IOWAt the fu*k?
If a brand is a function of promise (imagery) and performance (interaction), then the brand Iowa is largely a function of the promise. The Hawkeye state is one of the least visited states in the union, attracting fewer tourists than Nebraska or Kentucky. The promise/perception: the caucus and dead baseball players emerging from a cornfield. YTD, with this week’s debacle, the Iowa brand has suffered an erosion in equity greater than any geography other than the Wuhan region.
The Iowa primary is first for little other reason than it’s first, and has been since the disastrous 1968 Democratic Convention, where the DNC decided it needed a more egalitarian process. So it let Iowa go first, as they had a quaint (antiquated and stupid) caucus process that required more time. The contrast of candidates and deep-fried Snickers was a media hit that cemented the process as “American.” If “American” means damaging and irrational then, yes, go Hawkeyes.
Intimacy = Contact
I write about tech executives, and (no joke) refuse to meet with them. Mostly because I’m an introvert and don’t enjoy meeting new people. But also because intimacy is a function of contact. Often when I meet someone, I like them as a person, feel empathy for them, and find it harder to be objective about their actions. I was recently invited to an “intimate” dinner with the CEO of Uber orchestrated by his PR team, who were looking to spread Vaseline over the lens of the exploitation that Uber levies daily on its 4 million “driver partners.” As Gladwell writes, the people who did not meet Hitler got him right.
It’s difficult for our elected leaders not to shape public policy around the concerns and priorities of the super wealthy when they have more access to their senators. It’s easiest to identify with those who are most like us and those we spend the most time with. The median wealth of Democratic senators is $946,000, Republican senators $1.4 million.
A National Bureau of Economic Research study of the 2004 presidential primary estimated that people in early-voting states had up to five times the influence in candidate selection of voters in later primaries. Since 1972, the Iowa caucus winner for the Democratic party has become the party nominee 70% of the time.
The most influential people on the planet, who decide our laws and wars, spend way too much time interacting with Iowans. Over the last year, the top six candidates for the Democratic nomination collectively spent a year in Iowa. So, who has influence over the most influential people in the world? Old white people. Specifically, about 171,000 of them, about a quarter of the population of Washington, DC, and just 15.7% of Iowans — a state with less than 1% of the U.S. population, and just 1.1% of the electoral votes.
The Iowa caucus has more sway over who gets the nomination than any media firm, ethnic group, or other state, as it provides focus and momentum in the all-important attention graph. So a state with the population of Chicago, whose inhabitants are 90% white, does what almost every policy and institution in America does: transfer wealth from the young and non-white to the old and white. Even in the land of old and white, it gets whiter and older — caucus attendees must have the time and money to caucus. Show me a single Latina mother, and I’ll show you someone who can’t make it to a caucus.
It Gets Worse
The second primary is where a candidate can get real momentum, but it’s also a chance to check and balance Iowa. Unfortunately, New Hampshire boasts the second-oldest population in the union and is even more monochrome with 93% white residents. White households commanding 8x the wealth of black and Hispanic households, skyrocketing student debt, anemic home ownership among millennials, and an agricultural sector where 15% of income is government subsidies — these are not a function of chance.
A democracy on its own is dangerous, as it creeps from egalitarianism to a mob mentality. A liberal democracy is supposed to slow our thinking by inserting institutions and laws that provide guidance and balance. Each of us didn’t send a text message on whether we should launch, on September 12, 2001, nuclear-tipped MGM-52 Lances into Kabul. Our slow thinking saves us from ourselves. But now, our institutions have transformed from bodies of nuance to vehicles of discrimination and cronyism.
Ingesting deep-fried Snickers and town-halling with old white people for a year inhibits our leaders’ ability to move where the puck is headed. Ideas worthy of consideration aren’t heard, and outdated thinking becomes a pillar of our union. For example, Social Security should be disbanded. Yes, I said it. The wealthiest cohort in human history (US baby boomers) should not be the recipients of the largest transfer payments in history.
Without Social Security, senior poverty would escalate from 9% to 39%. This isn’t evidence of the program’s veracity, but its inefficiency. Lifting 15 million seniors out of poverty is noble, but not worth $1 trillion a year, escalating to $1.8 trillion over the next decade. So, each year we are spending $16,500 per person to pull these Americans out of poverty, vs. $5,700 per person for recipients of Medicaid. A targeted program for seniors, similar to most other social programs, would end the universal basic income program that Iowa and New Hampshire have essentially secured for one demographic: seniors. A better investment would be guaranteed income for Americans in their first decade of life vs. their last.
