GM

GM

To bail out or not to bail out, that is the question.
Whether 'tis better in the economy
to suffer the expense and burden of outrageous union contracts
or take up bankruptcy against the risk of greater losses
and defaulting end the debt. To default to reverse --
No more -- and by bankruptcy to say we end
the bad business, and the thousands of pensioners at the gates
that demand satisfaction for their years of hard work.
'Tis truly a consumption
devoutly to be wished: Bankruptcy or Bailout?

Okay, not sure why I felt the need to rip off an ol' Englishman but I find the whole issue tiring. But lacking anything else really interesting to write about and no post for a few days I'll go over this beyond the simple fact that sometimes the economy goes to hell, and sometimes big, crummy, businesses go under too. Less than a decade ago it was the airlines that needed out from under their union contracts that were unsustainable. On principle, I don't have a problem bailing out the auto industry. I do have a few problems with this auto industry. The big 3 have screwed up their business by the numbers.

Sure, parts of it are at least explainable. The Michigan legislature is a bought and paid for subsidiary of the United Auto Workers. When management has tried to fight the union the government has always taken the side of the workers... which again, is fine, in general. Except when the demands of a union threaten to put the business as a whole out of action and leave everybody, including the workers, without jobs. Still, the first and major fault lays with management. It is their responsibility to prevent this from happening, they make millions of dollars for their "talent" in managing labor and legislatures. They failed, it's more their fault than anybody else.

Now that we know who to blame... we have a problem to solve. It's likely that letting GM, Ford and Chrysler go under will cost the government more than any bailout. Analyzing it as a matter of adding to the debt or inflation etc. actually might argue for a bailout. So, on the one hand, bailing out the auto makers will save the economy money in the short and probably even medium term. On the other hand continuing the unsustainable labor contracts will just have the auto industry back on the hill hat in hand. The only legal method for the auto industry to get out from under the current contracts is bankruptcy.

Unfortunately, bankruptcy has a few nasty side effects that might be better termed as "effects." First, sales will suck. Who wants to buy a car form a company that is has its debtors seizing color printers from the head office for sale at pawn shops? Obviously, that's an exaggeration, but the market share of the Japanese car makers will still go up with a bankrupt GM and that's not market share that's likely to return. The dirty truth is that Toyota makes better cars for less. When GM is paying north of $70/car on health benefits for workers and retirees in Michigan and Toyota pays just over $40/car in Alabama it is a very powerful advantage. GM cars cost more and are, frankly, lower quality. This is only effectively offset by national loyalty to "American Made." In the current penny pinching atmosphere I seriously doubt people will feel obliged to pay extra for pride. Second, it murders the company's credit. Cars need financing, if the company is not able to maintain a high stock price, borrow money and sell bonds they won't have the cash to give to customers who want to buy cars. Cash flow is impossible in bankruptcy because any free assets can be claimed by debtors. Sure, the courts can protect some liquid assets but that is a huge expense unto itself. Thirdly and finally, who is big enough to finance a auto-industry bankruptcy anyway? It isn't going to be Citibank that's for damned sure. The fact is that it would have to be the government that would provided protection regardless. The bankruptcy would just cost more albeit with the advantage of breaking the Union.

So on the pro column for bankruptcy we have the breaking of the UAW... pretty tempting. On the con column a much larger government expense than a bail out... pretty terrible. Bad and worse. Without being a real economist (I just play one on the Internet) I'm not going to guess. Go to somebody that you trust and take their judgement. Here are a few articles proposing one solution or another:

The Big Three Make Their Play John Steele Gordon

U.S. automakers deserve a bailout By Gregg M. Sherrill

Auto Bailouts Will Give Us Detroitsky By Robert Tracinski

Why the Dems' Drive to Aid Detroit Is Stalling Out By Jay Newton-Small

Let Detroit Go Bankrupt - Mitt Romney

Why GM Deserves Support Short-term government backing can preserve a vital industry.By RICK WAGONER

In Detroit, Failure's a Done Deal By George Will

Who's next?

