Black Friday Christmas List

Black Friday is here and it is time to think about the perfect gift for everyone on your list.

Here are a few ideas that might help you with your Christmas shopping this year.

Monopoly for Millennials

Hasbro has introduced a new version of the classic board game for Millennials.

Instead of playing the game to see how much real estate you can control the Millennial version is focused on collecting "experiences".  "Forget real estate, you can't afford it anyway" reads the cover of the game.

Experience points are earned by visiting such things as a music festival, a farmers’ market, a vegetarian bistro, a bike share and your friend’s couch.

On the game cover Mr. Monopoly is sporting Millennial-appropriate plastic shades, earphones and a participation medal while holding a latte in one hand a snapping a selfie with the other.

One chance card reads, "You hear of something that offends you. Go and complain on social media. Collect 50 retweets.”

It appears that some Millennials have done just that. They are not happy with the light-hearted take on their generation.

Someone must like it. The game was being sold exclusively at WalMart but is reportedly sold out. The $20 game has been selling on eBay and other sites for upwards of $60.


MAGA Build The Wall Blocks

Another idea is the MAGA Build The Wall  building blocks that is being sold by Keep and Bear and conservative apparel and gifts website.

"The set includes 100 building-block pieces and a Trump figurine wearing a Make America Great Again hard hat. The pieces snap together, allowing kids -- or their parents -- to build a section of a miniature border wall" according to CNN.

I particularly like the Trump figurine who looks to be totally in-charge and completely dedicated to finish the project on-time and under budget.

It is not a bad representation. However, his red tie is way too short and blue suit is way too light.

The blocks are recommended for children age 5+. However, my grandchildren knew who President Trump was at ages 3 and 4.


Coffee Mugs- Pro-Trump and Anti-Trump

You can cover all your giving with the simple choice of a coffee mug. Both anti-Trump and pro-Trump mugs are available on Amazon. That should cover about everyone. There are not many left in middle.

I don't know if it means anything but the anti-Trump mug only sells for $9.95 while the pro-Trump mug costs $17.95.

Shop till you drop...or...until your fingers fail you.

Bubbles and Beliefs

The last decade has seen unprecedented monetary and debt expansion in the United States and around the world.

The monetary base in the United States increased 5-fold in just over five years after the 2008 financial meltdown.

Very little of that monetary expansion has been pulled back in the subsequent five years.

Both private and public debt increases have also accompanied that monetary expansion in the United States. $70 trillion in various debt instruments (public and private) are outstanding which is about 1/3 higher than it was a decade ago.

The same is true globally. There is now over $237 trillion of debt in the world. Total global debt has increased 42% in the last decade.

What happened as all of this monetary and debt expansion occurred especially considering the abnormally low interest rates that were in place for much of the decade?

The money flowed into assets. Stock prices. Housing prices. Commercial real estate. Tech start-ups.

In fact, interest rates were so low that savers and investors were penalized in the extreme by staying in cash. The low interest rates made it so unattractive to hold cash that many savers finally gave up and took a flyer on the stock market, bought a new house or invested in a tech start-up. There was no yield in cash or in many credit instruments. It was much better to buy an asset.

Of course, as more demand is created the price of each asset increases.

What did those low interest rates and the increased monetary base do for American households?

It made a lot them much wealthier.

In fact, the increase in aggregate household wealth has been staggering.

Household net worth increased by $45 trillion over the last 10 years and $60 trillion since 2000.

However, as this chart shows, U.S. gross domestic product, only increased about $4 trillion in the last decade and $9 trillion since 2000.

Another way to look at this is that in the last decade our aggregate household wealth increased at 10 times the rate that we actually increased our GDP over the same period.

This is unsustainable and it appears we may be in the early stages of the bubble bursting or (hopefully) the air slowly being let out of the balloon.

Over the last few weeks the stock market has been showing signs that the party is over after its 10-year bull market run. It is down over 10% from its highs earlier this year but about 40% of S&P 500 stocks are down at least 20% this year. Morgan Stanley sent a report to its clients yesterday that it believes we have entered a bear market in equities.

For a little perspective, this is chart showing the performance of the Dow Jones Industrial Average in the last 10 years through today.

It has been an amazing run. Each dollar invested ten years ago grew to over three dollars in the last decade.

2018 has been an different story. There have been a lot of ups and downs and volatility during the year. However, despite the recent losses, the DJIA is still only 1.5% below where it started the year. At the same time, it is off  9% from its highs at the beginning of October.

Some high profile individual stocks have fared much worse.

Apple is down 20% from its high this year.

Facebook is down 39%.

Netflix is down 37%.

Amazon is down 27%.

Alphabet (Google) is down 19%.

Crude oil has fallen almost 30% since the beginning of October.

Sales of new and existing homes have also fallen over the last few months. You can see what has been happening on the West Coast in particular in this graphic. Active listings up. Sales down. Change in the rate of appreciation is down.

We are just not seeing downward pressure in prices in stocks, oil and the housing market in the United States either.

In fact, Deutsche Bank annually tracks 70 different financial assets and commodity indexes around the world. It has been doing so since 1901.

At the end of October, 89% of all of these asset classes showed a loss for the year in dollar terms. That is the highest percentage of assets showing a loss in 118 years. That eclipses the 84% that showed a loss in 1920.

Compare that to last year when only 1% of those asset classes had a negative return for the year.

Have you ever heard "What goes up must come down"?

This is what Deutsche Bank said in its report accompanying this data.

This is what happens when the vast majority of global assets are expensive historically due to extreme monetary policy. When the tide goes out you’re more likely to get en masse negative months rather than rotation from day equities into bonds or visa-versa.

