Professor Mark J. Perry's Blog for Economics and Finance
Dr. Mark J. Perry is a professor of economics and finance in the School of Management at the Flint campus of the University of Michigan. Perry holds two graduate degrees in economics (M.A. and Ph.D.) from George Mason University near Washington, D.C. In addition, he holds an MBA degree in finance from the Curtis L. Carlson School of Management at the University of Minnesota. In addition to a faculty appointment at the University of Michigan-Flint, Perry is also a visiting scholar at The American Enterprise Institute in Washington, D.C.
119 Comments:
While your post is not good news, the declining trend of the contract is.
Them's pretty normal odds for an incumbent president at this point in the election cycle.
Last I checked, Intrade also predicted the legislative branch will go heavily to the Republicans.
Given that Romney is a big government Republican - an Obama with an "R" instead of a "D" emblazoned on his puffed up chest - I'm almost happier to see Obama win (though I detest that idiot more than I could ever express in words in any language).
I fear that if Romney wins, we'll have a spend and spend situation not unlike the one during the Bush years and the press will blame the inevitable bad outcomes on free markets again - and all because of the "R".
With a Republican congress and Democrat president, the odds that they'll lock horns and remain gridlocked most of the time increase. The more gridlocked they are, the less harm they can do.
methinks is right; a goldman paper last week stated the most fiscally conservative outcome over the long term would be the current status quo
http://news.firedoglake.com/2012/04/09/goldman-sachs-most-fiscally-conservative-combo-would-be-obama-gop-house/
The Dems (specifically, Barney Frank) have started to turn on him over the Health Care Initiative. If the Supreme Court overturns the law, expect a major Dem turn on him & the InTrade #s to go decidedly against him.
A split government as we had after 1994 will probably be more fiscally conservative. But that's no reason to favor an Obama victory. A reelected Obama will appoint federal judges, including Supreme Court justices. Obama can prevent reform of EPA and other controlling federal agencies. Our Congress and our Courts have allowed the federal Executive branch to have way too much power. Unless Republicans get 60 senators, I don't see anything changing if Obama stays in office.
Good point, Jet Beagle. I didn't think it through far enough.
BTW, on my behalf, George White posted via his facebook account a response to your questions about speculators at Cafe Hayek. I can't see the response, but George (as the commenter) can. There seems to be a glitch where some comments fail to appear in the new system at Cafe Hayek. Yesterday, Don Boudreaux also posted something I sent him in the comments and it also didn't show up - although Don could see it when he accessed the blog.
Anyway, if you care, I still have the email I sent to George in response to your Cafe Hayek post.
methinks, I got your message through George. Good points. Airline industry, though, is pushing feds to regulate speculators. United and Southwest CEO's, along with airline industry lobyists, have been blaming speculators for high jet fuel prices. I've been having debates about this with my airline's fuel VP.
In the for, 'what its worth' section consider the polling disection done by Toby Harden of the UK Daily Mail: Barack Obama's re-election bid is already in deep trouble
19 April 2012 11:06 PM
Its an interesting read...
Intrade speculators seem to do no more than follow the polls that they read. Its really not an indication of the real market as buying an ipad would be. So it doesn't have predictive value, its a coincident indicator, nothing more.
What a sad commentary on America that this dog-eating disaster of a President could be leading in the polls against anyone after 3 years of Hopeandchange. I guess we'll find out in November if the freeloader content of the American public has tipped the balance.
This may be right.
When the evangelicals figure out that Romney contends Jesus Christ walked around the American West and was a prelude to Joseph Smith, they may decide to stay home, or even vote for Obama, a declared born-again.
Watch for a few "Come to Jesus" moments from Obama on the campaign trial.
Obama also can note he did get Osama, something no GOP'er even got close to.
On this blog, we are obsessed with economic issues. But the swing vote may have other items in mind.
Intrade had the D's keeping the House in 2010 at 56% only 5 months until the election.
We all know how that played out.
Intrade had the D's keeping the House in 2010 at 56% only 5 months until the election.
We all know how that played out.
Jet Beagle,
That is disappointing. My experience is with small independent oil and gas producers who all had hedging operations and some of them also speculated as well. From what I observed, these guys were fairly savvy and I am almost certain (at least I fervently hope) that the traders employed by airlines to actually execute their hedges are also more savvy.
There's a disappointing number of people who don't understand the benefits of liquidity until they are gone. And even then, most rarely connect worsening market conditions to evaporating liquidity.
Good luck in your debate. I'm guessing you're not getting very far, but I hope I'm wrong.
Paul,
That Hopey Changey is leading in the polls could be more a reflection of how voters feels about Romney than how much voters like Barry.
"..or even vote for Obama, a declared born-again."
A born-again what? Black Liberation Theologist? You think Reverend Wright's church is a plus for the evangelical vote?
p.s. you're an idiot.
Methinks,
Yeah, that's true, I'm not a big Romney fan either. That said, we've had 3 yrs of this nimrod's gargantuan government and war on capitalism. How could anyone think Romney could be worse?
"The book of 3 Nephi is of particular importance within the Book of Mormon because it contains an account of a visit by Jesus from heaven to the Americas sometime after his resurrection and ascension. The text says that during this American visit, he repeated much of the same doctrine and instruction given in the Gospels of the Bible and he established an enlightened, peaceful society which endured for several generations, but which eventually broke into warring factions again."
--30--
Romney is very devout, and no doubt subscribes to the above passage.
I am not sure how that will sit with USA evangelicals, who can count Obama among their converts.
This is will be fascinating issue during the race.
Look for Obama to tout his religion, perhaps even GOP-style, during the election.
Sheesh, for that matter, if Romney thought it would help him win, he would probably renounce Mormonism.
You get what you pay for.
