The Outsider Perspective, Issue 21 | The Beltway Outsiders

Welcome to the 21st issue of The Outsider Perspective, brought to you by The Beltway Outsiders.

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Good Friday Morning! We’re 17 days away from the general election. The last debate is behind us. For the most part, the last national stage each campaign had to make their case was at the last debate. Americans typically tune in for the debates and have their minds mostly made up by the end of the last debate. Early voting is officially underway in most states offering it. Why is all this important? Clinton leads by 7 points nationally while votes are being cast. By some estimates 45-50% of the vote will be cast between now and election day. We’re truly in the last mile of the election now. So let’s jump right into the analysis…

The Election

The State of the Race – 30,000 foot view of the race

Let’s just state the obvious point: barring some unforeseen event, largest recorded polling error we’ve ever seen, or some other odd miracle in favor of Donald Trump, Hilary Clinton is going to be the next President of the United States.

The path ahead for the Clinton campaign is simple: push get-out-the-vote operations in battleground states during early voting, push Trump in red states like Arizona and Georgia, and stay clean of any earth shattering event. For Trump, it’s hard to say. Nate Silver provided excellent context:

Clinton went into the final presidential debate on Wednesday with a lead of about 7 percentage points over Donald Trump. And according to the only two scientific polls we’ve seen, voters thought that Clinton won the debate. Occasionally, the initial reaction to a debate can differ from the way it’s perceived days later. But in this case, the morning headlines, which focused overwhelmingly on Trump’s refusal to say whether he’ll accept the election results, are potentially worse for Trump than the debate itself. In YouGov’s poll of debate watchers, 68 percent of voters said they think the candidates should pledge to accept the results of the election.

There are less than three weeks left in the campaign, and there are no more guaranteed opportunities for Trump or Clinton to command a huge public audience, as they do at the conventions and the debates (although, they’ll get plenty of attention, of course). Millions of people have already voted. Trump has had a significant advertising deficit, and an even more significant deficit in terms of his turnout operation. He’ll probably spend a significant chunk of the remaining news cycles quarreling over his contention that the election is rigged, and with the numerous women who have accused him of sexual assault. He doesn’t have an obvious — or even a not-so-obvious — path to the presidency.

More ominous for Trump, in the RealClearPolitics average of polls, Clinton has a lead or is tied in the last 30 polls (only one poll shows a tie, the LA Times / USC poll. Read more about why it is an outlier here). If you remove the outlier LA Times / USC poll, you’d have to go back to Fox News’s poll just after Hilary Clinton’s fainting episode after a 9/11 memorial service to find a poll where Trump had a lead.

Hurting Trump even more, the viewing public overwhelming saw Clinton as the winner in all 3 debates by a wide margin. Trump performed so poorly in the debates that Clinton registered the largest polling boost FiveThirtyEight could find evidence for in recent Presidential history. Clinton received boosts from her convention and all 3 debates. Trump received very little boost or even lost ground after all those events. And with the media focused myopically on Trump refusing to say he would accept the election results, the negative news coverage will only continue.

The last note I’d make on the macro level of the election is this: this is the most polarizing race we’ve had between men and women in a long time. While Trump holds a small lead among male voters, Clinton holds a monster 20 point lead among females. For context:

To put this year’s gender split into a little more context: Trump’s 7-percentage-point lead among men is about how well George W. Bush did with men in 2000. If we had an average gender gap this year, we’d expect Clinton to carry women by between 5 and 10 points (given how men say they are going to vote). That kind of gap would result in a close race overall, which is exactly what the state of the economy suggests should be occurring.

Instead, Clinton is leading by about 6 or 7 percentage points nationally in the FiveThirtyEight polls-only forecast. Basically, the vote among men looks “normal”; the split among women does not. That is, the historically large gender gap this election is because women are disproportionately favoring one candidate (Clinton) — to an extent we wouldn’t expect them to in a normal election given the “fundamentals.”

While many commentators are correctly noting how Republicans are losing college-educated men for the first time since the 1960’s, the more telling stat line is how Trump is losing women. His sexist comments and allegations of sexual assault are driving women out of the Republican Party in droves.