Are bigger losses ahead?

Time will tell.

However, bubbles can only expand so far. You only hope that they don't burst with a big bang. The chaos that follows can quickly become a financial and political crisis. At least that is what history teaches us.

However, bigger drops in asset prices often begin with asset prices acting like they have this year. They slip and slide, grinding away in an inexorable movement that trends downward. This gives people hope that we are only in a temporary lull before prices start moving up again.

That is my hope as well. However, looking at the free money and loose credit that has been made available over the last ten years tells me that it is more a question of "when" and "how bad" the day of reckoning will be than to think this is a temporary lull.

Be aware of the bubble that has been created.

And beware of the consequences to your wealth.

The last decade has been enormously beneficial to many American households. However, it has not resulted from a normal state of affairs. The monetary base manipulation, the expansion of credit and low interest rates have distorted normal market forces.

The worst thing you can do is believe that all the asset increases over the last decade we have seen are "real."

Thanksgiving might be a good time to consider the advice Nassim Taleb provided in his excellent book, "The Black Swan" back in 2007.

"Consider a turkey that is fed every day. Every single feeding will firm up the bird’s belief that it is the general rule of life to be fed every day by friendly members of the human race ‘looking out for its best interests,’ as a politician would say

On the afternoon of the Wednesday before Thanksgiving, something unexpected will happen to the turkey.

It will incur a revision of belief."

Credit: The Black Swan via Wikicommons

Happy Thanksgiving!

However, don't be a turkey.

Review your beliefs with all this information in mind. You don't want to have your beliefs revised for you with the same surprise as consumed that poor bird.

Cold Will Be A Real Crisis

The Democrats are once again going to be in control of the House of Representatives and that means that we are once again in a "climate crisis."

Democrat activists (including Congresswoman-elect Alexandra Ocasio-Cortez) had a "sit-in" in the office of Democrat leader Nancy Pelosi this week.  It looks more like a party than a "crisis" to me considering the looks on their faces.

Ocasio-Cortez states that we only have "10 years left to plan and implement a Green New Deal before cataclysmic climate disaster."

"Justice Democrats" stage sit-in on "Climate Crisis"

Pelosi, in turn, put out this statement of a Democrat proposal to spend "$1 trillion on infrastructure that will make our communities more resilient to the "climate crisis" and, for good measure, create 16 million new good-paying jobs as a result.

I think I have seen this movie before.

Didn't the Democrats have another almost $1 trillion infrastructure spending program with Obama when they were last in control in the House? I think I also remember something about shovel-ready projects with jobs.

How many good-paying jobs did that result in?

At the same time, we have Democrats blaming the horrific California wildfires on climate change.

Of course, that now includes President Trump because he removed the United States from the Paris Accord on Climate Change.

For example, singer/songwriter Neil Young, who lost his home in the blaze, is blaming Trump for "defying science" and the climate change that he says has made California more vulnerable to fires.

Of course, left unsaid is that since Trump took office the United States is the only major country in the Paris Accord where carbon emissions actually fell.

In fact, CO2 emissions in the United States in 2017 were the lowest they have been per person in 67 years!

The United States, despite its population and industrialization, is a leader in having the cleanest air quality in the world.

Have you ever seen or heard these facts in the media?

You also hear very little in the media about the science of sun spots and their effect on our climate.

I doubt you have also heard about this recent report from NASA that warns that the lack of spots scientists are currently seeing on the sun could bring us record breaking cold in a matter of months.

The sun is entering one of the deepest Solar Minima of the Space Age,” wrote Dr Tony Phillips just six weeks ago, on 27 Sep 2018.

Sunspots have been absent for most of 2018 and Earth’s upper atmosphere is responding, says Phillips, editor of spaceweather.com.

Data from NASA’s TIMED satellite show that the thermosphere (the uppermost layer of air around our planet) is cooling and shrinking, literally decreasing the radius of the atmosphere.

To help track the latest developments, Martin Mlynczak of NASA’s Langley Research Center and his colleagues recently introduced the “Thermosphere Climate Index.” 

“Right now, it is very low indeed … 10 times smaller than we see during more active phases of the solar cycle,” says Mlynczak.

Do the three charts above qualify as SCIENCE?

I sincerely hope that colder temperatures are not in our future.

Given a choice between hot or cold, I will choose hot any day. It is not because I like the beach. I like to eat as does everyone else on this planet. It does not take much in colder weather to disrupt our growing seasons and the yields of crops.

When you consider past history on climate you also quickly realize that God dwarfs anything that man can do. For example, the year 1816 was considered "The Year Without a Summer" after Mount Tambora erupted and the ash seemed to veil the sky across large swaths of earth. Crops failed around the world and famine followed. Riots and political unrest were not far behind.  People tend to get really angry when they are hungry. How much did the average global temperature fall that year? - only about 1 degree!

That story has always made me much more concerned about global cooling than warming. A rise in temperatures is actually beneficial for food production. It can extend the growing season further north. More food can be produced. Cooler temperatures do the exact opposite.  Given a choice there is little doubt where I come down.

Do you think it might also be considered a crisis if ice sheets covered this much of the United States?

It happened before. Who is to say a version of this could not occur again? Even something reaching 1% of this would be devastating considering the population centers involved and the grain and corn that is grown in these areas today.

I can only pray that those happy go lucky "Justice Democrats" never find out what a real crisis is. Man-made global warming or climate change is not a crisis. If they are concerned about a crisis there are plenty of them looming ahead to deal with. The national debt. Public pension funding. Social security and Medicare funding. The Islamization of Europe. 1.5 billion Chinese vs. 325 million Americans. All of these involve basic MATH.

