Friday, November 07, 2008

Whither Realignment? (Why Palinism Won't Work)

I read a great line this morning:

"College educated Americans have concluded that their bank accounts are safe with the Democrats, but that their values are under assault by the Republicans."

It seems to me that this gets to the heart of things. The Reagan coalition depended on supplementing free-market capitalists with Reagan Democrats who wanted a return to muscular patriotism.

The Bush 2 Administration somehow managed to reverse Reagan's alchemy--it dramatically enlarged the Federal government, and its tendency to paint its opponents as friends of terrorism struck most as McCarthy-esque rather than patriotic.

Reagan helped everyone--Democrat and Republican--feel better about being American. Bush 2 made everyone feel worse. Then along came Obama with a Reaganesque charisma and a message of hope.

In the 80s, the Democrats couldn't understand how Reagan managed to convince the Reagan Democrats to vote "against their economic interests" (a debatable point; Reagan's changes to the tax code may have helped rich voters most, but they almost certainly helped the Reagan Democrats as well--I'm firmly of the opinion that I'd rather do better on an absolute basis than on a relative basis). Their reaction was simply to restate their message in shriller tones; only Bill Clinton's triangulation strategy managed to win the White House for them, and that only because of the Perot effect.

Now in 2008, certain Republicans can't understand how Obama managed to convince the Obamacons to vote against their economic interests and elect a redistributionist. "If we just restate our old positions more strongly," they reason, "People will eventually come to their senses."

Palin is still fighting the last war, much like the Democrats during the Reagan era. Time to move on.

Best. Campaign. Rundown. Ever.

I just finished reading Newsweek's behind-the-scenes look at the presidential campaign.

Wow.

It is an astonishingly rich and detailed piece of reporting, filled with surprising stories and facts, and carrying the ring of truth.

While anyone who was ever been in the papers knows that journalists will never get the story exactly right, it seems to me that the reporters did their best to capture the essence of the story, and to treat all the participants fairly and with respect. For example, Steve Schmidt, often cast as the Rove-ian heavy, comes off as surprisingly sympathetic.

(Ironically, the only person who doesn't get the sympathetic treatment is Sarah Palin...whether this is accurate, liberal media bias (TM), or simply because she wasn't close enough to the insiders dishing the dirt, I can't say)

If you're a campaign junkie, I strongly recommend you read the whole thing. Here are the high-level impressions and notes that I carried away:

1) Barack Obama is unbelievably calm and self-assured. Campaigns really do take their tone from the top, and Obama's cool, intellectual style trickled down to all the members of his staff. Even during the toughest times, he wasn't a yeller or screamer.

A note to all you sci-fi nerds out there--when I read that Obama rarely ate on the campaign trail, and would order food "to go" at campaign stops that reporters were convinced he'd never eat, all I could think of was "Stephen Byerly." I for one welcome our robot overlords.

2) Both Hillary Clinton and John McCain ran incompetent campaigns, but they were incompetent in different ways.

Hillary's campaign was a microcosm of the internecine infighting of the Clinton White House, leading to this memorable and poignant line:

"Crisis, chaos, deceit and subterfuge. After eight years in the Clinton White House, it was all familiar to Hillary—a world she had bravely struggled in but not against; it was the only world she really knew."

John McCain's campaign also suffered as a results of its candidate's failings...which were the obverse of his strengths. Impulsive, impatient, and combative, the McCain campaign's constant machinations and attacks kept breaking on the cool impassiveness of the Obama campaign. It didn't help that despite his dogged tenacity and endless energy, McCain simply didn't enjoy organization or preparation, and was apt to depart from his own chosen strategy, seemingly on a whim.

