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September 3, 2012

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Convention 2012

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Star Bucks Obama’s Celebrity ATM

Hollywood and Silicon Valley are dispensing lots of cash. But their interests are colliding and Obama’s in the middle.

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COVER STORY

Al Hunt TODAY’S TAKE

The expectation in Charlotte is the polar opposite of the Republicans last week. The Romney bashing will be easy and predictable; what’s necessary — and tougher — is to make a compelling case as to why the next few years will be better than the past four.

Clooney, Zuckerberg back Obama as Hollywood, Silicon Valley fight over piracy. The Debrief The Big Story Political Capital Bloomberg Government Election Insider Swing State Bloomberg View Al Hunt Ad War Muse Calendar

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STAFF AND CREDIT EDITORIAL MATTHEW WINKLER Editor-in-Chief, Bloomberg L.P. NORMAN PEARLSTINE Chief Content Officer, Bloomberg L.P. ALBERT R. HUNT Washington Editor TIMOTHY A. FRANKLIN Editor, Bloomberg Insider ARTHUR HOCHSTEIN Cover Designer, Bloomberg Insider MATT MANSFIELD Design Director, Bloomberg Insider PAIGE K. CONNOR, GEORGE PETRAS Designers, Bloomberg Insider DAVID RAPP BGov Content Manager KELLY REILLY BGov Graphics Director EDITORS Laurie Asseo, Jeanne Cummings, Bob Drummond, Steve Geimann, Clark Hoyt, Steve Komarow, Mark McQuillan, Robin Meszoly, Jon Morgan, Cary O’Reilly, Mark Rohner, Michael Shepard, Robert Simison, Michael Tackett, Lauren Vicary, Joe Winski PHOTO EDITORS Graham Morrison, Natasha Cholerton-Brown

» Today’s

Bloomberg Ranking

percent

That’s the share of donations North Carolina residents gave Republican Mitt Romney over Democrat Barack Obama from the $5.6 million donated to both presidential campaigns since January 2011. In 2008, 71 percent of $8.9 million went to Obama over Republican John McCain.

BUSINESS PETER T. GRAUER Chairman, Bloomberg L.P. DAN DOCTOROFF President & CEO, Bloomberg L.P. PAUL BASCOBERT COO, Bloomberg Consumer Media ANN DUFFY Publisher, Bloomberg Insider CAROLINE W. HARRELL-CRAMER Ad Director, Bloomberg Insider

Contributions North Carolina residents Mitt Romney $2,888,422 Barack Obama $2,704,437

What’s Ahead

Carolina on My Mind

Can’t We Get Along?

A Last Splash

10 a.m. » North Carolina favorite son James Taylor headlines CarolinaFest, which kicks off the convention’s festivities. Janelle Monae, Jeff Bridges and the Abiders, a Labor Day parade and plenty of food highlight the festival. Tryon Street, Uptown Charlotte.

2 p.m. » Sure, President Barack Obama’s health-care law didn’t get a single Republican vote. That doesn’t mean the parties can’t work together, right? Bloomberg’s Susan Goldberg moderates a panel on “Bridging the Political Divide in the 2012 Elections,” with Obama for America’s Ben LaBolt, YouTube’s Olivia Ma, the Washington Post’s Marcus Brauchli and the New York Times’s Matt Bai, at the Bloomberg Link, EpiCentre, 210 E. Trade St., 3rd floor.

7 p.m. » On the unofficial last day of summer, the DNC Beach Bash wraps up Labor Day with beach-themed entertainment at Great Wolf Lodge, 10175 Weddington Road, Concord.

SOURCE: CENTER FOR RESPONSIVE POLITICS, AS OF: JULY 31, 2012

FINANCE/ADMIN/SALES Joseph Clemente, Sheila Debiase, Mary Hilley, Marley Goldfein, Katie Aldrich PRODUCTION Bernie Schraml, Debra Foley, Jim Delahanty, Kakoli Mukherjee HOW TO CONTACT News: 202-624-1800 Address: Bloomberg Insider, 1399 New York Ave., NW, Washington, D.C. 20005 Cover image: Getty Images; Illustration by Arthur Hochstein

Charlie Rose ON THE CONVENTION I’m looking for President Obama to explain exactly what he would do in a second term. We know some of the issues — climate change, Iran, and tax and entitlement reforms to reduce the deficit. But if this contest is to be defined by substantive debate, Obama must be clear about his goals. Bloomberg Television: 7 p.m. and 10 p.m.

Bloomberg Insider

PAGE 4 » MONDAY, SEPTEMBER 3, 2012

The Debrief

» Morning Convention Fill

Blue and Red Don’t Mix as Positions Harden Among Swing-State Delegates

Bloomberg asked 284 Democratic delegates: Who would be the best Democratic presidential candidate in 2016?

By John McCormick Bloomberg News

or Democratic and Republican convention delegates, there is no color purple. There’s only deep blue and deep red. Among Democrats, 99 percent called President Barack Obama’s rescue of the auto industry a success, while nine in 10 Republicans said it was mistake. Ninetythree percent of Democrats say punish Wall Street more, while 62 percent of Republicans say that’s wrong. And on the overriding issue of the federal deficit, it’s easy to see why consensus is difficult. Six in 10 true-blue Democratic delegates would raise taxes, especially on the wealthy, and cut defense spending. The Republicans, traditionally described with the color red, want Mitt Romney to do the opposite: Cut domestic spending, squeeze Medicare and Social Security, and block higher taxes. The findings of the Bloomberg News survey of swing-state delegates not only reflect deep divisions nationwide, but help explain this year’s presidential campaign tactics. With polls showing fewer than 10 percent of voters undecided, Obama and Romney must embrace sometimes polar-opposite policies as they compete to send bigger numbers of loyalists to the polls. At last week’s Republican convention, “most of their message was to rallying the troops and getting them fired up,” said David Redlawsk, a political science professor at Rutgers University in New Brunswick, New Jersey. “My expectation is the Democrats will do the same.” The differences between the parties were starkly clear in the Bloomberg survey. Two-thirds of the delegates surveyed before this week’s Democratic convention say insufficient tax revenue is the main cause of the long-term federal deficit, a view held by just 1 percent of Republicans. More than 9 of 10 Republicans pick entitlements, such as Medicare and Social Security, as the biggest driver, compared to just 5 percent of Democratic delegates. On the federal rescue of General Motors Co. and Chrysler Group LLC, Republican presidential nominee Romney has said he would have let the companies go bankrupt instead, although he’s also taken credit for recommending a version of the restructuring that helped turn the

POLL RESULTS

percent

Hillary Clinton Secretary of State

Martin O’Malley Maryland Governor PHOTOGRAPHER: DAVID PAUL MORRIS/BLOOMBERG

POLL POSITION An exclusive Bloomberg News survey of swing state delegates at the Democratic National Convention highlights divisions with Republicans.

companies around. Obama has campaigned on the industry’s turnaround. “There was no alternative,” Democratic delegate Erin Sievert, 32, a title company closing officer from Waterloo, Wisconsin, said in a follow-up interview. “It was either bail them out, or an end to the American auto industry.” April Riggins, 57, a Republican delegate and interior designer from Scottsdale, Arizona, said she opposed Obama’s action because she worries it helped companies that are moving jobs outside the U.S. “I don’t see that there’s been positive improvement,” she said of the sector’s long-term employment picture. Democratic and Republican delegates’ views are almost as dramatically different when it comes to the Federal Reserve and whether the central bank should maintain its independence. Eight in 10 Democratic delegates said the Fed’s independence is a good thing because it protects monetary policy from political pressures, a view held by just 37 percent of Republican delegates. “Congressional oversight tends to be temporal,” said Mike Coleman, 60, a retired automotive executive and Democratic delegate from Boca Raton, Florida. “To have a stable currency, you need to be a little bit divorced from the whims of elections every two years.” Democratic delegates are also much more positive than their Republican counterparts about the performance of the Fed since the 2008 financial crisis. Almost half of the Democrats rate its performance as good or excellent, compared to just 6 percent of Republicans. Virtually all of the Democratic del-

egates surveyed — 93 percent — say not enough has been done to hold Wall Street responsible for its role in precipitating the financial crisis, something of an indictment of their party’s leadership. Fewer than four in 10 of the Republican delegates hold that view, with the majority — 62 percent — saying that more punishment would discourage banks from lending and hurt the economy. Trade with China is one area where delegates from the two parties are more in agreement. Asked whether the next president should impose trade and currency sanctions on China, even if it risks a trade war, 46 percent of Democrats said yes, a view held by 57 percent of Republicans. The survey interviewed delegates from Arizona, Colorado, Florida, Iowa, New Hampshire, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin. On the Democratic side, where state delegations are larger, 284 delegates participated. Among Republicans, there were 158 participants. The national conventions draw the most active of the activists from both parties, meaning their views tend to be more extreme, Redlawsk said. “There are very dramatic differences between two different versions of what makes a good society and successful country,” he said. “The parties are more clearly ideologically defined than they have been in a long time.” jmccormick16@ bloomberg.net

Andrew Cuomo New York Governor

5% 4% 2% 7%

Mark Warner Virginia Senator

Joe Biden Vice President

Rahm Emanuel Chicago Mayor

Other

GETTY IMAGES

Hillary Clinton

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 5

The Big Story » What to Watch Today

Groundwork for Week of Contrasts

PHOTOGRAPHER: MANDEL NGAN/BLOOMBERG VIA AFP/GETTYIMAGES

REACHING OUT President Barack Obama greets Kristin Harper, 9, of Aurora, Colorado, upon arrival at

Buckley Air Force Base on Saturday. Obama was on the campaign trail over the weekend, laying out the case for how he contrasts with his opponent, Republican Mitt Romney.

