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“Bernie’s ‘Momentum’ Is A Farce”: Sanders Owes His Recent Winning Streak To Demographics, Not Momentum

If the prevailing media narrative is to be believed, as we head into next Tuesday’s crucial New York state primary, Vermont Sen. Bernie Sanders – by virtue of winning seven of the last eight Democratic nominating contests – has gained crucial momentum, while Hillary Clinton has seen her earlier momentum slip away.

But is that true?

It’s certainly a narrative that Sanders and his supporters have tried to popularize in their recent public comments. As Sanders told George Stephanopoulos this past Sunday on “This Week“: “In the last three and a half weeks, we have reduced [Clinton’s] margin by a third. … We believe that we have the momentum. We believe that the polling is showing that we’re closing the gap. Actually, as you may have noticed, of the last three national polls out there, we have defeated Secretary Clinton in two of them. So there’s no question I think the momentum is with us.”

In truth, the answer depends in part on what one means by momentum, which turns out to be a much-touted but often poorly defined concept. When pundits talk about momentum, they usually refer to one of two possibilities. The first refers to the winnowing of candidates, as typically happens early in the nominating process. When this occurs, it can appear that the remaining candidates gain “momentum” by virtue of picking up some of the departed candidates’ support. There is evidence indicating this type of momentum does occur. However, that’s not the type of momentum that pundits are referencing now, more than halfway through the fight for the Democratic nomination. Bernie’s recent victories haven’t driven anyone from the race.

There is a second type of momentum, however, one more consistent with how the term is being used in the current media narrative. It is the belief that a succession of electoral victories can increase the probability that the winning candidate will do better in subsequent contests simply by virtue of those previous wins. Under this scenario, winning begets more winning – the more wins, the greater the subsequent momentum – and losing has the opposite effect. When pressed to clarify how this type of momentum operates, proponents explain that winning leads to increased campaign contributions and more volunteers – resources that ultimately translate into more votes, and thus more wins. For those making this momentum-as-bandwagon argument, Bernie’s current winning streak is clear proof that his momentum is very real – each victory during the last three-and-a-half weeks made it more likely that he would win the next contest. For this reason, Sanders and his supporters believe he is poised to do very well in next Tuesday’s New York primary.

There’s only one problem with this scenario. There’s just not much evidence that momentum of this type exists, at least not in the recent context of Sanders’ victories. Instead, the likelier explanation for Sanders’ recent success (as I noted in my recent Professor Pundits contribution) is that the Democrats have held a string of contests on terrain that was particularly favorable to Sanders. Demographics, and not momentum, has been the key to his success.

It’s no secret that Sanders does best in caucus states dominated by more ideologically motivated participants and in states with low minority populations. As it turns out, six of Sanders’ last seven victories came in largely white caucus states. (Hawaii, a caucus state, was a demographic exception.) In fact, 11 of his 15 victories to date have come in caucus states. (He almost gained a 12th victory in the Iowa caucus, where he finished a close second to Clinton.) On the other hand, she has won 16 of the 21 primaries held so far. Indeed, if one constructs a regression equation to explain Sanders’ vote share, the two biggest predictors are whether it is a caucus state and whether it had a large proportion of white, liberal voters. By this standard, one might argue he actually underperformed expectations in Wyoming, a largely white, caucus state, where he won “only” about 56 percent of the vote, less than he earned in several similar nearby states. More importantly, he split the 14 Wyoming delegates evenly with Clinton. That’s not exactly the “momentum” he needs.

This is not to say that momentum is a completely meaningless concept. There is some evidence that voters’ choices in the primaries are influenced in part by perceptions regarding how likely it is that the candidate is going to be elected. If a candidate can clear a certain threshold of perceived electoral viability, her chances of gaining additional votes increase.

But this is precisely where the Sanders’ momentum argument works against itself. Because Sanders’ recent victories have come predominantly in smaller caucus states and because of the Democratic Party’s proportional delegate allocation rules, Sanders’ winning streak hasn’t substantially cut into Clinton’s delegate lead, at least not nearly enough to alter the perception that she remains the clear favorite to win the nomination. Since March 22, when Sanders’ current win streak began, he has gained a net of only 70 pledged delegates on Clinton and still trails her by more than 250 pledged delegates. Her lead expands to more than 700 if one includes superdelegates. Moreover, Clinton can more than wipe out Sanders’ recent gains with a strong showing in her home state of New York next Tuesday, where there are 247 pledged delegates at stake.

