The American Clean Energy Act, Global Warming and the Position of China and India

The American Clean Energy and Security Act (Waxman-Markey) was recently approved (narrowly) by the U.S. House of Representatives. The bill now goes to the U.S. Senate for consideration.

There are several provisions of the bill -- some are bold and others modest, some progressive and others status quoist. With respect to Global Warming and Carbon emission reduction, the Act mandates, "Starting in 2012, ACES establishes annual tonnage limits on emissions of carbon and other global warming pollutants from large U.S. sources like electric utilities and oil refiners. Under these limits, carbon pollution from large sources must be reduced by 17% below 2005 levels by 2020 and 83% below 2005 levels by 2050. To achieve these limits, ACES establishes a system of tradable permits called “emission allowances” modeled after the successful Clean Air Act program to prevent acid rain. This market-based approach provides economic incentives for industry to reduce carbon emissions at the lowest cost to the economy."

So, per ACES Act, the United States is using 2005 as the benchmark, and hoping to reduce the carbon emissions by about 17 percent in 2020. 

Has Barack Obama's support slipped in the month of July?

There has been speculation -- reasonable and based on some empirics -- that Barack Obama may have slipped some in the match-up against John McCain in the presidential preference measurement. This slippage appears to have occurred since about July 4th weekend. For example, the fivethirtyeight.com model shows some downturn, and Michael Barone also appears to think so. The tracking polls by Rasmussen and Gall Up show the race to be with in 1-2 points.

However, I am not certain that the preference measurement data are clear on this matter. I think that we need to get some new preference data from Ohio and Indiana, and that will present a more clear pictures, The last preference measures from Ohio and Indiana showed Obama to be in slight lead (2-4 points) in Ohio, and essentially tied in Indiana. Here is my thinking --

(1) It is true that Obama's lead has shrunk in Maine from 20 plus points to about 9 points, it is also true that McCain's lead has ballooned to 20 plus points from about 9 points in Kansas (Rasmussen reports.) But it is also true that Obama's lead in California has expanded to 20 plus points from single digits (Field poll) and to double-digits in most East-coast states and robust numbers in Michigan (Quinnipiac, Sienna, Strategic Vision polls and Survey USA polls.)

(2) Michael Barone argues (July 16th) that "...if one assumes McCain is running a little stronger now, in which states would he be overtaking Obama, assuming a uniform rise across the country? In the South, Virginia (13 electoral votes). In the West, Colorado, Montana, New Mexico, and Oregon (24 electoral votes). In the Midwest, Indiana and Ohio (31 electoral votes). "

But recent preference measures (polls) taken after July 4th weekend show that Obama is leading by 4 points (about the same lead as in June) in Colorado, by about 9 points in Oregon (may be even a little bigger lead than in June), and he is tied with McCain in Virginia (about the same status as in June). There have not been preference measures in Montana, New Mexico and Indian and Ohio in the month of July. (Source, see RealClear Politics data). In any case, Barone's inference is inconsistent with data -- McCain is not leading in any of the states mentioned by him.

The state-by-state polls still appear to show the presidential race to be where it was in the month of June. Ohio will be a big one -- new polling data from Ohio will provide greater clarity.

Barack Obama and the gallop to the Politcal Middle

Barack Obama is racing to the political center, ready to defy stereo-types (e.g. a weak liberal) and spar with John McCain. In this regard, Obama has made several decisions by Obama in the last month or two.

Among those decisions are Obama's solemn undertaking to protect Israel, in a speech to the leading pro-Israeli lobby (AIPAC); Obama's nuanced welcome of U.S. Supreme Court's decisions affirming the right to bear arms by individuals, and the right of appeal to Guantanamo detainees, and gentle disagreement with the Supreme Court's decision rejecting death-penalty for child-rape; Obama's acceptance of the compromise in the Foreign Intelligence Surveillance Act (FISA), which contains a provision granting telecoms companies immunity from lawsuits for co-operating in a surveillance program that conducted wiretaps without warrants;Obama's efforts to lower the rhetoric on free trade and NAFTA, and increased recognition of the importance of trade and markets; and Obama's support and even a call for expansion of faith-based initiatives and programs, and recognition of faith-based community groups.

