Donald Trump/Election 2016/Politics

Donald Trump’s Win in 2016: The Outsider Effect and The Obama Theory Of Trump

Posted on by matts

I last wrote on Libertarian candidate’s Gary Johnson’s Presidential campaign in 2016, providing the analysis behind a longtail scenario I had imagined in which, contingent on hitting specific triggers, there was a plausible if unlikely prospect that he could be the first third party candidate in decades to gain electoral votes, an outcome which could potentially deprive both of the major party candidates of the necessary 270 votes to avoid Congressional purview in the electoral decision.

Despite mutual dislike of the primary two candidates at historic proportions, once Johnson’s first trigger of reaching 15% in the requisite pre-debate polls (or alternatively successfully petitioning the Debate committee to waive the requirement) was missed, his election became essentially impossible. William Weld, Johnson’s running mate, even publicly acknowledged this while the campaign was ongoing, admitting in an October interview that the “real world” goal was to win merely 5% of the national vote, a threshold that would deliver federal matching funds and ballot access for the party in future elections. He also provoked the ire of some Libertarians and Republicans by publicly expressing a preference for Clinton over Trump. 1  In the end, the ticket didn’t come close to the 5% threshold.

Explaining The (unexpected) Victor: Donald Trump

Innumerable pundits, professional and otherwise, strained to attribute the ascent of Donald Trump in 2016 to some factor or another. Many explanations during his unexpected run of success in the Republican primaries revolved around what they identified as a budding distrust among Republican voters of the “establishment”–Trump, of course, the anti-establishment candidate not only in terms of policy pronouncements running counter to traditional GOP positions on issues like free trade, but also in personal style, indignantly eschewing the advice of all of those same pundits who bristled at his frequent unscripted, un-Presidential faux pas to tighten control over his public speech, instead doubling down by holding increasingly raucous campaign rallies and hiring a campaign manager who backed a “Let Trump be Trump” strategy.

While certainly a sui generis Presidential campaign–“unorthodox” as anything other than a comically understated descriptor constitutes an injustice to its novelty and absurdity– two constants of American political history can explain it to those still nonplussed at the improbability of Donald Trump’s election.

First, The Outsider Effect

Washington is perpetually unpopular, which confers privileged status to those who have a claim at being an outsider. In particular, Americans historically prefer outsiders with executive experience–usually Governors or Generals–as these candidates are able to draw an easy contrast with members of Congress as being action-oriented, in contradistinction to the legislators who are relegated by the rules of a deliberative body into perceived torpor.  Unlike in Great Britain, where Prime Ministers typically have long careers in Parliament before their election*, American Presidents rarely come from Congress, and if they do, it’s usually after an intervening period as Vice President. For a Presidential candidate, a long legislative history is actually a liability, as being forced to take positions on hundreds or thousands of pieces of legislation allows opponents extensive opportunities to cherry-pick the most unpalatable votes and harp on them during the campaign. It is almost impossible to escape a legislative career without many votes that will become problematic in the future, in part because of the arcane procedures which sometimes produce bills with a host of amendments unrelated to or incongruent with the primary subject of the bill, creating difficult decisions for Members of Congress, and in part because the interests of one’s constituents do not always line up with Presidential primary or general election voters.

Only three Presidents since the turn of the 20th century have come directly from Congress, and all three had a short enough stay as to both retain credibility as an outsider and avoid a lengthy and problematic legislative record. Senators Harding, Kennedy and Obama all became President during their first Senate term. George W. Bush, Bill Clinton, Ronald Reagan, Jimmy Carter, Richard Nixon, Franklin Roosevelt, and Woodrow Wilson all became President during or directly after their Governorships, Eisenhower after WW2 service and a University Presidency; Herbert Hoover and William Howard Taft from Cabinet positions; and all of the remaining from the Vice Presidency.

The outsider phenomenon in American politics can be traced back at least to Andrew Jackson’s election in 1828. The first six Presidents had been aristocrats all with a direct tie to the founders of the country, whereas Jackson, was the beneficiary of egalitarian reforms in the 1810’s and ’20s that expanded the franchise from only only property-owning white men to all white men, giving the common man new influence in American democracy. As the franchise has continued to expand, and since parties began holding primaries instead of choosing candidates at their national conventions, the outsider effect has become more pronounced over time.

Donald Trump was an outsider in the best possible way–not just to Washington, like some of the Governors in the race– but to politics in general, and his behavior and continual disrespect for existing political norms repeatedly reinforced it in the minds of voters.

