The Democrats May Have a Voter Problem

Lost in the talk about Trump crushing Marco Rubio in his home state of Florida is any discussion surrounding the number of people who actually turned out to vote in the Republican Primary.  This may come as a shock to some given the general excitement around candidates like Bernie Sanders on college campuses, but Donald Trump received 1,077,221 votes to Hillary Clinton’s 1,097,400.

So what, he would have lost, right?

Not so fast.  Total votes for the Democrats came out to be 1,702,878 broken down as follows:

Clinton: 1,097,400
Sanders: 566, 603
O’Malley: 38,875

Whereas the Republicans had approximately 2,355,183 votes cast for GOP candidates, broken out as:

Trump: 1,077,221
Rubio: 636,653
Cruz: 403,640
Kasich: 159,412
Bush: 43,452
Carson: 21,163
Others: ~12,000

There is an old saying in politics that is going to be very important for this election:

Democrats fall in love, Republicans fall in line

This saying points to the Democrat’s issue, what will Bernie Sanders voters do?  The majority of his voters right now are young and idealistic.  They view the establishment in much the same way that Trump supporters view – with extreme frustration – so there exists a very real scenario where a significant number of his supports either write Sanders in or don’t vote at all.

That could absolutely sink the Democrats in critical states like Florida (Remember, President Obama only defeated Mitt Romney in Florida by about 0.9% of the vote).  Trump being able to match Hillary when competing against far more opponents is incredibly important.  If the above saying holds true, a lot of these voters will “fall in line” and vote for Trump in the general election regardless of who their current choice is.

Combine that with half the country’s feelings toward Hillary Clinton and there is a very real possibility that Donald Trump takes the White House.

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Post-Caucus: How Close It Was!

The Iowa Caucus proved to be more of a thrill ride than anyone expected.  The Clinton-Sanders margin was almost negligible and the GOP had 3 candidates taking the majority of the Republican votes.  In yesterday’s prediction thread we stated that Ted Cruz and Bernie Sanders would be Monday night’s victors.

Ted Cruz did in fact win with Donald Trump taking second place (also predicted) and Marco Rubio taking third place.  Rubio’s strong showing was not expected in Iowa as the Evangelical population pointed more to a strong Ben Carson showing (who finished forth with around 10% of the vote and was our predicted 3rd place finisher).  Rubio’s win was bolstered further by a key endorsement from Tom Scott.  This result for Rubio will likely lead to a major jump in the national polls.

The most disappointing performances within the GOP had to come from Rand Paul and Jeb Bush.  Rand’s father Ron finished in third place during the 2012 Iowa Caucus and there was some thought that he would capture a bit of that magic.  At fifth place with only 4.5% of the vote, the Paul campaign has to be frustrated by their candidates inability to grab real traction within the party.

For all of the disappointment felt by the Paul campaign, the Jeb Bush camp must be in outright panic.  With millions of dollars spent and coming off his strongest debate performance yet, the early GOP favorite had to expect better than 2.8% of the vote.  We may be seeing the last days of the Jeb! experience.

In all, don’t expect the GOP candidates to throw in the towel before next week’s Primary in NH.  NH tends to be more friendly to establishment / moderate Republicans, many of whom were at the bottom of this poll.  After NH, though, we expect several campaigns to close up shop.

For the Democrats, the story got interesting in Iowa.  Martin O’Malley – debt strapped and with little support – suspended his campaign.  O’Malley is often rumored to be interested in a VP nomination, but that may be in doubt now that the Democrat Party has seen what he would actually bring to the table.  Staying in this race through the Iowa Caucus may have hurt O’Malley’s political career more than it helped.

Clinton narrowly defeated Bernie Sanders in a state that she had a decent lead in before the votes were cast.  While this is a technical win for Hillary, it was also a spiritual win for Sanders, though it was not without controversy.  No other candidate has come from the fringe to the mainstream like he has and with a monster lead in New Hampshire, he is going to force Clinton to play major defense over the coming weeks.

One additional point of note about the Democrat voters shown during the CNN broadcast was the difference in voter profiles between those who chose Clinton and those who chose Sanders.  The voters that valued “experience” overwhelmingly chose Clinton, while those that wanted “someone who shares my values” overwhelmingly chose Sanders.  Look for this information to be used by both campaigns going forward.

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Digging In: How Would Sen. Rubio Help Small Business?

Small businesses employ a significant percentage of the American workforce so it was great to see the FOX Moderators allow a question that asked Sen. Rubio to explain how he would promote small business in the current economic environment.  Sen. Rubio’s response was a bit rough around the edges, but could form the basis of a strong pro-small business platform going forward.

The buzzword reference to Obamacare aside, the content of Sen. Rubio’s response makes a lot of sense.  Small businesses make up a large part of the economy, but are often overlooked when significant policies and reforms are pushed through DC.  Sen. Rubio’s point to connect the impact of the Dodd-Frank Act to the struggles of Community Banks, who are the primary lenders to small businesses, is one that his campaign could solidify and present to the nation in an understandable manner.

In 2014, Federal Reserve Governor Daniel Tarullo noted in a speech to the Community Banker Symposium that:

One recent study found that loans extended by rural community banks to small businesses default less frequently than similar loans granted by their urban counterparts, and that the performance advantage is greater when the bank and the borrower are located in the same county.

A message that stresses “community, trust, and hometown business” is a hard one not to appreciate, especially with trust in the financial system at all time lows.

If there is indeed evidence that smaller creditors promote small businesses and that a fall in the number of these creditors is linked, in part, to the Dodd-Frank Act, then the Rubio Campaign has a strong plank to play to.  However, the facts supporting this plank and the overall potential strength of the position are meaningless if Sen. Rubio cannot connect the dots in a straight-forward manner.

The Senator’s response last night didn’t quite get there for the average viewer.

Regardless of the facts supporting the position that: regulatory compliance for smaller lenders is forcing these banks to close or consolidate which, in turn, tightens the credit pools for small businesses, blind calls to repeal Dodd-Frank will be met with stiff opposition from the Democrats who will respond by saying anyone in favor of a repeal supports deregulation and works for Wall St.  The opportunity is there for the taking and with the right message, this position could resonate with voters.  File this under “higher risk, higher reward.”

Where did the 25% Tax Rate Come From?

Within Sen. Rubio’s response was a call to decrease the corporate income tax rate for small businesses to 25% which was similar to the cut that was proposed by President Obama’s Administration.  This is an interesting call to make as reducing this tax rate for those organizations that may not have the resources available to adopt complex tax strategies that help to lower their rate would have a positive net impact on small businesses.

Unlike the personal income tax brackets which are progressive by nature, the corporate income tax rate is static at 35% (at the Federal level).  This rate can make it difficult for small corporations to push income back into the company that could then be used on wages, job growth, and other investments.

Sen. Rubio may have something here, but it appears this plan was also ‘out of the blue.’  There are no mentions to a corporate tax rate cut on the Sen. Rubio campaign website so any additional details about how this plan would work and to which organizations it would apply are not available.  At any rate, the Rubio campaign should explore this tax cut and determine if it is worth incorporating into the Senator’s overall economic vision.  Again, promoting small business is going to resonate with a large number of voters, but a half-baked plan will be destroyed by this candidate’s political opposition as “favoring the rich and big business.”

Image Credit: FOX News

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