I also wonder who there will be to blame if it does get COLDER?



Postscript:

Just after I finished writing this post these were a few headlines at The Drudge Report.

Will we see more of these in the coming months? Let's hope not.

That Chill Map. November 15, 2018. 1000AM EST.

I also find it interesting that cataclysmic disaster is always 10 years away (or 4 years in the case of Obama in 2009).

Look at some similar statements as chronicled by Instapundit. I know these people are big on renewable energy. However, it seems that these statements about the impending crisis are also renewed each year to be another 10 years away. They have been doing the same thing for the last 30+ years.

This does not even include this famous statement by Al Gore that he made in 2007 when he accepted the Nobel Peace Prize.

The ice cap is falling off a cliff. It could be completely gone in summer in as little as 7 years from now.
                                                     -Al Gore, Nobel Peace Prize Speech, December, 2007


In July 2018, the Arctic ice extent measured 3.3 million square miles. That is actually 259,000 square miles more than it measured 7 years ago although it is true that the ice extent is about 12.5% less than its 1981-2010 average. However, a loss of 12.5% is a lot less than 100% would you not agree?

Divergent Views, Divided Government

After every election political pundits come out of the woodwork trying to explain the results of the election.

The fact that the Democrats ended up winning the Arizona Senate seat has some arguing that President Trump's immigration views (building a wall, ending chain migration, establishing stricter asylum rules etc.) was somehow a key reason for this loss and the close results in Texas, Florida and Georgia.

Even some Republicans argued that Trump should have spent more time bragging about his economic accomplishments and less time on immigration.

However, exit polls of voters shows that immigration is still a very strong issue for Trump. It was even a stronger issue in the four states mentioned above.

This is from the CNN exit poll's national sample of almost 19.000 voters.

50% agree that Trump's immigration policies are about right or not tough enough compared to 46% who think they are too tough.

Bear in mind, this is not asking people about current law, this is asking people if they were in agreement with Trump's far stricter  views on immigration than we currently have.

As I have stated before, if you want to know the one issue that really put Trump on the road to The White House, it is this one.

Notice also that those that agree with Trump on this issue voted Republican 85% of the time. At the same time, of those who thought Trump was being too tough in his views on immigration, 90% voted Democrat.

It is even more interesting to look at this issue in those key swing states I mentioned above.

In Arizona, voters are with Trump on immigration 57%-36%.

In Florida, voters are with Trump on immigration 54%-41%.

In Georgia, voters are with Trump on immigration 60%-35%.

In Texas, voters are with Trump on immigration 52%-43%.

What is interesting in this data is that these are all key swing states that also have large immigrant populations. However, even considering this, immigration is still a very strong issue for Trump and the Republicans.

Here are some other key swing states looking to 2020.

In Ohio, voters are with Trump on immigration 58%-38%.

Even in Nevada, another state with a large population of immigrants, a solid majority supports Trump 51%-46% on immigration

You might ask how can the national numbers be only 4 points favorable towards Trump's views on immigration when looking at the individual states above.

You need to look no further than California for that answer. Only 38% of voters agree with Trump on immigration in that state.

What about the national economy as an issue?

Why didn't it matter more in those House races in particular?

It seems that if you are a Democrat the economy looks bleak merely because Trump is President. Likewise, the economy seems to looks good to most Republicans exactly because Trump is President.

17% of voters think that the national economy is excellent, 87% voted for the Republican.

30% of the voters view the national economy as "not so good" or "poor". They voted for the Democrats 84% of the time.

Those that thought the economy was "good" tilted slightly to the GOP.

What do I take from this?

Expect President Trump to not moderate his views on immigration leading up to 2020.

He is likely to push the Democrat Congress hard on this issue as he no doubt understands the polling and popularity of his policies---especially in the key swing states I mentioned above which will determine the electoral college votes in 2020. Trump clearly will want the Democrats to be shown to be on the far left on this issue defending open borders and the abolition of ICE.

One interesting fact to consider.

California Democrats will make up almost 1 out of every 5 members of the House of Representatives in the next Congress. They will have an inordinate influence on the Democrat caucus with those numbers.

In fact, the California delegation of Democrats alone is more than all of the House members combined from 34 other states.

http://mehlmancastagnetti.com/wp-content/uploads/Split-Decision-2018Midterms.pdf

153 of a projected 232 House Democrats (66%) will come exclusively from the East or West Coasts.

This all provides better context on why we will hear more and more Democrats complaining about how unfair the electoral college is and why it is even more unfair for Wyoming or Delaware to have as many Senators as California.

All of the above should give you a better perspective on why the Founders were so brilliant in designing the governmental system they did. They were deeply concerned about concentrations of power forming majorities that would run roughshod over minority views and rights.

It was never intended to be The Coastal States of America. Or The Large Cities of America. Let it never be forgotten that our Founders named the country The United STATES of America for a reason.

We can see the wisdom of that thinking even more with each passing day.

Weird and Wild

I have followed politics closely for over 50 years. For some of those years I was not just an interested observer on the sidelines. I was in the arena. I helped to organize and lead a statewide ballot initiative in Ohio, I managed a local political campaign and I provided political consulting services on a number of campaigns.

In all those years I have never seen an election as weird and wild as this year's mid-terms.

Most elections have a theme, a consistency or common denominator.

It might be anti-incumbent, a red wave, blue wave or it might be an election that no one ever gets excited about. That theme carries through most of the elections throughout the country. The rhythm stays consistent.

2018 had none of that. It defied almost all of the rules.

Let's look at this in closer detail.

