Internet Effect in '08?

The internet was supposed to transform the political landscape in '04 after it propelled Howard Dean to the front of the Democratic Primary pack through small donations and passionately organized young people. As Dean imploded in Iowa and his volunteer army melted away or was absorbed by the Kerry campaign, the internet failed did not transform the general election. The most remarkable media event of the campaign was the Swift Boat Veterans for truth, which was more of a comment on campaign finance reform than changes in media.

According to MSNBC, of the top tier candidates McCain, Obama and Edwards are the biggest beneficiaries of donations under $200 with 31% of their total coming from the types of donors candidates most hope to reach online. Clinton, along with Romney and Giuliani has received less than 15% of her donations in amounts smaller than $200. That makes Obama the biggest winner in raw dollars, not even counting the alleged $500k he took in in one hour on the night of his SC win.

The most telling test of the internet's supposed transformative power may come in the next week. The big question, as put forward by a posting
on the Coldheartedtruth blog is will the Clintons' latest round of tactics pay off on Super-Duper Tuesday or are they playing with an outdated playbook which does not take into account a new demographic of high-information voters? That is, are we going go find out that the "Clintons still a step ahead, or have they fallen a step behind?"

Pew MediaSources has a very good study on the role of the internet in this election. 24% of Americans now say that the regularly learn something about the campaign from the internet, as compared to 13% in 2004. This growing participation is particularly significant when matched with Nielsen/Netratings data from the 2000 election which found that 86% of the online audience is registered to vote as compared to 70% of the U.S. population.

Perhaps unsurprisingly, young people are particularly active online with 42% of those 18-29 using the internet for campaign related information. The Obama campaign has shown eagerness to tap this demographic by setting up its own social networking software and given that almost 50% of 18-29 year olds voted for him in SC, his investment in this demographic is paying off.

But does it give him a chance at cracking new demographics given that internet usage is much lower among older demographics? Clearly, this is a problem particularly given that he trails significantly among both men and women over 65 (see below post.) A study from the University of Maryland tells us that women are also less likely to use the internet than men and usage declines with income which will make it particularly difficult to get to low income women where he trails significantly.

That said, there is room for expansion beyond his current base through the internet. While 18-24 year olds are very pro-Obama there is still significant support fo Clinton in the 25-29 demographic. Also according to the University of Maryland Latinos use the internet at a higher rate than all whites. Finally, women use the internet for communication (email) almost as much as men.

So despite some major blindspots (the over 65 set and low income women) the internet could offer a change of the rules that could eat into major Clinton constituencies. The next week may offer a test of whether they have taken it into their calculations.

Muddling the "Gender Gap"

Margie Omero at pollster.com has interesting analysis on how the "gender gap" between Obama and Clinton is muddled by other demographic variables. Her analysis is based on a recent Pew poll that finds that Clinton leads among all voters over 50 (+26 among older women and +21 among older men) but the gender gap only really shows among younger voters where she leads by +17 among women and trails by -9 among younger men.

But the far more important predictors of support for Clinton are socioeconomic status and ideology. Men and women in households earning over $50,000 a year both favor Clinton to Obama by 41% to 36%. Clinton among all educated voters, by -3 among women and -9 among men.

Obama leads by +5 with liberal women but trails by -15 among liberal men. Clinton leads by +37 among non-liberal women but ties with Obama among non-liberal men.

So the picture is definitely too muddled to be simply summed up with "gender gap." But some of the sub-narratives do hold up. Hillary is strongest among women in households with less than $50,000 a year (+36) and is stronger among older voters. Meanwhile, youth, higher income, and higher education all play in Obama's favor. I can't say that I can make sense of the interaction between ideology and gender.

Wild and Woolly

The $145 billion stimulus plan Bush announced on Friday has failed to impress says the Washington Post:

Most world markets were digesting for the first time the Bush administration's proposal to try to stimulate the U.S. economy with tax benefits. (It was announced Friday, after Asian and European markets had already closed.)

Traders around the world seemed to have little faith that the plan would arrest the slowdown in the U.S. economy, even if some version of it is passed by Congress.

