Category: Politics

Joe Biden’s Strongest Potential Running Mates

Just like that, it’s over. Now that Vermont Senator Bernie Sanders has dropped out of the Democratic primary, former Vice President Joe Biden begins the march towards his coronation in Milwaukee (maybe) in August as the Democrats’ nominee for president. A major step in that march is the selection of a vice presidential running mate; someone who can unify the party, perhaps provide additional competitiveness to the ticket, and drive turnout for and inspire confidence in the 77-year-old Joe Biden. We’ve talked about when we’d expect this announcement to be made, and though it’s likely months away based on what we can infer from history, we also laid out the case for why you might expect this announcement to come sooner. Either way, we know our nominee, and we’ve spent months tracking the strongest vice presidential picks for Biden. 

Biden announced during the last Democratic debate that his running mate would be a woman, and though it’s not likely he will break that promise, this is a good place to stress that the tracker finds the strongest potential matchups regardless of Biden’s statements. Even though Biden has said a woman will be his running mate, our list will still include some men because they are calculated to be stronger running mates with Biden than a generic woman. We already have a built in metric to increase the score for ticket diversity (both in race and gender) based on a regression performed on the corresponding change in betting odds when the Democratic nominee is a woman against the odds of the Democratic vice presidential nominee being a woman. This estimates that gender diversity is important for 20% of the value of the ticket. But the vice presidency is not and should not be a tokenizing position, and if a man is truly a more compatible running mate than a woman, the tracker’s job is to show that and show why this particular ticket is strongest.

The goal of the tracker is to find the strongest ticket given the nominee, not to predict a running mate. Finding the strongest matchups is nonetheless a good proxy for probability (if a campaign is acting in its rational best interest), and our more rigorous historical data-based and algorithmic tracker has nonetheless fallen in line with many other sitespredictions for likely vice presidential picks. Still, because of the strict algorithm, you may note that the tracker has been bearish on oft-mentioned potential VPs like Massachusetts Senator Elizabeth Warren (who is from a noncompetitive state),1Our tracker is not specifically dinging her for this because Massachusetts is so uncompetitive (though it is dinging folks from more competitive states like Ohio Senator Sherrod Brown and Arizona Senator Kyrsten Sinema), but Warren also represents a Senate seat that a Republican governor would have the power to temporarily fill, something Democrats are not likely to want in an election where the Senate is in play. Florida Representative Val Demmings (who is a two term congresswoman and does not meet our “minimum viable office” threshold) or former Georgia State House Minority Leader Stacey Abrams (who also does not meet the minimum viable office threshold).

With all of that in mind and with the knowledge that these are Biden’s strongest choices, let’s take a look at the top ten contenders as of Sanders’ withdrawal.2All scores are as of April 8, and are liable to move around a bit as the generic ballot adjusts. The generic ballot was at a -7.7 lean (negative indicating towards a generic Democrat) at the time of the data pull.

#10 – Oregon Governor Kate Brown (Score: 36.28)

Strengths: geography, state experience, gender diversity
Weaknesses: experience match, noncompetitive state

Brown may be the least floated name in our top ten and she has not received much — if any — speculation for the pick, despite the fact that she has thirty years of state experience in Oregon, is a prominent female governor from the West, and the first openly bisexual person elected governor in the history of the United States. Brown would be a gesture towards an area of the country that Democrats are very strong but often ignore (more picks from the West will round out our top five), and for women’s and LGBTQ advocacy in general. With a strong environmental and public health record, the fact that Brown’s name does not come up more frequently seems like a mistake.

#9 – Former Massachusetts Governor Deval Patrick (Score: 37.54)

Strengths: geography, state experience, race diversity, doesn’t hold an office (not a key seat)
Weaknesses: gender diversity, noncompetitive state

Very briefly in the race himself, the New Englander holds the benefit of geographic diversity from Biden and eight years of state experience, which balances nicely against Biden’s largely federal experience. Patrick was a civil rights lawyer at the Department of Justice and the first African-American elected governor of Massachusetts. Many in the Obama sphere (the former President and Patrick are longtime friends and allies) would appreciate this gesture, and even view Patrick as a more obvious “natural heir” to Obama’s legacy than Biden.

#8 – New Hampshire Senator Maggie Hassan (Score: 38.32)

Strengths: geography, gender diversity, experience match, competitive state
Weaknesses: key seat risk

Hassan is a relatively new member of the Senate, coming to office in 2017 after serving two terms as New Hampshire’s governor. Another New Englander with a strong experience balance with Biden, Hassan benefits from New Hampshire’s competitiveness, but despite the strong Democratic lean heading into the election she’s knocked down in the rankings because her seat is more likely to be filled by a Republican than some of the other potential VP picks. This is fair, considering she won election in 2016 by under 1,000 votes; that same year, New Hampshire was the state that Hillary Clinton won by the smallest margin.