This failure to clear the viability threshold has two unfortunate consequences for Sanders. First, despite his claims to the contrary, his recent victories provide little reason for Clinton’s superdelegate supporters to change their minds and back Bernie. Second, to the extent that perceptions of electoral viability matter to prospective voters in upcoming states, it is Clinton and not Sanders who is most likely to benefit. She is the perceived front-runner, and thus she is more likely to gain the support of voters who want to back the race favorite. And those perceptions of viability are not likely to change in the foreseeable future, as the Democratic race returns to terrain, in the form of larger, more demographically diverse primary states, likely more favorable to Clinton, including Pennsylvania, New Jersey and California. On the other hand, and unfortunately for Sanders, only one of the remaining 16 Democratic contests is a caucus state.

Does momentum exist? Yes, if one means the added benefit a candidate receives by virtue of being perceived as the most viable candidate, electorally speaking. Based on that definition, at this point in the Democratic race, it is Clinton and not Sanders who has the better claim to possessing the “Big Mo.” And that’s not likely to change in the immediate future.


By: Matthew Dickinson, Professor, Middlebury College; Thomas Jefferson Street Blog, U. S. News and World Report, April 14, 2016

April 15, 2016 Posted by | Bernie Sanders, Hillary Clinton, Momentum, New York Primaries | , , , , , , | 6 Comments

“A Pension Jackpot For Wall Street”: A Vicious Cycle Whereby The Financial Industry Wins And Taxpayers, Once Again, Lose

Most consumers understand that when you pay an above-market premium, you shouldn’t expect to get a below-average product. Why, then, is this principle often ignored when it comes to managing billions of dollars in public pension systems?

This is one of the most significant questions facing states and cities as they struggle to meet their contractual obligations to public employees. In recent years, public officials have shifted more of those workers’ pension money into private equity, hedge funds, venture capital and other so-called “alternative investments.” In all, the National Association of State Retirement Administrators reports that roughly a quarter of all pension funds are now in these “alternative investments” — a tripling in just 12 years.

Those investments are managed by private financial firms, which charge special fees that pension systems do not pay when they invest in stock index funds and bonds. The idea is that paying those fees — which can cost hundreds of millions of dollars a year — will be worth it, because the alternative investments will supposedly deliver higher returns than low-fee stock index funds like the S&P 500.

Unfortunately, while these alternative investments have delivered a fee jackpot to Wall Street firms, they have often delivered poor returns, meaning the public is paying a premium for a subpar product.

In New Jersey, for example, the state’s alternative investment portfolio has trailed the stock market in seven out of the last eight years, while costing taxpayers almost $400 million a year in fees. Had the state followed the advice of investors like Warren Buffett and instead invested its alternative portfolio in a low-fee S&P 500 index fund, New Jersey would have had more than $5 billion more in its pension fund. In all, as New Jersey plowed more pension money into alternatives, its pension returns have routinely trailed median returns for all public pension systems.

It is the same story in other states that have been increasing their alternative investments.

In Rhode Island, Democratic state treasurer Gina Raimondo’s shift of pension money into alternatives has coincided with the pension system trailing median returns. Had the state generated median returns, it would have had $372 million more in its pension system.

Likewise, a Maryland Public Policy Institute study shows that returns from that state’s $40 billion pension system have trailed the median for the last decade. Had the state met the median, it would have $3.2 billion more in its pension system — an amount the study’s authors note is enough to “award 80,000 poor children with $40,000 four-year college scholarships.”

It is a similar tale in North Carolina, Kentucky and many other locales. In short, public officials are spending more and more pension money on high-fee alternative investments, and those investments are generating worse returns than other low-fee investment vehicles.