Trump’s path to victory

So is Trump’s path to victory completely closed? No. He does have a chance. FiveThirtyEight’s election currently gives Trump a 13.3% chance to win, with Clinton having a 86.7% chance to win. Their program runs a simulated election 10,000 times and projects winners based off of current polls and other factors. Trump wins in 13.3% of those. On Monday, FiveThirtyEight looked at the instances of their simulation when Trump won the election. Certain states popped up again and again:

There are six states — Ohio, Arizona, Iowa, Florida, North Carolina and Nevada — that appear on at least 80 percent of Trump’s victory maps. It’s very, very difficult to imagine a win for Trump if he doesn’t win all of these: A Trump win without Ohio occurs less than 1 percent of the time in the model simulations, and a win without Nevada only about 2 percent of the time. There are six more states that appear on around half or more of the victory maps, and these are a bit interesting: Minnesota appears more often than Pennsylvania, but in fairness Pennsylvania is rather definitively far out of Trump’s reach, whereas there is more uncertainty in Minnesota given slightly scanter polling.

Even if Trump managed to win those specific 6 states, he’d still be short of victory. If he managed to pull that off, he would then have to flip one of the following states into his column: New Hampshire, Pennsylvania, Michigan, Wisconsin, Minnesota, or Colorado. One of those states would give him the 270 electoral votes he needs. Otherwise he’s short at 265 (assuming he carries states like Georgia, Texas, and Utah). If Clinton wins one of the six states above, it’s very likely Trump’s electoral path is closed. And currently, Clinton holds narrow leads in 4 of the 6 states: Arizona, Florida, North Carolina, and Nevada.

Trump’s campaign plan to win these states is to lock down his base and make the campaign so deplorable that people simply don’t go out and vote. From his campaign advisors:

Trump’s all-out offensive is not just designed to defend against the groping allegations or to serve red meat to what the source described as his “populist” and “nationalist base.” According to the source, who requested anonymity to discuss high-level strategy candidly, the attacks on the Clintons are also aimed at the “suppression of votes” from millennial women, African-Americans and the “idealistic Bernie Sanders supporter.”

“Principally, we’re trying to drive them to a third party or just have them not vote,” the source said.

Polls have shown minorities and women all favor Clinton. However, Clinton has struggled with millennials. Many younger voters backed Clinton’s progressive primary opponent, Vermont Sen. Bernie Sanders. The source said that the campaign believes that a one-two combination of Trump’s “populist message” and anti-Clinton attacks can get liberals, minorities and millennials to stay home.

“It’s always been a two-pronged attack, this outsider-agent-of-change message, which we know resonates… that’s this whole populist take on the system. The system is rigged. Hillary Clinton is the guardian of the status quo. You’re getting ripped off, trade deals, the economy jobs, national security border, that mantra. That falls up underneath that. The second part is then: How do you suppress the Democratic vote?” the source said.

That’s why many of Trump’s attacks on the Clinton Foundation will focus on its dealings in Haiti and sub-Saharan Africa, particularly Nigeria. The source described these countries as places where the Clintons “treat blacks as people they can make money off.” The source said Trump came up with this line of attack, which he brought up in the last presidential debate, to appoint a special prosecutor as president and potentially jail Hillary Clinton, as he was conducting an event in Miami’s Little Haiti, where locals were venting their dissatisfaction with the Clinton family’s dealings in their country.

The source predicted that these attacks, coupled with Trump’s “populist message,” would help “get 10 to 15 percent of the black vote,” but said that the move was primarily an attempt to get other African-Americans to stay away from the polls on Election Day.

“Principally, doing that is about suppression of vote. Like, you know, ‘I’m not going to get out of bed. I’m not going to go vote for her,’” the source said. “It’s about the suppression of votes, just to get them to stay home. If we can pick up some votes along the way, that’s fantastic, but it’s really about the suppression of votes.”

