Superdelegate Math

(click chart to enlarge)

Like the Obama and Clinton campaigns, I've done my own spreadsheet predicting the outcome of the Democratic race. I've made the assumption that current voting coalitions hold up and I take into account latest polling where possible.

I'm showing the picture 2 different ways. First, I show the pledged delegates at various points in time. Then I include the superdelegates assuming they continue to accumulate proportionally (i.e. no major break for one side or the other). In both cases, the race is always close ... the margin is never more than 100. The maximum margin happens after PA and includes the superdelegates. At that point, Hillary is leading and the margin is almost entirely provided by the superdelegates.

If status quo continues, Hillary ends up within a hair of winning the nomination. However, Obama will have won the pledged delegates. This is not a happy scenario for the Dems. I'm guessing that at some point, the superdelegates will have to put their finger on the scale even moreso than it already is (currently favoring Hillary by about 90). The question is ... when? and for whom?

Of course there is another possibility. Clinton or Obama may at some point peel off enough voters from the other's coalition that they open up a wide gap in pledged delegates. Ultimately, this would be the best case scenario for the party. But there is no reason to think that's going to happen. The coalitions on both sides are rock solid. Both candidates will probably have plenty of money. And there will probably be no major mistakes.

So now we see the stakeholders posturing on whether the superdelegates should should commit to a candidate or whether they should stay on the sidelines. Clnton advocate Donna Brazil has gone so far as to threaten to quit the Democratic party if the superdelegates "decide the race". Of course her position ignores the fact that the current difference of 90 superdelegates in favor of Clinton might very well decide the race. In my prediction, that 90 delegate margin is 2x the pledged delegate margin. The Obama side is openly urging the superdelegates to commit. The fact is that he NEEDS them to commit or he will most probably lose.

In a previous post, I tried to interpret a statement by Howard Dean that seemed to be trying to pressure superdelegates into commitment. Since then, various other "nuetral" figures in the Democratic party have suggested that the superdelegates wait "for a few more weeks" ... presumably they are hoping that someone will control of this race ... or possibly they don't want the superdelegates to pick sides at an Obama high point.

How will all this unfold? My crystal ball is very cloudy at the moment ... I'm guessing that after the March 4th primaries in Ohio and Texas the end-game should be pretty apparent to everyone. Either the superdelegates break for Obama and he wins, or status quo and Hillary wins. I can't tell which way this will go at the moment, but I can predict that the superdelegate gap on April 22 (the day of the PA primary) will predict the eventual winner. I say if the margin is closer to 90 than 0, Clinton will win. Otherwise, Obama will be the nominee.

Mitt Romney Out, John Kerry's Endorsement More Important than Ted Kennedy's

Romney goes fishin'

Time to start up the boat again Kenny ... VRRRM VRRRM

As I predicted, Mitt Romney exits the race. The fiscal conservative wing of the house of Reagan mourns. There was no heir apparent to Reagan in this race, but Mitt beared the closest resemblence to one.

This basically clears the way for McCain. A shift from Romney to Huckabee seems extremely unlikely.

Prediction: Huck will also drop out by Sunday. Then let the healing begin.

Kerry's endorsement more important than Kennedy's

Why you ask? Check out this article from the Washington Post:

http://blog.washingtonpost.com/the-trail/2008/02/07/obama_fundraising_strength_com.html

When you get John Kerry's endorsement, you also get his database of 2004 Democratic Presidential campaign donors. Turns out this comes in handy since he's the only one that's got one.

I’m Super, Thanks for Asking!

Before the conclusion of the voting on Super Tuesday, Howard Dean said the following in an interview on NY1 television:

"The idea that we can afford to have a big fight at the convention and then win the race in the next eight weeks, I think, is not a good scenario,"

"I think we will have a nominee sometime in the middle of March or April. But if we don't, then we're going to have to get the candidates together and make some kind of an arrangement, because I don't think we can afford to have a brokered convention -- that would not be good news for either party."

Of course, he’s right. Brokered conventions are bad. They tend to weaken the nominee, as they weren’t directly elected by the people. Brokered conventions need to be avoided.

