Division of Labour: September 2011 Archives
September 30, 2011
Another Winner in Our Spot The Idiot Contest
Today's prize goes to John Judis who writes in The New Republic (gated),
"You know, when Herbert Hoover had to face a financial crisis and then unemployment, his strategy was to balance the budget and cut spending ..."
A question for Mr. Judis: In what world, sir, does spending going from $3.1 billion to $4.6 billion (during a time of deflation no less) constitute a CUT in spending?
This is also a good time to plug Steve Horwitz's new Cato piece, "Herbert Hoover: Father of the New Deal."
Posted by E. Frank Stephenson at 09:01 AM
September 29, 2011
On Trade Imbalances and Jobs
C. Fred Bergsten writes in the NYT:
BY virtually ignoring trade, President Obama and Congressional Republicans are missing a major opportunity to create jobs. The United States runs an annual trade deficit of about $600 billion, or 4 percent of our entire economy. Eliminating that imbalance would create three million to four million jobs, according to Commerce Department estimates, at no cost to the budget.
Not so fast. There are (at least) two reasons why moving toward trade balance might not increase employment in the US. First, many imports are inputs to things that are produced here; making those imports more expensive might harm production of (and jobs making) the goods that use the imports as inputs. Second, the flip side of a trade deficit is net capital inflow which may create jobs by financing factories such as BMW in SC, Pirelli here in GA, etc. Hence, eliminating a trade deficit also means eliminating a net capital inflow and potentially harming job creation.
As an aside--I realize that statements about currencies being overvalued or undervalued may be based on PPP comparisons, but every time I read such a claim (such as Bergsten's "The artificially low value of the renminbi — it is 20 to 30 percent less than what it should be ..."), I mutter to myself "pretense of knowledge."
UPDATE: Don Boudreaux weighs in with one of his typically sharp letters to the editor.
Posted by E. Frank Stephenson at 02:58 PM
September 27, 2011
Changing layouts, sharing private information, meh. Didn't get my dander up. But I'm seriously considering typing a snarky status update to register my displeasure about the following:
Facebook filed paperwork Monday to form a political action committee called "FB PAC," CNN has learned.
Don't bother clicking the link; I copied the whole story.
If you or someone you know has been personally affected by the high prices due to influence peddling among special interest lobbyists, post this to your status for one hour.
Minimum thought to the minimum wage
Okay, we're used to people pushing for increases in the minimum wage, using arguments such as those below. See if you can guess the occupation of the expert quoted:
Raising the minimum wage to get more cash to the working poor is just as crucial [to getting the economy going]...
Who said it? Paul Osterman, whom the CNN story identifies as "economics professor at MIT," but whose vita shows that he is actually "Professor of Human Resources and Management," though he was assistant and associate professor of econ at Boston University previously. There is also a greater percentage of the nation's income going to college tuitions than ever before, so Dr. Osterman can afford a higher give-Tim-Shaughnessy-a-bunch-of-money contribution. If he gave me a one-fifth increase in my salary, or even just $3000, that would make a tremendous difference in my life too.
Later in the CNN story,
Many economists and small business owners fear that increasing the minimum wage would end up hurting the working poor rather than helping them, because employers who couldn't afford to pay more would be forced to cut staff.
One whole study? No wonder he is going to be the next CEA. Here's a review of more studies by Neumark.
None of the raising-the-minimum advocates ever do the reductio ad absurdem when discussing the minimum wage: why not raise it to $20 an hour? To $100 an hour? That would give even more money to the working poor.
Even when I played college soccer, we still had to practice the fundamentals, the drills we did when we were seven years old. Working at MIT doesn't absolve you from knowing correct principles of economics, like the effects of price floors set above market prices.
September 26, 2011
A New Video on the Atlanta Government Schools Cheating Scandal
Posted by E. Frank Stephenson at 11:22 AM
September 21, 2011
Obama: Most economically ignorant president ever?
I've been saying for some time that Barack Obama is the most economically ignorant president since Zachary Taylor, but I increasingly fear I've been doing the general a disservice. It's not just erroneous economics, but sheer ignorance of markets and economics.
You see it in periodic comments of the President. Perhaps the most famous came when he said that ATMs and airport ticket kiosks lead to unemployment: “When you go to a bank you use the ATM, you don’t go to a bank teller. Or you go to the airport and you use a kiosk instead of checking in at the gate.” (An interesting tidbit - do a Google search for this - you'll see the comment was more or less uncommented upon in the "mainstream media.") He's used this a couple times, here also blaming internet travel sites.
But there have been numerous others, as when he explained that auto companies had to make more electric cars in order to satisfy the market. This showed a titanic ignorance of how markets work, the President apparently of the belief that "the market" was what a central planner decided was needed, not what consumers actually wanted. He shows know concept of consumer preference, the subjective value of goods and services, or even the role of prices in providing information to firms.