The plan is to shrink the voting populace so much that the only bloc of voters left to make an impact are pro-Trump voters. His campaign is resigned to the fact that they can’t increase Trump’s appeal. So they’re going the opposite direction and trying to shrink Clinton’s constituency.

This should reframe why Trump continues to harp on the election being a fraud or rigged. It’s not about accepting or rejecting the result of the election, as many pundits think (particularly after the last debate). There is considerable evidence from political scientists saying that if voters believe an election is rigged or already decided, they don’t show up to vote. Trump believes his base of supporters vote for him no matter what happens in the race. This means he has to convince everyone else to not vote. And since he’s losing minorities and women completely, his only option left is to suppress that vote.

Keep this section in mind in, what appears now, to be an unlikely Trump victory. If he wins: it will be because people did not vote. This point is why I disagree heavily with Trump supporters on this being a Brexit election for them. In Britain’s Brexit vote, voter turnout hit historical highs, breaking records. The Brexit coalition built a distinct message with voter turnout efforts. Trump’s strategy is to shrink the voting pool to remove women and minorities.

If you’re reading this and thinking it’s an unlikely scenario, then you understand why Trump’s odds of winning are at 13% right now. The election will come down to Clinton’s get-out-the-vote operation and Trump’s effort to suppress the vote. Trump has no get-out-the-vote field operation.

Evan McMullin, the long shot independent conservative, surges into a lead in Utah

One of the biggest stories of the past week was how Evan McMullin surged from nowhere, to third place, to now leading in some polls against Trump and Clinton in the state of Utah. FiveThirtyEight’s model if the election were held today in Utah projects McMullin would take 27.8% of the vote, taking him past Clinton and sending Trump plummeting in the same projections. One recent poll showed McMullin as a 6 point favorite to win the entire race outright. Looking at his odds, Nate Silver had this to say:

What makes this tricky — and why the model probably underestimates McMullin’s chances — is that he’s a late arrival on the scene, having only qualified for the Utah ballot in August and having only started to attract significant attention recently. Typically in mid-October, if you saw an independent polling at 20-something percent, you’d assume he was on his way down after once having been more competitive. McMullin, however, has the potential to benefit from a feedback loop as more people hear about his candidacy and consider him to be a viable option. And it’s interesting that the most recent poll of the bunch, from Rasmussen Reports, gave McMullin his best number. Our model will respond aggressively if further polls find McMullin in the high 20s or low 30s instead of at 20 percent of the vote. You can already see some of the difference in that our now-cast, which weights recent polls more heavily and makes more sympathetic assumptions about third-party candidates, gives McMullin a considerably better chance than the polls-only and polls-plus models do.

Where to look next for McMullin? Idaho. He held an impromptu event in the state and in less than 24 hours filled out the event location. Standing room only. He is taking several trips through the Mountain West states and Virginia in coming weeks. His campaign will focus on pushing his numbers up in other states. But his base is in Utah. What remains is why Mitt Romney has been silent throughout this entire campaign. McMullin has delegates within his reach. Romney would help push McMullin over the line.

C’mon Mitt…

Links for your radar

Clinton, seeing Arizona in play at the last minute, is dispatching surrogates Michelle Obama and Bernie Sanders. – New York Times
Republican PACs and Super-PACs are trying to create a firewall to save the House and Senate. They’re spending money in districts once thought impervious to a Democratic push. – Politico
FBI Agents say Director Comey stood in the way of their investigation into Clinton’s email server. – The Daily Caller
State Department tried to engage in ‘quid pro quo’ to get Clinton email classification change with FBI. – Washington Post
President Obama is spending his days building a strategy to shape his own legacy post-White House. – Washington Post
[Video] The Perot Myth: How the long standing myth that Ross Perot cost George H. W. Bush the election is wrong. – ESPN Films & FiveThirtyEight
Don’t Blame #NeverTrump: Intraparty feuds didn’t undermine the campaign of the worst presidential candidate in recent memory. – Rich Lowry
Trump camp still sending out feelers on starting a new cable news network. – Wall Street Journal
Trump is winning. Against Paul Ryan. – Bloomberg View
Clinton’s odds at winning Texas are great than Trump’s at winning Pennsylvania. – FiveThirtyEight
Trump’s political suicide. – Charles Krauthammer

