The Tale of Two Campaign Strategies

It is now clear what the campaign styles are going to be with Governor Romney and President Obama.  I decided I would write about this because a lot of impatient Republicans are getting anxious and demanding that Romney goes on the attack in a way that John McCain never did.  However, if you understand the strategy as I think I do (though I could be completely wrong), you’ll have a great appreciation for what the Romney camp is doing.

First, I wanted to discuss the Obama campaign strategy, which is very much like Obama’s presidency: spend, spend, spend and talk, talk, talk.  The Obama campaign knew all along that their only way of winning was to flood media with negative ads on whomever the competition would be.  It is not a coincidence that Obama spent the last 3.5 years raising money for his re-election.  Already, the Obama campaign is spending millions of dollars trying to define Romney early, much like Bush did against Kerry.  There are three main problems with this portion of their strategy:

• Money is not coming in as fast as Obama would like; Romney actually raised more money than Obama the past two months and Romney has a lot of Super PAC money backing him too.
• The number of battleground states are growing, increasing the need for money.  At this point in the election, the Obama campaign would hope that the race would be narrowing, now opening up.
• The Obama campaign has outspent the Romney campaign by leaps and bounds and yet, the polls reflect a tie right now.  If you’re going to try to start the race fast and hold on to the lead, you need to have a lead to hold onto.

The second piece of the Obama campaign strategy is to get Obama out talking to as many folks as possible.  The one thing Obama has going for him is that his likeability numbers are pretty good, so they want to get him out there to shake hands and kiss babies.  You’ll see a lot of talks so that he can get 30 second clips in the media with him rallying crowds.  The main problem with this is that people have seen Obama talk a million times and each time, it loses its luster and coverage.

Now, onto the Romney strategy.  Imagine if you will a slingshot; at first it would appear that the projectile is going backwards as it slowly gets pulled back, but then in an instance, it is catapulted forward.  Romney runs his campaign very similar.  Do you remember the primaries?  Romney wasn’t aggressive, played it pretty safe, and did not make any big mistakes.  After Newt Gingrich got in the lead and threatened Romney, the Romney campaign (and its supporting Super PACs) overwhelmed the Gingrich campaign with a shock and awe styled campaign and took Gingrich out of the race quickly.  I would look for Romney to hold onto their money until it really matters and then go wild.  In the primaries, he showed he can go after people in the debates, can be just as dirty as the Obama campaign is right now, and he knows when to turn it on.

There are three good reasons why I believe Mitt Romney should not get overly aggressive (as many Republicans are suggesting) at this point in the election:

• In the summer, most people (besides me) are not hanging on every word that is said in the Presidential election and are probably sick of all the Obama ads already.  They are waiting for the initial noise to stop and the presidential candidates to offer real solutions and policy.
• The items that the Obama campaign is going after are small potatoes.  They talk about how he carried his dog on vacation, how he may have picked on a kid over 30 years ago, how his company may have outsourced some jobs overseas over ten years ago, and the list goes on.  These are not the issues that are make or break issues for president.  Although it can help paint a narrative, a well timed response in a debate or speech can offset millions of advertisements in an instance.
• The traditional role of the vice presidential candidate is that of the attack dog.  Usually, the vice presidential candidate is the one that goes after the other presidential candidate and Romney has not picked his VP yet, although it is coming soon.  Allow Romney the time to pick his VP and then let his VP go to town on Obama, without hurting Romney’s likeability ratings.

Romney has a lot of money in his campaign war chest and is using it conservatively.  I would imagine they have plenty of ads ready to go to convince independents to go Republican.  Statistics show that the majority of undecideds at this point will go for the challenger because they know enough about the incumbent, that if they aren’t behind Obama now, there is not much he could possibly do to swing their vote. So relax, the statistics thus give the edge to Romney when the polls are tied and Republicans are in a good position to win!

Obama’s New Tax Increase

Obama has tried numerous strategies to try to gain favor and/or bad mouth Mitt Romney in the past months.  It is has been mildly impressive that they have a new attack every week that is completely random, usually not true, but very distracting.  However, last week President Obama got back on what appears to be one of his key messages, that the rich people need to pay their “fair share” and actually presented a policy stance: raising taxes on the “wealthy.”

President Obama said that the Bush tax cuts need to expire for those making more than $250,000 for couples and $200,000 for individuals.  His proposal is a one year extension, just enough to get him through the election.  One of his main arguments was that he wants to return to the same tax rates as the Clinton era.

