Brexit Contagion: In the Air Tonight

June 23, 2016 will forever be celebrated as the day the UK gained its independence from the global bureaucracy of the European Union. Britons voted to leave the EU, 52% to 48% to leave the EU, a decision that will surely shape the global order going forward. As a result, Prime Minister David Cameron, who led the remain campaign, announced that he planned to step down by October. Will Boris Johnson become the next Prime Minister?

The EU is a politico-economic union of 28 member states. The EU was founded in 1957 by six core states of Belgium, France, Italy, Luxembourg, Netherlands, and West Germany. The six core states signed the Treat of Paris creating the European Coal and Steel Community on April 18, 1951. To create a common market, the six went on to sign the Treaties of Rome in 1957, establishing the European Economic Community which would later become the European Union. From the onset, the EU was birthed as an economic union creating its own single market. Due to its global influence, the EU is considered as a potential superpower, influencing the global order. The United Kingdom made its first application to join the European Union in 1961, later admitted into the union on January 1, 1973 with Denmark and Ireland.

The Brexit vote has started a contagion has now started to spread. Voters in France, Italy, and the Netherlands are demanding their own votes on the EU membership and the euro. The European continent now faces a contagion of shorts with pending referendums. In the Netherlands, polls show a majority of voters want a referendum on membership, and voters are evenly split over whether to stay or go.

In a stunning shift of the global order, those who supported Britain to ‘Remain’ in the EU are now on the wrong side of history. Both President Obama and former Secretary of State Hillary Clinton, urged Britain to stay in the EU. While presidential hopeful Donald Trump backed the campaign to leave. Did President Obama’s advice to ‘remain’ push some voters to ‘leave’? Has the president lost his foreign policy credibility? Has the president cemented his impendence with being on the wrong side of this vote? Those on the wrong side of this issue could lose any and all their credibility going forward.

Here in America, the rise of Donald J. Trump has taken many by surprised…even myself. When Trump announced his candidacy, no one in the GOP field took him seriously, and I presume, even Trump himself did not expect to win the primary. The UK voting to leave the European Union has improved the chances of Trump winning the presidency in November. In fact, I believe the Brexit has signaled a Trump presidency is very likely. Donald Trump is very similar to Boris Johnson, the leader of the leave campaign. Both have tapped into the angry electorate. Both have railed against globalization and the effects it has on European and American workers. Both blame the impact of immigration for the economic woes of native workers. Lastly, both have tapped into the populism by appealing to emotion and not logic.

Let me be clear. The United Kingdom voting to leave the EU does not mean Trump is guaranteed to win in November. But rather a signpost that the trends of nationalism and populism are in the air, and this contagion could spread worldwide. To work in a Phil Collins reference here. The results of the Brexit, the world can now “feel it coming in the air tonight.” The leave voters in the UK gave the finger to the globalist “to wipe off that grin, I know where you’ve been, it’s all been a pack of lies.”

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Price Political Poll Data for the Last 5 Months

Below are graphs showing the average polling data for the last 5 months. Polling data was taken from Real Clear Politics.

 

ClintonTrumpgraph2

ClintonKasich2

ClintonCruz2

ClintonGOP2

 

As you can see below, Donald Trump does worst than both Cruz and Kasich. January 2016 was his best month, but in February, all his gains were lost, and peaked in March. Of the three candidates, Kasich does the best against Clinton. His spread differential hoovers around 7 points.

Date Clinton/Trump Spread Clinton/Kasich Spread Clinton/Cruz Spread
Dec-15 5 0.8
Jan-16 3.04 -1.9
Feb-16 4.1 -7.0 -0.7
Mar-16 10.6 -6.7 2.6
Apr-16 7.0 -7.3 3.9

Please note: There are no polling data for Clinton v. Kasich general election match-up for the months of December and January.

