Insight: For most voters, presidential campaign is distant

1 of 5. U.S. Republican presidential nominee Mitt Romney (L) and U.S. President Barack Obama answer a question at the same time during the second U.S. presidential campaign debate in Hempstead, New York, October 16, 2012.

Credit: Reuters/Jim Young

By Andy Sullivan

WASHINGTON | Sun Nov 4, 2012 1:23am EDT

WASHINGTON (Reuters) - This year's presidential election could be among the closest in U.S. history, as President Barack Obama and Republican Mitt Romney are locked in a virtual dead heat. For a growing number of voters, however, it will not be much of a contest at all.

Roughly 22 percent of the U.S. population lives in the nine politically divided states that are likely to determine the outcome of Tuesday's election - and that have been the focus of the candidates' campaign stops and advertising.

That has left four-fifths of Americans effectively on the sidelines, the highest proportion in more than century.

It's a reflection of how Americans elect their president not by popular vote, but through a state-by-state process known as the Electoral College. The winner of each state typically is awarded that state's electoral votes, with 270 electoral votes needed to clinch the White House.

Over the past four decades, presidential elections have played out on a shrinking battlefield, as political parties have become more ideologically unified and Americans increasingly have moved to communities where their neighbors share their political views, analysts say.

As a result, most states can be taken off the table - as either particularly friendly to a candidate, or not - before a presidential campaign even begins.

With the South and the Plains states firmly in the Republican column and the Northeast and West Coast solidly Democratic, elections since 2000 have come down to a few states that, for one reason or another, remain politically diverse and up for grabs.

This year, Obama and Romney focused the bulk of their television advertising and ground-level campaigning on nine states: Nevada (6 electoral votes), Colorado (9), Iowa (6), Wisconsin (10), Ohio (18), New Hampshire (4), Virginia (13), North Carolina (15) and Florida (29). Romney has made a late bid for Pennsylvania and its 20 electoral votes, but polls there have shown Obama with a consistent lead.

Some of the most competitive states, such as Virginia and Colorado, have become that way as more Democratic-leaning Hispanics and college graduates have moved in. Others such as Ohio and Iowa have been relatively untouched by demographic shifts, and the two parties have remained at a rough parity in those states.

And some states have been split down the middle.

In Wisconsin, the state capital of Madison is one of the most Democratic cities in the country, while the suburbs of Milwaukee are now among the most Republican.

Competitive presidential races in the 1960s and 1970s involved states that encompassed more than half the U.S. population. Since 2000, the presidential race has been competitive in states where roughly one-quarter of U.S. voters have lived.

Political analysts say the narrowed geographic scope of the presidential campaign is not just a symptom of increased polarization - it is also a reason the gap keeps widening. The dynamic encourages presidential candidates to ignore wide swaths of the nation and can make it more difficult for the winner of the election to govern effectively.

"Politics now isn't about issues, it's really more of a tribal affiliation," said Bill Bishop, who examined the increasing geographical polarization of the country in his 2008 book, "The Big Sort."

AN IDEOLOGICAL SHIFT

Between the 1880s and 1960, close presidential elections were rare in the United States. Since the 1960s, Americans increasingly have moved into communities that mirror their own cultural preferences, Bishop found.

A computer programmer who wants to cycle to work and eat organic produce might move to San Francisco, while someone with the same skills who wants plenty of parking and a thriving evangelical community might choose a Dallas suburb, Bishop said.

Over the same time period, political parties have become more ideologically consistent.

While Republican voters now are much more likely than Democrats to oppose abortion, the two groups showed no difference on the issue in 1988, said Columbia University professor Andrew Gelman.

"The parties are definitely more ideological than they used to be, and the voters are, too," Gelman said.

This ideological and geographical sorting has been most pronounced at the local level, but it has played out at the state level as well, as southern conservatives have switched to the Republican Party and northeastern moderates have been pushed to the Democratic Party as Republicans have emphasized conservative stands on social issues.

As politically divided as the nation is overall, presidential races are now much less likely to be competitive at the state level.