#7 – Minnesota Senator Amy Klobuchar (Score: 39.38)

Strengths: geography, gender diversity
Weaknesses: experience match

Klobuchar’s name has come up frequently as a likely Biden VP pick, with commentators stressing her electability. Though she ran in the primaries as a moderate alternative to Biden and managed to stay in longer than many of her colleagues, she nevertheless bowed out and endorsed him before Super Tuesday. Klobuchar hails from a region that Democrats believe is key in unseating Trump and has already exceeded electoral expectations in Minnesota, overperforming the state’s partisan lean by 22 points in her 2018 election. Though she’s not a newcomer to the Senate, she hasn’t been there for decades like Biden has, and she has state prosecutor experience to round out her outsider credentials. Klobuchar makes sense as a safe, inoffensive pick who can run on a platform of pragmatism and competency, as well as a geographically competitive pick, and — though our tracker does not use this as a metric — an ideologically similar pick to the moderate Biden.

#6 – Former Secretary of Housing and Urban Development Julian Castro (Score: 41.83)

Strengths: race diversity, geographic diversity, doesn’t hold an office (not a key seat), experience match
Weaknesses: gender diversity

Castro ran in the primary as well before endorsing Elizabeth Warren, and though a Warren-Castro ticket makes a lot more sense mathematically (score: 60.94), the same qualities that made him a strong contender for Hillary Clinton’s VP also make him an appealing pick for Biden. Castro, a former Obama cabinet official from Texas, has nearly a decade of experience in San Antonio politics, which complements Biden’s weaknesses in Southwestern appeal and local experience nicely. Though he may be a bit left leaning for Biden, his youth, energy, and appeal among Latinx voters will be key to in helping Biden win Southwestern states and fight Trump on his home turf in Florida. Biden’s top five strongest VP picks however include several more competitive and ideologically compatible Latina women, so Castro will likely be passed over once more.

#5 – Hawaii Senator Mazie Hirono (Score: 44.83)

Strengths: geography, gender and race diversity, not a key seat
Weaknesses: experience match, noncompetitive state

Hirono has also been near the top of our list for a long time despite her strong vice presidential credentials receiving very little press attention. This is probably because of her age. She will turn 73 on the day of the 2020 election, which our tracker does indirectly knock her down for based on her and Biden’s federal cumulative “over-experience”. The senator from Hawaii does have 22 years of state experience that pick up her numbers relative to other generic picks, and her diversity and (extreme) geographic disparity pick up her numbers as well. She was a vocal player during Brett Kavanugh’s confirmation hearing, one of the most memorable and energizing events of the Trump presidency, and has been a strong proponent for women’s issues and the #MeToo movement, which would both make for a strong foil to the Republican ticket and lend Biden some credibility with these issues.

#4 – New Mexico Governor Michelle Lujan Grisham (Score: 50.04)

Strengths: geography, gender and race diversity, not a key seat
Weaknesses: experience match

The only female governor of color, Lujan Grisham is a strong contender in part because she is the only non-senator in the top five. In a year where Democrats are anxious to make the battle for the Senate as competitive as possible, the New Mexico governor may be a perfect compromise in terms of electability, diversity, and security. As a Latina from the Southwest and a former chair of the Congressional Hispanic Caucus, she is a strong demographic complement to Biden even though she falls a little short from an experience standpoint since she’s only been a governor for two years. Expect to hear more about Lujan Grisham — she’s a dark horse candidate to be sure, but one who would allow Biden to garner credibility with the border states thrust into the spotlight under the Trump administration and perhaps broaden the Democratic coalition in competitive states with large Latino populations like Arizona, Nevada, Colorado, and even Texas.

#3 – Illinois Senator Tammy Duckworth (Score: 50.87)

Strengths: geography, gender and race diversity, not a key seat
Weaknesses: noncompetitive state

Duckworth actually does a lot better in our tracker that you might expect, given the noncompetitiveness of Illinois in national elections and that her experience compatibility with Biden is a bit short of where contemporaries like Catherine Cortez Masto and Kamala Harris fall. The tracker gives her a boost because of diversity and her Senate seat not being easy to lose, but it’s not difficult to see why she’d appeal outside of our algorithm. An Iraq War veteran who lost her legs when her helicopter was shot down, she requested and received a waiver to continue serving after her double amputation. She then ran for public office and became the first woman with a disability to be elected to Congress, the first senator to give birth in office, and has been a prominent advocate for veterans within the party and the chamber. Duckworth can speak with experience on military and veterans issues, has maintained a moderate record, and represents many communities and constituencies in the country that Biden does not strongly resonate with on his own.

