September 10, 2012

Election Fever

Definitely don't have the time to reflect on this election like I did four years ago. But I'm still closely following it. What else do I got to do? What films?

Based on the economy, this election is Romney's election to lose, and it appears he's doing a good job at it.  Most of the country seems to have make up it's mind. The populous vote seems to about 50-46 Obama/ 48-44 Romney based on various national polls.

However, the electoral college is what wins the election, not the popular vote. Currently, Obama is ahead. At this point, he only has to win one large swing state, like FL, VA, or OH and one or two smaller swing state, like NH, CO, NV, IA or WI.  Testing various scenarios, using the electoral map, indicates he has a lot more paths to winning, than Romney.

Obama got a small boost in the polls from Democratic National Convention, but in the next two months he'll receive significant downward pressure in the polls from Romney's war chest and upcoming negative advertising. Romney has a mega cashbox to spend that he's received from billionaires and super pacs.

Obama's camp will be promoting his saving of the car industry and killing of Bin Laden, prominently. Both are hot issues in swing states working Obama's favor. Similarly, he has become the champion of the middle class, coming from modest means, choosing a life of helping people vs. Romney who champions the wealthy, comes from a wealthy family, and choose a life of making cash.

Romney's camp will be focuses on policies to reduce the deficit, taxes, regulation and high unemployment rate.  On  social issues, I believe Romney's personal beliefs aren't that far from Obama, but he has to tow the party line. His parties and now his official anti-abortion and anti-same sex marriage policy positions will hurt him with women and more progressive independents.

What's also going to hurt Romney's plan to reducing taxes and regulation is that the plan brings to mind W. Bush's policies of lower taxes and deregulation.  Bush tax cuts and two wars contributed significantly to the national debt. The non-regulation of the banking sector caused the current economic turndown.  Romney's camp did not invite W. Bush and Cheney to the Republican Convention, a huge red flag. 

On the other hand, Clinton was front and center at the DNC.  Where he clearly linked the W. Bush policies to our current economic problems: "It's simple arithmetic. A country can't reduce taxes and increase spending like under W. Bush and expect the deficit to decrease. It just doesn't work that way." Clinton also highlighted economic prosperity during his term.

Nevertheless, there is still 57 days to the election and two more unemployment reports.  My guess is unemployment will decrease each report: 1) due to the Fed's upcoming QE3 announcement on September 13th causing a surge in equity markets; and 2) the turnaround in the housing market. With interest rates at historical lows and housing pricing back on the rise, the housing sector will be hiring again.

And even if the unemployment reports come in weak, perhaps not go down, but increase, there are still three debates. Clearly Obama is the better orator. Romney comes off as very awkward. Romney will want to stay focused on jobs and only jobs, but he will be forced to discuss foreign relations, military and human rights.  None of these are his strong suit.

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