El Debato

These are my limited observations from tonight’s debate, from the 10 or so minutes I saw before I nodded off for a nap.

Have you ever seen one of those letters composed from words cut from magazines? You know how the words are all different fonts and sizes and choppy? That’s how President Obama sounded to me tonight. I often couldn’t tell if the two words he just said were connected to previous sentence, the next sentence or stand alone.

I liked the first part of Romney’s response to the question about this country losing jobs overseas. He should continue to hammer this message home. The answer isn’t trickle down government, it’s to make the U.S. a more attractive place to invest.

Most economists agree, incentives matter. We — through government — chase those jobs away by making it less attractive to invest in America.

I didn’t care much for the second part of Romney’s response. If China devalues its currency to make its products cheaper, we benefit at the expense of the Chinese citizens. They should be up-in-arms about that. Not us. They will be some day.

The moderator seemed fair.

President Obama seemed surprised and a little disappointed that one of the questioners, Kerry, was not female, and judging from Kerry’s body language, not prone to be wooed Obama’s machismo.

Also, the President didn’t answer Kerry’s question, which was When did the Libyan embassy request extra security and who turned down that request? President Obama started his answer at the time of the attack.

I wasn’t clear on what Romney’s answer was on the assault weapon ban question. But, I don’t really care, either. President Obama said enough repeating the wisdom/ that guns kill people. He also demonstrated his lack of understanding of the second amendment when he said something about people having guns to hunt and (I think he said, I was nodding off) fish.

Yes. The 2nd Amendment protects our right to hunt and fish (who fishes with a gun?)./

No. It does not. It protects our right to protect ourselves from an oppressive government and other things that might encroach on our safety. It is one check-and-balance on power in a document that is full of check-and-balances.

I think the President also said something about eliminating mentally unstable people, or not eliminating them…not sure. It was one of those choppy moments. But, I think even he wished that he could ‘walk that one back.’

After I woke from my nap after the debate and was cleaning the kitchen, I heard some post-debate poll results.

One question was which candidate will help the middle class the most. If I heard right, the results were 54% to 30-something% in favor of President Obama.

Wow. I guess this may show the distrust some folks have for a rich guy and the love they have for a guy saying he’s going to pick that guy’s pocket.

However, I’d caution the 54% that you may want to favor the guy who is talking about making our country more attractive for investment. That will do more to help the middle class than any nutshell game. That makes as much sense as a football coach saying he’s going to win games by putting the best team on the field.

In case that 54% needs a little help with that, that makes a lot of sense.

Someone doing their job

 

I enjoyed McGurn’s opinion piece in the Wall Street Journal today, …Lehrer Got it Right.

Despite all-around criticism that last week’s Presidential debate moderator ‘let things get out of control’, McGurn described Lehrer’s response to the criticism.

“I’ve always said this and finally I had a chance to demonstrate it,” he told Politico. “The moderator should be seen little and heard even less.”

He followed up Monday on radio’s “Imus in the Morning,” saying he wasn’t in the least “apologetic” for how things went. In particular Mr. Lehrer insisted that it wasn’t his job to challenge Mr. Romney on issues favored by the cognoscenti…

“If somebody was going to challenge Romney about the 47%,” Mr. Lehrer said, “it was going to have to be . . . the president and vice versa. They were there to do the challenging.” What a novel idea: Instead of leaving it to the press to decide what issues take priority, let the candidates choose and go at it.

Bingo.

 

 

 

Incentives matter

If I was one of Romney’s advisers I would have recommended that Romney not concede anything regarding his remarks.

I don’t think his “not as elegantly stated” concession did as much for him than if he would have simply stood behind his comments and challenged opponents to state their case and have a public debate about it.

I’ll give credit to ABC News last night for at least trying to present a fact-based case against his statement. They showed a pie chart of the recipients of government transfer payments.

Social Security was a slice. ‘People who have a job but make less than $50k’ was another big slice.

But, a pie chart does not make a compelling case.

The question is how many people in the pie chart  have come to depend on their government benefits to the point that it influences their vote out of concern about losing those benefits?

As I mentioned in my previous post, Democrats reveal that they agree with Romney as many of their campaigns do nothing more than tell the folks in the ABC News pie chart  that voting against them puts their government benefits in jeopardy.