Second, The Obama Theory of Trump

In all of the prattle called political commentary this election cycle, one observation stood out to me for its insight into Donald Trump’s success with voters. It came from former Obama Chief Campaign strategist, David Axelrod. “Open-seat presidential elections are shaped by perceptions of the style and personality of the outgoing incumbent. Voters rarely seek the replica of what they have. They almost always seek the remedy, the candidate who has the personal qualities the public finds lacking in the departing executive.” Axelrod furnishes Obama’s perceptions of Obama as hesitant, weak and given to appeasement in foreign affairs (though it should be noted Axelrod considers these misunderstandings of Obama’s virtues).

His own style an answer to the George W. Bush Presidency, Obama’s gentler touch on foreign affairs–legendary journalist Bob Woodward recounted a conversation with a prominent foreign leader who said of Obama, referencing America’s enemies: “No one’s afraid of him”– pushed the larger share of voters not to Marco Rubio, who advocated for a robust role (“There is only one nation on earth capable of rallying and bringing together the free people on this planet to stand up to the spread of totalitarianism”), but to candidate Trump, whose blustery pronouncements drew a caricature of the qualities the public found lacking in the prior executive. Among them were his outrageous call in a GOP primary debate for the US military to execute not only terrorists, but their family members as well. He in rough, bull-in-a-china-shop style, exemplified to many the toughness Obama’s careful manner was missing.

Notes and Further Reading

*Prime Ministers in Great Britain are elected similarly to how we elect a Speaker of the House of Representatives. The legislator needs to win only his own district, and is then selected by members of his party in the legislature.

http://theweek.com/articles/659098/how-bill-weld-betrayed-libertarians

Trump’s new campaign manager
The Obama Theory of Trump

http://www.nhregister.com/business/article/Journalist-Bob-Woodward-visits-Connecticut-to-11345093.php

Election 2016/Politics

The Plausibility of Gary Johnson Winning Electoral Votes in 2016

Posted on by matts

The Plausibility of Gary Johnson Winning Electoral Votes in 2016 

The last time a third-party candidate won electoral votes in a Presidential election was in 1968, when segregationist George Wallace won five Southern states in the contentious aftermath of the passage of the Civil Rights Act four years prior. While Wallace won just 14% of the national popular vote, because his vote was highly concentrated geographically, he was able to siphon off 46 electoral votes in a close election between Richard Nixon and Hubert Humphrey. Wallace is the only third-party candidate in the last 100 years to win electoral votes. 

There is a powerful structural explanation behind the poor historical performance of third parties in American history. American elections are subject to a single-member simple plurality system, which means that in a single district, electoral votes are awarded to the single candidate who achieves a plurality of the vote. Contrast this with proportional electoral structures, which above a minimum threshold divide representation in proportion to share of the vote. The SMSP system produces what is sometimes called the “Wasted Vote Phenomenon”: voters tend to avoid candidates who they assume have zero probability of victory, even if that candidate closely resembles their personal policy preferences, and will settle for an imperfect candidate who they perceive has some probability of victory.

For third-party candidates, the result is often a negative feedback loop wherein the candidate polls low leading up to the election because voters perceive that they cannot win, fueling the continued perception they cannot win, and reducing the amount of media coverage they receive. Come election day, the vast majority of voters will sacrifice some degree of fidelity to their policy preferences and choose one of the candidates from the two dominant parties.

Because the electoral system in the United States is unfavorable to third party candidates, and given their poor historical performance, is it plausible that a third-party candidate like Gary Johnson could win electoral votes, let alone the election, in 2016?

There are certainly idiosyncrasies of the 2016 race, specific to the personalities of the two major candidates, while perhaps not as structurally powerful as the geographic partisan realignment of 1968, that benefit a third-party candidate. If you’re reading this, you’re highly likely to be already familiar with the high rate of mutual unfavorability for Trump/Clinton. But even so, as of today, Johnson polls at just 8.4% according to the RCP Average, and while some states do have a much higher share of Libertarians—more discussion on this later—his support is not subject to the same degree of geographic concentration as someone like Wallace, a headwind for winning electoral votes.

But I’d argue that there actually is a plausible scenario for Johnson victories, despite the headwinds; Johnson could hit a point of critical mass in support that would immediately remove the psychological “wasted-vote phenomenon”, resulting in a snowball wherein he gains increased exposure.