"Intrade Speculators Predict Obama Re-Election"
Speculators are ruining this market. :>)
Sheesh, for that matter, if Romney thought it would help him win, he would probably renounce Mormonism.
I don't necessarily see that as a bad thing. I wish that...what does Paul call him?... your boyfriend had helped himself by renouncing Obamacare the way Bill renounced Hillarycare in '94.
Obama is a politician. Anyone think Romney is not?
:-)
hopey changey? I can't wait for Romney's shtick.
Romney said something the other day about getting rid of the mortgage deduction on 2nd homes.
I think he's on the right track but I got a feeling it won't win him votes....with the well off, eh?
The election will be all about who can get their base out and who can win over the independents.
I think Obama's base will come out stronger than the Conservative base but the independents may well lean towards Romney.
Romney almost has to run the table to win though.... right?
"Speculators are ruining this market."
Ha Ha! That's pretty good, Buddy.
Not that it matters, using Obama's logic, even if the speculators bet wrong, somehow they still win (?)....
On this blog, we are obsessed with economic issues. But the swing vote may have other items in mind.
Right. Most voters, are hopelessly stupid. I had not realized the extent of this, until now. When you see highly educated people, in real life, say things like "the rich"...you start to wonder about whether "democracy" truly is desirable.
That being said, I think Romney winning the GOP primary is NOT a good thing.
It's not because whether he wins or looses, the results will be that the average Neanderthal voter will equate his inevitable "failure" to reign in government, or to "grow" the economy, as evidence of failure of "conservative economic trickle down policies".
If he fails to win the election, the American Taliban (Rick, Sarah, and the rest of the social conservatives) will view this as evidence that THEIR version of "conservatism" is the right choice for the GOP, and their wing will become more powerful.
If he wins, he will fail (of course), and the independent vote will swing back to the Dems for 2016.
The best outcome, i think, would have been if Rick Santorum had won the GOP primary. Santorum is so ape-s**t crazy, that he would certainly have lost the election. he would have crystallized the differences between the "libertarian" wing of the GOP, and the Taliban wing of the GOP. Hopefully, this conflict within the GOP would have led to the Taliban breaking off and forming their own Hezbollah (Party of God), and the rest of the GOP becoming more libertarian, and more along the lines of what it once was. In 2016, they could count on more independents, that today stay away from the GOP simply because of the Taliban, and certainly won the presidency.
Meanwhile, the GOP will win the legislative branch anyway, so whomever was the GOP candidate would not have mattered.
--------
The real battle in this country is not between the Left and Right, Dems or GOP. While that is a battle, that is a battle that WILL solve itself...The money will run out one day, and even the Dems will change their tune once the money runs out. Running out of money doesn't change the nature of a people. it just teaches them a good lesson, that need to be learned over and over.
The real battle, is between the culture warriors. If the American Taliban achieve their goal of fundamentally changing American culture from an individualistic one, to a collective one (and that is what Rick wants, have no doubt about it), then there will be nothing that can be done for this country. That will be the end of America.
Obama is a politician. Anyone think Romney is not?
:-)
hopey changey? I can't wait for Romney's shtick.
Romney said something the other day about getting rid of the mortgage deduction on 2nd homes.
I think he's on the right track but I got a feeling it won't win him votes....with the well off, eh?
The election will be all about who can get their base out and who can win over the independents.
I think Obama's base will come out stronger than the Conservative base but the independents may well lean towards Romney.
Romney almost has to run the table to win though.... right?
I agree with you completely, Larry. Mitt is facing an uphill battle. I think Obama is a better rabble rouser (I don't mean that in a derogatory manner) than Mitt and will be riding the wave of a (mildly) improving economy.
Mitt, however, will have high gas prices and high unemployment going for him, as well as many pissed off independents.
These next 6 months will be crucial.
we ALREADY have Social Security, Medicare, MedicAid, EMTALA, SNAP, etc and have for many years.
right?
why are we NOW portraying this as a struggle between independent, self reliance and collectivism?
Every other country in the industrialized world is more collective than us, right?
so..now we say that we have what, gone too far and in danger of becoming like Europe (and Japan, Australia, etc) and must "roll back" these entitlements so that we move away from collectivism?
why are we NOW portraying this as a struggle between independent, self reliance and collectivism?
Because, apparently, you only now started paying attention and because it is now obvious that they're all bankrupt.
Every other country in the industrialized world is more collective than us, right?
I stopped and asked an angry, rioting Greek in the midst of throwing Molotov cocktails at the police along with a Spaniard, who, like 25% of his countrymen was unemployed and they both said "yes". So, we have a lot of catching up to do before we lower our standard of living to the average Frenchman's - whose income is comparable with the average Louisianan (the poorest state in the USA).
Eventually, following our current path, we will all be as progressive as they are. So progressive that our best days are already behind us.
AIG,
You're right. I saw something the other day that made me...well, sad, I guess.
After they repealed the equal pay for women law in Wisconsin, the gop representative they talked to said nothing of the fallacies or unintended consequences of the law, he said something to the effect of men needing to be the bread winner of the household. I'm sure the news could have selected a more intelligent response from 50 others, but they aired that one...they should have never had that opportunity. When our representatives don't understand policy, how can we expect Joe Six Pack to grasp complex (and sometimes counterintuitive) ideas?
With friends like that....
" Because, apparently, you only now started paying attention and because it is now obvious that they're all bankrupt."
Remember, we're talking about THESE countries, right:
1. Argentina
2. Australia
3. Brazil
4. Canada
5. China
6. France
7. Germany
8. India
9. Indonesia
10. Italy
11. Japan
12. Mexico
13. Russia
14. Saudi Arabia
15. South Africa
16. Republic of Korea
17. Turkey
18. United Kingdom
19. United States of America
ALL of these countries are headed to bankruptcy because of collectivism?
we're headed for a worldwide collapse of the major industrialized countries?