The average state margin between the winning and losing presidential candidate in close elections widened steadily from 8 percentage points in 1960 to 14.8 percentage points in 2004, according to research by Alan Abramowitz of Emory University and Kyle Saunders of Colorado State University.

The presidential battleground as a whole has shifted during this period. Virginia, for example, had been a reliably Republican state in presidential races from the 1950s until Obama carried it in 2008.

At the same time, elections have steadily shrunk in scope.

Republican Richard Nixon campaigned in all 50 states in the 1960 campaign for the White House. He lost narrowly to Democrat John F. Kennedy, but the race was competitive in 20 states, where the margin of victory for either candidate was narrower than 5 percentage points for either candidate.

Some 18 states were competitive in the 1976 matchup between Democrat Jimmy Carter and Republican Gerald Ford. In the 2000 nail-biter between Republican George W. Bush and Democrat Al Gore, 12 states were in play. The battlefield shrunk to 10 states in Bush's 2004 matchup against Democrat John Kerry.

The pattern is less noticeable in years in which one candidate wins handily, such as Republican Ronald Reagan's landslide victory over Democrat Walter Mondale in 1984 or Democrat Bill Clinton's relatively easy re-election bid over Republican Bob Dole in 1996.

CLOSE NATIONALLY, NOT LOCALLY

But in close elections, the trend is clear.

The contrast is especially striking between this year's campaign and the 1976 race, in which Carter defeated Ford by 2 percentage points.

That year, 51 percent of the population lived in states where Carter ended up winning or losing narrowly. New York, California and Texas were among the most competitive states for each candidate.

Those three states, which accounted for 30 percent of U.S. gross domestic product in 2011, are not in play this year. New York and California are solidly Democratic, while Texas is a sure thing for Republican Romney.

The nine most competitive states this year accounted for 20 percent of the nation's GDP last year.

These states are home to a smaller slice of Americans than were in play during Bush's razor-thin win in 2000, which turned on 12 states that accounted for 27 percent of the population.

With a smaller playing field in the presidential race, the candidates have tailored their pitches to a smaller slice of the electorate than ever.

Obama has been emphasizing a revival in manufacturing, which could help him in Rust Belt states such as Ohio and Wisconsin. Romney's proposal to expand the Navy seems aimed squarely at Virginia, which is home to a large naval base and military contractors that are an important part of the state's economy.

At a time when spending cuts are needed, neither candidate has mentioned trimming the controversial federal subsidy for ethanol, which could anger corn farmers in Iowa.

This calculus can shape governing as well, said Mark Kennedy, who heads George Washington University's graduate school of political management.

"You know which issues you're going to be called on the mat for in the next election," he said.

As the election nears, those lucky enough to live in the "swing" states might not exactly be thrilled. The intense campaigning can widen already existing partisan divisions, and the barrage of television ads, telephone polling and door-knocking can get wearisome.

"People in Colorado are miserable because they're getting called up all the time," Gelman said. "There's more money and less places to spend it so it's getting a little bit unpleasant."

(Editing by David Lindsey and Doina Chiacu)

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Insight: Women voters helped make Obama; could they break him?

1 of 3. Women point their cameras at the stage as U.S. President Barack Obama speaks at a campaign rally in Cleveland, Ohio October 25, 2012.

Credit: Reuters/Kevin Lamarque

By Patricia Zengerle

WASHINGTON | Sat Nov 3, 2012 6:18pm EDT

WASHINGTON (Reuters) - Women helped propel Barack Obama to the White House in 2008, but their flagging enthusiasm for him reflected in recent polls has created uncertainty about who will capture the female vote in Tuesday's election.

Four years ago, women voters supported Obama over Republican John McCain by 56 percent to 43 percent. Among men, the Democrat led McCain by just 49 percent to 48 percent.

But women's enthusiasm for Obama as president has slipped this year, making his road to re-election more difficult.

He is narrowly favored to win the female vote, but in many national polls, the incumbent's lead over Republican Mitt Romney among likely women voters has dipped to single digits. Reuters/Ipsos polling data last week had it at nearly 5 percentage points. He trailed among likely male voters by about 6 points.

