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You are trying to convince others that the product you are selling is high quality. Your target audience is concerned that the product is low quality. So your sales pitch should be credible – it should be convincing that the sales pitch would not be made by someone who is selling a low quality product.

Your target customers are also salesmen. They sell their own products and use a certain kind of lingo when they pitch. They use this lingo even when they are selling bad products.

Since you are pitching a product to them, you are tempted to use language they understand. But here is the problem: they know they use this language even when are makin’ stuff up. If you use that language, they suspect you are makin’ stuff up. So they do not believe you.

So, you have to come up with your own jargon, one your customers are unfamiliar with. Of course, back up your pitch with facts and logic. But if you pitch seems like BS, the evidence will have to be all the stronger to help you. If you have no facts and logic on your side, only a unfamilar pitch has any chance of succeeding.

Incredible piece by Dani Rodrik on a plot to discredit his father-in-law, a Turkish general:

On a drizzly winter day four-and-a-half years ago, my wife and I woke up at our home in Cambridge, Massachusetts, to sensational news from our native Turkey. Splashed on the first page of Taraf, a paper followed closely by the country’s intelligentsia and well-known for its anti-military stance, were plans for a military coup as detailed as they were gory, including the bombing of an Istanbul mosque, the false-flag downing of a Turkish military jet, and lists of politicians and journalists to be detained. The paper said it had obtained documents from 2003 which showed a group within the Turkish military had plotted to overthrow the then-newly elected Islamist government. The putative mastermind behind the coup plot was pictured prominently on the front page: General Çetin Doğan, my father-in-law

Begs the question: In a comparison between two types of pseudo-democracies – voting constrained by threat of military coups or voting manipulated by dirty tricks – which is the better system?

 

A division in a company, division A,  is trying to find talented people. They have a number of positions to fill and they can fill them now or wait to find better candidates. Once a position is filled, it is hard to terminate employment for a few periods at least. The profits of the division depend both on the quantity and quality of the people employed.

This system creates an option value to waiting. Given its payoff function, the division has a quality bar for hiring. The quality bar depends on the number of unfilled slots. It leaves some slots empty deliberately to capitalize on option value. There is another threshold for firing, also with an important option value component in its determination.

A CEO is hired to build value. He is focussed on the short term. For him, unused resources mean lower output – the quality is less important. So he starts allocating resources across divisions. If a division has unused resources or positions, the CEO gives them to another division if they can come up with a candidate that passes their bar.

Let’s assume the divisions have private values – they put zero value on the other division’s success. (Microsoft recently reorganized itself because different parts of the company were at war with each other.)

For each division, the option value of an empty slot declines – it can now be filled by someone from the other division. The incentives are obvious – both divisions lower their standards for hiring and firing. There is a race to the bottom.

Counterintuitive effects arise if there are common values – each division takes the other’s success into account. Suppose division A’s standards for hiring are originally higher than division B’s. Division A faces much the same incentives as in the case of private values – it will lower standards to pre-empt slot reallocation to division B. But division B, since it now wants to prevent the decline of division A, will raise standards so the principal will not give it division A slots. The fact that this seems so implausible argues in favor of private values.

In any case, even in the case of common values, the divisions’ equilibrium response to principal short termism will not achieve the first best. A better strategy is to reallocate slots between divisions ex ante. The reallocation should reflect the principal’s payoff function as well as those of the divisions. Then, let the divisions make their own decisions on hiring and firing.

 

Just went to a talk by Jesse Shapiro where he gave an overview his work on the media, much of it joint with Matt Gentzkow. One theme is that competing newspapers with different party affiliations generate more information for the electorate. How fitting to return to my office and find this Guardian discussion (by Howard Reed) on FT takedown  of Piketty (by Chris Giles).  Main issue is that FT did not account for differences in way wealth is measured across separate series which are then merged into one time series:

To summarise, Chris Giles’s investigation of Piketty’s data has uncovered some errors and inconsistencies which Piketty will hopefully address in future work. This shows the importance of quality assurance and third party checking of all results from statistical analysis – particularly when they involve spreadsheets, where it is very easy to make errors.

However, Giles then goes on to make a very serious error of his own in handling the UK data: he treats changes in the way wealth inequality is measured over the decades as if they were real changes in the underlying distribution of wealth. This error leads him to the misleading conclusion that wealth inequality fell in the UK between 1980 and 2010, whereas in fact it has increased (although not by quite as much as Piketty’s published results would suggest).