Price Political Report Presidential Poll Tracker

ClintonTrumpgraph

  • RCP Average: Clinton (47.4%) and Trump (40.1%), Spread: +7.3
  • Price Political Report Average: Clinton (47.8%) and Trump (40.7%), +7.1

ClintonCruzgraph

  • RCP Average: Clinton (46.5%) and Cruz (43.2%), +3.3
  • Price Political Report Average: Clinton (48.0%) and Cruz (41.9%), +6.0

ClintonKasichgraph

  • RCP Average: Clinton (40.7%) and Kasich (48.2%), -7.5
  • Price Political Report Average: Clinton (42.1%) and Kasich (46.2%), -4.1

ClintonGOPraph

Clinton/Trump Clinton/Kasich Clinton/Cruz
PPR Avg. 7.1 -4.1 6.0
RCP Avg. 7.3 -7.5 3.3
Moving Avg. 7.0 -2.8 6.5
Median 7 -6 6
Mode 9 -8 6

Trump, The GOP’s Lost Opportunity to Defeat Clinton

Earlier this week, Donald Trump swept the Northeast winning the states of Delaware, Pennsylvania, Maryland, Rhode Island, and Connecticut. Winning those five Northeast states–which traditionally vote Democrat–further solidified Trump’s quest in locking down the GOP nomination. Currently his delegate count rests comfortably at 996. He needs 241 of the 571 delegates left or 42 percent.

It is clear, that Donald Trump’s rivals, Cruz and Kasich, have little to no chance of winning on the first ballot in Cleveland. It is possible that Donald Trump will not obtain the required 1,237 delegates, forcing a contested convention. It is unknown what the results would be if such scenario were to occur.

A member of the Republican National Committee spoke to the media stating that if Donald Trump were to achieve 1,100 delegates–little less than 200 delegates below the required 1,237– he would likely secure the nomination. But there are problems with this. First, this ignores the GOP convention rules. They require 1,237 or simple majority of the 2,472 total delegates to secure the nomination. If he hypothetically achieved only 1,100 delegates, he would only have 44 percent of the total delegates, a far cry of a simple majority. Secondly, this is giving into the demands of Donald Trump and his supporters. Throughout this process, Trump has whined, and decried the delegate system–which he surely has benefited from since he is the front-runner in total delegate count. His demeanor has been less than presidential. If Donald Trump does win the GOP nomination, he would be the worst candidate to go against Hillary Clinton that the GOP could have put up.

However, the Republican Party is not without fault. They trounced out their largess of talent. They filled the field with 17 candidates, effectively dividing up the vote, which prevented an opponent with equal number of popular votes to arise. Donald Trump was the only candidate who had the large name ID, who branded himself as the anti-Washington Establishment. It is true Ben Carson was the other anti-Washington establishment candidate, but he was not able to garner enough votes to stay in the race.

Trump’s Unfavorably Problem

Trump is viewed unfavorably among key demographics which could hurt him in the general election:

  • In Florida (an important swing state), where Cuban-Americans are more conservative than other Latinos, a whopping 73 percent of Hispanic voters say they view Trump unfavorably. Another 11 percent view him “somewhat unfavorably.” Against Hillary Clinton, Trump would lose Florida’s Hispanic vote in nothing short of an embarrassing smack-down — 69 percent to 18, according to the poll conducted by the political research group Latino Decisions and commissioned by the pro-immigration reform group America’s Voice.
  • On February 11th, two days after the New Hampshire primary, Clinton led Trump on the Morning Consult poll by just one percentage point (42% vs. 41%). However, just two months later, on April 11th, Clinton led Trump with female voters by an 18-point margin.womangraph
  • Donald Trump’s image among U.S. women tilts strongly negative, with 70% of women holding an unfavorable opinion and 23% a favorable opinion of the Republican front-runner in March. Trump’s unfavorable rating among women has been high since Gallup began tracking it last July, but after rising slightly last fall, it has increased even further since January.womangraph2
  • Donald Trump is broadly unpopular with national adults; more so than any other major candidate of either party. Trump was seen favorably by 30% of the country, while twice as many U.S. adults saw the GOP front-runner unfavorably (63%).

graphadults

  • NBC News/SurveyMonkey tracking poll found that Trump was viewed unfavorably by 86% of black voters and 75% of Latinos. Overall about eight in 10 nonwhite voters in that survey had an unfavorable view of Trump, with about seven in 10 saying their view was “very unfavorable.”
  • According to a Harvard University’s Institute of Politics at the John F. Kennedy School of Government, sixty-one percent of 18-to-29 year-olds prefer that a Democrat be elected president in the fall, while 33 percent of those surveyed back a Republican. That gap of 28 percentage points has nearly doubled since a similar poll conducted last year, when the difference was just 15 percentage points with Democrats again in the majority. In a hypothetical head-to-head contest among likely voters, Democrat Hillary Clinton trounces Republican Donald Trump, 61 percent to 25 percent — a 36-point margin. Of those likely voters surveyed, 14 percent said they were undecided. The poll found that millennials largely reject Trump, the leading Republican candidate. He has the highest negative ratings of any of the candidates included in the survey: 74 percent have an unfavorable view of Trump compared with 17 percent who have a favorable view of the billionaire businessman.