Republicans point to Romney's gains with women since his strong performance in the first presidential debate on October 3.

Marguerite Hunsinger, 59, of Flagler Beach, Florida, who had been undecided, said the debate shifted her to Romney's camp.

"I'd been very, very skeptical about Romney," said Hunsinger, a self-described homemaker. "And I just thought he acted very presidential and capable, and he had answers that I agreed with more."

In contrast, she said Obama "was like asleep. ... It felt like he was just wasn't there."

Romney's camp accuses Democrats of condescending to women by overemphasizing issues like contraception when polls show men and women both care more about jobs and the economy.

Democrats note that Obama continues to hold significant leads among women in the decisive swing states and say the women's vote will help propel him to victory.

Women comprise more than half of the U.S. electorate, and in presidential elections, about 7 percent more women vote than men.

'WOMEN'S ISSUES' BOOST OBAMA

Democrats insist that Obama outshines Romney on many issues important to female voters, from healthcare to education, equal pay and fair taxes.

Evelyn Miranda, 47, of Hialeah, Florida, said she had been undecided, but recently embraced Obama because of his positions on social issues and insistence that the wealthy pay higher taxes.

"He wants to tax people more who make more money. I am really for that a lot," she said.

Miranda, an artist and teacher, also said she worried that Republicans might ban abortion, a position with which she disagrees after experiences with student sexual abuse survivors.

Obama's current support margin among women is not only below his own 2008 performance but that of Al Gore in the 2000 election. Gore, then the Democratic vice president, narrowly won the popular vote but lost the Electoral College to Republican George W. Bush.

"Certainly, team Obama would like to see their national margin among women higher," said Tufts University political scientist Richard Eichenberg, who is tracking this year's gender gap and estimates Obama's lead among women nationally at 8 percentage points.

"In 2008, he had an extra cushion when he won big (+13 among women), and Gore won narrowly with +11. So I think that they would like that 8-point number a little higher," Eichenberg said.

But Obama's standing among women remains strong in the battleground states he will need to clinch all-important electoral votes. "He leads among women by large margins in virtually all the swing states," Eichenberg said.

For example, in Ohio, Eichenberg noted polls during October showed Obama with a 12-point lead among likely women voters.

Romney's solid showing - and Obama's poor one - in the first debate in Denver upended the presidential race. Obama had been building a lead before he and Romney first went head-to-head. Romney has since gained steadily in the polls.

For the week ended September 30, just before the debate, Reuters/Ipsos poll data showed Obama leading Romney by 52 percent to 41 percent among a sample of 1,022 likely women voters. He also led among likely men voters, by 47 percent to 44 percent.

Last week, Obama led Romney among likely female voters by 48 percent to 44 percent, and trailed among likely male voters by 50 percent to 44 percent, the Reuters/Ipsos data showed.

JOBS, JOBS, JOBS?

Obama's team has courted women with ads stressing his support for equal-pay legislation, abortion rights and contraceptive insurance coverage. The Democratic National Convention featured high-profile women emphasizing those issues.

They slammed Romney for shifting positions on abortion and contraceptive rights since his 2002 election as governor of Democratic-leaning Massachusetts and for failing to support Obama-backed legislation easing the way for women to sue over workplace pay discrimination.

But some analysts said that approach might help explain Obama's flagging support, in a year when economic problems and a high jobless rate worry voters.

"The Democrats have been very focused on what we call the particularistic concerns of women, such as abortion, equal pay and contraception," said Lara Brown, a political scientist at Villanova University.

"I'm wondering if the women who are migrating toward Romney, they're just saying to themselves, 'Abortion and birth control and equal pay are not my issues, what I'm more concerned about is the overall state and health of the economy.'"

Marion Kirschner, 33, of Delaware, Ohio, placed herself among those voters.

The Romney supporter called herself "kind of liberal" on social issues like abortion and gay marriage rights - which Romney opposes - but said government should focus elsewhere.

"I think the government should worry about the economy, domestic issues and foreign policy. That is more important to me than social issues," said the married mother of 17-month-old twins, who works at an aviation company.