However, in 2001 (Clinton’s last year as President), the federal budget was $1.9 trillion.  In 2011, President Obama’s federal spending was $3.6 trillion.  In ten years, our government has nearly doubled in size and the President’s tax plan does not get us close to a balanced budget.  Further, I feel his tax plan of increasing taxes on small businesses will be a job killer.  A small tax increase can take away the revenue needed to pay someone’s salary.

The Republicans and Mitt Romney argue that tax cuts are the key to recovery, based on what Reagan did.  The reason it worked for Reagan is that he brought tax rates down by over 40 percentage points, which is a big change that did spur economic growth.  However, all of the Republican proposals I have seen have been less than 5% points, which will not be significant enough to catapult our economy.  As much as I believe in tax cuts, we need to get our spending house in order before we get too aggressive with cuts.  If we cut taxes too much before reducing spending, it could hurt our deficit so much, that it will slow economic growth instead of spur it.

As I have always said, this blog is about solutions.  There are a lot of things I would do such as repeal Obamacare and cut spending drastically.  However, I would go after two things first that are a little less political and could have the biggest initial impact for our economy.  The first thing we need to do is gain some stability, so I would try to get permanent income tax rates versus continually extending Bush tax cuts one year at a time.  Permanency gives stability to small businesses, thus allowing them to plan and hire.  Because this would not be easy, here’s my compromise: make the Bush tax rates permanent, but close loop holes.  The rates keep taxes low, but closing loop holes increases revenues, making both parties happy.  While Republicans may argue that closing loop holes are a net tax increase, I have a different opinion altogether.  Loop holes are, in my mind, unintended tax breaks that lawyers took advantage of, which is not congruent with the original intent of Congress when the code was created.

The second thing I would do is permanently cut the corporate tax rate in half.  Right now, the United States has the highest corporate tax in the world.  Our corporate tax revenue is only 8% of the U.S. total revenues (approx. $180 billion), so it’s impact financially for the government would be small, but the impact for the businesses would be large.  Cutting the rate in half does three key things:

• It reduces the cost of doing business in the United States, helping jobs come back home from overseas.
• It increases the ability to hire people and reduce unemployment.  Further, when the money goes to individuals’ income vs. corporate income, it will still be taxed, thus roughly breaking even on net revenue.
• Last, this concentrated radical change would be just big enough to spur change in our economy.  The tax cut would essentially increase the profitability of every corporation in the United States and help the stock market as well.

The key to problem solving is to start with high impact, low effort solutions (i.e. my two ideas).  Afterwards, you look for high impact, high effort solutions (i.e. solving social security and healthcare).  The two simple ideas I proposed would be easy to understand, quickly implemented, and highly effective in spurring economic growth.

How Republicans Win 2012 – Options

For my 100th blog post,  I decided to let you in on how the Republicans can create a strategy that will improve our system and economy, resonate with voters, and defend against Democrats.  It all comes down to one thing, giving citizens options.

I love having options, it is essentially a form of freedom.  I believe Republicans need to develop programs where people can choose between the current system and a new system.  Giving citizens the option between old and new eliminates the fear of the new.  Further, Democrat’s entire election campaign is around generating a fear of the Republicans.  For example, they have commercials of a Paul Ryan looking figure pushing granny off the cliff.  Just this past weekend, David Axelrod labeled Republicans a “reign of terror.”

I want to give a you few examples of options:

• Social Security –> the Chilean model essentially privatizes gains and socializes loses.  Basically, people would be given the option to stay with the current system or invest a portion of their social security dollars (instead of paying the full tax) to a private investment.  If the private investment does not meet the payout they would have received with the government social security check, they are paid the difference by the government.  It benefits the citizen because people typically get paid more privately than with social security, less money is paid out to citizens because their investments worked, preventing the system from going bankrupt, and there are still people paying in for those who want to stay on today’s version of social security.
• Medicare –> Did you know it is cheaper for us to pay citizens about $15,000/yr. for them to get their own private insurance than it is for them to be on medicare?  If we give people the option to do the private version, we would save money, even if only 10% did it.  Further, insurance is all about risk for the insurance companies.  If they have a larger pool of people paying in, it reduces the risk for them, increasing their ability to make insurance more affordable..
• Tax Code –> What if we had the ability to choose between the current tax code and paying a straight 20% of earned income without any deductions? If I had the option of paying a straight 20% instead of going through the confusion of our current model, I’d probably choose the easy path.