Now comes this quote from Ron Suskind's book, Confidence Men:
"Both [Chair of the Council of Economic Advisors Christina Roemer and National Economic Council Director Lawrence Summers] were concerned by something the President had said in a morning briefing: that he thought the high unemployment was due to productivity gains in the economy. Summers and Romer were startled.
“What was driving unemployment was clearly deficient aggregate demand,” Romer said. “We wondered where this could be coming from. We both tried to convince him otherwise. He wouldn’t budge.”
So our President really does think productivity is bad for the economy. As economist Scott Sumner says, "So for 200 years rapid productivity growth didn’t cause any serious unemployment problems in America, but now, right after NGDP collapses, we are to believe it is producing mass unemployment, even though recent productivity gains have been rather low. I’m at a loss for words. We elected a Luddite as President of the United States."
Association is not causation, but...
While the earnings of middle-income Americans have barely budged since the mid 1970s, the new data showed that from 2000 to 2010, they actually regressed.
And from the new EFW report:
The world’s largest economy, the United States, has suffered one of the largest declines in economic freedom over the last 10 years, pushing it into tenth place. Much of this decline is a result of higher government spending and borrowing and lower scores for the legal structure and property rights components.
Haven't we known that economic freedom leads to growth for at least a couple of centuries? We don't put leeches on people to heal them anymore, but we still think we can put a leech on the economy to heal it.
As a bonus, one of the CNN subheads is "Why it sucks to be middle class." I imagine it sucked worse to be a king two hundred years ago than it is to be middle class, or even in poverty, today in the US. I'd also rather be in poverty in the US than be an average income earner in countless countries around the world. There is something to be said for absolute vs. relative standards of living.
Surely It's Just a Coincidence That ...
UPDATE: Here's the abstract of Horst Feldmann's 2007 Southern Economic Journal article examining the relationship between unemployment and economic freedom:
Using data from 87 countries and the years 1980–2003, this paper empirically analyzes whether and to what extent economic freedom affects unemployment. According to the regression results, economic freedom is likely to substantially reduce unemployment, especially among women and young people. A small government sector and a legal system characterized by an independent judiciary, impartial courts, and an effective protection of property rights most clearly seem to have beneficial effects. In addition, there are indications that freedom to trade across national boundaries and a light regulatory burden may also lower unemployment, though apparently in the long term only.
Posted by E. Frank Stephenson at 11:40 AM
Smart People Can Be Slow Learners
Yet another example of a failed open access bike program comes from Davidson College. Some key graphs:
Why was such a useful and popular program discontinued? Unfortunately, it appears that the strong Davidson sense of honor and responsibility wavered when it came to these bikes.
Posted by E. Frank Stephenson at 09:08 AM
September 20, 2011
Only a few semesters of Principles Micro under my belt, but I love this clip as a way to demonstrate the relevance of marginal utility per dollar (first 40 seconds):
Economic Freedom of the World
The new Economic Freedom of the World report, coauthored with Josh Hall and Jim Gwartney, is released today. The big news is the continuing decline of the United States. Since 2000, the overall rating (out of 10) has fallen from 8.45 to 7.58 in 2009. This decline is among the largest in the world during the period putting us in the company of countries like Venezuela and Argentina. The overall decline is accounted for by changes in three areas: Spending, Property Rights, and Regulations. Here are some of the specifics (all data are changes from 2000-2009):
Here's a little teaser video I did:
Posted by Robert Lawson at 09:17 AM
Mr. EBT Eats Well
A few weeks ago a friend found the receipt below at the DeKalb Farmers Market (a grocery store in Atlanta) and thought it interesting that EBT was paying for snapper and crabs. I was reminded of this picture when I saw the Mr. EBT video embedded below the photo. (Note the vid has some NSFW language.)
(UPDATE 12/16: See also this photo.)
A side note--next time one hears about the obesity epidemic maybe Mr. EBT's government subsidized comsumption of candy and chips should come to mind as a contributing factor.
Posted by E. Frank Stephenson at 08:21 AM
September 14, 2011
Even P-Kroog Thinks It's a "Ponzi Game"
Social Security is structured from the point of view of the recipients as if it were an ordinary retirement plan: what you get out depends on what you put in. So it does not look like a redistributionist scheme. In practice it has turned out to be strongly redistributionist, but only because of its Ponzi game aspect, in which each generation takes more out than it put in. Well, the Ponzi game will soon be over, thanks to changing demographics, so that the typical recipient henceforth will get only about as much as he or she put in (and today's young may well get less than they put in).
Source. HT: Instapundit
Posted by E. Frank Stephenson at 08:27 AM
September 13, 2011
More on tolerant conservatives
For a long time, I've noted that conservatives and libertarians live happier, more active lives than liberals, and are generally more tolerant. (Yes, that anonymous friend is me). I have also long noted that in my experience, conservatives are, on the whole, more tolerant than liberals.
