Primary? Caucus? Please explain!

My personal education goal for this week was to understand what in god’s name is going on with the primary system in my country.  I genuinely had no idea what it’s all about other than the very vague and general notion that this will lead to presidential nominees for the Democratic and Republican parties.  The whole process is pretty convoluted so get ready for some bullet lists.

What is the function of the primary system?  As stated already, this is all about the Democratic and Republican parties to choosing their nominee.  This can be done via two methods: a primary or a caucus, primary being sort of a catch all for both the primary process (think voting via secret ballot) and the caucus process (think old-timey with people arguing and actually milling about a room, directly influencing how other members of the party will vote).  I’ll start with the primary process because it is more in keeping with how I normally think voting would work.

Before we get the state primaries, How does the National Convention work?

The candidate is decided at the party’s respective national convention at the end of primary season.  Each state has a set number of delegates that it sends to the national convention.  That number is set based on that state’s proportion of the total United States population so that larger states get more delegates and therefore more volume to their voice and the opposite is true of smaller states.  The number of delegates is not the only factor, however, in the volume of a state’s voice in choosing a candidate.  There is also the timing of the state’s primary, with earlier states having wildly outsize influence over the rest of the primary race.  Iowa and New Hampshire, for example, collectively only have 53 GOP delegates out of the 2,472 total at the national convention but they are all we’re hearing about because they come first and can therefore launch candidates into the national focus or declare a nationally viable candidate a dog from the outset.  The Democrats have 68 delegates from Iowa and New Hampshire in an overall pool of 4,051.  For the Democrats, Iowa and New Hampshire make up less than 2% of total delegates.  You’d never know that from following the media, would you?

Primary

A primary works the way you probably imagine an election working.  People vote secretly for the candidate they like and official results are known once the polls close and votes are counted.  Contrast this with a caucus system where the result is not official until after the State Convention.  Just hold that for now.

How does it work?  Well, of course the Democrats and Republicans couldn’t do it the same way.  Read on:

1. Democrats – each state’s population votes and sends that state’s delegates to vote at the Democratic Convention based on proportion of votes within the state.
   1. E.g. If a state had 10 total delegates
      1. A: 40%
      2. B. 30%
      3. C. 30%
      4. 4 of 10 delegates vote for Candidate A, etc.
   2. At the Democratic National Convention, whichever Candidate gets more than 50% of the delegates becomes the Nominee.  I believe this to be the case, it is shockingly difficult to find details that are seemingly as fundamental and obvious as this.  From what I gathered this seems to be correct.  Please let me know if I’m wrong.
   3. Again, each state’s number of delegates is proportionate to its size relative to the whole country.
2. Republicans.  The GOP does things the same way as Democrats except delegates don’t necessarily vote at the convention according to the proportion of votes for their candidate in the state.
   1. The state could be winner take all in which case whichever candidate has the most votes gets all delegates’ votes for that state.  This has some significant repercussions that may not be immediately obvious, namely:
      1. A winner take all approach incentives potentially disproportionate focus by candidates on these states.  A win gets all the votes so why focus on states that divide delegates by vote?
      2. Disincentives less well-known candidates from showing up.  If a candidate doesn’t think he can reach the necessary share of voters to take the whole state, they may ignore it altogether and instead focus on states where they feel they have a hope of getting some delegates.
   2. As with the the Democratic National Convention, whichever Candidate gets more than 50% of the delegates becomes the Nominee.

Caucus

How does a primary work.  Settle in, this is not the most difficult thing to comprehend but it is more convoluted than a primary system.

1. The caucus is the functional unit of the caucus system.  It is a gathering in a precinct in the state.  Many caucuses occur throughout all the precincts throughout the state.
2. At each local caucus typically 50-100 people get together to caucus.
3. Each party functions differently with its own unique set of rules and procedures.
4. Parties market for different candidates to influence people to caucus, or vote for their candidate.
5. Sometimes there is a cutoff, i.e. if a candidate doesn’t get 15% of the caucus vote, then that candidate’s voters must redistribute and pick another candidate.  This, of course, makes the process more volatile than a primary model because the polls have a more difficult time capturing who the sub-15% candidate’s supporters will vote for as their second choice candidate.  The pollsters have enough trouble with accurately predicting who voters support.  Imagine how flawed predictions can be when we’re essentially talking about derivative votes, or ‘if you try to vote for Candidate X and find you can’t, who will you then vote for?’
6. Each precinct selects delegates which go to the County Conventions (representing more people).  The County Convention gathers all the precinct delegates together which then votes according to how they were chosen at the precinct level in order to pick delegates who go to the District Conventions.  The District Conventions picks delegates who go to the State Conventions.  State Convention picks final delegates who go onto the National Convention.
7. The whole caucus process takes place over many months as the delegates move from local precinct caucuses up to the state convention.  The result is not official until it is announced at the State Convention.  However, the media focuses on the Precinct Conventions going into the County Conventions.