As in Republicans. Who will run for President for that grand ole party now that it has lost two elections in a row?

First, let us get one thing very straight, the Republican party is not dead. It won't be dead. It will come back and win an election again sometime in the future. Nothing in politics lasts forever, just ask Tom Delay.

With that said it's time for some wild speculation:

The contenders:

Sarah Palin.

Plus,
Name recognition! Everybody knows her and she's a star! How is it possible that Palin, the loser #2 has managed to get more press than the actual winner of the election? Really, there have been more media stories about Palin's wardrobe than Obama's tax plan. Like it or not she is interesting and most of those who are close minded and hate her would not ever vote for her. Out from under the McCain campaign she may well be a very different candidate. She was the person who raised taxes in Alaska, passed gay civil union rights and destroyed the Republican party in Alaska. She's not just a little responsible for Young's close call and Stevens possible loss. Before she started screaming corruption I suspect the Democrats in Alaska and investigators would never have asked the questions they did. Finally, why not Palin? She's a populist Republican woman who is probably still the most popular person among conservatives.

Minus,

Women hate her. It's shocking, a bit of eat your own in this case, but the fact of the matter is her pro-life politics are far more of a problem for her than they would be for a man. Where as abortion is not a terribly important issue in American politics any longer, it seems to follow Palin and kills her among self identified feminists. That creates a real problem. Women tend to be less partisan and vote more often. Where woman might be gettable for the right Republican man, ironically they're more closed to Palin. She's also a conservative who refuses to apologize which makes her hated by the media. The bald-faced nature of the media's preference for Obama this year and hate of Palin is a real problem. Palin can turn this issue to her advantage but the constant drum beat of vitriol towards one person is difficult to over come over the course of months. Just ask Hillary Clinton what she thinks of the mainstream media.

Chances,

Pretty good. She's got to keep her head down, keep Alaska working well and try not to get dragged down by the loss against Obama. I'd say she's got a better than 50/50 shot of ending up in Washington as a leader of the party eventually. Don't count on 2012 for sure... but also remember that she's in her 40's and that she's got plenty of time.

Romney

Pluses,

He's vetted and suave. He is a well spoken, hansom and undeniably able dude. The fact that there are probably not many skeletons in his closet also helps him. He was generous to McCain when he lost the primary and managed to keep his nose clean though out the general election. He's also fabulously independently wealthy which might help off-set the fact that the Democrats have become the party of riches. Finally, the conservatives have to support him. The 3 week rally to Romney by the radio hosts and Evangelists at the end of the primary inoculates Romney from the right. If Sean Hannity starts in on Romney for flip-flopping on abortion or gay rights he'll be contradicting himself. Finally his expertise is in the economy! That is the most important political issue and will stay that way. He can credibly criticize anyone on that front and will benefit.

Minus,

He's very slick. The produced and polished candidate makes some folks nervous. He also has a record that is pro gun control, abortion and gay rights. That might make him more viable in a general election but vulnerable from the right. It translates into an enthusiasm gap. He's perfect... almost too perfect. So folks don't get too excited for him. Then again, give him 4 years in the public light for folks to gain confidence in him and he might end up shedding these problems.

Chances,
Good, he did lose. He also has a life. I think he's the most likely Republican to throw his hands up and decide he's just not ambitious enough to bother. The family, money and time that a retired multi-millionaire has at least a decent chance of making him not bother to turn in his paperwork to run for president in 2012.

Mike Huckabee

Pluses,

He's well spoken, has a good record as a governor and is a true member of the base of the Republican party. Unlike Palin, or Romney there is no twist to Huckabee. Look up Republican in the dictionary and there you have it, a picture of Mike. This will help him in the primary and will help him because he doesn't have to worry about answering questions about being a hypocrite.

Minuses,

He's a bit nutty! He's gotten on a few strange policy schemes such as a national sales tax and an anti-abortion amendment. While I doubt he would actually use these things as issues in an election it does make him vulnerable to the accusation that he's on the fringe of politics. That makes it possible to marginalize him and then dismiss him. He just doesn't fight like a heavy weight. He might fix this over time but for now it's a temperament issue. He's not presidential.