Foreign Policy

The Battle for Mosul, Iraq begins

The Iraqi army, with the support of roughly 5,000 US military personnel, has advanced into the city of Mosul, Iraq. The new battle is an attempt to oust ISIS fighters in the city. ISIS took over the city 2 1/2 years ago. The Iraqi army has between 25,000-30,000 troops hitting the city trying to take it back. The key to watching all reports on this battle is to ignore announcements that the city has fallen to the Iraqi army. Or the battle is moving faster than thought. The battle is not over at that point, it’s likely just beginning. ISIS plans to use guerrilla tactics to drive the army back out of the city:

But despite its early success, the campaign to dislodge the Islamic State from one of its last remaining Iraqi strongholds will be neither quick nor easy. The group is undoubtedly preserving its strength for conflict inside the city itself, which will be more difficult and more destructive than waging war in largely unpopulated areas. For now, the militants are likely relying solely on rearguard action, or defensive maneuvers made by a retreating force, while they wait for their opponents to converge on the city.

As the battle for Mosul unfolds, the danger of it causing a humanitarian crisis will increase. Some 750,000 Iraqi citizens still live in the city, and though Iraqi authorities and international aid agencies have set up refugee camps in preparation for the assault, they will not be able to handle a sudden, sizable influx of people. And as the Islamic State is expelled from the city, it will become more desperate as it weakens, taking bigger and bigger risks to try to regain the territory it has lost.

On the humanitarian part of it, only 900-1000 civilians have fled the city thus far. Though aid workers are expecting far more and have 50,000 emergency tents set up. Aid workers expect nearly 1 million civilians to flee the city and surrounding area.

The key point to remember here is this: The US has not left Iraq. There are boots on the ground. We’ve scaled our forces back because President Obama failed in negotiating a new agreement in 2011. But we have boots on the ground. And those troops are in harms way right now. Any claim to the contrary is a false narrative. The military has requested more than the 5,000 troops on the ground currently because they’re concerned US men and women on the ground are not being equipped or protected enough by current resources. Keep these brave men and women in your thoughts and prayers.

US appeasement of Putin and Russia leaves Allies incapable of responding

The stream of failures in US policy towards Russia and Syria continues unabated. The week began with the White House announcing they would discuss dealing with Syria, and all options were on the table. This included military force. They also planned to have discussions with the UK and Europe about handling the crisis in Syria. The UK and US went so far to say that they were discussing the potential for sanctions against Russia. Nothing happened:

After a meeting of 11 governments opposing Assad’s rule, U.S. Secretary of State John Kerry and British Foreign Secretary Boris Johnson each insisted all options were on the table. But their stark explanations about the danger of resorting to military force appeared to rule out such a move.

The result was a somewhat schizophrenic threat that was unlikely to scare Assad’s government or Russia as they move to crush the last rebel-held areas of Aleppo, Syria’s largest city.

The US will make loud noise about removing Assad and Russia, but no real action is taking place. And while Russia momentarily halted its bombing the Syrian city of Aleppo, the move looks more like a chance to regroup and retrench their position. Particularly when the Russian Navy plans to intensify its bombing of Aleppo, in the largest fleet movement for Russia since the Cold War:

Russian warships off the coast of Norway are carrying fighter bombers that are likely to reinforce a final assault on the besieged Syrian city of Aleppo in two weeks, a senior NATO diplomat said on Wednesday, citing Western intelligence.

The fleet passed by the Norwegian city of Bergen on Wednesday, the diplomat said, while Russian media has said it will move through the English Channel, past Gibraltar and into the Mediterranean Sea to the Syrian coast.

“They are deploying all of the Northern fleet and much of the Baltic fleet in the largest surface deployment since the end of the Cold War,” the diplomat said on condition of anonymity.

“This is not a friendly port call. In two weeks, we will see a crescendo of air attacks on Aleppo as part of Russia’s strategy to declare victory there,” the diplomat said.