18% of children live in households that are food insecure. We could likely reduce this by two-thirds if we dropped groceries on the front door of every household with children, every day. However, this makes no sense, and neither does Social Security. For two-thirds of seniors, Social Security has detached from the program’s original mission — to eradicate senior poverty — and is now the world’s most expensive upgrade from Carnival to Royal Caribbean for Nana and PopPop. Senator Michael Bennet is correct when he says the reason we don’t discuss universal Pre-K is because toddlers don’t vote. They do, however, caucus. But only when cake is involved.
Racism, income inequality, and a generation less prosperous than their parents are complicated problems with no silver bullet. A decent place to start is to reorder the caucuses. Put Iowa and New Hampshire last. Kevin Sheeky, a Bloomberg advisor, suggested that the three closest states in the previous presidential general election go first in the next primary. This year that would mean Michigan going first, then New Hampshire and Wisconsin. That seems a lot more dynamic and strategic.
Or … eliminate the caucuses altogether. Caucuses are undemocratic in that they require hours of participation that only those with the freedom not to work can afford. Older, wealthier, and more highly educated Americans punch above their weight in electoral terms — they have time to vote and stay engaged politically. Younger, poorer, and less educated Americans punch below their weight; they don’t have the time and resources to be politically involved and to go to the polls. Democrats need to get young and diverse voters to the polls. The Iowa and New Hampshire caucuses accomplish the opposite.
Dems also need to be more strategic. Millions of dollars, hours, ads, and corndogs are concentrated on small states that don’t make a big dent in the effort to organize and activate the national voter base. There are nearly twice as many registered Dems in Brooklyn as the entire state of Iowa. Iowa has a population of 3.2 million, New Hampshire 1.4 million, Nevada 3.1 million, South Carolina 5.1 million. Iowa is currently a non-competitive general election state, and little of all this work can be harnessed in November.
And the strongest cautionary tale of the Iowa caucus — the fallibility of technology. The app, creepily named Shadow, by a firm formed five months ago, was barely tested and crashed. In addition, 4chan users conducted an operation to clog the phones and stop precincts from reporting. All this confusion without a hack.
Technology is hackable, glitchy, and dependent on WiFi, which itself is vulnerable to attacks. An 11-year-old hacked a voting machine prototype in 10 minutes. Ivanka Trump has shown a peculiar interest in trademarking voting machines. The only safe election is a paper ballot election. Count them twice. Leave Russia, tech hubris, and Ivanka’s trademarks out of it.
At the State of the Union, the president honored 13-year-old Gage Hake and his mom, and recognized their father/husband, who was killed in Iraq. Gage was present, in the moment. But he wasn’t focused on his deceased dad or the recognition. Gage was 100% focused on consoling his obviously distraught mother. Any child of a single mother knows what it means to have your entire universe collapse to one thing: the well-being of your only remaining parent. A 13-year-old boy trying to be the man of his house and comfort his mother is instinct. Our institutions and idolatry of the dollar have arrested another instinct — to ensure the next generation prospers.
Life is so rich,
Don’t people have social security contributions in the US?
Why not have IA/NH/NV/SC all vote on same day?
Good points. Not sure if that was a mistake, but just an FYI NH does not caucus. I would also imagine there are states with far less tourism than KY (bourbon, horse racing, etc.)…
I was mostly believing you until you had to go and do … “Source: Fox News”
Agree w/ your points but you’re too smart to join the “I’m-cool-bc-I’m-talking-smack-about-white-people” crowd. If you’re too scared to talk negatively about another race, prob best not to do it to any – even your own.
He is not talking smack about white people. He is pointing out the power which Old white people hold, because their vote matters more due to the electoral college. This in turn leads to leaders ignoring other sects and focusing on them. He isn’t saying white people are bad, he is just pointing out that they are getting more advantage from the current system, which shouldn’t happen. Because everyone is equal in the US of A.
Scott this is amazing! I especially love the idea of the three closest states in the previous election being the first three primaries. Maybe Elizabeth Warren’s team can flesh out the ideas of switching Social Security from the end of your life to the beginning 🙂
I am so new to just surfing around the internet. I have been impressed with the things people come up with.
