My Take on the 2012 Election

Demographics were the big winner of the 2012 election. Those who understood the electoral consequences of this came up smelling like roses. Those who didn’t, now emit the pungent odor of rotten eggs. The implications for all of us are huge. The bottom line is that the United States is well on its way towards becoming the first large, multi-ethnic, and even multilingual country in the history of civilization, similar to the city state of Singapore today.

What was billed as the closest and most important election in history turned out to be a landslide in favor of the president, 332 electoral votes to 206. Obama lost only two states that he won in 2008, North Carolina and Indiana. He trumped Romney by 3.4 million votes. Obama won every battleground state by a margin of 1%-7%, except North Carolina, where he lost by 2%.

The leftward shift in the senate was even more amazing, given all the Republican trumpeting about an impending takeover by their party. The Democrats picked up two seats, taking their lead to 55, against 43 Republicans and two independents. We now have our first openly gay senator, Tammy Baldwin, from Wisconsin. It should certainly make for some interesting speeches in the August chamber.

I ended up correctly calling the outcome in all 50 states (see “It’s Still Looking Like an Obama Win”). Then, I said the president had an absolute lock on 272 votes needed to win, but that there was a distinct possibility that he would sweep the battleground states, ex North Carolina. In the end, that’s exactly what we got. My call on the immediate market aftermath was not quite as good.

Here are my analysis of the results of the battleground states with the number of electoral votes at stake:

Florida (29)-200,000 immigrants from the Dominican Republic since 2008 who, entirely registered as Democrats, were decisive. They received an additional push from young Cubans, ignorant of the Bay of Pigs, who have turned their voter bloc blue.

Virginia (13)-The overflow of government employees and professionals from the Washington DC suburbs was enough to push this state into the Obama column for the second election in a row.

Ohio (19)-It was all about union organization and the car industry, which Romney shunned. In the end, the vote wasn’t even close.

Nevada (7)-Democratic registrations outnumbered Republican ones 4:1, despite busloads of supporters brought in from Utah to help the right.

Colorado (9)-Here the effort to legalize medical marijuana ended off pulling in far more liberal voters than conservative ones. The growth of the Hispanic vote was another major factor.

Pennsylvania (20)-was never really a battleground state, although it was billed as such. Native son, vice president Joe Biden, had a big presence here.

Wisconsin (10)-A bruising recall election against a conservative governor, which he narrowly won, really activated an angry Democratic base. The selection of an extremist conservative vice president candidate, Paul Ryan, cost the GOP tens of thousands of votes.

Iowa (7)-Obama swept the urban population centers, as he did across the country. He also posted his strongest results among white, blue collar workers sympathetic with the auto bailout.

South Carolina (15)-is a mystery to me, as it was subject to the same urbanization trend in Virginia, but North Carolina went right instead. Go figure.

The real shocker was how wrong the polls were, with many showing races a dead heat to the bitter end. The Romney crowd made much of the inherent flaws in the polling process, claiming vociferously that the mainstream ones were greatly understating their candidate’s strength. Every time I researched these claims I found them to be baseless, and in-fact found more reasons why it was the Democratic vote that was undercounted; no polling of those only using cell phones, cherry-picking of conservative neighborhoods and income groups, and so on.

As Election Day approached, the conservative claims of polling flaws became more bizarre. One commentator insisted that when pollsters called, the liberal unemployed were there to answer, while conservatives were gone at work. The actual outcome was that in many races, the Democratic vote was understated by 10%-15%. The Missouri senate race, which pitted Republican, Todd Aiken, against liberal Claire McCaskill, went to the liberal by a stunning 15.2 points. It was called a tie the night before. Conservative polling companies, like Rasmussen, will never have a shred of credibility again.

I don’t believe that there was a rightwing conspiracy to bias the polls. Instead, they fell victim to what I call “old model disease”, which I frequently see in the business world. Demographic trends in the United States are moving so fast that few can keep up with them. Romney would in-fact have won the election with the  2008 voter base. But we don’t have that country anymore. The Obama campaign figured this out early and structured their campaign accordingly, with ample assistance from friends at Google (GOOG), to great success.

From 2008 to 2012, the white vote fell from 74% to 72% of the total, while nonwhite edged up from 27% to 28%. The shift was much more pronounced in the battleground states. In Ohio, the white turnout plunged from 83% to 79%, while nonwhite soared from 17% to 21%. In Florida, the white vote cratered from 71% to 67%, while the nonwhite leapt from 29% to 34%. In the end, Romney captured fewer votes than John McCain in 2008. These trends are certain to accelerate into the 2016 election and beyond, with the following long term implications:

*George W. Bush will be the last white male president elected in US history. Future elections will see dueling minority and women candidates court the non-white vote.

*Arizona will become a battleground state in 2016, delivered there by a rising Hispanic population and liberal tax refugees fleeing California.

*Texas will be the next battleground state in 2020. Since 2000, the population has increased from 20.8 million to 25.7 million. Some 75% of the increase has been black or Hispanic. This is turning safe Republican seats into contested ones, as was made clear in the reapportionment thrown out by the Supreme Court. The first evidence of this came last week when the GOP lost its super majority in the Texas legislature.

*After taking two years off to write another book, Hillary Clinton will capitalize on these trends in her 2016 run at the presidency.

*Expect to hear from the mayor of New York City, Michael Bloomberg, the ultimate party switching chameleon of American politics. Whether he runs as a Republican, Democratic, or independent, Jew or gentile, is anyone’s guess. He could well bring a resurgence of the old “Rockefeller Republicans” for which the country is sorely in need, fiscal conservatives and social liberals.

*Gay marriage initiatives passed in four states. Next to come: an onslaught of gay divorces.

*Decriminalization of marijuana also did well, like in Colorado. The choice was simple: tax and regulate weed, or raise taxes to pay for locking up tens of thousands of offenders.

The other big winner in the election was bipartisanship. Too many voters remember the last time we went over a cliff, the one regarding the debt ceiling negotiations in July, 2011. Over the following six weeks, the value of their IRA’s and 401k’s plummeted by 25%. I think that the higher-ups in the Republican Party have access to their own private polls and were already well aware that the election was lost. New Jersey governor, Chris Christie, would not have endured that love fest with arch enemy Obama in the aftermath of hurricane Sandy if he thought he would be out of a job in a week.

I have a theory about what happens next. Obama is now a one-term president who will never run for public office again. He gets to choose whether he becomes a footnote, or a chapter in history. He may well abandon his supporters on the left to strike a deal with Republicans over the fiscal cliff and entitlements reform. If he pulls that off, stock markets will rocket, and he will go down in history as the president who saved the United States. This is a much more likely scenario than you think and has plenty of precedent. Remember, only Nixon could go to China.

We have all earned a well-deserved rest until the 2014 midterm elections, when all the same issues will be fought over once again. The campaigns should start in about seven weeks.






Was Bipartisonship the Big Winner in 2012?

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