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All posts by Jim Garven
The Wall Street Journal Editorial Board’s take on the midterm elections
Assorted Links (11/1/2010)
Here’s a list of articles that I have been reading lately:
cafehayek.com
“The latest EconTalk is John Quiggin defending his claims about zombie economics–that certain ideas keep coming back to life even though they should be put to death.”
Government or God?
insight.kellogg.northwestern.edu
Interesting research from the Kellogg School of Management at Northwestern University: “Voting may feel like a regular part of the political landscape in many nations, but elections are also periods of uncertainty. Events like elections can shake people’s fundamental need to believe in an orderly structured world. To counter this apprehension, new research suggests people’s faith in a higher power becomes stronger. Surprisingly, the research also finds that when faith in the stability of God or the government is shaken, people turn to the other entity to restore a sense of control.”
Wall Street Still Doesn’t Love the GOP
online.wsj.com
“In The Wall Street Journal, Charles Gasparino writes that bankers and tea partiers both know that the Dodd-Frank banking reform bill has written ‘too big to fail’ into law.”
House Takeover Would Give GOP Ways To Attack Health Law
www.thefiscaltimes.com
“If Rep. Joe Barton becomes chairman of the House Energy and Commerce Committee next year, the Texas Republican vows to make life miserable for Democratic defenders of the health care overhaul law.”
Who’s Afraid of Marco Rubio?
online.wsj.com
“Democrats are scared enough of the charismatic Republican Senate hopeful that some were willing to sacrifice their own candidate to help a stronger challenger in the race.”
A Vote Against Dems, Not for the GOP
online.wsj.com
“Voters don’t want to be governed from the left, right or center. They want Washington to recognize that Americans want to govern themselves.”
Reefer Sadness for Pot Farmers
www.businessweek.com
“In Northern California’s Humboldt County, small marijuana growers find the legalization of their business could be the worst thing that ever happened to them.”
How Corrupt is the United States?
dmarron.com
“According to a recent study, the United States has more public sector corruption than do many other developed economies. More precisely, Transparency International reports that corruption perceptions are higher for the United States than for 21 other countries.”
www.city-journal.org
“Most Americans don’t like the Dodd-Frank act.”
How We Got Here
www.nytimes.com
“For nearly two decades, America turned steadily more liberal. But that changed abruptly when President Obama took office.”
Midterm elections 2010: Prepare for a new American revolution
www.telegraph.co.uk
“Popular rage against the elite could change the nature of US politics, says Janet Daley.”
George F. Will – What’s at stake Tuesday
www.washingtonpost.com
“During the Tuesday evening deluge, pay particular attention to these stories.”
From the Rally to Restore Sanity, part II
Hat tip to Greg Mankiw!
Assorted Links (10/31/2010)
Here’s a list of articles that I have been reading lately:
Tuesday’s National Economic Referendum
www.realclearmarkets.com
“Over the almost 40 years that I’ve been eligible to vote there have been only two elections in which economic policy has so dominated public debate that social issues disappeared from view. One such election will take place on Tuesday. The other happened 30 years ago when Ronald Reagan challenged incumbent Jimmy Carter for the presidency.”
More Evidence on Why the Stimulus Didn’t Work
Johnbtaylorsblog.blogspot.com
“The most debated issue is the size of government purchases multiplier. Suppose that the government purchases multiplier is 1.5… 1.5 is at the upper range of estimates, and was used in a paper by Christina Romer and Jared Bernstein to estimate the impact of the American Recovery and Reinvestment Act of 2009 (ARRA). However, John Cogan, Volker Wieland, Tobias Cwik, and John Taylor found that the multiplier in the case of ARRA was much smaller, around .7. Robert Barro argues that it is zero. So there is debate.”
How to Reform Education
online.wsj.com
“Michelle Rhee and Adrian Fenty on what they learned while tackling Washington, D.C.’s failing public schools.”
