Category Archives: political markets

Sanders, Biden lead in Iowa. Is Buttigieg a buy?

Biden, Sanders nipping at the heels …

The latest Real Clear Politics poll has former U.S. vice-president Joe Biden garnering 20.7% of the nod among likely voters in the Iowa caucus.  U.S. Senator Bernie Sanders is nipping at Mr. Biden’s heels with 20.3% of likely caucus participants supporting the independent senator from Vermont.

While Mr. Sanders continues to draw on the support he had during the 2016 campaign for the Democratic nomination, Mr. Biden has been able to maintain his front-runner status based on a more centrist approach to policy and political capital built up among black voters given his eight years as vice-president in the Barack Obama administration.

Buttigieg rising …

Meanwhile, Real Clear Politics polling data sees former South Bend, Indiana mayor Pete Buttigieg still in the hunt polling at 18.7%. A relative unknown two years ago, Mr. Buttigieg has been able to leverage, according to Axios, $2.3 million in television advertisements, 100 staff on the ground, and 20 field offices in Iowa to put him in striking distance of a win in Iowa.

Mr. Buttigieg’s third place status behind Messrs Biden and Sanders exposes his unknown factor.  He has done well nationally given that he was not known outside of South Bend until recently.  Whether he can raise his media profile in the next three weeks enough to get him over the top remains to be seen.  Mr. Biden and Mr. Sanders receive much more mentions from media, thus taking up needed oxygen for Mr. Buttigieg’s campaign to fuel itself on.

In addition to media, the philosophical space that Mr. Buttigieg seems more inclined to occupy has been taken up by Mr. Biden.  Mr. Biden moved to the middle immediately on his decision to run, his centrist approach being of no surprise to many observers.  Mr. Sanders, on the other hand, has stuck with his progressive policy rhetoric, positions that have endeared him to voters occupying the far left including a significant number of young and college-aged voters.

Mr. Buttigieg, while recognized as a moderate, cannot dominate the middle among Iowa voters and will seem less than genuine should he move left.

What may also be weighing on Mr. Buttigieg’s ability to leap ahead of Messrs Biden and Sanders is the view of black Americans toward his candidacy.  Although blacks are waning demographically, they still comprise a significant voting block within the Democratic Party.  Mr. Buttigieg has very little support among black voters and expression of this lack of support will manifest itself on 29 February when voters go to the South Carolina primary.  The specter of this onslaught may be looming over the polls in Iowa as Iowans who are more concerned about selecting the candidate best situated to beat Donald Trump decide to make a perceived securer choice in either Mr. Biden or Mr. Sanders.

The prediction markets …

The political prediction markets are giving Mr. Sanders the highest probability of winning one day after the last debate prior to the Iowa caucus.  PredictIt is pricing an affirmative on a Sanders’ victory at $.46 while pricing an affirmative on a Biden victory at $.32. Mr. Buttigieg’s chances at victory as determined in the prediction markets looks more in line with his poll numbers where PredictIt is pricing his chances of winning at $.17.

Is Buttigieg a buy?

Locking in Mr. Buttigieg at $.17 with the hope of a 500% return on the chances of a Buttigieg win would require two things.  First, Mr. Buttigieg will have to increase his media exposure by continuing to message via broadcast media, social media, and newspapers.  Second, he would need monumental gaffes on the part of both Mr. Biden and Mr. Sanders.  While Mr. Biden is known historically for misspeaking, Mr. Sanders has been very disciplined in his messaging.  This week’s allegations that Mr. Sanders shared with Senator Elizabeth Warren in 2018 his doubts about a woman beating Mr. Trump in 2020 seems not to have had much of an impact on his campaign.

What could cause some disruption in the Biden campaign is any testimony offered during the Senate’s removal trial of Mr. Trump where such testimony describes any impropriety on the part of Mr. Biden in his son’s service on an energy company’s board in Ukraine.  Even so, we believe that such testimony would only serve to secure Mr. Sanders’ lead.