#2 – Nevada Senator Catherine Cortez Masto (Score: 52.65)

Strengths: geography, experience match, gender and race diversity, competitive state
Weaknesses: key seat risk

I am actually incredibly proud that our tracker has consistently presented Nevada Senator Catherine Cortez Masto as a top choice for Biden. Throughout all of February (even with a major caucus in her home state) she was not making major news as a potential VP pick. Nowadays, her name has broken into the headlines, and there are rumors that she’s one of Biden’s top three choices. Cortez Masto makes sense mathematically as well as pragmatically: Nevada is a close state, but still Democratic-leaning enough that the risk of her seat being filled by a Republican isn’t too high. She served as the state’s Attorney General for eight years before being elected to retiring Senate Minority Leader Harry Reid’s seat in 2016; and not only is she a prominent Democrat in the Senate (she currently serves as Chair of the Democratic Senatorial Campaign Committee), but she is the first Latina ever elected to the chamber.

Even though Nevada only has six electoral votes, she still gets a larger boost from the competitiveness of her state than any other top ten pick. Nevada is also an important state for Democrats symbolically this year, as it is a labor union stronghold and will be one of, if not the, most affected state by the novel coronavirus crisis due to its heavy reliance on the service and hospitality industries. Definitely keep an eye on Cortez Masto.

#1 – California Senator Kamala Harris (Score: 59.44)

Strengths: geography, experience match, gender and race diversity, not a key seat
Weaknesses: noncompetitive state

Finally we get to a choice that  has seemed so obvious that it’s become almost boring. Despite their infamous face off in one of the Democratic presidential debates, Harris has been floated as a running mate for Biden for nearly a year, and for good reason. She, like Cortez Masto, was Attorney General in her home state before being elected to the Senate in 2016, has a strong balance of state and federal experience, and possesses the geographic and demographic diversity that Biden lacks. Biden has even gone out of his way to tease the speculators with his outreach to Harris and Harris herself seems to be making moves typical of a national nominee

Despite the misguided loftiness of her presidential campaign, Harris is clearly a rising star in the party who captures a midpoint between its more moderate, establishment members and the left. It would be wise for a forward-thinking Biden campaign and Democratic Party to give her a stepping stone as a party leader. Our exemplars at FiveThirtyEight have noted these strong benefits for Harris and concluded that “Biden is a party man, and Harris is a party choice.” And, holding no grudge of his own from the primaries and apparently eager to elevate other Democrats on his way to the presidency, Biden would be well served to build his party’s future, acknowledging that he will not be its standard bearer for long.

The fact that she represents the largest state in the country and that her seat is safely in Democratic hands makes Harris an ideal choice for the first Western politician to be nominated on a Democratic presidential ticket. A Biden-Harris ticket would be cross-country, diverse, and woman forward, uniquely uniting the Democrats and firing them up for the showdown they’re anxious for this autumn.

Running Mates: Episode 4 – 1980 – Bush v. Mondale

With Jimmy Carter and Walter Mondale up for reelection, Lars and Michael discuss the foreign policy and economic crises that perpetuate a strong challenge from Ronald Reagan, who placates establishment Republicans by putting George H.W. Bush on the ticket.

When Will Joe Biden Announce His Running Mate?

Now that he is the presumptive Democratic nominee, Joe Biden will begin turning his attention towards uniting the Democratic Party and defeating Donald Trump this autumn. This shift in focus will require him to make an important choice that will provide him an opportunity to do both: choosing his vice presidential running mate. 

Save for the results in November, Biden’s choice may be the most anticipated question left this year in politics, and for good reason. In an election already overshadowed by a pandemic, the 77-year-old Biden’s running mate has become a topic of widespread speculation and deliberation. We’ve written before over the course of the primary about some of his strongest choices, and we’ll have a piece in the near future rounding out who they are and why they would complement Biden well, but first we should cover when we can expect a decision will be made.

If you think it seems a bit early for us to turn our attention to this already, you’re not wrong. Historically speaking, the presumptive nominee has announced their running mate weeks or, more commonly, just a few days before the convention. Since 1980 every single running mate has been announced less than three weeks before the convention, with the average announcement occurring just five days before the party convention kicked off.