Making the world a better place
cafehayek.com
“Right now, a child is crying. A blind woman is walking the streets of New York asking for help at an intersection. A beggar has his hand out. A classroom full of students awaits the teacher’s entrance. Someone’s heart is breaking. A friend’s wife is in the hospital and he finds himself overwhelmed in so many ways. Someone needs you. Do you help? Do you look the other way? If you help, how do you help? With all your heart and soul? Or are you bitter or bored or distracted? Is your phone ringing? Or are you checking your email while you’re listening to a friend’s troubles? Can you find a reason to do what is easy and what is best for you? Or do you help?”
Charles Lane – Obama’s electric-car cult
www.washingtonpost.com
“Maybe it was karma, but the Volt’s launch coincided with publication of a 72-page report by J.D. Power and Associates that confirmed, in devastating detail, what many other experts have found: Electric cars still cost too much, even with substantial federal subsidies for both manufacturers and consumers, to attract more than a handful of wealthy buyers – and this will be true for at least another decade. What little gasoline savings the vehicles achieve could be had through cheaper alternative means. And electrics don’t reliably reduce greenhouse gas emissions, since, as often as not, the electricity to charge their batteries will come from coal-fired plants.”
The Economic Way of Thinking: Red States with a Bad Case of the Blues
ewot.typepad.com
“The Tax Foundation just released their updated State Business Tax Climate Index (click on the map above for an easier to view version). New Mexico (-10), Alabama (-9), and Connecticut (-9) had the biggest year-over-year declines in rankings; Illinois (+7) enjoyed the biggest improvement primarily because states similar to it raised taxes while Illinois kept taxes fairly constant this past year. South Dakota enjoys the best ranking; New York has the worst ranking. When we look at southern states, they clearly seem to have a case of the blues. That is, they’re way more red in their rhetoric (and when it comes to social issues) than they are in reality. ”
The Cost in Jobs of Doing Business With China
blogs.wsj.com
“Does trade with China really cost the U.S. 2.4 million jobs? Some economists say the oft-cited number doesn’t square with economic reality.”
ObamaCare and Voters
online.wsj.com
“The Wall Street Journal writes that Clinton and Obama told Democrats it would be popular. Whoops.”
Requiem for the Pelosi Democrats
online.wsj.com
“In The Wall Street Journal Weekend Interview, Democratic Rep. Brian Baird says that House Speaker Nancy Pelosi and the Obama administration are unpopular because they failed to spur job creation.”
Key Bloc Of Voters Flocks to The GOP
online.wsj.com
“The Democrats’ final push to woo undecided voters appears to have fizzled, potentially putting dozens of competitive House races beyond reach and undermining the party’s hopes in at least four toss-up Senate seats, according to party strategists and officials.”
From the Rally to Restore Sanity
Hat tip to Alex Tabarrok!
Art in Austin…
My wife Jan Florence Garven is one of four featured artists in an upcoming show at Diaz Gallery in Austin, TX entitled “The Harvest”; here’s information on the opening reception:
Should US Mail Be Privatized?
Chris Edwards, of the Cato Institute, and Keith Boykin, of The Daily Voice, share their views. (Original Airtime: Tues. Jul. 6 2010, 1:50 PM ET)
Prediction Markets and the Upcoming Midterm Elections
Now that we are on the eve of the midterm election, it is worthwhile considering what the “prediction markets” are indicating.
In an earlier posting entitled “What are the prediction markets saying about the economy?”, I lay out some of the technical details concerning how the intrade.com market in particular works (there are other similar markets; e.g., the Iowa Electronic Market at the University of Iowa’s Tippie School of Business, but my sense is that intrade.com is the dominant player in this “space”). The intrade.com contracts are very simple – each contract specifies some sort of state-contingent event, along with a date at which the contract matures. The payoff is $10 if the contingent event occurs, and $0 otherwise. Prices are quoted in terms of Intrade “points”, and each $1 payoff is worth 10 Intrade points, so a $10 payoff is worth 100 Intrade points. This way, the market prices resemble probabilities (technically, these are actually “Arrow-Debreu” prices), but for practical purposes, it is reasonable to interpret these prices as probabilities.