Vicki May, 43, of Colonial Heights, Virginia, said she hoped Romney would improve the economy, while expressing anger with Obama.

"I've been out of work for three years and I haven't been able to find anything," she said. "They keep saying there are jobs out there, but I haven't noticed."

(Editing by Alistair Bell, Marilyn W. Thompson and Peter Cooney)

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Insight: A giant storm and the struggle over closing Wall Street

1 of 2. Sandbags block the entrance of the New York Stock Exchange in downtown Manhattan as super storm Sandy made its approach in New York October 29, 2012.

Credit: Reuters/Andrew Kelly

By John McCrank

NEW YORK | Tue Oct 30, 2012 3:15am EDT

NEW YORK (Reuters) - At 6:30 p.m. on Sunday night, with Hurricane Sandy bearing down on the U.S. East Coast, New York Stock Exchange operator NYSE Euronext had more immediate problems: a revolt from the trading firms that are its lifeblood.

NYSE officials, including global head of sales Christine Sandler, told the firms that while the exchange would shut down its physical trading floor it was planning to open for business on Monday as an electronic-only trading venue for the first time.

But dealers trading shares were skeptical, according to interviews with about a dozen people privy to discussions including senior exchange officials, Wall Street executives, traders and other sources.

The final choice after more than two days of discussions, these sources said, came down to this: whether to use an unproven system to keep the markets open while risking employees' safety, or close for the day and play it safe.

If the NYSE had opened for business its electronic systems may have had to handle more than double the volume it had averaged in recent weeks, a prospect that worried market participants already reeling from a series of embarrassing market snafus this year.

The firms also did not want their employees to have to report to work in the midst of the worst storm to hit New York City since at least 1938, a storm that was forecast to bring flooding, punishing winds and widespread power outages.

"It was, 'Please don't do this. The market is not ready'," one of the sources said.

Late on Sunday night, the NYSE and other exchanges finally decided to close the market on Monday, the first time the Big Board had done so for bad weather since Hurricane Gloria in 1985. While the NYSE took the lead in closing trading in stocks and options, the final decision was collectively taken by all the exchanges, including Nasdaq OMX and CME Group Inc.

In the end, most market participants agreed that NYSE, other exchanges and regulators made the right call, but many on Wall Street still griped about how long it took to reach that decision.

The fact that such a choice took a series of long, complicated discussions signals the enormity of what was at stake. In the event, the storm made landfall on the U.S. East Coast on Monday evening, bringing widespread flooding and extensive power outages to many areas, including Lower Manhattan, home to Wall Street and the exchange.

As the trading closure extends into Tuesday and possibly beyond, analysts estimate that exchanges and banks are losing tens of millions of dollars in revenues every day. Numerous companies have postponed their earnings announcements, and plans of at least six firms to go public have been disrupted.

Late on Monday night, NYSE and Nasdaq said that on Tuesday they would run tests as part of a new contingency plan to see if an electronic-only market could resume equity trading in major names as soon as Wednesday, if the NYSE floor is not reopened.

Overall the storm is likely to cause tens of billions of dollars in economic losses, according to estimates from disaster modeling firms and economists.

NYSE's contingency plan was put in place several months ago in coordination with its member firms, a spokesman said. The concerns that were voiced on Sunday by brokers were largely due to the fact that the hurricane was approaching and New York's subways, buses and other transport were being halted that night.

The firms had already reduced the number of staff who were expected to come into their offices, and that was going to make it difficult to properly monitor the changes required for the new routine, the spokesman said. The concerns were amplified by the risks posed to employees themselves by the storm.

STILL THE BIG BOARD

The weekend discussions are also a symptom of how much stock trading in the United States has changed. When Gloria hit in the 1980s, the New York Stock Exchange was by far the biggest game in town, and could essentially make decisions about the market unilaterally.

Over the past 10 years, however, dozens of alternative exchanges and other trading venues have popped up, taking market share away from the NYSE. That meant the NYSE had to consider if it could afford to be left out if the alternative trading venues that are all electronic were to open for business as usual.

The NYSE remains the largest stock exchange in the United States, however, responsible for more than 25 percent of U.S. equity trading volume, and had the biggest voice in the talks.