However, Dean now faces the very real possibility that neither candidate earns the necessary 2025 delegates to win the Democratic nomination outright. So, what’s Dean thinking when he says that he may have to get the candidates together to make some kind of an arrangement? The possibilities are as follows:

1. One of the candidates steps aside. (not a very likely possibility)

2. Seat the delegates from Florida and Michigan or possibly re-run those races (which the Obama campaign would not agree to as it would stack the deck for Clinton).

So knowing that both of these options are essentially non-starters, I’m guessing that Dean’s intent was to rally the superdelegates to pick a candidate.

I believe that both the Obama and Clinton campaigns made the same interpretation and reacted.

Clinton’s campaign (through it’s surrogates … I said cynically) started to argue for a re-do or delegate seating of Florida and Michigan. The argument was made by pointing to the standing positions of the DNC and the respective state democratic committee– DNC has requested that Florida and Michigan re-do, the state committees have said “seat our delegates”.

But is a fight over seating these delegates really what Clinton wants? First of all, deadlock between the DNC and state Democratic Commitees would have to be broken and could get ugly. Along with that, Obama’s supporters would cry foul and there would probably be a legal challenge. It’s hard to believe that all that could happen without substantial damage to Hillary's general election campaign.

So what's the thinking of the Clinton camp? My guess is that the argument they'll be making to the undecided superdelegates will be: If Florida and Michigan had had a voice, I would have been elected. Therefore, I'm really the people's choice.

Meanwhile, the Obama campaign “accidentally” let a spreadsheet slip that supported the Howard Dean nighmare scenario where no candidate has the delegates for nomination. Basically, I interpret this as ... "yeah, Howard Dean is right! You superdelegates can't let this happen!"

See the following article for the details:
http://www.bloomberg.com/apps/news?pid=20601087&sid=a9T3ToQrPGqc&refer=home

“Coincidentally”, Obama is openly lobbying for more superdelegate support:

"If this contest comes down to superdelegates, I think we're going to be able to say that we have more pledged (earned) delegates, meaning that the Democratic voters have spoken," Obama said.

"And I think those superdelegates who are elected officials, party insiders, would have to think long and hard about how they approach the nomination, when the people they claim to represent have said, `Obama's our guy.'"

Thus the Obama campaign likes the idea of virtual brokerage. Furthermore, they are making the case for a rally to their side. But obviously a Clinton argument which included Florida and Michigan would weaken and possibly trump the delegate count argument.

So, Obama may be counting on another rationale to sway the superdelegates: Obama's electability in the general election. The case is made today by columnist George Will (again I said cynically … not coincidentally):

http://www.washingtonpost.com/wp-dyn/content/article/2008/02/06/AR2008020603943.html

So what’s going to happen here? The most likely scenario is that the election will be decided by primary voters.

If neither candidate can get enough delegates, I expect that the superdelegates will decide matters. Or at least with that premise, I can manufacture plausable rationale that might explain why all the players did what they did.

Super Tuesday Postgame Analysis

Democratic Headline: Obama levels the playing field

Let’s start by saying that when the delegate counting today is complete, Obama will have won more delegates on Super Tuesday than Clinton. The difference will be small, but make no mistake - Obama has cleared a major barrier to his candidacy.

Don’t tell this to Rudy Guiliani, but front-loading the primary schedule was a huge advantage for the frontrunner. Hillary Clinton has held a 20-30% lead in most of the Super Tuesday states for the last few months. Obama has had to pare down these huge margins in a very short amount of time. The odds were long against Obama still having a viable candidacy exiting Super Tuesday. Last week I predicted he’d lose by 70 delegates, and I thought he’d be lucky to get that. But thanks to some brilliant tactics and campaigning we now have a horserace. Furthermore, the back half of this race favors neither. The best campaign will win.

So, what were the strategies going into Super Tuesday?

Clinton:
1. Clean up in NY and CA
2. Win her “backyard” states: MA, CT, NJ
3. Win Western states with large Hispanic populations: AZ, NM
4. Win in her other “home” state and backyard AK, MO, OK, TN
5. Concede the caucus states?

