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Will no one stand up for George W Bush? Will no one put the wheels back on this wreck?

President Bush will be the first president in 72 years to face the electorate with a net job loss. The Iraq war has deeply torn the nation. National polls show a neck-and-neck race. Yet economy-based projections still show a decisive Bush victory on Nov. 2.

What gives?

Political scientists and many economists say this may be the year to throw the economic models out the window. Forecasters are flummoxed about the impact of Iraq, uncertain about the true state of the economy, and less sure about their projections than in any recent election...

Despite record deficits, surging oil prices and the loss of jobs under Bush's watch, mathematical and statistical models continue to project a Bush victory. Economists, however, are raising questions about their own models.

These models, just like the predictive presidential futures market, have always been suspect. To be fair the modelers have always taken their models less seriously than the general public. Perhaps this election will put a number of urban myths to bed (although it will undoubtedly spawn others).

Originally posted to Daily Kos on Sun Oct 10, 2004 at 05:27 AM PDT.

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Comment Preferences

  •  Somewhat off topic... (none)
    Why is John Kerry's plan to increase the tax rates of the wealthy the right fix for the economy?



    •  The pertinent question I took from (none)
      this diary entry is, why is JFK tied with - or a couple points behind, actually - a sitting president that has 'presided over a net job loss', at war in Iraq, 52.00/barrel oil, and dimly aware of his own existence?
      •  the pertinent answer is cultural issues (none)
        guns, gays and God still plays well in red states, and this year from AZ to MO to southern OH to FL to parts of Pennsyltucky, the battlegrounds are red.

        "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

        by Greg Dworkin on Sun Oct 10, 2004 at 11:46:11 AM PDT

        [ Parent ]

        •  I Would Say The Pertinent Answer (none)
          is incumbency and an ongoing war. It is not only hard to beat an incumbent, it's even harder to beat an incumbent president in the middle of a war he's leading. It's hard for Americans to dump their president. Even harder when we are at war.

          I'm very pleased that we're even in the game.

          Iraq is deja vu all over again.

          by chuco35 on Sun Oct 10, 2004 at 01:28:06 PM PDT

          [ Parent ]

          •  I am, too but it's a regional issue (none)
            Bush is being utterly destroyed in the northeast but winning the south.

            Kerry is 56 Bush 32 in the east, for example in Zogby's tracking poll. it's the only region like that, yet there's war here, too, and Bush is, alas, our incumbent as well.

            "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

            by Greg Dworkin on Sun Oct 10, 2004 at 01:32:48 PM PDT

            [ Parent ]

            •  That's Right (none)
              But the northeast has always been much less war-like than the rest of the country, especially wars of choice such as the Mexican and Spanish Wars. This doesn't change the electoral dynamics, IMO. I'm sure many more voters in the northeast would find it easier to vote Kerry if we had already faced reality in Iraq, admitted it is strategically unwise to occupy the country, and brought our kids home. Our kids are still there though, and many people find it hard to change horses in a war-stream, even if they see the folly of Bush's ways.

              This is even more pronounced outside the northeast. That's why Bush invaded Iraq, IMHO. For his battleship moment. If Bush wins it'll be because people won't want to change presidents in the middle of a war. Ironically, if Kerry wins it'll be because of people's disgust for the war.    

              Iraq is deja vu all over again.

              by chuco35 on Sun Oct 10, 2004 at 03:36:32 PM PDT

              [ Parent ]

    •  Fantastic article (none)
      and well worth reading from start to finish - which will take you a while, but it's really worth it.
    •  Great site (none)
      and, finally, soom real economic thought.

