The Importance of Being Electoral

What??? Hillary Clinton had a majority but still lost? It may seem unbelievable and unfair, but really....it's as fair as it's been for more than 200 years.

A Visit to Electoral Land

For those of you who need a quick US civics lesson I'll give you the long story short. In the US Electoral system, voters don't choose the President and Vice President directly. Instead, they vote for Electors who gather in each state (the first Monday after the second Wednesday in December) to cast their ballots for President and Vice President.

Each State is assigned a number of Electors equal to that State's number of Congressional representatives plus two, being the number of Senators. Presently there are 538 Electors nationwide. The number change every 10 years as the US Census measures the national population and demographic.
In the early days of the US electors were not chosen by popular vote. In most states the Electors were chosen by the state legislatures. Clearly this meant there could a wide gap between who the people wanted for President who was actually.

Over time this all changed and by 1870 all states had gone to a where the Electors are actually chosen by the people so that in practice, the Electors are really proxies for the people. What makes the Electoral college system unique is that instead of simply counting the nationwide totals, the state by state totals are counted. It's not enough for a candidate to win big in a handful of large states. Instead, a candidate must win across a wide spectrum of the electorate in several states.

Electoral Implications

A small swing in a handful of states seem to decide the elections. This may appear to be the case, but that's only when the elections are really really close. We've see the colors of the electoral map change dramatically in a short space of time. In 1964 the entire map was blue. In 1972 the entire map was red. Whenever an election is close, by definition a small percentage of the population decides the race.

The system forces candidates to address people across the country. If polling were nationwide a candidate could theoretically sweep regions with large populations and win the nation-wide vote. This would basically leave rural America at risk of being ignored.

The marginal balance shifts to smaller states. In a national wide system a candidate could win heavily in a few heavily populated states and in the process ignore voters in less populated states.

Population and demographic changes are taken into account over time. Look at California, for example. For many years the state accounted for less than 5% of the Electoral College. Over the last few decades the population has increased sharply and now California is more than 10% of the Electoral College. Similarly, Texas and Florida have become more important in recent years. New York, on the other hand is less important than it used to be.

Minority matters. The election we've just witnessed is a case in point. It rarely happens, but from time to time a candidate wins enough states to obtain a victory in the Electoral College. Democracy is not about 51 people getting their way all the time and 49 people always losing. If year after year 49 people lost while 51 won over time the 49 would lose faith in the system. They could become effectively disenfranchised and systematically abused. From time to time the minority needs a break! They need to get their turn at the helm for the good of the greater whole. Much as I don't like Donald Trump, maybe, just maybe, he'll really fight for the minority that elected him and America will really be better. Or maybe he'll turn out to be a disappointment and a disaster. If so, then so.  At least the minority can't argue they didn't have a chance.

States have rights. America is one nation, but one nation composed of 50 individual, sovereign states, each of whom can determine its own affairs. If the people of Maine want to divide their Electors proportionally instead of winner take all, that's their choice. If the people of Alaska want to legally bind their Electors to vote according the will the of the majority, that's there business and their right.

The College Provides A Safety Valve. There are 21 states at the moment where Electors can break from the popular will. Almost never do Electors vote as anything other than a proxy for the results of the electorate. But maybe, there will be a day when we will thank ourselves that possibility of Electors overriding the electorate exists.

At the end of the day, bizarre as it may seem, the Electoral College makes sense and serves America well. The Founders of America were deeply suspicious not only of central authority, but also of the madness of a crowd. The naive interpretation of democracy is majority rules. But majority rules can very easily mean majority dictates, majority is tyranny. Letting the minority win from time to time is maybe the price to pay for a stable democracy.

The other thing the Founders were afraid of was the possibility an election could be somehow manipulated so that the Presidency was not won but stolen. In those days the system was particularly vulnerable to the possibility that one or a few states could spoil the process and produced lopsided results on a national level.

Today the problem still exists, but the root cause is different. Make no mistake here the possibility of national elections being hijacked is just as real if not more in the 21st century as it was in the 18th century. We live in an age where sound bytes matter far more than serious reflection. We live in an age where masses of people can be swayed by an increasingly powerful media able to propagate ideas and spin them virally in a few clicks.