Larry, your reading comprehension skills are as abysmal as your grasp of basic economic principles.
Larry,
"why are we NOW portraying this as a struggle between independent, self reliance and collectivism?"
I guess you weren't paying attention when the "extremist" Gingrich GOP lost the budget battle against Clinton in the shutdown of '95. For that matter, Reagan was warning about collectivism back in '61: http://www.youtube.com/watch?v=fRdLpem-AAs
This battle is nothing new. Obama, however, is a leftist unlike any President we've had since FDR. He's not some political whore like Clinton, he's a True Believer who refuses to learn despite the trainwreck he created.
thanks, methinks. that means a lot coming from you!
:-)
we ALREADY have Social Security, Medicare, MedicAid, EMTALA, SNAP, etc and have for many years.
right?
why are we NOW portraying this as a struggle between independent, self reliance and collectivism?
Every other country in the industrialized world is more collective than us, right?
so..now we say that we have what, gone too far and in danger of becoming like Europe (and Japan, Australia, etc) and must "roll back" these entitlements so that we move away from collectivism?
I think, and I may be wrong, but this struggle has been going on since the '30's, but it's always lingered just below the surface. You start to see resistance in the 70's with the formation of the Libertarian Party and the shift of the GOP away from big government to slightly less big government. Now that we look across the sea and see Europe still struggling with the financial crisis after we've begun to recover, as well as them facing bankruptcy, the backlash is "well, shit, that could be us!" From what I observe (and this is strictly an opinion), the call is to fix things now while we are strong enough and able before we have to.
"ALL of these countries are headed to bankruptcy because of collectivism?"
Not all of them, but we are.
" This battle is nothing new. Obama, however, is a leftist unlike any President we've had since FDR. He's not some political whore like Clinton, he's a True Believer who refuses to learn despite the trainwreck he created. "
geeze Paul.. have you seen THIS Reagan video?
http://www.youtube.com/watch?v=cgbJ-Fs1ikA
isn't Reagan just as big a whore?
" Not all of them, but we are"
are all industrialized countries - the G20 - all collectivist?
name the one's that are not.
YEah, I've seen it. Did Media Matters, or whatever Liberal douche site you got it from mention Reagan made that speech in the context of cutting tax rates along with closing loop holes?
Can you comprehend how that's different from Obama's plans?
along with a Spaniard, who, like 25% of his countrymen was unemployed
You mean 25% of Spaniards who are employed?
the gop representative they talked to said nothing of the fallacies or unintended consequences of the law, he said something to the effect of men needing to be the bread winner of the household.
Yep. I bet he voted for Rick Santorum too. That's the difference between the American Taliban, and the "libertarian" wing of the GOP. These guys are going to guarantee that the Left...will win.
ALL of these countries are headed to bankruptcy because of collectivism?
Larry. Things in the world are a matter of degrees, and a matter of specifics...not generalism and absolutes.
" Can you comprehend how that's different from Obama's plans? "
sure.. but it shows that Reagan was a collectivist also, right?
" Larry. Things in the world are a matter of degrees, and a matter of specifics...not generalism and absolutes. "
right.. but asking for clarity is not a bad thing either, right?
do we think that most all industrialized countries are on the WRONG PATH in terms of collectivism?
are they all doomed to fail just on different timeframes?
if not.. which ones will survive and why?
"sure.. but it shows that Reagan was a collectivist also, right?"
No, dumbass. You have to look at the totality of their administrations. Only a nitwit would be arguing their policies were the same even though their rhetoric coincided once.
Reagan supporting keeping and reforming social security and Medicare , right?
he believed in taxing the rich, right?
Reagan is to the LEFT of ALL of the current GOP candidates, no?
be honest.
do we think that most all industrialized countries are on the WRONG PATH in terms of collectivism?
are they all doomed to fail just on different timeframes?
if not.. which ones will survive and why?
Oh Larry! Again, its not about absolutes. It's not about "failure". Even Greece isn't a "failure".
The issue is of degrees; if one can make the argument that a certain activity is a drag, or reduces performance or efficiency or is uneconomical etc etc...than it is movement in the wrong direction. It doesn't mean that you will spontaneously explode, or that you will start putting up pictures of Chairman Mao.
But it is still...the wrong direction.
Also, just because other "industrialized" countries do something, doesn't mean it is a good idea. Rich countries, just like rich people, have a lot of "slack" before they can see the consequences of their actions. Rich people buy Chevy Volts (all 4 of them), but that doesn't mean that it is a good idea.
You mean 25% of Spaniards who are employed?
My bad!
Larry. Things in the world are a matter of degrees, and a matter of specifics...not generalism and absolutes.
I'm sure he'll understand that about as well as he understood me when I told him medicare and social security are bankrupt. I'm sure he's not going to toss some unformatted table showing us there are some IOU's to ourselves in some "lockbox" now.
he believed in taxing the rich, right?
Reagan is to the LEFT of ALL of the current GOP candidates, no?
No. He isn't. And Larry, please don't be silly. "Taxing the rich". No one is arguing on not taxing the rich. We're arguing about the type of taxation.
And please, don't insult the intelligence of the people here by talking about "the rich".
Larry, if you think Reagan is to the "left" of anyone, listen to this guy:
http://www.youtube.com/watch?v=yt1fYSAChxs
WOW. I want to vote for this guy
honestly, I don't think Obama has a snowballs chance come November. It will be a repeat of 2010 with ALL the strength coming from the "not Obama" platform.
the media is doing the best they can to rig polls (btw, GALLUP has Romney +3 even after a brutal primary where the President didn't have to answer for all his failures)but the anecdotal evidence just doesn't match the narrative they are trying to create:
1. many D senators/reps are "retiring" - apparently their internals are not done by liberal newspapers.