Year / Party Nominee / Running Mate Days Before Convention
Running Mate was Announced
1980 – R Reagan / H.W. Bush 0 (during convention)
1984 – D Mondale / Ferraro 4
1988 – R H.W. Bush / Quayle 0 (during convention)
1988 – D Dukakis / Bentsen 6
1992 – D Clinton / Gore 4
1996 – R Dole / Kemp 2
2000 – R W. Bush / Cheney 6
2000 – D Gore / Lieberman 6
2004 – D Kerry / Edwards 20
2008 – R McCain / Palin 3
2008 – D Obama / Biden 2
2012 – R Romney / Ryan 16
2016 – R Trump / Pence 4
2016 – D Clinton / Kaine 3


Even given the historical precedent, Biden waiting until five days before the Democratic National Convention — which has been delayed because of the novel coronavirus and is now set to convene in Milwaukee in the third week of August — to announce his running mate still feels awfully late given how prevalent the discussion surrounding it has been. Something about this cycle feels different. It could be a product of the Biden campaign’s own machinations, since he declared during the March Democratic debate that his vice presidential pick would be a woman, thus putting the issue at our attention. It could also be because, despite how it seemed back in the winter, Biden became such a clear front-runner as the campaign escalated. After Super Tuesday, Biden’s nomination seemed inevitable, so it makes sense to start focusing on a general election against a very polarizing president. Consolidating the party behind him and directing the nation’s attention towards Trump, or at least on why Biden himself is the man to bring America back together, demands an early start. Especially in the middle of a national — and global — health crisis. Projecting a presidential team ready to face down Trump and face down the novel coronavirus pandemic sooner rather than later may demonstrate a readiness to govern.

Announcing a running mate on the earlier side would also be tactful in terms of spinning an election narrative and keeping the momentum after his impressive victories since Super Tuesday against the last candidate standing, Vermont Senator Bernie Sanders. The Republican National Convention will take place a week after the Democrats hold their own convention, and although Trump will benefit from going last due to the effects of a likely convention bounce, he has never wanted for media attention and still isn’t always portrayed in a positive light. He rarely captures the unbridled optimism that Democrats have at their gatherings, even failing to do so during his convention in 2016. Biden would be well served to seize several positive and optimistic news events in a row after becoming the de facto nominee. Announcing a historic running mate and the media-boost generated by a convention would build up a lot of momentum, and Biden has signalled he is ready to begin the process already. 

Still, it’s unprecedented for a modern campaign to announce a running mate more than a few weeks — let alone several months — before the convention, and if there’s one thing you can count on Biden to do (it’s actually a defining plank in his presentation as why he would be a good president), it’s sticking to time-tested traditions. And though these desperate and strange times may call for unconventional campaigning, it may also prolong an already seemingly foregone primary, as many states have pushed back their contests to June. Still, if Bernie Sanders drops out in the next couple of months, leaving Biden uncontested as opposed to just unreachable, Biden can stack the calendar in his favor. With less time to spare for the general election due to the virus pushing the conventions back to back, Biden may be encouraged to act as soon as Sanders falls out of the race. By declaring victory in May or June, unveiling a vice presidential pick over the summer, and accepting the nomination in August, the Biden campaign can truly go national.

The Economics of the COVID-19 Rebate

You will probably be receiving a check from the federal government in the next few months. If you are a single filer and make under $75,000, you will receive the maximum rebate of $1,200. If you make over $75,000, this amount  will be cut by 5% per dollar for every dollar over $75,000, before hitting zero at $99,000.1If you make over $75,000 you can see exactly how much you’ll receive by taking your income above $75,000 subtracted from $24,000 and multiply it by 0.05. For example, if you make $80,000: (24,000-5000)*0.05 = $950. Or you can just use this calculator, I guess. Each dependent child will add $500 as well. If you file jointly the income level rises to $150,000 and if you file as a head of household it rises to $112,500. This rebate is one of the results of the “Phase 3” COVID-19 response package that Congress passed on Friday and President Trump signed later that afternoon.2Phase 1” was the immediate response passed at the beginning of March providing just over $8 billion to health agencies. “Phase 2” was a more thorough piece of legislation addressing sick leave and testing for the uninsured. The goal is to provide immediate aid to Americans who need it and inject a massive stimulus into the economy to counter a rapidly deteriorating economic situation.

You’re probably going to start seeing and reading a lot of articles with advice on what to do with with this money; and while I would love it if the world came to me for their personal financial advice, that is not what I want to do here. Instead I want to lay out the economics of why this rebate is being issued, and why you shouldn’t feel guilty about this money if you receive it but don’t think you need it as much as others might. 

First and foremost, this money is intended to support those who need it, many people are finding themselves temporarily out of work and it goes without saying that if you need to pay rent, buy food, cover expenses, or support yourself and your loved ones, you should use the rebate for that. Please, take care of yourself, take care of your family, be responsible, and don’t think that this means you should not continue to heed the CDC guidance and continue social distancing to the extent you are able. This is not just about you, it’s about hundreds of thousands of Americans who could die or become seriously ill if you and your 300 million compatriots do not keep to yourself. 