Obama Plan: Link Romney With Failed Policies By Julianna Goldman Bloomberg News

resident Barack Obama was 1,600 miles away from delegates gathering at the Democratic National Convention, laying the foundation for a week in which he will draw sharp contrasts with Republican Mitt Romney. “They have tried to sell us this tired, trickledown, you’re on your own, snake oil before,” Obama told 13,000 people gathered yesterday at the University of Colorado-Boulder. “Those ideas don’t work. They didn’t work then, they won’t work now. They did not create jobs. They did not cut the deficit.” For the incumbent, whose candidacy four years ago was fueled by a theme of hope and change, much of this week at the Democratic convention in Charlotte, North Carolina, will be about setting himself apart from Romney. “Nothing is going to be like 2008,” Obama’s chief political strategist David Axelrod said in an interview. Less about reigniting the enthusiasm of four years ago, the convention this week will focus more on sharpening the differences with Romney. “Mitt Romney spoke for 45 minutes and never

mentioned any of his proposals,” Axelrod said, referring to Romney’s convention speech last week in Tampa, Florida. Obama advisers insisted that the president’s focus won’t be predominantly negative and will reflect optimism that the economy will be better than the last four years. “The biggest challenge the president faces is to seize the future,” said Democratic strategist Tad Devine. “He needs to convince voters that he has a real plan to improve their future.” Romney aides say he is laying out a clear plan for creating jobs, and charge it is Obama who is trying to obscure his record. “Instead of delivering hope and change, the president has resorted to divisive attacks to distract voters from the problems facing middle-

“Nothing is going to be like 2008,” Obama’s chief political strategist David Axelrod said.

class families,” Romney press secretary Andrea Saul said. Leading into the convention, Obama set out to barnstorm battleground states —Iowa, Colorado, Ohio and Virginia — all of which he won in 2008 and where he’s now locked in tight contests with Romney. Trends aren’t necessarily on Obama’s side: the unemployment rates in Iowa, Virginia and Colorado increased in July from the previous month. Campaign officials said Obama’s Sept. 6 nomination acceptance speech will stress the different path forward for the economy than Romney is proposing. Without mentioning former President George W. Bush by name, Obama has been aligning Romney’s economic policies with those of the previous administration, linking them to the worst recession since the Great Depression. Taxes will also play prominently, with the president criticizing Romney for supporting an extension of Bush-era tax cuts for top earners and failing to provide specifics on how to tackle the country’s fiscal mess. Another contrast: national security. Romney “said that ending the war in Iraq was tragic; I think it was the right thing to do and I said I would do it and we did it,” Obama told the rally in Boulder. “I said we’d take out bin Laden and we did,” he said, referring to last year’s raid that killed al-Qaeda leader Osama bin Laden. “We are bringing our troops home from Afghanistan and I’ve set a timetable. We will have them all out of there by 2014.” Obama can’t count on people remembering at the ballot box why they voted for him four years ago. “Essentially, Obama just needs to jog the American memory, remind voters of the qualities they admired so much a few years ago — intelligence and poise and character and sturdiness,” said Jim Jordan, a Democratic strategist who was an early manager of Senator John Kerry’s 2004 presidential campaign. With 64 days until the election, and efforts on both sides focused on less than a dozen battleground states, Obama’s campaign is turning to its ground game. Courting women and younger voters, it is pushing to mobilize and register new voters to cast ballots in states with early voting. Similar efforts in 2008 were critical to Obama’s victory, campaign officials said. Iowa begins early voting the end of September. In 2008, 77 percent of Colorado voters cast early ballots or voted by mail. Sixty-one percent did so in North Carolina, and 55 percent in Florida, according to the campaign. “A vote on Election Day is not better than a vote before,” said campaign spokeswoman Jen Psaki. “A vote is a vote.” jgoldman6@bloomberg.net

Bloomberg Insider

PAGE 6 » MONDAY, SEPTEMBER 3, 2012

Political Capital

» The Currency of Government

Obama’s Ban on Lobbyist Giving Doesn’t Keep Them From Charlotte By Jonathan D. Salant Bloomberg News

eather and Tony Podesta sported scarlet “Ls” at the Democratic National Convention four years ago, a reaction to then-presidential candidate Barack Obama’s exclusion of lobbyists from his campaign. Obama doesn’t accept lobbyists’ donations or allow them to raise money for his campaign. And that still won’t keep the Podestas, one of Washington’s best-known power couples, away from the Democratic conclave beginning Tuesday in Charlotte, North Carolina. They’re planning two brunches just blocks away from where the delegates will nominate Obama for a second term. “Yum and fun,” Heather Podesta said. The Podestas’ clients include BP Plc, Prudential Financial Inc. and Lockheed Martin Corp.

From meals to cocktail receptions to batting practice at the local minor league ballpark, the Democratic gathering — like its Republican counterpart last week — will offer plenty of opportunities for special interests to mingle with officials in a position to address their concerns. Conventions “are just influence-peddling free-for-alls,” said Craig Holman of Public Citizen, a Washington-based advocacy group that favors stricter limits on lobbying. Monroe, Louisiana-based CenturyLink Inc. and Decatur, Illinois-based Archer Daniels Midland Co. are helping to sponsor batting practice for Democratic officials, delegates and others on Tuesday. So is the National Association of Broadcasters. The event will raise money for children’s hospitals in Charlotte and Chicago, and the Illinois delegation will be special guests. (The Charlotte Knights are a Chicago

PHOTOGRAPHER: TONY ASHBY/AFP GETTY IMAGES VIA BLOOMBERG

POWER LOBBYING Heather Podesta, one of Washington’s best-known lobbyists, talks with Kurt Campbell, U.S. Assistant Secretary of State East Asian and Pacific Affairs, at a conference in Perth, Australia, in August 2011. White Sox farm team and Obama was a U.S. senator from Illinois.) The Illinois delegation includes Senator Richard Durbin, the chamber’s No. 2 Democratic leader, and Representative Bobby Rush, a member of the House Energy and Commerce subcommittee on communications and technology. “It’s probably smart to have a presence at these events if you’re a lobbying organization,” said Dennis Wharton, an NAB spokesman.

The airlines’ Washington-based trade group, Airlines for America, is co-sponsoring a reception Wednesday for “transportation policy leaders.” Members include Delta Air Lines Inc. and Southwest Airlines Co. Conventions are “sort of like the Super Bowl of political influence,” said Bill Allison of the Sunlight Foundation, a Washington-based watchdog group. jsalant@bloomberg.net

POLITICAL BRIEFS » For more go to go.bloomberg.com/political-capital Democrats See Choice, Not a Referendum

Victory Margin in 2008 Highlights N.C. Stakes

White House Honey: Ale to the Chief

Marriott Hails Romney As Mormon Ambassador

Democrats are framing this year’s election as a contest between two competing economic plans rather than a referendum on President Barack Obama. “We’re going to explain to the American people and the middle class of this country how we’re going to continue to recover,” David Plouffe, a White House senior adviser, said on ABC’s “This Week” Sunday as Democrats gather for this week’s national convention. “What Mitt Romney is going to offer America is top-down, trickledown fairy dust. It didn’t work then, it’s not going to work now.” Eric Fehrnstrom, an adviser to Romney, the Republican presidential nominee, said the economy “has not turned around.” July’s unemployment rate stood at 8.3 percent.