In some ways, the Guardian discussion is even clearer than Piketty’s own response today. This reflects the universal truth that (good) referees and discussants can often explain your paper better than you can yourself.

But this all leaves one question unanswered: When is Piketty going to respond to Debraj? He disputed Piketty’s theory not his data.

Your kid leaves her phone lying around. You find the scatterbrain never bothered to change her password as you guiltily break into her phone. You follow the trail of texts from last Saturday night. The slang is beyond you but Google translates. Shocked you find the supposed naïf and her friends were trying score some pot and booze from the cool crowd in school.

How should you respond?

You immediately want to go Putin-style hard on her ass. Confrontation, grounding, extra math classes. But any confrontation will likely reveal you accessed her phone. The stakes will only increase. Password changes, another phone purchased with the proceeds from the baby-sitting business..who knows where it will all end up?

You think through your strategy. Before this crisis, your threshold for the gateway drug was caffeine. So no Coca Cola has crossed the girl’s lips. But it seems she’s graduated from Izzes to Corona. Surely that worse than Coca Cola so you should come down like a ton of bricks? But one thing is certain – your access to her secret life is over because she’ll close off the information superhighway. How will you know if and when she’s “chasing the dragon” as people apparently said when you were young? You realize your threshold for intervention is coke (the drug) not Coca Cola. Just keep an eye on her messages till you see “yeyo” and then intervene.

You contemplate home schooling. You head over to the liquor cabinet and fix yourself a Scotch. Straight, no chaser.

 

 

 

Eric Posner makes a key point:

After the collapse of the Soviet Union, Ukraine inherited a huge nuclear arsenal, which it subsequently gave up. In return it received assurances from Russia,  the United States, and the United Kingdom that its territorial integrity would be respected. These assurances were embodied in the Budapest Memorandum of 1994. While the United States and the UK complied with that agreement by not invading Ukraine, Russia did not.

What if Ukraine had retained its nuclear arsenal? It seems more than likely that Russia would not have invaded Crimea. Putin might have calculated that Ukraine would not have used its nuclear weapons in defense because then Ukraine would itself have surely been obliterated by Russia. But the risk of nuclear war would have been too great; Putin would have stayed his hand. (However, it is possible that Ukraine would have been forced to give up its nuclear weapons one way or the other long before 2014.)

So between meaningless paper security assurances and nuclear weapons, the latter provides a  bit more security. One implication of the Crimea crisis may be the further unraveling of the nuclear nonproliferation efforts that President Obama has made the centerpiece of his foreign policy.

I would add that a similar implication follows from the lessons of Libya.

A rational player concedes to a known crazy type in a negotiation. If the crazy type is committed to a tough strategy, meeting that strategy with toughness leads to disaster. Hence, a rational opponent will concede. But this means a rational type has the incentive to pretend to be crazy. Then, a rational opponent will still concede as crazy and rational types pool.

This strategy might be effective in a two player game with one-sided incomplete information. But if one side is the Republicans in the Senate, it is not going to work because the McCain, Ayotte, Collins… part is too rational to send the country over the debt limit. So what to do?

One strategy is to compromise and try to win the Presidency. This is the establishment strategy with all its prescriptions of outreach to women and immigrants. But only a centrist appeals to the wishy-washy median voter. So if you are Ted Cruz, you cannot get the policies you want via a centrist Republican winning the Presidency.

The other strategy is to make commitment credible. This involves primarying those who do not vote crazy. Partisans turn out in droves in primaries and even a rational politician who wants re-election is forced to act/vote crazy to get into office. Then you have enough crazies or acting crazies to filibuster if your demands are not met. In essence, you give up on winning the Presidency and focus on ruling in opposition as a minority.

 

 

He has a blog (!):

Carl Reiner on Twitter last week, worried about the current Government shutdown, said this was cause for great concern in the world’s leading democracy.  And I thought, leading?  Who’s following?    The answer would appear to be no one.

After one of the recent school shootings a young mother said to me, “What must you think of us?   You must think we’re all mad.”     Mad certainly, but not all of you.

Half of America seems to be entirely enviable, movies, books, TV, arts, liberal democratic institutions, great centers of learning and research, gay marriage, social freedoms, etc. etc.

The other half does seem to be, well, nuts.

From the always interesting Erik Erickson at Red State:

So the question is do we want to stop Obamacare or do we want to stop the debt ceiling increase? My view is that we cannot do both at the same time. We might dare to dream, but the debt ceiling will be increased one way or the other.

