advice from a fake consultant

out-of-the-box thinking about economics, politics, and more... 

Sunday, June 29, 2008

On Politics And The Internet, Or, Who Are We Missing?

It is by now an accepted fact of life that the Internet is having some sort of impact upon the political process…after all, if it wasn’t, would we even be here?

But we’ve all wondered exactly how much impact; and now the good folks at the Pew Research Center have taken the time and trouble to do some survey work that seeks to answer that very question

The logical approach would be to “walk through” the data (which is, frankly, good news for Obama) and see what they have to say about it…but let’s take a different approach today.

Let’s instead look at the data and ask ourselves: who aren’t we reaching, why, and what implications might those answers have going forward—and downticket?

First things first: we’ll be evaluating data obtained from Pew’s “The Internet and the 2008 Election” report (part of the Pew Internet & American Life Project)…and if you don’t regularly visit the Pew sites, you should. They are a fantastic resource for those interested in reality-based reality—and in this election season, reality will matter.

It’s possible to summarize the report’s findings in a paragraph or two, and let’s use that as a jumping off point:

--Democrats are significantly advantaged in this election cycle because of the Internet, and particularly Obama Democrats. This is primarily because voters’ political engagement through the Internet is primarily a function of age and income—that is to say, those who are the most engaged trend to younger age groups and higher income brackets.

--The more someone is politically engaged through the Internet, the more likely they are to use the Internet as something beyond a “reference library”. These “Webitics 2.0” users organize and connect with each other, donate online, forward political messages to others…and even create their own media to advance their political interests (not to mention their “separation anxiety”).

--The trend of increased Internet influence upon the political process has been reinforced over time; and voters in the 2008 cycle are roughly twice as likely to use the Internet as a tool of political involvement as they were in ’04. (As with the rest of the data, however, this trend skews younger as well.)

--These advantages are unlikely to accrue to those running for other offices in this cycle…unless the candidate has an unusually well-educated—or especially young—constituency.

--These results are not particular to either party. Younger Republicans use the Web as well, but since there are fewer Republican supporters in younger age groups Republican-leaning sites tend to have lower traffic numbers.

The facts out of the way, we are ready to turn to the analysis…which brings us to the first question: who aren’t we reaching?

Two-thirds of those from 50-64 years of age, and 85% of those 65 and older do not “look online for information about politics or the campaigns”, the Pew folks tell us. More than 75% of those with a high school education don’t either.

We also aren’t reaching those with lower incomes: 60% of those with incomes from $30-50,000 and nearly 80% of those with incomes below $30,000 do not use the Internet for information about politics. By contrast, if you made $75,000 or more last year (or you’re a college grad), two-thirds of your income bracket is getting information online.

Obama supporters and activity are strongest in places like the DailyKos website, these numbers suggest…and perhaps not surprisingly, older and lower income voters are the voters least likely to be found there.

So where are those voters?

You might think that talk radio is where they are to be found…but that’s where it gets weird. More than 75% of talk radio listeners are college educated, according to Arbitron data—and over 60% have incomes above $50,000. Older voters are listening to talk radio, however, as you might expect—70% of listeners are 45 or older…just about exactly where Obama’s supporters are least likely to be found.

But what about Obama’s other “area of interest”: those with incomes below $30,000, and not college educated?

I can’t offer you an answer based on any real information at all…but here’s a guess based on talking to a few folks who are under 30, and don’t have college educations: at the moment, most of these folks seem disinterested in politics altogether—and that means they’re unlikely to be found online or listening to talk radio.

So what’s an Obama to do?

He may already have part of the answer: concerts. News outlets that are not…shall we say…”Democratic-leaning” have reported that as many as half of the 75,000 attendees at Obama’s Portland, Oregon rally were drawn to the event because of the “opening act”, the Decemberists.

If it’s true, it’s genius.

Try to imagine the last time a candidate attracted to a political event more than 30,000 “outsiders” who were uninterested in politics in the first place.

Another possible solution might explain the decision to not limit his spending: to get to those over 50, Obama will probably have to bombard that group with advertising that appeals to their economic interest…and also counters the McCain “security” advantage within that group. To advance both those messages at the same time, nationwide, will be enormously expensive—but even here we can find data that offers us an opportunity.