These observations cut heavily against the typical liberal's sense of self, but it really makes sense, if you think about it. The core of conservatism, no less than Ronald Reagan used to say, is libertarianism - the live and let live philosophy. And equally at the core of libertarianism is a tolerance for lifestyle choices. Liberals and hippies and free love types and survivialists and all kinds of crazies can move to Vermont or New Hampshire or Idaho, and the flinty natives just accept them (with the immigrants gradually changing the political culture of the two former states to match their intolerant liberalism). Modern liberalism, by definition, seeks to impose its will on individuals, largely in the belief that it can perfect society through politics. This doesn't mean that they are bad people. And perhaps we should be more intolerant. (In fact, that's the argument that my liberal friends routinely give me when I point these things out, although they don't put it in those terms - instead the argue, for example, about the evils of smoking, or paying people less than the minimum wage, or making racist comments, or the dangers of owning a gun, etc. etc.). It's modern liberalism that imposes smoking bans, and mandates speech codes, and so on. I say "and so on" because I am off on a digression.
My point was simply to note that evidence continually trickles out for the proposition that I routinely observe - liberals are less tolerant of differing beliefs than conservatives.
The latest comes from Match.com, which has been running algorithms on their members in order to better match people. One result: says Amarnath Thombre, Match.com's lead researcher, "the politics one is quite interesting. Conservatives are far more open to reaching out to someone with a different point of view than a liberal is."
I leave it to the more highly trained economists here to explain the dynamics of dating and mate choice.
Homeland Security: Just Another Part of the Rent-Seeking Society
Posted by E. Frank Stephenson at 09:13 AM
September 12, 2011
Proof by Exhaustion?
Posted by E. Frank Stephenson at 02:17 PM
The Social Security Ponzi Scheme in Pictures
MR and Cafe Hayek both have posts about Social Security being a Ponzi scheme. It's actually worse because it is compulsory not voluntary. Mike Lester's cartoon from the Sept. 4 Rome News-Tribune illustrates this point:
Posted by E. Frank Stephenson at 09:01 AM
September 09, 2011
Will the Real Paul Krugman Please Stand Up
Here's a letter from me that appears in tomorrow's WSJ:
Jonathan P. Williams's letter suggests that Alan Krueger's recognition that extending unemployment benefits increases the duration of unemployment spells is at odds with Paul Krugman's thinking on this question. Actually, Mr. Krugman seems to be of two minds on the issue. While he has called the notion "bizarre" in a column castigating Republicans for pointing out the effect that extending benefits has on joblessness, Mr. Krugman and his wife, Robin Wells, wrote the following in their textbook, "Macroeconomics" (p. 210): "Public policy designed to help workers who lose their jobs can lead to structural unemployment as an unintended side effect. . . . In other countries, particularly in Europe, benefits are more generous and last longer. The drawback to this generosity is that it reduces a worker's incentive to quickly find a new job." Apparently Mr. Krugman thinks the existence of the effect depends on the party affiliation of the person mentioning it.
Posted by E. Frank Stephenson at 10:08 PM
September 08, 2011
Does the Lack of a Profit Motive Affect Hiring in Academe? Evidence from the Market for Lawyers
That's the title of a new paper by DOL friend Dan Sutter and his co-author Rex Pjesky. Here's the abstract (gated copy here):
The comparative performance of academic and economic markets continues to be debated. One factor potentially distinguishing academic markets is the profit motive. Profit and competition have been shown to curb discrimination in markets, and the absence of profit discipline could result in myriad forms of prejudice in academic hiring. We explore the role of the profit motive in the performance of academic markets by comparing the pedigree of employees of top law schools and top law firms. Top law schools are much more likely to employ graduates of top ranked law schools than elite law firms, and the difference exists at both the junior and senior levels. We find no evidence that the graduates of top 5 law schools outperform grads of less prestigious schools in publications or citations. In the absence of a profit motive, academic hiring appears more likely to indulge a preference for pedigree, and by implication, this may explain other scholarly prejudices in the academy.
Posted by E. Frank Stephenson at 08:27 AM
That Might Hurt
Police Chief Wayne Payne says 35-year-old Nathan Mark Hardy was arrested Saturday after allegedly being caught stuffing food into his cargo shorts — two bags of jumbo shrimp, a pork loin and two live lobsters.
Source. Live lobsters in one's pants just doesn't seem like a smart choice.
Posted by E. Frank Stephenson at 08:17 AM
September 07, 2011
An Unsung Hero of Capitalism
Nearly six decades ago, Keith W. Tantlinger built a box — or, more accurately, the corners of a box. It was a seemingly small invention, but a vital one: it set in motion a chain of events that changed the way people buy and sell things, transformed the means by which nations do business and ultimately gave rise to the present-day global economy.
