A Missed Opportunity

August 31, 2012Danny Vinik 2 Comments

Romney speaks at the RNC.

The Republican National Convention wrapped up last night with Mitt Romney giving the keynote address and Clint Eastwood adding the…um entertainment. I was not able to attend the first night, but last night was certainly much more exciting and interesting than the previous evening.

The reason? The night wasn’t full of politicians. It was full of people who knew Romney personally. Ted & Pat Oparowsky spoke about the care and compassion Romney showed their family, and in particular, their son, who was diagnosed with cancer at just 14 years old. Next, Pam Finlayson gave a moving speech about her daughter, who was born three and a half months premature and died just over a year ago at the age of 26. She told the quiet crowd how Romney had frequently cared for her two-year-son while her daughter was in the hospital and when she was unable to prepare a Thanksgiving meal, the Romneys stepped right in and showed up at her door, meal in hand.

The crowd was silent during these great speeches and many were wiping tears off their cheeks after them.

A number of other individuals – from Romney’s days as a pastor, his time at Bain and his term as Massachusetts governor – gave a tremendous picture of Romney as a smart, caring man.

Then, just before the networks cut in, a video played throughout the arena about the Romney family and Mitt’s parents. It had numerous old family photos and videos from Mitt’s father, George Romney. It had interviews with the Mitt’s sons, about how they always used to cause trouble as a kid and they would never go to their dad to ask for money (always their mother).The video was nothing short of adorable.

Then prime time came and out walked Clint Eastwood to a huge ovation. Then Clint Eastwood spent the majority of his speech talking to a chair (with an invisible Obama in it of course). I don’t think it was disrespectful but it was incredibly strange. From inside the arena, it felt weird. When I re-watched in on TV later, it was even weirder. I really cannot figure this one out. Eastwood had no teleprompter or notes. He went on stage and said what he wanted to – and it showed.

The empty chair routine was certainly awkward. I’m not sure why anyone at the RNC approved of the idea (or let Eastwood sneak a chair onstage). But it was a huge missed opportunity. The Oparowsky’s story, Pam Finlayson’s moving speech or the video of Romney’s family would have been perfect to humanize Mitt and show a complete different side of him to a huge audience.

Instead, the world saw an 82-year-old Clint Eastwood talk to a chair. It was a huge mistake.

As for Romney’s speech itself, it was solid and effective. But it was not a game changer. It was policy-light, rhetoric-strong. His top lines of the night were certainly:

If you felt that excitement when you voted for Barack Obama, shouldn’t you feel that way now that he’s President Obama? You know there’s something wrong with the kind of job he’s done as president when the best feeling you had was the day you voted for him.

And:

I wish President Obama had succeeded because I want America to succeed.

Romney was mostly his strong, confident self for most of the speech. He grew a bit emotional when talking about his parents but quickly transitioned to his time as Governor.

Overall, Romney was exactly who we know him to be: a presidential-looking, confident man that just cannot seem to connect to the average person.

That’s what makes the inclusion of Eastwood and the exclusion of the humanizing videos and speeches about Mitt such a huge missed opportunity. Those stories could have helped him connect with the average voter more than any speech could. But the millions of viewers in prime time didn’t get to see them and that may go down as one of the biggest mistakes of this election.

Romney Campaign Finds Its Message

August 30, 2012Danny Vinik Leave a comment

Paul Ryan speaks at the RNC.

The second night of the Republican National Convention was yesterday and I was lucky enough to be there (as I will be tonight). It was a slow starting night, but finished strong with speeches from former Secretary of State Condoleezza Rice, New Mexico governor Susana Martinez and of course Paul Ryan.

Republicans continued pounding the President for “you didn’t build that,” with nearly every speaker mentioning the line. It’s clearly playing a much more prominent role in the election than any political pundit predicted. It’s become the Romney campaign’s main message.

Now, the line is incredibly deceptive, if not an out-and-out lie. In fact, the Washington Post’s fact checker Glen Kessler awarded it Four Pinocchios just yesterday morning. But it’s not going away, not matter how much liberal bloggers scream and yell about it. And even worse for those annoyed bloggers, it has finally given the Romney campaign something to run on.

A theme I’ve noticed over the course of this election is that the Obama campaign has had a clear plan of attack against Romney, but the Romney campaign has not had one against Obama.