Why are Iowa and New Hampshire so disproportionately influential?

Because they are the first to choose their delegates and essentially declare the state’s endorsement for a candidate, the donors, the media, and the population consequently look to them for the front runners who then receive more support, potentiating an advancing cycle.  On the other hand, the losers are dealt an outsized blow because their new label, especially in comparison to the new “winners”, scares away the population, the donors, and consequently the media.

Now we know how the primary process functions.  It’s messy but it makes sense to some degree.  There are just so many underlying issues beyond the scope of this quick article that can be exploited to block certain populations from voting or at least make it very difficult.  There’s also the obvious issue of unfair manipulation of voters in the case of the caucus that a primary with its secret ballot system obviates.

Sources

Vote Smart

Kahn Academy

NPR 6 Ways to Pick a President

The US Corporate Tax System: Corporate Inversions

Corporations and what they’re up to always seems to be a hot election issue.  Tax them more and increase government revenue.  Tax them less and create jobs.  Stop them from inverting and leaving our shores, taking jobs and resources with them.  Allow freer trade and grow the overall pie.  I had some grasp of what all this means but didn’t understand the real consequences of all possible actions.  I try to give the benefit of the doubt and assume that if there are two sides arguing a point, each side must have some validity.  So, again, I did some investigation and here is what I learned.

I thought I would be able to cover the topic more comprehensively but it’s larger and more complicated than I initially thought.  I hoped to cover corporate tax structure in general but instead I’m focusing on inversions, which brings in the overall picture, but the focus is mostly on inversions.

So what the hell is a corporate inversion? In short, it’s when a corporation merges with a corp in another country in such a way that the newly merged entity is now based outside of the US.  There are a few ways to do this with different consequences and levels of complexity but that’s all we really need to get started.

Why is this “bad”?  It turns out that might not be the right question at all.  Inversions on their own may not be bad or good.  They seem to be more of a symptom than the cause of any problems.  The cause seems to be an antiquated US corporate tax system.  The problems with and solutions to our US system seem to be primarily twofold:

1. International vs Territorial Tax System.  The US is the only major world power that still has not moved to a territorial system.  In a territorial system, revenue is only taxed when it has been earned domestically.  In the US system, any corp that is based in the US must pay taxes on revenue earned anywhere in the world.  They do, however, get a credit for taxes paid to the country where the revenue was actually earned, but they’re still paying more than they would if they were based in the other country.  The incentive to invert is pretty clear here and any attempt to stop inversions directly is obviously an attempt to address the symptom, not the cause.  Move to a territorial system and there is no longer any incentive to move abroad to avoid US taxes.
2. Corporate Tax Rate.
   1. This will sound backwards at first but bear with me.  The US has the highest corporate tax rate among the developed world.  Again, we’re incentivizing corps to keep their revenue outside of the US to avoid paying our higher tax rate.  International revenue is only taxed once it is moved inside the US.  Therefore corps keep thier revenue parked overseas indefinitely so that they can avoid the higher US tax rate.  In fact, there is currently over $2 trillion of revenue parked internationally and growing.  This is money that the US will likely never be able to tax.  A smaller chunk of something, the argument goes, is better than a larger chunk of nothing.  Lower the rate to bring it into line with the rest of the developed world and corporations will have no need to shuffle money around the world.
   2. Additionally, there is a maneuver called earnings stripping or transfer pricing where the foreign parent company makes a loan to the US subsidiary.  This is often not a loan of necessity but rather to lower the overall tax rate of the corp.  The increased cash on hand is not taxed as income domestically but the interest charged by the parent to the subsidiary is an expense that lowers the domestic profit which lowers the domestic tax burden.  The domestic profit is shifted overseas where it is taxed at the lower rate of the parent company’s country.  The net is a lower overall tax burden for the conglomerate and lower tax revenue for the US.  The corporation “wins” and the US treasury loses.
   3. Solution: Lower the domestic tax rate to stop companies from having any need to move to greener pastures or to shuffle money around to pay less in taxes.

