Black Swans and Ron Paul
I am in complete agreement with Taleb here. Ron Paul is the only one talking economic sense in the entire Presidential race. I give Newt some slack because he is the only one that has actually done the seemingly impossible, balanced a Federal Budget. But we don’t need a balanced budget, we need a reduced budget. We don’t need to control the growth of Government, we need to reduce Government. All this Bullshit about contraception is lipstick on a pig. It’s obfuscation to the real and only problem we are facing, fiscal meltdown.
My quibble is not with Taleb, but with this idea that the economic morass is a Black Swan. Black Swans are unpredictable. The mess we are in was/is very predictable.
Mr. Not so Electable anymore
There has always been a huge chink in Romney’s armour of electability. Last night, that chink turned into a chasm.
Romney lost 25.2% to Santorum 55.4% in Missouri; 17% to Santorum 45.2% in Minnesota and 35% to Santorum 40% in Colorado. To be fair, two are non-binding caucuses and MI was a non-binding primary. Does it mean that Santorum is the man now. I still don’t think so. I’m still convinced that Santorum was the lucky man at the right time to receive the Not Romney bounce going into the Primaries. Santorum hasn’t been the focus of a $30 million negative ad bomb that Newt is dealing with. That’s all going to change.
It will be interesting to see how Santorum reacts to the carpet bombing of negative ads that Team Romney will unload on him. Meanwhile, Newt is waiting for Super Tuesday. I think if Newt is smart, he’ll let Romney do all the dirty work against Rick (which is the only thing Romney is good at) and focus on the positives of his campaign, which is what he wanted to do in Iowa before Mitt went negative first.
Where does that leave poor Mittens? Well besides the millions in SuperPAC funds to unload a barrage of negative attack ads on Newt and Rick….not much. Romney is/has peaked. His constant negativity has hurt him. His percentage of votes has all gone down vs ’08. If you look at the States Romney has won, you see two things pop out, money spent on attack ads and demographics. Money is the big reason that Romney won Florida. Romney’s campaign spent $7 million to Newt’s $1 million and the Romney’s PACs spent $8.5 million to Newt’s $2.2 million. In Nevada, the huge Mormon population played a big factor in Romney’s win. As for New Hampshire, what can you expect when the candidate campaigned in the state for the past 5 years?
Looking ahead, there are some bright spots for Mitt. He should do well in Maine, Michigan, Vermont and Massachusetts. After that it looks bleak. Going out West, he might do well in Idaho (sizable Mormon population there) and of course Utah, but that’s it. One of the problems for Romney, is that he doesn’t have enough money to sustain the constant stream of negative attack ads against two opponents. If he goes full bore on the attack against Santorum, Newt will come out the winner. If he goes full bore against Newt, like he has been, Santorum will come out the winner.
This is the big reason Team Romney and it;s surrogates have been pushing the meme to end the primaries early. They know, just like in 2008, a longer primary will spell their doom. It’s not because the longer primary will expose more and more of Mitt weaknesses as a candidate, which are legion. It’s because Mitt only campaigns negatively. A prolonged negative campaign only hurts the candidate in the long run, while propping them up in the short run. Unless Mitt can campaign on positives, telling people why they should vote for him instead of why they should vote against the other guy, he will continue to lose support.
Romney would help himself and his party if he realized that he will have a much higher chance of winning the general election if he reaches out to conservatives and convinces them to be enthusiastic. It’s one thing to win the vote of every anti-Obama voter in the country, but on his current trajectory Romney will fail to convince many of them to make that extra effort to get their friends and neighbors to the polls. That could ultimately mean the difference between victory and defeat — and for now Romney seems oblivious to that fact.
This is also the reason why I don’t think Romney would win against Obama. You can’t win by hoping that the electorate will vote against the other guy. I think Republican’s misunderestimate Obama’s 2008 win. I think the GOP thinks Obama won purely by running a 100% against Bush campaign. He didn’t. He gave Liberals a reason to vote for him as well. He gave them Blue meat as well as telling then to not vote for the other guy.