Chances,

I think pretty poor. The Republican party is not moderating so that's not his real problem. What the Republican party is going to do is reemphasize it's point of view on the economy, role of government and taxes rather than values. With the spotlight moving away from wedge issues such as gays, guns and bibles the Huckabee isn't as attractive.

Bobby Jindal

Pluses,

He's not a white male. Seriously, novelty votes matter. Look at all the folks who stated that they voted for Obama because he was making history not because of his policies. Right or wrong being a non-white male is now a plus in American politics. Shocking right? He's also got a very strong record in Louisiana. That state was a wreck after a decade of one party rule and he's done a good job of cleaning it up. His role during the hurricanes this summer was widely lauded and it is not possible to paint him with the "Bush Brush" because he came into power in 2006. He's also got plenty of time to build whatever ideological platform he wants. The advantage of low name recognition is that he gets to make himself from scratch. Obama did this very effectively, so can Jindal.

Minuses,

He's very young. While well spoken and suave he's got very little experience on the national stage. His time working on hurricane relief bodes well for him, but it's just not a sure thing. The fact is that the Republican party does appreciate comfortable faces and experienced hands. Reagan didn't get the nomination the first time he ran despite being very popular. It's a bit easier to engineer a meteoric rise in the Democratic party ideologically. Still, look for Jindal. If he goes for it, I believe he's got a shot.

Chances,

Fairly low. First, he might not even try. He's got a decent thing going in Louisiana and might step up to a different post than President. Just keep an odd eye on him. He is in Iowa this week...

Words of 2008: a postmortem

Front Runner
Democrat
Senator
Hillary
Caucus
Fund raising
Experience
Change
Iraq
Surge
Republican
Bush
Pant-suit
Edwards
Iowa
Obama
"thrill up my leg"
Huckabee
Romney
Tears in New Hampshire
Comeback
Primaries
McCain
South Carolina
Super Tuesday
Proportional allotment
Concession?
Debate... Debate... Debate...
A speech in 2004
Resco
Chicago
Bill
Petraeus
Racism
Sexism
Wright
Internet money
registration
Indiana and North Carolina
Pennsylvania and Ohio
Texas, Nebraska and Nevada
indecision: March... April... May... June... July...
Concession.
Public Financing
Euro Trip
Hero
Celebrity
Old
Inexperienced
Wrong
Hope
Maverick
Historic
Global warming
Gas Prices
Pickens Plan
Drill Baby Drill
Off Shore Oil
Alternative Energy
Convention
Biden
Gaff
Greek Columns
Palin
Lipstick
Pig
Hockey Mom
Trigg
Snow Machine
Media Bias
Gotcha!
Feminism
-777
Credit Crunch
Bail out
Paulson Plan
700 billion
"Suspending My Campaign"
Debate? - Debate.
Reid
Pelosi
Frank
Boehner
Dodd
Recession
Housing Bubble
Liquidity trap
Erratic
Leadership
Ayers
Taxes
Redistribution
Polls
Super Majority
Senate
House
Indiana
Pennsylvania
Florida
Ohio
Virgina
North Carolina
364
President

Please feel free to point out any omissions in the comments.

So, fellow citizens, now is the time for all good men to come to the aid of their country

Congratulations to Barack Obama.

It is now the duty of us all to acknowledge his victory and support his administration. I have serious disagreements with Obama's proposed polices on taxes, the economy and foreign relations. However, he deserves a fair chance. No one should doubt that he is our president and I am openly hopeful that he will prove me wrong.

This is a Democracy that requires peaceful transfers of power. It is time for all of us to rally to Barack Obama and give him a fair shot. No one should commit the same sin as many did in making a demagogue of President Bush in 2000 before he had spent a day in office. Obama deserves our praise, and our deference, regardless of whether we voted for him or not. If he doesn't succeed there is another election in 2010. Until then, it's his show.