Returning to the Arbitron data, we see that the highest proportion of talk radio’s audience is found in the Intermountain West and a bloc of States that consist of the Dakotas, Nebraska, Kansas, Minnesota, Iowa, and Missouri—and New England. We also discover that half of that audience does their listening at home, not in the car (just for reference, about 1/3 of that audience is listening in the car).

This suggests that the potential exists for large-scale radio buys to have a disproportionate impact in reaching a key audience that Obama seeks to either discourage altogether or possibly convert to his side—and lucky for us, radio is inexpensive compared to TV advertising. Better yet, the states with the highest talk-radio audiences are in relatively inexpensive media markets….or reachable as “cohort” markets serviced by larger markets. For example, a purchase in Boston gets you coverage throughout New England.

What about those farther down the ticket? At the moment, the DCCC is not as flush with cash as Obama, suggesting an interesting scenario indeed: Obama pulls tons of new voters into the system, plus draws lots of interested Democrats.

This “raises all the boats” for downticket Democratic candidates…but it does so by placing those candidates in Obama’s debt, which could be a powerful tool when it’s time to actually legislate.

Is this Democratic advantage likely to erode over time?

After all, it is more likely than not that some of today’s younger Democrats will become Republicans as they age…and it is also more likely than not that those weaned on Facebook will eventually adapt it to the advantage of the Republican cause as they age and gain influence within that Party’s structure.

So what are the lessons here?

We are seeing the rollout of the Internet as a powerful tool of politics—if you’re under 50 and have an income over $50,000.

Over time, that impact should increase as the population using the internet themselves age.

The voters Obama is now seeking to either discourage to convert are not available to him using the tools that have been the most effective for him so far…but moving forward with concerts combined with “carpet-bombing” media markets with TV and radio spots should make those voters more accessible.

If I’m correct, and this is the Obama strategy going forward, there’s one thing we know for sure: considering the amount of money he’ll need to pull it off, there’s going to be no shortage of emails from David Plouffe in your inbox soliciting money from now until November.

Tuesday, June 24, 2008

On Buying Out The Fleet, Or, Here’s A Gas War We Can Win

There is no way to save us from our dependence on oil, we are told, except to drill for more oil wherever it can be found—and some will even tell us it’s possible that there’s so much oil not yet discovered off the coast that all our problems will be over once we poke a few holes in the ground and git ‘er done.

Of course, it’s also possible there are monkeys to be found in certain of my body cavities…and I’m hoping most fervently that no one proposes drilling in my ANWAR in an effort to find out.

But what if there was another way?

What if we could afford to convert our gas-powered cars to something else…something that could reduce our national gasoline consumption by 70%?

Something we could put into place just as quickly as offshore wells could be drilled—and maybe even faster.

A “Manhattan Project” of fleet conversion, if you will.

Well, Gentle Reader, I think we can—and today we examine a way it might be done.

Those who are regular readers in this space probably recognize this as the part of the diary where we introduce background information while keeping the plan a bit of a secret…just to build the suspense…but today, let’s do the opposite: let’s open with a plan, and then provide the supporting numbers.

So here it is: Americans are quite familiar with the concept of paying farmers to not grow crops—why not apply the same logic to this problem? To be more specific, I’m proposing we subsidize drivers, through loans and grants, to get out of gasoline cars and into electric, just as quickly as we can—and to apply the money that will be saved on gas and other expenses to repay the investments needed…meaning that over time this could be an idea that’s either revenue neutral or net positive, depending on the future price of gas.

To examine how the numbers work out, let’s begin with the costs of today’s cars:

The first, and most obvious, is oil itself…and the State Department estimates we spent about $400 billion on imported oil in 2007.

The cost of making fuel substitutes is adding up as well, and experts point to ethanol as one substitute that imposes many costs, some of which are as yet unquantifiable, but clearly substantial. Among those costs is a subsidy of nearly 50 cents per gallon paid to ethanol producers that will cost us roughly $4 billion this year-and we expect that amount to grow to $7 billion a year by the middle of next decade, if production estimates prove correct.

Then there’s automobile maintenance. The American Automobile Association reports that maintaining a car and keeping it in tires averages five and a half cents per mile—and the Department of Transportation estimates Americans drove more than 3 trillion miles in 2006. Multiply the two and we apparently spend somewhere around $165 billion annually on maintenance.