2. Obama is pandering strongly to his african american base which should be a locked and loaded voting base. Why wouldn't he stay above the fray if this was all guaranteed?
3. They know the economy and jobs are the key that is why they are trying so hard to report unemployment simply as the denominator falls off a cliff. This is the ONLY RELATIVE positive economic metric for the President and it still stinks.
4. Every voting group Obama had in 2008 will be down hard.
5. since 2009, D's somewhat associated with the policy of the current President have been destroyed at the polls, even in D strongholds.
6. One of the strongest libs in the game Kucinich was demolished in a swing state Obama carried in 2008.
R's will control all 3 branches come January, we will see what they do with it.
be honest.
Reagan believed in getting elected, Larry. That is a politician's single most cherished belief. It is the central tenet of their self-worshipping religion.
Now, don't get me wrong. Compared to Barry, Reagan was an angel sent from heaven. But, then, most criminals compare favourably to the babbling boob installed in the Oval office now.
" But it is still...the wrong direction"
yup... does that really mean that ALL industrialized countries are eventually headed for bankruptcy because their "collectivist" policies are not sustainable?
re: Reagan... would you agree that the tax structure under Reagan is the same one that the GOP wants today?
do you think the tax structure that Reagan supported was equivalent to what the GOP candidates and Romney/Ryan want today?
just trying to keep you honest guy.
"Reagan supporting keeping and reforming social security and Medicare , right?"
Reagan campaigned against Medicare creation in the '60's. In the '80's there was approximately zero support among the public for repealing entitlements, and Tip O'Neill would have loved to demonize any efforts by the GOP. Zombie Reagan would support reforming bankrupt entitlements along the lines of Paul Ryan's plans.
" Reagan would support reforming bankrupt entitlements along the lines of Paul Ryan's plans. "
that's not what he did back then.
are you saying he was spineless and did not stand firm in his beliefs?
yup... does that really mean that ALL industrialized countries are eventually headed for bankruptcy because their "collectivist" policies are not sustainable?
I can't argue with your straw men. I can only argue about reality.
Keep him honest, Lar?
You can't even keep what he's saying straight in your head.
Larry, before you keep talking, I beg you, spend 28 minutes watching this:
http://www.youtube.com/watch?v=yt1fYSAChxs
Don't go on making up more straw men
" I can't argue with your straw men. I can only argue about reality."
it's not really a strawman if you believe the POLICIES will inevitably lead to bankruptcy.
If you believe that collectivism leads to bankruptcy..it's not a strawman.
that's what I was asking.
are you saying he was spineless and did not stand firm in his beliefs?
No, Lar, it's pretty clear that what Paul is telling you is that Reagan understood that fighting losing battles is a losing proposition.
Ponder that for a second.
it's not really a strawman if you believe the POLICIES will inevitably lead to bankruptcy.
If you believe that collectivism leads to bankruptcy..it's not a strawman.
Larry. Do you run the finances in your household? Do you have finances? If you do...apply these statements to your own budget. Do you see what I did there?
Now stop saying such silly things.
geese guys.. it's NOT what Reagan said.. it's what he actually did.
Reagan was very good at talking and "spinning". I pay attention to what he actually did or did not do.
telling me to listen to a 20 minute political stump speech in lieu of judging him on his actions is comical.
listening to Reagan blather might be good for you but I'm satisfied with looking at what he actually did do (and not).
Reagan talked-the-talk.. but he did not walk-the-walk... TRUTH!
Lar,
Who told you collectivism leads to bankruptcy (other than the Soviet experience where collectivism led to actual bankruptcy)?
Where is the quote? The only one making that claim is you.
"are you saying he was spineless and did not stand firm in his beliefs?"
No, it means he had to pick his battles. He tacked as far towards freedom as was politically possible.
I am saying you are an idiot if you don't grasp this. You probably do, you're just doing your usual thing in this thread where Larry the Liberal pretends to be the pragmatic guy who just wants to do what work, garshdarnit. Your hero Obama plays this game all the time, too.
Well, this conversation went down hill fast.
No, Lar, it's pretty clear that what Paul is telling you is that Reagan understood that fighting losing battles is a losing proposition.
Ponder that for a second
I am.
is that what the current crop of GOP candidates say?
" The real battle, is between the culture warriors. If the American Taliban achieve their goal of fundamentally changing American culture from an individualistic one, to a collective one (and that is what Rick wants, have no doubt about it), then there will be nothing that can be done for this country. That will be the end of America."
geese guys.. it's NOT what Reagan said.. it's what he actually did.
Larry, the US government doesn't run on the whims of a single individual, be that the President or not. Obviously, Reagan could DO very little.
Which is why, whomever wins the presidency, is really pretty insignificant.
Larry,
"it's NOT what Reagan said.. it's what he actually did."
And yet you still sent me that stupid, dishonest clip from Media Matters and asked me to comment on it.
" Larry, the US government doesn't run on the whims of a single individual, be that the President or not. Obviously, Reagan could DO very little.
Which is why, whomever wins the presidency, is really pretty insignificant. "
does that go for Obama too?
:-)
The TRUTH TRUTH TRUTH, Lar, is that Reagan was not a dictator who could do whatever he wanted.
No, those presidential powers came later.
Reagan was forced by this outdated thingie called a "constitution" to work with the Democrats congress that plagued his entire presidency. All eight years.
" And yet you still sent me that stupid, dishonest clip from Media Matters and asked me to comment on it."
because he actually did that, right?
does that go for Obama too?
Yes. The fault lies entirely with the majority of Americans who vote for the legislators, and president, who wanted them to do the things they did.
It's all a matter of DIRECTIONS...and speed of movement.
Which is why, again I repeat, it's not about absolutes.
Which is why, whomever wins the presidency, is really pretty insignificant.