Obama:
1. Clean up in IL and heavily black AL, and GA
2. Minimize the damage in NY and CA
3. Try to pick off a couple of Hillary’s backyard states where it was close: CT, NJ (Concede MA), MO
4. Clean up in caucus states

Evaluating the execution, I’d say both sides did well. Hillary cleaned up in NY, the jury is still out, but she should get something like a 10% delegate margin in CA … a solid victory, but not the bonanza she was hoping for. Obama was able to win narrow victories in a couple of Hillary’s backyard states: MO and CT. But that was somewhat offset by extra delegates in MA and a convincing win in NJ (which had been running neck-and-neck in all the polling). AZ and NM were split, but NM was a caucus state and was won by a very narrow margin.

On the Obama side, he did extremely well in his cleanup states winning many extra delegates. Results in the head to head competitions were mixed as I described above. But most impressive was that he was able to run the table in the caucus states. I’m thinking that the Clinton team has to be pretty surprised at the magnitude of the victories there:

State Clinton Obama
Idaho 17% 80%
Kansas 26% 74%
Alaska 25% 74%
Colorado 32% 67%
Minnesota 32% 67%
North Dakota 37% 61%

These are some lily white states we’re talking about. Prior to Super Tuesday, Obama hadn’t proved he could get more than 40% of the white vote. I think team Clinton was counting on the race gap to keep Obama from blowing her out here. One problem with that strategy though … these are typically low turnout affairs. So a good “get out the vote” ground game produced some eyebrow raising results.

The bottom line on all of this is that even though both sides will be claiming victory today, the Obama camp has to be pretty happy to be where they are. And the Clinton camp has to feel like they missed the opportunity to take control of this race.

But exiting Super Tuesday both sides probably feel pretty good about their chances going forward.


GOP Headline: McCain takes Command, but Reagan coalition fractures

On the Republican side McCain swept the big winner-take-all NE states: NY, NJ, CT. He also won convincingly in IL and OK and eked out MO. On this basis, he takes something like a 250 delegate lead and is the prohibitive favorite.

The story of the night was Huckabee’s over-achievement. He was expected to be competitive in states with a heavy evangelical population. But he was able to win 6 states outright: AL, AK (where he was governor), WV, GA, IA and TN. In GA, AL, an WV the margins were slim. My guess is that the conservative campaigns that were intended to drive votes from McCain to Romney unintentionally diverted votes to Huckabee. Thus McCain’s margin of victory was not as strong as it might have been, but the race is still 3 horses which ultimately hurts Romney. Had Huckabee only won 2 states, he might have been convinced to step aside.

So while Romney otherwise did well, he now faces very long odds. His campaign is relying heavily on his personal fortune and the return on investment doesn’t look good. This is purely speculation, but I’m guessing Romney will withdraw in the very near term.

As of today, McCain is in the driver’s seat. He’s got a coalition of moderates and hawks that will make him competitive going forward and his competition is running out of steam. It’s hard to think of a scenario by which McCain might lose, but if there is one, it starts with Huckabee or Romney dropping out of the race quickly.

The bad news in all of this is that with Huckabee’s success, the Republican coalition is now split 3 ways: moderates and hawks going with McCain, fiscal/traditional conservatives going with Romney, and evangelicals going with Huckabee. McCain has to bring the coalition together again. The quicker he can put this race away, the sooner he can start doing that.


PS: Here's some good links to watch today as the delegate counts unfold. I wouldn't pay too much attention to the superdelegate counts until we get closer to the convention.

http://www.cnn.com/ELECTION/2008/primaries/results/scorecard/#val=D
http://www.cnn.com/ELECTION/2008/primaries/results/scorecard/#val=R

The Vice Presidential Short List

While we’re waiting for the Super Tuesday returns, let’s speculate on potential Vice Presidential candidates.

First of all, what makes a good Vice Presidential candidate? The first and most important criterion is that the ticket is strengthened in the swing states. The second criterion is that the choice excites the party’s base (usually by providing balance). The third criterion is that the candidate can hold his (or her) own on the stump and in debates.

Looking at the swing states, the “big 4” (i.e. the ones with the most electoral votes) are Florida (27), Ohio (20), Michigan (17), and Pennsylvania (21). In 2000 and 2004, Florida and Ohio went to the Republicans while Pennsylvania and Michigan went to the Democrats. The margins in these states were all less than 5%. Looking at the 2006 elections, Florida went mostly Republican while the other 3 went Democrat. Here are the Governors:

FLA Gov. Charles Crist (R)
OH Gov. Ted Strickland (D)
PN Gov. Edward Rendell (D)
MI Gov. Jennifer Granholm (D) (foreign born so she can’t be president)

Next, I’ve listed the remainder of the battleground states with a significant number of electoral votes.