The crowd has a life of its own and the crowd is far more connected to each other than ever before. One day the crowd will turn into a stampede. When this happens, it will be really comforting to know there exists the possibility for one last bastion of sanity, a few souls, a few Electors in a few states who are brave enough and courageous enough to put forward their conscience and change the balance before it is too late.

On the back of Donald Trump's election there have been calls for a change in the system. Those calls emanate from the frustration that democracy didn't deliver the result they wanted. When that happens they are naive enough to believe the problem was that the majority didn't win, so therefore democracy lost. I submit differently. I submit democracy won.

We may not all like the result. But rest assured, our system and the checks and balances we put on executive power mean the as a nation we are far strong than any one person in any one office, even if that office is the Oval Office.

I'll be a conservative stick in the mud, habit driven toad and take my chance with the Electoral College.

Michael Sonenshine is CEO of Symfonie Capital LLC. He manages the Symfonie Lending Fund, Symfonie Angel Ventures and the SymCredit P2P Lending Platform.

Trump's Nomination is Not a Done Deal

I'm not a political pundit.  I'm an investment manager.  Don't take what I say here as anything more than one man's view. As always, I welcome comments and criticism.

Let's get a few things straight.  First, I'm not a supporter of Donald Trump.  Second, I'm still eating a piece of humble pie after my post earlier this year when I said I didn't think he would win the nomination.  Third, I continue to believe that even if he really gets the nomination, he won't win the general election.

Let's leave the general election to one side.  There is about a six week window between now and the Republican convention.  A lot can happen now and then. Even so, I'll stick my neck out a bit further and say here that much can go wrong for Mr. Trump when delegates assemble in late July.  Here's what to look for.

A Chorus of Un-Endorsements
Senator Mark Kirk, a Republican from Illinois, was one of the first, if not the first, to step forward and say that after reconsidering his view, he's come to the conclusion that Mr. Trump is unfit to be President.  Take that in context, however.  Mr. Kirk is from a state that tends to vote for Democrats.  He holds the Senate seat that was vacated by Barrack Obama.

Still, Mr. Kirk is not alone.  More than a dozen Senate Republican's have been critical of Mr. Trump especially after last week.  Mr. Trump came under heavy fire after criticising a Federal Court judge on the basis of the judge's Mexican heritage.

While we're on the subject of judges, let's get one thing straight.  Judges don't just make up rules arbitrarily.  They don't run cases on whim or by the seat of their pants.  Being a judge is serious business.  I know this because I come from a family of lawyers and because the course of an international career has introduced me to legal systems not only the US but in several European countries.

In any functioning democratic system Judges are guided by a set of clearly written rules and legal precedents. Judges write lengthy comments that cite the legal reasoning behind their opinions.  Potentially any ruling they make can be questioned an appealed in a higher court.  Mr. Trump's comment about the judge serves only to show how little respect Mr. Trump has for the judicial system and the intellect and professional quality it takes to become a judge, especially a federal court judge.  That alone makes me wonder how good a job Mr. Trump will do when it comes to interviewing and selecting future Federal Court judges.

Senator Kirk is hardly alone in retreating from his pledge to support Mr. Trump if he eventually wins the nomination.  In the wake of Mr. Trump's criticism of the judge, Republican Senator Lindsey Graham of South Carolina said "This is the most un-American thing from a politician since Joe McCarthy. If anybody was looking for an off-ramp, this is probably it. There’ll come a time when the love of country will trump hatred of Hillary.”

Politicians Running for Cover

In presidential elections the "coat-tail" effect is often talked about.  The coat-tail refers to the tendency of voters to vote for an entire slate of candidates, including the presidential candidate and all those in the same party.  When a candidate has long coat tails the slate of candidates tends to do well.

Judging by the number of Republicans either speaking out against Mr. Trump or distancing themselves from him there is evidently a strong feeling among Republican that Mr. Trump will have difficulty at the ballot box.  Particularly those Republicans who are at risk of losing in the general election want to avoid the possibility that Mr. Trump will be a liability rather than an asset.

The Labyrinth of Convention Rules

A few days before the Republican convention starts 112 delegates will gather to determine the final rules for how the convention will operate.  Literally, they set the rules of the game.   The rules must then be approved by the full convention before the nominating process can begin.