Like it or not, we must acknowledge that we also spent some portion of our military budget on “oil security”. The 2007 Defense Department budget request—without the War Supplemental requests—came in at $471 billion. Supplemental requests ware estimated to be another $90 billion. A charitable estimate might assign 30% of that number to “oil security”, adding roughly $175 billion more annually to our oil costs. An estimate of 50% equals more or less $280 billion annually. We’ll use the lower number today.

Add these together, and we spend at least $735 billion, plus an unknown amount from additional “ethanol costs”, to drive gasoline powered cars annually.

So what would it cost to replace them?

In my proposal, the Federal Government would provide a grant of $15,000 to the owners of the 136.5 million cars on the roads (that’s a 2005 number), which would basically pay off the loans on those cars. They would have to be turned over to the Government for scrapping. (Any leftover money would have to be spent on the replacement car.) That’s just about $2 trillion over the 10-year life of the program…or $200 billion a year.

Additionally, I would provide low-interest loans of up to $30,000 to purchase a new electric car. (Just for reference, you can buy a Prius for $23,770.) At 5% interest, that’s a maximum $150 billion “carrying cost” annually…but if the loans are priced at 5%, it’s a virtual wash. (There will be some losses for delinquencies—but as with student loans, the IRS can help with collections…)

We will have to upgrade the electric grid to provide about 17% more power than it does today, and based on the Edison Electric Institute’s numbers that means we need to provide about 180,000 megawatts (MW) of new capacity.

Is it possible to generate that much power using a no-fuel source like, maybe…windmills? The answer seems to be: yes. The Pacific Northwest alone has the potential to generate 137,000 of those 180,000 MW—and beyond that there’s tons of wind potential on the Great Plains…and believe it or not, even Texas (yes, I said Texas...) now sees wind farming as a cash crop.

So how much would it cost to build all that capacity? 229 MW of wind capacity installed near Whisky Dick, Washington (how cool is that…I got to say “Whiskey Dick” in a serious story…) is costing Puget Sound Energy $380 million. Based on that number it should cost about $299 billion for the new wind turbines--assuming no “bulk discounts” or decreases in price as the technology advances. Add 50% for new transmission and distribution, and you get roughly $450 billion…which is about $45 billion a year over 10 years

Having demonstrated that it’s possible to make this change, we need to take some time to address the biggest problem that prevent us from simply “flipping the switch” and putting this plan in place.

What is it? Batteries. To make a long story short, batteries for different types of electric car applications demand either high power or long-lasting power—and a battery that can provide both is usually too heavy and emits too much waste heat (the more heat, of course, the more energy lost, making the battery less efficient).

Charging time is another issue. To charge batteries quickly requires high voltage, and a nation of rapid charging cars could have problems delivering enough power through the electrical grid as it’s currently designed…and at the moment, charging batteries using 120V current takes hours, not minutes.

But there’s good news on the horizon—and a company that is the world leader in the batteries that power cordless tools is one of the companies that thinks they can advance the state of the art. A123 Systems makes the batteries that power one of the most impressive of today’s electric cars, the Tesla.

A123 Systems put 6,831 AA battery-sized batteries in a car that’s a very close cousin of the Lotus Elise (the cars’ chassis are built on adjacent assembly lines) and the resulting car is quite amazing.

220 miles on a charge (this is a plug-in car…no gasoline engine of any kind); and performance that is shocking to those who think of electric cars as inherently boring and lacking in performance. What do I mean by shocking? Well, the car has been slowed down quite a bit by the introduction of the new monospeed transmission, so acceleration from 0-60 mph is now up to 3.9 seconds from 3.2.

It seems to be able to turn a bit of a corner as well…as this video demonstrates…

Of course, this is a $100,000 car—and without backup power, you better not travel more than 219 miles to the next outlet, or it might be tow time.

More typical performance is found in the Subaru R1e—an all-electric plug-in car that is a variant on a car currently available in Japan, which can travel at speeds up to 65 mph for 50 miles before needing a charge.

Both of these cars appear to require less than $2 a day for charging for most electric consumers in the US.