The biggest mistake of both campaigns was to underestimate the mettle of their opponent. Hillary honestly believed that Obama couldn't win the election because of his race, and that the superdelegates would break her way. McCain couldn't stand Obama because of a perceived lack of "honor" (in McCain's defense, Obama and his campaign showed a Chicago-style ruthlessness, including the decision to reject public financing) and never took him seriously enough:

"McCain's essential world view, bred into him by his Navy-admiral father and grandfather, is that of a warrior. In his bestsellers, McCain made clear that the personal quality he extols above all others—even courage—is honor. Over time, egged on by his subordinates, he came to believe that Obama was a nice enough young man, but somehow lacking in this most noble of warrior virtues."

3) Obama won in part because his campaign didn't even bother to pay lip service to the traditional campaigning methods of the Democratic Party. After all, this is the same political machine that managed to lose 7 of the past 10 presidential elections.

In 2004, John Kerry set aside significant resources to have specific programs for blacks, gays, Native Americans, the disabled, etc. Obama's campaign started to assign a single liason to each group (already a major scale-back) and ultimately shitcanned the whole effort, dispersing those staffers to focus on get out the vote efforts.

A few additional tidbits:
  • Hillary Clinton wasted a boatload of money on chartering her own G4 jet; rather than staying in motels in rural Iowa, she would stay in a suite in Des Moines, then jet out for her campaign stops
  • One of the reasons Democratic donors were reluctant to give more to the Clinton campaign was the fear that Hillary wouldn't be able to control Bill (an accurate fear, as it turned out)
  • Hillary Clinton was curiously reluctant to run for president; she liked her life and her accomplishments in the Senate
  • Hillary Clinton lives with her mother; Bill is only an occasional visitor (I'm sure there's a book to be written about that fact alone)
  • Obama asked his staff to uncover and review every one of Reverend Wright's speeches; this may have been the one major way that they failed him. He was blindsided by the "God Damn America" speech.
  • When the rest of his staff didn't know what to do, Obama made the decision to make a major speech on race in Philadelphia, and wrote the speech almost entirely by himself. He regularly pulled all nighters to write his important speeches.
  • Steve Schmidt is a devoted family man who has memorized all the songs to Disney's "Enchanted" so that he can sing them with his daughter. (Side note: Enchanted is an awesome movie. I love the sequence where Giselle and her animal helpers (rats, pigeons, cockroaches, and flies) clean up Patrick Dempsey's apartment.)
  • Ted Kennedy actually had a major beef with Obama over his failure to keep his end of a Senate bargain. When a colleague asked Teddy why he had endorsed Obama, he simply replied, "Caroline."
  • When BarackObama.com directed people to the Red Cross web site to donate in advance of Hurricane Gustav, the traffic surge brought down the site within 15 minutes...something that didn't happen during 9/11 or Katrina.
  • When he first got the news that McCain had picked Sarah Palin as his running mate, Joe Biden asked, "Who's Palin?"
  • Even though the press attacked the McCain campaign for being negative, McCain and his team actually vetoed a bunch of particularly vile attacks:

    "McCain had set firm boundaries: no Jeremiah Wright; no attacking Michelle Obama; no attacking Obama for not serving in the military. McCain balked at an ad using images of children that suggested that Obama might not protect them from terrorism; Schmidt vetoed ads suggesting that Obama was soft on crime (no Willie Hortons); and before word even got to McCain, Schmidt and Salter scuttled a "celebrity" ad of Obama dancing with talk-show host Ellen DeGeneres (the sight of a black man dancing with a lesbian was deemed too provocative)."
After reading this article, I had a better sense of the candidates than ever before. My overwhelming feeling was that, policy considerations aside, the right man won. I share few of Barack Obama's domestic policy beliefs, but if he shows the same discipline, understanding, and competence in the White House that he did on the campaign trail, he might have a chance of living up to the sky-high expectations of his supporters.

Thursday, November 06, 2008

Election Roundup: Why Obama Won, Naked Palin, etc.

