Extended primary WAS a boon to the Democrats

Back in February I made this claim while most Obama supporters were chewing their fingernails over the showdown with Hillary Clinton. Results from the field are backing me up: a 50 state+ primary benefited both Obama and the Democrats tremendously, pushing up the Dems’ voter rolls and helping Obama build a veteran ground team that McCain just isn’t matching:

An observation we’ve heard repeated in Obama offices across America, Crandall emphasized how beneficial the contested primary had been for building the foundation for record turnout. “We had real hints of it in the primary,” Crandall said. The first-time voters the campaign energized for the May 6 vote foreshadowed what North Carolina is seeing today. Crandall remembers thinking “these are NOT your typical primary voters.”

FiveThirtyEight.com

I’ve spoken to enough Hillary supporters in NH who felt, in fact, that the contest didn’t run long enough (many wanted a floor battle). Ending this contest any sooner would have been a disaster.

In any event, what Obama has now is the envy of any political operation anywhere: thousands of battle-hardened organizers spread throughout the 50 states. This is not just a benefit to Obama on Nov 4 — it benefits all of American democracy. It may even yet become a thorn in Obama’s side: a people who have stood up do not easily sit back down again. And that’s how democracy should be.

A network analysis of the Obama 08 campaign

A fresh pair of articles is shining light back on to the Obama ground operations, which — presuming victory on November 4 — will be remembered as one of the deepest and most robust political startups in modern history. Zack Exley’s in-depth piece on “The New Organizers” in the Huffington Post goes into (excruciating) detail on Obama’s Ohio general election team, while the Washington Post finally brings some MSM coverage to Obama camp’s innovations. Common to both pieces is the role of Marshall Ganz, probably the leading theorist and practitioner of grassroots organizing in America, and the striking absence of any similar efforts by the Republicans and the McCain campaign.

Both articles describe the Obama campaign’s team structure, which marries tight grassroots networks to a more traditional campaign hierarchy. My colleague Aaron Shaw has been ruminating over the topologies of these networks take and, taking off from his thinking, I suggest that the campaign in its ideal type looks a bit like this:

The Obama campaign network

The superstructure of the campaign is traditional, top-down command-and-control (with information flowing upwards, of course). At the roots the campaign — as is typical for most volunteer efforts — comprises ad hoc mesh networks. It’s in inserting strong, tightly-knit teams that the campaign has made the greatest innovation. Each team, as a whole, functions like a paid staffer, with similar responsibilities and accountability. Exley quotes a paid field organizer, “This program allows [volunteer] Glenna’s team, with just two or three weeks of [database] training… to know how to pull lists and put canvass packets together. So all that type of work that eats up so much time for organizers can be handled at the local level—at her place.”

Neighborhood teams thereby function as force multipliers for paid staff. And they work because, with extra investment into training and fusing teams together, they allow busy people with school or full-time jobs to play as big of a role as they’re capable of taking on, rather than being stuck with one-size-fits-all phonebanking just because the campaign lacks the infrastructure to recognize their unique talents.

In my diagram above, I drew a circle around the team to indicate that they can function as the equivalent of a paid staffer. What’s I didn’t quite illustrate is the fact that, as local residents, the teams also have a deeper and wider network than a paid staff parachuting in. Outsiders are more prone to be captured by local elites who may or may not have the campaign’s best interests in mind. Furthermore, the total number of solid connections that paid staffer can make locally is probably much lower than the total number of contacts that the local team, in total, already has. It’s easy to see how — with enough time and money to invest in their recruitment, training, and support — strong teams become the natural junction between a national, top-down hierarchy and a local, dispersed field of volunteers.

The black magic of financial innovation

Arthur C. Clarke’s third law reads: “Any sufficiently advanced technology is indistinguishable from magic.” What’s the difference between technology and magic? As this blog post points out, “magic” is the halting of inquiry. With that formulation, it’s possible that science can paradoxically plunge us into a second Dark Ages, when the world around us are controlled by forces beyond our ken.

It has become obvious that, among recent technological advances, no field has moved so far so quickly as the world of high finance, specifically, the world of complex derivatives. George Soros testified in 1994 to the House Committee on Banking, Finance, and Urban Affairs, “We use derivative instruments to a much lesser extent than generally believed, very largely because we don’t really understand how they work.” Both he and Warren Buffett restricted their dabbling in derivatives after being seriously burned.

In his 1994 quote Soros didn’t mean that he didn’t know the role derivatives play in the market. Rather, he was pointing out that — like an iPod, or a jet engine — it’s quite difficult to figure out what is going on under the hood of any particular derivative instrument. In other words, they are magic.

Which is not to say that widespread understanding can’t catch up to complex derivatives to make them safer as bona fide financial instruments. Many derivatives have genuine value: consider weather-based derivatives as a hedge for farmers. A heap of regulation to ensure transparency when useful and block abuse when it’s not would help close the gap between financial technology and magic.

An economist is lying when he blames “greed”

As a matter of public relations, no one has ever gone wrong blaming financial disasters on “greed.” But we all know that greed is the basic engine of capitalism. Greed may not be “good,” but it’s there, and we rely on it to power our modern economy. So the problem isn’t greed: greed, like the poor, will always be with us. The key to a thriving capitalist economy is channeling that greed in productive directions.

(That channeling, by the way, is called regulation.)

So when Alan Greenspan argues that the current meltdown is due to “greed” (Taking Hard New Look at a Greenspan Legacy, NYT), warning bells should go off that this guy is trying to get himself off the hook.

The whole point of regulating markets is to manage systemically what we cannot count individuals to do wisely. Mr. Greenspan is no fool. He knows that, and he knew it at the time when he was unscrewing the safety latches that prevented Wall Street from venting all that red-hot greed into the unprotected sectors of our economy. And in deregulating exotic derivatives, he stood by while Wall Street created a risk-laundering scheme of epic proportions.