Trump is Not Ronald Reagan

Many of his supporters claim Trump’s unfavorably is similar to what Reagan had in 1980. Ronald Reagan is the Frank Sinatra of Republican politics and Donald Trump is not Reagan. All Republican politicians try to be like Reagan, and all conservative voters are nostalgic for those years.  According to FiveThirtyEight, Trump’s favorable rating among the general electorate is, on average, 30 percent. His unfavorable rating is a sky-high 63 percent. In other words, more people dislike Trump than like him. On the other hand, the American public was more evenly split on Reagan at a comparable point in the 1980 campaign.

According to an April 1980 Cambridge Reports survey, 39 percent of Americans had a favorable view of Reagan, and 44 percent had an unfavorable view. Reagan’s net favorability rating was 28 percentage points higher than Trump’s is. It is possible Trump could see his popularity rise after the primary campaign ends, and the Republican base unities under his candidacy. But Reagan was also in the heat of a primary fight until May 1980, against George H.W. Bush. It seems likely that Trump, if he wins the nomination, will be much less popular than Reagan was when he started the general election campaign.

In the end, Donald Trump does not give the GOP a strong candidate that they need to defeat Hillary Clinton in the November general election. Instead, they are left with a candidate who is divisive, bombastic, and immensely flawed. It is unclear where the GOP goes from here and how they will recover if Trump loses to Clinton. Having Donald Trump as their nominee, not only increases the likelihood that Clinton will win the general election, but could put the party behind for the next 4 to 8 years, and lose their influence for a whole generation. Also, a Clinton presidency could see the Supreme Court shift left, cementing the lefts’ progressive agenda for decades. Moreover, throwing all their eggs into one basket in the 2016 GOP primary has depleted the bench of their talent. Historians will look back at the 2016 primary election for the GOP as the most divisive ever. They will see this as a lost opportunity for Republicans to defeat an incredibly vulnerable opponent in Hillary Clinton, and Trump supporters will bear this burden.

Summer Wars: A Fight Down to the GOP Convention

On Tuesday, billionaire real estate mogul, Donald Trump, lost the Wisconsin Primary to Texas Senator Ted Cruz, 35.1% to 48.2% respectively. Cruz’s victory in Wisconsin further solidified the sentiment that a brokered convention in Cleveland, Ohio, is increasingly likely. As of today, Trump has 743 delegates, Cruz; 520, and Governor Kasich; 143. Trump’s quest towards 1,237 has not been easy. During his bid, he has faced many obstacles along the way. As it stands, Trump has captured 60 percent of the required delegates, needing only 494 more to secure the GOP nomination. There are 769 delegates remaining which are scattered among 16 states, with the last batch of state primaries ending on June 7.

Nationally, Trump is ahead in the polls with an RCP average of 39.6%, with Cruz at 32.2% and Kasich; 20.8%. Over the past several weeks, polls have tightened between Trump and Cruz, seeing his double digit lead over Cruz narrowed down to single digits. In the general election against Clinton, Trump does not do well in the polls. Current RCP average shows Clinton over Trump 49.4% to 38.9%, with a 10.9 point spread. If Bernie Sanders were to somehow defeat Hillary Clinton, the polls show him beating Trump by 16.5 in the general. On the other hand, Kasich is the only Republican candidate who defeats Clinton in a one-to-one general election match-up. RCP averages show Kasich at 47.7% versus Clinton with 41.1%.

Going forward into the summer, Donald Trump will continue to face many obstacles—both in the primary and in the start of the general election process (if he wins the nomination). For Trump to win 1,237, he will need to win 64 percent of the remaining delegates to avoid a brokered convention. Alternatively, for Ted Cruz to win the nomination, he will need to miraculously win 93 percent of the remaining delegates to triumph on the first ballot. Mathematically, Governor John Kasich has no chance of winning the nomination on the first ballot due to needing more delegates than what is left in the race. Both Cruz and Kasich hope to play spoiler, preventing the bombastic narcissist Donald Trump from winning the GOP nomination.