      "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

      by johnmorris on Sun Oct 10, 2004 at 01:24:20 PM PDT

      [ Parent ]

  •  The good side (none)
    2 good things will be accomplished this election day if this will convince economists and political scientists that their models are absurdly simplistic to rely on 'tangible' economic numbers.
    •  Economic Numbers (4.00)
      I suspect that one of the reasons these models are not working is that the numbers they rely on are mistated. There have been a huge numbers of ways in which the inflation numbers have been manipulated down in recent years, for example hedonic pricing (If a computer has twice the spec of last years model but costs the same it is shown as falling 50% in the CPI calculation, however the basket is then reweighted to bring it back up to its original weight), owner inputed rent (Although almost everyone buys a house and prices are rising, the CPI asumes we all rent and as rents have been falling this lowers the CPI). Likewise umeployment numbers are similarly manipulated, the number of people employed has fallen by a far larger number than the unemployment rate has gone up; the rest are "voluntarily" unemployed. How many lottery winners do you know?
      •  Even beyond that (4.00)
        I'm interested in the way that economic models encourage the buying and selling of services rather than free services.  So when society changes so that I have to pay for day care instead of using family members care for the kids or if I have to buy a car instead of walking to the store- that's considered a good thing.  

        The economic models make no effort to judge quality of life- was I in better health, better spirits, or more in touch with my community when I walked to work or had my neighbor watch my kids?  Milton Friedman doesn't care.

        •  nice post (none)
          and I've thought about that often.
        •  Damn Capitalism (none)
          Nobody ever thinks about the little guy...

          I was thinkin the U.S. should build about a hundred of those Australian Solar Towers along the U.S./Mexico border. It'd cost about half as much as this war is supposed to, and would create thousands of new jobs! Plus it would make Buchanan happy; could you imagine the improved border patrol with a hundred mile high structures along the border?

          But the most important thing it would do of course, is handle the power needs of most of North America. The estimates are each of the structures could power 200,000 homes. Multiplied by 100, that's well over 10% of U.S. households, powered for free!
          Hopefully the towers would become more popular soon after the initial ones were built.

          Alas, "free power" to the Republicans is NOT a good thing. Same reasons they don't like any form of renewable energy; ya can't make any money off it.

          Edwards wants to build BioDiesel proccessing plants all over the Midwest. I say using farm waste for fuel is better than fossil fuels anyday.

  •  Typical American (none)
    to believe that a marketplace can fix or predict everything.  Economics is far from being an exact science, as the linked article also points out.
    •  Talk about syncronicity... (none)
      I just finished a diary entry on the Iowa futures market last night:

      I think that futures markets are relatively good integrators of available information into a  measure of the current state of the world.  They are descriptive, but are they predictive?  If in the past there existed a relationship between an observable part of the state of the world and an event taking place in the future then registered traders, having access to this information, would incorporate it into their trading behavior.  For example, if no Republican has won a presidential election while loosing Ohio and we can observe a certain trend in Ohio's polling numbers then this represents a change in probability of a Bush win, which has implications for the value of the futures contract.  

      But when certain relevant information is not observable (.i.e.: data on newly registered voters reachable only by cell phones) or certain material events are unpredicatable (i.e.: next action by Iraqi insurgents) or if causal relationships valid in the past break down and do not apply to the present, then futures loose their predictive value.

      The Keen Meme Memo
      A Journal of Politics, Policy and Progress

      by Ivy Selensky on Sun Oct 10, 2004 at 12:46:41 PM PDT

      [ Parent ]

    •  Amen (none)
      Although I didn't read the article, as far as I can tell, economists are best at devising models to show why their past models were wrong.

      There are too many assumptions built into "the dismal science" and since no economist has EVER had to worry about where his/her next meal was coming from, they are bound to be detached from the reality that faces the people they make predicitions about.

      Democrats are here to remind us that life is unfair. Republicans are here to make sure it is.

      by spitonmars on Sun Oct 10, 2004 at 12:48:10 PM PDT

      [ Parent ]

  •  Well... (none)
    It comes down to the fact that these "markets" are amalgamations of opinions. But you don't get to enter your opinion unless you have the money to play. I think it is a safe bet that a disproportionate number of Repubs are doing the trading.

    Case in point, I wanted to buy Kerry at .32, but I don't have the spare cash to wager.

    I see it more as a record of the bias of the moneyed classes. Still fun to watch though.

    •  Safe bet that the traders are Repubs? (none)
      Sure bet.  My whole working life (3 decades) in the commodity/financial futures industry, and I can count on the fingers of one hand the number of traders who don't go Repub.  The workers and support staff are largely Dem, but the boys (and few girls) whose income is in the form of capital gains are Repub in thought, word, and deed.

