Wednesday, May 20, 2015

Debate Dilemma

The Republican Presidential primary field seems to get bigger every day.

And we can expect more entrants before it is over.

Last week I provided my initial views on the race and provided my perspectives on the candidates.

I believe the large field is a positive as it provides the opportunity to find the best candidate from a broad and diverse talent pool.

However, there are two practical problems with a big field that are also somewhat interrelated.

Human brains tend to perform poorly when faced with too many options. In fact, faced with too many choices we often make no decision at all. Or revert to a default mode. Confusion often means that we are most likely to just stay with the status quo. Therefore, good choices may never get a fair evaluation in the confusion caused by too much choice.

Barack Obama most likely would never have been elected if he had been one of six challengers to Hillary Clinton in 2008. He owes a good bit of his success to the fact that it was really just Hillary and him after New Hampshire. The rest of the field melted away early (Biden, Edwards, etc). A crowded field would have been to Hillary's advantage.

At the same time, John McCain won the GOP Presidential nomination in 2008 by being the default pick. Romney, Huckabee, Giulani, Ron Paul and Fred Thompson made the selection much more difficult (and risky). McCain was the safest pick in that he had been around the longest and he was the most familiar to voters. When questions arose and each candidate faltered in some way, McCain was the beneficiary.

The other practical problem involves the Primary Debates.

Most voters learn the most about the candidates from the televised debates. It is the one chance most have to judge the character and competence of the candidate but also in how they connect with the voters.

I follow politics closer than 99.9% of Americans but my exposure to most of the candidates running is limited to brief sound bites and slick tv ads. For example, I have seen Scott Walker, Jeb Bush and Ben Carson do a few tv interviews but nothing of substance. I have only seen Carly Fiorina in a couple of YouTube clips. I have had more exposure to Rubio, Christie and Cruz but it still is lacking in my assessment of each as a Presidential candidate.

I have the best feel for Huckabee (2008) and Santorum (2012) because I saw them in a lot of debates in the past two election cycles. Of course, you would have to live on the moon to not have seen Donald Trump a lot but I have no idea how he would stand up in the give and take of political debate.

That is why I think the debates are critically important in the selection process.

However, how do you have a debate with 15 candidates? Or even 12? It is impossible to do and have it be worthwhile for the voters.

You also have the additional problem of the confusion of choice with such a large field.

Understanding the problem, the Republican National Committee is rumored (with the tv networks) to be trying to limit the number of debaters in some way to between 9-12. They have already announced that they are limiting the number of debates to 9-12 compared to the 20 that were held in the 2012 primary season.

Limiting the number of debates seems to make sense. However, limiting the number of candidates to just 9-12 if there are 15 viable and credible candidates is not a smart decision in my opinion.

I agree that having that many candidates on stage at one time is not workable but there has to be a better way.

I think the better way is to break the field down into separate debates and also make it a competitive enterprise.

After all, isn't competition a bed rock principle of the Republican party? And shouldn't the Republican party also be striving to be as inclusive as possible rather than creating some exclusionary rules on who participates and who does not?

Instead of one debate the week of August 6 (the night of the first scheduled debate) have two (or three) with no more than six candidates.

You can then pair the top candidates (by current polls) in one debate and the second (or third tier) in another debate.

You poll after the debate and the 3 or 4 remaining leaders in the polls stay in the top tier and the top two winners of the second (or third tier) polls move up and the lower end of the top tier moves down.

In effect, it would be like calling up someone from the minors to "The Show" to challenge for the starting lineup. Or going from AA ball to AAA ball in the case of moving from the 3rd tier to 2nd tier.

You continue doing this with each scheduled debate until you had a manageable debate field and could manage only one.

My understanding is that the sponsoring networks for the debates hold a lot of power on the rules of participation but the Republican National Party needs to be actively working to push for the format that will best showcase its candidates (and its brand).

New York magazine devotes an entire article to the problem and suggests other creative solutions.

How about the 2016 GOP Primary Bracket?  Each candidate is seeded and debates one-on-one with another candidate with the winner proceeding much like March Madness.

The Republicans have a unique opportunity to educate, inform and entertain the electorate in the coming election cycle. What better way to do it than with a little competition and gamification in the debate process.

It might look like a debate dilemma.

However, it looks to me like it could be an opportunity to have the debates really be a difference with distinction for voters by,

making the process more inclusionary and less exclusionary,
simplifying the process for voters,
adding some competitive excitement to the race,

in order to identify the best Republican candidate.

What's wrong with that?

Monday, May 11, 2015

The Race Is On

The increasing number of GOP candidates formally announcing their Presidential campaigns has resulted in a lot of people asking my views of the race.

