Episode 25: Crazy Train
Picking this week’s theme and the song was easy. We are officially on the crazy train. As predicted in last week’s newsletter, the Election is a close contest and still undecided. The good news is Americans turned out in historic numbers and cast approximately 145 million votes. It’s inspiring to see so many people exercise their constitutional rights and perform their civic duty. Biden will win the popular vote by more than 4 million votes. (Hillary Clinton won the popular vote in 2016 by approximately 3 million votes.) However, the electoral winner remains unclear as a few states—Arizona, Nevada, Georgia, North Carolina, and Pennsylvania--are still too close to call or being disputed. The delay in declaring an official winner is frustrating, but the massive number of mail-in ballots this year has strained the system and vote-counting process. Several states allow ballots to be counted after Election Day as long as they postmarked by November 3rd. In Pennsylvania, votes that arrive up to three days after the Election are legal. Team Trump takes umbrage to these “late” votes in the states he’s winning but supports counting them where he’s losing. It feels like President Trump is holding a Magic 8-Ball and keeps shaking it until he gets the answer that suits him.
Biden is in the best position to win the Election, given he is leading the electoral vote and has multiple paths to 270. Trump can still win the Election, but it’s a long-shot and unlikely without some form of legal intervention. For this reason, President Trump has doubled down on allegations of voting fraud and filed various lawsuits in battleground states. However, judges in Michigan and Georgia have quickly dismissed the cases based on a lack of evidence. Some Republicans are starting to distance themselves from Trump based on concerns of Trump’s baseless accusations. Regardless, Team Trump appears undeterred in the fight for re-election. Therefore, a final, official, and legally defensible winner of the Election may take weeks or even months. In the meantime, both sides are jockeying for position with the media and supporters and claiming imminent victory.
So, what can we make of this mess? Below are the key takeaways:
The pollsters got it wrong, again. ABC/Washington Post came out with a Presidential Election poll one week ago that said Biden was up 17% in Wisconsin; Biden won the state by only 0.5%. That’s not an error; it’s malpractice. Polls influence voting. You could argue the issue from both sides regarding who benefits, but there’s no doubt the polls impacted election results. For Trump supporters, you may see a lead that looks insurmountable and feel your vote won’t matter, so why bother. For Biden supporters, you may be comfortable with a large lead and not feel a need to vote. The polling system is broken and lacks credibility, and it feels irresponsible for the media to keep promoting it.
Democrats and left-leaning voters are scratching their heads about the Election results. In their eyes, they see a President with moral turpitude who was crippled by the pandemic, saddled with the worst economy since the Great Depression (in an Election year), and plagued with multiple incidents of racial conflict that surfaced deep wounds for people of color. Democrats wanted this Election to be a statement, a repudiation of President Trump and his brand of populism. It was not. The “blue wave” that was expected by pollsters and pundits didn’t occur. Instead, the Election results highlight that many Americans reject the progressive ideas of the left. Trump supporters view the President as a cultural warrior, even a savior, battling against those who condescend and judge them. Political pundits and journalists live in bubbles in liberal, urban markets such as NY, LA, SF, DC, and Atlanta. These individuals, and the organizations they work for, continue to be tone-deaf to the experience of millions of people in rural America.
Trump lost ground with white voters and women, especially in the suburbs. These voters helped elect Trump in 2016 but abandoned him in 2020. Biden won suburban voters by 11 points, suburban women by 20 points. If you want to point to one area where Trump lost the Election, this is the starting place.
Trump gained ground with non-white voters. People of color voted a higher percentage for Trump in 2020 than in 2016. Trump won 34% of the Hispanic vote vs. 28% in 2016, and he won 12% of the Black vote vs. 8% in 2016. The Cuban and Venezuelan vote in Dade County helped Trump win Florida by a more considerable margin than in 2016. Trump performed well with Latino men, especially in Texas. He won that traditional red state by a more significant margin than 2016 based on that group’s support. Demographics and shifts in the population are a concern for Republicans as the core base of white voters creep to minority status by 2045; however, inroads with Latinos are encouraging. Latinos are the fastest-growing segment of the US, so this Election is a tuning fork for the Republican Party moving forward. Democrats may point to Hispanics in Arizona as a cause for celebration. However, this “Red to Blue” flip is mostly due to CA residents fleeing the state and establishing residence in tax-friendly Arizona and bringing the Democratic vote with them.
