought to calm the waters with a sports analogy to appease the statistical illiterati.

Mr. Obama is not a sure thing, by any means. It is a close race. His chances of holding onto his Electoral College lead and converting it into another term are equivalent to the chances of an N.F.L. team winning when it leads by a field goal with three minutes left to play in the fourth quarter. There are plenty of things that could go wrong, and sometimes they will.

But it turns out that an N.F.L. team that leads by a field goal with three minutes left to go winds up winning the game 79 percent of the time. Those were Mr. Obama’s chances in the FiveThirtyEight forecast as of Wednesday: 79 percent.

If you are a Philadelphia Eagles fan, or perhaps a vintage Red Sox fan--or even worse, an Eagles and Red Sox fan--the logic of Silver's words suggest only one reasonable conclusion: Welcome to the White House President Romney.

But if Mitt Romney loses, there will be hell to pay in the Republican Party. From the beginning, Mitt Romney was scripted from central casting to be the Republican candidate in a general election. He survived a competitive primary season. He shook the etch-a-sketch as his campaign promised. He moved toward the center. But in the end, Mitt Romney will go down in history as the Republican candidate with the perfect resume who was unable to defeat a Black, liberal Democrat--still believed by nearly 20% of Americans to be a Muslim--presiding over the worst reelection circumstances since FDR in 1936.

In the end, Mitt Romney preferred for too long the campaign strategy of letting Obama's record be the defining question in the race, and never successfully established the rationale for his own leadership. He said he was better for jobs, but had no inclination to tell people what he would do, only that they must trust him to do it.

The failure of the Romney campaign should lead to fundamental questions about the structure of the Republican coalition. The modern Republican Party was birthed in the Goldwater campaign of 1964. It was given strategic direction in Richard Nixon's Southern Strategy that dislodged southern white voters from FDR's Democratic Party coalition. And it flowered under Ronald Reagan in 1976 and 1980 as the Republican Party coalition of today. Central to the modern Republican electoral strategy is the coalition of single issue voting groups, including anti-abortion, pro-gun, anti-tax, pro-faith, anti-gay voters conceived and driven by Grover Norquist, and the effective excommunication of the pro-choice, socially liberal wing of the Republican Party.

But the emergence of abortion as a dominant issue for swing voters and the nagging gender gap is an indicator of the larger failure of the President to make the case to swing voters that he understands the dynamics of the private economy and supports policies to enhance private sector job growth. While the Obama administration can claim credit for federal efforts to support the auto industry, Mitt Romney has built his campaign around the single message that the President has a deaf ear to the concerns of the private sector. The fact that Romney can say so little about what he actually would plan to do--to the extent of claiming in the famous 47% video that he actually would not have to do anything--speaks volumes about the President's failure in this regard.

In a grossly simplified schematic, the national electorate can be characterized around voter attitudes on both economic and social issues. This excludes a range of other subjects, such as foreign policy, but it is accepted as conventional wisdom that few voters cast their ballot based upon matters beyond our shores. A recent Gallup survey validated this view, as 0% of women and 2% of men indicated that foreign policy issues are important for them in this election.

As shown here, the dominant stance of the two political parties are in the opposite quadrants of the matrix. Democrats advocate liberal stances on economic and social policy matters, while Republicans choose the conservative stance on both. What is notable in the Gallup survey, is that while abortion ranks number one as the concern of women, at 39%, jobs ranks second at 19%. That the president has not been able to close the deal with swing state women has been directly attributable to Mitt Romney's greater credibility through much of the campaign on the issue of jobs.

And the President's struggles in this regard are well earned. The Republican Party convention built its theme around the President's famous you didn't build that remarks--that he himself derided at the Al Smith dinner. As much as Democrats might want to claim that the remarks are taken out of context, they fairly reflect an attitude toward private business that is pervasive in the Democratic Party. Democrats historically are disdainful of profit and hostile toward private industry, notwithstanding the reality that for most of America the private economy is the source of their income and target of their aspirations.

The President's singular focus on his struggle with Republicans over raising taxes on the wealthy obscures the larger reality that only a growing private economy will provide the ladder to economic opportunity that is critical to rebuilding the American middle class. Increasing taxes on the wealthy will do nothing to achieve the fundamental goals of growth, and little to ameliorate the growing income disparities across the economy.

The President's tin ear on what regulation can and cannot achieve is evident in his stump speech regarding Dodd-Frank banking regulation. The problem with Dodd-Frank is not that whether it labels large banks as too-big-to-fail, because too-big-to-fail is a market and political reality, not a creature of the Dodd-Frank legislation. Rather, the problem with Dodd-Frank is that in seeking to tighten regulatory rules on the dozen or so large financial institutions whose conduct was complicit in the global financial collapse, it has placed enormous burdens on thousands of other banks and financial firms that constitute no system threat to the nation. As the President continues to demagogue this issue, he demonstrates his own failure to parse the difference between JPMorganChase and the regional and community banks across the country that are critical to our economic recovery.

The fight for the swing voters in Ohio and elsewhere is fight to win the lower-right quadrant of voters who believe in individual liberty on social issues, and government restraint on economic issues. The irony for Republicans is that after finally killing off the last of the Rockefeller Republicans, their hopes for victory rest with a man who was an economic conservative and social liberal before he wasn't. To his credit--if that is the correct term--while Romney may be walking back his promotion of supply side tax cuts and reclaiming Obamacare, he has not recanted his newfound pro-life stance that was part of his political makeover as he cast aside his social tolerance in pursuit of his party's presidential nomination. For all we don't really know about what Mitt Romney believes, that lower left quadrant that is the center of the American electorate is part of his DNA.

For the President, fighting his way to the lower-right quadrant is more difficult, simply because he has never been there before. The irony is that Democrats have lost much of their liberal economic mojo over the years. Obama mentor and potential savior Bill Clinton began the march to the right when he wooed Wall Street with the promise of financial services deregulation and ended welfare as we knew it. Unlike the Clinton's, Obama is by all appearances a true believer, and swing voters take him at face value: they like him personally but do not believe that fixing a very broken private economy is his strong suit.

In Obama, voters may have someone whom they believe cares more about people like them, but who simply does not share many of their core views about what needs to be done to build the private economy. If Nate Silver is correct, it isn't going to be all about the economy this time. But finding their way back to the center of the American mainstream on economic matters will likely remain a challenge for the Democratic Party in elections to come.