First, I don't have a personal favorite at this time. There are a lot of candidates I could support. There is not one that I would reject in favor of Hillary Clinton or any other Democrat I can see running.

In fact, I believe that is going to be the first priority in most Republican voters minds when they vote in the primary. Can they beat Hillary (or another Democrat)?

I am hedging a little on Hillary because I am not altogether sure that she will be the Democrat candidate. She most likely will be the nominee but who knows what else lurks in her closet? In addition, there are still a number of influential Democrats who want someone else but are silent right now. Most of the people who rejected her for Barack Obama eight years ago are still around.

It is still almost eight months until the first primary votes are taken and well over a year until the conventions. A lot can happen in that amount of time.

Running for political office is very similar to positioning a product in the marketplace. The same principles that apply to marketing and branding apply to a Presidential candidate.

Who are your target customers? How do you position yourself against your competitors? What are the principal features of your product? What are your advantages? What are the benefits to your "customers'? What are your key differentiators in the marketplace"?

It is also important to craft a simple message or overriding theme when you are running for President. Presidential politics is especially difficult for voters to figure out. There are a lot of issues and few voters (especially the key swing voters) agree with any one candidate on every issue. This complexity and the cognitive limitations human beings have in dealing with it forces people to construct simplified models of how the world (or the political scene) works in order to cope with it.

This is the notion of "bounded rationality" which the noted social scientist Herbert Simon documented in the 1960's and 1970's that is key to understanding how people make decisions. And they are not always based on rational thought.

I am going to use a little bit of "bounded rationality" myself in analyzing the Republican field and try to simplify it for you (and me) as well as consider it in marketing and branding terms.

First, the reality of Presidential primary politics is that the field narrows naturally over time as there is only so much money, organizational talent and voter support to go around.

The 2016 Republican primary calendar looks like this between February 2-March 15.

Tuesday, February 2
Iowa caucus (GOP)

Tuesday, February 9
New Hampshire

Saturday, February 20
South Carolina

Tuesday, February 23
Nevada caucus

Tuesday, March 1 (Super Tuesday)
Colorado caucuses
North Carolina

Saturday, March 5

Tuesday, March 8
Hawaii Republican caucuses

Sunday, March 13 
Puerto Rico

Tuesday, March 15

I believe that no more than three candidates will still be standing going into Super Tuesday. All the others will have been eliminated in the aftermath of the first three states.

That is why it is important to carve out a "brand" that is unique and gives a candidate the best opportunity to appeal for support

My guess is that there will be three distinct types of brand categories at play in the primaries. Each candidate will be positioned within one of these groups as they try to attract the financial and voter support to gain the nomination.

To advance, each candidate in a brand group will need to beat the others in that group first. My guess right now is that the three survivors will come out of these distinct groups.

You could see two candidates both emerge from the Establishment group, for example, but if that occurs it would be my guess that one of the candidates repositions themselves to either the Evangelical or Non-Traditional brand.

This is how I see the three brand categories right now.

Jeb Bush, Marco Rubio, Scott Walker, Chris Christie, (John Kasich or Rick Snyder if they get in)

Mike Huckabee, Rick Santorum, Ben Carson, Bobby Jindal, Rick Perry

Rand Paul, Ted Cruz, Carly Fiorina, Donald Trump, Lindsey Graham

If I had to handicap the race right now, I would place Bush, Huckabee and Paul as the favorites in each category.

The big question mark right now is that there are so many candidates that are not battle-tested in Presidential politics. Only Huckabee and Santorum (and to a lesser extent, Perry) have the experience under their belt. A lot of candidates can look good on paper but how will they do under the glare of the debate stage and the scrutiny of the national press? This is particularly true of those who have not spent their careers in politics---Carson, Trump and Fiorina. That is why handicapping the race at this point is a fool's errand.

At this point I believe the best candidate on paper is Marco Rubio.  He has a number of advantages. He is young. He is articulate. He is Hispanic. He is from a very important swing state. He has a good looking family.

His major negative is his ill-considered attempt to broker an immigration reform bill that was in direct conflict with the views of the vast majority of GOP primary voters. However, in a testament to his political skills, he has done a good job of pivoting from that miscue and putting some distance between his views then and now. We will see how that plays once the race really gets going.

For now the race is mostly about money. And there seems to be a lot of money flowing in. Jeb Bush will bring in the most. I read one report that suggests he might have $100 million banked by the end of this month. However, will Jeb Bush be able to collect votes as easily as he is raising cash? In my view it will not be easy running with the Bush name. He starts the race with more money and also with more baggage that he only has by way of birth. It may not be fair but it's politics. It's never fair.

Rubio, Perry, Paul, Cruz and Trump may have the resources to get to Super Tuesday and beyond even if they can't gain traction in February. Substantial money in the bank when February begins could blow my three-pronged race theory out the window.

