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Analyzing US 2012 Election Results

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Introduction 

A post mortem of the US 2012 election victory by President Obama is in order to explain voter choices. The articles identified issues that explained why Republicans lost 2012 election.

The following topics are discussed:

  1. Moochers, Takers and Makers
  2. Changing Demographics, Culture and Ethnicity
  3. Two Philosophies
  4. Swing States and Entitlements
  5. References and Notes

 

Moochers, Takers and Makers 

Economy, taxes, federal budgets, jobs, healthcare, women issues and immigration reforms dominated the election rhetoric.

Romney-Ryan maintained that the 47% Americans were ‘moochers and takers.’ Purist in the Republican Party called high annual income earners ($50,000+) as ‘makers’. They ignored a reality that 75% Americans earned less than $50,000 and with existing loopholes they can avoid paying income tax. Loopholes also helped Romney and other wealthy to pay income taxes on unearned income at a rate lower than salaried secretaries. The 2010 income data for all Americans are presented below.

Personal income in the United States 2010 Census Data 1115 2012

Income = Wages + Unearned Income

Total Income    Range

% of US   Population

Cumulative   %

Under   $2,500 to $15,000

25

25

$15,001 to   $25,000

23

48

$25,001 to   $50,000

27

75

$50,001 to   $75,000

13

88

$75,001 to   $100,000

5

93

$100,001 to   $250,000

5

98

$250,001 to   millions

2

100

Census’s statistics provide detail on income distribution and demographics and are used to produce the nation’s official poverty statistics. http://en.wikipedia.org/wiki/Personal_income_in_the_United_States

Annual income of 25% Americans was less than $15,000 and additional 23% earned less than $25,000. Most voters with high school or less education belonged to minorities. The 47%ers are African-Americans (13%), Latinos (10%), young adults, single parents and retired seniors with no savings. Romney-Ryan claimed that the 47%ers were unlikely to vote for them as moochers and takers seek entitlements that Republicans were against.

Republicans regarded the 47%ers as lacking personal responsibility. Republicans failed to appreciate that the 47%ers were low skill workers. With limited education and no special skills most 47%ers were not equipped to generate annual incomes higher than $35,000. For the honest upstanding low income Americans, unlike Republicans, President Obama offered a policy to provide low interest loans for education and opportunities to participate in the affordable healthcare through insurance exchanges; the focus was to help low income families to move up to middle class.

Changing Demographics, Culture and Ethnicity 

The cultural and ethnic diversity of the US in 2012 elections made a big impact. Voters included 35% non-Latino Caucasians men; 37% women (52% of 72% population) and 28% minorities: African-Americans (13%), Latinos (10%) and others (5%). The US is no longer mostly white evangelical or fundamentalist Protestants. The US is a melting pot of cultural and ethnic diversity.

In my view the party that won was focused on how to register voters that usually don’t bother to vote. This group included most minorities; college bound singles, veterans, and retirees with zero to limited savings and adults with limited education (high school or less) and skills. Collectively Americans in the bottom half of the income distribution are the Romney 47ers. The Obama volunteers devised a process to reach out to such voters considering their economic realities. Polestars like Nate Silvers developed statistical modeling of voter inclinations to gauge the pulse of the 47%ers and correctly predicted not only Obama victory but also victories of Senators and House of Representatives from each state.

The Democrats core constituency – young people, log termed unemployed, low income retirees, and minorities living in urban areas are Americans in the bottom half of the income distribution. They typically vote in lower numbers in off year elections. This factor partly contributed to Republicans capturing House of Representatives in 2010. The 2010 election victories gave a false sense of confidence that the nation was for Republican extreme conservative values.

The party that lost the election was wedded to a purist approach of the Tea Party and its leaders made several blunders that affronted the potential voters. Republican leaders and managers failed to recognize significance of the impact on voting patterns of changing US demographic, ethnicity and cultural composition. Republicans trusted polestar Rasmussen Reports and Gallop that failed to gauge the pulse of 47%ers.

The cultural shifts – more single parents, more assertive young women, and ethnically more diverse society, etc – are having huge consequences on elections. The 113th Congress will have 80 women in the House and 20 in Senate. For the first time in history, women and minorities in 113th Congress will make up the majority of Democratic Party. Women’s issues were prominent legislatively (e.g., Lily Ledbetter Fair Pay Act, reproductive rights, etc) and on the campaign trail. The campaigns focused on health issues and women’s equity. Both parties were wooing female voters.