The series of triggers that together create a plausible scenario for victory are as follows: (1) Reaches 15% Support Required to Participate in the Presidential Debates this Fall, (2) Connects with Voters during a Strong Debate Performance, and (3) Media Coverage of the Positive Trend.

The first trigger: Reaching 15% Support and Participating in the Presidential Debates this Fall

The Committee for Presidential Debates (CPD) has announced their requirement that a candidate register at least 15% in at least 5 national polls to be included in the debates. Though Johnson is only at 8-9% in the RCP average, Johnson has recorded 13% and 12% each multiple times, and with five weeks until the first debate on September 26th, with several dozen polls to be released during that time, a few point in his underlying numbers, achieving 15% in five polls on variance is very possible.

Trigger two: Connects with Voters during a Strong Debate Performance

Polls testing the favorability and unfavorability ratings of Gary Johnson over the last few months have variously registered percentages ranging from 49% and 78% of the electorate who don’t know enough about him to form an opinion. This represents a huge treasure trove of untapped potential that is unavailable to Donald Trump and Hillary Clinton, both of whom have essentially universal name recognition. So if Johnson were to enter the first debate with 15% support, exiting it with 20% is entirely reasonable.

Trigger three: Media Coverage Of The Positive Trend

Consider the flip-side of the obstacles faced by a third-party candidate– that because success is rare, when that candidate surges to 20%, it’s newsworthy. Reference the media coverage of the Bernie Sanders campaign—it was a great story for a septuagenarian socialist to actually challenge the powerful favorite of the party establishment. 

Erosion of “Wasted Vote” Phenomenon, and Winning in a 3-4 Person Race

Say Johnson were at 20% after the first debate, and becomes the subject of increased media coverage as mentioned above. Johnson is now suddenly a viable candidate to voters, and voters who had some interest in him but would not support him due to fear of wasting their vote, now do.

Remember that Johnson doesn’t need to shoot for 50%; in a 4-person race (Jill Stein is also polling relatively well for a 3P candidate), the winner might win with something like 33%, or even less.

Which States are the Best Opportunities for Johnson?

We do have some basis for comparison, at least on a relative basis compared to national vote share, given that Johnson ran in 2012. In an election year where neither candidate was under FBI investigation nor had uttered a myriad of comments objectionable to a variety of ethnic and religious groups, Johnson earned 1% of the national vote.

The highest shares by state for Johnson were:[1]

  1. New Mexico (GJ’s home state) – 3.55%
  2. Montana – 2.93%
  3. Alaska – 2.46%
  4. Wyoming – 2.14%
  5. Idaho – 1.91%

You might expect a state like New Hampshire, high in it’s share of Libertarians[2] and a state motto of “Live Free or Die”, to be in the top 5 of Johnson’s highest relative 2012 vote share, but the Libertarian candidate earned just 1.16% of the vote, just slightly higher than the national average.

What’s the difference between NH and a state like Montana or Wyoming, all of which are Libertarian-rich? The latter two aren’t swing states. This lackluster NH performance may be representative of a larger phenomenon: voters in swing states perceive their vote to be more valuable, and are therefore even less likely to “waste” their vote. Montana and Wyoming were non-competitive in 2012.

But the difference in perceived viability of a 10-20% national candidate and 1% national candidate may be enough to register significant and disproportionate upside in Libertarian-rich states, even if they are usually swing states.

Colorado for instance, also a Libertarian-rich swing state, gave Johnson only a slightly improved 1.38% in 2012, registered 16% (almost double his national average) in the most recent Quinnipiac poll there just over a week ago.

So If Gary Johnson hits the 3 triggers I laid out in this post, he is very much a threat to win states like Colorado and New Hampshire. And if there are state polls leading up to the election that have him leading, it makes him a viable candidate everywhere.

[1] www.fec.gov/pubrec/fe2012/federalelections2012.pdf

[2] http://reason.com/blog/2015/06/26/this-map-shows-how-many-libertarians-are

Entrepreneurship/Philanthropy

On Zuckerberg’s 99%, in Defense of the Mega-Donation

Posted on by matts

I read with great interest the variety of reactions on the internet to Mark Zuckerberg’s pledge this past week to devote, over the course of his life, 99% of his shares in Facebook to philanthropic causes, an amount currently corresponding to $45,000,000,000 and likely to increase over time.

I’d be lying if I could say I was surprised that within that variety existed a strong current of negativity and vitriol directed at Mr. Zuckerberg, but I was, still, dismayed.