"It's all over but the dying" (voting) a election night watching guide

The election is today, as you likely know. I encourage you all to go out and vote. It would appear that those incredible turn-out numbers that some of the polls were assuming might actually happen. That's bad for John McCain.

How you can tell who won by 4:00pm

If John McCain doesn't win Indiana by more than 7 or 8 points... you can be pretty sure Obama will win.

If Obama wins Virginia by more than 4 or 5 points, you can be very sure he'll win.

If McCain doesn't win North Carolina by 4 or 5 points you can be very sure Obama will win.

We should have a very good guess about who is our winner by about 4:00 pm.

If we do have to wait until 5:00pm watch Ohio and Pennsylvania. Obviously if Obama or McCain win both it'll be a big boost to either of them. Though if they split check out the margins. If either of them is not close favor the person who managed to win big to win Florida and end the election at 5:00pm when the panhandle closes.

If, shockingly, we get past 6:00pm without a really clear idea who will win it'll be 7:00pm when Colorado and New Mexico come and probably clinch things things.

It is only very slightly possible that we'll still not know for sure at 8:00pm when Nevada truly must be decisive.

Good luck to your guy!

Polling and you, a guide #2

Messing up a poll

The first, and least common method of queering a poll's results is in the question. For example a questions such as "Do you support the war criminal John McCain who bombed civilians in Vietnam or the civil rights hero Barack Obama who wants to give you $500 if he's elected?" would tend to produce a result favorable to Obama. This is an extreme question, however there are more subtle hints such as "Do you favor Senator Obama or John McCain?" Just leaving the honorific off of McCain's name will tend to help Obama in a poll. This is the oldest, and crudest method of manufacturing favorable data and is frankly out of date. Pollsters today don't rely on such brute force methods of massaging data... instead they massage samples, as discussed above, by arguing who is a "likely voter" and who is not.

It gets complicated....

As if it wasn't already tough enough to follow. Unfortunately, polls have more uses than predicting the winner of an election. The most common is fund raising. People prefer to give money to a candidate who is winning and will have influence. Those who are seeking influence though their dollars want to spend their money on somebody who will actually have power. Giving money to a candidate who then loses negates any possible influence. This phenomena is why so many big interest groups give money to both candidates... just so that they can say in a lobby somewhere that they supported whoever actually gets elected. Polls fit into this because the campaign can cite them when soliciting money. Imagine a call to the CEO of a industrial farming interest that says "look, this polls says that I'm beating the other guy by 20 points, there's no reason to give money to him and ever reason to give it to me."

Obviously, this second use for polls encourages corruption. Because polls are subject to the whims and judgment of the pollster it is very easy to twist the numbers based on "assumptions" that have their motives in producing a result to raise money rather than an accurate picture of the electorate. The polling organizations are also subject to lobbying by the candidate and simple rooting interests. If a pollster has a biased view of the electorate that is in the gray area where numbers have to be replaced with judgment (for example how many new voters aged 18-20 will actually cast their ballots) the final numbers can be wildly different from another pollster who uses the opposite assumptions. This is why the NYT/CBS poll has Obama up 14 points while Gallop had him up only 3 points last week. The math would suggest that there is something greater than 1 in a million chance that those two numbers could be generated from surveying the same electorate... yet because of all the adjustments that these polls use they end up with those very different results from the same population.

So, if you're trying to use polls to figure out who's winning you have to decide who you trust.

First, throw out most any news organization that runs its own poll. Most news outlets have their biases, are inexperienced (thus tend to take "advice" from campaigns) and are interested in creating news (so will build polls that end up with extreme results). Two examples of news organizations that I suspect of trying to "make news" are the NYT poll cited earlier that had Obama up by 14 and the AP poll last week that had Obama up only 1 point. I frankly think they're both worth throwing out.