That’s the percentage-point margin of victory for President Barack Obama four years ago in North Carolina, which is hosting the Democratic National Convention this year in Charlotte. North Carolina Bloomberg had the closest by the election among Numbers the states that Obama won in 2008, and only Missouri, which he lost by onetenth of one percentage point, was closer. There are 15 electoral votes at stake in North Carolina, the 10thhighest total, and party officials are emphasizing the importance of the state to Obama’s re-election campaign by the choice of Charlotte as the convention host.

The White House has served beer for special occasions, like President Barack Obama’s peace talks for a Harvard professor and a Cambridge, Massachusetts, policeman. Yet now, the White House is not only making and serving its own brew. It’s also sharing the recipe for a 1600 Pennsylvania Avenue variety of honey ale. The online tutorial can be viewed at: http://m.whitehouse.gov/ blog/2012/09/01/ale-chief-whitehouse-beer-recipe There’s a long presidential tradition of this, traced to George Washington’s whiskey still, the video notes. Yet while beer may make for jolly good fellows, the White House kitchen may have to bag its hops if Mitt Romney, a member of the Mormon Church who doesn’t drink alcohol, is elected president.

Among Mitt Romney’s advisers and family members, there’s been a lively debate about whether his Mormon faith would hurt or help his campaign. Among members of his church, there’s little dispute: Having Romney as the Republican nominee has been a boon to their littleunderstood faith. As Romney and his wife, Ann, sat in church Sunday in Wolfeboro, New Hampshire, congregants gave testimonials about how his candidacy has introduced the public to role models for their Church of Jesus Christ of Latterday Saints. “There has never been as much positive publicity about the church,” J.W. Marriott Jr., chairman of Marriott International Inc., said in his testimonial.

» Jonathan D. Salant

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Bloomberg Insider

Cover Story

Dueling Dollars

Clooney, Zuckerberg Back Obama As Hollywood, Silicon Valley Fight Over Privacy

PHOTOS: GETTY IMAGES, PUBLIC DOMAIN; ILLUSTRATION: ÁLVARO VALIÑO, MATT MANSFIELD/BLOOMBERG

Bloomberg Insider

By Julie Bykowicz » Bloomberg News

hree months after a tuxedo-clad George Clooney shared a White House dinner table with Barack and Michelle Obama, the president traveled to the actor’s mansion in Studio City for another meal. That second party, a starstudded affair in May, came with a better dessert: $15 million in campaign cash. Less than two weeks later, Obama returned to California, this time to the San Francisco Bay area, to collect contributions from the state’s technology crowd at a Hawaiian-themed dinner thrown by venture capitalist Douglas Goldman. “Arguably, California has become the ATM for Democrats in this race,” said Chris Lehane, a San Francisco-based party strategist who worked on Al Gore’s 2000 campaign. “Hollywood is doing more than ever; Silicon Valley is stepping up with its new money.’’ Obama, 51, has attended at least 25 California fundraisers in the past

MONDAY, SEPTEMBER 3, 2012 » PAGE 9

two years, records show. Almost all were in or near Los Angeles or San Francisco. Golden State residents account for one-fifth, or about $31 million, of the re-election campaign’s contributions of more than $200, according to the Center for Responsive Politics, a Washingtonbased group that tracks fundraising.

Piracy Fight

Tech and entertainment’s like-minded backing of Obama masks a political drama embroiling these two industries: a fight over content piracy. Winning the president’s favor could give one side an edge in a legislative battle that might be re-engaged as early as next year. If Hollywood succeeds in curtailing unsanctioned use of its content online by going after companies such as Google Inc., it would hamper the growth of the Internet and free speech, the technology industry has argued. For Google and other Silicon Valley companies, whose » Story continues on next page

Bloomberg Insider

PAGE 10 » MONDAY, SEPTEMBER 3, 2012

Cover Story employees have invested millions of dollars in Obama’s campaign, winning the piracy fight could translate to billions for their bottom line, said Andrew Schwartzman, a communications attorney in Washington. The stakes are high in Hollywood, too. The Motion Picture Association of America estimates the film industry loses $20 billion annually because of piracy. Federal researchers have called the theft “sizable,” while saying it is impossible to calculate its true cost. Movie studios were close this year to winning a major federal victory in cracking down on illegal Internet use of its content. The MPAA, which represents the studios, was lobbying for a measure that would let the Justice Department seek court orders forcing Web providers, search engines, payment processors and online ad networks to block or stop doing business with non-U.S. sites linked to counterfeit goods.

Internet Protest

PHOTOGRAPHER: PETE SOUZA/WHITE HOUSE VIA BLOOMBERG

WHITE HOUSE REGULAR Actor George Clooney in a meeting outside the Oval Office with President

Barack Obama in 2010. Clooney has also sponsored a high-profile fundraiser at his home for Obama.

PHOTOGRAPHER: JONATHAN ALCORN/BLOOMBERG

DREAM DONOR Jeffrey Katzenberg, the chief

of animation studio Dreamworks, wrote a $2 million check to Priorities USA Action, a super-PAC run by former Obama aides.

PHOTOGRAPHER: ANDREW HARRER/BLOOMBERG

TECH VISITORS Sheryl Sandberg, chief operat-

ing officer at Facebook Inc., left, and Adele Frances Einhorn Sandberg arrive for a 2011 state dinner.

PHOTOGRAPHER: JOSHUA ROBERTS/BLOOMBERG

STAR SUPPORT Movie mogul Harvey

Weinstein, who hosted a fundraiser at his home, during the Correspondents’ Association party in 2012 with actress Reese Witherspoon.

The legislation was sailing toward passage in Congress — until an Internet protest led by Google and Wikipedia stopped it in its tracks this January. In the middle of that battle, Obama’s technology and intellectual property aides issued a statement that tried to split the difference, saying “the important task of protecting intellectual property online must not threaten an open and innovative Internet.” Some in Hollywood were taken aback; they were expecting the president’s support of their legislation. Shortly after the bill collapsed, Jim Gianopulos, who donated the maximum allowed to Obama in 2008 and is co-chairman of News Corp.’s Fox Filmed Entertainment, said in an interview with Variety magazine, “I have been a very early and ardent supporter of the president, but I couldn’t say at this time that I am very enthusiastic about providing support.” His initial anger has fizzled. “There was annoyance, yes, but you move on,” Gianopulos said in an interview.

Dealmaker Role

If he wins re-election against Republican challenger Mitt Romney, Obama could be cast in the piracy fight sequel as the dealmaker — a role that can be difficult to play from the Oval Office. “The best way to inoculate yourself is to telegraph where you’re going to go on an issue,” said Tony Fratto, a former spokesman for Republican President George W. Bush. The piracy showdown earlier this year was a wake-up call for the tech community, which expanded its lobbying presence and ramped up its political giving. “One thing is certain: There will be a lot more sitting down and discussing things with Silicon Valley before there’s another bill,” Schwartzman said. “You’ll never again see Hollywood controlling the show with no opposition.”

PHOTOGRAPHER: PETE SOUZA/WHITE HOUSE VIA BLOOMBERG

FACE TIME Obama chats with Mark Zuckerberg, chief executive officer of Facebook Inc., at a private Silicon Valley meeting in 2011.

Netflix, Salesforce

Technology leaders, including executives at Netflix Inc. and Salesforce.com Inc., are among

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 11

Cover Story Obama’s most active bundlers — those who aggregate individual donations — and Google and Microsoft Corp. employees give more collectively to the president than workers at almost any other company. Hollywood is also nurturing its relationship with Obama. His campaign has raffled off time with Clooney and Sarah Jessica Parker to drive $5 campaign donations, while on the other end, a super-political action committee supporting him has leaned on Hollywood for $1 million checks, including a pledge for such a donation from talk show host Bill Maher. Obama’s celebrity simpatico was on display last month at film producer Harvey Weinstein’s waterfront house in Connecticut, where two gleaming gold Oscar statues peered down at him from a bookcase. The president called actress Anne Hathaway “spectacular” as Catwoman in the Batman movie and remarked that screenwriter Aaron Sorkin “writes the way every Democrat in Washington wished they spoke.”