I’d like to have citizens cast their votes based on who they think will uphold the Constitution, not based on who gives them the best benefits. In many other parts of society, this conflict of interest would be easily recognized as corruption.

Consider a city councilman who gets to vote on awarding a road construction contract and one of the bidding firms happens to be his own paving company. Nobody would trust the city councilman to represent the people’s best interests in that case, even if he was the most upstanding and fair person.

We would demand that this city councilman remove himself from this vote.

Searching for her Couric moment

I was eating breakfast and catching up on reading this morning, while my wife was rolling through some recorded Today shows from the past week, including coverage of the Republican convention.

I’m not a big fan of any politician and I have even less respect for so-called journalists. The Today show coverage was blatantly tilted.

In the general coverage we learned that Mitt and Paul watched the convention from their boxes “looking uncomfortable at times” and that Mitt’s speech was “short on policy discussion.”  We also learned that Clint Eastwood’s speech was “unorthodox” for a political convention.

These slants got me to thinking how the coverage will be different for the DNC convention. I expect we’ll learn that Obama and Biden looked poised and how their speeches energized the crowds. If the DNC has a counter to Eastwood, it will be innovative and fresh.

Then, Savannah Guthrie interviewed Ann Romney. It appeared Savannah was fishing for her Couric moment.  To be clear, that’s the moment every empty suit journalist appears to dream about. It’s the moment when you ask such an absolute ridiculous question of a political candidate that you clearly despise, and you get a ridiculous answer. Couric proved out that most people will only remember the ridiculous answer, not the ridiculous question, especially if that’s all you remind them about. I’ll hand it to Katie. Many people never questioned dumb assumption that the magazines a candidate reads matters.

Guthrie first tried to knock Mrs. Romney off guard using Eastwood as the segue from the general coverage, asking some sort of nonsense question about how Eastwood’s speech didn’t really go as planned.

Ann looked puzzled, answering with something like, We thought he did fine. We had a good time.

Cue up attempted Couric moment: Later, Guthrie asked Mrs. Romney if she could name a specific policy that her husband supports that will help women. As Romney begins to speak calmly, I believe Guthrie realizes that she didn’t do a good enough job at shocking Mrs. Romney, so she interrupts her guest and adds a clarifying condition, in true 5-year-old playground-tag-rule-making fashion (“you can only stay on base for 5 seconds”): it has to be something specific that only benefits women, it can’t be something that benefits both men and women.

wtf?

Mrs. Romney looked a bit more puzzled and rattled off something that sounded as good as any beauty pageant contestant does when asked a dumb question during the question-and-answer competition and they assume it bad form just to say, sorry, that’s a dumb question, can I have another?

If I was reading Mrs. Romney’s eyes correctly (or maybe just imagining how I would answer Savannah), I think she really wanted to answer:

Savannah, dear, what a dumb question. How on Earth did you pass your civics class? Do you not understand the President’s role? 

His role is not to pick winners and losers, which is what he would be doing if he supported a SPECIFIC policy that would “help” women — whatever that means.

The President’s role is to defend our country to keep every man, WOMAN and child safe from foreign invaders and uphold the Constitution so that every man, WOMAN and child can enjoy life, liberty and the pursuit of happiness unencumbered by heavy-handed government and free of interference from our neighbors.  

Well, at least Romney’s answer was good enough not to be used as future empty fodder against her husband and Guthrie will have to keep trying to find her Couric moment.

But, note to Guthrie — whose own success defeats her perception of unfairness to women that the President needs to fix — Couric isn’t all that hot anymore. Why not go for a lasting career. Become a good journalist. Drop the Howard Stern shock jock tactics. There’s still time.

“Romney Hood” Straw Man

In logic lingo, a straw man fallacy is a false and easily defeated representation of your debate opponent’s position.

A real straw man is easy to beat in a fight. It has no muscles or awareness to counteract your advances. I could tell you that I beat up “Mike Tyson” if I named a scarecrow Mike Tyson and beat it up. You would be right to be skeptical of my claim. If you cared enough, you might ask me some follow-ups, like are you talking about THE Mike Tyson?