Trust the professionals in general. And of the professionals you want to watch those polls that advertise and take pride in getting as close as possible to actual outcomes of elections. These firms make their money by getting it right, not by promoting one message or another. Often campaigns will employ two polling organizations. A public and an internal. The public poll is, frankly, an arm of the media campaign that also runs commercials and raises money by using TV, Internet and radio. It's job is to provide "facts" that promote the candidate. The internal pollster is often a tightly kept secret that is charged with providing an accurate picture of the election to the campaign strategists. Firms like Rasmussen, Zogby and Gallop are often subcontracted as internal pollsters. They never disclose which campaigns they're working for, but that is how they make most of their money. Their public polls are advertising for their internal polling contracts. In this way they have incentives to try to get it just right, regardless of who'd they prefer to see win.

Even these ostensibly more accurate polls can be wildly wrong. Zogby is the most notorious for having such a complicated polling procedure that he mathematically prejudices his results. Basically, he makes so many adjustments, tweaks and compensations (such as those discussed in the post below) that his numbers bear very little resemblance to the original survey data. Remember, every one of these little twists of the numbers might get the reported numbers closer to reality... but they also increase the chance that the poll will be really far away from reality. The danger of tweaking the numbers cuts both ways. So, the famed "margin of error" which is usually reported using the chi-squared of the sample as if it wasn't hand picked, tweaked, and otherwise molested, is in reality often far greater than 3 or 4 points. Mind blindingly this is a mathematical reality without a real utility. Because pollsters who are good at their jobs will often put the right tweaks in, choose the correct samples, and massage the numbers the appropriate direction they will report numbers that can be well within what one would expect with a normal chi-squared analysis simply by making good educated guesses. So, more error, but more accurate poll. Screwy right?

Finally, something to remember about all these folks who love to tell you the electoral vote count based on state polls. Ignore them! At least for the most part. Those state polls are rarely done by the sort of professional organizations needed to get a good idea about where voters will actually come down. If the margin is less than 7 or 8 points you can consider it a toss up. Also, those polls are usually taken over the course of a week or so. Because of this, the conditions of the campaign will have changed from the beginning of the poll to the end. This really messes up the results. Finally, state polls are not taken every day. Because events can drive polls one way, and then the other in the course of a day or two they usually aren't capturing much data that is actually interesting. It's best to just watch the national numbers, and then apply it to geographical regions that are "swing" within the states to get a guess at the EC. Also remember, only twice has the EC gone a different way than the popular vote. Barring a once every 100 years or so occurrence those state counts really don't tell you anything more than the national polls, and the national polls tend to be more professionally done and timely.

Ok, some truths to remember about polls... all polls

-They aren't true, they're a reflection of a truth a the time.
-They are all subjective educated guesses based on what the pollster believes not hard facts
-Combining polls does not make for a more accurate poll
-Not all polls are designed to truthfully describe the electorate be a cynic - if it looks to good to be true it probably isn't
-Trust the professionals who have economic reasons to be accurate. Doing a good poll is very hard, of the big firms only Rassmussen, Zogby, Gallop and Investors Business Daily were within 2 points of both the 2000 and 2004 election.
-Do not trust universities, news outlets, or small state-wide firms. These folks will often have undiagnosed biases, ulterior motives, or too little experience to come up with a good result. The University of Chicago and Pew are exceptions to this general rule... even though Pew had a really screwy poll recently.

Last thought:
Be cynical! Polls are not votes, don't expect anything and don't be upset if polls end up wrong. The one, best and only important poll is on November 4th, it's got such a large sample size that the margin of error is so small it can be dismissed.

Polling Post #1: What's in a poll?

So I figured I'd better get this done before it was too late.

Polls are tough. As I'm sure you've noticed they tend to disagree, sometimes wildly. How could two polls, both conducted using "scientific" standards be so different? This question is one not simple. Actually, it's complicated enough that I've dreaded writing this post because I'm afraid it will blow up into a 5000 word expository essay saying effectively nothing. However, I'll try to be brief and split this into two parts.

A political poll is a scientific sample of the electorate that is designed to predict who the entire population will vote. A few quick rules to remember.