Obviously, the examples I gave are extremely complicated.  However, I wanted to illustrate some ways that we could create platforms that provide options.

I believe Republicans are trying to convince the American people that we need massive changes.  However, people do not like change, especially big change.  The public opinion of an entire nation cannot turn like a speed boat, it is more like a massive air craft carrier that takes miles to slowly turn around.  By offering options, it allows people time to get comfortable with big ideas.  The great thing about the private options presented is they will naturally become popular because they will typically put more money in people’s pockets.

Romney and Republicans need to market options more than the big ideas.  They need to tell Democrats, “If you like the current system, keep it.  Meanwhile, us 50% of Americans (the Republicans) will take the private options, make more money, and help cut the national budget.  You’re welcome Democrats…you’re welcome!”

The Election Begins: Obama vs. Romney

After months of being dormant on the blogosphere, I am back.  Bored and confused by the primaries, the Republicans finally have a candidate to go against President Obama.  Although there are a plethora of topics I’d love to dive into, I thought I’d start with framing up the 2012 Presidential Election.  So far, I’ve heard this election is about the women vote, the independent vote, the hispanic vote, the swing states vote, the religious conservative vote, and just about every other option.  So which group is it?  The truth is that it cannot be about one group of people, it is about what candidate do you trust to improve our country.

A few comments on the aforementioned groups:

• Women vote – I believe both candidates underestimate the diversity of thought among women.  To put all women in a group and say they have a collective set of key issues is vastly misplaced and demeaning in my view.  Like men, women have a variety of views and issues.
• Independent vote – most believe independents are people right in the middle.  The truth is, most have strong views on the left and strong views on the right that leave them conflicted – for example, they may be socially liberal but pro-life.  The candidates who spend time arguing their points versus bad mouthing their opponent will convince independents to vote for the strong view on that candidate’s side.
• Hispanic vote – a large majority of Hispanics are Catholic and have a lot of conservative principles.  However, Republican have not typically come alongside Hispanic voters.  Bush carried 45% of Hispanic votes vs. McCain only getting 31%.  Romney is in the drivers seat on this one.
• Swing State votes – these 12 states will ultimately decide the election, but their key issues are quite diverse.  Because of their diversity, there ends up being little difference between a general election campaign and a 12 state campaign.  The only real difference is that they will have more visits in these states.  With today’s 24-7 media coverage, it doesn’t really matter where presidential candidates stop because even if they were in your home town, you probably wouldn’t see the events live anyway.  The only interaction you’d have is waiting in traffic longer.  On a side note, I do think this could affect Romney’s VP choice.
• Religious conservative vote – Even though Romney has flip flopped on some religious conservative stances, he has aligned with their views and will still be much closer to their views than President Obama.  Like other sects of the population, although they have viewpoints they are passionate about, they will look to the candidate that they feels gives the United States the best chance at success.

In 2004, Democrats hated Bush with a passion.  I believe Republicans disapprove of Obama’s leadership in a similar fashion in 2012.  Many Republicans are counting on that passion to win the election.  However, like in 2004, you cannot win an election based on hatred of the other candidate.  People do not vote against a candidate in the booth, they vote for a candidate in the booth.  If they are not mildly excited about the direction that candidate is going to attempt to steer the country towards, they will not show up to vote for their candidate–this is especially true with independents.

If you ask people today what John Kerry’s top issues were, they’ll rarely be able to tell you because his campaign focused on Bush bashing rather than casting a vision.  You can see the power of casting a vision by looking at the 2008 Obama campaign, which casted a vision of Republicans and Democrats holding hands, Washington working together to cut deficit spending, and more.

President Obama’s strategy this time around appears to be one of divide and conquer.  He is trying to divide the country and get enough sects of the population to support him in order to get a majority.  He does this by alienating groups and demonizing Romney.  For example, he’s willing to lose the “rich” group if he gets the middle and poor class by calling Romney a rich person not in touch with the American people.

For Romney to win, he needs to focus on casting a clear vision of where he wants to bring America.  It will take a lot of discipline to stay on message and use every opportunity he has to share his vision, especially with the onslaught of distractions and attacks from the Obama campaign.  I personally believe Obama has been worse than Jimmy Carter because Carter’s failures didn’t cost $5 trillion in four years.  Although Ronald Reagan pointed out factual information that showed Carter’s shortcomings, the main reason Reagan beat Carter was because of the positive vision he cast for the United States that rallied people on both sides of the aisle.

It is going to be a very close election…should be fun!