Taking Note

The Battle for Pennsylvania

The McCain campaign is putting a lot of resources in Pennsylvania, on the theory that this is their best shot at turning a big 2004 blue state red and that they can't win without such a takeaway given the rest of the electoral map.  This theory may well be correct but how plausible is it that they could actually succeed in this effort.  Not very. First and most obviously, they are far behind in the polls. The Pollster.com trend average still puts their current deficit in the Keystone State at around 8 points, despite some tightening of the race in the last couple of weeks.

Second and less obviously, the GOP is fighting a demographic headwind in Pennsylvania.  Here are the key trends and groups Wlliam Frey and I identified in our recent report on The Political Geography of Pennsylvania, most of which are making life more difficult for the Republicans.

First, will the white working class maintain its level of support for the GOP?  If it does not and moves toward the Democrats, this could tilt the state from its current purple status to solid blue.  Indeed, given current demographic trends, which are steadily reducing the ranks of white working class voters, the GOP needs to not just maintain, but increase, its support among these voters to have a reasonable chance of carrying the state in 2008.

Homeowner Relief: Getting It Right

The New York  Times reported on October 31 that the federal plan to help homeowners in foreclosure is stirring up bad feelings. This is not surprising, considering that only a fraction of the homeowners with mortgages bigger than their deflated home values will receive help, namely those facing foreclosure. What is more, if the federal government absorbs part of the cost of servicing unmanageable mortgages, homeowners will have a powerful incentive to seek foreclosure in order to qualify for federal relief.

These problems are avoidable. The problem of unfairness and perverse incentives are the product of a flawed approach. Michael H. Krimminger, special adviser for policy at the Federal Deposit Insurance Corporation, underlined the problems with the Treasury’s approach when he made the remarkable statement, “This is not about trying to create fairness. The goal is to keep people in their houses.”

Why isn’t it about fairness? Why is the government so  keen to keep people where they are? The goals are wrong and the program is wrong. There is a better way to help distressed homeowners.

Whites with Some College: America's Most Underrated Demographic

We've heard a lot this year about the white working class and how important this group will be to the election.  That's correct and I've written a lot about this myself, including a recent post on this blog. 

But the white working class is a diverse group and one segment that doesn't get the attention it should is whites with some college.  They are about 40 percent of the white working class today, a percent that has been growing over time.  Moreover, whites with some college have been stable as a percent of the overall electorate, while the rest of the white working class has been declining sharply.

The Right Stimulus Package

Almost everyone wants another economic stimulus package.  In a recession – and we are sliding into a deep one – even some economic dinosaurs have learned basic Keynesian economics: the public sector must help revive aggregate demand so that businesses can hire, families can earn and spend, and the entire economy can get back on its feet.

Five proposals for stimulus measures have received a good deal of attention.  Three are good; one is mediocre and one is terrible.

The Wise Men

Amidst the ruined reputations and lost fortunes of the global financial crisis, three men emerge with their stature significantly enhanced. To put it simply: If the Masters of the Wall Street Universe and their Washington patrons had listened to Paul Volcker, George Soros, and Warren Buffett, the current catastrophe probably could have been averted. Volcker is 81. Soros and Buffett are in their late 70s. Volcker is more an economist than a financier. His record as chairman of the Federal Reserve from 1979 to 1987 stands as a classic example of public service. Soros has made many billions by choosing where to put his money, and then given it away and made billions more. Warren Buffett is Brand Buffett, America’s most famous investor and richest man.

White College Graduates and the 2008 Election

On Thursday, I posted an analysis of the white working class vote and how it might play out in the 2008 election.  Today I'll look at white college graduates who, unlike the white working class, are a growing group in almost all states, particularly swing states.  And in states like Colorado and Virginia their representation among voters is likely to be particularly high--around 35 percent in Virginia and over 40 percent in Colorado.

White college graduates have been moving toward the Democrats over time.  For example, in 1988 the Democrats lost both white college graduate and white working class voters by 20 points.  In 2004, the Democrats actually did lost ground among white working class voters, losing them by 23 points.  But they only lost white college graduate voters by 11 points in 2004, a 9 point improvement over 1988.

The urgent case for a big stimulus

Making banks solvent was never going to be all that was necessary to make the American economy whole again. The inexorable recessionary process is now well on its way. We will learn more about how far and fast we are sinking in the next couple of weeks, as the data become more clear. But reports of serious lay-offs are widening. Few are borrowing, or can borrow. There is little spending power out there. Except for the late 1990s, Americans simply did not make enough to get by without borrowing. In the 2000s, wages for typical Americans did not go up at all, nor did family income. Now they will go down. Where will the spending power come from? Living on a credit binge is over.

The Snapshot: The Public Rejects Conservative Approaches to Taxes

We’ve heard a lot from conservatives lately about how progressives are seeking to redistribute wealth with their “socialist” tax policies. But so far this critique doesn’t seem to be getting far with the public. There’s a good reason for this: The public actually agrees with progressives’ stance on taxation and rejects the conservative approach.

Data from the latest Pew Research poll shows that only 25 percent of the public agrees with the centerpiece of the conservative tax program: making all of the Bush tax cuts permanent. In contrast, 62 percent want to either repeal tax cuts for the wealthy while keeping the rest of the cuts (37 percent) or repeal all of the tax cuts (25 percent).

Assigning Blame For Rising Medical Costs

The conventional wisdom about skyrocketing healthcare costs tends to blame someone: patients who demand too much care; doctors who practice defensive medicine because they fear being sued; aging boomers, and finally, everyone’s favorite, “the insurance companies.”

In fact, none of the above is the driving force behind the nation’s spiraling health care bill, according to a brand new report from the Center for Studying Health System Change (HSC) titled “High and Rising Health Care Costs: Demystifying Health Care Spending.” (Many thanks to Robert Laszewski at Healthcare Policy and Marketplace Review for calling my attention to this report).

The culprit behind long-term health care inflation, the study reveals, is not a “who” but a what: “advancing medical technologies” combined with low productivity. Yes, that’s right: while improved technology has boosted efficiency in other sectors of the economy, when it comes to healthcare, technological advances are associated with lower productivity.  There is no one group to be blamed for runaway healthcare inflation; the problem is systemic.

The White Working Class and the 2008 Election

This spring I published a paper with Alan Abramowitz on "The Decline of the White Working Class and the Rise of a Mass Upper Middle Class".   That paper and others covering:

• The changing face of suburbia and the growth of exurbia
• The increased political homogeneity of American communities
• The minoritization of America
• The growth of unmarried and alternative households and the decline of traditional values
• The concomitant rise of white evangelical and secular, nonobservant religious populations
• The rise of the millennial generation and the aging of the baby boomers

are included in my new book, Red, Blue and Purple America: The Future of Election Demographics.  With the book out, it's a good time for me to mark my beliefs to market.  In my paper with Abramowitz, we observed that, given the changing demographics of the US electorate, the Democrats should be able to win a solid victory in 2008 if they could bring their deficit among white working class voters down from its very high level in 2004 (23 points) to a comparative modest 10-12 points.  Does it look like the Democrats will be able to hit this this target?