Except that now the president can kill you or imprison you for the rest of your natural life on a whim and claim - without a shred of evidence - that you are a dangerous terrorist.
" Reagan was forced by this outdated thingie called a "constitution" to work with the Democrats congress that plagued his entire presidency. All eight years. "
in other words, he compromised?
blasphemy!
" Except that now the president can kill you or imprison you for the rest of your natural life on a whim and claim - without a shred of evidence - that you are a dangerous terrorist"
true.. but who gave him that power?
in other words, he compromised?
In other words, he got what legislation he could passed and he couldn't pass all that he wanted. That's not compromise, that's constraint.
I'm done entertaining Larry in this thread. I should be focusing on work, actually so I can pay his FICA while he relaxes in the EZ chair watching Matlock reruns.
true.. but who gave him that power?
What the hell does that have to do with anything. Let me guess. You're going to tell us it's Reagan, amaright?
re: compromise... tomato tamato
re: entertaining FICA.
don't affect me much at all guy.
but thanks for the entertainment!
:-)
you're not blogging while someone is paying you to work are you?
Paul, I'm sorry you're still at work this Friday afternoon. I'm already mixing drinks. It's the only way to make Larry entertaining.
" What the hell does that have to do with anything. Let me guess. You're going to tell us it's Reagan, amaright? "
no... geesh...
re: "drinks".. I'm already ahead of you boys..
Yes, that's obvious, larry. I'm not a boy.
Methinks... it was a generic "boy" ..my apologies if the gender got confused!
Romney could be another Reagan. He's certainly flexible enough.
Recall, Reagan was a Democrat and a Moderate California Governor before he became our great Conservative President.
Of course, Obama failed to do a Clinton after the 2010 election, and should be rated below Carter, who was at least a fiscal conservative.
"The greedy, market-manipulating, market-destabilizing speculators on Intrade are favoring an Obama re-election with odds of 60.4%, see chart above. Will Obama call for an investigation?"
_________________
I just wanted to say that I found this to be clever and humorous.
No apology necessary, Larry. 'Twas just an FYI. I mostly hang out with boys anyway.
see .. I KNEW you WERE one of the guys!
My wife is one of the guys so it's comes as a compliment.
:-)
Call me an optimist, but I believe that Romney would be a good president. Sure he would not be everything all conservatives want, but I have a gut feeling America would be better off for him rather than that socialist Kenyan joker.
I took it as one, Larry. Thank you.
The U.S. is locked in a rolling depression (i.e. underproducing by $1 trillion a year, with monetary and fiscal constraints, although the economy isn't receding).
If the economy slows into the election, 2012 will likely be a repeat of the 2010 election.
Obama failed to adjust after the 2010 election, like Clinton after the 1994 election, or failed to make significant compromises like Reagan.
Obama has been rigid almost as much as Romney has been flexible.
Given the circumstance of high debt and weak economy - the options to improve it are few.
If you cut govt spending, it will increase unemployment and reduce the purchase of goods/services in the economy.
If you don't cut spending, we have a structural deficit that will keep adding to the longer term debt.
What is needed is for the economy to grow stronger and produce more revenues but given the depth of the recession and the fact that recovery has been unlike any prior recovery, the path forward is not at all clear.
If McCain or Romney were the Prez for the last 3 years, they would have the same problems and the same lack of available options.
What has been concluded is that as bad as the debt is - that the economy is a higher priority.
But cutting taxes, which are already the lowest is 50 years, will add even more to the debt
Winding down the two wars is going to add more people to the unemployment roles also.
Would McCaind and Romney have put off health care reform to focus on the economy? Probably yes. Looking back, Obama should have been focusing on the economy from the get go.
Still... no matter who becomes Prez, the options are still limited and too much push in cutting spending or lowering taxes is still caught between the economy and the debt.
I note that we do have the sequestration bill which mandates across the board cuts including DOD unless Congress reverses it.
"If you cut govt spending, it will increase unemployment and reduce the purchase of goods/services in the economy"...
ROFLMAO!
Well how very 'Krugman like' of you larry g...
larry g, stout defender of Bernanke Bucks?
Larry: Increase it to far beyond the natural rate of 8.3%?
actually I'm no Defender of Bernanke but the man WAS appointed by BUSH and his predecessor GreenSpan was an even bigger idiot.
"actually I'm no Defender of Bernanke but the man WAS appointed by BUSH"...
Which begs the question larry g, does it pay for a liberal to appoint a liberal to anything?
Juandos - name the guy/gal you think should be the Fed OR would you abolish the Fed all together?
:0)
It's quite amazing there are people, like Larry, who defend failure.
Obama has been a weapon of mass economic destruction, particularly on the middle working class.
However, it's not too late to jolt the U.S. economy into a virtuous cycle of consumption-employment by removing overregulation, cutting federal spending by $1 trillion (i.e. to 2007 spending), cut taxes by $1 trillion, inspire confidence in the American people, and support the greatest country the world has ever seen.
Then, the Fed can begin a tightening cycle to sustain the economic boom.
If not mistaken, Obama is in favor of the across-the-board sequestration budget, no?
so he wants to cut spending - across the board including DOD. The GOP wants to cut entitlements but not DOD.
We got into problems by cutting taxes and not cutting spending.
They violated paygo by giving tax cuts and not cutting spending.
We now have a structural deficit as a direct result and the hit on Obama is that because the GOP refused to cut spending on BUSH, it's essentially Obama's fault now that he won't cut entitlements only but not DOD.
It's an Alice-in-wonderland world in this regard.
If the GOP actually put forth a budget proposal that WOULD balance the budget and passed it in the HOUSE, tremendous pressure would be brought on Obama and the Senate.
But the House GOP is a bunch of feckless fools who want to play games ...i.e. cut entitlements but not DOD...
and regulation? where is the CBO scoring of the regs and their cost to the budget? it's just more propaganda with no intention at all to carry through with anything serious.