And now Obama, while sticking to his argument that Iraq war was unjustified and should not have been authorized, affirms that he will listen closely to the advice of the military leaders. While Obama says that the his plan to withdraw the troops in 16 months -- one brigade a month -- is firm, he also suggests that he will "refine" and recalibrate the actual details. Per media reports, Obama said,“What I said this morning what I will repeat, because its consistent with what I have said over the last two years, is that in putting this plan together I will always listen to the advice of commanders on the ground but that ultimately I am the person thats making the strategic decisions.”

Finally, Obama has set a somewhat rigorous condition (surprisingly, so) for later-term abortions. In an interview this week with Relevant, a Christian magazine, Obama said prohibitions on late-term abortions must contain "a strict, well defined exception for the health of the mother." Obama then added: "Now, I don't think that 'mental distress' qualifies as the health of the mother. I think it has to be a serious physical issue that arises in pregnancy, where there are real, significant problems to the mother carrying that child to term."

All these decisions -- and nuanced statements -- move Obama to the political middle, and make it a challenge to categorize and stereo-type him. However, when does that journey to the middle starts to appear a bit opportunistic? Time will tell though so far, I think, that Obama has maintained a sense of authenticity in his journey to the middle. In general, Obama appears to be thoughtful and making sensible changes based on empirics.

McCain, Obama and the Finances

Senator Barack Obama has opted out of the public financing system in his contest for the U.S Presidency, and John McCain has decided to stay in the system. It appears that Obama may have about $250 million to invest in the months of September and October, and McCain may have only about $85 million.

Should McCain be afraid? No and Yes.

No, because I do not think that Obama's financial edge will do much for him in advertising (traditional and non-traditional) for his candidacy and causes. The reason is simple -- time is short, and there will be galore free publicity. Here are some ways that Obama may use his financial resources to increase the scale and scope of advertising. Let us look at various elements of this advertising.

First, Obama can and will probably advertise in almost all the 50 states -- even as his campaign will concede that several states like Alaska have not voted for a Democratic candidate for a very long time. The goal of this exercise to merely scare up McCain's campaign and force him to spend some of his valuable resources -- money and time -- in some of those states lest he should lose. Will this be effective? I rate the effectiveness about 3 on a 1-10 scale (10 being most effective) because when push comes to shove McCain will not divert his resources (he cannot afford to) and thus would call the bluff (not out of choice but out of necessity.)

Second, Obama can use micro-segmenting and try and use different media for diffusing his image. Money provides that luxury. Obama can also try non-traditional approaches and media.

Will be this an effective strategy? Better than the 50-states strategy but not overwhelmingly so. I would rate this strategy to be about 5. The reason is simple. The Presidential race will get plenty of free media coverage from networks, cable channels, print media, blogs, u-tube productions and those Presidential debates. Additional reach -- over and above these -- is likely to have marginal impact. Further, the content/message of the candidate does matter.

The message will determine the basic positioning of the candidate, and no amount of volume of reach can necessarily change that positioning. Two examples of this are: one, though Barack Obama invested thrice as much as Hillary Clinton in Pennsylvania Democratic primary and twice as much in Ohio, the ultimate preference numbers did not change from the forecasts three weeks before the actual voting; two, with less than $1 million investment the 'Swift Boat' advertisement against John Kerry was devastatingly effective. In the first case, the message was the same but in the second case, the message was sharply different and new (whether that was true or not is besides the point -- further, since Senator Kerry did not effectively and immediately repudiate the attacks the message assumed a level of truthfulness as a default.)

Final aspect of this element is that Obama is likely to receive somewhat of a negative coverage from the mainstream media for his rejection of public financing -- this is not huge but one cannot ignore the word-of-mouth value of major networks and newspapers. In this case, the word-of-mouth effect would be negative.

Yes, because Obama might gain a very substantial advantage in voter registration, and mobilization with paid staff and localized promotion and patronage. It takes almost one-on-one to persuade a voter to register, and then actually vote on the election day. The upside of such voter mobilization is monumental. Particularly when the enthusiasm for McCain's candidacy is somewhat muted thus far. For example, in the recent USA Today-Gall Up survey 61% of Democrats said they were more enthusiastic than usual about voting in this year's election, while just 35% of Republicans said that.

Obama can employ this vast resource to mobilizing voters through registering new voters and individual contacts -- paid staff (and volunteers) knocking on the doors, telephonic calls, mobilization on the day of the election. Here, the resources can make a very big impact. I would rate the potential effectiveness of this approach about 7. There is substantially higher marginal benefit to be achieved here.