Many in the Republican establishment are overtly hoping that Cruz and Kasich succeed in stopping Trump from winning the nomination. Many of them  have been pushing the #NeverTrump movement for weeks on social media hoping to curb his momentum. Covertly, many are hoping Cruz can defeat Trump on the second ballot if a brokered convention were to occur. According to the convention rules, if no candidate obtains the required 1,237 delegates on the first ballot, the convention moves to a second ballot. Unlike the first ballot—most delegates are “bound” to vote for a particular candidate on the first ballot, based on the results of their primary, caucus, or convention vote—more than 50% of delegates are unbound. When delegates are “unbound”, they are free to vote for which ever candidate they prefer. If no candidate reaches 1,237, the convention moves to the third ballot. On the third ballot, a bulk of the delegates become unbound, free to vote for which ever candidate they prefer.

If a brokered convention does indeed occur, those unbound delegates who are not rock solid supporters of Trump, could freely back which ever candidate they prefer. “If Trump heads into the convention without the magic number of 1,237, already more than a hundred delegates are poised to break with him on a second ballot, according to interviews with dozens of delegates, delegate candidates, operatives and party leaders.” Both Cruz and Kasich see either the second or third ballot as their path towards victory, taking away the unbound delegates from Trump.

Strategically, Ted Cruz would be the logical second ballot option to defeat Trump, if he were not to secure the nomination on the first ballot. If Cruz were to fail, Kasich sees himself as the alternative to both Trump and Cruz. A brokered convention in July would be devastating for the Republican Party. If Trump were to lose on the first ballot, many of his supporters would view this as a nefarious attempt by the party to “steal” the nomination away from Trump.

Consequently, if he wins the majority of the delegates, but falls short of 1,237, and the party does go with another candidate, many of his supporters would sit out in the general election. This would surely favor Clinton in the general election. Regardless, Trump’s presence has brought chaos to the primary process for Republicans, unnerving the party elites in Washington. What will a Trump victory mean for the Republican Party? For one, Trump could lose to Hillary Clinton, breaking the party apart, causing further infighting. If the party does schism, the party could go away of the Whig Party or at the very least, see their strength receed for years until they can regroup. It is unclear where the Republican Party goes from here. Time will only tell.

The $15 Minimum Wage Will Kill Jobs. Should You Care?

Peter Coy
Bloomberg Businessweek

This is a story about ethics and economics, winners and losers, and the philosophical muddle on both ends of the political spectrum, as told through two of the hot-button issues of the 2016 U.S. presidential race: the minimum wage and free trade.

Start with an unpopular but irrefutable fact: Raising the minimum wage to $15 an hour, as some states are doing, will create both winners and losers. The winners will be workers who get paid more, of course. The losers will be low-skilled workers who don’t get paid at all, because employers couldn’t afford to keep them on.

Should you care that a measure intended to make people better off will actually make some worse off? That’s a deep question that has exercised such greats as John Stuart Mill, Vilfredo Pareto, and John Rawls. Before you answer it, though, please consider the case of free trade, which involves a similar conundrum. Like raising the wage floor, lowering barriers to cheap foreign imports makes a lot of Americans better off (by cutting the cost of baby clothes, toys, televisions, etc.) while undeniably hurting others (by closing down their factories).

This is where it gets interesting. As similar as the two cases are, the political reactions to them are not. Liberals like Bernie Sanders are strongly in favor of raising the minimum wage, yet suspicious of free trade. When it comes to the minimum wage, they’re all about the greatest good for the greatest number, but on the topic of trade they’re focused intently on protecting the disadvantaged minority.

Conservatives are just as self-contradictory on these two issues, only in the opposite direction. They worry a whole lot about Americans losing their jobs because of a higher minimum wage, but are less concerned with people losing their jobs because of lowered trade barriers.

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Karl Rove: ‘Fresh face’ might be best GOP nominee

One thing that unites many supporters of Donald Trump and Ted Cruz is the suspicion that party elders might try to hand the Republican presidential nomination to another candidate if neither Trump nor Cruz arrives in Cleveland with the 1,237 delegates required to win.

Important voices in the conservative world have voiced such concerns. Rush Limbaugh, for one, has speculated that the Republican establishment will try to “install whoever they want” at a contested convention. (Limbaugh guessed such a final choice might be Jeb Bush or Paul Ryan.)

Now Karl Rove, a man many view as the physical embodiment of the establishment, has poured gallons of fuel on the Republican fire. Appearing on Hugh Hewitt’s radio show Thursday evening, Rove said a “fresh face” chosen at the convention might turn the GOP’s fortunes around and win in November.

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