Obama is not a fiscal conservative, never promised to be one but he does support sequestration.
On the other hand, the GOP claims to be fiscal conservatives and wants to cut spending but they don't walk-the-walk.
the only Republican to actually put together a budget that actually balances in 5 years is Ron Paul and 7 GOP Congressman supported it while most of the GOP Congressman signed on to the bogus RYan plan that does not balance until 2037 and even then only by using totally bogus supply-side tax cut premises that not even the CBO can validate.
It's a mess, no doubt about it but it was a long time in making... from about 2000/2001 where our "excuse" was that we "had no choice" because "we were attacked" ...like fiscal responsibility is not allowed if you are "attacked".
I don't defend failure Peak.. but I do think facing the truth about things is necessary.
Obama favors sequestration and the end of the Bush Tax cuts - those two together WOULD balance the budget.
THe GOP is opposed to both and their only alternative is the totally bogus RYan proposal.
Larry, you're still defending failure, with excuses.
If Bush could've been elected to a third term and got his way, a V-shaped economic recovery would've been achieved in 2010, and the Fed would be completing a tightening cycle, by now, to slow the expansion.
Instead, we got a weak 1933-37 Roosevelt-type recovery, except this one is much more wasteful.
Obama had his way for two years. Trillions of dollars were spent and squandered and more regulation was passed.
The result: Depression.
Peak - the deficit was already IN PLACE when Obama took over. It was caused by tax cuts, doubling of DOD and Medicare Part D.
Obama has nothing to do with that.
The TARP was Bush's response to the meltdown. Obama carried it forward.
The stimulus was Obamas but it was at most a trillion dollars - a one shot deal not adding to the structural deficit.
You call "failure" the fact that Obama would not make the cuts the GOP would not themselves make.
If the GOP had handed Obama a balanced budget and a stable economy you could pin "failure" on Obama but when you hand Obama a structural deficit and a depression-like economy and call him a failure for not fixing it what happened to the GOP/Bush's role?
They had every opportunity to balance the budget and their excuse was "we were attacked".
do you really think the GOP would balance the budget right now if they could?
Ryans "plan" balances the budget in 2037. What kind of a balanced budget is that?
I don't make excuses for Obama. He did have the opportunity to step up in leadership in cutting the budget and he did not do it but he did not create the deficit to start with and it's dang near impossible to cut spending when the economy has cratered and revenues are the lowest in 50 years.
Larry, the federal deficit was $162 billion in 2007, and if it weren't for the money paid back from Bush's TARP, the Obama deficit would be even more than $1 1/2 trillion a year.
The federal government is spending over $1 trillion a year more than in 2007.
Peak - did the DOD budget double or not?
Did Homeland Security get created under Bush?
Did Bush pass Medicare Part D?
Tell me what things did Obama add to the structural deficit - the things that continue year after year?
What Bush did to the deficit continued past his departure.
Who is supposed to cut the things in the budget that were added prior to 2008?
whose job is that?
better than that - tell me where the increases in the budget are.
Are they in entitlements?
Are they in normal cabinets budgets?
where did the increased 1.5 spending actually come from?
500 billion comes from DOD.
how much comes from homeland security/other national defense spending?
how much comes from Medicare Part D?
name the specific things that Obama added to the budget that are permanent and add permanently to the structural deficit?
Remember, Obama is in favor of sequestration AND elimination of the Bush tax cuts.
Those two things will come close to wiping out the deficit.
where is the other sides's proposal?
It's the Ryan proposal that takes until 2037 to balance and even then it counts on supply-side tax cuts to generate revenue.
taxes are the lowest in 50 years.
Lower than Clinton. Lower than Reagan.
if you're going to decide to having the lowest tax rates in 50 years.. why would you say you did not need to cut because supply-side would increase the revenues?
When the revenues did not increase as expected who was responsible for dealing with that?
Larry, I guess, you didn't notice the massive spending spree the first two years under Obama (Democrats in Congress used the term "spending fatigue").
Tax revenues are low, because of the Depression caused by Obama, who still has one foot on the accelerator and the other foot on the brake.
Here's some data from a year ago:
Federal spending 2007: $2.73 trillion.
Federal revenue 2007: $2.57 trillion.
Budget deficit 2007: $161 billion.
Federal spending 2011: $3.82 trillion.
Federal revenue 2011: $2.17 trillion
Budget deficit 2011: $1.65 trillion.
(2011 estimates)
Peak - if you look at the budget, and compare it back to 2007 - tell me where the increased spending is coming from.
when you double the DOD budget...it has to have an effect.
right now we take in about 1.3 trillion in corporate and individual income taxes.
we spend 1.3 trillion in DOD and Homeland Security.
it was DOD and Homeland security that took a balanced budget in 2000 to a 1.x trillion deficit in 2008 when Obama first stepped into office.
He did indeed ADD to it with the tarp and stimulus but they are not structural. They were one-shot expenditures.
What exactly would you cut in the current budget to shave off 1-1.5 trillion?
tell me first what you would cut that Obama added to it...
do you know?
then once you cut what Obama added, how much more would you have to cut and what wold you cut?
it easy to blame Obama. It gets a lot tougher when you have to say what you'd cut...ESPECIALLY if you don't want to include DOD.
Obama supports the sequestration budget. Who else supports it?
Not the GOP... but they have no real alternative proposal other than the totally bogus Ryan proposal.
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Larry, the additional $1 trillion a year in federal spending is a waste, because as you say there's nothing to show for it.
The economy needs pro-growth policies and we haven't seen them from Obama.
" , the additional $1 trillion a year in federal spending is a waste, because as you say there's nothing to show for it."
agree! but WHAT is it spent on?
that's my point.
