Sweet sorrow and all that… but allow me dwell on happier sentiments. I’d like to thank Doug once again for lending me the keys to this big, rumbling, cantankerous, and unstoppable truck of a blog. I’ve been a loyal Balloon Juice reader for at least four years now, so blogging hereabouts for the past two …
Elias Isquith
Milton vs. Mitt
This post is in: Politics, Republican Stupidity
If it’s within 72 hours since the latest job report, that means it’s time for centrist and left-of-center commentators to excoriate the Fed for its continued refusal to do a damn thing about the tepid recovery. And so it is! Mr. Yglesias (you guys ever heard of him?) has been banging on this particular drum …
Milton vs. MittPost + Comments (51)
On one team are the leaders of the Federal Reserve, the European Central Bank, the Bank of Japan, and the Bank of England. Alongside them are the political leaders of the United States, Germany, Japan, and England along with the main opposition parties in all of those countries. The Bank of International Settlements wants tighter money. Every few months Brazilian politicians pop up to complain about “currency wars.” And then on the other side you have … a handful of economics bloggers.
Overcrowded though the tight money bandwagon may be, they’ll have to make room for one more.
Two years late and from stage far, far right, here comes the one politician in America who makes Barack Obama look like a restless spirit of impulsive outbursts of emotion; the current, former, future and alleged CEO of Bain Capital, Willard Mitt Romney!
Mitt Romney says the Federal Reserve shouldn’t use new stimulus measures to boost the still-sluggish economy.
The Republican presidential hopeful says he doesn’t think another round of stimulus would help the economy, arguing that previous measures didn’t work.
Romney tells CNN’s “State of the Union” in an interview scheduled to air Sunday morning that business incentives are preferable to more government intervention.
Business incentives are indeed preferable to more government intervention, much in the same way that cake is preferable to death. It’s a less than enlightening dichotomy the (presumptive) Republican nominee is employing in defense of his chosen policy. Maybe Romney misrepresents the nature of the Fed’s decision because his current position is so radical, it wasn’t until mid-January of 2009 that it ceased to be exclusive property of the rightwing fringe. Perhaps Romney’s gone a little scatterbrained from the cognitive dissonance of being a self-described “severe conservative” while at the same time rejecting the most significant work of Milton Friedman, one of movement conservatism’s patron saints.
It was none other than Reagan’s favorite economist who argued that central bankers should never consider themselves out of options, even if they’ve lowered the interest rate (their preferred means of influencing the economy) to zero. Engaging in an after-speech Q&A session at the Bank of Canada, in the year 2000, Friedman had this to say about Japanese monetary policy:
As far as Japan is concerned, the situation… shows how unreliable interest rates can be as an indicator of appropriate monetary policy.
During the 1970s, [Japan] had the bubble period. Monetary growth was very high. There was a so-called speculative bubble in the stock market. In 1989, the Bank of Japan stepped on the brakes very hard and brought money supply down to negative rates for a while. The stock market broke. The economy went into a recession, and it’s been in a state of quasi recession ever since. Monetary growth has been too low. Now, the Bank of Japan’s argument is, “Oh well, we’ve got the interest rate down to zero; what more can we do?”
It’s very simple. They can buy long-term government securities, and they can keep buying them and providing high-powered money until the high powered money starts getting the economy in an expansion. What Japan needs is a more expansive domestic monetary policy.
The Japanese bank has supposedly had, until very recently, a zero interest rate policy. Yet that zero interest rate policy was evidence of an extremely tight monetary policy. Essentially, you had deflation. The real interest rate was positive; it was not negative. What you needed in Japan was more liquidity.
Friedman died in 2006, so we’ll never know what his advice to Ben Bernanke and Barack Obama would have been. But judging from these recent comments and, more importantly, his groundbreaking work on the Federal Reserve and the Great Depression, it’s hardly outlandish to claim Friedman, were he alive today, would read much like Yglesias (just with fewer typos). Cato’s Timothy Lee certainly thinks so. Not to put too fine a point on it, but here’s where Romney stands: To the far right of Milton Friedman and Cato. At least he hasn’t yet threatened bodily harm.
[x-posted]
Why The Presidential Election May Not Be As Close As You Think
by Elias Isquith| 124 Comments
This post is in: Election 2012, Media, Politics
Relying heavily on Nate Silver’s indispensable blog at the New York Times, Michael Tomasky sticks his neck out just a bit to argue this year’s election may not turn out as close as most expect: There’s a secret lurking behind everything you’re reading about the upcoming election, a secret that all political insiders know—or should—but few …
Why The Presidential Election May Not Be As Close As You ThinkPost + Comments (124)
The aggregate poll shown above helps illustrate how competitive the race has been, at least since June of last year. What it doesn’t quite show, however, is the consistency that’s defined the polling thus far. Jigger with the outlay a little bit, and the Obama-Romney contest begins looking a bit more predictable. Below, I’ve changed the vote range (Y axis) from the above’s 35-55 to a simpler 0-100. The already minimal variation seen in the poll above becomes even further reduced.
We’re talking horserace right now, so forgive me the sports metaphor; but what the above reminds me most of is a basketball game that looks a little closer on the scoreboard than it does on the court. Let’s say it’s the Celtics and the Heat playing each other — but while the Celtics never trail the Heat by more than five points, they never grab the lead for themselves either. At a certain point, they’re running themselves ragged just to lose by a little.
But that’s just the popular vote; and any Democratic voter can tell you that it’s the Electoral College that counts. Yet even by that once cruelly discordant metric, things are looking rosy for the President. Relying on Silver’s model again, the chance of Obama’s winning the 270 Electoral College votes necessary for reelection is an arresting 71 percent. And that’s nearly four points better than was the case a week ago. Looking at the trend lines, you see a slight but discernible tendency: The more voters see of Romney, the less likely becomes his winning the Presidency.
I’d be remiss if I didn’t sprinkle in the necessary caveats right now: Two months is a long time in politics; something could happen that, like the financial crash of late-2008, is unforeseen and dynamic-shifting. (There’s always the Whitey Tape!) November 6 is hardly a fait accompli. But the less-than-ideal scenarios under which Obama still wins the White House are multiple. Noted by Tomasky, but little remarked upon elsewhere thus far, the President could prevail despite losing nearly all of the high-profile swing-states:
[S]omething to keep in mind for election night: Whatever Obama’s number is at 10 pm Eastern, add [California, Oregon, Washington, and Hawaii’s] 78 EV’s—they’re a mortal lock, and a hefty insurance policy. If he wins Nevada (6) and Colorado (9), it’s over.In other words, Obama can lose the big Eastern four—Ohio, Virginia, North Carolina, and Florida: all of ’em!—and still be reelected.
There are no guarantees, and if American politics went according to plan, we wouldn’t be talking about Barack Hussein Obama II being on the cusp of securing a second full term as the President. But next time media coverage of the election has you lock-jawed and white-knuckled, keep this in mind: Coming out of what should’ve been the easiest months for Romney-as-challenger, when Republicans coalesced around his candidacy and voters gave the (relative) new guy the benefit of the doubt, the GOP’s presumptive nominee still has a less than four-in-10 chance of ending the Obama era.
[x-posted]