Eventually the market may move to “series hybrid” electrics, which, like railroad locomotives, use small fossil-fueled engines to run a generator that provides the electricity for the car. The Chevy Volt, expected on the market for the 2010 model year, is such a car. The company reports the first 40 miles of travel would use the plug-in batteries only, and beyond that the engine kicks in to spin the generator (and recharge the battery), which gives the car a range of 640 miles on 12 gallons of fuel.

Which brings us to the final question: how fast could such a conversion occur?

The Census Bureau tells us that 12,087,000 cars, more or less, were manufactured in the US in 2006. If we instituted a lottery system (or something similar) to choose who gets ‘em first, it should take about 10 years to replace the fleet—and if we allow consumers to buy US and foreign-made cars under the terms of the program, the conversion could occur considerably faster.

So that’s it.

I’m proposing we buy out gasoline cars with borrowed money, and I’m suggesting that 70% of the $400 billion we spend annually on gas, as well as most of the $165 billion we spend each year to fix gasoline engines could be saved by the conversion, helping to repay the costs incurred…I’m proposing that we lend ourselves the money to buy new electric cars—but I expect that money to be repaid by the owners of those cars—I’m further suggesting we can “windmill” our way into providing the additional generating capacity required, and I’m suggesting that we justify this highly unusual intrusion by the government into the private economy on National Security grounds…because reducing our gasoline consumption by 70% makes our OPEC friends 70% less powerful…and also puts us at a competitive advantage compared to China and any other country who hasn’t yet broken their oil addiction.

And if all that wasn’t enough, it’s also one enormous public works project that can’t help but create hundreds of thousands of long-term jobs in our very beaten-down manufacturing sector.

Obama, are you listening?

AUTHOR”S NOTE: George Carlin has left us…with a few thoughts on the American Dream that offer a far better eulogy than anything I could ever provide.

Thursday, June 19, 2008

Why Do Terrorists Have Rights?, Or, A Government, Restrained

There is a lot of debate in the public space this week over the impact of the United States Supreme Court’s ruling that gives detainees in a “holding pattern” at Guantanamo Bay access to the United States Courts for the purpose of presenting petitions of habeas corpus.

It is a generally accepted misunderstanding that the Court’s ruling gave new rights to the detainees, which seems to be the issue that is the most controversial.

The purpose of today’s discussion is to explain why that view of the ruling is dead wrong…and to offer some thoughts on why this ruling might actually be one of the most important “restraint of government” rulings to have come down the pike in some time.

So off we go, eh?

First, the background. The Supreme Court has ruled in Boumediene et al. V. Bush, President of the United States, et al. that some Constitutional protections do extend to “non” US territory, and that the Military Commissions Act can not restrict the US Courts from having jurisdiction over “any aspect of the detention, transfer, treatment, trial, or conditions of detention of an alien detained by the United States since September 11, 2001.”

The Government had attempted to argue that because the Guantanamo Bay Naval Station’s holding facility is located on Cuban territory Constitutional protections do not apply, and that view was dismissed by the Court. The Court instead relied on a concept known as the “Territorial Incorporation Doctrine” which grants some, but not all, of the Constitution’s rights to those who live in US Territories…and as the Court noted, having “complete and uninterrupted control of the bay for over 100 years” pretty much makes it a US Territory, despite its physical location.

And that’s where we begin to address the question of whether this ruling gives new rights to detainees.

In reading the ruling, one thing that stands out is that the Court is not so much empowering the Plaintiffs as it is restraining the power of Government to operate outside the control of the Constitution—that the Court is saying that whatever the United States Government does, to the extent the sovereignty of other nations allows, it must do it within the framework of that document…and that despite the Administration’s desires, there is no legal basis to deny these detainees access to any judicial forum beyond the military tribunals offered by the Military Commissions Act. This from Boumediene V. Bush:

And although it recognized, by entering into the 1903 Lease Agreement, that Cuba retained “ultimate sovereignty” over Guantanamo, the United States continued to maintain the same plenary control it had enjoyed since 1898. Yet the Government’s view is that the Constitution had no effect there, at least as to noncitizens, because the United States disclaimed sovereignty in the formal sense of the term. The necessary implication of the argument is that by surrendering formal sovereignty over any unincorporated territory to a third party, while at the same time entering into a lease that grants total control over the territory back to the United States, it would be possible for the political branches to govern without legal constraint.