Right now the GOP is holding up very well in the press and public opinion because it is clear they want negotiations. The GOP keeps passing legislation to fund departments of government. It has put the Democrats in an awkward position.

But the moment the GOP refuses to raise the debt ceiling, we are going to have problems. Remember, the last time you and I wanted the GOP to fight on the debt ceiling, the attacks from our own side were particularly vicious.

They’ve been vicious over the shutdown too, but now that we are here, the water ain’t so bad and only a few ankle biting yappers continue to take shots at conservatives from the GOP side.

It will not be so with the debt ceiling. And the GOP will no longer seem very reasonable. The debt ceiling fight will become an impediment to undermining Obamacare.

The main target is defunding Obamacare. Since the House will cave on the debt limit, not good to link defunding Obamacare to the debt ceiling. Link it to CR. Logic seems good if you like the objective. Also, it reveals that right believes debt limit will be raised. Hence, bondholders can relax.

From National Memo:

A day in the life of the emptiest suit in Washington:

7 a.m. You wake up, light a Camel. Read a pink Post-it left on the refrigerator by your wife: “John, don’t ever forget, YOU REALLY ARE THE SPEAKER OF THE HOUSE!!! Also, we’re out of bagels.”

7:30 a.m. You lie in your tanning bed meditating about the government shutdown, wondering if it was such a brilliant idea to let it happen. You put on some Pink Floyd, “Dark Side of the Moon,” but that doesn’t help.

8:00 a.m. On the ride to Capitol Hill, your driver remarks that there’s not much traffic in the city, no tourists lined up to see money being inked at the Bureau of Engraving and Printing. You smoke another Camel.

Hiaasen has a new book out.

Leviathan_by_Thomas_Hobbes

 

From political scientist Gary Cox at the Monkey Blog:

The idea goes back to England’s Glorious Revolution, where MPs fought hard to put the Crown on a short financial leash, so that they could control Crown officials’ actions. Although they did not use the term, English arguments about what would give Parliament bargaining leverage vis-à-vis the Crown hinged on the budgetary reversion.  Because expenditure authority would lapse every year, forcing portions of the government to “shut down” in contemporary American parlance, parliamentarians were assured the Crown would seek a new budget every year — whereupon they could bargain for attainment of their various goals.

Eventually the power of the purse meant the monarch became a figurehead, the House of Lords a rubber stamp and power truly resides in the House of Commons. So, the analogy would be that the President becomes an (elected) figurehead, the House of Lords becomes an (elected) rubber stamp and the House of Representatives becomes the center of power. And the Tea Party Republicans want to turn us into Britain!

President Obama may or may not have the constitutional authority to raise the debt limit without Confressional approval. But he has not because:

[S]ome observers outside government in Washington and on Wall Street, citing a game theorylike approach, suggest that the president’s position is more tactical than fundamental, since raising the possibility of a way out for the White House like the constitutional gambit would take the heat off Republicans in Congress to act on its own before the Oct. 17 deadline.

This is Schelling 101 and of course is based on Sun Tzu:

When your army has crossed the border [into enemy territory], you should burn your boats and bridges, in order to make it clear to everybody that you have no hankering after home.

If the federal government shuts down on Oct 1, only essential staff get salaries. Congress is considered essential.

After the government shutdown, there will be a blame game to determine who gets held responsible for the closing of national parks etc. Either or both sides could in principle suffer the negative hit from the shutdown. Each party has to do something to get the upper hand in the argument. The first to renounce their salaries during the shutdown will get the upper hand.  They can say ” We share the pain of the shutdown with the American people and stand in solidarity with them. The other side is not suffering and is inflicting pain on all of us – they have nothing to lose and are advancing an extreme political agenda which is not in the interests of the American people.” The other side will soon capitulate and give up their salaries too. But the second-mover does not reap the rhetorical benefit. There is huge incentive to move first. So, there is a pre-emption game and everyone renounces their salaries.

There are two rationales for a limited strike on Syria: (1) Deter Assad from using chemical weapons again and (2) Send a signal to Iran that the US will enforce a red line against nuclearization.

The implicit threat of a tough response from the principal if an agent takes a Bad action must be coupled with the promise that there will a soft action if he takes the Good action. If the principal always takes the tough action as he is a hawkish type or always takes the soft action as he is a dovish type, the agent’s incentives are not responsive to the principal’s strategy. In the absence of incentives, the Bad action is optimal for the agent. The principal’s welfare is low because the agent takes the Bad action. The principal has to signal he is a coordination type to truly change the agent’s incentives.