That brings back the original question: Why are pension funds pursuing such an investment strategy? Some of the answer may have to do with the same psychology that encourages the gambler to try to big-bet his way out of deficits. But it also may have to do with campaign contributions. After all, many of the politicians who have been pushing the alternative investments just so happen to benefit from Wall Street’s campaign contributions.

That spotlights a pernicious dynamic that may be at work: The more public money that goes into alternative investments, the more fees alternative investment firms generate, the more campaign contributions are made by those firms, and thus the more money politicians devote to alternative investments, even as those investments deliver poor results for pensioners. It is a vicious cycle whereby the financial industry wins and taxpayers, once again, lose.


By: David Sirota,  Senior Writer at the International Business Times; The National Memo, September 26, 2014

September 27, 2014 Posted by | Financial Industry, Public Pension System, Wall Street | , , , , , | Leave a comment

In Cantor, Hedge Funds And Private Equity Firms Have Voice At Debt Ceiling Negotiations

As the debt-ceiling talks tick down to the Aug. 2 deadline, leading the opposition to any deal that includes higher taxes is the new tribune of rank-and-file House Republicans: Majority Leader Eric Cantor of Virginia.

Cantor’s pivotal role marks a rapid rise for the 48-year-old from the Richmond suburbs. It also represents a major coup for sectors of the investment community that Cantor has been striving to assist for years — on the same tax issues that have been at stake this month. And so far, he has prevailed on those issues.

Among the White House’s top demands for new revenue are changes in the tax code affecting hedge funds, private equity firms and real estate partnerships, which would raise an estimated $20 billion over 10 years.

For the past four years, Cantor has taken the lead in the House on fighting the same changes. He also has been one of the top recipients of contributions from those industries — last year, his two fundraising committees took in nearly $2 million from securities and investment firms and real estate companies, more than double the figure for Boehner (R-Ohio).

The hedge fund and private equity proposals were at the center of Cantor’s decision to exit talks with Vice President Biden this month. Since then, the prospect for any immediate tax increases has declined, with the focus turning to spending cuts and broader tax reform postponed.

This dismays Democrats, in part because Cantor has cast his defense of the investment tax treatment as part of the broader tea party-fueled anti-tax orthodoxy. To Democrats, Cantor embodies the convergence of tea party and business interests, which is often obscured by the movement’s anti-Wall Street rhetoric.

“This [anti-tax stance] isn’t all coming up from the grass roots,” said Rep. Chris Van Hollen (D-Md.). “This goes to some longtime cozy relationships between House Republicans and hedge fund managers in the financial sector.”

A spokesman for Cantor noted that he always has opposed raising the investment taxes in question but declined to comment further.

Cantor has said repeatedly that Obama and other Democrats are exaggerating the value of closing tax loopholes for financiers. Although Cantor opposes closing them to raise revenue, he says he is open to doing so as part of broader tax reform that lowers overall rates.

“So I know it makes for good politics to throw the shiny ball out there . . . that somehow Republicans are wed to that kind of policy to sustain these preferences, when all along, in our budget and in our plan, we have said we’re for tax reform, we have said we’re for bringing down rates on everybody,” he said on the House floor last week.

Jennifer Thompson, a political science professor at Virginia Commonwealth University and former Republican campaign operative, said Cantor’s longtime opposition to the investment tax provisions is a sincere reflection of his conservatively inclined district.

“Eric Cantor is a Virginian and you can’t separate too much from that fact,” she said. “His constituents are very much aligned with the no taxes and being back in the black and that’s what Eric Cantor represents.”

Lawmakers from both parties have cultivated the investment community, but Cantor, whose wife is a former Goldman Sachs vice president, has had particularly strong connections. In 2006, his campaign committee and his leadership PAC, established to support other Republicans, collected $682,500 from securities and investment and real estate firms, far more than any other Republican on the Ways and Means Committee and nearly double the take of then-Chairman Charles B. Rangel (D-N.Y.).

Cantor sprang into action in 2007, when Democrats proposed the two major tax code changes that have been at the center of the debt talks. He formed the Coalition for the Freedom of American Investors and Retirees and invited several dozen industry groups to the opening meeting.