First, the turnout in the 2018 mid-terms was off the charts. An estimated 114 million ballots were
cast. That was 47.5% of the voter-eligible population. There has been nothing approaching that level of participation in over 50 years.

Let's put that in context. Only 83 million votes were cast in 2014. 138 million voters went to the polls in the 2016 Presidential election year. We exceeded 114 million votes in a mid-term!

You have to give credit to that turnout to Donald J. Trump. What other explanation is there? You cannot argue with the energy Trump has created on both sides. Everyone says we need more participation. This year we got it.

We are also continually told that Republicans are responsible for suppressing the vote. 30 million more people voted in this midterm with Trump as President than voted while Barack Obama was President in 2014! What voter suppression?

We also heard in the months leading up to the election that there was going to be a 'blue wave' of Democrats being voted into office. The Democrats did gain control of the House of Representatives by gaining 30+ seats (final number to be determined). However, the Republicans gained 3 seats in the Senate pending final counts in Arizona and Florida.

This might not seem like a big deal if you don't have a historical perspective on mid-term elections. However, consider that in the last 80 years the President's party has collectively only picked up a total of 7 seats in mid-term elections. And Trump's GOP picked up 3 in one election! That is pretty remarkable.

At the same time, there are disconnects. That is the reason I call the election weird.

Let's look at Ohio.

The Republicans retained the Governor's office. Mike DeWine (R) defeated Richard Cordray (D) for the seat held by term-limited John Kasich.

Republicans also won every other state office (Attorney General, Auditor, Treasurer, Secretary of State).

The GOP also held every House district in the state as did the Democrats.

Credit: RealClearPolitics

A ballot issue that would have decriminalized many drug offenses in the state lost 63%-37% despite $10 million being spent to support the measure.

However, two-term liberal Democrat Senator Sherrod Brown was reelected by 7 points over Jim Renacci. There is no theme there.

It gets even weirder when you look at Massachusetts, Maryland and Vermont.

These are deep blue states. Trump lost each of them by 26-27 points.

However,  Republican Charlie Baker (MA) (+34 points, Republican Larry Hogan (MD)(+14 points) and Republican Phil Scott (VT) (+15 points) each won re-election in these states. Even more remarkable is that at the same time Republican Baker was winning Massachusetts by 34 points Democrat Socialist Elizabeth Warren was winning in the same state by 24 points. In Vermont, Independent  Socialist Socialist Bernie Sanders was winning by 40 points when the Republican Scott was winning by 15 points!

How does this happen if we are supposed to have these political party differences that are supposed to so irreconcilable?

The answer here is the power of incumbency. All of those cited above were running as incumbents. It is a powerful advantage particularly when things are good and the economy is humming along as it is.

If that is the case, why didn't the good economy help the Republicans in the House more?

A big reason is that almost 40 Republicans in Congress did not run for re-election. Some ran for other offices (like Renacci in Ohio). However, more than half retired, including Speaker Paul Ryan and Trey Gowdy from South Carolina. Losing the power of incumbency makes a huge difference in a political race. Name ID for a politician is their most valuable asset. New names requires a lot more money to promote. Money spent on name ID for a new candidate takes away from all the other GOP candidates as well.

In my view, this was the major reason for the loss of the House by the GOP.

Why did so many retire? Many probably believed they were facing a blue wave that did not materialize. They did not want to be in a fight. Many certainly did not relish being in the minority party having been in the majority for a few years.

The irony is that it ended up being a self-fulfilling prophecy.

Others question why the great economy did not help the GOP House retain control. Many political pundits blamed Trump for not putting more focus on the economic accomplishments of the last two years. They said he talked too much about illegal immigration.

I think this criticism is misplaced. Trump talked about the economy plenty. Let's face it, Trump is never shy about talking about his accomplishments.

The polls actually showed that healthcare and immigration were more important issues with voters.

This is also natural. Human beings tend to not focus on those things that are going well in their lives.
We have a tendency to take the good for granted. We only get excited and motivated about those things that we are not happy with or think we should have that we don't.

"You don't have a job" or "You don't have health care" is a more motivating message than "You do have a job" and "You do have healthcare".

There was also a lot of talk before the election about the new wave of Socialist Democrats who were going to save the Democrat party. Yes, Alexandria Ocasio-Cortez won in New York City. However, she did not have any competition in the general election in her deer, deep blue district. She effectively won the seat when she beat the old, traditional Democrat in the primary.

How did some of the other Far Left liberals do in competitive districts?

Every one of them lost. It is true that Beto O'Rourke, Andrew Gillum and Stacey Abrams all came close. However, they all lost. As did other like-minded leftists in House districts. This handy list was provided by PowerLine.

Those Democrat House members who won tended to be moderates. In addition, many of them campaigned stating that they would not vote for Nancy Pelosi for Speaker.

It will be interesting to see how this develops. I think those freshmen Democrats are going to find out very quickly how the power game works in the Democrat caucus. You can say anything at home as long as you vote the right   Left way in D.C.

We also are now over 48 hours after the polls have closed and two of the biggest counties in Florida (Broward) and Arizona (Maricopa) have not completed counting their votes. How is this possible? These are two of the larger counties in the United States. How come all the other counties can get the job done and they can't? How do we know that fraud is not occurring? When in our lifetime has a big pile of votes come in late and pushed the Republican to a win? Weird and wild.

Has anyone also noticed the change in tone from the Democrats in two short days?

During the campaign we didn't hear anything about Russian collusion. We didn't hear anything about impeachment. Or investigations. It was all supposed to be about Democrats focused on the issues for you. And working in a bi-partisan basis with the President for solutions to our problems.