Donald Trump's first problem actually began long before he even declared himself a candidate.  The delegates to the convention are largely composed of party leaders, many of whom worked tirelessly for other candidates.  These delegates are bound to support Mr. Trump on the first round of balloting, but they aren't bound to select a package of rules that will not allow at least a challenge to the first round of balloting.

Mr. Trump's second problem began when he started winning primaries with his populist rhetoric and divisive language he created plenty of enemies within his own party.  He may have won the popular votes, but he is far from popular within the party. Many senior and influential Republicans have said they would not attend the convention.  That might be their publicly stated stance, but that doesn't mean these people won't be working behind to scenes to set the stage for a convention that does not finally approve Mr. Trump's nomination.

So Where Do We Go From Here?

The next few weeks will be critical for Mr. Trump.  The party can be as much his friend as it can be his undoing.  Mr. Trump needs to mend fences and adopt a tone and protocol that demonstrates he will not be a liability in the general election.  In short, he needs to lose his ego. He needs to usher in an era of good will, make policy concessions and adopt a tone and style that convinces the political establishment he can be counted on and that he won't jeopardise their interests and their candidacies in other elections.

Mr. Trump should think seriously about having not just a slice of humble pie, but a meal full of humble pie. If, in the coming weeks, if Mr. Trump rebrands, himself, ingratiates himself, takes on a more politically acceptable tone, and makes a bridges a serious set of policy differences he has a good chance of sailing through even choppy waters at the convention.

If not, he will most certainly face a serious challenge at the convention.  Even if he manages to overcome that challenge, the damage done would probably ruin his chance to win the general election.  The Republican party line will read something like "Vote Republican even if you don't vote for Trump."

For those of you who want to read more, here's a selection of articles I found interesting.

http://www.msnbc.com/msnbc/some-republicans-discuss-anti-trump-convention-coup
 
http://www.vox.com/2016/3/24/11295380/republican-convention-rules-trump-delegates

http://www.usnews.com/opinion/articles/2016-05-09/republicans-opposed-to-trump-should-skip-the-gop-convention-in-cleveland
 
http://www.nytimes.com/2016/03/20/us/politics/donald-trump-republican-party.html?_r=0
 
http://www.politicususa.com/2016/06/07/one-republicans-slowly-lining-opposition-donald-trump.html
http://www.wnd.com/2016/05/see-list-of-98-top-republicans-who-refuse-to-back-trump/
 
http://www.theguardian.com/us-news/2016/may/08/republican-party-unity-donald-trump-paul-ryan
 
Questions?  Comments?  Write to me at msonenshine@symfoniecapital.com

Why Donald Trump Will Not Be the Next US President

If you like maps, stick with me!  The maps in this post tell nearly the whole story.


Donald Trump continues to make headlines as the Republic front runner for the nomination.  It's still early days, however and headlines don't say much about the real picture.  So let's look at the detail.

About 35% of the delegate count has been awarded.  Mr. Trump has not won a majority in any state so far.  Therefore the delegates are being awarded proportionally.

Mr. Trump has won 331 delegates as at 4 March. Marco Rubio and Ted Cruz combined have 348 delegates (231 and 116 respectively).  Another 38 have gone to Ohio Governor John Kasich (27),  and Dr. Ben Carson (8) and former Florida Governor Jeb Bush (3).

So the headlines call Mr. Trump the front runner.  But the detail is that he has less than the najority.  Mr. Trump is far from the winning the nomination by that count.  Moreover, a tide of opposition to him from within the Republican party is rising.

If things continue to unfold like this, the winner will be determined in August at the convention.  With more than half the delegates pledged to other candidates and the anti-Trump lobby building, Mr. Trump is not likely to get the nomination.

The second reason Mr. Trump won't be the next president is that even if he captured the Republican nomination he still has to contend with Hillary Clinton or Bernie Sanders and political realities underlying the electoral map of the US.

For those of you unfamiliar with the US election system it's worth noting that the US President is not elected simply by majority across the country.  We have an electoral college system in which each state has a certain number of votes, based on population.  In theory a candidate can win with a minority of the general population, but a majority in enough of the large states.

The electoral pattern in the US is that there are a core of Western and Mid-Western states that practically always vote Republican.  There is also core of Eastern  and Western States that have been Democratic strongholds in the recent years.  Then there are a few swing states.  Each of these is small on its own. Collectively they add up to about 20% of the electoral vote.