I wasn’t alone in my dismay, Sam Altman, one of the principals of Y-Combinator, an incubator for start-ups, expressed his view:

Many of the criticisms were frivolous–Zuckerberg would still after donating have hundreds of millions to himself, that he’s only doing it for the tax deductions, he’s merely effecting a big PR stunt, that the “unethical” nature of Facebook itself undermines any subsequent good works of the founder, that the lack of success shown by his previous $100 million donation to the Newark, NJ school system mean he will be a poor allocator of resources, etc.

Dealbook’s critique, which was pointed less at Zuckerberg and more at other media outlets who had earlier praised Zuckerberg’s altruism, was more thoughtful, yet still misguided.

All Zuckerberg has done as of yet, is create a Limited Liability Corporation in order to facilitate the transfer of his shares, in order to ensure favorable tax treatment. But making a public pledge isn’t nothing, and the tax benefits from the LLC will effectively accrue to the subject of Zuckerberg’s giving.

Dealbook does allude to an important substantive issue in the debate on the balance between voluntary and involuntary contributions to the public good, remarking that charities rarely fund quotidian needs, like infrastructure improvements. Jesse Eisinger, for Dealbook, warns against the insufficiency of the grace of the super-wealthy to support them.

The assertion about the nature of giving is correct, but the line of argument overstates the danger to the so-called quotidian, which is not in actuality threatened by the prospect of mega-donations by the superwealthy supplanting traditional government-run welfare systems. One reason is that the raw amount of donations and income tax receipts aren’t a seesaw, or at least not a symmetrical one.

If an entrepreneur were to receive a windfall, she could donate a portion of that to charity, and subtract this amount from her gross income, and be taxed on the difference. But for every incremental dollar she donates, while the charity of her choice receives the full dollar, a full dollar to the US Treasury isn’t lost.

Let’s say she’s in the highest US tax bracket of 39.6%. She decides to donate $100,000, split between several organizations which support various causes. The government “misses out” on $39,600, which has been directed to charity, but the organizations also get the $60,400, making the full $100,000. It’s the entrepreneur who forgoes the $60,400.

Secondly, mega-donations, while often making a splash in the philanthropic world (especially when they are directed strategically), make little difference in the amount of tax revenue collected, which in the US draws on a base of about 150 million people, the vast majority of whom do not have the disposable wealth necessary to divert a significant amount of their tax dollars to charity; along with several million businesses, for total annual revenue at in excess of $6 trillion (3.25t at the federal level).

And, while it’s of only limited analytical value, the amount of charitable donations and amount of tax receipts are of course positively correlated over time, in line with growing American prosperity.

Charitable giving, in contrast to the outlays of a bureaucratic vehicle funded by involuntary and systematic contributions, does tend to align disproportionately to causes producing an emotional response in the donor. Non-profits that can successfully make an appeal directly to the donor do well– if they can you make you tear up in an advertisement, they can probably get your dollar. Therefore things that are interesting, cute, especially sad, get funded. You might call this the Hormone Effect, or Oxytocin Effect in philanthropy, which one could argue distorts the distribution of gifts.

But governmental appropriations fall victim to all sorts of biases, traps and inefficiencies as well, the likes of which may be more fit for an encyclopedia than a blog post.

And at the same time, the opportunity to build a legacy by doing great things can motivate the super-wealthy (and others) to make incredible contributions that a government doling out money never would. The Gates foundation, for instance, targets causes in a highly strategic way in order to maximize the efficiency of every dollar donated. And the difference between an organization blindly appropriating to a given cause, and a dedicated individual who has reputational incentives can be exponential rather than incremental.

Part of my aforementioned dismay, and this is directed more at the critiques I branded with frivolity, stems from the de-motivational aspect of the negativity. A whole generation of entrepreneurs is watching this unfold, and potential philanthropists, even those who genuinely want to improve the world, also want to be well-thought of (and especially so compared to the average person). There’s nothing wrong with thoughtful criticism that keeps us accountable, but there’s always the possibility harmful indirect effects when they get nasty. It’s this same nastiness that keeps a lot of capable people of out public service.

Zuckerberg’s pledge to donate 99% of his wealth, and the subsequent positive media coverage, changes the conversation for hyper-successful entrepreneurs and investors, in a similar way to the Gates/Buffett giving pledge to donate 50%. If you’re a billionaire, interested in helping the world but reticent about agreeing to donate half of your net worth, seeing one of the world’s most visible billionaires pledge 99% makes 50% a lot more palatable.