Get ready. I warned you. Talk is cheap. Let's see what they do. And this is already not starting well.

If you think the election was weird and wild. Fasten your seat belt for the next two years.

As I stated before the mid-terms, all of this might very well work to the advantage of Donald J. Trump. He now has someone to blame if the economy or stock market goes south. If nothing is done on health care or immigration he also has someone to share the blame. The Democrats will be a great diversion and punching bag for any problems that arise.

All of this is undoubtedly not good for the country but it may be a gift for Trump heading into re-election.

Always remember...

In the end, the voters always get what they vote for.

This is what they voted for. Weird and wild.

The Day After

If there is one big takeaway from the 2018 election results it once again displayed the genius of the constitutional framework that our Founding Fathers established.

We have heard incessant complaining, crying and gnashing of teeth about the evil Donald Trump and his Republican colleagues in Congress for two long years. Yesterday was the chance to do something about it. All 435 members of Congress were up for re-election. 35 members of the Senate also faced the voters.

Our governmental system is designed to allow voters to send a loud message every two years with that power. Voting for all House members assures that voters . However, it is also constructed to protect us from the short-term whims of a bare majority so that we don't veer wildly off course or trample minority rights in the process. The six year terms of the Senate assures that.

We saw exactly that last night.

The Democrats look to have picked up somewhere around 30 seats. It was about average for a mid-term election. However, the Republicans look like they picked up 3 Senate seats. That is unusual considering the Democrat victories in the House.

Both results were right in the range that I was expecting. The Republicans were facing an uphill battle to retain their majority due to historical trends in the midterms and 40 Republican incumbents who did not run in 2018 due to retirements. Those were big obstacles to overcome.

Democrats had a similar problem in the Senate. They were defending 26 seats. The GOP was only defending 9. That was not an easy task.

The people had their say. Was it a rebuke and repudiation of the direction Donald Trump and the Republicans are taking with America?

Hardly.

Was it a message that there are some issues that Americans are concerned with about some aspects of the direction?

Absolutely.

To use an analogy about what happened yesterday think about it as if I am driving down the road and Mrs. BeeLine softly say to me, "Are you sure we are on the right road, honey?". Compare that to what happened in 2010, after Barack Obama's first two years, were the tone might have been louder and angrier "You have us on  the wrong road. How did you get us lost so quickly?".

For those who lack the historical context, here are the changes in Congressional seats at the first mid-term election for all Presidents since Reagan.
                         
                               House                Senate

Reagan                    -26                        0
Bush I                      -8                        -1  
Clinton                    -54                      -9
Bush II                    +8                       +1
Obama                    -63                       -6
Trump*                   -27                       +3

* preliminary per RealClear Politics.com

Despite the evidence of the clear genius of our system I continue to marvel at how unhinged liberal Democrats always are about our institutions if things don't go their way. Somehow everything is great when they are in power (Presidential powers, Senate, House, Supreme Court) but everything is wrong about our Constitution when they are not in power.

I was not happy when Barack Obama was elected President. I thought the American people made a terrible decision compounded by giving the Democrats massive majorities in the 2008 election. I did not cry. I did not confront people on the streets or elected Democrats in restaurants. I did not call the President a fascist. You did not see other Republicans doing that either. Our constitutional system eventually took care of the problem.

Sure, Obama and the Democrats did some damage while they were in power. However, the integrity of the system did not allow them to wreck it. We have come out the other side better for it.

Why can't the Democrats have a similar view?

Despite their gains yesterday there are Democrats who are still unhappy. I could not help but chuckle at a few of the complaints I have seen on Twitter.

Here is Joy Behar saying that the Democrats lost the Senate because of gerrymandering.

How do you gerrymander an entire state?

Joy Behar, I have found the people responsible for gerrymandering the Senate.

Washington, Adams, Jefferson, Hamilton and Madison. Those are the crazy guys that "gerrymandered" the Senate by writing the Constitution.

Sadly, that is the way many liberals think.

Behar is not the only one. This is from another guy who should know better.

Josh, that is why we have a House of Representatives. Did you skip Civics class in school?

Memo to Josh--the Founders never designed a democracy. We have a constitutional republic.

It is also worth remembering that our Constitution has already been amended once (17th) to make it more “democratic” to provide for the direct election of voters. The original document provided for Senators to be selected by the individual state legislatures. The  Founders designed a republic in order to better protect minority rights. There is a reason that the Senate and House are different.

Power, politics, greed, bias, conflicts of interest, oppression. There is nothing going on today that our Founders did not anticipate.

Due to the intelligence and insights of our Founding Fathers, they wrote a document that considered all of the above and more in writing the U.S. Constitution.  They knew that instability, injustice and confusion within the institution of government had caused many to fail.  They were determined to build a governmental structure that could endure for the ages.

Federalist Paper #10 was written (by James Madison) to describe "How the Union Will Act as a Safeguard Against Domestic Division and Rebellion". The Founders understood that opposing political factions were the greatest potential threat to any government and that the the only redress was often violence. They wanted to insure that factions could not wield power that would be dangerous to either the rights of other citizens or the common good.

They also knew that good thinking people would not always be in positions of power. They knew that there would always exist a human instinct that could result in "wicked and improper projects" (the exact words used by Madison). They wanted to avoid situations where the "here and now" interests of the party in power would prevail at the expense of the rights of others and the good of the whole under a pure democracy..

They understood the danger of factious and fringe candidates like Alexandria Ocasio-Cortez or Maxine Waters receiving votes and attaining power. They saw the danger of those with radical religious views gaining a foothold in our government. As a result, the Constitution was designed to deal with all these risks. This is the actual language in Federalist #10.