Other Battleground States (Electoral votes >5)
VA (2004 margin: 8.2% R, EV: 13) Gov. Tim Kaine (D)
MO (2004 margin 7.2% R, EV 11) Gov Matt Blunt (R)
MN (2004 margin 3.5% D, EV 10) Gov Tim Pawlenty (R)
WI (2004 margin .4% D, EV 10) Gov James Doyle, Jr. (D)
CO (2004 margin: 4.7% R, EV: 9) Gov. Bill Ritter (D)
IA (2004 margin .7% R, EV 7) Gov. Chet Culver (D)
OR (2004 margin 4.2% D, EV 7) Gov. Ted Kulongoski (D)

On the Democratic side, the guy that jumps out at me here is Tim Kaine from VA. He’s a Harvard Law guy, a Jesuit, and he gave the Democratic Response to the State of the Union in 2006. He’s been tabbed as a rising star in the party and his approval rating is 55%. Strickland and Rendell should also be considered (61% and 54% approval rating. respectively). Recently Ohio, Pennsylvania, and Virginia have all been going Democratic. But there’s a pretty good chance that Ohio and Pennsylvania go Democratic in 2008 without the Veep bump, while Virginia will be more difficult to win. I’d definitely lean towards Kaine. One problem though, Kaine has endorsed Obama so that may tip the scales toward one of the other two if Hillary Clinton is the nominee.


On the Republican side, Crist and Pawlenty are both 60%-ish approval rating in their state. The Republicans are more likely to take FL without a lot of help though, so I might lean towards Pawlenty.

Lastly, I don't think we'll see any "dream tickets" this time around. On the Dem side, I don't think Hillary would help Obama's ticket should he win. Older women are pretty reliable voters. If she wins, he could help her but I doubt he would. A better career choice would be to go be Governor of Illinois.

On the GOP side, none of the other candidates has the fiscal conservative credentials to help McCain.

Jan-31 Gallup: Clinton-Obama gap to 4%, McCain running away from the field

http://www.gallup.com/poll/104071/Gallup-Daily-Tracking-Election-2008.aspx

Great performance by both candidates in last night's debate by the way. By far the most substantive debate in the campaign.

POLICY: HEALTH CARE

Health care in America has several major shortcomings.

First and foremost, there is a major deficit issue that needs to be addressed. See the figure from the non-partisan Congressional Budget Office. "Outlays" are Outlays due to Social Security + Medicare. The numbers on the left are percentage of GDP.

So in other words, Social Security and Medicare taxes and premiums would have to almost double in the coming decades to pay for the rising costs. Part of that problem is Social Security, but I will only address the Medicare component in this post.

Second, there are millions of uninsured or underinsured in our system. This is not just a social problem, but also a cost problem. Since the only way that a lot of these folks get treated is in emergency rooms, the cost is unduly high. Of course, those costs are passed along to the consumer through higher hospital costs, doctors fees, etc....

Third, the cost of insurance to most families is onerous.

HEALTH CARE REFORM PROPOSED BY THE PRESIDENTIAL CANDIDATES

To broadly characterize the health care proposals put forth by the presidential candidates, the Republican plans attempt to address the cost of insurance to families and leaves open the possibility of working the deficit problem (they can’t address it outright due to the political difficulties) but does little for the problem of the uninsured. The Democratic plans attempt to address the uninsured and the cost to families problems, but do nothing for the deficit problem (the assumption being that this will have to be solved by reprioritization of budgets or tax increases / reductions in service).

A PROPOSAL BY A DUMB BLOGGER

In my view, there is a better answer. I propose a health care system modeled on the system we use to finance retirement. In other words, I propose a system that looks very much like a 401k / IRA with a safety net of Social Security. To accomplish this, I’ll have to borrow some of the ideas from both the Republican and Democratic plans. The outline of the plan is as follows:

1. Responsibility of paying for health care in retirement is shifted from Medicare to the individual with a safety net. The safety net would be analogous to Social Security.