Million-Dollar Donations

DreamWorks Animation SKG Inc. Chief Executive Officer Jeffrey Katzenberg was among the first to jump into the re-election fray. In May 2011, he wrote a $2 million check — an amount matched only by Qualcomm Inc. founder Irwin Jacobs, a fellow Californian —to Priorities USA Action, the super-PAC run by former Obama aides. Katzenberg also organized the May 11 Obama fundraiser at Clooney’s house. “Once again, the entertainment industry has

stepped forward in a very big way,” Katzenberg told the crowd gathered to partake in Wolfgang Puckcatered food on Clooney’s tented basketball court. It was an event that took place a day after Obama voiced support for gay marriage, a top issue for California Democrats and many in the entertainment industry. “The creative community tends to be very values-driven as opposed to single-issue or financial-interest driven,” said Andy Spahn, a former DreamWorks spokesman who is a national finance chairman for the Democratic National Committee. Beyond that, Obama has “a generational appeal” compared with Romney, 65, among Hollywood donors, Spahn said.

Innovation Meeting

Just after Valentine’s Day in 2011, Obama held court with top tech minds at a private “innovation” meeting outside San Francisco. Facebook Inc. founder Mark Zuckerberg, Google Chairman Eric Schmidt and Netflix CEO Reed Hastings all got a chance to pepper the president with questions at a dinner hosted by John Doerr, a Silicon Valley venture capitalist. In April, Zuckerberg traded his signature hoodie for a tie to appear at a town hall with Obama. “The president is popular in the Valley,” said Rey Ramsey, president of TechNet, a technology trade group based in Washington. “It’s never difficult for him to fill a room.” Ramsey said the tech world is drawn in by Obama’s tone and demeanor, as well as Democratic Party positions — including making it easier

for foreign workers to obtain visas. “He speaks the language of innovation,” Ramsey said. That translates into campaign cash.

Sandberg Fundraiser

Facebook Chief Operating Officer Sheryl Sandberg opened her Atherton, California, home in September for a million-dollar fundraiser that Lady Gaga attended. Also present was Sarah Feinberg, a former White House staffer who left to work for Facebook. Another Atherton resident who has hosted Obama, venture capitalist Goldman, said there’s “a natural affinity” in the Bay area for the president because of his positions on tolerance and innovation. The frequent flights go both directions: Highprofile Californians show up at the White House with regularity. A review of visitor logs shows that Clooney, Weinstein and Katzenberg are among those who have made repeat trips. Zuckerberg and Sandberg have visited the president’s home a dozen times. Romney supporters have sought to turn Obama’s celebrity ties against him. An online advertisement by American Crossroads, a super-PAC backing Romney and Republican congressional candidates, shows Obama wearing sunglasses in one clip and dancing with talk-show host Ellen DeGeneres in another before displaying sobering unemployment statistics. The 45-second spot has been viewed more than 500,000 times on YouTube. “After four years of a celebrity president, is your life any better?” text in the ad reads. jbykowicz@bloomberg.net

PHOTOGRAPHER: PETE SOUZA/WHITE HOUSE VIA BLOOMBERG

SILICON VALLEY ELITE President Barack Obama meets with technology industry executives, clockwise from left, Eric Schmidt, chairman and chief executive officer of Google Inc., Arthur “Art” Levinson, chairman of Genentech Inc., John Chambers, CEO of Cisco Systems Inc., John Doerr, a partner at Kleiner Perkins Caufield & Byers, Larry Ellison, CEO of Oracle Corp., Reed Hastings, CEO of Netflix Inc., John Hennessy, president of Stanford University, Carol Bartz, CEO of Yahoo! Inc., Dick Costolo, CEO of Twitter Inc., Mark Zuckerberg, CEO of Facebook Inc., Obama, the late Steve Jobs, then CEO of Apple Inc., Steve Westly, managing partner of The Westly Group, and another unidentified diner during a private dinner in Woodside, California in February 2011.

Bloomberg Insider

PAGE 12 » MONDAY, SEPTEMBER 3, 2012

» The Business Implications of Government Actions

Changing Face of

Energy Security

The U.S. is producing record amounts of oil and natural gas, but w The debate has moved from energy independence to human safe ROB BARNETT

is an energy analyst at Bloomberg Government. He was associate director of climate change and clean energy at IHS Cambridge Energy Research Associates. He holds master’s degrees in economics and engineering. rbarnett12@bloomberg.net

ANTHONY COSTELLO

ver since the 1973 Arab oil embargo, the U.S. has been obsessed with energy security, including the desire to rely less on foreign oil and produce as much as possible at home. For just as long, the energy debate in presidential election years has been over the need to take better advantage of our own natural resources: extracting more oil, gas and coal, on the one hand, or promoting conservation along with alternatives such as solar and wind power. Now the presidential election will be conducted against a different energy backdrop. Discoveries of shale deposits and the rise of new oil technologies have reshaped the U.S. energy marketplace. Big increases in renewable energy as well as domestic oil and natural gas production — combined with the declining market share of coal — change the terms of the old production-versusconservation debate.

is Bloomberg Government’s lead analyst. He was a buyside investment analyst at Osprey Partners in the energy sector. He holds an MBA from the University of Virginia’s Darden School and is In its place, the next president will have to manage the a CFA charter holder. COMING economic vagaries and the potential environmental efacostello4@bloomberg.net

BGOV ANALYSIS

TOMORROW fects of the nation’s topsy-turvy energy supplies.

Thanks largely to a technology called hydraulic fracturing, or “fracking,” U.S. crude oil production increased almost 11 percent from 2006 to 2011 and is at its highest level since 1998. The same goes for natural gas. A 25 percent boost in production over the past five years brought natural gas production to an all-time high, while prices dropped to almost their lowest point in a decade. The rise in renewables

COMING TOMORROW

Why the homesick U.S. economy depends on a housing recovery.

To learn more about BGOV visit about.bgov.com

Percent Share of U.S. Electricity Generation, by Source in 2011

42% COAL Share has declined from 50% in 2004.

FACTOID:

The Recovery Act designated $3 billion for carbon capture-and-storage development.

has also been large, though working from a much smaller base, growing almost 100 percent in five years. Decisions by the next president will turn on the business and social impact of regulatory policy. What type of fracking regulations will the Environmental Protection Agency and Interior Department settle on? Will new EPA regulations for greenhouse-gas emissions and other pollutants continue to restrict the competitive position of coal-fired power? What will happen to the pace and scale of leasing and permitting on federal lands and waters? What about U.S. treatment of nuclear or renewables? The emergence of hydraulic fracturing as a potent — and hotly debated — energy production technique illustrates the kind of challenges to come. Just a few years ago, most industry observers expected domestic oil and natural gas production to continue falling. Fracking, a process by which high-pressure fluids are injected underground to free oil and gas deposits from tiny pockets, has opened up vast reserves of shale natural gas and “tight” crude oil that were previously considered too costly to produce. In North Dakota, for example, the results of fracking have been staggering. Oil production has risen more than 400 percent in the past five years; the state has overtaken Alaska to become the second-largest oil producing state behind Texas. Fracking doesn’t come without controversy. There are concerns about the impact the drilling process may have on local water and air quality. A recent study by researchers at Duke University found evidence that drilling in Pennsylvania may have contaminated drinking water supplies. Most aspects of hydraulic fracturing are regulated at

25%

th go re ti co an

ai “f ti ti ga ho th w it

co m in no as

su ab fr pr C

st ne of

NATURAL GAS

Rapid increases in natural gas production from advances in horizontal drilling and hydraulic fracturing have increased share from 18% in 2004.

O fl

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 13

Selected Challenges for the Next Administration

Chukchi Sea

Potential Arctic Ocean permit drilling areas

but with what consequences? n safety. By Rob Barnett and Anthony Costello

ew her n of ale

ed llare

ral ed

an ken te

e e hers syl-

the state level, but there’s pressure for the federal government to get involved. The EPA’s recent regulations aimed at fracking —and the expectation of more to come — may increase production costs and slow the development of domestic oil and natural gas. In April, the EPA issued its first regulation aimed at the roughly 13,000 wells that are “fracked” each year. The rule requires exploration companies to conduct “green completions” to reduce emissions from their oil- and gas-extraction sites. The EPA and the industry hold differing views of what this will mean to the economics of fracking. EPA says the rule won’t cost the industry a cent; the industry says it will suffer $2.5 billion a year in added costs. In its own study, Bloomberg Government concluded that both the EPA and the industry miss the mark. It found the regulation will cost the industry from $316 million to $511 million a year — not nothing, but also less than 1 percent of revenue associated with oil and gas production. EPA’s fracking regulation alone should be easily surmounted by the industry. Still, it raises questions about the next round of rulemaking. EPA is studying fracking’s impact on drinking water, which may increase pressure to develop new federal regulations using the Clean Water Act. This doesn’t mean there’s a binary choice between stringent regulation and no regulation. It does suggest the next president will influence the scope, scale and timing of energy independence.

ct ic

ean

Alaska’s North Coast Offshore drilling in the Arctic Ocean could help expand domestic production. The next president will decide whether to proceed with new federal leases for offshore oil and gas exploration in the Alaskan Arctic.