Here, I reproduce the Wednesday, 10/28 implied probabilities associated with various political contracts. The GOP House Control contract currently indicates nearly a 90% probability that the GOP will win control of the House of Represenatives. In my opinion, the more interesting contracts are the ones indicating the number of House seats gained by the GOP and Senate Seats held by the GOP. The current make-up of the U.S. House of Representatives is 256 Democrats, 178 Republicans and one vacancy (256+178+1=435), so if the GOP gains 50 seats (80% probability), it will have a majority of 22 House members. In the Senate, the markets indicate a nearly 80% probability of 48 GOP seats. However, given that there are at least two “independents”, this would seem to indicate “gridlock” at the very least!
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Control of the House of Representatives |
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Control of the Senate |
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Democrats |
11.1% |
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Democrats |
55.0% |
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Republicans |
88.8% |
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Republicans |
12.5% |
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Neither |
0.1% |
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Neither |
32.5% |
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Number of House seats gained by the GOP |
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Senate Race Spotlight: CONNECTICUT |
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20 Seats Gained |
97.7% |
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R. Blumenthal (D) |
93.5% |
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30 Seats Gained |
96.0% |
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Linda McMahon (R) |
6.5% |
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40 Seats Gained |
87.2% |
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Senate Race Spotlight: WEST VIRGINIA |
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50 Seats Gained |
79.9% |
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Joe Manchin (D) |
52.8% |
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60 Seats Gained |
43.9% |
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John Raese (R) |
47.2% |
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Number of Senate seats held by GOP |
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45 GOP Seats |
97.5% |
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46 GOP Seats |
96.9% |
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47 GOP Seats |
89.0% |
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48 GOP Seats |
78.9% |
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49 GOP Seats |
48.5% |
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50 GOP Seats |
30.0% |
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51 GOP Seats |
15.0% |
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Assorted Links (10/29/2010)
Here’s a list of articles that I have been reading lately:
Understanding Regime Uncertainty
cafehayek.com
“Writing in today’s Wall Street Journal, Robert Reich reveals his misunderstanding of regime uncertainty. Unleashing this destructive uncertainty requires more than simply changing in major ways government’s role in the economy. Instead, regime uncertainty is increased by changes that portend into the indefinite future a greater degree of arbitrary government economic intervention.”
N.T. Wright Refuses to Choose
www.robmoll.com
“Former bishop turned professor says he opposed making a choice between his care for the church and his academic pursuits.”
The Biggest Election Myths of 2010
online.wsj.com
“In The Wall Street Journal, Potomac Watch columnist Kimberley Strassel says that Democrats will lose big in the midterm because of the Obama agenda, not because of secret campaign donations or extremist tea partiers.”
A Little Lady Predicts a Big Win
online.wsj.com
“The Republican tide may even reach the Jersey Shore, Peggy Noonan writes.”
Abortion, Conscience, and Doctors « Public Discourse
www.thepublicdiscourse.com
“If people are not prepared to offer legally permitted, efficient, and beneficial care to a patient because it conflicts with their values, they should not be doctors,” declares Julian Savulescu of Oxford University. Savulescu’s position, known as the “incompatibility thesis,” contradicts important statements about the rights of conscientious refusal articulated by the American Medical Association, U.S. federal law, and international law.”
College for Those Who Can’t Learn
www.americanthinker.com
“It is not easy being a connoisseur of educational foibles — just as one is recovering from the latest foolishness, along comes something new, and it’s back to the anti-depressants. The latest installment of Educators Gone Wild is the push to enroll the “intellectually disabled” in college. We are not talking about at…tracting eccentrics; these recruits are youngsters with Down Syndrome, autism, and other disabilities that seriously impede learning. This is college for those stymied by reading and writing.”
Brother, Can You Spare a Trill?
freakonomics.blogs.nytimes.com
“Economists Mark J. Kamstra and Robert J. Shiller propose a new tool for government financing: “trills” — i.e., shares in U.S. GDP.”