Voters don’t like war just for the sake of it – they pay the costs and see little benefit (Kantian peace). But they can be convinced to go to war if there is a serious national security threat. There are coordination types. By going to Congress, the President imports the preferences of the median voter. The agent knows that the Good action is more likely to be met with a soft response and a Bad action with a tough response. The agent responds is more likely respond with a Good action. So the President’s payoff goes up whatever his true type. Hence, going to Congress is a great idea for the President whether he is hawkish, dovish or coordination type.

Our garbage cans sit on a back alley that is shared with a large apartment building. Last week, I found that our bins were full of trash left by a couple of people from the building. Their names and apartment number were on several Amazon boxes so I left them a note saying “Please do not dump your trash in our garbage cans. If you carry on doing it, I’ll call the City and complain.” Next morning, when I went out to the alley, I discovered several mattresses, a bed frame and other furniture.

I was attempting deterrence – “If you do x, then I will punish you with y” – but instead I caused escalation. I carried out my threat but it seems my erstwhile neighbors had moved out so my threat had no bite. This is an example of a generic problem in international relations – you take an action that is meant to deter but it backfires and causes escalation. We face a similar problem in Syria.

First, there is an international “norm” against the use of chemical weapons. Implicitly, it contains the threat that anyone who uses chemical weapons will face punishment of some form. The international community wants to make sure Assad does not use chemical weapons again, so someone has to step up and punish him. Or so the argument goes.

Second, there is the issue of “reputation”. The President threatened Assad with repercussions if he crossed  a “red line” on the use of chemical weapons. We also threatened Iran with repercussions if they cross their own red line with nuclear development. So, to maintain our credibility with Iran, we have to carry out our threat to punish Assad.

This akin to the reputation model of the chain store paradox as studied by Kreps and Wilson. A chain store faces entrants in many towns. If accommodation is cheaper than fighting in any one town and these payoffs are common knowledge, there is no predation via a backward induction argument. But if the chain store might be run by a “crazy” entrepreneur who loves to fight entry, a “rational” type will pretend to be crazy. Since both crazy and rational types fight entry, entrants should stay out.

Something like this argument lies beneath the “red line” argument for a limited strike against Assad.

First and foremost, we can attack Syria even if they do/did not use chemical weapons. In the chain store paradox this cannot happen – the chain store fights entry if it occurs but it can’t just fight for the hell of it if entry does not occur. In Syria, we can try for regime change and employ the use of chemical weapons as an excuse to intervene militarily. We can do this even if Assad backs down. This may seem farfetched to us but after the experience in Iraq and Libya as a pose to the survival of the regime in North Korea, this does not seem implausible to outsiders. So, if Assad thinks American will attack whatever he does, this does not increase his incentive to back down. Expecting attack, he might fight harder.

Plus Iran get the same signal – America wants regime change. So, they will redouble their efforts to go nuclear.

This is as plausible a forecast of future events as any other.

Israel uses it, Saddam used it, the US uses it w.r.t. Taiwan vs China policy and now Larry Summers is using it – strategic ambiguity.

[W]ith a high-profile appointment like for Fed chair or the Supreme Court, vagueness becomes a virtue. When Senate confirmation is the goal, a candidate wants to maintain wiggle room and let people project upon you whatever their preference is.

What Summers is trying to do is to create a situation in which conservative senators view him as a tough, no-nonsense central banker who will maintain the integrity of the dollar against those dirty hippies who want to debase the currency. Simultaneously, he wants liberals to view him as someone who will do whatever he can to try to strengthen job creation and find creative ways to improve growth.

Now we pretty much know Israel is nuclear but at its strategy’s inception things were not so clear. The US has not had to openly side with Taiwan or China in a significant conflict etc. This is important because it is hard to maintain ambiguity about your true preferences or nuclear status if you have been forced to reveal them in the past. Larry Summers has revealed lots about himself in the past either through policies he has embraced or comments he has made. Even if these opinions were not necessarily about monetary policy, they reveal the intellectual framework and biases that inform his economic worldview. So it is impossible to maintain strategic ambiguity as a stance.

The Democrats are threatening the change the filibuster rules in the Senate. The repercussion may be a significant response by the Republicans when they take control of the Senate. This may be quite soon if Nate Silver’s forecasts pan out. 

But perhaps the magnitude of the response can be quantified by examining history? Legislation has to be approved by the House, Senate, President and often the Supreme Court. How would a simple majority rule in the Senate have changed legislation?  Repealing Obamacare, civil rights, etc might be hard even with Senate majority rule. Cabinet and other appointments require Senate approval. How would a simple majority rule have changed personnel? John Bolton was a recess appointment at the U.N. – things would not have been different if he had been approved by Senate majority rule.  Etc , etc.