Beaufort Sea

Carbon Capture and Storage

Proposed Keystone XL Pipeline The U.S. already imports more oil from Canada than from any other country, and Canada has the third-largest proven oil reserves on the planet. The next president’s decision on the Keystone XL pipeline could lessen the need for non-Canadian oil imports.

Existing Keystone Pipeline Proposed Keystone Pipeline extension

Bakken shale

Proposed EPA regulations would essentially ban the construction of new coal-fired power plants unless carbon captureand-storage technology is used. Carbon capture and storage adds almost 50% to the cost of generating electricity from coal-fired power plants.

Fracking & Shale Exploration Most aspects of fracking are regulated by states, but there is growing pressure for the federal government to get involved. An EPA assessment of fracking’s impact on drinking water is expected in 2014 and could lead to new federal fracking regulations.

Marcellus shale

Mancos shale Coal deposits Coal deposits

Renewables

The U.S. market for wind turbines is expected to collapse by 90% in 2013 as a result of the expiring federal wind production tax credit.

Barnett shale

Eagle Ford shale

Haynesville shale

Gulf of Mexico permit drilling lease parcels

Gulf Oil Drilling

19% NUCLEAR Output has been flat since 2004.

Production from the Gulf accounted for about 23% of U.S. oil production in 2011. Permitting activity in the Gulf slowed significantly after the BP Deepwater Horizon oil spill.

FACTOID:

The Obama administration announced an $8.3 billion loan guarantee to help Southern Co. build twin reactors in Georgia. If it proceeds, they will be the first new U.S. reactors built in 30 years.

HYDROELECTRIC

RENEWABLES

PETROLEUM

FACTOID:

71% of U.S. petroleum is used in the transportation sector, followed by industrial, commercial and residential uses. About 1% of U.S. consumption is used to produce electricity.

SOURCES: U.S. ENERGY INFORMATION ADMINISTRATION, DATA COMPILED BY BLOOMBERG GOVERNMENT GRAPHIC: DAVE MERRILL/BLOOMBERG GOVERNMENT, BGOVGRAPHICS@BLOOMBERG.COM

Bloomberg Insider

PAGE 14 » MONDAY, SEPTEMBER 3, 2012

The Election Insider

» Stories Behind the Story

Cost of Wall Street Cold Shoulder

PHOTOGRAPHER: SPENCER PLATT/BLOOMBERG VIA GETTY IMAGES

TENSION WITH INDUSTRY The Obama campaign has spent more than $22 million defending the Dodd-Frank Act that angered big banks.

President Obama’s decision to distance himself from Wall Street has been popular with the public while costing him in fundraising

By Jonathan D. Salant Bloomberg News

resident Barack Obama’s estrangement from Wall Street is costing him money in fewer campaign donations even as it is fueling his argument for re-election. Since the start of his campaign through Aug. 20, Obama has spent an estimated $132 million on television commercials, with $22 million — or 17 percent — on an ad defending the 2010 law he signed tightening bank oversight and criticizing Republican challenger Mitt Romney’s opposition to it. “Rather than attack the industry, he’s been able to use Romney’s positions and focus on that, as opposed to doing what the conventional wisdom suggested and run a very populist campaign focused on bashing Wall Street,” said Elizabeth Wilner, vice president of New Yorkbased Kantar Media’s CMAG, a company that

tracks television ads. As Obama takes the stage at Bank of America Stadium in Charlotte to accept the Democratic nomination, some of the political ramifications of the Wall Street Reform and Consumer Protection Act are already on display. Employees in the financial, insurance and real estate industries, which pumped $43 million into the president’s campaign four years ago, have given Romney $29 million this year. That’s more than twice the $12 million they’ve donated toward Obama’s re-election, according to the Center for Responsive Politics, a Washington-based research group. Meanwhile, public opinion on the bank measure favors the president. Voters support the law by a 53-point margin, 73 percent to 20 percent, according to a July 18 Lake Research Partners survey. Republicans back the measure by a 20-point margin, and independents by 50 points, the survey showed.

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 15

That explains why Obama’s re-election campaign has highlighted his support for the law and Romney’s opposition to it. More than half of the $22 million he spent on the commercial went to airing it nationwide during the London Summer Olympics. “They very clearly decided that the message of that ad was something they wanted Americans across the country to see,” Wilner said. The commercial featured the president facing the camera and criticizing Romney for advocating repeal of the law, called Dodd-Frank for Democratic sponsors former Senator Chris Dodd of Connecticut and Representative Barney Frank of Massachusetts, and enacted over Republican opposition — including that of Romney’s running mate, Representative Paul Ryan of Wisconsin. “Governor Romney’s plan would cut taxes for the folks at the very top, roll back regulations on big banks, and he says that if we do our economy will grow and everyone will benefit,” Obama says in the ad. “But you know what? We tried that top-down approach. It’s what caused the mess in the first place.” The commercial also ran during Olympics coverage on local stations in such competitive states as Florida, Nevada, Ohio, Pennsylvania and Virginia. In total, the spot ran more than 9,000 times. The president’s re-election supporters, echoing attacks made by Romney’s primary rivals, have focused on the former private-equity investor’s tenure at Bain Capital LLC, which he co-founded. The campaign and its allies have aired more than 1,000 TV ads that are critical of Romney’s stewardship of the private-equity firm. The pro-Obama super-political action committee Priorities USA Action ran an ad featuring an employee of a company formerly owned by Bain Capital. “This was a booming place,” the former employee, Donnie Box, says in the ad, “and Mitt Romney and Bain Capital turned it into a junkyard, just making money and leaving.” It’s “a backdoor attempt to attack Wall Street without doing so directly,” said David Primo, a political science professor at the University of Rochester in New York. “It’s an attempt to go after Wall Street while holding out your hand for money.” Republicans have tried to inoculate Romney against those attacks by painting Obama as Wall Street’s favorite candidate. The pro-Republican

American Future Fund, a nonprofit group that doesn’t disclose its donors, spent $1.3 million on commercials criticizing Obama’s support of the bank bailout and the prevalence of White House aides with ties to the investment community, according to CMAG. The ad doesn’t name the administration individuals who have moved between the financial community and the White House. They include Chief of Staff Jack Lew, who formerly worked at Citigroup Inc., and Gene Sperling, director of the National Economic Council, who was a consultant for Goldman Sachs Group Inc. “Obama won’t admit to supporting Wall Street but Wall Street sure supports President Obama,” the ad says. That isn’t the case when it comes to campaign donations. Obama raised $15.8 million from employees in the securities and investment industry and their families in 2008, more than anyone else, according to the center. This cycle, Romney has collected $11.5 million from the industry compared with $4.2 million for Obama through July 31. The president held a financial industry fundraiser that same month in New York, acknowledging that his support has fallen on Wall Street. “So many people in this room were active in 2008,” he said. “So many of you have had to defend me from your co-workers over the last three years.” Former UBS Americas Chairman Robert Wolf, who raised more than $500,000 for Obama in both 2008 and this cycle, said the campaign is holding fewer financial-industry fundraisers this year, and those always sell out. “Not everyone decides how they want to vote based on the Dodd-Frank bill,” said Wolf, who is chief executive officer of New York-based 32 Advisors LLC. Romney’s support on Wall Street extends beyond the debate over the new regulations, said Emil Henry Jr., a former assistant Treasury secretary in George W. Bush’s administration. “The president has shown an inability to provide leadership on the pressing financial issues of our time such as debt, deficits and entitlement reform,” said Henry, who has organized fundraising events for Romney. “These issues are primary for many in the financial services community.”

More than half of the $22 million he spent on the commercial went to airing it nationwide during the London Summer Olympics.