Rural populations typically vote Republican and are shrinking. Minorities in industrial urban belts in 28 states are concentrated in Central-Mid-West region and East and West coasts. Only 39% whites voted for Obama: non-Latino whites Republicans dominate rural communities of Mid-western and Southern states and they are dwindling to minorities in urban centers. Three southern states (Georgia, Texasand Arizona– two bordering Mexico) with growing industrialized urban areas are likely to come into play in 2016 as the Latino and other minority populations in the industrial areas of three states continues to increase. The potential for vote banks is likely to energize both parties, especially women and minority represen atives’ majority of the Democrats in the 113th Congress to pass the immigration reforms to solve problems of 11.5 million illegal immigrants.

With signing of the Immigration and Nationality Act of 1965 by President Johnson (LBJ) the racial demographics of the US started shifting. I benefited from this bill. I received in 1965 a Green Card in six weeks avoiding a 100 year wait list for people of non-European origins. Voters in 1965 were 80+% non-Latino white Europeans; in 2012 72% were Europeans and 28% minorities. Shifting immigrant patterns created cultural and ethnic diversity of the US electorate. Politicians who failed to learn from the cultural and ethnical diversity of voters failed to sway voters.

Minorities in the urban centers are growing with arrival of new legal immigrants. David Brooks* observed with women getting financially independent and asserting control over reproductive rights cultural focus on getting married to start a family has shifted. With declining numbers of married women it is no longer a stigma to be single parent households. Typically one wage earner household have low incomes relative to families with two wage earners. Low income households concentrate in urban settings and politically tend to be center-left or progressives Democrats. High income household concentrate in suburbs and politically tend to be center-right or conservatives Republicans.

Two Philosophies 

Voters had a clear choice between two philosophies: Obama offered a message of hope for growing economy using a middle-out, bottom up model of economic development and manufacturing job creation. Republicans were for a top-down or supply-side trickle down economic growth model of reducing taxes on rich. Republicans argued for helping rich save on taxes to encourage investments and small businesses* for job creation.

Without offering any concrete proposals, Republicans focused on advocacy of wealthy and small businesses to solve problems of slow economic recovery of past 4 years. They were distracted with contentious conservative social engineering agenda of prolife policy and denying reproductive rights to women; they offered questionable offensive explanations for pregnancies of rape victims. The 47%ers were called ‘the entitlement’ group. They emphasized personal responsibility to discourage 47%ers  entitlements.

The Republican policy proposals for solving the illegal immigrant problem was dead on arrival judging from a huge Latino votes (70+ %) that reelected Obama. Republicans opposed the Obama Dream Act to solve problems created by 11.5 million illegal immigrants. With an executive order (June 2012) Obama offered a path to legitimized 800,000 undocumented Latino immigrants*.

Republican model for job creation ignored a reality that job creation is driven by consumer demand. Most low paying jobs are created by small business in service sectors. Consumer demand is depressed if income of consumers is depressed. So no matter how much money rich have, in absence of demand job creation stalls.

Investors such as hedge fund operators and equity capital managers create a limited number of high paying jobs but such business models are not labor intensive. Like Romney founded Bain Capital essentially many equity capitalists are vulture capitalists specializing in raiding capital rich companies with substantial pension funds and equity in low productivity operations. The business model is designed to enrich investors over a short period by dissolving the business; it is not for creating long lasting high paying manufacturing jobs.

Swing States and Entitlements 

Although gerrymandering is not exclusive to a single party, the Republican Governor’s in 9 of 28 swing states failed to suppress voting through gerrymandering – imposing requirement of voter ID cards. Heavy turnout of urban voters for Obama and democrats surprised Romney-Ryan and Republican Party. Obama-Biden ticket won 8 of 9 swing states for a 332 electoral vote victory and Democrats captured additional seats; 113th Congress will have 201 Democrats in the House and 55 in Senate.

Romney-Ryan concluded that Democrats won the election by offering entitlements to voters. Different entitlements or incentives were offered by Romney-Ryan to the wealthy and small businesses supporters; it included cutting tax rates, converting social security to a voucher program, balancing budget by eliminating tax loopholes and cuts in Medicare and Medicaid programs, repeal of the affordable healthcare act, and eliminating environmental protection or climate change laws.

Republicans bragged about individualism and offered favorable tax treatments for rich and against government support for 47%ers communities. Democrats offered a policy to help 47%er communities and raise revenues by requiring rich to pay a fair share of income taxes.