"Foreign markets are doubtful about the ability of Congress to move quickly, and foreign markets have watched the Federal Reserve move slowly in August, September, October and November," Kotok said. "So the concern from abroad is that the U.S. has been too slow and done too little and is now playing catch-up."

We'll see if a rate cut of 75 basis by the Federal Reserve, the largest in 18 years, will help. At any rate, the Fed is taking this seriously now.

I'm not sure how fair it is to declare this yesterday's declines to be a referendum on Bush's stimulus plan (which I have yet to thoroughly review) given that investors seeing a lot of risk out there. With Bank of America and Wachovia reporting very large declines in fourth quarter profits, and the Bank of China reporting exposure to U.S. subprime mortgage loans, investors are going into full panic mode.

Bernanke on Board

Bernanke is backing a fiscal stimulus plan and President Bush is as well. That's as green a light as we're going to get. Now let's see if everyone can agree on what the package is going to look like.

New Perspectives on the Fiscal Stimulus

Everyone is getting in on the fiscal stimulus game. A brief survey...

The Congressional Budget Office (CBO) has weighed in with a well balanced and researched primer. Many of its conclusions are similar to the Brookings primer reviewed below so I will refrain from commenting further.

The Economic Policy Institute (EPI) provides an interesting reason to favor increased government spending over tax cuts in its plan. (Emphasis added)

Government spending is more effective than tax cuts in stimulating domestic demand for two reasons: a portion of the tax cut will be saved rather than spent immediately, and consumers are more likely than the government to spend on imports (rather than domestically produced goods). Approximately 10 cents per dollar of consumer expenditures will be spent abroad, while virtually every penny of investments in public infrastructure will be spent domestically.

The EPI also believes that this spending should satisfy unmet social needs. I think everyone agrees that this is a good principle but whether government or individuals best make this decision is a pretty fundamental ideological divide.

The Center on Budget and Policy Priorities (CBPP) subscribes to the timely, targeted and temporary goals for a stimulus pushed by Brookings. They do, however, cite work by Stiglitz and Orszag pointing to government spending being more effective than tax cuts, probably because the spending is direct as opposed to transfers to taxpayers who may end up saving.

Still, the CBPP points to broad-based tax cuts as an effective measure because they are easy and quick to implement. They also support state fiscal relief, strengthened unemployment insurance, and temporary increases in food stamp payments as effective measures.

In contrast to EPI, CBPP opposes new infrastructure investment as projects usually take months to get off the ground.

The Center for Economic and Policy Research (CEPR) is pushing a $600 tax cut for all taxpayers, $20 billion in tax credits for energy-conserving homes and businesses, $7 billion in public transit use subsidies, $3 billion in heating subsidies for low and moderate income families, and $25 billion in temporary relief for states and localities.

So that's quite a mix of options for you. Notably, with the exception of the EPI/CBPP differences on infrastructure spending, there appears to be pretty widespread agreement on what makes up an effective stimulus package.

Krugman and DeLong Enter the Ring

Paul Krugman wrote a piece for yesterday's NYTimes praising the stimulus plans of Edwards and Clinton and criticizing Obama's plan. As Obama's plan contains no alternative energy plan and includes cross the board tax cuts, he sees it as further to the right than the plans proposed by the other candidates.

That may be the case, but considering that this is a fairly technical economic issue "further to the right" does not constitute legitimate criticism of the policy. As I said in an earlier post (Fiscal Stimulus Showdown) alternative energy programs, while laudable in their goals, have yet to be shown to be an effective stimulus tool, read, they're probably going to take a while to implement. Broad-based tax cuts, while not as targeted as one would like, get money into people's pockets much more quickly.

Delong takes the same tack in attacking Krugman's rather shallow analysis of the stimulus plans in his blog. To be fair, he uses the same Elmendorf and Furman briefing I used as a jumping off point so perhaps this fight is really Krugman versus Brookings.

Universal Health Care Mandates

Theoretically speaking, the case for universal health care mandates is very strong. But as Robert Reich argues they are a silly thing to quibble over at this point in the campaign as the bickering takes the steam out of the common push for universal health care insurance. His most striking example is Massachusetts where 20% of the population is currently exempted from the mandate as the insurance is still too expensive for them.