OBAMA’S AIR ATTACK ON WALL STREET

OBAMA FOR AMERICA TV AD

PRIORITIES USA ACTION AD

jsalant@bloomberg.net GETTY IMAGES

Bloomberg Insider

PAGE 16 » MONDAY, SEPTEMBER 3, 2012

The Swing States

» A Look Inside Ohio

Obama, Kasich in Clash for Credit as Ohio Leads Midwest in New Factory Jobs State Unemployment At Four-Year Low Spurs Jobs Debate By Mark Niquette Bloomberg News

ore Ohioans have jobs in the resurgent auto industry because “I refused to turn my back on communities like this one,” President Barack Obama said in July in Maumee, near Chrysler Group LLC’s Toledo Jeep factory. Last week, the state’s Republican Governor John Kasich claimed credit for rising prosperity. “We are managing our finances and creating jobs,” Kasich said during a speech at the Republican National Convention in Tampa. His party’s policies led to the best job-creation record in the Midwest even in the face of “headwinds” from Obama, he said. The economy is the top issue in Ohio, polls show. Which way the state votes may depend on who gets credit for growth in employment, said John C. Green, a political scientist at the University of Akron. Economic data alone won’t help voters decide between competing explanations from Obama and his Republican opponent, Mitt Romney, forcing voters to pay more attention to the candidates’ policy positions, Green said. “It’s likely to make an already close and competitive election even closer and more competitive,” Green said in a telephone

PHOTOGRAPHER: MARIO TAMA/BLOOMBERG VIA GETTY IMAGES

BETTER TIMES People walk past the Hancock County War Memorial in Findlay, Ohio. The state’s economy is improving, with 130,600 jobs added since the end of 2010.

Ohio. Recent polls have shown Obama with a slight advantage in Ohio before the national political conventions. After losing almost 557,000 jobs from 2000-2010, Ohio’s economy is improving. The jobless rate in the Buckeye State was 7.2 percent in July, the lowest since September 2008 and below the nationwide 8.3 percent. The 130,600 jobs added in Ohio since the end of 2010 — including 37,100 in manufacturing — were the fourth-most in the U.S. and the most among Midwestern states, according to federal data.

“I don’t blame Obama for all the economy situation because he inherited a lot of it. But I do think that Romney will at least try to put a new face on it. ’’ Donald Downs, 48, baker interview. At stake are Ohio’s 18 electoral votes. The battleground state of 11.5 million residents put President George W. Bush over the top for re-election in 2004 and helped elect Obama in 2008. The state is considered a must-win for Romney. No Republican has been elected president without carrying

Nationwide, Ohio’s improvement in economic health ranks sixth from the first quarter of 2011 through the first quarter this year, the most recent data available, based on the Bloomberg Economic Evaluation of States. The barometer reflects mortgage delinquencies, personal income, tax revenue, employment, home prices and value of

publicly traded companies. Obama points to his efforts to spur recovery from the worst contraction since the Great Depression, including the 2009 government bailout of U.S. automakers. He contrasts that with Romney’s call to let auto companies go bankrupt, and a “fundamentally different” economic vision. Sherry Gaunt, 52, credits Obama for saving her job. She is a material handler at the General Motors Co. auto assembly plant in Lordstown, east of Akron. Her job is on the third shift, added in 2010 to make the Chevrolet Cruze. “If we did not have the help from the government, we would not be working,” Gaunt said in a telephone interview. Kasich said Ohio is growing by following policies championed by Romney, such as cutting taxes, streamlining regulations and limiting spending. Donald Downs, 48, said he is backing Romney because he thinks the economy could do better. He lost his job as a baker in Columbus in 2009. “I don’t blame Obama for all the economy situation because he inherited a lot of it,” Downs said in an interview. “But I do think that Romney will at least try to put a new face on it, change things around.” mniquette@bloomberg.net

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 17

Bloomberg Insider

PAGE 18 » MONDAY, SEPTEMBER 3, 2012

» Opinions and Commentary

The Unglamorous Work of Job Creation By the Editors

e keep hearing that this presidential election is all about jobs. So why aren’t we getting more concrete ideas from the presidential candidates about how to create more of them? Trick question! We know there are no easy answers. Declaring that you will produce 12 million jobs in your first term by lowering taxes, boosting domestic energy production and cutting government spending, as Republican nominee Mitt Romney does, isn’t convincing. Nor is President Barack Obama’s promise to lower unemployment by taxing the rich and spending more on education, public works and manufacturing. The U.S.’s 8.3 percent unemployment rate requires more short-term, down-to-earth ideas. So on the day we celebrate the American worker, it’s worth noting some success stories from the annals of job creation. One of the best examples comes from the campaign battleground state of Ohio. The state lost 282,000 jobs in the 2007-2009 recession. Today, Ohio’s unemployment rate

is 7.2 percent, 1.1 percentage points below the national figure. As the presidential campaign intensifies, Obama will try to claim credit for Ohio’s comeback, as will the state’s Republican governor, John Kasich. In truth, they both deserve some credit — but not all or even most of it. Kasich’s two predecessors, one a Democrat and one a Republican, got the ball rolling with a program called Third Frontier, a 10-year-old economic development plan that encourages companies, suppliers, service providers and academic institutions to work together to attract more employers to the state. Third Frontier provides research and development support; lobbies governments to cut red tape; jawbones local colleges to produce more engineering, math and science graduates; connects entrepreneurs to business leaders who can provide mentoring; and helps link companies to overseas markets. Ohio voters have twice approved bond issues to fund the program. All of this collaboration seems to be having an effect. Ohio claims Third Frontier has directly created 14,500 jobs, at an average salary of about $62,000. Manufacturing has

ILLUSTRATION BY BLOOMBERG VIEW

rebounded. There are waiting lists for vacant apartments in downtown Cleveland. Office space is scarce in Youngstown. Unemployment is 6.9 percent in Akron. A recent Brookings Institution study of the U.S.’s 100 largest labor markets says Cleveland was fourth-best in the country for attracting new industries and lowering unemployment. Youngstown came in sixth, and Akron and Columbus were tied for eighth place. None of this is ideological or partisan. Government money is

necessary to help fund the staff, but the work doesn’t require gobs of federal money. Nor does it provide easy sound bites the way tax cuts, deficit reduction or entitlement reform do. It’s also not as intellectually stimulating as debating the virtues of free markets versus the power of Keynesian economics. The evidence, however, shows that it’s much more effective. Read more opinion online from Bloomberg View at bloomberg.com/ view.

QUICK VIEWS The Toughest and Most Obvious Question

Let Joe Run the Show If I were in charge of this week’s Democratic National Convention in Charlotte, I’d make it all about Joe. Following a week in which the Republicans reached new heights of inauthenticity, culminating in an actor’s conversation with a man who wasn’t there, Vice President Joe Biden offers the ultimate counterpoint. There is nothing Biden can do or say to obscure his regular-Joe-ness. Among the quartet running on the two party tickets, he’s the only working-class hero of the bunch. He comes across like a guy whose house is underwater. If party conventions are all about pretending we can shape the future to mimic a mythical past, Biden’s the man for the job.

His motor-mouth bespeaks (and bespeaks) an era when Americans had sufficient leisure to indulge a loquacious neighbor. With Democrats on a roll with blacks, Hispanics and women, Biden is the ultimate ambassador to the land of white guys, matching the Republican team in sheer whiteness while surpassing them in guyness. Paul Ryan, the Republican vice presidential candidate, dissembles, and seems unnervingly calculating. Biden exaggerates, and seems endearingly clumsy. Americans might not thrill to the prospect of a Biden presidency, but that’s OK — another guy heads the ticket. He’s no Joe, though. —Francis Wilkinson

On CBS’s “Face the Nation” Sunday, Maryland Governor and Obama surrogate Martin O’Malley did his cause no favors with his answer to the obvious question from host Bob Schieffer. “Can you honestly say,” Schieffer asked, “that people are better off today than they were four years ago?” O’Malley’s answer: “No.” He added, “That’s not the question of this election.” That’s not going to fly. O’Malley proceeded to lay out how the Bush administration had made mistakes and left President Barack Obama playing a terrible hand. Obama partisans have been using this line for four years and have internalized it. Apparently it’s so obvious to them that Obama deserves to be graded on a curve that they don’t re-

alize how pathetic it sounds to say so. Obama’s challenge at this convention is to make the case that his four years were well spent — not just on health care, foreign policy and social issues, where Obama has clear achievements to highlight, but on the economy. And he has to explain why the next four years can be expected to produce more economic growth than the last four. It’s a tough case to make, but it’s not optional. As Schieffer responded to O’Malley, “Bush is not on the ballots.” — Josh Barro For more quick commentary from Bloomberg View editors and columnists at the convention, go to bloomberg.com/view/ the-ticker.