Now that the heavy stuff is over, if you are still employed and your life is carrying on more or less financially stable despite your wistful leering out your window at the forbidden out-of-doors, you may feel a little guilty about the check you’re about to receive. There’s a compelling argument to be made that money should only have gone to those who need it: the unemployed or underemployed, especially in the services industry. I have unwittingly made this argument myself, and while the intention is correct, the economics are not.

Spend, Baby, Spend

With little traditional monetary policy action available (the Federal Reserve has already slashed interest rates to near zero and the required reserve ratio, down to 10% since the Great Recession, was slashed to 0% this month for all depository institutions) and an incredibly unorthodox and indeterminate economic slowdown — the signs of which are emerging rapidly — a massive fiscal response or unconventional monetary policy option is necessary. Former Federal Reserve Chairs Ben Bernanke and Janet Yellen have historically endorsed the prospect of “helicopter money”, Federal Reserve-financed drops of money on the American public to encourage spending and break away from a contraction verging on a deflationary spiral. And current Federal Reserve Chairman Jerome Powell has noted the high possibility of the economy currently being in recession and promised potentially unlimited lending to keep financial markets operating, though he concedes the Fed’s abilities will be limited while the economy is tempered and will be most impactful “when the recovery does come, to make that recovery as strong as possible.” In the immediate term, however, fiscal stimulus is needed. And the Phase 3 COVID-19 legislation is the first major step to assure temporary financial survival and cash to the millions of Americans increasingly finding themselves out of work. So why? Why pay out billions of dollars to give all Americans, even those who don’t need it as much as others, a cash influx?

Because the more anyone spends money, the better off everyone will be. In economics, there is a metric called the marginal propensity to consume (MPC), which is a number between 0 and 1 that reflects what portion of additional disposable income will be spent. For example, if the marginal propensity to consume is 0.4, for every additional dollar you received, you’d spend $0.40 of it and save $0.60. It is the inverse of the marginal propensity to save (MPS).3There is also MPM, the marginal propensity to import, which is not negligible, though it is likely less pervasive in covering immediate costs such as housing, healthcare, and food, so for simplicity’s sake, I will leave it off. You’re welcome. It’s calculated as a derivative of the consumption function (C) over disposable income (Y), given that the change in C over the change in Y is equal to the MPC. The MPC plus the MPS (a derivative of the savings function (S)) is equal to 1:

The marginal propensity to consume is important because of an economic concept called the fiscal multiplier, a larger part of multiplier theory, which notes that when the government spends a sum of money, the national net income may increase by more than the increase in spending. This was first conceptualized in the early 1930s by a student of John Maynard Keynes named Richard Kahn, is a key component in Keynesian economics and many of its subschools, and was at the heart of many New Deal policies. You can think of it this way: if the US government were to spend $10 billion to build a brand new spaceship for NASA, GDP increases by $10 billion right off the bat in the production of a new creation; but consider the vast majority of that $10 billion is likely going to labor costs, who then pass much of  that money in the form of buying new things: a new home, new car, or cups of coffee; then those homebuilders, carmakers, and baristas receive a portion of that money that they would not otherwise have received and go on to buy their own new homes, cars, and cups of coffee, and this multiplies out to actually increase GDP by way more than $10 billion even though only $10 billion was initially spent, possibly two, three, five, or ten times as much.

The MPC is how you calculate the multiplier, K, which is equal to one over one minus the MPC, or, effectively, one over the MPS:

The share of labor compensation in GDP has been around 60% since the Great Recession and it’s been estimated that the marginal propensity to consume is around 0.10 (meaning K = 1.11), so let’s assume that in the example above $6 billion goes to the initial labor, who then spend 10% of their additional income, and so on, increasing GDP by $6 billion * 1.11, or $6.66 billion. That’s an additional $660 million in value purely by virtue of having spent money to begin with. And this is not just wishful thinking, this is really how it works, if to a lesser degree than what the traditional economics textbook might imply.4On another note, there’s also an inverse of this, which is the money multiplier, which reflects how banks perpetually lend given deposits. This creates a massive amount of cash in the process as determined by one over the reserve requirement. Recall that the reserve requirement during the Great Recession was 10%, meaning that for every $100 deposited in a bank, a maximum amount of $1000 would be created in a perfectly functioning financial and economic system. The multiplier did not perform at this level due to banks holding reserves over the required ratio (excess reserves). Since banks are not required to lend out cash, the money multiplier is actually closer to 1.2, falling far short of the economic estimate of 100, even if it could be that high in rough practice. Now that the Federal Reserve has dropped the reserve requirements to 0, an infinite amount of money can be created. How exciting! Of course, the marginal propensity to consume is greater at lower income levels, as consumption increases until all needs are met, which is a good argument for some fiscal restraint in capping the income level that receives the cash rebate. Different degrees of and targets for spending will have different multipliers based on who they impact and their mechanisms. Increasing food stamp benefits is estimated to have a multiplier around 1.73, whereas more regressive tax cuts or policies that crowd out more efficient spending like building sports stadiums are often thought and estimated to have multipliers lower than one, resulting in getting less economic gain than what was spent.5Thank you for clicking me and wanting to know more. Crowding out describes a situation wherein the government, due to spending more, “crowds out” investment because it needs to soak up funds via debt, thus cutting off private investment’s access to capital, or at least making capital more expensive. The crowding out phenomenon is a frequent argument against publicly-funded economic growth and Keynesianism as a long term solution. As for taxes, Ricardian equivalence assumes rational consumers who are aware taxation will be required to finance any such spending either now (so less money to them) or later (paid via bonds, the interest on which must also be paid at a later date, so ultimately also less money to them), so saving would increase, thus reducing the multiplier. Empirical modern research on this theory has refuted it, and many of the assumptions behind it are no longer widely held in all but the most basic economic models. But there is still something to be said for consumers at a certain range of income realizing that this will have to be paid for and being more thrifty, expecting a tax increase or inflationary pressure in the future — the bill comes due.