Posted by E. Frank Stephenson at 02:20 PM
September 05, 2011
Speaking at UK on Wednesday
September 2, 2011
SMU PROFESSOR DISCUSSES ECONOMIC FREEDOM SEPT. 7
"Economic Freedom and the Wealth and Health of Nations" is the topic of a talk to be delivered on the University of Kentucky campus by Southern Methodist University Professor Robert A. Lawson Wednesday, Sept. 7.
The lecture, which is free and open to the public, will begin at 4:30 p.m. in Room 110 of the White Hall Classroom Building. The talk is sponsored by the BB&T Learning Laboratory on Capitalism in the Gatton College of Business and Economics, the Economics Society, and UK Students for Liberty.
Lawson, co-author of the annual Economic Freedom of the World Report, holds the Jerome M. Fullinwider Chair at SMU's Cox School of Business. Widely published in economics literature, he is often cited as a major contributor to the measurement and analysis of economic freedom.
The event is supported by a gift to the Gatton College from the BB&T Corporation.
Posted by Robert Lawson at 03:39 PM
Except not in the usual sense of the expression. Consider:
Posted by E. Frank Stephenson at 08:58 AM
September 04, 2011
Some early electoral college math
In 2008, John McCain won 173 electoral college votes. It is very difficult to imagine any state that voted for McCain in 2008 not supporting the GOP candidate in 2012. So that means the GOP nominee has to swipe 97 votes from the Obama column to win in 2012. Where might they come from?
Read More »
First, some caveats. State head-to-head polling is very iffy this far from the election. For example, President Obama has terrible approval numbers in Kentucky, 39/56 approve/disapprove. McCain beat him there 57.5% to 41.1%. Over the past three presidential elections, Republican have won the state by an average of 17 poitns. Yet in head to head match-ups, Obama currently leads all 2012 GOP candidates. Does anyone really think Obama is going to win Kentucky in 2012?
Thus, I tend to find that approval/disapproval numbers tell us more. Yet they also have their weakness - after all, candidates run against other specifically identifiable candidates. In an election such as we should expect in 2012, much will turn on whether voters see the race as a referendum on Obama, or as a referendum on the Republican nominee's suitability. President Obama will spend over $1 billion to make it the latter, and have tremendous help from the national press corps. Space prohibits me from talking at length about the particulars of each state's electorate, particularly as it may react to the various GOP candidates and the issues at the fore in 2012. I do believe that past election results, however, are quite useful - in states that typically voted Republican before 2008, and voted Republican again in 2010, there is a high probability that 2008 was an aberation. With that said, here we go.
Let's start with likely GOP pick ups.
1. The Census: States won by McCain will have 6 more Electoral College votes in 2012 than they did in 2008. So if we are correct that all 2008 GOP states will hold for the GOP, we have the GOP +6.
2. Nebraska. Nebraska is one of two states (with Maine) that splits its electoral college votes - although that hadn't actually happened until 2008, when McCain won 4 of 5. Obama got one vote by carrying one of Nebraska's three congressional districts. That won't happen this time. GOP +1.
3. Indiana. Indiana politics lean slightly Republican at the state level, but in national races the state has been reliably Republican - at least until 2008, when Obama defeated McCain 49.9 to 48.9. But George W. Bush easily won the state twice, with 56.7% in 2000 and 59.9% in 2004. Before Obama's win, the state hadn't gone Democratic since Lyndon Johnson's 1964 landslide over Barry Goldwater. Obama's approval rating in the state has been hovering around 40%. Outgoing GOP Governor Mitch Daniels is popular and Mike Pence, the likely gubernatorial nominee, and long-time Senator Richard Lugar will be a popular figures on the statewide GOP ticket in 2012. GOP + 11.
4. Virginia. McCain bailed on Virginia fairly early in the 2008 race, and the state went relatively comfortably to Obama, 52.6% to 46.3%. But Bush won the state by 8 points in both 2000 and 2004, and like Indiana, we have to go back to 1964 to find the last pre-Obama Democratic presidential win in the state.
In 2009, Bob McDonald ended 8 years of Democratic rule in the Virginia statehouse by crushing Creigh Deeds by 18 points. Republicans also won 61% of the vote for the state House of Delegates in 2009, increasing their margin by to 59-39 in that Chamber, and swept the statewide offices. In 2010, Republicans picked up 3 congressional seats in the Old Dominion. Democrats took over the State Senate in 2007 but will probably lose control this year. And U.S. Senator Jim Webb will be retiring, depriving the Democrats of a well-regarded incumbent on the statewide ticket in 2012. Governor McDonald remains popular, which should help the GOP in 2012, even though he won't be on the ballot.