Why Republicans Must Become More Libertarian
Excellent interview with Sen. Jim DeMint
I like DeMint. He is not a Status Quo kind of guy.
I like how he equally criticizes Democrats and GOP for falling for more centralized control.
Every time you have a compromise, it’s more Government, more spending and more debt.
4 years of Obama or Romney….same thing really
They must really think we are idiots.
First the spin via MSNBC:
The U.S. economy created jobs at the fastest pace in nine months in January and the unemployment rate dropped to a near three-year low, offering a hopeful sign for hiring in the year ahead.
Employers added a net 243,000 jobs last month, the Labor Department reported Friday — that’s the most since April and far better than economists’ expectations for a gain of only 150,000.
January saw the most jobs added since and April and May 2010, when 277,000 and 458,000 jobs were created. But those months were skewed by massive hiring for the census. Before that, the last month with more job creation was March 2006.
The upbeat tenor of the January jobs report was further strengthened by revisions to November and December payrolls data, which showed 60,000 more jobs created than previously reported. In addition, hiring was widespread across many high-paying industries. And average hourly earnings rose four cents, which should help to support spending.
The continued labor market improvement could be a relief for President Barack Obama who faces a tough re-election campaign this year.
Speaking at an event in Arlington, Va., Friday, Obama welcomed the strong January jobs report. But, he added, there are “still far too many Americans who need a job.”
“The economy is growing stronger. The recovery is speeding up. And we have to do everything in our power to keep it going,” Obama said.
Now let’s look at the numbers via ZeroHedge:
A month ago, we joked when we said that for Obama to get the unemployment rate to negative by election time, all he has to do is to crush the labor force participation rate to about 55%. Looks like the good folks at the BLS heard us: it appears that the people not in the labor force exploded by an unprecedented record 1.2 million. No, that’s not a typo: 1.2 million people dropped out of the labor force in one month! So as the labor force increased from 153.9 million to 154.4 million, the non institutional population increased by 242.3 million meaning, those not in the labor force surged from 86.7 million to 87.9 million. Which means that the civilian labor force tumbled to a fresh 30 year low of 63.7% as the BLS is seriously planning on eliminating nearly half of the available labor pool from the unemployment calculation. As for the quality of jobs, as withholding taxes roll over Year over year, it can only mean that the US is replacing high paying FIRE jobs with low paying construction and manufacturing. So much for the improvement.
Via ZeroHedge: Persons not in the Labor Force
Via ZeroHedge: Labor Force Participation Rate
If you look at the first graph, you’ll see a huge uptick in the number of people not in the Labor Force. Remember how they calculate unemployment? Unemployment rate = Unemployed workers / Total labor force. It’s easy to see how a huge drop in the labor participation rate, which is the total labor force, can make the numbers look artificially good.
Expect more of this chicken-fuckery as the election cycles gears up. The media will portray the unemployment numbers as “unexpectedly better than forecasts” in an attempt to carry water for their Chosen One.
Candidate Romney = Rise of the Libertarians
A lot of people have been talking about what will they do if Mitt Romney is nominated for the GOP Presidential Candidate. I’m not alone in thinking that the GOP establishment is desperately trying to prop up Mitt as their establishment candidate. The establishment GOP media is pushing Mitt and attacking Newt. They have their various reasons, mostly citing “electability,” for pushing Romney but that won’t help Mitt if he should become the nominee.
The level of negative attacks coming from Mitt Romney’s campaign is turning people off. How else can you explain almost a $10 million ad blitz from Team Mitt (with 80% being attack ads) and losing independents nationally (his Raison d’être)? Mitt seriously lacks any Tea Party support as well. The establishment has been openly hostile to the Tea Party, wanting the votes but not the criticism. Rubio is a perfect example, elected by the Tea Party only to shun the Tea Party (TP Caucus and SOPA?) and put himself in Mitt’s camp. Mitt probably think that since Liberals think Tea Partiers are all racists, he better stay away so as to not be guilty by association.
So what does that mean for the Libertarian party?
