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Obama Takes Commanding Lead

Prediction markets like the Iowa Electronic Markets and InTrade allow people to place bets on election outcomes. They are far from perfect, but have been better at predicting election results than polls have been since their introduction.

We gather national polls for the 1988 through 2004 U.S. Presidential elections and ask whether either the poll or a contemporaneous Iowa Electronic Markets vote-share market prediction is closer to the eventual outcome for the two-major-party vote split. We compare market predictions to 964 polls over the five Presidential elections since 1988. The market is closer to the eventual outcome 74% of the time. Further, the market significantly outperforms the polls in every election when forecasting more than 100 days in advance.

According to both, Obama now has the biggest lead since the 2012 Presidential Election began trading. InTrade now puts the odds of an Obama re-election at just over 75%.
The Iowa Electronic Markets put Obama’s odds slightly higher at just under 80%.

Most Of The 47% Come From Red States

In yet another case of irony, Romney is likely to win most of the “freeloader” states, while Obama is likely to win most of the “contributor” states.

Arctic Ice Cover Sets New Record Low

With the presidential campaign and middle east turmoil grabbing all the headlines, Climate Change hasn’t gotten much coverage lately. But it’s still happening.

Following the new record low recorded on August 26, Arctic sea ice extent continued to drop and is now below 4.00 million square kilometers (1.54 million square miles). Compared to September conditions in the 1980s and 1990s, this represents a 45% reduction in the area of the Arctic covered by sea ice. At least one more week likely remains in the melt season.

This is the graph for August. The new one in September will need a new scale since the ice extent has fallen below 4.

Conservatives Jumping GOP Ship

Jon Huntsman:

“I will not be attending this year’s convention, nor any Republican convention in the future, until the party focuses on a bigger, bolder, more confident future for the United States – a future based on problem solving, inclusiveness, and a willingness to address the trust deficit, which is every bit as corrosive as our fiscal and economic deficits,”

Former Governor Charlie Crist:

As America prepares to pick our president for the next four years — and as Florida prepares once again to play a decisive role — I’m confident that President Barack Obama is the right leader for our state and the nation. I applaud and share his vision of a future built by a strong and confident middle class in an economy that gives us the opportunity to reap prosperity through hard work and personal responsibility. It is a vision of the future proven right by our history.

Even the conservative Economist magazine won’t endorse Romney:

Behind all this sits the worrying idea of a man who does not really know his own mind. America won’t vote for that man; nor would this newspaper.

Et tu Fox News?!

On the other hand, to anyone paying the slightest bit of attention to facts, Ryan’s speech was an apparent attempt to set the world record for the greatest number of blatant lies and misrepresentations slipped into a single political speech. On this measure, while it was  Romney who ran the Olympics, Ryan earned the gold.

And finally, here is great commentary on Mitt Romney’s speech titled, “The Huge Lie”, by Andrew Sullivan:

We are testing a hypothesis. Can a campaign be based on lies that are premised on a deeper invention of the past – and still win? Has Ailes successfully created a new reality? We will find out. But what is at stake is the very empirical basis of our democratic debate. Are we about to live in a post-truth world? Is the Republican belief-system about to replace reality?

Public Sector Unions, Problem Or Scapegoat?

It’s a fact that union employees earn more than non-union employees. It’s also a fact that union membership rates are higher in the public sector than in the private sector. Conventional wisdom concludes that union employees – and, therefore, public sector workers – are overpaid. (In a future post, I will make the case that the opposite is more likely true – non-union workers are actually underpaid).

A popular idea coming from the GOP is that unions are one of the major problems with today’s economy and a significant contributor to government deficits. Mitt Romney’s Plan for a Stronger Middle Class includes “Protect workers and businesses from strong-arm union tactics” as one of his twenty bullet points. (I assume Mr. Romney is speaking of public sector unions, since private sector union membership has declined dramatically since 1980, while public sector union membership has held steady at about 37%). And a new conservative book, The New Leviathan: The State Versus the Individual in the 21st Century, even includes a chapter by Daniel DiSalvo titled, “Government Unions and the Bankrupting of America”.

But are public sector unions really a problem, or are they just a scapegoat? Are they a significant contributor to our large federal budget deficits? According to a recent study by the CBO:

In fiscal year 2011, the government spent roughly $200 billion to compensate federal civilian employees— about $80 billion for civilian personnel working in the Department of Defense or on defense-related activities in other departments, and about $120 billion for non-defense personnel…

Overall, the federal government paid 16 percent more in total compensation than it would have if average compensation had been comparable with that in the private sector, after accounting for certain observable characteristics of workers.

According to this CBO analysis, 2011 federal government compensation would have been $27.6B lower if public sector compensation was the same as the private sector. Considering the total federal budget for 2011 was $3.63T, this works out to 0.76%. It seems pretty ridiculous to suggest that 0.76% of the federal budget can cause the “Bankrupting of America”.

Now that we’ve quantified the fiscal effect of public sector unions, we can rephrase the initial question posed by this post: 0.76%, Problem or Scapegoat? The answer is pretty obvious.

Voter Suppression – American Style

Even though there is no widespread voter fraud in the US, and in-person voting fraud is almost non-existent, several states have passed laws requiring photo ID at the polls. The latest state to attempt legislation is Pennsylvania – a key battleground state in this year’s election.

According to a recent estimate from the Pennsylvania DOT, 9% of registered voters don’t currently possess a valid driver’s license. Voters most likely not to have a driver’s license are African-Americans, Hispanics, the elderly and the young. So why would Pennsylvania be trying to pass a law which could disenfranchise 9% of voters – the majority of whom lean democratic – in order to solve a non-existant problem? I’ll let Pennsylvania House Republican Mike Turzai explain, in his own words:

 “Voter ID, which is gonna allow Governor Romney to win the state of Pennsylvania…. done!”