Nonetheless, because this payout is a no-strings-attached rebate, consumers are empowered to spend it on whatever they’d like, and the government is not spending it on what might be a less productive endeavor, the multiplier will almost certainly be positive. People still have to buy food, pay their rent, and take care of their day-to-day needs, and it’s likely those at the lower end of the income scale (who will benefit the most from this bill) will spend more of it on immediate necessities than those who need it less, multiplying out cash and spending power as this inflates earnings from spender to spender. 

There is even precedent for a similar kind of cash handout from not that long ago which gives us an idea of what we can expect. At the onset of the Great Recession, President Bush signed the Economic Stimulus Act of 2008, which gave many Americans between $300-$600 with the aim of encouraging spending so as to provide a floor to the weak economy. These types of refundable lump-sum tax rebates were estimated to have a multiplier of about 1.26, comparatively higher than most other tax cut options, though not as high as various types of spending increases. Though the rebate did boost spending to a degree, it was not as much as expected since most Americans saved the money in lieu of spending it and the checks arrived too late to stave off the recession, which was already well underway by the time they arrived in the later half of the year. Nonetheless, it certainly did not hurt the economy, and the cash injection was valuable towards paying off debts, increasing savings (even if this didn’t effectively improve investment, as banks weren’t loaning much out in these times anyway), and providing some cash to many who may have desperately needed it. The situation in the US was also only getting started: Fannie Mae and Freddie Mac were taken over by the federal government in September, Lehman Brothers went bankrupt only days later, the Troubled Asset Relief Program would be authorized in October and the Federal Reserve didn’t even drop interest rates to zero until December. And that was all before President Obama was sworn in in January of 2009 and had to address the back half of the crisis, managing the automotive industry bailouts and officially exiting the recession in June of 2009, though of course economic malaise would be persistent for the next several years. Though this initial stimulus was only about $152 billion, successive fiscal support such as the Troubled Asset Relief Program (which authorized $700 billion, of which only about $440 billion was used), and the Recovery Act (which cost $831 billion) made up most of the federal government’s fiscal response to the recession.6To say nothing of the $4.5 trillion dollars the Federal Reserve provided in quantitative easing to inject additional funds into the financial system and lower long-term interest rates. And while history indicates this was probably not enough and the government should have spent more to mitigate the persistent economic torpidity that would follow, you might note all of these successive bills are already dwarfed by the $2.2 trillion spent on the Phase 3 COVID-19 response legislation alone.

A Recession Unlike Any Other

Despite its size, the Phase 3 COVID-19 response legislation will not be enough. The contraction at hand is not because of the traditional reasons economies fall into recession, such as burst asset bubbles, supply shocks (i.e., a sudden increase in energy prices), financial crises, and the like, wherein there is a decrease in aggregate demand. In recessions like these, the federal government often cuts taxes and increases spending, while central banks increase the money supply to lower interest rates. This encourages businesses to take out cheap loans, new public works projects to provide jobs, and consumers to run out and buy things with all that new cash. This recession is different because we don’t want these things to happen, at least not like that. We want businesses to keep their doors closed, schools to stay shuttered, and the last thing we want is consumers running around outside within six feet of each other waving their $1200 checks. Some have argued that the aim of a COVID-19 response should be to “actually decrease demand; a kind of anti-stimulus.” Tax cuts, more spending, and lower interest rates will not help the economy to the degree they historically have, and may even make the economic scenario worse if things abruptly turned around for folks and they started traveling, going back to work, and shopping around only to spread the virus further. Yes, the economy is in trouble because people aren’t spending — but not because they don’t want to or because they had to cut back. Instead it’s a self-imposed slowdown where governments are begging people to stay inside and requiring businesses to close. No matter how much money you have right now, you’re not going to go on that big vacation to Europe you had planned, nor should you. But it’s worth saying, and now saying again, how weird it is for such behavior to be discouraged in the context of your average recession. 