I would argue that many of the Tea Partiers are libertarian minded voters. I’d challenge anyone to find huge level of disagrement with Tea Party fiscal policy (since there is no central figure for the TP, Wiki is the best source) and CATO’s fiscal policy. Many Tea Partiers are endorsing Ron Paul, an Austrian economic style libertarian. There would be no room for a Paul in a Romney administration, every knows it. So where will all that support go? Dr. Paul has said he will not run as a third party candidate, I believe him.
I think a lot of people that cannot stomach the notion of voting for Romney will instead vote for the Libertarian party candidate, most likely Gov. Gary Johnson. I know a lot of Paulites like Johnson. I like Johnson and I know a lot of Tea Partiers do too. Looking at Gov. Johnson’s fiscal policy aims, they mesh with the Tea Party.
If the GOP primary keeps going like it’s going, with Mitt Romney poisoning the well in his Pyrrhic quest for the nomination, I see the Libertarian Party growing. As Soros said, “There’s not much difference between Obama and Romney.” Where will the people go if faces with two of the same?
Update: Like Mana from heaven comes this great link from Legal Insurrection: The Conversation With a Florida Tea Partier That Should Scare Every Republican
“I see a Romney nomination causing Tea Partiers like me to tune out. We are already disheartened by the congressional leadership. Romney will be the final nail in the coffin. He is completely uninspiring, and is everything we have been working so hard to defeat within the GOP,” Rebecca said. “Don’t even get me started on that Bain Capital picture. Ugh. There is no way he can win. And I don’t want to have to defend him while he tries.”
“I will be voting this Tuesday. I will make it fit into my schedule. I feel like my vote matters right now,” Rebecca said. “But can you see how I might not make it a priority if I feel like either my vote doesn’t matter, or if I don’t feel like the candidate I’m voting for will be much different then what we have? Can you see how life may take precedence over casting an uninspired vote? I can’t be alone in this thought process, and if enough people feel this way (and I think they will) it will be catastrophic for Romney and really very bad down-ticket as well.”
This is exactly the way a lot of people are feeling. It reinforces my point that a Romney nomination will cause a lot of people to just not vote Romney. They won’t vote Obama either, but Romney will be as much of a uniter for the GOP as Obama has been nationally.
Parallels to the 2008 Democratic primary? You betcha! Remember the PUMAs? Remember how they caved and enough HRC dems held their nose to vote for Obama? That turned out great didn’t it? There is little difference between the GOP establishment and Democratic establishment. Do we cave in this time as well, for another empty suit?
Flipper’s Greatest Flops
This video is not only funny, but could be devastating to Romney if the primary goes long (which I hope it does).
Romney is a Keynesian
I posted this on a Legal Insurrection thread but thought I’d post it here as well.
Newt can’t say it but everyone else should be saying it. Romney is not a Reagan Republican, he is a Bush Republican. Romney is a progressive, he like all progressives believe that Govt (if run by the right people aka himself) will bring a better society. His tell is when he talks about Regulations. He talks about “smart regulations” like all progressives do. Romney says that the free market needs regulations, which show how good a Keynesian he really is just like Bush.
Govt doesn’t create jobs. It can only give the right environment so that markets can create jobs. I’ve heard Newt talk about that, I’ve never heard Romney say anything like that. Romneynomics = Bushonomics = Obamanomics = Keynesian clap trap that caused this whole mess…the idea that our betters are the ones that should make the decisions. Newt at least is taking the good parts of Paul (Fed, economics (Reagan was an Austrian)) and leaving the bad parts of Paul. Romney would never touch the Fed.
I’m posting this on my Xoom so Ill add some links and videos to add some evidence for me claims later.
Newt in Outer Space
“By the end of my second term, we will have the first permanent base on the moon. And it will be American”
The latest attack on Newt by the conservative media (to be fair to Rubin, she is and has been firmly on the Romney train for a while now) is on Newt’s recent talk about building a space colony on the Moon.