The other interesting thing that I see in looking at the state primary lineup is how nicely the early GOP primary states match up with the swing states Republicans have to win in the general election.

This article in Hot Air points to seven states that the GOP must win to prevail in 2016. Which states are we talking about?

Iowa, New Hampshire, Nevada, Colorado, Virginia, Florida, Ohio.

Each of those states is in the early part of the primary season meaning that winning in those states should hold some greater relevance in selecting the best Republican nominee.

This map shows the electoral math based on the recent leanings of the 50 states.

Note that Florida is absolutely critical in any path to the White House for the GOP.

So keep your eyes on both Bush and Rubio.

It is hard to see where at least one of The Sunshine Boys will not be on the ticket as the Presidential or VP nominee when you consider that math.

Wednesday, May 6, 2015

Infernal, Not Internal

It is called the Internal Revenue Service.

However, there is nothing internal about it.

Internal is defined as something that is inside of something else. That means it has limits and boundaries. I have seen no evidence of any limits anywhere at the Internal Revenue Service of late. On the other hand, there seems to be plenty of malfeasance, misconduct, misbehavior, mismanagement or mistakes. All of which seems to have no limits or boundaries

Infernal is defined this way according to Google's dictionary.

1. "of, relating to, or characteristic of hell or the underworld."

2. "irritating and tiresome (used for emphasis)."

It seems a little more fitting doesn't it?

Let's look at the recent record.

Lois Lerner. We still don't know the full story of what was going on in the Exempt Organizations Unit of the IRS which Lerner headed. However, all the evidence points to the fact that organizations were being targeted by the IRS based on their political views.

Lerner took the Fifth and we were later told by the Commissioner of the IRS John Koskinen that Lerner's emails had been lost forever after a computer crash and could not be retrieved from its archival storage. Of course, we found this was not true and it has subsequently "found" 35,000 Lerner emails of which 6,400 were just turned over to House of Representatives this week.

Of course, we all know what would happen to a taxpayer if they told the IRS they lost their supporting documentation.

Wayne Allyn Root. Mr. Root was in the same graduating class at Barack Obama at Columbia University in 1983. However, he has claimed that, despite having the same major as Obama, he does not know one person in his class at Columbia who knew Obama. Needless to say, he has been a vocal critic of the President over the years.

Root also found himself to be a frequent target of the IRS Audit Division after he starting voicing his concerns about Barack Obama, a fact that he did not think was coincidental, and which he wrote about in 2013.

This week he updated the story with new evidence in his IRS audit file which he recently obtained in a Freedom of Information Act (FOIA) request. I was a tax attorney for many years and was often involved with IRS audits, appeals and tax cases. The documents certainly raise questions in my mind about what the IRS was doing in this case.

You can view the documents yourself here and make up your own mind. Mismanagement? Misconduct? Mistake?

Taxpayer Service. It was also recently reported that 8 million phone calls from taxpayers went unanswered during tax season as the IRS cut millions from taxpayer services. Such much for Service in the name as well. Only 40% of those who called the IRS got through and many of them were put on hold for as long as 30 minutes.

Commissioner Koskinen stated that the reason that they had to cut taxpayer services was because "the agency is required by law to implement the health law, leaving him with few other places to cut." However, there seem to have been plenty of things in Obamacare that were in the law that ended up not being required. Funny how that works.

Obama Stimulus Tax Credits. It was reported this week that a recent Treasury Inspector General audit found that the IRS doled out more than $5.6 billion in refunds on tax returns for tuition tax credits. The questionable claims involved almost 4 million students where there was no documentation from the college that tuition has been paid or was from a school that did not qualify under the law.

The Inspector General stated "the IRS still does not have effective processes to identify erroneous claims for education credits.”

Almost $6 billion in bogus refunds in just one year. And we keep hearing that our taxes have to be raised because there is not enough money?

IRS Tax Cheats. Another report by the Treasury Inspector General that was released today found that the IRS refused to fire the majority of its workers who were found to have cheated on their tax returns. In fact, in some cased these IRS employees were actually promoted within a year of the offense.

During the decade from 2004 to 2013, the IRS identified nearly 130,000 potential cases of tax violations by its own employees, and concluded about 10 percent of those were actual violations. 
Of those 13,000 cases, 1,580 were deemed to be intentional cheaters, and they were sent to managers for discipline. But in 60 percent of the cases, the managers refused to fire the employees.
Among the abuses were employees who repeatedly failed to file their returns on time, those who intentionally inflated their expenses and those who claimed the stimulus homebuyer’s tax credit without actually buying a home.

Take another look at the IRS logo.

Note the scale of justice.

Does that look the way the IRS is doing its job?

We deserve better.

Infernal, Not Internal.