The latest polling - by the Democratic firm Public Policy Polling - shows Obama with slightly higher disapproval than approval, but in a statistical tie with Mitt Romney and leading the other GOP candidates. Despite this relatively strong head-to-head polling, when push comes to shove I don't see Obama carrying the state. GOP +13.
This gives the GOP 31 of the 97 votes needed to flip the White House.
Lean GOP Pickup
1. North Carolina. Obama beat McCain by 14,000 votes in 2008, 49.7% to 49.4%. As in Virginia, Public Policy Polling has Obama in a statistical tie with Romney and leading the other Republicans, but his approval/disapproval stands at 46/50%. Bush twice won with 56% of the vote here, and like Indiana and Virginia, North Carolina also voted GOP in both Clinton elections. Before Obama, the Democrats last victory here was Jimmy Carter in 1976. In the 2012 Governor's race, polls show Republican Pat McCrory leading incumbent Democrat Beverly Purdue by 6 to 12 points. Unemployment exceeds 10 percent. This state looks awfully good for a GOP pick up right now. GOP +15.
2. Florida. In contrast to Indiana, Florida has become very Republican at the state level, with the GOP holding better than two to one advantages in both houses of the legislature, but only marginally Republican in presidential races. Obama carried electoral college giant 50.9% to 48.1% in 2008. The state has been very close in each of the last 5 presidentials, with Bush's 5 point victory in 2004 being the closest thing to a blowout. But Obama's numbers have plummeted in recent polls, to 44-51 positive/negative in the latest Quinnipiac Poll, down 9 points since May, and only 42% thought he deserved reelection. That poll also showed him, however, with a narrow lead over Mitt Romney.
If not for the unpopularity of Republican Governor Rick Scott, I would probably put Florida in the "likely GOP" column. One caveat: if Marco Rubio is the Republican VP nominee, as many suspect, then you can definitely move the state to the "Likely GOP" column. GOP +27.
3. Ohio. Ohio is another state where Obama's approval rating is upside down and falling, but where he holds his own in head-to-head polling with GOP candidates. A late July Quinnipiac poll had his favorable/unfavorable at 46/50, with the same 46% saying he deserved re-election (vs. 47% saying he does not). In August, Public Policy Polling had him at 44/52 approval/disapproval. But he leads Romney and Perry narrowly and the others by more in match up polling.
Like many states on this list, the GOP made big pickups in Ohio in 2010. New Governor John Kasich has pushed through public collective bargaining reforms and a serious budget that hits a number of sacred cows of the left, and that has hurt his rankings. But if the reforms work, he'll look pretty good by November 2012. Democratic Senator Sherrod Brown will be on the ballot for re-election, and he also suffers from bad numbers.
Though I've put them all in "lean Republican," Florida and North Carolina look pretty good for the GOP. Ohio is where the really hard work begins. GOP +18.
4. New Hampshire. Obama carried the Granite State by a comfortable 54.1 to 44.5% in 2008, but the GOP struck back with a vengeance in 2010, holding a U.S. Senate seat with surprising ease and picking up both of the state's congressional seats, plus flipping both houses of the state legislature. In fact, the GOP won its largest State House majority since 1984, and its largest Senate majority since 1962. A recent Gallup Poll shows Obama's approval at a mere 40%. Perry might not play well with the state's electorate, and New Hampshire is not the reliably Republican state it was just 20 years ago (the Democrats held the Governor's office in 2010), but it looks ripe for a GOP gain in 2012. GOP +4.
That's 64 electoral votes I think lean Republican, which added to likely pick-ups puts the party within two of the 97 vote pick up it needs.
Several states are strong GOP pick-up opportunities, but at this point I would rate them only as toss-ups:
1. Colorado. Public Policy Polling had Obama at 46% approval in early August, while Gallup puts him at 44%. Independents are 38% approval vs. 56% disapproval.
For a decade, progressive, Democratic activists and funders engaged in a careful, well thought out plan to convert this marginally GOP state into a Democratic bastion, and by the end of 2008, the effort had yielded considerable fruit. Obama carried the state by 9 points, easily the best showing for a Democrat since Lyndon Johnson in 1964, and the Democrats had captured both U.S. Senate seats, a majority of the Congressional delegation, both houses of the state legislature, and most statewide offices.
Republicans and the business community finally began to get organized after the '08 debacle, and in 2010 the GOP narrowly reclaimed the State House (by one seat) while making marginal gains in the State Senate and winning the Secretary of State's office. Republicans also gained a Congressional seat. Yet signs of GOP disarray in the state remained: Don Maes won the state's GOP gubernatorial primary and was such a bad, scandal-ridden candidate that the Party disowned him - Maes finished 3rd in the race. Tea Party favorite Ken Buck won the party's senate nomination but was a somewhat surprisingly weak general election candidate, allowing appointed first term senator Michael Bennett to narrowly hang on.