Newt Gingrich is plagued not simply by the blistering rhetoric, the Washington insider-ness, the messy personal life and the ethics problems. He sounds, well, sort of daft these days. His latest brainstorm is for a moon colony by the end of his second term. The bonus here is that if we get 13,000 people (if you ask where that number comes from, it’s akin to asking how the Star Trek transporters work) it can be a new state! (New Gingrich? New Callista?)
They use this to push the meme that Newt is too “grandiose” for the party and for the country. (A Google search for “newt” and “grandiose” produces About 2,220,000 results (0.24 seconds)) I think that is a lame attack. Every person running for President thinks in grandiose terms. Does “this was the moment when the rise of the oceans began to slow and our planet began to heal” ring a bell? Didn’t Reagan think “grandiose” thoughts when talking about bringing down the Soviet Union? What about JFK talking about the initial space program? Wasn’t Lincoln just a little “grandiose” when he issued the Emancipation Proclamation?
I’m not saying that Newt is any of those men. It’s common for the conservative media (Commentary is still marginally conservative) to attack Newt saying that he is comparing himself with those other great men of history. I think what Newt is saying, is that if you can’t achieve anything if you don’t have the vision to do something great. This can be for good or ill. Going to the Moon was a historical achievement, which required a lot of vision. Defeating the Soviet Union was a historic achievement, which required grandiose vision. Of course not all things turned out so well. Obama had vision and he shoved Obamacare down our throats. FDR had vision and we are still left to fix the messes they both made.
When it comes to the Moon and Space exploration, I don’t think we are going to have buyers remorse like we did with Obamacare. Setting up a Moon colony will require vision, but it will also require Science. It will require sceince and technology that we don’t have right now. How and what kind of structures will be build? How will be get food, water, air? These questions are essential to any manned mission to Mars. The question is not if we will go to the Moon but when. Gingrich has merely given a promise that he will push for it.
The other common attack is how will Newt pay for it. They erroneously assume (like all good Liberal Big Government types) that the only way to go to the Moon is by more Government spending. Let’s look at what Newt said in the last Florida debate.
Gingrich was then asked whether he, as president, would put more federal money toward the goal of sending astronauts to Mars as soon as possible. The former Speaker of the House said he would use federal money to greater effect — instituting, for example, a series of prizes to encourage space exploration.
“Most of the great breakthroughs in aviation in the ’20s and ’30s were the result of prizes. Lindbergh flew to Paris for a $25,000 prize,” Gingrich said. “I would like to see vastly more of the money spent encouraging the private sector into very aggressive experimentation.”
Some of those prizes, he added, might reward getting humans back to the moon, sending them to Mars, building space stations and developing the commercial spaceflight industry.
“There are a whole series of things you can do that could be dynamic that are more than just better government bureaucracy,” Gingrich said. “They’re fundamentally leapfrogging into a world where you’re incentivizing people who are visionaries, and people in the private sector to invest very large amounts of money in finding very romantic and exciting futures.”
Gingrich also implied he would trim NASA’s budget, which currently represents roughly 0.5 percent of the federal budget.
“I’d like to see a leaner NASA,” he said. “I don’t think building a bigger bureaucracy and having a greater number of people sit in rooms and talk gets you there.”
The last part is key. No where does Newt say you have to dramatically increase spending. How do you give out prizes, while trimming the budget? By getting rid of a bloated bureaucracy that’s how. That’s a point Newt has made over and over again. Any person saying Newt will increase Government is lying, either a Liberal who only thinks in Big Government or a Romney supporter that only thinks in Romney talking points (which are known to be false, misleading or outright lies).
Going to the Moon could be the incentive to get kids interested in science and engineering again. I know growing up, I loved (still do) movies about space. It’s what got me into science initially. I think it’s what drove a generation into the sciences. We need more scientists and engineers, not just in this country but the world. We need them more than we need sociologists or psychologists.
Shooting for the Moon is part of the American culture. It’s part of our national character. Why not make sure it’s a part of our children’s generational character. I can’t say it any better than this guy:
Obamany Refinance plan: Change you can believe in.
James Pethokoukis is one of the few people holding Romney’s feet to the fire. He has a great article today on Romney’s housing plan.