Conclusion

We don’t see Mr. Buttigieg winning Iowa.  Iowans want to increase the chances of selecting a candidate that can go toe to toe with the President.  While the payoff would be substantial, the chances of a Biden or Sanders fall in Iowa are not high enough.

Political power starts in households, not in group politics

The head fake …

We are in the silly season.  National election primaries are ramping up as the New Hampshire primary and Iowa caucus looms in February and a number of state legislatures prepare for state representatives to invade their respective state capitals.  It is the silly season because candidates will attempt to sell you ideas and plans that have not a snowball’s chance in hell of succeeding.  All one has to do is listen to Elizabeth Warren or Bernie Sanders’ promises of delivering free college education or free childcare for working families without once laying out the tactics for dealing with a Senate that will likely be in the hands of the Republican Party on 3 January 2021.

The danger of group non-efficacy ….

One overlooked incident of silliness is the voters’ placement of limits on their own political power. Many voters limit their power and influence to the singular act of voting.  The reasons are well documented.  Voters are working two jobs trying to keep food on the table.  After working two or more gigs to feed their kids, voters want to chill for a couple hours watching Netflix versus going to a city council meeting or watching a debate or congressional hearing on C-SPAN.

These types of voters, those who cannot make the time to glean information on policy making are dangerous and quite frankly shouldn’t be allowed near a voting booth as their uninformed voting decisions have a negative impact on the rest of society (although some candidates may like this type of voter as long as they have bought into the candidate’s narrative hook, line, and sinker.)  Creating a large collective of voters i.e. political colonization, is advantageous to a candidate especially where the candidate can sell that group on what the group’s self-interests should be.  The candidate enjoys efficiencies from aggregating this most important electoral resource because creating a collection of voters buoyed by a few singular issues helps to refine the number of promises or political packages the candidate has to offer.

The risk to individual households with interests that vary widely from the group is that their political needs will not be served.  Being herded into a large group, whether based on race, culture, income, etc., dilutes your position, limits your influence, drowns out your voice.  There is a decision to be made.  Either be the wolf maximizing your political gains or be the sheep herded to the slaughter spawned by dissatisfaction.

Each household must step out on its own….

An individual household cannot hold itself back out of some false sense of allegiance to a group.  There is no rule saying you must bear the cost of a group’s non-efficacy.  Once you have decided that only you can increase your influence; that showing up just to vote is not enough, then you must take the next step of investment.  I will not tell you that the investment is cheap, but the costs can be minimized.  Here are a few simple steps that you may have already heard of.

First, build your political network.  That network may be right in front of you.  We are all six or fewer handshakes away from meeting Kevin Bacon.  Someone in your network likely knows a policymaker or elected official.  In that case, seek out an introduction.

One other way to meet policy makers or elected officials is to identify the policy maker or elected official that is making a decision on a matter that you are most interested in.  Contrary to public belief, elected officials want to meet you.  You are their resource.  When you identify them, set up a meeting or determine what events they will be attending so that you can meet them.

Second, continuously engage your policy makers or elected officials on those top issues you are concerned about.  Engagement need not be expensive.  Written correspondence is great.  A short letter will suffice.  Letters are preferable to email.  While both types get entered into the record, letters get more thorough responses.  Also, if your budget allows, offer to meet the policy maker or elected official for coffee or lunch.  As long as you are not lobbying on behalf of a group or business, no disclosure reports need be filed.

You can near guarantee an audience if you are bringing some insights or knowledge to the table.  In your emails or letters, always demonstrate that you are abreast of the issue by sharing some tidbit that you have researched.  This bit of information will get you closer to a meet and greet.  Stay informed!

Lastly, donate time, money, or both.  If you want to impress a policy maker or elected official, show up to hearings and if the forum allows, make a statement for the record.  If you believe an elected official is meeting your representative needs, send them a donation.  People who donate get an audience, even if it is a response to a message via LinkedIn.

You can do it …

The above advice is from real world experience.  I have met policy makers and elected officials simply as a result of reaching out.  For we shy types, it is not easy at first, but keeping your “ask” real simple will settle your nerves and keep the engagement simple.  Once you are willing to increase your households influence over the political process, you will see the investment of time as worth it.