While discussing the psychology of markets, Keynes once famously remarked that “animal spirits” encouraged consumption and people would spend when these spirits were lifted, as opposed to precisely calculating exactly when their personal budgetary situation would improve. He wrote, “If the animal spirits are dimmed and spontaneous optimism falters, leaving us to depend on nothing but a mathematical expectation, enterprise will fade and die.” And though Keynes’ General Theory of Employment, Interest and Money came out in 1936 in response to the non-pandemic but still extraordinary economic foibles of its time, it is these insights on human behavior and psychology that have made his work so pervasive and applicable even in times like our own. The peoples’ outlook has to be a positive one and government is the only institution that can provide both the hope and support that the economy will need to improve.

Survival, Not Stimulus

The goal of the Phase 3 legislation is to survive. Send out some cash to help get you through a week or two, massively expand unemployment insurance in both its length and magnitude (the bill provides nearly 100% wage replacement for the average worker, which some might argue is the most important part of the law), freeze federal student loan payments until October, and provide loans to small businesses that will not cripple them for months once the economy rebounds. And it does many of these things very well. But if the goal is to do more than just survive and in fact prevent what could become the worst recession of our lifetimes from getting worse, this will not do the job. There are already voices calling for more nuanced and specific ways to trigger direct economic activity like online-only purchase vouchers, provisions for further payments if the crisis lasts longer than a month, and the digitization of or creating contingencies for essential services like education, mental health, and even elections.

Some of these items may come in a Phase 4 bill, but given Congress’ deteriorating ability to convene, the Senate’s announcement that it will not return until April 20, and the House’s indefinite recess, by the time such a bill even gets moving it will likely be overdue. This brings us back to what we can do now and what those Americans who are still employed and collecting a paycheck but will also be receiving rebates can do. If you really want to help, do not feel guilty about spending it: buy goods online for delivery, support local restaurants even if you can’t go to them by buying gift cards, subscribe to online fitness courses or support artists by buying digital media. Your spending will have a multiplicative effect on the economy to a larger degree than its surface value, and even spending it on something you may think is frivolous or unessential given all that is at stake can have positive effects for those who may need a source of income right now more than you do. Stay safe, take care of yourself, take care of those near you, stay inside to the degree you can, and if you want to buy that new album, that fancy new blender, or a new board game to help get you through these times — don’t feel guilty about it. You have an opportunity to help out a lot of people by helping yourself.

Running Mates: Episode 3 – 1976 – Mondale v. Dole

Lars and Michael discuss the first post-Watergate presidential election and how Gerald Ford fails to excite or unite his party by picking Bob Dole as his running mate, while Jimmy Carter manages to capture optimism and credibility with Walter Mondale.

The Race is Down to Two Candidates. Their Strongest VP Picks Are Almost Identical.

And just like that, what was once the largest primary field in modern history, became what it was always probably destined to be: a slug fest between the moderates and the left, personified respectively by former Vice President Joe Biden and Vermont Senator Bernie Sanders. In the days before Super Tuesday, the legions of moderates behind the recently dropped out candidates Minnesota Senator Amy Klobuchar and former South Bend, Indiana Mayor Pete Buttigieg coalesced behind the former vice president, with former New York City Mayor Michael Bloomberg joining them shortly thereafter. The only other notable further-left-of-center candidate in the race, Massachusetts Senator Elizabeth Warren similarly dropped out after Super Tuesday but has yet to endorse either Sanders or Biden (Klobuchar, Buttigieg, and Bloomberg were all quick to endorse Biden following the suspension of their campaigns). The game theory of the Democratic primary that split the more liberal voters on Super Tuesday while unifying the moderate ones allowed Biden to come away with a sizable lead coming out of Super Tuesday.

Within a week, Biden went from being an underdog to favorite with a nearly 99% chance to  secure a majority of delegates and thus, the Democratic nomination for president. Sanders’ probability of becoming the nominee has shrunk to lower than 1%, coming down off a high of nearly 50% following his victory in the Nevada caucuses. Though Sanders hardly has a window to win the nomination now, the nation and media at large have been quick to note the similarities with 2016 primaries. Biden being perceived as more moderate and accessible to Republican voters than Hillary Clinton (and his fellow candidates throughout this primary) and Democrats being more eager than ever to find someone they deem electable both point in his favor. And Biden seems on a path to follow a similar trajectory as Hillary Clinton’s 2016 primary campaign against Sanders by building a moderate coalition of Democrats that are more southern, more diverse, and older than that of Sanders’ supporters.