Trump owns the rural vote and motivated them to vote in large numbers. Trump won rural areas by 21 points. Biden dominated the urban centers and won city voters by 34 points.
Biden rebuilt the “Blue Wall” in rustbelt states (Minnesota, Wisconsin, Michigan, Pennsylvania), and Trump is paying for it. Oh, the irony!
The stock market loved the Election “results.” The stock averages soared to huge gains this week and were comforted by the prospect of a Biden presidency countered with a Republican majority in the Senate. I suspect the markets would have reacted very differently if the Democrats won the Presidency and flipped the Senate.
The media spent most of the week covering the presidential race, but the bigger story was Congressional Elections. For the House, all 435 seats were up for grabs, given members are elected to two-year terms. The House started with 232 Democrats, 197 Republicans, one Libertarian, and five vacancies. A party needs 218 seats to gain the power of the Lower Chamber. In the 2018 midterms, Democrats flipped 40 seats in the House and reclaimed majority status. Democrats hoped to build on the 2018 mid-term success, but they lost ground this cycle, and Republicans gained at least five seats (and counting), dwindling the Democratic majority to a bare minimum. Still, Democrats will retain control of the House, and Nancy Pelosi remains in her role as Speaker.
In the Senate, Republicans started with a 53/47 edge. Assuming Biden wins the Presidency, Democrats need to gain three seats to control the Senate, as the Vice President can cast a tie-breaking vote. Some races were expected to be easy wins by both parties. That proved true. Republicans won 19 seats and Democrats 13, although John James (Republican) lost a close race to incumbent Gary Peters (Democrat) in Michigan and refused to concede and has called for an investigation into voter fraud. Of the remaining four races that lack a majority winner, Republicans hold the lead in three (Alaska, Georgia, North Carolina), and Democrats hold the advantage in one (Georgia). So what does all this mean in aggregate? In Colorado and Arizona, the Democrats flipped two seats, and the Republicans flipped one seat in Alabama. Therefore, there is currently a net gain of one for Democrats, giving both Republicans and Democrats 48 seats with four races undeclared. The Republican incumbent in Alaska has a large lead so it’s fair to assume that seat will stay red. There will be a special election run-off in January for the three remaining races without a majority vote (North Carolina and two races in Georgia). Republicans are leading two of those races so the Party of Lincoln should retain control of the Upper Chamber. What’s noteworthy is the enormous amount of money spent on Congressional races. More than $100m was raised by the Democrats to unseat Lindsey Graham, a Republican senator from South Carolina, who won by 14 percentage points. In Kentucky, Democrats spent $88m to oust Mitch McConnell, the majority leader. He cruised to a 21-point victory. I would imagine the run-off races in January will exceed these record spending figures given what’s at stake.
In CA, the classification of gig-economy workers was on the ballot. Companies such as Uber, Lyft, and Postmates would argue that these freelance workers are independent contractors. However, last year California’s legislature passed a bill to require gig-economy firms to reclassify these workers as employees. The change in worker status carried enormous financial penalties for the companies in employee benefits, including minimum wage, unemployment benefits, and health insurance. Thanks to Prop 22 passing this week with 58% support, rideshare and delivery companies will be able to reclassify these workers as independent contractors but still offer minimal benefits, including a guarantee of hourly earnings, vouchers to access subsidized health insurance, and vehicle insurance. Companies formed a coalition and put a $200 million campaign behind Prop 22, and it paid off.