Probably someone has studied this already…

Via ESPN:

“Thibs is a guru,” Gibson said. “He understands the game plan.
“He had me guarding Ray Allen. That’s how much confidence he has in everybody’s ability to guard on defense. He really drew up and knew what the team was gonna do.
Every time they ran down and ran offense, it was exactly what Thibs showed us on paper.”

I was watching Fox News and they were discussing whether the law needed to be changed so US citizens could be interrogated at length without being told their Miranda rights. The rationale is that the suspect is willing to give information if he knows it will not be used against him in a court. Also, he will be more pliable with no lawyer present. And if the information is very valuable, this is a price worth paying. (At least I think this was the gist of the Five on Fox crowd.  I was a bit inebriated after a boozy conference meal at the Princeton Conference on Political Economy.)

The Five on Fox usually rail against rampant Leviathan – an uncontrolled government usurping the rights of honest, gun toting, red meat eating citizenry. That same Leviathan, if given the power to use domestic enemy combatant status, would apply it more and more broadly. A domestic enemy combatant is actually harder to define objectively than an assault weapon. A slippery slope would undoubtedly ensue and regular citizens would face being interrogated as enemy combatants. This is the risk of adopting the view of the illustrious Five.

But what about the benefits of greater Leviathan power, the power to interrogate true enemy combatants? We know Leviathan breaks the law at the risk of being held to account in court. There is no point running this risk in run of the mill cases. But there is a benefit in true enemy combatant cases. No jury will convict Leviathan in the latter case – the court of public opinion will replace the court of law. But egregious violations in run of the mill cases will surely lead to convictions by triggering the feeling “that could have been me” in jury members. So, roughly speaking, the law will be broken if and only if the case merits it.

Hence, there is no need for “domestic enemy combatant” status w.r.t. Miranda rights.

HT: I believe Becker and/or Posner made a similar argument years ago. If someone can tell me the reference I would be grateful.

concorde

James Surowiecki has a great article about why the Jets are sticking with struggling quarterback Mark Sanchez:

[T]he Jets have invested an enormous amount of energy and money in Sanchez, and, assuming that no one will trade for him, they are contracted to pay him $8.25 million next year, whether he plays or not….

In a purely rational world, Sanchez’s guaranteed salary would be irrelevant to the decision of whether or not to start him (since the Jets have to pay it either way). But in the real world sunk costs are hard to ignore. Hal Arkes, a psychologist at Ohio State University who has spent much of his career studying the subject, explains, “Abandoning a project that you’ve invested a lot in feels like you’ve wasted everything, and waste is something we’re told to avoid.” This means that we often end up sticking with something when we’d be better off cutting our losses—sitting through a bad movie, say, just because we’ve paid for the ticket. In business and government, the effect pushes people to throw good money after bad.

Jeff and I have a paper, Mnemonomics: The Sunk Cost Fallacy As A Memory Kludge, that offers a primitive theory of this “Concorde effect” as a response to limited memory. Mark Sanchez was hired years ago. At that time there was a rationale for why he would be a great QB for the Jets and hence he was paid a high salary. This rationale for his hiring has been lost in the mists of time but his salary is recalled perfectly. His salary encodes the rationale for his hiring – the higher the salary the better must have been the rationale for his hiring.  Even if we have forgotten the details, the rationale must have been good if Sanchez was paid a high salary. Therefore the higher the salary, the greater the chances of retention even when future events creates costs of retention.  This is the Concorde effect. As far as Mark Sanchez goes, mnemonomics does not do too bad a job.

But an obvious alternate theory rests on reputation:

“Taking the original decision-maker out of the picture and letting a fresh pair of eyes look at the pros and cons can help,” Arkes says. He points to a…study of a bank that found that loan officers were reluctant to acknowledge that loans they’d made had gone bad, whereas new executives were far more likely to take the loss and move on. Whoever becomes the Jets’ new general manager will have no personal or reputational investment in Sanchez, which should make it easier for him to be more objective, though he’ll still have to persuade the head coach and the owner.