The influence of factious leaders may kindle a flame within their particular States, but will be unable to spread a general conflagration through the other States. A religious sect may degenerate into a political faction in a part of the Confederacy; but the variety of sects dispersed over the entire face of it must secure the national councils against any danger from that source.

It is a brilliant design. And it works. We keep seeing that over and over again.

Yesterday. The Day After.  We will also see it work in the days ahead if we allow it to work as designed.

Why do so many Democrats only understand and accept it when they are in power?

Washington, Adams, Jefferson, Hamilton and Madison understood the problem. That is why the Constitution was written the way it was.

Mid-Term Musings

Several BeeLine readers have reached out to me and asked me my predictions on the upcoming mid-term elections.

The 2012 Presidential election taught me to never make a political prediction again. Let's call this blog post my musings about the election rather than a prediction.

It seems that other people in the polling business should be taking the same advice. They were just a tad off in their projections in 2016.

2012 Election

This is what I wrote on the morning of the 2012 election in "If I Am Wrong, I Am Wrong About America".

There are people making predictions about today's Presidential election that are going to be very right or very, very wrong.

I have looked at a variety of polls.  I have looked at past elections.  I even watched the NFL games yesterday because somebody said they have been an election indicator in the past.  Supposedly if the Washington Redskins lose at home in the last game before the election it spells doom for the incumbent.  I guess if President Obama loses he can blame it on Robert Griffin III. Wouldn't you know it is another guy from Texas.

I am throwing all of that stuff out the window.  I am making my prediction based on one belief.  I refuse to believe that we still do not have a majority of people left in America who believe in America. People who don't vote on revenge.  People who still care more about the country than themselves. People who still believe in the United States of America rather than the Divided States of America. People who still believe that we remain the last real hope for the world.

My prediction is based on the two factors that I have written out before-- Turnover + Turnout.  I believe there have to be a significant number of Americans who voted for Obama in 2008 that will not do it again.  I estimate that turnover has to be at least one voter in every ten.  Some voters who voted for McCain will switch to Obama but it will be far fewer than those that turn on Obama. 

There will also be significantly higher turnout by Republican-inclined voters compared to 2008. There will not be a seven point Democrat edge at the polls as there was the last time.  I would expect it to be no more than a couple points advantage. It might even reach parity like 2004 and 2000.

I predicted a Romney win with at least 295 electoral votes.

I was wrong and it shook me to the core. It was not the fact that my prediction was wrong but that so many of my fellow Americans could have such a different view about the job that Barack Obama had done as President. It was discouraging and disheartening.

I fully understood Obama's win in 2008. He said all the right things. Four years later more people should have understood it was just words. He might have had some style but there was no substance behind it.

2016 Election

I was smarter in 2016. This is what I wrote on the Sunday before the 2012 election in "Predictions, Words and Actions".

I don't make election predictions anymore. I especially don't make predictions when you consider that the pollsters who do this for a living do not seem to have a clue.

For example, consider these two national tracking polls that came out this morning. They could not be further apart.

LA Times-Trump + 5.6%

ABC- Clinton + 5.0%

Of course, what really matters is the electoral college tally. However, state polls in the key battleground states also do not "predict" anything. All of these states are tied or well within the margin of error.

Florida

Ohio

North Carolina

Iowa

Pennsylvania

Michigan

Colorado

Nevada

New Hampshire

As I have written before, this election will be decided on turnout. Will the traditional Democratic constituencies--African-Americans, Millennials, Single Women---turnout like they did for Barack Obama? If they do, Hillary Clinton will win. If they don't, Donald Trump can close the history books on the Clintons and The White House. However, it remains to be seen whether the FBI investigation of the Clintons will open a completely new chapter to close the book once and for all.

The first six states on my list above all went to Trump. He also won Wisconsin which I thought was outside his reach. Trump lost New Hampshire by 0.5% and Nevada by 2.5%. He lost Colorado by just under 5%.

That night restored my faith in the American people. It was a 180 degree turn in my emotions compared to four years prior.

What is going to happen in this year's election?

The Republicans have an uphill challenge to retain the House. The party in The White House has lost an average of 33 seats in midterm elections since 1938. The Democrats need to win 23 seats to gain control.

The GOP is also dealing with the retirement of almost 40 House members. That eliminates the significant advantage of incumbency in those districts.

The Democrats have also been energized all year. We saw that energy in almost every special election.

Republican voters did not turn out in those races and it indicated to me that a Blue Wave could sweep a number of Democrats into office as a result.

However, in the last month, GOP enthusiasm seems to have returned in the wake of the Kavanaugh confirmation hearing.

The Democrats also have the challenge of defending 26 of the 35 Senate seats up for election. 9 of these are also in states that Trump won in 2016. The numbers clearly favor the GOP in the Senate races.

Enthusiasm from both Democrats and Republicans is in uncharted territory for a midterm election. Look at this poll from Gallup on relative enthusiasm about voting in the mid-term in the years 1994-2018.

There is no precedent for this. Therefore, making a predictions about this election is very risky. There is nothing that looks like this in recent history.

Many of the polls that you are seeing predicting a blue wave are based on the final vote count only being composed of 25% Republicans, 33% Democrats and 42% Independents. That seems to assume that many Republicans will stay home. For example, Republicans made up 33% of the voters in 2016 (Dems 36%, Independents 31%). In the 2014 mid-terms Republicans made up 36% of the voters (Dems 35%, Independents 28%). 

The enthusiasm factor suggests that the GOP turnout is going to be higher than many of these polls are suggesting. So does early voting results. More on that below.