New Jersey, Montana, and Arizona legalized recreational marijuana, and South Dakota and Mississippi approved medical marijuana. One in three Americans now lives in a state where recreational marijuana is legal. Oregon became the first state in the US to decriminalize the use of all drugs, including cocaine, heroin, and meth. Drugs are not legal in Oregon, but criminal penalties are removed—including prison time—for possessing small amounts of drugs. Individuals caught with drugs will have the option to pay a $100 fine or get a “health assessment” at an addiction center.
I. Below are the articles I found interesting the past week:
I’m a data guy. I absolutely love looking at data and analyzing trends. It gives me comfort in making decisions. However, as they say, bad inputs equals bad outputs. Election polls, and possibly all polls, are broken. The reality is people don’t trust polls. There’s too much missing and incorrect data to predict accurate outcomes. After pollsters have failed in two consecutive elections, the question is where do we go from here? Do we double down on polling and try and make them better, or do we abandon them all together? Americans love a good poll. We are obsessed with knowing what others think. It’s a signal for us that it’s time to worry, celebrate, or act. Perhaps we spend so much time worrying what other people think that we don’t invest enough time to explore what we think. Something to ponder.
Polling failed. It’s time to kick the addiction
I’m fortunate that my personal and professional network consists of successful people. I never had children, but most of my friends do. I would say the one thing most of them worry about is how to balance giving their kids opportunities (education, travel, and other experiences) while preserving a hunger for success and teaching them how to be scrappy. The word grit is hard to define, but you know it when you see it. There’s lots of research referenced in this article that suggests that grit is the one characteristic that predicts success. I would tend to agree. Life can be challenging and certainly unpredictable. Things don’t always go your way, and life isn’t fair. Grit enables people to get through the tough times long enough for the tide to change. If this concept resonates, this article is worth a read.
12 habits that helped me real grit and mental strength
II. The rest of the best
Rigorous study backs a psychedelic treatment for major depression
Why Albert Einstein said: The measure of intelligence is the ability to change
III. Stats that made me go WOW!
- Facebook conducts an internal survey with its 49,000 employees every six months. This survey posted this month showed that only 51% of respondents said they believed that Facebook was having a positive impact on the world, down 23 percentage points from the company’s last survey in May. In response to a question about the company’s leadership, only 56% of employees had a favorable response, compared to 76% in May.
- An estimated 34,000 pieces of junk over 10 cm in diameter are currently orbiting Earth at around ten times the speed of a bullet. If one of them hits a spacecraft, the damage could be disastrous. With the help of AI, ClearSpace-1 plans to launch the world’s first debris-removing space mission. If the ClearSpace-1 cleanup is successful, it’ll pave the way for more AI-powered, debris-removal missions—meaning a safer space for satellites, spacecraft, and anything else we put into orbit.
- Credit Suisse, a bank, forecast Britain’s GDP will shrink by 5% this quarter and by 11.8% over 2020 as a whole.
IV. Name that Tune!
As I write this email, I am listening to Crazy Train by Ozzy Osbourne.
John Michael “Ozzy” Osbourne was born in Birmingham, England. Ozzy suffered from dyslexia and suffered sexual abuse from school bullies in grade school. This trauma led Ozzy to leave school at 15 and set the stage for him to throw himself into music and create an altered persona on stage. Ozzy made a name for himself as the lead singer of Black Sabbath, known as the “Prince of Darkness.” Black Sabbath was formed in 1968 and named the band after the film of the same title. The group pioneered the heavy metal sound. Ozzy left the band and went on to a successful solo career. Ozzy reunited with the original Black Sabbath band members in 2011, and they played for another six years. Of course, Ozzy achieved mainstream celebrity for the reality TV show, The Osbournes, which aired on MTV and documented Ozzy’s life with his wife Sharon and their kids Jack and Kelly. In 2006, James Hetfield and Lars Ulrich of Metallica inducted Ozzy and Black Sabbath bandmates into the US Rock and Roll Hall of Fame.
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