Our basic charter cannot be contracted away like this. The Constitution grants Congress and the President the power to acquire, dispose of, and govern territory, not the power to decide when and where its terms apply. Even when the United States acts outside its borders, its powers are not “absolute and unlimited” but are subject “to such restrictions as are expressed in the Constitution.”

The Court goes on to suggest that if the Government’s view were to be upheld, it would be possible for the President and Congress to interpret law. The Court says that is not allowed, and refers to one of our most fundamental legal precedents to illustrate its point. To quote the 1803 case Marbury v. Madison:

It is emphatically the province and duty of the judicial department to say what the law is. Those who apply the rule to particular cases, must of necessity expound and interpret that rule. If two laws conflict with each other, the courts must decide on the operation of each.

Why shouldn’t we allow Government, from time to time, to act outside of the Constitution? There are those who will point out that we are in dangerous times, and that it is sometimes necessary for the Government to take exceptional measures to ensure our protection.

The answer is fundamental: the Constitution exists to enumerate exactly what Government is allowed to do. In this country We, The People, control all the rights and liberties of our Nation…and we grant to Government some powers from time to time as we choose through the Constitution. From time to time we also remove some of those powers.

What we never do is allow Government to grant unto itself rights, or to strip We, The People of rights.

The Court, in this ruling, reasserts that most basic of American principles—that Government is under the control of The People—that it is not a power unto itself, that its powers derive from the grants we give it…and that every person affected by the Government’s actions has a basic right to contest those actions, whether the Government likes it or not.

This is the fundamental difference between freedom and despotism; and we are the most privileged Nation on Earth for exactly that reason.

Tuesday, June 17, 2008

On Open-Source Campaigning, Or, Do It Yourself Yard Signs

Just yesterday I was doing some reading at the BlueNC site, and I found this story by persondem who is planning to make and presumably distribute anti-McCain yard signs.

persondem was asking the community for slogans...which got me to thinking, “why not?”

Before I knew what I was doing I had created roughly 50 of the darn things—and that’s how we get to today’s story...

As I said, there are quite a do you have a handy beverage and a snack?

OK, then, if you’re ready, here we go...

Family values?
Ask his first wife...

McCain for President?
"A cold chill down my spine..."
--Senator Thad Cochran

We need a President...
...not McPatton.

Only tax the middle class.
Then the rich can afford
to hire more of us.

John McCain or Ron Paul?
Who’s the real conservative?

$3 billion a week
X 100 years =
Your kid’s future

McCain’s foreign policy?
Visit nice places.
Meet nice people.
Then kill them.

What flip-flops more than
a Waffle House pancake?

Screw the people.
Vote McCain.

Who needs change now
when things are so great?

The Keating Five
wasn’t a basketball team.
McCain = business as usual.

McCain: “Hey lobbyist!
Why don’t ya come up
and see me sometime...”

McBush Part III:
This time it’s...kind of sad, really.
Choose better.
Choose Obama.

Remember when...
...people liked America?
Vote Obama.

Halliburton thanks you
for your generous support
of our bottom line.

McCain: He never met a
lobbyist he didn’t like.

buggy whips...

Second wives
for McCain.

Why support our vets when
we can spend that money
bombing Iran?

Broken economy.
Broken military.
Broken reputation.
McBush ‘08

Is it appeasment
when you surrender
your principles?
Ask McCain.

Look out! It’s the
Swerving Talk Express.

Truth, Justice,
and the Lobbyist Way.
Vote McCain.

Summer shoes...or
McCain strategy?

McCain supports
oil rigs
near our beaches.
Do you?

Better GI Bill?
McCain: Gee, I
don’t think so...

Obama wants you.
McCain wants...
your kids.

90% of the military
is in Iraq.
Gas is $4.50/gal.
Can we afford either?
Vote Democratic in ‘08

I went to Iraq
and all I got
was this lousy
artificial arm.
End the war now.

Price of gas: $4.50/gal.
Prosthetic arm: $30,000
A soldier’s sacrifice: priceless.
End the war now.

War in Iraq...
...gas costs $4.50
War in Iran...?

Do you work part time
to pay for gas?
Elect McCain and it’ll be
full time.

Support remedial economics.
Vote McCain.