References and Notes

  1. Kishan Bhatia, “USA Elections” 2012 – 0902 0915 2012 (2,490 words) http://www.indiacause.com/blog/2012/09/23/usaelections-2012/
  2. Kishan Bhatia, “US Healthcare Insurance and Pro-life Ideology” 1030 1031 2012 (1,528 words) http://www.indiacause.com/blog/2012/11/03/us-healthcare-insurance-and-pro-life-ideology/
  3. David Brooks, “Age of possibility is transforming the globe” http://www.chron.com/opinion/outlook/article/Brooks-Age-of-possibility-is-transforming-the-4045012.php
  4. Poverty Data: According to the US Census men tended to have higher income than women while Asians and Whites  earned more than African Americans and Hispanics. The overall median personal income for all individuals over the age of 18 was $24,062 ($32,140 for those ages 25 or above) in the year 2005. The overall median income for all 155 million persons over the age of 15 who worked with      earnings in 2005 was $28,567.

United States Department of Health and Human Services

(HHS) figures for poverty in 2012

Persons in

Family Unit

48 Contiguous States and D.C.

Alaska

Hawaii

1

$11,170

$13,970

$12,860

2

$15,130

$18,920

$17,410

3

$19,090

$23,870

$21,960

4

$23,050

$28,820

$26,510

5

$27,010

$33,770

$31,060

6

$30,970

$38,720

$35,610

7

$34,930

$43,670

$40,160

8

$38,890

$48,620

$44,710

Each additional
person adds

$3,960

$4,950

$4,550

 

  • As a reference point, the minimum wage rate in 2009 was $7.25 per hour or $15,080 for the 2080 hours in a typical work year. The minimum wage is a little more than the poverty level for a family of one (see Poverty in the United States). For each additional person in a family additional $4,000 to $5,000 a year is needed. A single parent family of four needs more than $27,000 income to be above poverty level. Annual wages of $30,160; $45,240; $75,400 corresponds to 2, 3 and 5 times the minimum wage, respectively.
  • Poverty is a state of privation or lack of the usual or socially acceptable amount of money or material possessions. According to the U.S. Census Bureau data (September 13, 2011), the nation’s poverty rate rose to 15.1% (46.2 million) in 2010, up from 14.3% (approximately 43.6 million) in 2009 and to its highest level since 1993. In 2008, 13.2% (39.8 million) Americans lived in relative poverty. In 2000, the poverty rate for individuals was 12.2% and for families was 9.3%.
  1. There are 22 to 27+ million Small Businesses (SBA) and sixty to 80% of all mostly low paying service sector jobs are by SBA, each employing one to fewer than 500 employees. The US small businesses in 2011 accounted for 30% ($1.5 of $3.5 trillion) payroll and      21% ($7.8 of $29.7 trillion) revenues. The US had in 2011 more than 14,000 large businesses. Contrary to non-stop rhetoric of Republicans, 96% small-businessmen are not millionaires; 3.3% are millionaires and the vast majority of millionaires do not make their millions from small business. Fewer than 50% of small businessmen annually make more than $250,000.
  2. The illegal immigration issue: President Obama (June 2012) essentially provided amnesty to the children of illegal immigrants who meet certain criteria and are in the country in good standing. The Obama Dream Act was designed to give a path to legal status for younger undocumented immigrants and it was very popular with illegal Latino immigrants. Obama said the new policy affects about 800,000 undocumented immigrants. The policy, effective immediately, applies to young people under the age of 30 who came to the U.S. before they turned 16 years old. They must have lived in the United States for five years, have no criminal record, and earned a high school diploma, remained in school or served in the military.
  3. Polestar Nate Silvers built a statistical model for data mining and accurately predicted election outcomes (2008 and 2012). Rasmussen Reports and Gallop Poles raised false hopes for Republicans as they were consistently wrong. The statistical models were better at and other models were poor in data mining of young voters.
  4. Center Right vs Center Left Policies: Reelection of President Obama and loss of Senate seats by pro-life Republican candidates suggests that theUS electorates are for leadership by advocates of center-left policies. Electorates were not impressed by arguments of Republican center-right for continued political supremacy by non-Latino-white men, denial of reproductive rights to women and affordable healthcare for all Americans. Voters rejected Republican conservative social engineering agenda; voted for the middle out, bottoms up economic policies and against the trickle down supply-side policies of the Republican Party. The super packs set up with up to a billion dollars in contributions by many top 1%ers were unable to deliver elections of extremely conservative politicians with anti-union, anti-reproductive rights for women and anti-immigration reform agendas.
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