USA Election 2000 – Iranian Edition (And Your $$)
The Iranian election becomes another election mess. The American (the first edition) version requires a Supreme Court to give a final answer. Iranian one? A Supreme Leader gives a final say.
And the Supreme Leader says the incumbent wins.
In a situation like, just like the American original version, a decision made by that few individuals, the decision is ultimately political, whatever the cloak it is actually. In the American original version, it is under the cloak of law. In the Iranian version, it is under the religious leader’s cloak. Note that the Supreme Court Justices are life time appointments just as well.
What ticked? Not bribe. As usual, what is the alternative of the decision? Supreme Leader weighted between incumbent and challenger. Who is a bigger threat to the Islamic Republic? Or for that matter, to the power of clergy?
Challenger is always about “change”. Incumbent is always about “you know what you get. Don’t rock the boat.” This applies to any institution (note, not necessarily a country), any selection process (note, not election), any candidate.
The next question is: what about the protests? Supreme Leader is confident he can manage the internal crisis. If the protests get any worse, it will be between a Tiananmen Square (Iranian Edition) and End of Soviet Union (Iranian Edition). Certainly, Supreme Leader thinks the worst scenario is Tiananmen Square.
Alright, so what does one care about this latest news episode? Political instability drives up the prices of commodities, in particular, the commodities the geography produces. So, in this case, oil.
Oil will become more expensive, if this goes on. The only way oil does not increase further is traders believe the recession is so bad there is no demand for oil anyway, i.e. demand will decrease even if the quantity of supply is not being affected by the political instability of Iran.
Oil exploration companies’ stocks go down (not up). The core material of their product gets more expensive, so their profit margins get squeezed. Consider the following company, BP:
The companies that get affected less so are the American oil exploration companies who have less exposure to Middle East (or think about the Canadian oil companies). And if you happen to own renewable energy companies’ stock, you should see prices going up for your stocks. Given today is Friday, one may be tempted to clear their stock inventory just in case the next episode of this Iranian Election comes up and affect the portfolio.
The things that really distort the prices of stocks affected by Iranian election are: Obama’s announcement on health care and Obama’s announcement on the merger of OTS and OCC.
CNN Advertisement: Time To Buy Republican
The author (John Feehery) of this CNN commentary is a political operative, lobbyist, etc. He makes his living by using his access to the Republicans. When Republicans are in disarray, so is his livelihood. In order to drum up more business, he has to encourage his potential customers to spend money in Republicans. This article is very consistent in his message about “bottom out”. He also points out very explicitly that political entrepreneurs will see opportunities.
He is also very good at organizing his advertisement into 5 bullet points. These points are also in order to of investment relevance rather than political ideology relevance.
All his points are very valid. However, the advertisement taste is a little too obvious.
Since when CNN did distributing ad content in place of news content?
How To Use Swine Flu
This swine flu became a real political event: California declared a state of emergency; Homeland Security is making moves; Obama is making another TV appearance again. It so far looks like the market is reacting to the Fed statement rather than this health event. Banks are up for 3%, S&P are 2% and medical supplies are only up 1.7%. It is almost a drag in the market today.
With this swine flu, manufacturers and distributors of over the counter medical supplies are of interests for products like hand sanitizers, wipes, over the counter drugs, surgery gloves, masks, etc.
Certainly, vaccine makers should go up. However a lot few of those.
Also related industries would be hotel and tourism interests. Retailers and mall operators which have a heavier geographic exposure in the southern states would get affected (Tex/Mex cuisine chains who have more sites in California and Texas, say). This issue will fuel more talks around border control.
Having a tighter border control can be used to divert the attention from gun control once people move their attention back to border violence (if there will still be), drug territory dispute. We are more connected than before. However, this forces lobbyist to be more creative to exploit the issue of the day.
AIG The Sacrifice: The Reflection Of America’s Political Risk
I agree quite a few points of this article in regard to the AIG episode.