With these two candidates left,1Yes, Tulsi Gabbard is still in the race, for the <1% of you who constitute her polling average and two earned delegates so far. the primary has come down to a slug fest between two demographically similar candidates (though their supporters are dramatically different, more on that later). We talked in our last check-in on the state of the vice presidential picks after Iowa and New Hampshire about how Sanders and Biden are very similar in what they each bring to the table as a nominee: white, male, septuagenarians with over 25 years in the federal government who are both from very small and very liberal leaning states. This means their strongest vice presidential matches will likely be similar, and indeed, on comparison, they share many of the same top ten picks, most of whom we talked extensively about in our last piece (since they’ve been the front-runners in the tracker for some time now, as Biden and Sanders have been the most likely nominees for months): Senators Kamala Harris, Tammy Duckworth, Mazie Hirono, and Catherine Cortez Masto, as well as former Obama Secretary of Housing and Urban Development (and 2020 presidential candidate) Julian Castro. Ohio Congressman Tim Ryan is creeping up in the rankings due to the increasing favorability for Democrats in the generic ballot. Oregon Governor Kate Brown also appears on both of their top ten picks, as does Minnesota Senator Amy Klobuchar, the very same Amy Klobuchar who just endorsed Biden, how interesting

One major new addition to the tracker, New Mexico Governor Michelle Lujan Grisham, has already made a sizable impact as the absolute strongest pick for Sanders and in the top four for Biden. Lujan Grisham is a very strong vice presidential candidate compared to these two because of her demographic and regional strengths, as well as her combined experience both as a member of Congress and as a governor. Her exclusion in the original listing of potential VPs was a clear oversight on our end, and she’s ranked number three overall between the candidates.

Where Biden and Sanders differ, they do not do so dramatically. Sanders does not have former Massachusetts Governor Deval Patrick due to them sharing a region (both are from New England), and Biden misses out on former Virginia Governor Terry McAuliffe because Sanders’ and McAuliffe’s cumulative experience in federal and non-federal positions add to a 21.31 differential over Biden’s. This is because they’re almost exactly at the correct balance of federal and non-federal experience between them. 

Between the two of them,, Biden and Sanders each have seven women rounding out the top ten, and seven candidates who are non-white. Four of the candidates are from the Far West region and two are from the Southwest. It appears the tracker is favoring geographic and demographic diversity over the competitiveness of states, as only three of these candidates are from states currently within the competitiveness metric: Cortez Masto of Nevada, Ryan of Ohio, and McAuliffe of Virginia. If the race does tighten, New Mexico and Minnesota are on the threshold, so Klobuchar and Lujan Grisham could see their numbers improve even further.

From here on out, as the odds have refined between the two candidates, there won’t be a lot of upheaval unless the generic ballot shifts (these shifts at the margin end up making a large difference, being able to put Ohio or Georgia in play and not have to worry about defending Virginia or Colorado is a huge potential factor in selecting a competitive running mate); but stay tuned for further analysis on who our likely VPs will be and what they individually bring to the ticket.

Other Updates

We have dropped Bloomberg, Buttigieg, Klobuchar, Steyer, and Warren from the tracker as they have each dropped out — er, ahem, suspended their campaigns. Though we may work on an at-large tool for Democratic presidential candidates using our VP pick database that lets you play around with possible nominees for fun in the future.

Now that we’re in the endgame now, I will begin researching how to build out the tracker to be slightly less broad. My gut instinct tells me Sanders is unlikely to pick a staunch moderate as a running mate, as he seems more ideologically “pure” than Biden, who might be more inclined to search for a more left-leaning vice presidential pick. There are a few variables I thought about adding in the initial tracker but cast aside for lack of time or out of desire to keep the tracker as broad as possible such as an ideology scale, a more nuanced VPKeySeat metric, or an endorsement discounter (if a potential VP has already endorsed someone, they’re less likely to be picked by the opposing camp, for example). If this gets rolled out you can expect a separate methodology piece and explainer on that.

There is still some fluctuation amongst the various picks’ strengths as the generic ballot adjusts, Democrats now have a seven point tailwind in their favor, which may make some states more in reach (Ohio, R+7; Georgia, R+12) and make others less necessary to defend (Colorado, D+1; Michigan, D+1) than they were a few weeks ago.

Per the note above, I have added New Mexico Governor Michelle Lujan Grisham to the tracker, as both she and Florida Representative Val Demings (also added) have both been mentioned in some recent speculative press about possible vice presidential picks for both Biden and Sanders. Lujan Grisham skyrocketed towards the top of the pack.

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