Markets Continue Plunging

The Dow Jones index was off another 679 point yesterday, on top of all the other triple-digits drops this month. European and Asian markets were also way down. Oil is down to $87 a barrel, off from a high of $140 a barrel due to fears of a worldwide recession/depression that would sharply reduce the demand for oil. Here is a graph of the Dow for the past THREE years.

Barack Obama is talking a lot about the economy, but John McCain is avoiding the subject largely. He really needs to come out with a clear plan to deal with it. Condemning greed is a nice first step but the voters want more than that. Although McCain has stopped running ads about William Ayers, the RNC is still doing so. Somebody at RNC headquarters apparently really thinks that the voters care more about who Obama briefly met decades ago than their jobs, investments, pensions, and future.

The End of American Capitalism?

Sounds pretty dramatic but that is the headline of a story on the front page of the Washington Post today. Maybe a bit exaggerated, but that the subject even comes up is amazing. None of the candidates are passing out the collected works of Marx and Lenin yet, but the next President is in for what candidates love to call (but hate to make) "tough decisions." It is far more likely that the scary phone call will come at 3 P.M. rather than 3 A.M. and will have to do with which other industries have to be nationalized to save them from going belly up.

For example, General Motors stock was off 31% to $4.76 a share yesterday. The Bush administration has turned the budget surpluses inherited from Bill Clinton into massive deficits financed by borrowing money from foreigners, especially in Asia. This means that Asian countries, especially China, own hundreds of billions of dollars worth of treasury bills. Now suppose the Chinese government decides it wants to get into the car manufacturing business so it makes a deal with Toyota, now the world's largest car manufacturer, to buy GM outright for a song and move its factories to China to be operated by Toyota but employing Chinese workers. All they keep is the U.S. dealer network and millions of American jobs are lost. If the next President nixes the purchase of GM, the Chinese sell their treasury bills and the dollar collapses. This is not science fiction any more. Which candidate is better prepared to deal with stuff like this could determine the election.

Polling's Perfect Storm?

According to Mark Blumenthal at National Journal, there are three factors at work that may cause polls to be way off this year. They are:

1. 20% of all households don't have a landline and they are mostly younger voters
2. The "Bradley Effect" in which white voters tell pollsters they will vote for a black guy but don't
3. Likely voter models may not capture the electorate correctly

Cell-phone-only voters are young and strongly pro-Obama and may cause his strength to be understated. The effect can be compensated for by weighting 18-29 year olds in sufficient numbers (but see below). The second effect is unknown although it did not appear to be a big factor in the primaries. This effect would cause McCain's strength to appear weaker than it really is. Finally, the likely voter models assume there is some way to tell who will vote and who won't. This year that is very hard to gauge and demographic models based on the 2004 exit polls may not be worth much. On the other hand, these effects may all cancel. It is a tough call.

Web Ads Are Gaining Traction

Videos on the Web are becoming a major force in the campaigns according to Amy Harder. They are cheap to air and face less scrutiny than TV ads so they can push the envelope more. Bloggers pick them up and they spread fast. They give a big bang for the buck. In addition, political ads on blogs are becoming popular because they reach very targeted audiences and are quite cheap compared to TV ads. For example, a standard-size ad on a popular blog like Talking Points Memo that gets a million hits a day goes for about $2500 a week. (This site, with almost 600,000 visitors a day is a veritable steal at $600/week, all of which has been recycled into blog ads.)

Are the Traditional Media Afraid to Tell the Truth?

Pretty much all the election projection Websites like this one show Obama over 270 electoral votes. Even very overtly Republican Websites like Real Clear Politics and Election Projection have Obama at 277 and 364 electoral votes, respectively. In contrast, MSNBC and CNN have Obama at 264 and the New York Times has him at 260. Chris Bowers has a story on this descrepancy. He hypothesizes that they are afraid of being accused of being pro-Obama and would like a close race since that gets more readers/viewers. He ends with: "So much information is publicly available now that a few nerds obsessed with poll numbers are much better sources for election information than you will ever get from big media." I guess that's a compliment, sort of.

Open Voting Consortium is Looking for Members

A group called the Open Voting Consortium has been set up to promote voting systems that have the following characteristics, among others:

• The whole system must be open to public scrutiny with no trade secrets
• The system must include a paper trail that can be counted and recounted if need be
• The system should invite public participation
• Ballots should be cast in private but counted in public
• Accessibility features should be built in (e.g., audio for the blind)

If you believe these are important things to have in a voting system, check out their Website and possibly join them.

Today's Polls

We have 13 presidential polls today. A Rasmussen poll in Michigan makes it clear why McCain abandoned the state: Obama is leading by 16 points. No doubt McCain's internal polls showed the same thing and Steve Schmidt decided it was hopeless. Obama still has a small (3-point) lead in Florida. He has been leading there in the last few polls. Florida is a must-win state for McCain. There is no way he can get to 270 without Florida. Same is true for Ohio, where Obama is ahead 48% to 45%. McCain absolutely must win Ohio, too. North Carolina is a statististical tie, with Obama 1 point ahead. Again, McCain must win North Carolina. He should be 10 points ahead here and he is not. Missouri is now for McCain 49% to 46%. It is not a must-win state for either candidate, but with 11 electoral votes, it is a prize worth having. Finally, West Virginia shows Obama with an 8-point lead. Let's wait for more polls before believing this one, although West Virginia is a poor state and the economy probably plays a role here. Furthermore, Biden has been pushing for clean coal as a way to reduce dependence on foreign oil and coal mining is central to West Virginia's economy. A continued push on the coal issue might be enough to capture this state. The problem with coal is that the environmentalists in other states don't like it. Politics is about tradeoffs.

We also have four Senate polls. In Alaska, Mark Begich is holding up against Sen. Ted Stevens (R-AK). A lot hinges on Stevens trial. If he is found guilty, the show is over. In Minnesota, another poll shows Al Franken ahead of Sen. Norm Coleman (R-MN). This was a race the Republicans thought they could win. A win by Franken puts the Democrats very close to a filibuster-proof Senate. A race to watch. In New Jersey and New Hampshire, the Democrats are cruising to easy victories. CQ Politics has updated its predictions in four Senate races: Georgia, Minnesota, Kentucky, and Virginia. All four changes move the races closer to the Democratic column. In Virginia, the race is now marked as "Safe Democrat," something unheard of for a challenger, especially when the other party holds the seat, even if it will be vacated.

We also have six House polls. In Alaska Ethan Berkowitz (D) is probably the beneficiary of all the corruption charges swirling around Rep. Don Young (R-AK) and it appears Berkowitz will flip the seat to the Democrats. Another upset appears to be in the making in NY-29 where the Democratic challenger, Eric Massa, is ahead of incumbent Randy Kuhl (R) 49% to 42%. Kuhl hasn't done anything wrong and his district is R+5. He just happens to be a Republican in a year when that is a bad thing to be. One can only wonder what is going on in the other R+5 districts that haven't been polled.

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