-No poll is perfect, even the most honest and perfectly conducted poll will have between a 3 and 6 point margin of error. This is mostly because the sample is only a representation of the population not the population in reality.
-Every poll uses different methodology that greatly affects the outcome of the survey. It is not hard to quite justifiably create a poll that reports a seemingly wildly inaccurate representation of the electorate.
-Mixing polls is not a great way to really get a sense of what is right. Because methodology is very different from poll to poll things like the Realclearpolitics.com average of the polls is interesting but not any more informative than any individual poll... and less informative than a single well conducted poll would be.

With that I have to ask: Where to start?

Registered voters vs Likely voters:

The first thing to look at when you're confronted with a poll is whether it is sampling registered voters, or voters the pollster considers likely to actually cast their ballot. The registered voter survey means that the pollster usually asks a very simple question often "If the election were held today, would you vote for Barack Obama or John McCain?" (they'll rotate who's name is read first) The likely voter poll uses the same question but applies dozens upon dozens of handicaps to attempt to discern who will actually vote, and to account for known deficiencies in polling procedure.

Common "adjustments"

So, when considering likely voters the first, most obvious thing to look for is voting history. Usually this is determined by how many times the person being polled has voted out of their last 4 or 6 opportunities. The Democratic party pollsters tend to favor 6, the Republicans favor 4... I've never been given an explanation as to why. Based on voter history different respondents will be given more weight in the poll. Whereas the average voter is worth 1 point in a poll those who are more likely to vote are weighted higher and less likely to vote is weighted lower. For example, a person who is polled who has voted in 4 out of the last 4 elections is very likely to vote in this election, therefore her response to the poll will be weighted as worth 1.2 points while someone who has voted 0 out of the last 4 times will be weighted at 0.8. In this way the final tally will tend to favor the opinions of those folks who have voted in the past and hypothetically better model the election in reality.

A sample of other adjustments

Pollsters have studied their own art extensively. Those like Zogby and Rasmussen have invested millions of dollars trying to guess these elections exactly and make their money by being accurate. Because a phone poll cannot achieve a perfect sample of the population for a myriad of reasons these pollsters make best guess adjustments. Some examples:

-Men are less likely to answer the phone than women. Also, men are more likely to vote. So when a man is surveyed his response is weighted higher than a woman's to model this phenomena.

-The rough guess is that 1/3rd of people under the age of 25 do not have a land line and are beyond the reach of a pollster. Therefore, when a person under the age of 25 is surveyed his/her answer is given greater weight.

-Republicans are more than twice as likely to refuse to participate in a survey than Democrats. So when Republicans are surveyed they're given more weight than Democrats.

-The Democrats have about a 10% registration edge nationally... however, Republicans are statistically significantly more likely to vote. So, the pollster has to decide how to weight these two conflicting inputs when deciding how many registered Republicans and registered Democrats to include in their sample.

-Older voters are more likely to vote than younger voters regardless of history. As a rule, the older the respondent is, the more weight they have in the poll.

-Newly registered voters vote and don't vote very unpredictably. Historically has been excellent turnout and enthusiasm among people voting for the first time in some years and other years it's been very flat. Unfortunately this is almost impossible to predict. In 2000 new voters voted in massive numbers despite no great effort on either party's part to register new voters. In 2004 bother Republicans and Democrats registered millions of new voters and they largely failed to show up! This is a very ticklish element for pollsters to account for because there's just no good rules to follow. Most of the time the surveyor has to use their "gut" and decide how to weight first time voters based on early voting, absentee ballot requests and dead reckoning.

There are literally dozens upon dozens more little adjustments and tweaks that go into a Likely Voter poll. Even the Registered Voter polls will select their sample based on how they believe the Republican VS. Democratic registration numbers will effect their sample. As such there is no such thing as a poll that doesn't have the finger prints of who took the poll.



Okay, you've got the basics of how a poll is put together, and why they're considered more an art than a science. Next I'll apply these lessons to the way that polls actually look in reality, how corruption factors in and who I trust to give me an accurate picture.