There’s surely a lot of truth to this theory. But there is a countervailing effect too. Managerial turnover generates limited memory – who knows why the previous CEO made the decisions he did? If he was smart, it would be good to accord his decisions some respect and see them through before trying out new ideas. Perhaps the best CEOs understand this. From our paper:

For example, when John Akers stepped down and Lou Gerstner became C.E.O. of IBM in 1993, he was determined to “carry out a set of policies put in place by none other than the much-maligned Akers.” He was not “rushing to make significant changes in vision” but was “still following through on Akers’ two-year-old restructuring.” He believed that “IBM has yet to test fully many if the changes Akers put in place” and said, “I want to make sure the current system is implemented before we try any alternatives.” We interpret Gerstner’s decision-making as follows: Akers’ old plans were initiated using information known to him at the time. By the time Gerstner arrived, the direct information was lost but was manifested indirectly in the strategic plan he inherited. Hence, this generated a bias to implement the old plan.

From  Ian Millhiser at ThinkProgress:

As of this writing, every single state except Hawai’i has finalized its vote totals for the 2012 House elections, andDemocrats currently lead Republicans by 1,362,351 votesin the overall popular vote total. Democratic House candidates earned 49.15 percent of the popular vote, while Republicans earned only 48.03 percent — meaning that the American people preferred a unified Democratic Congress over the divided Congress it actually got by more than a full percentage point. Nevertheless, thanks largely to partisan gerrymandering, Republicans have a solid House majority in the incoming 113th Congress.

A deeper dive into the vote totals reveals just how firmly gerrymandering entrenched Republican control of the House. If all House members are ranked in order from the Republican members who won by the widest margin down to the Democratic members who won by the widest margins, the 218th member on this list is Congressman-elect Robert Pittenger (R-NC). Thus, Pittenger was the “turning point” member of the incoming House. If every Republican who performed as well or worse than Pittenger had lost their race, Democrats would hold a one vote majority in the incoming House.

 

Hence, the Democrats need a +7% swing to regain the House given the current structure of House districts.

From a Politico article about the fiscal cliff:

“For many Republicans, a cliff dive means blaming President Barack Obama for a big tax hike in the short term and then voting to cut taxes for most Americans next month. That’s an easier sell back home in Republican-heavy districts than a pre-cliff deal that raises taxes on folks making over $250,000 or $400,000, extends unemployment benefits and does little if anything to curb entitlement spending. If they back a bad deal now, they run the risk of facing primary challenges in two years.

For Democrats, the cliff is better than setting a rich man’s cutoff in the million-dollar range — or worse yet, extending the Bush tax cuts for all earners — and slashing Medicare and Social Security to appease Republicans. They, too, see an advantage in negotiating with Republicans who will feel freed from their promise not to vote to raise taxes once the rates have already gone up….

Another analogy: It’s a Nash equilibrium. John Nash, subject of “A Beautiful Mind,” the Oscar-winning film that revolved around game theory, explained how players act in a multiplayer game. Put simply, if each player understands his adversaries’ strategies, no one will alter their own course. Right now, Obama, Boehner and Reid are locked in on a course for the cliff, and there’s no obvious solution that would make any of them switch directions.”
In the next story, they will superimpose electoral incentives on the Nash demand game!

In a post-election move:

According to multiple Fox sources, Ailes has issued a new directive to his staff: He wants the faces associated with the election off the air — for now. For Karl Rove and Dick Morris — a pair of pundits perhaps most closely aligned with Fox’s anti-Obama campaign — Ailes’s orders mean new rules. Ailes’s deputy, Fox News programming chief Bill Shine, has sent out orders mandating that producers must get permission before booking  Rove or  Morris…Inside Fox News, Morris’s Romney boosterism and reality-denying predictions became a punch line. At a rehearsal on the Saturday before the election, according to a source, anchor Megyn Kelly chuckled when she relayed to colleagues what someone had told her: “I really like Dick Morris. He’s always wrong but he makes me feel good.”

Via Matt Yglesias:

Here is an email I got from the Romney campaign:

You’ve stepped up

Sandeep,

This week, supporters from all over the country heeded our call to raise $7 million in 7 days to bring our message into new states. Because of you we have reached our goal in just 5 days and are now on air, sharing our plan to create 12 million new jobs.

Thank you for believing it’s time for real change, and that America can do better than the last four years.

Now, with 3 days left we are asking you to dig a little deeper to support our effort to raise $2 million by tonight.

Here is one from the Obama campaign:

Hey

Sandeep –

This is in your hands now.

Chip in $141, and let’s go win.

Turns out the Hey worked better in randomized trials and so they went with it.