One of the changes revolves around “carried interest” — the pay managers receive for gains they produce for investors — which is taxed at the long-term capital gains rate of 15 percent. Many tax experts argue that it should be taxed at the 35 percent rate for ordinary income because it is the managers’ compensation for services performed, not the result of their own capital investment.

Another proposal would tax profits from the sale of hedge funds as ordinary income.

Since 2007, Cantor has railed against the proposals, saying that the carried interest proposal would “raise taxes on innovation and opportunity in America” and harm “mom and pop” businesses.

Democrats dismiss that argument. “There is virtually no evidence that having these people pay ordinary income would inhibit business development,” said Rep. Sander M. Levin (Mich.).

The proposals passed the House, which was then under Democratic control, but fell short of a filibuster-proof majority in the Senate last year.

Cantor’s support from the industries soared. Contributions to his two campaign committees from the real estate and securities and investment sectors jumped to $916,307 in 2008 and doubled to $1.85 million in 2010, according to the Center for Responsive Politics.

The top 10 contributors to Cantor’s two committees in 2010 included three investment firms: employees at SAC Capitol Advisers, the hedge fund founded by Steven Cohen, gave $64,964; those at the private equity firm KKR gave $52,600; and those at Elliott Management, the hedge fund founded by Paul Singer, gave $44,198. The Blackstone Group, the hedge fund run by Steve Schwarzman, and its employees gave $26,100.

The main private equity and hedge fund trade groups have ramped up their lobbying amid the debt talks, spending $4.2 million this year.

By: Alec MacGillis, The Washington Post, July 25, 2011

July 27, 2011 Posted by | Businesses, Congress, Conservatives, Debt Ceiling, Debt Crisis, Deficits, Democrats, Economic Recovery, Economy, Financial Institutions, GOP, Ideologues, Ideology, Politics, Republicans, Right Wing, Tax Loopholes, Taxes, Teaparty | , , , , , , , , , , , , , , , , | Leave a comment

Tennessee Ushers In Era Of For-Rent Politicians With New Campaign Finance Law

During the 2010 election season, we heard Republican candidates from coast to coast run on creating jobs. In the 2011 Tennessee legislative session, the Republican majority forgot that message and went after teachers and teacher unions. Any other year this would have been enough to make the staunchest conservative proud, but in a session where Republican legislators presented bills by non-citizens with corporate interests, according to the Tennessean, the measure of success was also to include rewriting existing campaign laws to lift the ban on corporate donations. The ban was lifted late Wednesday when Gov. Bill Haslam signed into law SB 1915, which allows direct corporate donations to candidates.

SB 1915 changes existing law T.C.A. § 2-10-131 which did read: “No corporation may use any funds, moneys or credits of the corporation to make contributions to candidates. This means corporations are prohibited from making contributions to any PAC that supports the election or defeat of any candidate.” This has been nullified and allows for direct contributions without penalty.

For the first time in Tennessee history, direct corporate contributions to candidates and political parties will be allowed.

“This basically would just level the playing field, because unions are allowed to do this by statute now,” said Sen. Bill Ketron, R-Murfreesboro, according to the Nashville City Paper. Ketron was in the spotlight earlier this year, along with House Speaker Pro Tempore Judd Matheny, for introducing and sponsoring legislation they introduced without reading.

The argument for passing such legislation to allow the influx of corporate money into Tennessee politics was based on fairness. Republicans were quick to point to unions and their political action committees as justification of needing this change, implying that P.A.C. money was unfairly going to the Democrats. This was not the case.

When we examine the numbers, we find that it is the Republicans who are benefiting from PAC money by a margin of $3-$1, reports Knox News. SB 1915 was written to become law as soon as the governor affixed his signature to the bill. So corporate America, Tennessee is now open for business: You are free to directly contribute to any candidate you wish.

The 107th Tennessee General Assembly’s 2011 session was one filled with controversy and fundamental changes to our state’s political structure. While the majority worked to silence one voice in government, they simultaneously opened the door to another. Republican supporters of SB1915 contend that they are complying with the Citizens United ruling that extends First Amendment rights to corporations and lifts prior bans on corporate independent expenditures. Critics of the bill contend that it will lead to a decline in good government and pit legislators against each other for corporate donations.