Warning: Retirement Disaster Ahead
online.wsj.com
“Don’t let the rally in the stock and bond markets fool you. Many Americans are still hurtling towards a retirement train wreck, writes Brett Arends.”
Tax Breaks For The Wealthy Do Boost Economy – Forbes.com
forbes.com
“Congress is biting the hand that feeds long-run economic growth by raising tax rates on the rich.”
Stocks and Bonds Are Bullish on the Economy – BusinessWeek
businessweek.com
“Strong earnings for businesses in a wide range of industries, from CSX to GE to Cargill, may indicate faster economic growth in 2011.”
Democrat Estate Tax Will Trip Next Secretariat: Amity Shlaes
www.bloomberg.com
“The estate tax is one topic getting lost in the dust of the midterm races. That’s a pity. This tax, now quiescent, is set to roar back like a stallion in 2011 if lawmakers don’t rein it in with new legislation.”
Time for Bailout Transparency
online.wsj.com
“In the Wall Street Journal, Matthew Winkler, the editor in chief of Bloomberg News, writes that big banks don’t want you to know which of them went to the Fed for emergency help.”
The Rage Against Citizens United
online.wsj.com
“In The Wall Street Journal, Wonder Land columnist Daniel Henninger examines why Barack Obama gave the Supreme Court a public tongue-lashing.”
Shelby Steele: A Referendum on the Redeemer
online.wsj.com
“Shelby Steele writes in The Wall Street Journal that Barack Obama put the Democrats in the position of forever redeeming a fallen nation rather than leading a great one.”
Stock market aversion? Political preferences and stock market participation
www.sciencedirect.com
“We find that left-wing voters and politicians are less likely to invest in stocks, controlling for income, wealth, education, and other relevant factors. This finding from unique data sets in Finland is robust both at the zip code and at the individual level. A moderate left voter is 17–20% less likely to own stocks than a moderate right voter. The results are consistent with the idea that personal values are a factor in important investment decisions, in this case leading to “stock market aversion.” The results are inconsistent with alternative explanations such as wealth effects, risk aversion, reverse causality, return expectations, or social capital.”
Predicting the Midterm Elections: A Freakonomics Quorum
freakonomics.blogs.nytimes.com
“This year’s midterm elections promise to be a bit more eventful than usual, with predictions of seismic change in Congress and in many statehouses, most of it in a blue-to-red direction. But predictions aren’t elections; and even if the predictions hold true, what happens next?”
Assessing the Power of One at the Polls
economix.blogs.nytimes.com
“You’re more likely to be involved in an election-year car crash than to cast a deciding vote, an economist writes.”
www.nypost.com
“With campaign season comes predictable charges that Candidate X favors “tax breaks for corporations that ship US jobs overseas.” It’s a bogus claim.”
QEII, Like QEI, Isn’t Monetary Ease
www.realclearmarkets.com
“As is well known now, the Bernanke Fed is set to begin another round of so-called “quantitative easing” in order to stimulate demand. Unfortunately for Bernanke & Co. simply adding liquidity to an economic system does not promote growth. In fact, the relationship is reversed: it is new demand that stimulates the need for new liquidity, not liquidity that sparks demand.”
The Foreclosure Crisis and the Future of American Communities
online.wsj.com
“In The Wall Street Journal, Business World columnist Holman Jenkins, Jr. says that the attempt by journalists and state attorneys general to cast banks as villains will only make the housing crisis harder to surmount.”
Private Social Security Accounts Are Still a Good Idea
online.wsj.com
“In The Wall Street Journal, William G. Shipman of the Cato Project on Social Security Choice and Peter Ferrara of the Institute for Policy Innovation write that a couple who worked from 1965 to 2009 would have beat the government payout by 75%.”
Fouad Ajami: Karzai and the Scent of U.S. Irresolution
online.wsj.com
“In The Wall Street Journal, Fouad Ajami of Johns Hopkins University writes that the brutal facts about Afghanistan are these: It is a broken country, a land of banditry, of war of all against all, and the need to get what can be gotten from the strangers.”