Given your interest in guaranteed income, im curious about your feelings on Andrew Yang. Full disclosure I’m a supporter of his politically and financially, namely because of his focus on modernizing the way our government interacts with technology and his focus on the increasingly automated future of blue collar America. Great read as always, thanks.
Some commenters are suggesting that SS is “forced savings” as opposed to welfare. This is incorrect. SS is welfare — a tax imposed upon those currently earning income in order to provide supplemental income to those currently retired. Your SS taxes paid for your parents’ and grandparents’ SS checks. In fact, since we’re operating on deficits, it’s worse — we’re not just taking from current earners to pay current retirees, we’re borrowing against current and future earnings to pay current retirees. Retirees who then use their tax-subsidized free-time to be politically active.
You write about SS like it is a welfare check. I have done the math. If I had invested my SS contributions just in the Dow, I would have $960,000. Based on my SS check I will get less than half that by my expected death age. If it were my money my kids would inheret the rest. Being the government has it my kids get ZIP! I would be more than happy to get a check for all that I put in plus interest and tell you and all the other young people that think this is welfare to stick it.
Sorry, I fail to understand your point. The money you put into SS is gone: it was spent on your parents. You are currently living off your children (SS wise). That is welfare.
@Oliver Not true, I am a baby boomer, there are 76 million of us that paid in. My parent’s generation called the Silent Generation and was only 20 million and most women did not work. So you what’s your next excuss?
@Blase you are wrong. Social Security is a “pay as you go” scheme. The SS “savings” were an accounting book entry: what you paid in SS that didn’t go to your parents were used by other government programs. However, your parents retired closer to the end of life and died faster than baby boomers are dying (many costing millions of dollars during the last few months of life). Every dollar you get is coming from taxes your children (and/or your friend’s children) pay TODAY. This is ruining your grandchildren (and/or your friend’s grandchildren) financial future. When the Baby Boomer generation is gone, we are going to have a depleted country, where future generations are going to ask “why” we spent so many resources so people could “do nothing at home, overeating and watching TV”!
@Dan Social Security has been building up a surplus since the 1983 when reforms were put into place. The surplus is invested in US treasury notes. (Yes the government spends it but that’s beside the point) The current seniors are being paid out of that surplus. The fund is expected to be depleted in 2033/34 at which time the benefits automatically reduce to match the inflow. If congress doesn’t act then we will be back to a “pay as you go” system. I hope they do, because most of America doesn’t have much more than Social Security to retire on.
@Dave When you say that “the surplus is invested in US treasuries” it is the equivalent of me using my own cash and replacing it with a “promissory note” promising to pay me back in a few years. This is a complete circular rationale! It is clear that I’m becoming less wealthy if I do something like this. Also understand that the seniors that “accumulated that surplus” were not being charged for other expenses (let’s say to pay for new roads that were built for their own use by the federal government). The government did a “reform” in 1983 because it was an easier sell to say “give me more money now but I promise to give it all back to you in retirement ” vs. just saying “I need more of your money to spend, now”. Whatever the government collects is fungible: they will spend everything + a lot more (last year the deficit was $1 trillion, at an economic activity peak! Imagine what is going to happen during the next recession!) So every penny anyone is receiving from social security is being paid by someone working, now. The promise of retirement was a disaster for every western society: people retired too early, increasing the weight on the next generation’s shoulders. Resources are being funneled out of the younger generations. Case in point is college education: I will spend $250,000 per child to send them to college! Luckily, I have the money saved. However, I will have to keep working 12-14 hours a day until I drop because this is the only chance my kids/grand kinds will have to avoid being saddled with a mountain of debt (assuming the government doesn’t confiscate even more of my savings to give to somebody else).
Great note. But let’s go farther. When was the last time the US updated its government radically? I mean, how laws are passed, elections occur, anything. As a (grateful, white & legal) immigrant, it appears to me maybe a bit calcified. There’s some evidence of constipation. The last amendment (27th) was in 1992. And it was about the rate of compensation for members of Congress. Just for comparison, here’s a list of smaller, liberal, democratic countries and when they ratified their constitutions (or bill of rights): Ireland 1937, Sweden 1974, Canada 1982, New Zealand 1990, Chile 1990, South Africa 1996, Finland 2000. I’m not sure, but I believe a lot of US legislative norms (e.g. the filibuster and closure) were formed at the end of the 19th century (post-Reconstruction). Just wondering about a tune up. Thanks & be well.
