Before I get going with the news, I want to recommend a wonderful movie. Yesterday afternoon, I took my nephews to see Tim Burton’s Frankenweenie, and I loved it! Trust me, it isn’t just for kids. It’s a funny, touching story about a boy and his dog as well as a great homage to horror movies. There’s even a scene where the science teacher, who looks like Vincent Price and talks like Bela Lugosi, tells a meeting of parents complaining about his class that they’re ignorant and prefer fantasy to science.
The Boston Globe reviewer gave the movie four stars, which is unheard of for a film aimed at children. There’s a wonderful backstory too:
In 1984, when he was an eccentric young animator working for Disney, the young Burton made a 30-minute live-action short called “Frankenweenie,” about a boy named Victor and the scrappy pet he brings back to life after it’s hit by a car. The movie was weird, it was inventive, and it spooked the bejesus out of Disney executives, who refused to release it and fired Burton. After the director became famous in the wake of “Edward Scissorhands,” the company put it out on VHS; it now can be found as an extra on the “Nightmare Before Christmas” DVD.
The current entertainment landscape has been effectively Burton-ized; this season alone, there are two pallid family-film imitations, “ParaNorman” and “Hotel Transylvania,” that arguably wouldn’t exist had the director not made the world safe for light pop-goth gloom. The new, improved “Frankenweenie” is thus not only revenge served sweetly — it’s being released by Disney, tail between its legs — but a reminder that, at his best, Burton belongs in the same bleakly charming league as Charles Addams and Edward Gorey.
Now I think I need to watch Ed Wood again.
That was such a nice break from all the depressing news about Mitt Romney and other insane Republicans. Now lets see what’s in the news today.
Everyone is talking about the latest Pew Poll which has Romney leading by 4–quite a shock. Even more shocking, TPM’s polltracker average now has Romney ahead of Obama by close to 3 points. On the other hand, today’s Gallup tracking polls shows Obama ahead by 5 points. Weird.
Now for a little expert analysis. Nate Silver advises: Amid Volatile Polling, Keep an Eye on Election Fundamentals
Mr. Obama got a bounce coming out of Charlotte, and it had some staying power — with his national lead appearing to peak at about five or six percentage points. But polling released immediately after the debate seemed to suggest that Mr. Romney had drawn into a rough national tie.
By the weekend, however — after the release of a favorable jobs report last Friday — Mr. Romney’s bounce seemed to be receding some. Tracking polls released on Monday by Gallup and Rasmussen Reports actually showed a shift back toward Mr. Obama, although another poll by Pew Research showed Mr. Romney with a four-point lead among likely voters.
Polling data is often very noisy, and not all polls use equally rigorous methodology. But the polls, as a whole, remain consistent with the idea that they may end up settling where they were before the conventions, with Mr. Obama ahead by about two points. Such an outcome would be in line with what history and the fundamentals of the economy would lead you to expect.
Keep in mind:
Challengers also generally profit from the first debate: in 8 of the 10 election cycles since 1976, the polls moved against the incumbent, and a net gain of two or three percentage points for the challenger is a reasonably typical figure.
At the same time, incumbent presidents just aren’t that easy to defeat. Mr. Obama’s approval ratings are now hovering around 50 percent and don’t seem to have been negatively affected by his performance in Denver. Although Mr. Obama’s approval ratings may be slightly lower among those most likely to vote — meaning that Mr. Romney could win with a strong turnout — historically that number has been just good enough to re-elect an incumbent.
David Adkins of Hullabaloo took a look at the internals of the Pew poll and found some interesting tidbits:
– For starters, a full two-thirds of the respondents were over 50 years old. Is that likely to be the shape of the electorate? Very likely not.
– A full 77% of the respondents were white. That is almost certainly not going to reflect the final electorate.
– A large preponderance of the respondents were from the South (449), with the next highest total from the Midwest (294), and only 219 from the Northeast and 239 from the West. There will not be twice as many voters from the South in the election as from the Northeast or the West.
– Finally, more respondents claimed to be Republicans than Democrats, which would destroy the President’s chances in November automatically. It’s possible for the final electorate to resemble that Party ID, but unlikely.
Read the rest at the link. I found it helpful. Markos also had a good post on the polls yesterday, if you don’t mind going to the orange place. He noted that the PPP poll to be released today will also have Romney in the lead nationally.
Paul Waldman asks the same question I ask myself every Monday: Why Do the Sunday Shows Suck So Much?