This is a rare state where the decisive factor in 2012 may be less the President than the state parties. Does 2010 show the GOP getting its act together, or did it just benefit from a great GOP year nationally? Will the progressive Democratic machine hold together after the disappointment of the Obama years? We shall see. Toss Up Votes: + 9.
2. Nevada. Here's another traditional swing state that went to Obama with surprising ease in 2008, 55.2% to 42.7%. Picking up the seven or so points needed to swing the state won't be easy for Republicans. Unions remain strong here, and the state's libertarian voters may not cotton to someone of Rick Perry's open religiousity (although Mitt Romney's Mormon faith may play well in this heavily Mormon state; Senate Majority Leader Harry Reid is a Mormon). But Bush carried the state twice, and Obama was the first Democrat to crack 50% since Lyndon Johnson. Public Policy Polling, the Democratic firm, recently had Obama's approval/disapproval at a horrendous 41/53, with Gallup having a slighly higher 44% approval. Unemployment is 12.9%, highest in the nation. Toss up votes: +6.
3. Iowa. Iowa has gone Democratic in 5 of the last 6 elections, the exception being a very narrow win (49.9% to 49.2%) for Bush in 2004. Obama carried it handily, 53.9 to 44.4%, in '08. Obama looks reasonably safe here. His 49% approval in Gallup is above his national average. Yet is doesn't really feel like a Democratic state. In 2010 the state's voters sacked the state Supreme Court majority, primarily over its holding in favor of same sex marriage. Long-serving incumbent Chuck Grassley pounded out a two to one victory in the U.S. Senate race, the GOP picked up the governorship and the Secretary of State's office, and Republicans won a majority of the state vote for the U.S. House, even though Democrats won three of the 5 seats. Republicans hold a 58-42 edge in the State House, although Democrats hold the Senate 27-23.
Obama is at just 45% approval in Public Policy Polling August poll, yet as in so many other states, he leads his potential GOP opponents in head-to-head match ups. Even Romney trails Obama by 10. There are no other statewide races in Iowa in 2012, so this will be a straight Obama referendum. Toss up Votes: +6.
4. New Mexico. New Mexico is a state where George W. Bush's inroads with Hispanic voters helped him to a narrow win in 2004, after a narrow defeat in 2000 (Gore won the state by 367 votes). The state is basically Democratic at the local level, but Republicans have long been competitive at the presidential level and at times in other upper echelon offices. Obama won easily here in '08, 56.9% to 41.8% (the first Democrat to get 50% since LBJ), as the Republican share of the Hispanic vote plummeted. But the GOP bounced back in 2010 state elections, with Susanna Martinez taking the Governor's office and Republicans gaining 8 seats in the State House. Republicans also picked up a Congressional seat.
Hispanic voters here are more conservative than Hispanic voters nationwide. It will be interesting to see if Marco Rubio, if he is the GOP Vice Presidential nominee, helps the GOP, not just here but in Nevada (which also elected an Hispanic-Republican governor in 2010) and in Colorado, which both have a substantial hispanic voting population. (Rubio, of course, is of Cuban ancestry, whereas most western hispanics are of Mexican or Central American heritage.) And don't think it out of the question that Governor Martinez, or Nevada Governor Brian Sandoval could end up as a surprise pick for the GOP ticket, too. Either would probably pull both states, and perhaps Colorado, too, firmly into the GOP camp.
Gallup has Obama's approval rating here at 46%. Toss up votes: +5.
5. Wisconsin. Obama carried Wisconsin by 56 to 42% in 2008, after very narrow victories for Al Gore in 2000 (47.8 to 47.6%) and John Kerry in 2004 (49.7 to 49.3%). Republicans made enormous gains in 2010, however, retaking the Governorship for the first time in 12 years, taking both houses of the state legislature, and defeating Senator Russ Feingold. Walker's controversial collective bargaining reforms have knocked the GOP's numbers down a peg, but not enough for Democrats to retake the state Senate in the summer's recall elections, or to win an election to the state Supreme Court, despite an enormous investment of time and money in both.
I suspect that by next fall the controversy over Walker won't matter - the bitter-enders would vote for Obama anyway, and independents will be looking at the Presidential race on its own merits in this swing state. With that, note that Obama has a relatively healthy 50% approval rating in Wisconsin (per Gallup), a less enticing 45/51 approval/disapproval from Public Policy Polling. But PPP also has him leading all of the GOP candidates, Romney narrowly, the others by double digits. Toss up - 10 votes.
That's 36 toss up votes.
1. Pennsylvania. The Republicans have made major efforts here for each of the last several presidential campaigns, only to come up short, sometimes by considerable margins. Obama carried the state 54.5% to 44.2%; Kerry by 50.9% to 48.4%; Gore by 50.6% to 46.4%. Bill Clinton carried the state by nine points in each of his races.