 

Image Source

This all sounds straight forward enough.  The real problem is one of implementation, according to an article in the Economist from July 26, 2014.  Both sides of the political aisle more or less agree on what has to be done.  Progress comes to a screeching halt, however, when each party tacks other issues onto corporate tax proposals.  Again, according to the same article in the Economist, the Democrats want corporate tax reform to help fund “lefty” things like public infrastructure, which the Republicans typically oppose.  The GOP, in turn, wants to include cuts on personal tax rates, which the left is not keen on accepting.  In the end: more Washington gridlock.

So in short, the US tax system has created a climate that is all but shoving large corporations outside of our borders, shrinking the size of our overall tax pie.  By lowering the tax rate and only taxing revenue generated domestically, we could address the underlying reasons for inversions to begin with.

Please comment If I have misunderstood anything or left anything out or if you just have a thought to contribute.

Note: I know I don’t have many of my facts sourced.  At this point I’m writing these for my own edification.  With a google search and half a dozen or so clicks you can find primary sources yourself.

What Do I Like About Bernie Sanders

I’m a little bummed to acknowledge that my taste for Bernie is more of a feeling than a real rational conclusion that he’s the best candidate for our country or even just for me.  I realized that I couldn’t list what I’m looking for in order to evaluate his candidacy.  So, what am I looking for?  And what don’t I know?

1. Socially liberal. Supportive of LGBT/minority rights.  Equal pay for equal work.  Etc.
2. Campaign finance reform.  Overturn Citizen’s United.  I don’t know what would actually have to happen to reverse the supreme court ridiculous-sounding decision that corporations are viewed as people according to campaign finance law and could therefore donate unlimited money to Super PACs to finance a certain candidate.
3. Close tax loopholes on the ultra rich.  Maybe raise taxes on ultra rich and/or corporations.  I’m not sure.  I don’t know the economics of the situation.  It’s hard to believe that so many people have an opinion on something that I never hear discussed.  I’d like to spend some time learning about this.
4. Education Reform.  Lower the cost of school.  Subsidize education maybe.  I don’t know what is broken about our education system that makes it so exorbitantly expensive.
5. Less hawkish.  Less inclined to rush into a military conflict without a long term plan.  Lower military spending, again how much I do not know.  I’d like to read some policy statements and try to find a reliable non-partisan source for what their effects would be.
6. Change the process by which gerrymandering is done.  I have no idea how or why it came to be that legislators have the ability to draw their districts but it sounds ludicrous.
7. Not an isolationist.  I want a president who recognizes the importance of global partnerships as opposed to the United States dictating priorities.  I should dig deeper here too.  Read some foreign policy literature.
8. Behind Israel.  It’d be interesting to learn more about the relationship between the United States and Israel and what motivates it.
9. Strong on addressing climate change.
10. Strengthen Wall Street reform, limit or safeguard dangerously speculative investing, break up I-banks from traditional banks.

As I wrote that list I realized that I don’t have a keen grasp of what is important to me in my leader.  I have somewhat hazy ideas, sometimes in better or worse focus.  I am just now beginning to follow politics.

Politics.  Recently I’ve noticed an almost sad distinction between what I’m learning is called “Politics” and the actual governing of our nation.  It’s sad to see that even the leadership of our country, the men and women who guide the most influential nation in history, can be turned into a reality show where an hour is spent discussing who said what in a campaign and who’s being the most vitriolic.  The actual governing, the passage of legislation, diplomatic jockeying, these are things that effect us.  I couldn’t find a legitimate connection between my world and the story of who tussled with whom at the last debate.

The next thing to do is some actual research and see what I learn is behind the candidates positions.

To get back to my initial questions, without much research into Sanders’ past votes or statements, going generally off of his main talking points, he seems to clearly fit what I’m looking for.  Certainly better than any Republican and more than Clinton’s brand would indicate.