All this was playing out against a backdrop of technical problems this year, including Nasdaq's inability to process Facebook Inc orders fast enough when the social media company was going public and Knight Capital Group's near collapse due to a trading glitch that cost it $461 million.

Exchange officials insisted that their decision to shut down the market was ultimately led by concerns about the safety of the financial community.

"This is not the time to be thinking about your own pocketbook, first you think about what is best for the markets," an exchange official said.

CONTENTIOUS DISCUSSIONS

The discussions around what to do as the storm approached started as early as Friday, the sources said. But they intensified as the weekend progressed and the storm stayed on course.

Often these discussions were contentious, as participants sought to further their own agendas.

Even within the major Wall Street banks, for example, different business units were sometimes at loggerheads over the best course. Fixed income desks were insisting the markets open, as there was a major U.S. Treasury auction on Monday. But the equities desks were uncomfortable, several participants on the calls said.

By Sunday afternoon, NYSE had held a series of discussions with floor brokers, NYSE employees and city officials, deciding that it should close its floor trading operations and move all NYSE-listed stocks to the electronic venue.

Even that decision was not unanimous. The number of people in favor of keeping the floor open and the number opposed were about even, with some saying the trading floor should never be closed, while others argued that people should not be expected to put themselves in harm's way.

"People worried about the system and making sure there is enough liquidity, but this had more to do with human life and putting people in harm's way," said a trading firm executive who was involved in the discussions. Others noted that both safety and technical questions were big issues for people on the calls.

NYSE's decision to open, which was announced around 4 p.m. on Sunday, was short-lived, as trading firms grappled with their own contingency plans. Moreover, the exchange's back-up plan had not been tested since March 31, a worry after the market snafus of this year.

As the weather reports grew more dire on Sunday night, the Securities Industry and Financial Markets Association, which represents securities firms, banks and asset managers, added to the disagreement, voicing significant concerns about proceeding with trading.

Throughout the weekend, officials from the U.S. Securities and Exchange Commission were also on calls with the exchange operators and other market participants. SEC Chairman Mary Schapiro participated in at least one call with Nasdaq Chief Executive Robert Greifeld. She was also in email contact with NYSE CEO Duncan Niederauer.

The substance of their conversation could not be learned. But sources familiar with the situation said the SEC did not make the decision to shutter the markets and the view presented on the various calls was uniform about the need to close.

NO HEROES

By the time Sandler and other NYSE officials got on the 6:30 p.m. call, not only was the New York's transport system about to grind to a halt but a large area of lower Manhattan, edging right up to the boundary of the New York Stock Exchange at 11 Wall Street, faced a mandatory evacuation ordered by Mayor Michael Bloomberg. For the trading firms it was time to speak up.

Some of them, including Goldman Sachs Group Inc, CME's NYMEX, and Citigroup Inc, were squarely in the flood-prone evacuation zone.

At 7:30 p.m., senior NYSE officials, including Niederauer, arranged for yet another call, this time with other industry participants - from rival exchanges to regulators - on the line.

"There was a healthy discussion about what-ifs, and scenarios and any way we could open the market," said an official from a rival exchange.

A consensus quickly formed that the markets may have to close, said executives from three exchanges.

"This is not about, 'hey, you have a floor, you couldn't do it, we're electronic and we could', we are not going to make a competitive issue about it," said one person on the call.

By 10 p.m., Niederauer and SEC Division of Trading & Markets Director Robert Cook, among other market participants, had hammered out the plan to shut down fully.

"Sometimes you have to ask, 'Guys, why are we trying to be heroes here? The risk-reward just doesn't look too good'," said one NYSE official.

At 11 p.m. on Sunday, the exchanges announced the stock and options markets would be closed on Monday. Employees of some firms did not get alerted about the decision until after midnight.

(Additional reporting by Sarah Lynch, Ryan Vlastelica, Jessica Toonkel, Carrick Mollenkamp, Jed Horowitz; Writing by Dan Wilchins and Paritosh Bansal; Editing by Jennifer Merritt, Martin Howell and Alex Richardson)

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