From Schelling’s seminal Essay on Bargaining:

A potent means of commitment, and some-times the only means, is the pledge of one’s reputation. If national representatives can arrange to be charged with appeasement for every small concession, they place concession visibly beyond their own reach. If a union with other plants to deal with can arrange to make any retreat dramatically visible, it places its bargaining reputation in jeopardy and thereby becomes visibly incapable of serious compromise. (The same convenient jeopardy is the basis for the universally exploited defense, “If I did it for you I’d have to do it for everyone else.”) But to commit in this fashion publicity is required. Both the initial offer and the final outcome would have to be known; and if secrecy surrounds either point, or if the outcome is inherently not observable, the device is unavailable.

Grover’s Pledge has been signed by 219 members of the House and 39 Senators.

Tired of talking about nerdy poll aggregators? Time to turn to the Tech team of the Obama campaign. An interesting story by Alexis Madrigal at the Atlantic:

The team had elite and, for tech, senior talent — by which I mean that most of them were in their 30s — from Twitter, Google, Facebook, Craigslist, Quora, and some of Chicago’s own software companies such as Orbitz and Threadless, where Reed had been CTO. But even these people, maybe *especially* these people, knew enough about technology not to trust it. “I think the Republicans fucked up in the hubris department,” Reed told me. “I know we had the best technology team I’ve ever worked with, but we didn’t know if it would work. I was incredibly confident it would work. I was betting a lot on it. We had time. We had resources. We had done what we thought would work, and it still could have broken. Something could have happened.”

I associate the Republican Party with competition.  The Party promotes free market ideals – even in education where it promotes charter schools and vouchers so that traditional public schools will have to improve if they want to successfully compete for students.

So why doesn’t the Republican Party embrace these ideals of fully?  Republicans won reelection to the House in large part thanks to uncompetitive redistricting.

This makes the GOP weaker in the long run because it protects out of touch politicians from competition and from reality. Gerrymandering means that Republican Representatives can be oblivious to long-term demographic changes that are reshaping the electorate while Democratic Representatives in safe “districts” must disproportionately confront them.  The lack of competition makes the Republican Party weaker and less responsive to demographic change.  Only watching Fox News probably isn’t helping either.

The ramifications of this uncompetitive behavior likely influenced the outcome of the Presidential race and made it harder for Romney to win.  Mitt Romney embraced positions associated with the far right of the Republican Party in order to win the primary nomination.  Many of his opponents who forced this shift in Romney’s positions were elected to the House from uncompetitive districts. Bachmann’s district is estimated to be 8% more “Republican” than the nation.

If the Republican Party wants its next generation of leaders to be able to win state and national elections, it should embrace competition and renounce gerrymandering.  It should create House Congressional Districts that reflect demographic trends.  It should want to elect Representatives who could have a real shot at winning a state or a national election, not just those who can win in a District where the competition (and reality) have been eliminated.

From the New York Times:

In a striking last-minute shift, the Romney campaign has decided to invest its most precious resource — the candidate’s time — in a serious play to win Pennsylvania.

Mr. Romney’s appearance here on Sunday could be a crafty political move to seriously undercut President Obama, or it could be a sign of desperation. Either way, his visit represents the biggest jolt yet in a state that was until recently largely ignored in the race for the White House.

Over the last several days, with polls showing Mr. Obama’s edge in the state narrowing, Republicans have sprung into action and forced the Democrats to spend resources here that could have gone toward more competitive battleground states.

In a previous post, I discussed why it might be profitable to move ad budgets to non-battleground states if battlegrounds are saturated with coverage. Basically, if you are strong in the battleground states, by spending money in a non-battleground state, you can divert your competitor’s resources there too and, if you are weak, you have to go there out of necessity. Hence, you cannot determine whether Romney has momentum or not from his ad spending strategy. But what about his travel strategy? A candidate’s time is scarce, unlike his billion dollar ad budget, so it must be rationed carefully. So, what can we infer from the fact that Romney is campaigning in PA on Sunday?

The New York Times Electoral Map is useful to think through various scenarios. Romney needs to win NC, FL and VA to have any chance of making it to the White House. Visiting and campaigning in those states is part of his defensive strategy – he has no option but to devote attention to them. As everyone is saying, OH is the key to the door of the White House.