"pro growth" is blather.
define it.
cutting taxes even further is going to INCREASE the deficit.
supply side does not always work.
it worked under Reagan but not under Bush (not enough to cover the increased expenditures) and the GOP has no Plan B if supply-side does not produce the claimed increased revenues.. they just wash their hands....and walk away.
that's totally irresponsible.
if supply-side fails.. what do you do?
It is probably going to the Swiss Bank accounts of Obama's cronies.
Larry says: "It (tax cuts) worked under Reagan but not under Bush."
Tax cuts worked well under Bush in 2001 and 2008 (which the data show). Under Obama, they also worked well, although they were offset by other economic policies.
I defined some pro-growth policies above:
"Remove overregulation, cut federal spending by $1 trillion (i.e. to 2007 spending), cut taxes by $1 trillion, inspire confidence in the American people, and support the greatest country the world has ever seen."
Peak: It is the commie in chief you are talking about here. Inspiring America and making govt smaller is anathema to these dolts.
it's EASY to say cut "Remove overregulation, cut federal spending by $1 trillion (i.e. to 2007 spending), cut taxes by $1 trillion, " when those who say do this, themselves, won't/don't define what the regs are to cut, what actual spending to cut and advocate cutting taxes when they are already the lowest they've been in 50 years and right now barely pay for DOD and National Defense.
where is the beef?
why do the critics say this is all we need to do but they themselves, nor the GOP today or under Bush actually did any of these things?
Name the actual trillion in cuts.
name the actual regs that have been created recently to cut and how much they contribute to the deficit or hurt the economy.
explain how you pay for DOD and National Defense and the rest of govt if you reduce taxes even further but revenues don't increase (which is what happened under Bush).
here's a true picture of how we got here:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
what happened to Bush's 'pro growth" policies?
the chart shows that the tax cuts under Bush contributed to the deficit...and did not reduce it.
the deficit IS coming down as a result of winding down the two wars but returning servicemen are joining the ranks of the unemployed... and the ones who have been sliced/diced will become additional tax burdens.
but you can't say "cut taxes" and then insist that even though the DOD budget has doubled that it not be cut back to 2007 levels ALSO. If you do that, you will throw tens of thousands of DOD employees out of work.
I see no real plan from the people who say, cut taxes, cut spending and cut regulation.
It's just a motto with no real specifications.
Larry, you're making false assumptions that aren't supported by the data.
The federal government could begin deregulating the most overregulated industries, e.g. health care, energy, finance, and education (there are hundreds of thousands of pages of regulations), which will lower prices and costs substantially.
Also, the federal government is spending over $1 trillion a year too much, which is unsustainable. Using that deficit for tax cuts instead would strengthen household balance sheets, strengthen the financial industry, and spur demand, particularly in the private sector.
Obama's plan seems to be maintaining excessive regulation and spending, and hope the depression ends. So, more taxes can be collected, to close the deficit.
" The federal government could begin deregulating the most overregulated industries, e.g. health care, energy, finance, and education (there are hundreds of thousands of pages of regulations), which will lower prices and costs substantially."
why did they not get deregulated under Republicans and Bush?
"Also, the federal government is spending over $1 trillion a year too much, which is unsustainable."
we agree.
"Using that deficit for tax cuts instead would strengthen household balance sheets, strengthen the financial industry, and spur demand, particularly in the private sector."
no it won't. that's pure wishful thinking and you have no plan B if it fails... that's what happened to Bush. He cut taxes in anticipation of higher revenues and instead the deficit went higher and when it did - he had no Plan B for dealing with it.
My question to you is if you cut taxes every further and you ALREADY have a deficit, what happens when those tax cuts make the deficit worse instead of giving increased revenues?
"Obama's plan seems to be maintaining excessive regulation and spending, and hope the depression ends. So, more taxes can be collected, to close the deficit."
Obama is NOT doing what the GOP says he should do on taxes, spending and regulation but the GOP itself did not do these things either when they had the opportunity.
They also do not actually specify what to cut nor do they say what to do if cutting taxes fails to generate more revenues.
look at the chart:
http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
look at what happened when Bush cut taxes. The deficit went UP, not down.
what is the plan if that happens again?
answer: this is no plan... it must work or else.
that's not a plan, Peak. That's just irresponsible policy that takes us deeper in debt.
If you want to cut taxes, you have to cut govt spending. The folks who say cut taxes, won't propose actual cuts... all they say is Obama should cut.
that's totally nutty for the GOP to say it's Obama's fault because Obama will not cut govt when they had that opportunity and did not do it.
If they had actually practiced what they preached, we'd not have a deficit right now. We might have still had an economic meltdown but we would have had a balanced budget and little debt and able to deal effectively with the downturn.
Instead, we had significant debt but more important than that, we had a significant and building structural deficit that were a direct result of the inability and refusal of the GOP to double DOD spending and claim that tax cuts would pay for it and when it did not happen , they walked away.
that's why you are advocating right now.
cut taxes... on the hopes that more revenues will accrue but if they don't then "oh well".
that's not a rational policy.
If you want to believe in Supply Side economics (that DOES work sometimes) - then you have to also have a Plan B if the supply side tax cuts don't actually increase revenues
Otherwise you explode the deficit.
Peak, the responsible way to do tax cuts is to phase them in and go to the next phase when results actually occur but don't go to the next phase if revenues do not increase.
you need a way to back up or delay tax cuts if they don't actually produce increased revenues.
If you do not do this - you're basically saying that tax cuts are still okay even if they add to the deficit and debt.
Since taxes are the lowest they have been in 50 years or longer, decades, a generation... cutting them further when we already have a trillion deficit is just plain irresponsible.
The sequestration budget forces across the board cuts along with letting the Bush tax cuts expire.