Obama began with Bain Capital, attempting to refute Romney’s claim that his business background makes him the optimal choice for the Oval Office. The campaign (somewhat dishonestly) called Romney an outsourcer and then transitioned to sharp attacks against the former Governor for not releasing more of his taxes. Finally, the campaign turned to the Ryan Budget, trying to paint Romney as a man whose main goal is to help the rich and cut the safety net.

The story flows from one theme to the other, building up evidence along the way. What did the Romney campaign have? A few gaffes that no one really cared about and an economy that, while still bad, has been slowly improving.

More than anything, it needed a message. It needed something that both confirmed conservative fears that Obama is a big government socialist and convinced independents that Obama’s ultimate goal is wealth equality. In “you didn’t build that,” Romney found his message.

The Romney campaign wants to convince voters that Obama is a socialist intent on using the government to control outcomes; that Obama believes government is the root of all success, that individuals are cogs in the government machine and do not determine their own success (or lack thereof).

Yes, Obama does not believe any of these things. But that doesn’t matter. What matters is what voters believe. If Romney can convince voters of this message, he can win.

For a while now, I haven’t actually thought the election would be particularly close but I’m becoming less convinced. Before the Romney campaign discovered this message, I just didn’t see a way for it to win (outside a European meltdown, major government scandal, etc.). But now I do. If the Obama campaign cannot refute the “you didn’t build that” message, it opens the doors for a Romney victory.

The Effects of Advertising

August 26, 2012Danny Vinik Leave a comment

I’m at Logan airport, ready to head back to Duke for my senior year. I’ve been mostly MIA the past two weeks, taking a break after my internship at the Washington Monthly to reboot myself and prepare not just for the upcoming semester, but for all the political chaos surely upcoming as well.

But while I’m at it, I’ll toss in some policy as well: at some airports, I use my Verizon 3G wireless card to access the internet. Not at Logan. It offers free wifi in return for watching a short 15 second advertisement. That sounds like a great deal to me. I didn’t even watch the ad. I was getting my headphones out as it played and when I looked up again, I was connected.

Now, I’m not sure the financials behind the deal but I presume the advertising companies are paying for most of the internet and in return, Logan requires users to watch their ads. I haven’t done any research on how advertisements effect me – I like to thing I ignore them and make rational choices – but those companies have. They have loads of research on the value of advertising and would not have made the deal with Logan unless those ads work. And if they work, then they are distorting users choices. Now, this could be good or bad.

Economic theory stipulates that a rational consumer will always make the optimal, efficient purchase. They have complete knowledge of the product, the competitors’ products and prices. But most of us aren’t rational consumers in that sense. We don’t necessarily research every purchase thoroughly. We don’t check competitors’ prices for most purchases. We just don’t have the time. So maybe the advertiser is helping us out. Maybe it really does have the superior product and its ad is just saving us the research.

But the opposite can also be true: maybe the advertiser is selling the inferior product and “deceives” the consumer into purchasing it (deceives them by distorting the relevant information). Clearly, there is an economic loss here.

But is it offset by the economic benefits of ads from advertisers’ with superior products? If so, then consumers win here. Because if the net costs and benefits are zero, then all that is left is the ad revenue that often goes towards consumers (such as internet in the airport).

And beyond that, companies’ eagerness to spend money on ads does not tell us anything about the net effects of them. In an extreme example, perhaps consumers always purchase an inferior product so companies with the superior product are desperate to advertise their products everywhere. In this situation, those ads help consumers. And, those companies see great net benefit in advertising. So who are the losers here? Well, those companies’ with the inferior products. This is a situation where the more advertising, the better. The fact that the companies’ see a net benefit to advertising is meaningless

What matters is the distortion of those ads: does it lead consumers to make more efficient, economical purchases or not? What about when you include the economic benefits of the ad revenue?

These are important questions as advertisements become more and more prevalent in our day to day lives. For instance, New York City recently announced that it will sell advertisements on metro cards. At first blush, this seems like a great idea. It offers more revenue for the Metro Transit Authority to improve the train. But maybe the ads distort consumers’ choices in a negative manner. If that’s the case, then it isn’t necessarily a great idea. It depends on the benefits those consumers’ receive from the improved metro.

All of this is to say that we don’t fully know. I’m going to go through more research during the next couple of weeks and see what I can find, but it’s important to keep in mind that ads aren’t just annoying (another negative effect that I didn’t mention), they are also an important economic factor in our society.