What should Romney do if he knows the President has a significant lead in OH? There is no point campaigning even more in VA, NC or FL because even if he wins them, he cannot win the Presidency without some other states. He has to shift campaigning to some other states to make it to 269 electoral votes so the House can give him the Presidency. Then, it might seem he should shift his time to CO, IA, NH or WI. But to make it to 269, Romney would have to win WI, CO and one of the other two (according to my manipulation of the NYT map). This is a tall order. On the other hand, if he wins PA with one of these other four states, he is through. MN does not have enough electoral votes to counterbalance a loss of OH so the choice comes down to MI versus PA. If Romney is closer in PA than MI, that breaks the tie. So, to summarize, it makes more sense to campaign in PA and try to win one other state than to try to win WI, CO and one other.

What if Romney is ahead in OH? Then, he still needs one of CO, NH, IA or WI to win. Not focussing on those states and defending OH, VA etc. exclusively could cost him the Presidency. In this scenario, Romney does not have the luxury of the time to campaign in PA.

Hence, the Romney campaign’s focus on PA only really makes sense if they know President Obama is well ahead in OH. There is no Romentum.

UPDATE (11/3):  From NBC,

On party ID
In these surveys, Democrats enjoy a nine-point party-identification advantage in Ohio and a two-point edge in Florida. Republicans have argued that a nine-point advantage is too large in this current political environment; it was eight points in the Buckeye State during Obama’s decisive 2008 victory.

If you cut that party ID advantage in half, Obama’s six-point lead in Ohio is reduced to three points.

The Romney campaign is expanding ad buys beyond the battleground states. Is there a huge swell of enthusiasm so Romney is trying for a blowout or is it a bluff?

The traditional model of political advertizing is the Blotto game.  Each candidate can divide up a budget across n states. Each candidate’s probability of winning at a location is increasing in his expenditure and decreasing in the other’s.  These models are hard to solve for explicitly. What makes this election unusual is that the usual binding constraint – money – is slack in the battleground states. Instead, full employment of TV ad time and voter exhaustion with ads makes further expenditure unnecessary.  But, you can still spend the money on improving your get-out-the-vote operation or to expand your ad buy to other states. Finally, you can send your candidate to a state.  Your strategy varies as function of how close the race is.

If the battleground states are increasingly unlikely to be in your column, then a get out the vote strategy will not be enough to tip them back in your favor.  Better to try to make some other state close by advertizing and mobilizing there.  You must maintain your ad buy though in the battleground states to keep your competitor engaged so that they cannot divert resources themselves.

If the battleground states are close, then a get out the vote operation is quite useful even if ad spending is at its maximum.  Better to do that than spend money in other locations where you are way behind.

If you are far ahead in the battleground states, you have to keep on spending there as your competitor is spending there either because he might win or to keep you spending there. But, cash you have sloshing around should be spent “expanding the map”.  This gives you more paths to victory and also exerts a negative externality on your opponent, forcing him to divert resources including perhaps the most valuable resource of all, the candidate’s time.

So, you might spend heavily in a state even when you have little chance there.  This always has the benefit of diverting your opponent’s attention.  This means there is an incentive for a player to invest even if he is far ahead in the battleground states.  But there is also an incentive to invest when you are behind as you need more paths to victory and expenditure on getting out the vote is less useful. So, we can’t infer Romentum from the fact that Romney is advertizing in MN and PA.

I think we can make stronger inferences by making a leap of faith and extrapolating this intuition to a state by state analysis.  By comparing strategies with public polls, we can try to classify them into the three categories.

NC seems to fall into the first category for President Obama. Romney is ahead according to the polls but it gives the Obama campaign more ways to win and keeps the Romney resources stretched.  Romney is roughly as far behind in MI, MN and PA as Obama is in NC. So, they play the same role for Romney as NC does for Obama.  Bill Clinton and Joe Biden are campaigning in PA and MN so the Romney strategy has succeeded in diverting resources.

The most scarce resource is candidate time so we can infer a lot from the candidate recent travel and their travel plans. If the race is close in any states it would be crazy to try a diversion strategy as a candidate visit acts like a get out the vote strategy and hence has great benefits when the race is close. The President is campaigning in WI, FL, NV, VA and CO. In fact, both candidates are frequently in FL and VA.  NC is a strong state for Romney because, as far as I can tell, he has no plans to visit there and nor does the President. Similarly, I don’t see any Romney pans to visit MI, MN or PA. Also, NV also seems to be out of Romney’s grasp as he has no plans to travel there.  It is hard to make inferences about NH as Romney lives there so it is easy to campaign.  OH has so many electoral votes that no candidate can afford not to campaign there – again no inferences can be made. Both candidates are in IA.

So, I think the state by state evidence is against Romentum. NC and NV do not seem to be in play. The rest of the battleground states are going to enjoy many candidate visits so they must be close. That’s about all I have!

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