In the American media landscape, there is no single forum more prestigious than the Sunday shows—particularly the three network programs, and to a slightly lesser extent “Fox News Sunday” and CNN’s “State of the Union.” The Sunday shows are where “newsmakers” face the music, where Washington’s most important people are validated for their importance, where issues are probed in depth. So, why do they suck so much?
I live and breathe politics, yet I find these programs absolutely unwatchable, and I can’t be the only one. On a typical episode, there is nothing to learn, no insight to be gained, no interesting perspective on offer, nothing but an endless spew of talking points and squabbling. Let’s take, for instance, yesterday’s installment of “This Week With George Stephanopoulos.” We start off with dueling interviews with Obama adviser Robert Gibbs and Romney adviser Ed Gillespie. Were you expecting some candid talk from these two political veterans? Of course you weren’t. “If you’re willing to say anything to get elected president,” Gibbs says about Mitt Romney, “if you are willing to make up your positions and walk away from them, I think the American people have to understand, how can they trust you if you are elected president.” Which just happens to be precisely the message of a new Obama ad. What a fascinating coincidence! And you’ll be shocked to learn that Gillespie thought Romney did a great job in the debate: “Governor Romney laid out a plan for turning this economy around, getting things moving again. He had a fact-based critique of President Obama’s failed policies that the president was unable to respond to.” You don’t say!
Go read the whole thing. It’s not long.
As you know, Mitt Romney gave a foreign policy speech yesterday, and it isn’t getting great reviews except among the ultra-right wingers. Dakinkat wrote about it yesterday afternoon. This story is a few days old, but I wanted to call attention to it because it didn’t get a whole lot of coverage. During the debate last Wednesday, Romney made some (inaccurate, natch) remarks about Spain that caused some outrage over there. Here’s what he said:
“Spain spends 42 percent of their total economy on government. We’re now spending 42 percent of our economy on government. I don’t want to go down the path of Spain. I want to put more Americans to work.”
That did not go over well in Spain, where it was seen as on a par with the bumbling, insulting remarks Romney made when he was in Great Britain for the Olympics. Some reactions:
Fox News Latino: Mitt Romney Spain Jab Adds to Foreign Policy Woes
It has become apparent to some that Mitt Romney is in need of a crash course in Diplomacy 101.
He irritated Britons and Palestinians during a summer tour abroad and has declared Russia to be America’s No. 1 geopolitical foe. Just last week, the Republican candidate, who plans a foreign policy speech Monday, raised eyebrows in Spain by holding it up as a prime example of government spending run amok.
That left Spaniards confused, and threatened to reinforce Romney’s perceived handicap in international affairs….
Spanish reaction to Romney was swift.
“What I see is ignorance of what is reality, but especially of the potential of the Spanish economy,” said Deputy Prime Minister Soraya Saenz de Santamaria.
Maria Dolores Cospedal, leader of Spanish Prime Minister Mariano Rajoy’s Popular Party, noted that “Spain is not on fire from all sides like some on the outside have suggested.” Foreign Minister Jose Manuel Garcia Margallo called it “very unfortunate that other countries should be put up as examples” when the facts are skewed.
At HuffPo, former Clinton economic adviser Laura Tyson corrected Romney’s inaccuracies:
Mitt Romney made a wildly inaccurate claim during Wednesday’s presidential debate, and Laura Tyson, a former top economic adviser to President Bill Clinton, is calling him out….
But according to Romney’s campaign website, government spending accounted for only 24 percent of gross domestic product last year. The nonpartisan Congressional Budget Office says that government spending is 23 percent of GDP.
“I have no idea where that number came from,” Tyson, a professor at the University of California at Berkeley, told The Huffington Post after the debate. “That is certainly not a number that is consistent with the facts.”
Tyson said she couldn’t tell whether Romney said it “knowing it was wrong” or whether he “mixed the numbers up in his head.” But nonetheless, she said, “It’s clearly wrong.”
Tyson added that when it comes to taxes, “we’re not anywhere near countries like Spain.”
The Boston Globe reports that as many as 13,000 people may have gotten tainted steroid injections from a Framingham, MA pharmacy and could be at risk of getting meningitis.
US health officials on Monday said that 13,000 patients in 23 states, including Connecticut, Rhode Island, and New Hampshire, have been injected with a potentially tainted steroid treatment made by a Framingham pharmacy, more information can be found here and linked to a national outbreak of meningitis.
The US Centers for Disease Control and Prevention gave its sweeping estimate of the reach of the crisis as it reported 14 new cases of the disease, and another death in Tennessee, which appears to be the hardest hit among the states where the rare and serious form of fungal meningitis has been confirmed.