For illustration, let us examine Ohio (20 electoral votes.) In 2000, Al Gore lost the state only by about 350,000 votes even without any campaign investment. In 2004, John Kerry lost Ohio by less than 120,000 votes. If only Kerry had mobilized 10 extra votes in every precinct in Ohio, he would have won Ohio and the Presidency. Obama can pour his resources in the ground game in Ohio and quite possibly win it given the current sour political climate. Similarly, Kerry lost New Mexico and Iowa by less than 20,000 votes each -- and that can be easily overcome with strong election-day mobilization. In a state like Georgia where about 600,000 African-Americans have not registered to vote are rich Obama-votes. If they can be mobilized to register to vote and actually turn up to vote, Obama can put Georgia in play. In Florida, more than half a million black registered voters stayed home in 2004. Hundreds of thousands more African Americans are eligible to vote but not registered.

Off-shore drilling: The case by and for McCain

McCain has reversed his stance against off-shore drilling, and now advocates it. Obama continues to oppose this. The U.S. Congress currently has a statutory ban on off-shore drilling. What are the pros and cons?

With the high gas prices and improved technologies, voters are open to this idea -- all public polls show that 55-60 percent of Americans support off-shore drilling. It is estimated that there may be about 21 billion barrels of proven oil reserves that are left untouched because of a federal moratorium on offshore exploration and production.

So that should help McCain, right? Not much for two reasons. One, the voters will always be reminded that McCain might be opportunistic and runs counter to McCain's tough-it-out but do the right thing image. Two, the blue-collar, working class, lower income voters who are most affected by high gas prices are also surprisingly principled and tough (they would rather tough it), so McCain may gain no traction with this most plausible demographic group.

The principled-stubbornness of the working class demographic group came to most vivid demonstration when Clinton's advocacy of temporary suspension of gas tax (and Obama's opposition) did not fetch her any favors with this group in the Democratic primaries.

Finally, even if the federal ban on the off-shore drilling was removed it would be a long time before there can be any potential oil production because the individual states such as California and Florida have to make their own determination and then the business of drilling oil has to begin.

The probability of Obama winning the Presidential Elections

The probability of Obama winning the Presidential elections in November appears to be pretty robust. Here is why --

(1) Based on public polls, it is becoming evident that Obama is most likely to hold all the states (Michigan appears close but it is trending Obama's way) that Kerry won in 2004. That would give Obama 252 electoral votes. Add to this Iowa which is almost certain to go to Obama -- 7 electoral votes. That gives Obama 259 electoral votes.

On the other hand, McCain -- at this stage -- is not likely to win all the stages that Bush won in 2004 (284 electoral votes.) McCain is almost sure to lose Iowa (7 electoral votes.) Add to this mix, Ohio (20 electoral votes), Virginia (13 electoral votes), Colorado (9 electoral votes), and New Mexico and Nevada (each with 5 electoral votes) -- there is substantial doubt if McCain can hold these states. That puts McCain at about 225 electoral votes.

(2) The more compelling arithmetic is this. Repeatedly, in large numbers of public polls about 37-38 percent of the likely voters identify themselves as Democrats and about 30 percent as republicans. That leaves about 30 percent as independents.

Assuming both Obama and McCain get 80 percent of their party votes, the differential gain for Obama would be about 6.5 percent. In the cross-over vote of 20 percent, Obama would lose about 1.5 percent leaving a net lead of about 5 percent for Obama. Assuming that Obama and McCain split the independents, Obama's overall lead would be about 5 percent.

The only caveat is the potential Bradley-Wilder effect which accounts for about 5-7 percent.

(3) What adds to the odds of Obama's victory are the extra-ordinarily low approval ratings (in low 30s) of President Bush and the perception that the country is heading in the wrong direction (over 64-70 percent of Americans say this.)

Time for a woman president for the U.S.? Hillary Clinton or ...?

As Hillary Clinton's contest for the Democratic party presidential nomination is becoming less likely, there is a natural and somewhat anguished question: when will a woman be the presidential nominee of one the U.S. parties let alone be the winner of the office?

I think that Hillary Clinton was and remains the most plausible candidate for securing the U.S. presidential nomination and even winning the office of presidency.