Bloomberg Insider

MONDAY, SEPTEMBER 3, 2012 » PAGE 19

Al Hunt

» At the Convention

If Obama Wins a Second Term, He’ll Have to Get More Personal

here still are Kennedy Democrats; there are Clinton Democrats. There are fewer Obama Democrats. This reflects more the president’s style than his substance; he’s in the mainstream of his party, so popular that any primary challenge was out of the question. Yet he remains strangely unfamiliar to some core constituencies. If Barack Obama is re-elected, the biggest challenge won’t be ideological: He’s not the left-winger his opponents depict. The economy will be the dominant issue, events will shape others. Instead, it may be personal, his political persona. Be it Democratic politicians or members of Congress, campaign contributors or business leaders, there is a common refrain: Obama doesn’t much identify with us, or even much respect what we do. His relationship with most Democratic members of Congress lies somewhere between correct and cold. They believe that personal political loyalties are not an Obama priority. What makes this more than an insider’s game is that successful presidents — Franklin D. Roosevelt, Lyndon Johnson (domestically), Ronald Reagan and Bill Clinton — cultivated and established real political relationships. Could a re-elected Obama improve in this essential element of presidential leadership? There is no one more knowledgeable than David Maraniss, who wrote the best biography of him, “Barack Obama: The Story,” which traces the 44th president’s family background and life through his late 20s. Maraniss has a unique appreciation of his subject’s strengths and frailties, and of his psyche. “Obama,” Maraniss says, “is mischaracterized as aloof. It’s more a selfimposed detachment. He’s not good at the visceral transactions of politics.”

The acclaimed author sees two conflicting sides to Obama. There is the writer-anthropologist “who looks at the surreal aspects of the game of politics. He doesn’t want to buy into that game completely. To be fully engaged makes him uncomfortable sometimes.” The other side is a “fiercely competitive” man who appreciates what it takes to succeed, and who understands history. When first elected, Obama’s confident persona was supposedly modeled after the “Team of Rivals,” Abraham Lincoln’s enlisting of political rivals to his inner circle as described in historian

personal performance of late. Goodwin, who has spent time with Obama, says there are precedents that show presidents can change. Roosevelt in his third term, facing a crisis of global war, reached out to adversarial Republicans, such as Frank Knox to be his Secretary of the Navy and Henry Stimson, his Secretary of War. He minimized his Machiavellian proclivities to play people against each other. Political polarization may make it tougher for Obama than it was for FDR. Republicans were furious that Stimson and Knox joined FDR; today’s Republicans may hate Obama, especially a

His relationship with most Democratic members of Congress lies somewhere between correct and cold. They believe that personal political loyalties are not an Obama priority. Doris Kearns Goodwin’s book. Obama’s “Team of Rivals” today is more appearance than reality. “He thought it was a great idea and ever since he’s back tracked, he didn’t really do it,” says Maraniss. When top appointments are made, the paramount consideration usually is how they fit into the president’s comfort zone. He also avoids discomfort in dealing with his true political foes. Congressional Republicans have been unyieldingly partisan. Instead of trying to bridge the gap, the President only goes through the motions of dealing with them. In a second term, he’d probably face divided government, split public opinion, a lack of any clear mandate, and critical appointments starting with Secretaries of State and Treasury. That calls for the promise of Obama, not the

re-elected one, even more than the legendary animosity toward FDR. Still, she sees possibilities. “The president,” she says, “needs to use his keen analytical mind to look at what worked and what didn’t work in the first term. He needs to see how and who he spent time with, and how he allocated that time.” Without predicting what Obama would do, she notes there can be “an enormous sense of comfort” with a re-election that enables a president to stretch. And, Maraniss says, more than most politicians or most people, Obama has “throughout his life shown a capacity to learn and grow and change.” Albert R. Hunt is Washington editor at Bloomberg News. The opinions expressed are his own.

Bloomberg Insider

PAGE 20 » MONDAY, SEPTEMBER 3, 2012

The Ad War

» Tuning In to TV Spending

Obama’s

President Barack Obama’s campaign and the Democratic National Committee have aired about 256,000 ads since Mitt Romney became the presumed Republican presidential nominee in April. The bulk of advertising has been focused in Colorado, Florida, Iowa, Nevada, Ohio, Virginia and North Carolina. He has also advertised in less competitive states like West Virginia, where TV markets reach voters in Ohio.

TV Ad Attack Number of local network television presidential race ads from Obama and the DNC: 15,887: Las Vegas total 10,000

1,000 100

Ad totals April 10 to August 27

Rochester, Minn.

Cleveland

This southern Minnesota TV market reaches seven counties in rural northern Iowa. Obama won 58% of the vote in these Iowa counties in 2008 and has blanketed the market with 4,261 ads in an effort to reach those voters again in 2012.

Obama has advertised 11,967 times in Cleveland, an area rich with Democratic voters. More Obama ads have aired in Ohio than any other state, with about 50,000 ads in 11 markets that reach Ohio voters.

Portland, Maine

Only markets with at least 10 ads are included in the map Burlington, Vt. Sioux City, Iowa

Toledo, Ohio

Denver 9,833 ads

Boston

Reno, Nev. Washington, D.C. 5,681 Des Moines, Iowa

Omaha, Neb.

Colorado Springs, Colo.

In 2008 Obama won one of five electoral votes in Nebraska, after he carried the Omahabased 2nd district, represented by a Republican congressman. Repeating that feat in 2012 may prove difficult, but the 1,849 Obama ads aired in Omaha so far have also reached voters in Iowa, a swing state.

Las Vegas Obama has aired 15,887 ads in Las Vegas, more than any other media market. Of those, 1,244 were in Spanish. More than 27% of Nevada’s population is Hispanic, a group Obama will court to try to carry the state in November.

Wilmington, N.C. Charlotte, N.C. 7,301 ads

Tampa, Fla. 7,913 ads

The Obama campaign’s most-aired ad shows Obama in front of a fire house saying “the way you grow the economy is from the middle out” and that everyone prospers if the middle class does. The ad aired from July 2 to July 30.

Orlando, Fla. Obama carried Orange County, where Orlando is located, with 59% of the vote, helping him win Florida in 2008. He has advertised more in the Orlando market – 9,047 times – than anywhere in the state.

PHOTO: BARACKOBAMA.COM

Market where ad aired most: Reno, Nev., 629 times

WEEKLY AD TOTALS

Raleigh, N.C. 4,661 ads Jacksonville, Fla.

MOST-AIRED AD: “Believe”

Total times aired: 13,902

Norfolk, Va. 8,624 ads

Cincinnati 7,419 ads

*Based on advertisement counts reported weekly by CMAG

Cumulative local network television ads aired by the Obama campaign and the DNC each week and the percentage of those ads that are negative, or mention Romney. Colorado

Florida

As of August 27 Total ads Percent negative

*Includes Dothan, Ala.

Iowa

36,873

Nevada

*Includes Quincy, Ill., 33,083 Omaha, Neb., Rochester, Minn.

27,088

Ohio

Virginia

North Carolina

*Includes 49,950 Parkersburg, Charleston and Wheeling, W. Va.

36,205 *Includes Tri-Cities, Tenn., Washington, D.C.

April 10: 336

April 10: 314

*Includes Greenville, S.C. 23,305

22,123 Week starting April 10: 204

70%

April 10: 406

70%

April 10: 109

77%

April 10: 235

72%

76%

77%

May 8: 496

75%

SOURCES: KANTAR MEDIA/CMAG, USELECTIONATLAS.ORG, U.S. CENSUS BUREAU GRAPHIC: ALEX TRIBOU/BLOOMBERG

BGOVGRAPHICS@BLOOMBERG.COM

Bloomberg Insider

The Sightings

MONDAY, SEPTEMBER 3, 2012 » PAGE 21

» Sideline Happenings

Blowing Off Steam

sgreen57@bloomberg.net

PHOTOGRAPHER: ETHAN MILLER/ BLOOMBERG VIA GETTY IMAGES

IM TY

G BL O O M B R G VI A E

AG ES

obbyist Tony Podesta is so attached to his art collection that he’s bringing a piece with him to the Democratic National Convention. During luncheons he’s hosting at the Mint Museum’s Halcyon Restaurant, guests will be able to view “Woman Ironing (Isis)” a 2008 mixed-media work by Brazilian-born artist Vik Muniz from Podesta’s extensive personal gallery of modern art. Many Democrats are taking their passions — political, artistic as well as musical — to the convention in Charlotte. The Young Democrats of America will huddle at a National Football League party where guests can watch the season-opening game Wednesday between the Dallas Cowboys and New York Giants. The North Carolina Democratic Party hosted a welcoming party at the Nascar Hall of Fame with its counterparts in South Carolina, Virginia, Georgia and Tennessee. And who doesn’t like sex, politics and cocktails? That’s the theme of the Planned Parenthood Action Fund’s event as part of its “Women are Watching” campaign. The quadrennial convention is a cross between a trade show and a class reunion, says Democratic consultant John Edgell, who has attended nominating events since 1980. The parties also offer businesses a chance to promote their brands, in front of local and national policy makers and the media. Expect to see Microsoft Corp., Google Inc. and AT&T Inc. logos all over Charlotte. Bank of America Corp., based in Charlotte, will sponsor Politico’s breakfast series with newsmakers. Foodies can drop by the “CNN Grill” to sample a menu rich in Southern culture and get access to maps, data and videos displayed on an eight-foot touch screen. Techies can get a wonk fix at Facebook Inc.’s “Apps & Drinks” party, where developers will showcase their wares. Facebook also will partner with companies such as Microsoft’s TechNet and Oracle Corp. for “Innovation Nation,” where protechnology legislators will be honored. The Democrats tapped Hollywood and the music industry for performers. The Recording Industry Association of America lined up rapper Common, the 40-year-old Lonnie Rashid Lynn Jr., for a Sept. 4 benefit sponsored by Viacom Inc. and the Alliance of Automobile Manufacturers. The convention attracts actors and musicians