Photos of the vessels have been released by the Norwegian military, taken on Monday. A Norwegian newspaper quoted the head of the Norwegian military intelligence service saying the ships involved “will probably play a role in the deciding battle for Aleppo”.

These movements are being watched closely by Eastern European countries and NATO allies. They will want reassurance the US will intervene in the event Russia continues pushing its power around. Right now the only response from the White House is ambivalence and appeasement. The President refuses to check Putin. Putin understands he has a free reign with a lame duck and disinterested President. I would only expect the meddling to continue. And if the US refuses to act, it handcuffs the UK and others to deal with Russia.

Links for your radar

Qatar, a nation suspected of funding Islamic terrorist groups, appears to have given a seven figure gift to Bill Clinton on his birthday in order to gain access to the former President and Hilary Clinton’s State Department. This would violate federal ethics laws. Clinton Foundation denies it had to ever announce the gift. – New York Times
22 Congressional Democrats ask President for “No First Use” on US Nukes. This would handcuff the US from ever using nuclear weapons first in the event of a nuclear threat. This is strategically dumb and likely being driven by lobbying from the Ploughshares Group. The same group responsible for the Iran Deal. – Defense News
The new global hotspot: Yemen. John Kerry working to get a ceasefire in place after Iran backed group fired missiles at US Naval ships. I’d expect this ceasefire to work as well as the Syrian ceasefires. – NBC News
Rebels are already accused of violating the ceasefire in Yemen. – BBC
It’s deterrence, stupid: How the US needs to move towards deterring threats from materializing and growing. – War on the Rocks
Cyber Mercenaries: How governments are employing private groups to hit other countries for them. – Politico
Obama is doing just enough to lose slowly in Afghanistan. The war he said was important. – The Daily Caller

The Economy

Why China is back on US investors radar

China posted its GDP growth for the third quarter of this year. China claimed it grew at 6.7% in the third quarter in line with most economist’s projections. So why are people casting a blind eye? Because this was the third straight quarter China claimed it grew at 6.7%:

China reported on Wednesday that its economy grew 6.7 percent in the third quarter compared with a year ago. That matched economists’ expectations exactly, and was identical to the pace China set in the first and second quarters of this year. In economics, stability like that is remarkable — and usually not to be believed.

Economists often look beyond the official numbers to find alternative ways to gauge the Chinese economy. Other figures and facts on the ground suggest that a lending binge that China has unleashed in recent months is helping to sustain growth.

But by historical standards, China’s growth is slowing down. This year’s growth is set to come in at a pace slower than last year’s, which was already the weakest pace in 25 years.

In other words, everyone thinks China is lying about its official growth numbers. Wall Street firms were even less kind:

“It’s definitely unusual in an international context,” noted Julian Evans-Pritchard, a China economist at Capital Economics on Wednesday. “There are almost no countries that have such stable GDP growth rates.”

The GDP trifecta is the first since at least 1992 when Reuters began compiling data.

“It suggests quite significant smoothing of the data behind the scenes. Even by Chinese standards, this is quite rare,” Evans-Pritchard said.

The expectation is that China is hiding much lower growth behind the scenes. And that the Chinese government could set the US up for another time of bad economic conditions. The last time this happened was 2015, when China’s bad numbers caused global markets everywhere to tank. Most reformers say China needs to open itself up to free-market reforms in order to avoid long term pain in the form of recession and slow growth, like we’ve seen in Spain and Japan. So far, China has been slow to enact such changes. Which is why US traders are once again watching red flags pop up across the Pacific. And the longer people believe China is sitting on a massive bubble waiting to pop, the edgier they get as global signs point towards an oncoming recession.