So, can the GOP really turn Pennsylvania in 2012? Well, let's see: a Quinnipiac poll in early August had Obama's approval at an upside down 43/54, with a "deserves reelection" number at 42%. A Muhlenberg College poll late in the month delivered worse news for the President: a 35% approval rating, one of his worst in the country - what you'd expect to see in Alabama or some such deep red place. And while Democrats have a huge registration advantage in Pennsylvania, they tend to be culturally conservative voters. Republicans hold a comfortable majority in the state senate and regained control of the state house and the governor's office in 2010. But so far Republicans have not come up with a top challenger to Democratic Senator Robert Casey, Jr., who ought to be vulnerable, so that help Democrats a bit.
I'm sorely tempted to put Pennsylvania into at least the "toss-up" camp, if not the "lean GOP" camp; but the GOP's poor history in presidential races in the Keystone state lead me to keep it in the lean Obama column. Potential +20.
2. Oregon. Oregon? Oregon hasn't gone Republican since the Reagan landslide of 1984. Obama carried it by 16 points. But Republicans should be expected to make a charge here. The state is not hopeless for the Grand Old Party - the State House is deadlocked 30-30 and the State Senate is just 16-14 Democrat. Democrats have won the last three gubernatorial races without reaching 51% of the vote. Outside of progressive Portland, the capital of Salem, and the College town of Eugene, the state leans Republican, and much of the eastern state is as deep a red as any place in Idaho or Utah. PPP has Obama at 49% approval, but Gallup gives Obama just a 44% approval score. A July poll from Survey USA mirrored Gallup, with a 44/53 approval/disapproval. Oregon has a 9.5% unemployment rate.
Can Republicans win Oregon in 2012? Hell, yes. Potential + 7.
3. Michigan. Think of Michigan as a slightly smaller Pennsylvania. As in Pennsylvania, many registered Democrats are quite conservative culturally. As in Pennsylvania, Democrats have won the last 5 presidential elections here. As in Pennsylvania, the GOP has put a lot into Michigan in the last several presidential elections, but in the end the Democrats always win, often going away. Obama won here 57.3% to 40.9%. Obama's approval has also held up pretty well here, at 50% per Gallup.
But maybe Michiganders are fed up. Republicans made huge gains in 2010 to capture both houses of the state legislature, and won the Governor's office in an 18 point blowout after eight years of the glamorous but utterly incompentent Jennifer Granholm - which may remind people of the President. Then there is the 10.9% unemployment. And while the Romney name isn't magic in Michigan - since the popular George Romney left office in 1969, Ronna Romney, Lenore Romney, and Scott Romney have all lost bids for statewide office - if Mitt Romney is the nominee, you have to think there will be more than a little nostalgia for the golden age when Mitt's father was Governor.
4. Maine. Like Nebraska, Maine awards individual electoral votes for winning congressional districts. The GOP made huge gains in Maine in 2010 (see below) and could well take the electoral college vote for the First Congressional District, even while losing the state. Potential: +1
Total Lean Democrat: 44.
1. Maine: Obama '08, 57.7%; Approval 50% (Gallup); Unemployment 7.7%; Republicans gained 23 house and 6 senate seats in 2010 to take control of state legislature; won governship. As noted, Maine splits its electoral votes. If the Republican candidate wins the entire state, that would 3 more votes, in addition to the one credited above. Potential +3.
2. Minnesota: Obama '08, 54.1%; Approval 52% (Gallup); Unemployment 7.2%. Republicans gained 25 house and 16 senate seats to take state legislature in 2010.
3. Washington: Obama '08, 57.3%; Approval 50% (Gallup), 47/50% (SUSA); Unemployment 9.3%; marginal GOP gains in 2010.
4. New Jersey: Obama '08, 57.1%; Approval 54% (Gallup). Only if Chris Christie is on the ticket, or the bottom falls out for Obama, could New Jersey be in play.
Is there any state where Obama might make a gain? I've assumed not, but if I were to pick one, it might be Arizona, with it's burgeoning Hispanic population. McCain carried his home state with just 53.4%; Republican legislative gains were unimpressive in 2010; and for all the fuss about immigration, Arizona's unemployment is high but not out of control compared to the rest of the country- 9.4%. Obama's Gallup approval number is 44% in Arizona.
In this analysis, I've assumed here that the Republican candidate will be reasonably traditional - probably Romney or Perry. With a Palin, Paul, or Bachmann candidacy, for example, we'd almost have to say all bets off (which is not to say those three, or others, can't or shouldn't win, just that their nominations would seem to totally scramble traditional thinking about how the election might go).