If you did not - you could balance the budget and then do re-phasing of some tax cuts thought to be the ones that would actually increase revenues but you'd also say what else you would cut if those cuts did not actually generate the anticipated revenues.
otherwise, you're just gambling and if you lose, you add to the deficit,
that kind of policy is how we got to where we are now.
they did tax cuts, the cuts did not "work", they said "oh well" and walked away.
Now that another Prez is in charge they blame him - for not doing - what they themselves refused to do when they were in charge.
that's pretty ironic when most people believe that the GOP are fiscal conservatives but Dems are tax & spend.
so the fiscally conservative GOP who would not perform fiscally responsibly now says that a Dem (who sometimes/often? don't act fiscally responsibly)should do what they themselves refused to do.
how rich is that?
Larry, it's quite amazing, almost everything you say is wrong.
Phasing in tax cuts slowly was already done and it failed, the deficit shrunk to 1% of GDP, or $161 billion in 2007, spending on national defense as a percentage of GDP was substantially lower in the 2000s, under Bush, than between WWII and the early 1990s.
You give Bush no credit for his remarkable economic achievements and his attempts to prevent the housing crisis in 2004 (which was rejected by the Democrats), while giving Obama too much credit.
Trillions of additional dollars were spent and the depression continues:
http://stateofworkingamerica.org/files//GDP_gap_2000-111.png
******
The "Misunderestimated" President:
Bush inherited the worst stock market crash since the Great Depression and a recession. However, the Bush Administration turned the recession into one of the mildest in U.S. history (which wasn't a recession based on annual per capita real GDP growth), after the record economic expansion and structural bull market from 1982-00.
Over a five-year period in the mid-2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).
The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, the fourth longest economic expansion in U.S. history, and in a structural bear market that began in 2000.
The Bush Administration was adept at minimizing the recession in 2008, including providing a tax cut in early '08 for the Fed to catch-up easing the money supply, until Lehman failed in Sep '08, which caused the economy to fall off a cliff. However, appropriate policy adjustments were implemented quickly.
The financial crisis and severe recession could've been avoided by tightening lending standards, in a way similar to the Fed's tightening cycle from 2004-06:
Bush Administration Tried to Reform Freddie and Fannie Five Years Ago
CBS News
February 19, 2009
Karl Rove, “We were briefed as far back as 2001 about the problems with Fannie and Freddie; in fact, we moved aggressively in 2004 to regulate Fannie and Freddie, actually got a bill through the Senate Banking and Finance Committee only to have it filibustered by [Sen.] Chris Dodd.”
Rove said Fannie Mae and Freddie Mac “accelerated their imprudent behavior after we attempted to regulate them. They bought almost as much mortgage debt from 2005 through 2008” as they bought in their first 30 years of their existence.
“In fact, in 2003, when we sent our first members of the Cabinet up to talk about this on Capitol Hill, Barney Frank had a hearing in which they basically beat up everybody we sent up there in pretty vociferous language.
Peak - you're incorrigible! :-)
It does not matter what defense spending in WWII was.
It matters what it was in 2000 when we had a balanced budget and 5 trillion in debt and in 2008, it had doubled and we had 10 trillion in debt and a structural deficit that continued into 2009, 2010, etc because the GOP refused to trim it back to even 2007 levels.
You can do all sorts of "good" things for the economy but when you spend more than you are taking in in taxes, you've screwed up.
How come Bush gets to say "deficits don't matter" and then under Obama deficits and debt are proof of his incompetence?
double standard?
re: Fannie/Freddie/Rove ...
talk about "excuses"!
there was NOTHING the administration could have done to rein in Fannie/Freddie?
What exactly did Rove do about banks beyond Fannie/Freddie engaging in credit default swaps?
nothing, right?
then when those banks go Belly up, it was BUSH who bailed them out.
you say that a single minority Congressman and Senator prevented Bush from doing ANYTHING?
come on Peak... Bush could do nothing?
Remember.. Bush/Rove/Cheney were all OPPOSED to regulation or "interfering" with the market so they just stood back out of the way and when it blew up - they then tried to blame it on others.
talk about irresponsible!
Larry, the GOP didn't have a filibuster-proof Senate.
It seems, your solution to get us out of this depression is to blame Bush, along with implementing policies that failed in the past.
Peak, I'm not blaming Bush. I'm pointing out that there is a double standard when critiquing Obama for his failings and ignoring similar or worse failings in Bush.
there's enough blame to go around but there is no question that Bush had more options than being stymied by the minority Congress.
It was the GOP that pushed Medicare Part D through at 3am - not the Dems.
It was Bush who got the tax cuts and increased the DOD and Homeland Security budget which immediately took the country to deficits and those deficits continued throughout the rest of his Presidency and into the next Presidency.
The chart: http://en.wikipedia.org/wiki/File:CBO_Forecast_Changes_for_2009-2012.png
clear shows who contributed what to the structural deficit.
No matter who became Prez in 2008, they would have been saddled with the same structural deficit.
Obama did not spent trillions and what he did spent did not substantially add to the structural deficit. The Tarp, auto bails and stimulus are one shot deals.
What remains in the deficit is what was already in it when Obama took office.
I'm not defending him. I'm only trying to keep the facts straight for both him and Bush.
There is no way that John McCain would have had any more success given the depth of the recession and the sheer size of the deficit.
Whatever spending you cut - risks hurting the recovery.
it's a no-win situation no matter who is Prez.
I see you as a pretty straight shooter in this group. Right?
Larry, historically, and naturally, strong recoveries follow severe recessions, except for the Roosevelt recovery in 1933-37 and the Obama recovery in 2009 to today.
Excessive government regulation and spending slow economic recoveries.
Peak - this was by far the worst recession in history closer in severity to the depression.
the things that normally "work" to spur recoveries did not work as they did before and they don't have much to do with regulation as most of the regs have been in place for years.
we are blaming Obama for regulations that he had no hand in.
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