I can verify that toddlers caucus only for cake, play, and mommas. Yes to investing in all children.
Eliminate caucuses – that’s a slam dunk. Phasing out SSC seems like a good idea as I really don’t need it but I did pay in and my economic outcome for much of my working life was not certain. Having lived in Asia the system that Singapore uses seems more fair and less burdensome to government finances both for retirement as well as healthcare. Worth looking into Prof.
Rather than the Hitler reference, I would have preferred the GW Bush quote on Putin “I looked the man in the eye. I found him very straightforward and trustworthy – I was able to get a sense of his soul.” Same point though
refund all contributions. UST keep there 1/2.
“…eliminate the caucuses……… they are undemocratic” YEP!!!
Treating Social Security as a welfare program as opposed to a savings program is disingenuous. There are some legitimate issues with SS means, but SS is funded through payroll contributions.
For such a smart guy you’re pretty ignorant about Kentucky tourism.
So sad that Democrats could not execute this event correctly….no one seems happy with all this.
One of the few times Milton Friedman admitted to a mistake was in a debate with the head of the Social Security Administration Wilbur Cohen. Friedman brought up that, if seniors are the least impoverished demographic in the US, why not means test social security? Cohen shot back, “a program for the poor is a poor program”. Harsh, but a persuasive political economy argument. And arguably a good blueprint for welfare programs overall: means testing means enacting barriers to keep out malingerers, which makes receiving benefits more arduous for the deserving beneficiaries, and it creates a massive deadweight loss with all the gatekeepers you need to employ to distinguish the two groups. Something like a UBI could cut that gordian knot by making everyone a beneficiary and minimizing the administrative cost.
I also took note of the moment when Gage tried to console his mother. I was that same boy 42 years ago. It rocked me. I’m thankful I never had to participate in the reality TV show Gage did.
In a civilized world, prof, you take care of your elders. From ancient Rome to Mesopotamia, that nobility was shared. You are pretty worthless for giving them up, wonder why so introverted.
That’s not what Professor Galloway said at all. He said we need to stop wasting money on the old and wealthy in order to take care of the poor of all ages including the elderly.
@Matt I’ve got to disagree. Scott falls into the myth pushed by conservatives that SS is some sort of welfare gift, like Corporate Welfare and the big tax break Trump gave the 1%, when actually it’s money we all paid in. Agree, we *might* do better as day-traders, might not, what if you retired in 1929? I know some folks (admittedly foolish, poor investors) who are solely living off SS now (albeit in Thailand). So @Scott, please don’t peddle this bad information and myth, that the U.S. is a poor country and can’t support it’s elderly, when they paid their dues. For F*#* sake, greedy schmucks. How about instead of stealing from the poor and giving to the rich in the form of fat tax breaks, we stop that Sh*#*t. Why does Jeff Bezos, and AMZN, pay zero taxes? And on top of that, get fat, juicy subsidies from States falling over themselves to give him the taxpayers money? That’s Corporate Welfare folks and it must be stopped. Stop building inefficient, centralist, Soviet style monopolies. We need freedom from monopolies, and it all boats will rise. #unsubscribe
@Robert is spot on about corporate welfare. Considering Walmart’s strategy of curtailing working hours so employees are encouraged to apply for food stamps and other entitlements, let’s force the corporations to do the heavy lifting of wealth transference!
I believe we should collapse the primary process into four regional Super Tuesdays. This would shorten the primary cycle and lessen the amount of money throughout the entire political process. European nations all are successful electing their leaders in months, not years.
Love you, Prof, but caucuses–be they antiquated–ain’t stupid. In fact, there’s a very good argument to be made that we’d be better off with more caucuses and fewer primaries. Cf. Ziblatt and Livitsky, passim. Should Iowa continue to go first? Heck no. Does that make all caucuses everywhere “undemocratic?” Only in the same way that primaries are “more” majoritarian-authoritarian. Think slower on the issue. Love your stuff.
I use Outlook at work. As do probably many of your readers. The links in the email work, but there is zero indication that they’re links. No underline, no bold, no color. The only way to check is to hover over each word and see if the cursor icon changes. Can you please fix this???
New Hampshire is not a caucus state.
Godwin’s law meets the Committee To Pull Up The Gangplank. And once again the baby boomers would sacrificed on the alter of political correctness.