As a campaign junkie, it's going to be hard to come down from the high of watching this riveting election cycle unfold (even though the actual election lacked much drama beyond wondering if the Democrats would make it to 60 Senate seats). I've already written at length about the major issues, so I'll just draw your attention to two excellent roundups:

Reader's Digest of all people has a great rundown on Why Obama Won:

1. John McCain's age
2. The shrinking Republican brand
3. Obama's charisma
4. The youth vote
5. Superior technology
6. Money, money, money
7. International opinion
8. Bradley Effect backlash
9. An unhappy electorate
10. The economic crisis

I definitely recommend giving it a read; it's a reasoned, systematic look at the election--the sort of thing I'd write myself, but which has already been done for me.

Newsweek's Behind The Scenes "Highlights"

Fascinating look behind the scenes, including the following tidbits:
  • Before the last debate, the McCain team fought over whether or not to tell McCain that the election was effectively over. They narrowly decided to fight on.
  • The night she conceded, Hillary Clinton had a long and friendly phone conversation with John McCain. The two shared a dislike of Obama, whom they considered "callow and flashy."
  • At the GOP convention, when Schmidt and Salter went to brief Palin, she appeared fresh out of the shower, wearing only a towel and a hair towel. "I'll be just a minute," she told the stunned staffers, suggesting they chat with Todd while she was getting ready.

Tuesday, November 04, 2008

Cult Psychology: Why McCain's Attack Ads Didn't Work

Seth Godin hits it on the head:

"Attack ads don't always work. There's a reason most product marketers don't use attack ads. All they do is suppress sales of your opponent, they don't help you. Since TV ads began, voter turnout has progressively decreased. That's because the goal of attack ads is to keep your opponent's voters from showing up. Both sides work to whittle down the other. In a winner-take-all game like a political election, this strategy is fine if it works.

So why didn't the ads work this time?

The tribe that Obama built identified with him. Attacking him was like attacking them. They took it personally, and their outrage led to more donations and bigger turnout. This is the lucky situation Apple finds itself in as well. Attacking an Apple product is like attacking an Apple user."

Or more succinctly--attacking a cult leader simply enrages his followers.

As usual, the Obama campaign understood this principle.

Obama ran attack ads going after McCain (whose supporters didn't particularly like him), not against Palin (who was beloved by her base), even though he had far more damaging ammunition when it came to Palin.

Alas, the converse implication is not that "attack ads no longer work," but rather "attack ads don't work against a passionate following," so don't expect the 2008 elections to mark a sudden turn to civility in American politics.

Sunday, November 02, 2008

In Bad Times, It Pays To Be Versatile



In bad times, it pays to be versatile. Just ask Bo Jackson.

Cross-training is a major asset during times of flux. If you're looking for a job, you'd better have a wide variety of skills. If you're hiring, search for cross-trained athletes.

During booms, stability tends to prevail, and markets seem predictable. Given those circumstances, the right strategy to optimize returns is to specialize. Specialization lets you become more efficient at a particular activity, whether in sports or in business.

For example, you might become a trade show specialist that excels at making your company the talk of the convention. And if you're running a company, you'll do your best to carefully organize your company into discrete areas of responsibility that you can staff with specialists.

But when the boom ends and continuous change becomes the main characteristic of the business environment, specialization can spell your doom. In times like these, the rules are constantly changing, and those careful processes you spent years honing may become useless overnight.

If you're the VP Marketing at a startup, and you're a trade show specialist, you are screwed. If you can't turn on a dime and suddenly become an SEM jockey, or a lead gen guru, you'll soon be out of a job.

Conversely, if you're a jack-of-all trades who has been square-pegged into a round hole, now's you're chance to shine. Tackle the problems that no one else in the company wants to face, secure in the knowledge that you'll learn how along the way.

But remember, just as it's unwise to act as though the boom will never end, it's also foolish to believe that the bust will last forever. Take advantage of this time to build up your knowledge of new specialties so you'll be ready to switch strategies when the economic cycle turns once again.

Predicting the Obama Presidency

With the election of Barack Obama just a day away, I wanted to take a few moments to consider what an Obama presidency means for this country.