“We know that 13,000 people received the injection,” said Jamila Jones, a public affairs specilialist for the CDC in Atlanta. “They received it at facilities across the country. They are at risk.”
So far, 105 cases and eight deaths have been confirmed nationally, the agency said.
The steroid, called methylprednisolone acetate, was made by New England Compounding Center in Framingham, which voluntarily ceased operations Oct. 3 amid a widening probe of the treatment and its use at dozens of health care facilities from New Hampshire to California.
Now it’s your turn. What are you reading and blogging about today? I look forward to clicking on your links!
If you’re like me, you’ll get a big laugh out of Brad DeLong’s on-going tongue and cheek label of pretty much every economist as being a member of the “hippie caucus” simply for giving the MSM a lesson on economic theory. It’s not exactly the most complex model or theory that drives the idea that you deficit spend during a tough economy to create jobs and stimulate business. Every first year macroeconomic principles students learns that. My guess is that most of congress and the President never got that far.
So, here’s a list of Brad’s Hippie Caucus and the statements based on simple economic theory that puts them into membership. These are some big name economists basically saying what I’ve been saying for a few years now. The deficit is a long term problem. The immediate problem is business’ lack of customers. It’s an aggregate demand thing and increased government spending is the obvious policy remedy.
The first member is Laura Tyson who I’d really like to see as Treasury Secretary or head of the CEA again. She served under Bill Clinton. You remember Bill Clinton? He’s the one that had the best job creation record of any modern president.
But the overwhelming evidence suggests the opposite: when the economy has excess capacity, high unemployment and weak private demand, cuts in government spending reduce growth and eliminate jobs.
On this point, there is widespread agreement among experts. Ben Bernanke, chairman of the Federal Reserve, recently warned that sudden fiscal contraction might put the still fragile recovery at risk. The June report from the C.B.O. contains a similar warning. Even William Gross of Pimco, a vocal critic of the long-term fiscal position of the government, cautions that a move toward fiscal balance, if implemented too quickly, could “stultify economic growth.”
As Simon Johnson noted in his recent Economix post, fiscal contractions are expansionary only under special conditions. None of these apply to the United States today.
So what should policy makers do? They should pair fiscal measures aimed at job creation now with a credible plan to reduce the deficit gradually –- and pass both at once, as a package. Approving a deficit-reduction plan but deferring its starting date until the economy is near full employment will cut the odds that immediate contraction will tip the faltering economy back into recession.
Indeed, passage of such a package could bolster growth by easing investor concerns about future deficits, reducing long-term interest rates and strengthening consumer and business confidence.
The next member is Larry Summers. You remember him, he’s the one we thought the President may have actually listened to when doing his economic policy thing? Well, I’ve apologized for thinking Summers turned his back on his credentials and I’m having to eat my words again.
SUMMERS: I worry about a number of things with respect to growth. Most profoundly I worry about lack of demand in the United States. That means that factory capacity is unused, it means that buildings sit empty, it means that too many people are unemployed. And I look for measure that will serve to promote the level of demand in the United States. That’s why using this moment to repair our infrastructure is so important. That’s why I believe that the payroll tax cuts that put money in people’s pockets and increased employers incentives to hire are so important. And that’s why I believe that opening foreign markets and promoting U.S. exports which creates more demand is so important. And China is obviously an important part of that story.
So we already know that Paul Krugman is in the Hippie Caucus, but here’s an addition via Krugman. Traxis Partners Hedge Fund multimillionaire Barton Biggs is saying the same thing. Surprisingly enough, this comes from the WSJ whose editors have drunk enough Grover Norquist koolaid to be dead heads.
The U.S. and Europe are set to grow at an anemic pace for the foreseeable future unless the government can step in with an enormous fiscal stimulus, according to a veteran investor.
Speaking exclusively with The Wall Street Journal, Barton Biggs, managing partner at multibillion dollar hedge fund Traxis Partners, painted a bleak outlook for the developed world with only huge government intervention likely to improve things.
Mr. Biggs, former chief global strategist for U.S. investment banking powerhouse Morgan Stanley, demanded the U.S. government temporarily return to ideas used in the Great Depression as a way to get the country back to higher growth.
“What the U.S. really needs is a massive infrastructure program … similar to the WPA back in the 1930s,” he says.
The plan would be to employ some of the many unemployed people, jump start the economy, as well as help catch up with Asia, which is building state-of-the-art infrastructure from new mechanized port facilities to high-speed trains.