First, this exchange from CNBC’s Kudlow Report last night:
Romney: Again, let’s look at the numbers. Let’s see what kind of tax there is. If you’re talking about refinancing trillions of dollars of debt and the government is now going to be taking over responsibility for those mortgages, that would be a real problem. But let’s look at the details. Clearly, if there is a way of providing a break to homeowners to get lower interest rates, that is something which has always been part of the refinance story. If it can be done in a way that doesn’t add additional government obligation, that’s one thing. If instead it adds trillions of dollars in new debt to the federal balance sheet, that’s a very different thing. What about the investors who own the mortgage-backed securities who have to be repriced lower? They’re going to take a bath, pension funds are going the take a bath. In the speech, he put in one or two sentences about it. Let’s see what it shows. You have apparently more information about it than I do. I want to see what the plan shows, but clearly, you can’t go in and say we’re going to wipe out all the people who invested in mortgages and mortgage-backed securities. A lot of those are banks. Banks in some cases are in trouble already. You don’t want them to have to find themselves in even more distress.
Now, Romney could have said something like, “The way to boost housing is to boost the economy and speed up the foreclosure process so the market can clear.” But he didn’t say that. He said this: “Clearly, if there is a way of providing a break to homeowners to get lower interest rates, that is something which has always been part of the refinance story. If it can be done in a way that doesn’t add additional government obligation, that’s one thing.”
As James notes, Romney doesn’t criticisze the idea of a housing refinance plan at all, just the way Obama does it. Here’s Romney’s plan.
a) Every homeowner with a GSE mortgage can refinance his or her mortgage with a new mortgage at a current fixed rate of 4% or less, with the rate subject to change up or down with the price of Agency pass-through Mortgage-Backed Securities (MBS). For borrowers with an FHA or VA mortgage, rates would be higher, but these borrowers should be included in any large-scale refinancing program.
b) The homeowner must be current on his or her mortgage or become so for at least three months.
c) NO other qualification or application is required, other than intention to accept the new rate (that is, no appraisal, no income verification, no tax returns, etc.).
As Pethokoukis notes: “Hey, that sounds a lot like the Obama plan, except with the GSE limitation.” Obama will give “every responsible homeowner” a refi. Romney only wants to give it to people backed by Fannie and Freddie. Makes all those attack ads about Newt and Freddie seem hypocritical doesn’t it?
Another way of saying it would be so say Romney’s plan is Obama lite. They both think that Government should refinance people’s houses that they bought because of bad government policy. It’s government intervention because the last government intervention didn’t work out so well.
The main problem is that refinancing a house only helps marginally and if anything postpones the inevitable to a later date. It’s basic premise is to prop up house prices. The banks are not going to write down current asset prices for the house as long as it is being refinanced. The principle remains, it’s just the interest rate that changes. This keeps banks balance sheet artificially high, which keeps stock prices high. Politicians seem to think that if stocks are high, the economy is doing good. As if the last 3 years haven’t been proof of that error.
As noted in a NYT article from 2010, refinance plans only kick the can down the road.
Some experts argue the program has impeded economic recovery by delaying a wrenching yet cleansing process through which borrowers give up unaffordable homes and banks fully reckon with their disastrous bets on real estate, enabling money to flow more freely through the financial system.
“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” said Kevin Katari, managing member of Watershed Asset Management, a San Francisco-based hedge fund. “We have simply slowed the foreclosure pipeline, with people staying in houses they are ultimately not going to be able to afford anyway.”
Mr. Katari contends that banks have been using temporary loan modifications under the Obama plan as justification to avoid an honest accounting of the mortgage losses still on their books. Only after banks are forced to acknowledge losses and the real estate market absorbs a now pent-up surge of foreclosed properties will housing prices drop to levels at which enough Americans can afford to buy, he argues.
We’ve seen Obama’s refi plan fail. Now Romney is saying “Hey I can do it too! Look at me I’m electable.” Give me a break. Don’t expect to see any mention of Obamany Refi in the conservative media. That would hurt Romney too much. Of course, never expect to see anything that hurts Obama in the MSM.
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