The other factor that is difficult to assess this year is the impact of early voting on the election. Historically, absentee voting favored Republicans but with many states implementing early voting separate from absentee ballots this has added an additional factor that is hard to assess in any prediction model.

Early voting this year is through the roof. It seems we have reached the point where voters are becoming comfortable with the convenience this option affords them. I have seen some projections that suggest that almost 40 million votes may be cast early. To put that in context, about 78 million votes were cast in the 2014 midterm. This means that early votes in this election are approaching almost half of the what the total votes were in the last midterm election.

Since early voting was implemented it has been dominated by the Democrats. The Democrats had a fantastic mobilization effort and concentrated on getting their voters to the polls during early voting. Their strong presence in urban areas made this easier for them to do than it was for the GOP. The Democrats could send a bus to a community center or church and get dozens to the polling place easily. This is not easily done in rural or suburban areas. Those voters need to show up one by one.

Republicans reliably have showed up at the polls on election day over the past election cycles and this advantage was enough in most years for the GOP to prevail in many races across the country despite losing the early vote. It should be remembered that Republicans have captured over 1,000 state, local and federal offices from the Democrats since 2009.

This year the Republicans have flipped the script and in many states the GOP is leading in early voting.

Here are some early vote totals from a few key states. This is taken from a website TargetEarly which gathers early voter information and them models the vote based on available information (party registration, etc) between Democrat, Republican or Unclear.  It does not tell us the exact vote but it has proprietary methods to determine voter affiliation. Even then, the affiliation of the voter could still be incorrect. For example, a registered Democrat who voted for Trump in 2016 might also vote for a Republican for Congress. Likewise, a registered Republican who dislikes Trump could have lodged their protest by voting for a Democrat Senator.

(numbers in thousands of votes)

Arizona        578.6 D       758.9  R
Florida       1,999.9 D     2,142.7 R
Michigan      284.6 D        438.7 R
Nevada         297.7 D        278.4 R
Ohio             379.3 D        465.4 R
Tennessee     395.9 D        861.3 R
Texas         2, 235.9 D    3,038.6 R

Based on this analysis, Nevada is the only state Democrats are leading in early voting in these key states. Democrats typically come out of early voting with the lead. This early vote may not predict GOP wins in these states but it certainly does not look like a blue wave election. Republican turnout is too high.

This is an impressive turnout for the Republicans but does it simply mean that the traditional election day advantage for the GOP has been cannibalized? This is a big question that remains to be answered this year.

The Trump Effect

The other big factor this year is the "Trump Effect." Donald Trump is not on the ballot but his presence looms over every race. Will his 2016 supporters turnout to defend his agenda by voting Republican? Will his detractors turnout to vote Democrat as much to protest Trump as anything else?
It is another question that is unanswered at this point. It is particularly interesting as Trump had the support of a lot of blue collar Democrats in 2016. This made the difference for Trump in winning Ohio, Michigan, Pennsylvania and Wisconsin. Will these traditional Democrats crossover again and vote for Republican candidates in Senate and House seats in this election.

What is undisputed is that no President has ever worked harder on the campaign trail in a midterm election than Donald Trump. I have never seen anything close to the work ethic and effort this President has put in. The 72-year old President will have done 30 large rallies since Labor Day  For example, on Monday, November 5 he is scheduled to do three rallies (Cleveland, OH 3:00pm EST, Fort Wayne, IN 6:30 EST and Cape Girardeau, MO 9:00pm CST). In addition, he is participating in a telephone town hall meeting at 10am in the morning with swing-state and swing-district voters explaining why he needs their vote to support his agenda.

Ironically, from a strictly personal political perspective you can argue that Trump would be better off with a Democrat Congress heading into the 2020 Presidential election. Things have been very good economically under Trump. If the economy falters, or the recent stock market correction turns into a big fall, it will be easier for Trump to shift blame away from himself. "If only we had not messed things up by returning the crazy Democrats to power." It is something Trump is very good at.

Final Musings

The fact that there are only 35 Senate seats up for election makes it a little easier to guess how it will turn out. My guess (not a prediction!) is that the Republicans should net 2-4 seats on the night.

435 seats in the House make that a much tougher task for guesstimates. I am thinking that we will end up with a very evenly split House of Representatives whichever way it goes. If the Republicans retain control it will be a margin in the single digits. That means they will lose anywhere from 14-22 seats.

If the Democrats take control it will also be a margin that will be less than double digits. If this scenario occurs it means a pick up from 23-33 seats which would be right in the range of average turnover of seats in midterm elections for the opposition party.

As I wrote in an earlier blog post, a nightmare scenario would be if the House margin is a couple votes either way. That will insure that every special election the next two years will be something akin to the Kavanaugh nomination and a Presidential election all rolled into one. Control of the House could conceivably rest on the results of a single House special election. It is the last thing we need in the country right now.

It is time to vote if you did not vote early. It is then time to tabulate the results.

Crying or cheering comes next.

Been there and done both. As a result, I predict I will be well prepared for whatever the numbers show on Tuesday night (which will undoubtedly end up being Wednesday morning). I am not sure that some others can say the same based on what we have seen over the last two years.

Anchors Away

President Trump has stated that he is considering changing the policy of providing birthright citizenship to babies born on U.S. soil to illegal alien parents by executive order. These babies are popularly referred to as "anchor babies".

This is an issue I wrote about in these pages back in 2015 entitled, "An Anchor Around Our Necks" detailing the compounding costs of birthright citizenship.

The United States is decidedly in a distinct minority in providing citizenship this way. Among developed countries, Canada is the only other country to provide birthright citizenship.