Similarly, a straw man argument is easy to refute. Creating a straw man version of your opponent’s position is a common and natural argument technique that we’ve all used or encountered since we started talking.

Common examples conservative-types encounter include you have no compassion. Or, you just don’t care about poor people. Sometimes it’s a little more subtle. I can see your point, buy my conscience won’t let me support your position. 

Obama’s recent characterization of his opponent’s tax plan as Romney Hood, or the opposite of Robin Hood, is also a good example of a straw man argument.

To make this characterization, Obama leveraged the analysis of a third-party that took liberties at guessing Romney’s full tax plan, identified actions they believe Romney would take when he discovered that his plan wouldn’t work and, assumed it wouldn’t work. In other words, Obama beat up Mike Tyson.

Beware of straw men during this election season.

Hey Folks, Capitalism is a Good Guy!

Here’s a very good read on the virtues of capitalism in today’s Wall Street Journal from Charles Murray. A snippet:

From the dawn of history until the 18th century, every society in the world was impoverished, with only the thinnest film of wealth on top. Then came capitalism and the Industrial Revolution. Everywhere that capitalism subsequently took hold, national wealth began to increase and poverty began to fall. Everywhere that capitalism didn’t take hold, people remained impoverished. Everywhere that capitalism has been rejected since then, poverty has increased.

What happened to turn the mood of the country so far from our historic celebration of economic success?

Murray goes on to answer that question. First, he blames it on collusive capitalism — which he breaks into two parts: crony capitalism and government collusion.

He also assigns blame to those with earned success who are unwilling to defend themselves because they have a liberal mindset and seem embarrassed by their good fortune.

I’ll add to those thoughts.

People often mistake collusive capitalism for capitalism. They cannot separate the crony and collusive parts from capitalism itself. I think it would be clearer if we take the word capitalism out of the description and simply call it cronyism and collusion.

As Milton Friedman pointed out in this video, all societies have greed. Greed is not unique in capitalism. It is human nature. If all we had was capitalism and greed, we’d be okay. Capitalism directs greed into productive pursuits that benefit others. That results in earned success. As Murray points out, that is embodied by Steve Jobs, Thomas Edison and even Mitt Romney.

But greed also leads to cronyism and collusion. That is toxic. Rather than earned success, that leads to bending the rules (i.e. reducing the our freedoms) to gain unfair advantages. Those are embodied by the fat-cat, cigar-smoking, well-connected folks that feed our images of capitalism gone awry. This means that it was illegal for me to willingly assemble bikes for a local bike shop owner when I was a kid. I was underage and made less than minimum wage. The third parties who passed those laws might say that bike shop owner was evil, or that I was taking away job opportunities for others. But for those involved — myself, the bike shop owner and my parents — the arrangement worked out well.

But the key insight is that real capitalism is the best check against those rent-seekers, it’s not the cause. Neither is greed by itself. Cronyism and collusion are the causes.

Capitalism is the conjured, tabloid and propagandized evil. The way our society treats it reminds me of the fictional propaganda war waged against Harry Potter in the final book of J.K. Rowling’s popular series. The evil folks were in charge and spun everything they could to make Harry Potter look like the bad guy. They even had the media on their side, as the magic community newspaper, The Daily Prophet, wrote regular and unbalanced screeds against the evils of Potter. With J.K. Rowling’s brilliance, she made those screeds remarkably similar to the reporting we see here in the muggle world.

“I’m not your best friend, I’m your only friend”

Mitt Romney should adapt this speech from Larry the Liquidator, from the movie Other Peoples Money, for his campaign.

I especially like Larry’s 10-year analysis. Here’s Larry’s version (to shareholders):

For the last ten years, this company has bled your money. Did this community ever say, ‘we know times are tough, we’ll lower taxes, reduce water & sewer.’ Check it out. You’re paying twice what you did 10 years ago.

And our devoted employees, who have taken no increases for the past 3 years, are still making twice what they made 10 years ago.

And our stock? 1/6th what is was 10 years ago.

Here’s a version for Romney:

For the last 10 years, our government has bled our money. Did they ever come to you and say, ‘we know times are tough, we’ll share your pain, we’ll lower government spending so you can invest more and grow the economy, that way we’ll all do better?”

No. They increased spending in the good times and increased it more in the bad. They don’t care about you. They care about growing their power and telling you its for your own good.