So, if we exclude Arizona and the four "likely Obama" states, we can figure that the Republican nominee - assuming reasonable competence - begins with 179 electoral votes: the 173 won by McCain, plus the 6 votes those states have gained as a result of the census. From there he or she will need another 91, from a potential pool of 169 possible. Or to put it another way, he or she will need to carry those by 91-78 or better. Is that doable? At this point, I'd say it is more likely than not.
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Idealism and Nihilism
Quoth P. J. O'Rourke: " The sensitive plant of idealism never grows without the nihilistic twining vine."
More excerpts from this sobering essay:
The mass murder of September 11, 2001, was an act of idealism. It was idealism in the worst sense, but is there another sense that can be given to what we commonly call idealism? The concept that mankind and society could and should be perfected depends, for its moral value, on the definition of perfect, and every definition of human perfectibility is evil. Ideals are not to be confused with principles, with the Golden Rule or the Ten Commandments. Idealism means that ideas are more important than people, which ordering of priorities means that people die.
Zealots have always existed. Sometimes they’ve done real damage, [...b]ut, historically, the threat of a utopia was held in check by simple lack of power to effect one.
Then came the rise of the great nation-states, great examples of how—with taxes, legal structures, and bureaucratic organization—power could be expanded to shape life. This coincided with the Enlightenment and its many ideas, too many of which seemed applicable to life-shaping. Maybe the thing could be done. Wispy thoughts about what might be ideal turned into hardened idealism as we know it. [...]
After the Terror, “idealist” should have become an epithet, but it didn’t. It’s a compliment for us to pay to our politicians, for teachers to pay to our children, for me to pay to myself when others aren’t seeking their own perfection as perfectly as I am.
The sensitive plant of idealism never grows without the nihilistic twining vine. Everything must be scratched to start from scratch. To begin time anew, clean the clock. It’s appropriate that the poetic political leveler Shelley had a wife, Mary Shelley, who wrote Frankenstein, a better prediction than Marx made about what the “New Man” does when re-creation of humanity is undertaken.
Nihilism and the ideals that feed it are as persistent as the sins they claim to excise. I was shaken out of my own 1960s idealism when the Weather Underground faction of the SDS turned to nihilism with an unpleasant self-righteous ease. On March 6, 1970, while trying to make bombs, they blew up a townhouse on West 11th Street in Greenwich Village, around the corner from where I’d been staying with my cousin. Three of them got killed. I got a haircut.
Posted by Wilson Mixon at 11:19 AM
September 03, 2011
Below is a short letter published in The Cap Times ("Your Progressive Voice" for Madison, WI):
Posted by E. Frank Stephenson at 10:01 AM
Local readers mark your calendars--Skip Sauer of Clemson will be giving a talk on Moneyball at Berry on Sept. 22. (I also expect to host Larry Reed for a talk later this semester--stay tuned for details.) Meanwhile, here's the trailer for the Moneyball movie that will be released on Sept. 23.
Posted by E. Frank Stephenson at 09:51 AM
September 02, 2011
Gary Becker on market vs. government failure
In my read of Gary Becker, he gets it 90% right 95% of the time. In today's Wall Street Journal, he ups his average, and he does it by forgetting he ever argued that interest group pressures cancel each other out to achieve democratic efficiency. Nicely representing the comparative institutional approach:
The traditional case for private competitive markets goes back to Adam Smith (and even earlier writers). It is mainly based on abundant evidence that most of the time competitive markets work quite well, usually much better than government alternatives. The main reason is not that individuals in the private sector are intrinsically better than government bureaucrats and politicians, but rather that competitive pressures discipline market behavior much more effectively than government actions.
Capes for the Unemployed
This one still leaves me slackjawed even though it's about 4 months old. Previous post here; thanks to Pete C for the vid pointer.
Posted by E. Frank Stephenson at 11:34 AM
White House-Backed Solar Energy Company Collapses*
*That's the title of this story on ABC.
Posted by E. Frank Stephenson at 08:48 AM
September 01, 2011
QOTD: grocery store crisis
From McKenzie and Lee, Microeconomics for MBAs:
Without question, if the grocery industry were operated over the past decades the way the healthcare industry has operated, then the nation would likely have a "crisis" in the grocery business. The reason is simple: People would pay a fixed sum each month (their grocery premium) through their employer that would entitle them to virtually unlimited access to the grocery store shelves (after they have covered the $200 annual deductible) at a small fraction of the actual cost. Under such an arrangement, we should not be surprised if people consumed significantly more and better food, some of which would have limited value. We should also not be surprised if the shoppers' grocery price premiums went through the roof as few consumers would have much incentive to moderate their purchases by considering the full cost of the food they are buying.
The statesman who should attempt to direct private people in what manner they ought to employ their capitals would not only load himself with a most unnecessary attention, but assume an authority which could safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it. -Adam Smith
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