No doubt the applause which follows this statement comes from lovers of freedom and liberty…

The Middle Class – The True Job Creators

Paul Ryan, Fiscal Conservative?

Paul Ryan is the poster boy for small government, tea party republicans. The most likely reason he was chosen as Romney’s VP is to shore up support among that group. Looking at his voting record in congress, however, it appears he has been anything but fiscally conservative.

In June, I broke down, by administration, tax and spending policies enacted between 2001 and 2011 which added to the national debt. $5.7T was added to the debt by policies enacted under George W Bush. Paul Ryan voted for all of them – including the Medicare Prescription Drug bill, the Bush Stimulus Plan and TARP. In the first two years of the Obama administration, enacted policies added $1.4T to the debt. Paul Ryan voted for the Tax Act of 2010, but against Obama’s Stimulus Plan.

All told, there was about $7.1T added to the national debt by policies enacted between 2001 and 2011. Paul Ryan voted for approximately $6.1T of that total.

After so many decades of tax cuts and spending hikes, how is it that the GOP can still successfully perpetuate the myth that they are fiscally conservative? In fact, almost all of our current debt is courtesy of Reagan and the Bushes.

The recent spike in the debt is mostly from a decrease in tax revenues due to the recession. As mentioned in a previous post, Obama’s spending increases have been even less than Clinton’s, at 3.1% on a annualized basis. For true fiscal conservatives, the choice is clear. Vote for the Democrats.

Bush/Romney Economic Advisor Claims Stimulus Helps

From 2003 to 2005, N. Gregory Mankiw was chairman of the Council of Economic Advisers under President George W. Bush. In 2006, he became an economic adviser to Mitt Romney and continued during Romney’s presidential campaign in 2012. According to him, 90% of economists agree that cutting taxes and/or increasing government expenditures has a significant stimulative impact on a less than fully employed economy. In other words, Obama’s stimulus plan helped the economy significantly. See #4 below:

The recent debate over the stimulus bill has lead some observers to think that economists are hopelessly divided on issues of public policy. That is true regarding business cycle theory and, specifically, the virtues or defects of Keynesian economics. But it is not true more broadly.

My favorite textbook covers business cycle theory toward the end of the book (the last four chapters) precisely because that theory is controversial. I believe it is better to introduce students to economics with topics about which there is more of a professional consensus. In chapter two of the book, I include a table of propositions to which most economists subscribe, based on various polls of the profession. Here is the list, together with the percentage of economists who agree:

  1. A ceiling on rents reduces the quantity and quality of housing available. (93%)
  2. Tariffs and import quotas usually reduce general economic welfare. (93%)
  3. Flexible and floating exchange rates offer an effective international monetary arrangement. (90%)
  4. Fiscal policy (e.g., tax cut and/or government expenditure increase) has a significant stimulative impact on a less than fully employed economy. (90%)
  5. The United States should not restrict employers from outsourcing work to foreign countries. (90%)
  6. The United States should eliminate agricultural subsidies. (85%)
  7. Local and state governments should eliminate subsidies to professional sports franchises. (85%)
  8. If the federal budget is to be balanced, it should be done over the business cycle rather than yearly. (85%)
  9. The gap between Social Security funds and expenditures will become unsustainably large within the next fifty years if current policies remain unchanged. (85%)
  10. Cash payments increase the welfare of recipients to a greater degree than do transfers-in-kind of equal cash value. (84%)
  11. A large federal budget deficit has an adverse effect on the economy. (83%)
  12. A minimum wage increases unemployment among young and unskilled workers. (79%)
  13. The government should restructure the welfare system along the lines of a “negative income tax.” (79%)
  14. Effluent taxes and marketable pollution permits represent a better approach to pollution control than imposition of pollution ceilings. (78%)

Coulter Admits Fox Works For Romney

It’s pretty obvious to anyone paying attention that Fox News is a propaganda tool of the GOP. A few days ago on Sean Hannity’s show – during another one of her rants – Ann Coulter lets the cat out of the bag.

Conservative pundit Ann Coulter labeled Mitt Romney spokeswoman Andrea Saul a “moron” and said she should be fired for using Massachusetts’ healthcare law to defend the Republican presidential candidate against a super PAC ad.

Saul made her comments in response to an ad by pro-Obama super PAC Priorities USA featuring a steelworker who lost his job when Bain Capital closed the steel mill where he worked. The man, Joe Soptic, said his wife died because they had no health insurance.

Saul said on Fox News that if the Soptics had lived in Massachusetts, they wouldn’t have lost their health insurance.

“To that point, if people had been in Massachusetts, under Gov. Romney’s healthcare plan, they would have had healthcare,” Saul said Tuesday.

Coulter called the ad “despicable,” but said Saul should get the ax for bringing up a taboo subject instead of pointing out what she said were flaws in the man’s story.

“Anyone who donates to Mitt Romney, and I mean the big donors, ought to say if Andrea Saul isn’t fired and off the campaign tomorrow, they are not giving another dime, because it is not worth fighting for this man if this is the kind of spokesman he has,” Coulter told Sean Hannity on Fox News Wednesday night.

There’s no point in you doing your show, there’s no point in going to the convention and pushing for this man if he’s employing morons like this,” Coulter said. “This ad is the turning point and she has nearly snatched victory from the jaws of defeat! She should be off the campaign.”

An interesting admission. No point in Sean Hannity doing his show, if “morons” like Saul are going to undo all their hard work for the Republican nominee?