Need more consultation on reaching out to policymakers or elected officials? Feel free to reach out to me at altondrew@altondrew.com.

 

 

Republics are to keep the masses at bay, not to include them…

The purpose of governance …

The purpose of taking over government is to control its spoils.  The tricky part is to keep the barbarians from knocking down the gates, an act that may result from the perception that those who have captured government will not allocate an equitable portion of goods, resources, and capital i.e the spoils, to the masses.

The governing class in a republican form of government must then find a way to maximize the prestige and power it garners from taking over government while minimizing the amount of public capital allocated to appeasing the people it rules.  Resources are finite and the governing class can’t afford to have the instrument used for the day-to-day management of the citizenry and the channeling of power and prestige to the governing few to go bankrupt.

The issue then, for those who wish to take over government, is which approach to governance will bring about maximum prestige and power at the lowest cost of paying off the barbarian.  I recommend a political market approach based on transparency.

The market approach of American democracy …

American political governance is limited by the vote buying/selling transactions of the political market.  To garner the right to govern as an elected official, you have to win the vote.  What the candidate is willing to pay for this vote depends on her view of government’s role and her ability to convince the electorate to align its perception with her view.  She will not be transparent about her personal gains from winning office, preferring to tout the benefits that she can help shuttle to Americans as her rationale for running.  She will make the mistake of painting herself as selfless or altruistic.

All market transactions, including political market transactions, are two-sided. The voter/consumer seeks some type of economic relief via a government program, or some cultural win via a statute or regulation, and the elected official is willing to sell her a program in exchange for support in the form of donations, campaign volunteer time, or a vote.  All political parties participate in these transactions.  The voter/consumer must remain aware that these offerings are not being done for altruistic reasons.  They are being done out of the elected official/producer’s self-interest in garnering the power and prestige that comes with elected office.

The benefits of elected official/producer transparency …

When sitting across from the person you are negotiating with, you want as much transparency as possible as to their interests.  Knowing the real value they place on an item they intend to buy from or sell to you helps you to better price your offer.  As an elected official/producer, being transparent with the voter/consumer has three immediate benefits.

First, if the candidate for an office is upfront about their self-interest in running, they can avoid or mitigate the consequences that come from a lack of clarity.  The voter cannot come back and claim that the then candidate now elected official was anything but honest, a virtue many Americans claim to adhere to.

Second, if the candidate is transparent as to their self-interest, she creates a channel within which she can gauge the reasonableness of the voter’s demands.  In other words, the voter has a better understanding of the value of his vote for the candidate and can adjust his demands accordingly.  There will be fewer surprises as to the cost the candidate has to pay in order to secure a continuous flow of power and prestige.  She has a better idea not only of the voter costs for garnering her power and prestige, but can now explore a wider array of options for meeting voter needs at the lowest costs possible.

Another benefit of transparency is that by establishing up front her desire to garner and maximize power and prestige, the candidate will be viewed as transparent going forward during other transactions.  This creation of “good will” can only create for the elected official more opportunities to increase the political capital necessary for deploying the cost effective programs that she can exchange in the future for more votes.

It won’t be the programs that keep the barbarians from knocking down the gates.  It will be the transparency and the perception of honesty that flows that will keep the masses at bay.

Conclusion: Republicans can be transparent without being ogres….

Strength flows from transparency.  Republicans should not be afraid to tell the electorate, “I seek the power and prestige of the office because of the benefits (emotional, psychological, financial) that will flow to me, but I acknowledge those benefits won’t flow to me unless I meet your needs.”

America is a republic and as such, its political power is held by the people and its elected representatives.  What the definition does not tell you is that both groups do not, cannot, and should not rule equally.  What too many choose to describe as “American democracy” is a system that is not based on mass rule, but based purposefully on minority rule.  Because American democracy is in fact based on minority rule (one only need look at the discarding of the popular vote after the November 2016 general election), Republicans especially should take the lead in transparency in governing.  Transparency has a chilling effect on political tension and can only serve to secure Republican political power going forward.