Check it out. They’re spending twice as much as ten years ago.

Our debt? It’s tripled in the last 10 years. It was about $16 thousand for every man, woman and child back then. That was plenty. Did you just have a baby? Congratulations! She was born owing $50 thousand.

Other parts of Larry’s speech that I really liked:

  • It doesn’t pay to grow market share in shrinking market. The last buggy whip maker was probably the best, but you wouldn’t have invested in it.
  • Take the buyout, then go invest your money in growing businesses. You’ll help the economy, you’ll create jobs and “God forbid, you’ll make a couple bucks!”

That last one is another good one for Romney.  “God forbid that I pursued the American dream and SUCCEEDED. You can too!”

Spoiler alert: Other Peoples Money had a happy ending. Larry the Liquidator gained control of the company off the strength of his speech (hint, hint Romney), but discovered that the company could produce something useful.  I believe it was kevlar or gore-tex fabric, or something like that. So everyone got to keep their jobs and the company became a success again, without being liquidated.

The Backbone Hypothesis

I enjoyed Thomas Sowell’s column this week, South Carolina Message.

Sowell summarizes the surges in the multiple candidates against Romney:

The more fundamental message is that the Republican primary voters do not want Mitt Romney, even if the Republican establishment does — and it is just a question of which particular conservative alternative the voters prefer.

But, I think there is an additional message from South Carolina: Have Some Backbone!

Newt demonstrated backbone when he refused to accept the premise that he should feebly play along after the news media appeared to have manipulated and slanted the news against him.

“Sorry John, but you and your staff decided to lead a Presidential debate with this topic.  Don’t try to blame others.”

Mitt seems to have received the backbone message with his recent “I’m not going to apologize for my success” speech.  It’s unfortunate that he had to get this message though.  Newt had to test the backbone hypothesis before Mitt was willing to give it a try.

That’s not backbone.  That’s like standing up to the bully only after another bully has  intervened on your behalf.

Silly Gingrich

I wish I could advise Newt Gingrich not to attack Romney’s business record as the head of Bain Capital.  It should actually be applauded.

Gingrich can distinguish himself easily enough from Romney on their political records alone.  Gingrich brought financial accountability to the Federal government and reformed welfare under a Democrat President.  Romney basically implemented the liberal platform as Governor.

The Wall Street Journal reported today that Romney’s political opponents are stepping up attacks on his business record.

The attacks will center on Bain’s failures and portraying Romney as a “corporate raider” that acquired companies and fired people.

The journal tracked the results of the 77 companies acquired by Bain when Romney was in charge.  Here’s what they found:

1. “…22% either filed for bankruptcy reorganization or closed their doors by the end of the eighth year after Bain first invested, sometimes with substantial job losses.”

2. “An additional 8% ran into so much trouble that all of the money Bain invested was lost.”

3.  “Bain produced stellar returns for its investors”

4. “Bain produced about $2.5 billion in gains for its investors in the 77 deals, on about $1.1 billion invested.”

5. “Bain recorded roughly 50% to 80% annual gains in this period, which experts said was among the best track records for buyout firms in that era.”

6.  “If the Journal analysis were limited to bankruptcies and closures occurring by the end of the fifth year after Bain first invested, the rate would move down to 12%. “

It’d be tough to argue with this record.  It’s outstanding.  Criticizing this record is a bit like criticizing a major league baseball player who hit .350 driving in multiple game winning grand slams.

I agree with Romney’s response to Gingrich:

Doesn’t he understand how the economy works? In the real economy, some businesses succeed and some fail.

Many times in business, even if everything is done right, the business fails.  Consumer preferences change, competitors get a leg up, innovation obsoletes a product, new regulations put a crimp in the economics of a business.  Any number of things can happen. Sometimes they happen all at once.  Sometimes the best baseball hitters strike out.  Sometimes the most winningest professional teams coaches lose.

And to the argument that Bain fired people, they also created lots of jobs.  You don’t create $2.5 billion in gains without employing a few people along the way.

I realize that Gingrich is likely trying to appeal to voters who reflexively scoff as phrases such as “corporate raider” and “firing workers”, but for those of us who know better, this just makes Gingrich look silly.