Of course, nothing is perfect. I would change a word here:
“It will certainly make Mr. Obama’s task much more difficult when he tries to sell the public [my version would be: investors] on his administration’s ability to manage the rest of the bailout, and when he tries to sell private firms on the public-private partnership that will be needed to make the recovery work.”
Obama will have more difficulty to convince investors his future plans work (already stated in the article). Also, Obama will have more difficulty to get troubled entities to take the bailout. Look at AIG. This bailout actually bites!
AIG was politically insensitive. This story alone will make firms in the future to invest more to mitigate political risk or at least reputation risk (branding), which is not a good news.
In addition, a good portion of the reason for these companies to require a bailout is that their valuation (capitalization) fluctuated so greatly they were literally worthless. So, some companies may realize taking themselves off the exchange is not a bad idea, at least they can insulate themselves from the volatility. Is that what we want: fewer choices for mutual fund managers and pension fund managers? If they have fewer options and social security is running out, then what are to do?
Fewer choices on the exchange also means quicker wealth concentration. Gini coefficient will spike up very quickly. Is that what Obama wants?
Electioneering 102: A Lesson From Green Party of Canada
The federal election in Canada concluded on 2008.10.14. The incumbent party won another mandate. There are a lot of interesting content in this election to fill the media. However, for the purpose of Electioneering, this story may not make the cut to the paper, let alone to the headline. This case study lesson is experienced by the Leader of Green Party of Canada. This biggest contribution of this race is: how to choose a spot to run. The most applicable lesson of this is still city councilor.
Green Party of Canada has been increasing its vote share ever since the turn of the millennium. In 2006, they got 4.48% of the votes and no seats in the parliament. After that election, the Leader of the party then did not run in the leadership race again. It then became an open race and Elizabeth May won the leadership. She was an Executive Director of Sierra Club Canada, with government bureaucrat experience, a law degree and a recipient of Order of Canada. She ran a by-election earlier, against all parties and got the second largest votes in that race.
Green Party has long held the position that they are unable to win a seat because they are excluded from the televised debates. This election proves that a televised debate did not help.
May was looking for an epic race. This could have been the first sign of trouble. An election is not about making a statement. Election is about finding the most representative will of the people. By being the leader and possibly the first elected officer of a party, May’s election is more important than any other candidate. There is a lot of media attention, political resources, volunteer resources, and money involved in a leader’s race. Therefore, it is only prudent to maximum the vote, not to dramatize an epic.
If you are running in a city councilor race (or county board, school board, etc), you run to win. Any other objective is mischievous, and misleading the voters. It is true that people run elections for all kinds of reasons, some of them noble too. However, it is only when you aim to win would you be serving your voters, be honest to your voters, donors, volunteers and other kinds of supporters. Furthermore, if you do not run to win, your result tends to sink, even if you got some special interest groups’ backing because your true primary motives usually affect your plan, execution and result. For instance, since your real motive is a geography A, you divert more resources to that area instead. However, that area may be a contestable area. if the votes are already secured, no need to get vote there. However, you are doing it there to serve your personal interests. So, your volunteer hours are lost, your lawn signs are wasted. Alternatively, you may be interested at a specific donor group. Similarly you wasted your campaign.
Liberal party delivered their promise not to contest against May in order to maximize her chances to a seat, wherever her choosing. This promise is also unlikely to be offered in the next election since the leader of Liberal party is also in his trouble. And no one should plan a race with the expectation that this offer will be made twice anyway.
May placed this epic over at Central Nova, where the incumbent runs a dynasty there: 2 generations of incumbent, close to 10 elections. This is where the second problem is. One should contest in a place to win, not a place to dramatize. By being the leader, she can choose any leader she wanted. She should have picked a riding where
1) The Liberal candidate is not the incumbent, however strong enough that the votes actually matter in her race;
2) The Green votes are decent, say above the 2006’s record of 4.48% votes;
3) Incumbent votes are actually weak; below 50% is minimum requirement. The lower the better.