Links for your radar

The number of Americans balancing 2, 3, or more jobs at a time has hit an 8 year high. – USA Today
US Markets are building a wall – and investors are paying for it: How the spikes and swells we are experiencing preceded other downturns, including the 1987 crash. – Marketwatch
27 million Americans remain uninsured by Obamacare. – Bloomberg
How different industries are pricing in a Clinton electoral victory. – The Street
Mayors must institute policies to foster startups. – Kauffman Research
Wall Street predicts Clinton will win Presidency… but is also worried she will win by too much and remove GOP majorities in the House and Senate. – MarketWatch

What I’m reading

“Rosenberg Lies Never Cease: Sons seeking to exonerate their long-dead parents for their spying for Stalin are resorting to dishonest evasions” by John R. Schindler, the Observer

During the Cold War Americans had a heightened fear Soviet spies had infiltrated their government. This scare culminated with the hearings set up by Senator Joseph McCarthy. He claimed to have a list of officials in the government who were actually Soviet spies. Two episodes emerged out of this episode: the trial of Alger Hiss and the trial and execution of Julius and Ethel Rosenberg. The political fight over these two cases defined the left and right divide for a generation. With liberals defending those accused of communist sympathies and conservatives attacking them.

In the 1990’s, the CIA and FBI began declassifying Soviet era records. The Russians began doing the same with Soviet records after the fall of the USSR. This gave the world an open look at the truth behind all these claims. It turns out Hiss and the Rosenbergs were actually Soviet spies. The historical record is clear on this point.

Which brings us to the recent 60 Minutes story run on the Rosenbergs. CBS focused on the Rosenberg son’s attempts to exonerate their parents. John R. Schindler covers the backstory thoroughly and then explains what CBS leaves out of the story:

However, like much of what CBS showed the public, there’s a lot omitted—including key information which totally undermines the Meerpols’ case. In the first place, the word VENONA is totally absent from the program. That was NSA’s term for its above-top-secret program to intercept and decrypt Soviet intelligence telegrams sent between their secret spy bases in the United States and headquarters in Moscow. VENONA, which ran from 1943 to 1980, identified hundreds of Soviet agents in America and other Western countries.

When NSA declassified VENONA in the mid-1990s, it fundamentally changed what the public knew about the early years of the Cold War. Although Senator Joe McCarthy was a drunk charlatan, it turns out Moscow really did possess a vast network of spies in 1940s America.

Julius Rosenberg appeared in several VENONA messages, under the cover names LIBERAL and ANTENNA, which made plain that he wasn’t just a Stalinist true-believer but an important agent of the Soviet secret police who gave Moscow every American secret he could get his hands on. However, since VENONA was so secret—President Truman wasn’t briefed on the program until shortly before he left office—it could never be mentioned in court. The Justice Department had to find admissible evidence to convict the Rosenbergs, even though NSA and the FBI knew the extent of their treachery.

Unfortunately for the Meeropols, VENONA likewise makes clear that Ethel Rosenberg was a Soviet spy. I’ve worked with VENONA materials for years, including intercepts never released to the public, and I thereby shut the door on denialism regarding Alger Hiss, another one of Stalin’s spies inside the U.S. government that many on the Left simply refused to accept was a traitor, although his guilt was firmly established by VENONA.

The entire piece is well worth reading, as Schindler quotes directly from several Soviet era dispatches. It’s incredible to see CBS taking this extreme of a position on a historically settled issue.

Quote of the Week

You may have seen a quote circulating on social media recently attributed to C.S. Lewis in the Screwtape Letters. It’s a brief paragraph that focuses on keeping men focused on politics. The problem is that quote is fake. Here’s what C.S. Lewis actually wrote (“we” refers to the demons who tempt humans, and “the Enemy” is God):

About the general connection between Christianity and politics, our position is more delicate.

Certainly we do not want men to allow their Christianity to flow over into their political life, for the establishment of anything like a really just society would be a major disaster.

On the other hand, we do want, and want very much, to make men treat Christianity as a means; preferably, of course, as a means to their own advancement, but, failing that, as a means to anything—even to social justice.

The thing to do is to get a man at first to value social justice as a thing which the Enemy demands, and then work him on to the stage at which he values Christianity because it may produce social justice. For the Enemy will not be used as a convenience. Men or nations who think they can revive the Faith in order to make a good society might just as well think they can use the stairs of Heaven as a short cut to the nearest chemist’s shop. Fortunately it is quite easy to coax humans round this little corner.

Thanks for reading!