because it gets them out of their habitats and into contact with average Americans, said Robin Bronk, chief executive officer of the Creative Coalition. The B-52s will bring a hint of retro — they were formed 35 years ago — to the coalition’s gala led by Los Angeles Mayor Antonio Villaraigosa. Visitors might see Senators John Kerry of Massachusetts and Barbara Boxer of California boogying to “Love Shack.” Rapper Flo Rida will perform at the Got Your 6 military-veterans benefit, and the Roots will headline StartUp RockOn’s Music Extravaganza. The founder of DJs for Obama, DJ Cassidy, will be spinning at the benefit. Asked to name some songs that might be anthems for the convention, he said Jackie Wilson’s “(Your Love Keeps Lifting Me) Higher and Higher,” and McFadden and Whitehead’s “Ain’t No Stoppin’ Us Now.” After a night of rock ‘n’ roll, guests can chill at the Huffington Post’s Oasis, where yoga classes, facials, massages and reflexology will bring some Zen to their chaotic schedule. The yoga will come courtesy of YogaVotes, a nonpartisan campaign to get more flexible voters to the polls. Folk rocker Jack Johnson will headline Rock the Vote’s bus-tour stop in Charlotte as he did at the Republican convention last week to engage young people. Former first daughter Chelsea Clinton, who posed for Vogue’s September issue, will moderate a Microsoft-sponsored panel on the concerns of youth. For the Democratic bon vivant, Third Way, the proprivate sector think tank, will host a get-together at the uptown restaurant and lounge Mez, where the cocktails include the New York Sour and Old Thymer. In the end, conventions are about savoring historic moments and making memories. “If you can remember the party a couple days later, it was a good party,” said Edgell. “They all tend to blur together.” Unless, of course, he runs into Eva Longoria, one of Obama’s 35 national reelection committee leaders. Then he’ll be “hovering around the water cooler a week later talking about it,” he said.

Bloomberg News

By Stephanie Green

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Podesta’s ‘Woman Ironing’ Joins Flo Rida to Divert Democrats

G BL O O M B R G VI A E

Bloomberg Insider

PAGE 22 » MONDAY, SEPTEMBER 3, 2012

» SPOTLIGHT

Bloomberg Link events EpiCenter, 210 E. Trade St. 3rd Floor, Charlotte Today MEDIA PANEL — Politics and the Media: Bridging the Political Divide in the 2012 Elections, hosted by USC Annenberg's Geoffrey Cowan, Harvard's Trey Grayson and moderated by Bloomberg's Susan Goldberg. Participants include Ben LaBolt of Obama for America, Olivia Ma of YouTube, Marcus Brauchli of The Washington Post, Matt Bai of The New York Times. »2 p.m. RECEPTION — Hosted by USC Annenberg, Harvard Institute of Politics. »4 p.m. »5 p.m., Whisky River, EpiCentre, 210 E. Trade St.

PHOTOGRAPHER: TOM PENNINGTON/GETTY IMAGES VIA BLOOMBERG

TODAY » CHARLOTTE GEARS UP

Charlotte, North Carolina, prepares for its turn as Democrats gather this week to formally nominate Barack Obama for a second term as president.

a.m.

Morning & Afternoon: Junior Statesmen Foundation holds election symposium for students; Elon Poll panel with David Gergen and Charlie Cook; Americans for Prosperity hosts Fox News contributor Michelle Malkin.

Evening Highlights: Reception for LGBT candidates; clean energy party; former NATO commander Wesley Clark speaks; international leaders forum; Congressional Hispanic Caucus hosts party.

The Sked

Monday, Sept. 3

Matt Dowd

Now we turn to the president's big moment. Success would be to come across with humility and take some responsibility for the disappointment over the last four years. And, he needs to present a compelling vision of what the next four years could look like, and contrast that with Romney.

All day MEDIA CAFÉ — Hospitality Suite hosted by Congressional Black Caucus Institute. »All day, BlackFinn Saloon at EpiCentre, 210 E. Trade St. CAROLINAFEST — Democratic National Convention Host Committee holds CarolinaFest 2012, featuring James Taylor, interactive expositions, speakers, family activities and music including actor and musician Jeff Bridges and his band The Abiders. »10 a.m. to 6:15 p.m., Tryon St., between Stonewall and Trade.

Morning POLITICAL PLAYBOOK — Politico hosts morning newsmaker event with convention updates. »8 a.m., 222 S. Church St. PODESTA BRUNCH — Brunch hosted by Democratic fundraisers Heather Podesta, Tony Podesta. »10 a.m., Mint Museum. 5000 S. Tryon St.

BLOOMBERG MORNING PREVIEW

JUNIOR STATESMEN — Junior Statesmen Foundation holds Presidential Election Symposium for students, political leaders. »10 a.m., Stage Door Theater, 5th and College Streets. ELON POLL — Elon University, Charlotte Observer hold Elon Poll news conference and panel event. Participants include David Gergen of CNN; Charlie Cook of Cook Political Report. »10:30 a.m., Charlotte Observer, 600 S. Tryon St.

Afternoon NATIONAL JOURNAL — National Journal, The Atlantic, CBS News host daily briefing and convention

updates. »1 p.m., McColl Center, 721 N. Tryon St. AMERICANS FOR PROSPERITY — Welcome party hosted by Americans for Prosperity, which advocates for free markets, with Fox News contributor Michelle Malkin. »2:30 p.m., SMS Atrium, 1764 Norland Road. THE HILL — The Hill hosts daily briefing and convention updates. »4 p.m., Charlotte City Club, 121 W. Trade St., Suite 3100. LGBT CANDIDATES — Gay and Lesbian Victory Fund sponsors a welcome reception for LGBT elected officials, candidates, delegates, supporters and friends.

POLITICO LOUNGE — Politico hosts a Nightly Lounge convention watching event. »5:30 p.m., 222 S. Church St.

Evening ENERGY PARTY — Four groups host a clean-energy party to celebrate contributions of renewable energy and alternative fuels. »6 p.m., 7th Street Public Market, 224 E. 7th St. WESLEY CLARK — Echo Foundation holds its 15th Annual Award Gala, with keynote address by former Supreme Allied Commander - NATO retired Gen. Wesley Clark. »6 p.m., Knight Theater, 430 S. Tryon St. YOUTH RECEPTION — Sponsored by DNC. »6 p.m., Charlotte Convention Center, 501 S. College St. BOLDPAC PARTY — Hosted by Congressional Hispanic Caucus. »8 p.m., 5 Church, 127 N. Tryon St., Suite 8, at corner of 5th and Church St. APIA RECEPTION — Asian & Pacific Islander American Vote holds reception. »8 p.m., Whiskey River, 210 E. Trade St., Suite A-208. IMPACT FILM FESTIVAL — KickOff Party to celebrate filmmakers, policy leaders, actors involved in creating films for social change with special guest Jeff Bridges. »8 p.m., Butter Lounge, 950 Seaboard St. STARTUP ROCKON — Opening concert featuring hip hop band The Roots, hosted by StartUp RockOn. »8 p.m., Amos's Southend, 1423 S. Tyron St. HMC PARTY — HMC Council, which promotes progressive causes, holds annual party, with Rep. Jared Polis, D-Colo. »9 p.m., Aquavina Wine Room and Lounge, 435 S. Tryon St. ITALIAN AMERICAN — Reception honoring Italian American delegates to DNC, hosted by Italian American Democratic Leadership Council, National Italian American Federation. »9:30 p.m., Fiamma Restaurant, 2418 Park Road.

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