Revisiting Obama's Chance of Victory

In May 2012 I made the prediction that Barack Obama would win the 2012 general election and that either Mitt Romney or Newt Gingrich would be the Republican Nominee. I named six key swing states that the Republicans would need to win in order for there to be a Republican victory. Those states are: North Carolina, Indiana, Florida, Ohio, Virginia, and Colorado. We'll review the most recent polls in those states:

North Carolina: Obama 46%; Romney 48%

Indiana: Obama 42%; Romney 48%

Florida: Obama 46%; Romney 42%

Ohio: Obama 45%; Romney 48%

Virginia: Obama 49%; Romney 46%

Colorado: Obama 49%; Romney 42%

There is much speculation now that Marco Rubio will be Romney's running mate. There are two important facts about Rubio: he is a U.S. Senator from Florida, and his parents are immigrants from Cuba. The idea is that adding him to the ticket could both win the state of Florida for Romney, and improve Romney's poll numbers with Latinos. Polls show Obama ahead by about 44 points among Latinos. 

I think that adding Rubio to the ticket could push Florida to Romney's side, but he would still need to find a way to win Virginia and Colorado. According to the 2010 Census Virginia is 7.9% Hispanic and Colorado is 20.7% Hispanic (compared to 9.7% for the United States overall). This might lead you to believe that Obama will barely win the election, holding onto just Virginia of the six. I doubt this. Rubio is Cuban, not Mexican. He has stated that he supports SB 1070 for Arizona, but not for Florida. I interpret this as meaning that he is okay with Mexicans being oppressed, just not Cubans. The media has focused a lot on Romney's large recent fundraising totals, but cash on hand is the better overall predictor of whose poll numbers are going to improve from this point forward. Obama has $261 million, more than twice Romney's $122 million. The evidence still points to a fairly easy victory for Obama.

High Five

The Ladder to One Percenthood

In the midst of the debate and discussion surrounding the 1% versus 99% dichotomy, I've heard the claim that making it into the 1% is just a matter of avoiding consumer spending. I decided to do a kind of test of this theory.

Firstly, we should clarify the definition of the 1%. Most people have been defining it by income, but it is really more proper to define it by wealth. Economix had a good article on this topic. They explain that although the 1% are typically defined as those earning more than $380,000 per year, the 1% can also be defined as those with net worth totaling more than $8,400,000.

So, let us assume that you earn the 2010 median household income of $49,445. We'll also assume that you avoid consumer spending altogether. That's right, we'll assume that you somehow avoid all living expenses, and save 100% of your income. While we're at it, we might as well throw in an assumption that you somehow avoid paying any taxes. You then invest the money at a rate of return of 9.59% (the 20-year average S&P 500 total return). If you start this process at age 18, you'll enter the one percent club by the time you're 50 years old. You can surmise that adding in a small tax rate or living expenses would mean that you won't live long enough to enter the club at all. 

If you're wondering how long it would take you to make it to the top, Carlos Slim Helu's (the richest person on Earth) $69 billion would be matched when you turn 147.