4) Since there are 3 major parties contesting in every riding in Canada, an ideal riding is where all three parties split their votes, i.e. around 30% each. Of course this is unrealistic.
Election is a contest of organization, stamina of the salesman (candidate), branding (party), money (fundraising) and product (platform). A leader got the luxury of choosing a riding, which most people cannot afford the infrastructure investment to do. Building up a local political network to support is not easy. However, this is fairly accomplishable if you were interested at a city race. Changing a house from this corner of the town to that corner is not too difficult. What is the ideal demographic for you? Ethnic group? Income class? Age group? Occupation? Family status?
If she spent 30 minutes to look around the >300 ridings in Canada, she maybe able to see that there are multiple ridings where Liberal is the incumbent, however with >25% of votes; Green votes are above 5%, and the incumbent got votes around mid 30%.
With 30 minutes of your time, you can see that Welland is one such riding where the incumbent is Conservative. Vancouver Kingsway is another one, where the incumbent is NDP. There are probably others. These 2 may not deliver an ideal environment for victory. However, the point is there are potential sites to choose from.
If May knew that it wasn’t going to be a victory, then dramatizing an epic is not a bad option. However, in your case, don’t run. An election is costly not only to you, but also to your supporters in forms other than money.
If you plan to remove a low performing incumbent, then get all the prospective candidates together. Gamble all resources in only one person. So, all your prospective candidates may want to have a quasi primary to determine who will have the best shot.
What Is The Price Per Vote To Pass The Bailout Bill?
CNN says more banks are likely to fall. It seems like that 700B will get plenty of asset to buy. Now, how much did the additional votes cost to get the bill?
Taxpayers For Common Sense compiles a list of 15 pet projects within the bailout bill (). It would be difficult to determine which provision actually got tucked into the bill to exchange for votes. However, we can see where the most direct beneficiary of the provisions and see the incentives of the votes, especially the switch votes.
Of the 15 listed there, 10 of them are costed out. They total price tag is $26,396 M.
There were 60 switch votes: 58 No-to-Yes, 1 Abstain-to-Yes, 1 No-to-Yes.
If you cross out the direct beneficiary of the provisions listed in the website and plus 2 guesses I have for the research provision (301) and racetrack provision (317), then you get the table below:
|
Provision |
Cost |
Votes |
Cost/Vote |
States |
|
601 |
3300 |
1 |
3300 |
OR, ID |
|
301 |
19000 |
9 |
2111 |
TX, IL, WA |
|
201 Sales Tax Deduction |
3300 |
7 |
471 |
TX, FL, WA, WY, NV |
|
325 |
148 |
1 |
148 |
NY |
|
502 |
478 |
7 |
68 |
CA |
|
317 |
100 |
3 |
33 |
MI |
|
211 |
10 |
1 |
10 |
OR |
|
503 |
2 |
1 |
2 |
OR |
|
602 |
9 |
7 |
1 |
OH, PA, KY, VA |
|
504 |
49 |
0 |
|
AK |
This is a total of $26.4B for 30 votes (some of these votes above are the same votes). This is a total of $890M/vote. These 30 votes cover 51% of all swtiched votes.
The famous archery provision is provision 503. That provision, jointly with 211, gave the bailout bill 1 vote. Together, those 2 provisions cost $12M. The interesting thing is that the House Representative who district covers the biggest beneficiary company Rose City Archery, which is located Mytle Point of Oregon, voted against the bill twice. The original House sponsor is actually Representative Kind from WI (Yes twice). By far, the most cost effective provision is 602 (Transfer to abandoned mine reclamation fund). $9M for 7 votes, $1.3M per vote.
The most expensive provision is 301, $19B. I only identified TX, IL, WA. However, I am sure there are more states which would be benefited because of it. This one so far got 9 votes (and very likely more).
The most cost ineffective is 601, $3.3B for 1 vote. It benefits OR and ID. However, ID completely voted against the bill. I guess they did not exactly want the money.