The plain truth is that in the absence of widespread dissatisfaction with the current state of affairs, the electorate generally prefers to stay the course.  The rider may change but the horse is the same.
That's pretty much the case in the US today.  If anything the overall economy is improved from where we were in 2012. The US dollar buys far more across the globe than it did a few years ago.  More people have jobs today than in 2012. Socially we've seen a general relaxation of attitudes on issues.  All of this favors Democratic candidates.

Since 1936 in the general election many of the largest states have voted Democrat, except for years where there was widespread dissatisfaction with the status quo.  President Eisenhower a Republican, won the 1952 and 1958 elections in nearly every state.

In 1960 young John F. Kennedy narrowly won the election by swinging a few of the the larger states to his side, including Texas, Pennsylvania and New York (together these 3 states are 25% of the electoral college)  Much of the country was behind Richard Nixon at the time.

In 1964 Lyndon Johnson, building on the legacy an President Kennedy won practically every state across the country. Note however, that Johnson lost 4 States in the South that had gone to Kennedy in 1960.

In 1968, with widespread social discontent and a deeply unpopular Vietnam war Richard Nixon swept the nation with a landslide election.  The solidly Republican states swung back to Nixon.

It was no surprise, however, after his presidency ended in shame and scandal that Jimmy Carter was elected in 1976.  His victory came in a way similar to that of Kennedy, with about 15 states swinging out of Republican hands.  Those states were mainly in the South  (Mr. Carter was governor of Georgia) and the industrial Mid-West.

The Republicans regained control in 1980 and held the White House with solid support across the entire country until 1992.  The discontent was so great after the Carter years that even the bulwark Democratic states of the upper North-East swung into Republican hands. In the 1984 general election Democratic nominee Walter Mondale won only his home state of Minnesota.  The Democratic victory in 1964 paled in comparison to the Republic victory 20 years later.

This was the situation until 1992, when President Bill Clinton swung several of the large states back into the Democratic camp.  He even won in California and some Mid-Western States which had historically voted Republican. Part of this result can be credited to the migration of many people from the east coast to California.  By 1992 California had grown to 54 electoral votes from just 32 in 1960. Importantly, Bill Clinton, former Governor of Arkansas, carried some of the key swing states in the South and the mid-West.

The White House changed hands in 2000, when the younger George Bush beat Massachusetts Governor Michael Dukakis. That election was hardly decisive.  Simply a handful of states swung back into the Republic court.  The Democrats carried the bulk of the North-East, the upper Mid-West industrial belt and California.  What changed were the South and South-Eastern states that President Clinton had in his camp.

So what does the landscape look like now?  Well, firstly, the 2012 elections came out pretty much the same as the 2008 election. President Obama lost only the state of North Carolina. This pattern is typical for an incumbent president, providing that president hasn't done anything to alienate the population and provided the over economic and social situation has not changed dramatically.

It's hard to imagine that were Mr. Trump the Republican nominee he would win over the states that in the most recent elections supported Mr. Obama and the Democrats.

Judging by the evidence thus far much of the Republican party overwhelmingly prefers other candidates.  If Mr. Trump managed to gain enough supporters going into the convention, his majority would be at best slim.  Many Republicans who dislike Mr. Trump and hold relatively moderate views would be likely to select the Democratic candidate, providing that candidate's platform and policies were also centrist. This works well for Hillary Clinton, who has a strong base of support in southern states.

So my guess is that Mr. Trump will not make it as far as the Republican nomination to begin with, which is one of the reasons why I ignore almost anything he says.

Just for the record, I'm a registered Democrat, though I don't always vote along party lines.  If Mr. Trump were the Republican nominee I would most certainly not vote for him and if I were a Republican I would not be among those voting for him.

I hold no ill will toward Mr. Trump.  He's made himself a brilliant career in the real estate business. He is clearly savy  and smart. He understands well how to use the media to his advantage.  He's funded his campaign from his own pocket, which, of course, is his democratic right and something to be respected.

It's a good thing that this large, colorful figure has come into the fray.  He's made people start seriously thinking about who should be the next president and why.  But at the end of the day, I think he won't win the election.  Frankly speaking, I find that a rather comforting thought.

Note - the maps above were selected from http://www.270towin.com/historical-presidential-elections/.  Thank goodness for the internet!  You can find practically anything for the asking.