In a time when citizens are getting more impatient with their representatives, how does allowing corporate influence increase accountability? The financial summary of SB1915 shows that it will actually cost taxpayers money to implement. Not only do the taxpayers get silenced by corporate interests, they get to pick up the tab of implementing the changes. Gov. Haslam has signed the bill and it is now law in Tennessee. Let the era of rental legislators begin. May the highest bidder win.


By: Chris Robison, Associated Content, June 2, 2011


June 4, 2011 Posted by | Campaign Financing, Conservatives, Corporations, Democracy, Elections, GOP, Government, Governors, Ideologues, Ideology, Lawmakers, Politics, Republicans, Right Wing, State Legislatures, States, Unions | , , , , , , , , , , , , , | Leave a comment

The People Revolt: Reverse Robin Hood Visits Banks Near Wisconsin Capitol

This afternoon, the People’s Rights Campaign, a coalition of labor and community organizations, organized a community action on Madison’s Capitol Square. Activists scrounged for their last pennies and taped them to “deposit slips” so that they could be deposited directly into the accounts of the CEOs of M&I Bank, Bank of America and JPMorgan ChaseBank.

“Why should they have to pay any taxes at all when grubby peasants and working stiffs still have a few pennies left in their pockets?” asked the group’s press release.

Kim Grveles of Wisconsin Resists”What we’re trying to do here is call a spade a spade,” National Nurses United organizer Pilar Schiavo said. “Walker’s budget takes from the poor, seniors, students and workers at a time when people most need help. Walker is taking our last pennies and giving them to the rich and to corporations.”

Kim Grveles of Wisconsin Resists added, “We’re demonstrating Walker’s agenda to transfer money from people to corporate sponsors of the governor and other GOP members of the legislature. Every bill is making us poorer and making the big corporate campaign contributors wealthier just like a reverse Robin Hood– stealing from the working class poor and giving to the rich.

“The corporations aren’t paying their fair share in taxes, they’re getting bailout money and they’re making millions in profits every year.”

Organizers referenced a May 1st article in the Wisconsin State Journal that pointed out that “changes to a corporate tax law proposed in Walker’s budget may mean businesses would pay the state about $46 million less in taxes over the next two years– and $40 million less each year after that.”

Reverse Robin Hook Mike Amato speaks in front of M&IGroups of protestors spread out and took their pennies and deposit slips to the branches of M&I Bank, Bank of America and JPMorgan Chase Bank closest to the Capitol.

At M&I, security guards locked the front door as soon as the group of a dozen or so approached. Mike Amato of the Teaching Assistants’ Association, who was dressed as a Reverse Robin Hood, tried giving his deposit slip to a guard, saying, “They want to create a peasant system, so we’re helping them out by being reverse Robin Hoods, stealing pennies from the poor to give to the rich.”

The security guard seemed unimpressed, later blocking off the entrance to the drive-thru teller window as well, saying that it was “private property” and making deposits to the CEO’s account would not be allowed, but he was later seen with a bank manager, discussing the text of one of the deposit slips the group had left behind.

Reverse Robin Hood’s BandAccording to Schiavo, a group of protestors succeeded in getting into the local Bank of America investment branch, where they deposited their pennies into CEO Brian Moynihan‘s account. Protesters were locked out of JPMorgan Chase Bank’s branch but were able to deposit their slips through the slit between the glass doors and leave them in a pile in the entryway.

Schiavo noted that the People’s Rights Campaign seeks, through this action, to call attention to their platform, which calls for “restored rights to living wage jobs, access to healthcare and retirement security rather than giving back to corporations that have already received money from the government and continue to give huge bonuses to their CEOs.”

By: Rebecca Wilce, Center for Media and Democracy, May 11, 2011

May 12, 2011 Posted by | Bank Of America, Banks, Businesses, Collective Bargaining, Conservatives, Consumers, Corporations, Financial Institutions, GOP, Gov Scott Walker, Ideologues, Ideology, Income Gap, Jobs, Middle Class, Politics, Public Employees, Republicans, Taxes, Union Busting, Unions, Wealthy, Wisconsin, Wisconsin Republicans | , , , , , , , , , , , , , , , | Leave a comment


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