Unfortunately, Clinton has let the opportunity silp away from her in 2008 but her best efforts may not have been enough. Barack Obama has not only run a better tactical campaign (for example, Obama wisely contested all the caucus state contests while Clinton did not) but Obama is also the "person" that has met the mood of the country and time in 2008 -- just as Reagan did in 1980, and Bill Clinton did in 1992. When that happens i.e., "the candidate" is in perfect sync with the mood of the country, it is almost-impossible for any other candidate to overcome that.

However, Hillary Clinton is eminently qualified to be the President of the United States. There will be another time -- may be in 2012 or in 2016.

The New York Times has listed some potential women presidential candidates. The names are presented in the enclosed photo-graphics. Clearly, Hillary Clinton is the most credentialed person (who also happens to be a woman) for the U.S. presidency.

Reflection on Louisiana Governor-Elect Bobby Jindal's 2003 gubernatorial contest

This article appeared in The Shreveport Times on November 2, 2003

November 2, 2003

Blanco-Jindal: How was the race won and lost?

G.K. Kalyanaram

G.K. Kalyanaram is a professor and a management consultant who can be contacted at kalyan@alum.mit.edu.

Congratulations are in order to the governor-elect Kathleen Blanco and candidate Bobby Jindal, and the people of Louisiana for an issues-based and scandal-free gubernatorial elections last Saturday.

History would have been made with the election of either Kathleen Blanco (the first woman to be elected as the governor) or Bobby Jindal (the first non-white to be elected as the governor in the modern times), and history was made. Louisiana can be and should be proud.

However, it is instructive for us to understand the dynamics and the outcome of the election. The following are the summary facts of the two campaigns.

Bobby Jindal was leading in the polls by about 5-8 points with about a week to go; the polls showed Jindal to be in a statistical tie or with a very small lead as Louisiana headed to the polls.
Both Kathleen Blanco and Bobby Jindal ran credible campaigns. Blanco projected a ‘gentle and competent’ persona, and Jindal projected a ‘problem solver’ persona.

Blanco’s final-week advertisement sharply attacking the record of Jindal as the Health Secretary in mid-1990s was tough, and Jindal chose not to respond that advertisement.

Blanco secured about 52% of the vote, and Jindal 48% of the vote in the election. The overall electoral turnout was about 51% -- just about what was expected. The turnout of the African-American vote was about 46% and the white vote was about 55% -- numbers very similar to those in the earlier run-off elections.

Jindal secured about 9-10% of the African-American vote --- double the percentage of the African-American vote earned by the victorious Republican candidates in the recent elections. The final tally of the African-American vote for Jindal was about the same as the pre-election poll projections.

However, Jindal got slightly less than 50% of the white vote in almost the entire state except in one or two areas such as Baton Rouge. This mediocre performance was a surprise, and very much unlike the other victorious Republican candidates who have secured at least about 55% to 60% of the white vote. The final tally of the white vote for Jindal was clearly about 6% - 8% lower than the pre-elections poll projections.

This is what many poll analysts have found time and again: When two candidates for an elected office are equally matched and there is parity or near-parity on all the factors, the pre-election polls overstate the preference for the non-majority candidate by about 5%-10%. This is called the Bradley effect in electoral politics.

So the pollsters have to adjust for this phenomenon. If we had done that, then Jindal would have been trailing in the polls in the final weeks of the campaign, and not leading.

The Bradley effect was first observed in the California gubernatorial elections in 1981. Tom Bradley, the highly regarded Mayor of Los Angeles and a political centrist, was the Democratic Party candidate. Bradley also happened to be African-American. George Dukemejian, a well regarded administrator, was the Republican party candidate. Dukemejian happened to be White.

Both Bradley and Dukemejian ran well-matched campaigns. The polls on the eve of the election showed Bradley leading Dukemejian by about 4%. However, Bradley lost the elections by about 5%.

We have observed such phenomenon in other situations including where a non-black candidate contests in a black-majority congressional district.

There are several possible explanations for the Bradley effect. The most common argument appears to be that the non-majority candidate has to demonstrate his/her values are consistently and firmly. It is the question of “empathy and understanding.”

In the Blanco-Jindal race, Jindal let doubts about his “empathy and understanding” grow and settle by not responding to the sharp attacks on his health care record. Hence, Jindal will have to wait for another opportunity to serve.