Can your kids afford

Gas costs more...
Food costs more...
Government works less.
McBushonomics explained.

McCain: A better GI Bill?
They don’t need no stinking
GI Bill...

No Iraq timelines
and we’ll be home in 2013.
That’s my McCain!

The Bush tax cuts are bad
and I support them.
That’s my McCain!

Christian Evangelists are bullies
until I need their votes.
That’s my McCain!

I support immigration reform
but not my own bill.
That’s my McCain!

I won’t be seen with Mr. Bush
but he can raise money for me.
That’s my McCain!

Sunni? Shia?
Shunni? Squia?
I’m not quite sure.
That’s my McCain!

I support campaign finance reform
but not my own bill.
That’s my McCain!

I understand the Middle East
if Lieberman is close by.
That’s my McCain!

I support the troops
but not a new GI Bill.
That’s my McCain!

I travel to Iraq
but I can’t remember who’s who.
That’s my McCain!

The economy is in trouble
and economics is my weak area.
That’s my McCain!

Tax cuts for the rich
deficits for you.
That’s my McCain!

She stood by me
all through Vietnam
so I dumped her.
That’s my McCain!

So who else is making signs this summer?
Feel free to use these...and send in a few of your own.

Let’s kick his butt...and have some fun doing it!

Sunday, June 15, 2008

On A Civil Campaign, Or Things I Hope We Don't Say About McCain

Our Republican friends have begun the campaign season with their usual class and style; and the resulting Internet gossip has reported that Obama is a secret Muslim, that his Christian Reverend is the scourge of American religion, that he’s no patriot...and that he associates with every evil person on the planet, either by allowing them into his campaign or by his willingness to talk to those who hate us the most.

And Obama has, to this point, chosen to remain above the fray.

Because Obama has chosen the high road, I wanted to offer a few words about how we can be a more civil blogging community—and about a few things we should seek to leave off the table.

For example, it would be utterly inappropriate for us to question John McCain’s commitment to family values. After all, lots of husbands leave their wives for richer, younger women. And it’s perfectly natural. I mean, even if your current wife raised your three kids while you were in a Vietnamese prison camp that’s no reason why you should stay with her—especially if she can’t help finance your future.

And most especially if she was oh, I don’t know...perhaps the victim of horrendous injuries that were no fault of her own. ...that maybe caused her to gain a few pounds...and walk on crutches.

For example, this is the sort of thing we should not say:

“After he came home, he walked with a limp, she [Carol McCain] walked with a limp. So he threw her over for a poster girl with big money from Arizona [Cindy McCain, his current wife] and the rest is history”.

Surprisingly, that is the sort of thing Ross Perot would say, and he made a point of calling up Jonathan Alter earlier this year to express exactly that sentiment.

How would Perot know? As it turns out, he paid for Carol McCain’s medical care.

But that’s not something I would say about McCain, because I’m trying to elevate the conversation.

Another thing we should avoid discussing, if we seek the high road, is this whole question of what happened to McCain as a POW.

For example, it might be insensitive of us to question whether post-traumatic stress syndrome is the reason for McCain’s extreme temper and violent mood swings...even though others do.

And we shouldn’t question if these outbursts disqualify him from office...even though former Republican Senator Bob Smith did...even though he apparently went off on Republican Senator John Cornyn in a Republican Caucus meeting...even though Mississippi Republican Senator Thad Cochran gets a “cold chill down my spine” when he considers the possibility of a McCain Presidency.

But again, in my efforts to elevate the tone of the discussion I’ll leave all of that off the table.

Finally, if we really intend to take a high-minded approach to this campaign, the last thing we should be discussing is this recurring story that McCain blocked efforts to determine whether American POWs were removed from Korea and Vietnam to the USSR for medical experimentation and other purposes.

Even further, it would be highly impolite of us to point out that there are groups trying even now to position McCain as anti-POW...but there are those who are making that effort—including Vietnam Veterans Against John McCain, who report McCain actually gave information to the Vietnamese and made propaganda statements for them from his hospital bed.

So I hope all of this serves as a reminder that we should really work hard to make this as polite and civil a campaign as we possibly can; and I hope you use these examples of what we should not be doing as a guide to help you present McCain in a way that enervates and enriches the discussion...because after all, the last thing we want is to have another campaign like '04's on our hands.