It's not going to result in socialism and riots, per his opponents, or in a new Golden Age, per his adherents. But it will represent a major break with the past eight years.

Foreign Policy
Here is where an Obama presidency will have the greatest positive impact. Anyone who succeeded George W. Bush would receive a warm welcome from the rest of the world, but given Obama's popularity overseas, expect the initial reaction to be borderline ecstatic.

It is not simply that Obama is a proponent of greater engagement and multi-lateralism; it is that his election makes a mockery of many of the slanders spoken against America--that it is racist, insular, and ruled by a ossified ruling class. The Obama presidency can help restore our moral standing, so badly eroded by the abuses of the Bush Administration.

There is the risk that Obama will prove naive and weak, but having watched this steely operative ruthlessly destroy both the Clinton and Republican political machines, I am not too worried.

Taxes
This one is pretty simple--Obama plans to take from the rich and give to the poor. Under Obama's tax plan, 44% of the US population will either pay no Federal taxes, or actually receive money from the Federal government; in 2005, this figure was only 33%.

Whether you think this is a good thing or a bad thing depends largely on your political philosophy. On the one hand, government exists to do things that the market cannot. Essentially any government spending is redistributive, since it is incredibly unlikely that any program will provide benefits that are exactly aligned with the amount of money each citizen pays in taxes. But on the other hand, aggressive redistribution discourages enterprise; when the marginal tax rate is too high, even the most diligent discover better things to do with their time than working.

On the whole, I dislike Obama's tax plan, but if the Democrats win a 60-seat majority in the Senate, there's not much I can do about it.

Healthcare
A President Obama would take another run at healthcare reform. How ironic if he does in fact make Hillary Clinton the healthcare czar. Unfortunately, while his healthcare plan will increase coverage, it will also increase costs.

The basic problem with the American healthcare system is that, for legacy reasons, health insurance is largely provided by employers. This is a ridiculously inefficient system that increases costs, obfuscates incentives, and reduces labor market flexibility.

The two logical solutions are either single-payer healthcare (which capitalists like me hate, because it substitutes government rationing and policy for simple market incentives, resulting in long lines and poorer care) or individually-purchased health insurance (with some sort of safety net to cover the uninsurable).

Obama's plan is neither fish nor fowl, simply applying another patch to a broken system. It will increase the role of the government without dramatically lowering costs.

Energy
This one is also pretty easy. Obama intends to fund a massive public effort in renewable energies. The sound you just heard was John Doerr pumping his fist as he contemplates Kleiner Perkins' massive bet on cleantech.

The problem with this that the government has a horrendous track record in industrial policy. "Success stories" like the Manhattan Project and the Apollo moon landings are in fact great examples of how American wealth and industrial might can be used to accomplish non-economic goals. There was no real way to monetize nuclear weapons or lunar exploration, so naturally the government had to step in.

That's not the case with renewable energy. There's plenty of smart folks betting on these technologies already; all a massive public investment is likely to do is to inflate another bubble (and once again, John Doerr with the fist pump).

Conclusion
On the whole, an Obama presidency is likely to provide foreign policy positives, but domestic policy negatives. Yet because the strength of the presidency lies far more with the former than the latter, it is likely that the gains in foreign policy will offset economic losses relative to a McCain/Palin administration.

Ironic, isn't it? In an election that's being decided for Obama because of the economy, this capitalist believes that the greatest benefit of an Obama presidency will be in the realm of foreign policy.

American has done pretty well over the past 242 years, even under mediocre or even poor presidents. Even if Obama the President fails to live up to Obama the Candidate (remember, George W. Bush was elected as a bipartisan, compassionate conservative, who would unite America after the polarization of the Clinton years), America will eventually be fine.

But fondly do I hope, and fervently do I pray, that Barack Obama will rise to the challenge before him, live up to his rhetoric, and truly unite our country, rather than enacting a left-wing bizarro version of the last eight years.

Whether you vote for him on Tuesday or not, we will all be better off if Barack Obama really has the greatness that his supporters see within him.