Individuals would have to save money in the equivalent of IRAs or 401ks (Health Savings Accounts or a similar vehicle) while they are employed to pay for medical expenses in their retirement. Contributions to these accounts would be tax free.

Additionally, taxes would be deducted from paychecks with employer contributions (assumably less than the current FICA) to pay for the safety net. The safety net would work in similar fashion to Social Security: upon retirement, a monthly stipend would be paid into the individual’s HSA based on contributions.

2. Mandatory High Deductible Insurance with Tax Credit for the poor. A big difference between saving for retirement and saving for health care in retirement is that at any time, an individual may get sick and have to pay medical bills which would deplete their HSA. Insurance would have to be in-place to mitigate this risk. Tax credits would be given to offset costs for poor families.

Medicaid would still be required to help poor families that can’t meet their deductibles. Although In theory the costs of such a program should be substantially lower.

3. Larger employers would be required to match (up to a fixed amount) employees contributions to HSAs. In the current employer-based system, employers incur large and ever increasing health insurance expenses. Their burden could be greatly reduced while greatly increasing value.

4. Private sector insurance would receive tax credits for offering High Deductible Insurance policies if they met the following requirements:

a. Cover all individuals regardless of pre-existing conditions
b. Reimburse preventative healthcare costs (i.e. yearly checkups, mammograms, etc ..)

The tax credits would be designed to offset higher costs to the insurer due to meeting the requirements.

5. Heath care decisions would be entirely the responsibility of the individuals. Thus the burden/costs of health care administration are shifted to the individuals and away from the Govt. and away from Employers.


WHAT ARE THE ADVANTAGES OF THE PROPOSED SYSTEM?

The first advantage is that the Healthcare system becomes consumer driven. In the current system, inefficiencies are not driven out by market forces.

For example, even though drugs cost 2-5 times as much in the United States as they do elsewhere else in the world, HMOs typically don’t re-import them. The HMOs just pass that cost along to their customers (individuals and employers). Individuals don't see the outrageous cost of the drugs. They simply pay the co-pay. But ultimately, individuals and employers are paying for that inefficiency.

When an individual is looking at the choice between re-importing a drug and paying an exorbitant price, they’ll choose re-import. Other inefficiencies, such as unnecessary medical tests and procedures, and perhaps overhead due to excess litigation will be driven out as well.

Ultimately, good consumers will drive all the inefficiencies out of the system. The result will be that overall health care costs will go down. In the prescription drug example, Drug companies would have to lower prices in the US to compete with re-imports (where the prices would have to be raised). Even though the unfair US pricing has been a well-known problem and re-importation was legalized in 2003, reform has never fixed it. However where legislation fails, market forces would succeed.

The second advantage of the proposed system would be that cost savings from driving out inefficiencies and from removing the administrative costs would enable deficit reduction, universal coverage, manageable costs to families, and even reduced cost for employers.

The third advantage of the proposed system would be increased demand for more cost-effective healthcare solutions. Right now, individuals don’t necessarily feel the pain due to cost-ineffective management of diseases. However if individuals with diseases that cost a lot to manage (e.g. Diabetes) had to pay thousands of dollars out of their own pockets every year, you can be sure the urgency would be much higher to find a better solution. Diseases would get cured instead of managed, and ultimately the costs of healthcare would go down.

WHAT ARE THE DISADVANTAGES OF THE PROPOSED SYSTEM?

A disadvantage of the proposed system would be that people would make bad decisions. People that might not have gotten sick in the current system will get sick in the proposed system. Unfortunately there will always be a certain percentage of people that won’t make good risk / reward trades when it comes to healthcare. However, one would expect that the free market will come up with a solution for that problem as well.

A second disadvantage may be cost. The various tax credits I proposed wouldn't be free. I have to believe the cost would be significantly less than the $110 Billion needed to fund Hillary Clinton's plan. Furthermore, I believe that removing the healthcare burden from employers would increase profits and encourage growth. Ultimately as the inefficiencies in the system worked themselves out, the cost would mostly be offset. Combine that with the long term solvency of the healthcare system and I think that the total picture would be acceptable to even fiscal conservatives.