In fact, the trend has been to eliminate birthright citizenship in recent years. Ireland was the last European Union country to eliminate it in 2005. France did away with it in 1993. The UK in 1983.

Australia and New Zealand are other countries that eliminated birthright citizenship in recent years.

There are those who state that birthright citizenship is a constitutional right provided by the 14th Amendment to the U.S. Constitution and therefore can only be eliminated by constitutional amendment. However, this question has never been directly decided by the Supreme Court.

What does the 14th Amendment actually say which was enacted originally to insure that slaves would be recognized as citizens.

Amendment XIV, Section 1, Clause 1:

"All persons born or naturalized in the United States, and subject to the jurisdiction thereof, are citizens of the United States and of the State wherein they reside." (emphasis added)

That seems fairly clear except for the words I underlined above..."and subject to the jurisdiction thereof."

Is a child born in the United States to parents who are illegal immigrants "subject to the jurisdiction of the United States" when those parents are unlawfully present in our country?

This is the crux of the argument that is made by those (Donald Trump included) that believe that the 14th Amendment does not automatically confer birthright citizenship to children of illegal immigrants. At a minimum, they believe that Congress has the right to define what "subject to the jurisdiction thereof" means. It has already been accepted that this means that children born to foreign diplomats do not gain U.S. birthright citizenship nor do members of certain Indian tribes.

I would further argue that the very actions of the federal government in not enforcing the immigration laws means that illegal immigrants that are here have effectively not been "subject to the jurisdiction of the United States" by the consistent failure of our government to enforce the country's jurisdictional borders.  How can an illegal immigrant be considered to be subject to the jurisdiction of our country if they are here illegally but our government is doing nothing about it?

There were an estimated 300,000 children born in the United States last year to mothers who are illegal immigrants. To put that in perspective, that is about 1 out of every 12 births in this country!
Aa result of the prevailing interpretation of the 14th Amendment to the U.S. Constitution each of these children are considered to be United States citizens.

Another 500,000 children are born to legal immigrants. Taken together, births to immigrants make up about 20% of all U.S. births today.

U.S.-born children of illegal aliens are also eligible to sponsor the immigration of family members once they come of age. At 18, an “anchor baby” can sponsor an overseas spouse and unmarried children of his own. At full majority age at 21, he or she can sponsor parents and siblings under our "chain migration" laws.

Can you imagine anyone who voted for the 14th Amendment in 1866 at the federal or state level thinking that we would be conferring citizenship to this many as a result of this provision?

In fact, Senator Jacob Howard was one of the authors of the 14th Amendment and specifically offered the amendment language that added the words, "and subject to the jurisdiction thereof". This is his explanation of the reasons for that language and its import.

I doubt that Senator Howard or others at that time could have envisioned a time in which Chinese, Russian, Mexican or Honduran women would come to the United States specifically to gain citizenship for their child.

I recently had dinner with someone who had just returned from a visit to China. They commented to me that they were shocked at the high number of pregnant Chinese women on their flight from Shanghai to Los Angeles. They told me their flight was loaded with pregnant Chinese women.

What were they doing on the flight? They were on their way to Chinese immigrant birth hotels in Los Angeles specifically to gain U.S. citizenship for their child.

This article from NBC News earlier this year explained what is going on after Homeland Security raided 20 sites that were housing Chinese women awaiting the birth of a child in the United States.

Southern California apartment complexes that doubled as "maternity hotels" for Chinese women who want made-in-America babies were raided early Tuesday, capping an unprecedented federal sting operation, officials said.

NBC News was on the scene as Homeland Security agents swept into The Carlyle, a luxury property in Irvine, California, which housed pregnant women and new moms who allegedly forked over $40,000 to $80,000 to give birth in the United States.

The organizers who allegedly ran the Carlyle site, Chao Chen and Dong Li, used a website to drum up business, touting the benefits of a child with U.S. citizenship: 13 years of free education, low-cost college financial aid, less pollution, and a path for the entire family to emigrate when the child becomes an adult. 

They were funneled to several Orange County hospitals to deliver, but they didn't pay full price — approximately $25,000 — for medical services, officials said. Instead, they got reduced rates for the indigent, ranging from nothing to $4,000, the court papers say.

That translated into big losses for the hospitals. More than 400 babies linked to the scheme were born at just one facility in a two-year period, investigators said.

Of course, this birth tourism is nothing compared to the thousands of women who have entered the United States illegally and then end up giving birth to a baby in the United States.

For example, Parkland Memorial Hospital in Dallas reported that 70% of all its births in 2006 (16,000) were to illegal alien mothers. It is no longer reporting this number ( I wonder why?) but you have to imagine it is even higher today.

The costs of all of this are enormous. 67% of all illegal immigrant births are paid for by Medicaid (in other words--YOU).  The Center for Immigration Studies estimates that the Medicaid costs for births and early infant care for immigrants (legal and illegal) is over $5 billion per year

41% of the illegal mothers of these children have less than a high school education. 40% of these mothers are living in poverty. What do you think the chances that these children will also end up in poverty and on some form of public assistance? As I wrote in 2015, the compounding costs of anchor babies is mind boggling.

President Trump is unlikely to be able to change the policy through an executive order. However, who would have thought that Obama could have implemented DACA in that same manner.

Trump deserves credit for attempting to elevate this issue to public debate. It is an issue that deserves public scrutiny and discussion. Whether it goes anywhere will likely be determined by the midterm vote next Tuesday. Should the Democrats take control of the House you can be sure they will do everything to insure that there is no debate. If the Republicans maintain control, there might be half a chance at a debate. Why do think that Trump wants to use an executive order?

Trump is literally saying "Anchors Away" in more ways than one.