He suggested financing such building through the sale of U.S. Treasuries.
Okay, so Mark Thoma’s on the list too. No surprise there either. However, this comment is not on his blog Economist’s View, it’s at the FT.
I disagree with them that immediate austerity is needed. The long-term budget problem in the US is driven mainly by rising health costs, and we have many years to go before this begins to create big budget problems. Thus waiting, say, two years to begin reducing the deficit will not substantially change the probability of big problems down the road. But delaying austerity measures avoids placing a further drag on an already struggling economy, so the likely benefits are relatively large.
One of the arguments for austerity is that it would give the Federal Reserve “increased room for manoeuvre to adopt further quantitative easing if the economy weakens further”. I agree that the Fed fears being placed in the position of appearing to monetise the debt, but again I do not think immediate action is needed. A budget plan that both political parties can agree to, which is implimented only when the economy is stronger, would do a lot to give the Fed the confidence it needs to act.
Here’s a member of the Hippie Caucus from across the Pond. That would be no other than the FT’s Martin Wolfe. He sums it up nicely by saying “enjoy the coming slump” but if you want to read the wonky way of saying it, here it is.
Few doubt there is excessive private sector debt in a number of high-income countries. But how is it to be reduced? The BIS notes four answers: repayment; default; higher real incomes; and inflation. Let us rule out the last and focus on the first. Repayment means spending less than one’s income. That is what is happening in the US private sector (see chart). Households ran a financial deficit (an excess of spending over income) of 3.5 per cent of gross domestic product in the third quarter of 2005. This had shifted to a surplus of 3.3 per cent in the first quarter of 2011. The business sector is also running a modest surplus. Since the US has a current account deficit, the rest of the world is also, by definition, spending less than its income. Who is taking the opposite side? The answer is: the government. This is what a controlled depression means: every sector, other than the government, is seeking to strengthen its balance sheet at the same time.
Another former Obama adviser that’s in the Hippie Caucus and may join my list of people that most likely quit Obama because he wasn’t listening to any economists. That would be none other than former budget director Peter Orzag. You know I thought Christie Romer was a good one and was confused when she was supporting that weak ass stimulus. I’m now even wondering about Austin Goolsbee.
Today’s fiscal policy debate straddles two divides: one between those who support jobs and those who favor austerity, and one between those who think additional revenue is needed and those who don’t.
On the first divide, both sides are right, because the truth is that the U.S. needs both jobs and austerity — and a combination would be more powerful than either piece by itself. We face a very weak labor market now and, over the medium- and long-term, an unsustainable fiscal path. It would make sense to combine an additional round of temporary job creation measures with a substantial amount of permanent deficit reduction that would be enacted now but take effect later.
So, I’ve been blogging around here like my hair’s on fire pretty much since this financial crisis set in. I wrote the Obama stimulus was too little and too focused on tax cuts to appease the few Republicans resident in a then overwhelmingly Democratic Congress with a president with a mandate and political capital. I blogged that we didn’t need to extend the Bush tax cuts to millionaires and billionaires because they were the only ones that were recovering nicely. I blogged that the President should forget about health care reform and focus like a laser on the sour economic recovery. I also said that all that would do would give the Republicans more hot air come the negotiations for the debt ceiling increase. I’ve blogged repeatedly that businesses–no matter what the tax rates or the rate of interests–are not going to spend their money on capital or labor here in the US because they need customers first and foremost. I’ve also written extensively that all this cheap Fed money at the discount window and tax breaks for industry was likely to be used in places like Asia instead of here in the U.S. Brad DeLong has done an excellent job showing you that many, many top economists believe the same things. So, next time any one tells you that all economists are always caught off-guard, please remember all of this.
I truly believe that Republicans are trying to tank the economy and that Barack Obama is either tacitly or complicity or ignorantly going right down the garden path with them. Again, if you’ve got terminal cancer and need surgery to save your life do you call some one who has never gone to med school to operate on you? If you’re wrongly accused of murder and you need some one to argue that you’re innocent, do you want some one that’s never been to law school to represent you? Why or why do so many idiots in the press, in the congress, and in the White House think they know more about the economy and the financial markets than those of us that have spent our lives researching, studying, and doing it?
We should be rioting in the streets like the English and the Greeks. Instead,we’re acting like sheep to the slaughter. What our government is doing right now is actively working against the interests of its people. There are laws in place that require it to responsibly handle the economy and create jobs. They are doing the exact opposite of this. We need to get mad. Voting for idiots is not working.