      And stock traders are, if anything, more politically conservative than commodities traders, who tend to be the cowboys of the business.

      Traders still venerate and adore Ronnie Ray-gun.  The only Dem who ever caught their fancy was the pander-to-the-special-interests, entirely corruptable (and corrupted) Dan Rostenkowski.

      "Good pitching will always stop good hitting, and vice versa." (Casey Stengel)

      by cinnamondog on Sun Oct 10, 2004 at 10:27:01 AM PDT

      [ Parent ]

      •  Question (none)
        How is it that traders, who live and die on market history, never figure out that business always suffers under Republican administrations? I'm really asking. I'm in the construction business and can't figure out why so many working hands vote repub.

        "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

        by johnmorris on Sun Oct 10, 2004 at 01:31:57 PM PDT

        [ Parent ]

        •  It's crazy isn't it? (none)
          I've quit trying to figure it out.

          "Major combat operations in Iraq have ended." George W. Bush, May 1, 2003

          by Jim Riggs on Sun Oct 10, 2004 at 01:40:38 PM PDT

          [ Parent ]

        •  Ask them and you'll get some good spin-- (none)
          I have.  The current economic disaster is Clinton's fault, for instance.  (The trader community loathed Clinton, which is pretty funny because nothing -- nothing -- of the sleazy behavior in his personal life that was aired is something traders haven't done/thought about/wanted to do.  But I digress.)  What little of this debacle that isn't blamed on Clinton is blamed on 9/11.  (Traders as a group, BTW, are vociferous chickenhawks.  Lots of American flag patches sewn on trading jackets.  Who are those for?  We don't have any Iraqis on the trading floor...)  Historically, the great god Reagan cured the ills brought about by Carter, who gets their blame for the 18% prime rate of the late 1970's (even though a lot of traders made shitloads of money on that ride).

          A lot of it has to do with social attitudes.  Traders are not, as a group, very much inclined to want to lend a hand to those less fortunate than themselves; and that seems to me to be at the core of their dislike of the Democratic party.  'Dems encourage welfare and give our tax money to lazy people who don't want to work' is a dearly-held personal tenet of lots of traders.  (Let's not forget here that the "work" done by traders consists either of standing in a pit on the trading floor, or sitting at a computer screen, for as little as two or as many as six hours a day, and buying and selling abstractions on what are essentially whims.  Not too many people from the housing projects could do that, eh?)

          In general, they are not a likeable group.  Most are fearful and aggressive about their money, which tends to make one a Republican, IMO; and plenty of them have enormous issues about their masculinity and adequacy.

          I'm a woman who's been in their business world since I was 18, and those are the conclusions I've reached.  

          "Good pitching will always stop good hitting, and vice versa." (Casey Stengel)

          by cinnamondog on Sun Oct 10, 2004 at 02:19:12 PM PDT

          [ Parent ]

          •  I think you're right (none)
            about who they are and why they think the way they do. I have had very little experience with the managerial class, most of my life has been about buildings and the people who actually build them, but for a couple of years I managed construuction for a Dallas developer and was continuously amazed and amused at the world view. In the midst of the Savings and Loan crisis they never seemed to understand that the regulations they wanted so desparately to get rid of protected them from their own stupidity. I began to realize the wisdom of the American Robin Hood folk tales (Jesse James, Pretty Boy Floyd, etc.) It is silly to allow these people to ruin their own lives and ours. They should be leashed and muzzled.

            "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

            by johnmorris on Sun Oct 10, 2004 at 03:00:56 PM PDT

            [ Parent ]

            •  Leashed and muzzled-- yes, and that is (none)
              what I aim to do.  I'm in compliance.  :)  And it's not true that we are only catching the dumb ones.

              "Good pitching will always stop good hitting, and vice versa." (Casey Stengel)

              by cinnamondog on Sun Oct 10, 2004 at 03:11:24 PM PDT

              [ Parent ]

          •  Trading is the pits (none)
            In my six years as a currency trader, it's been my experience that your average trader views himself as a member of a mental/power elite, they tend to be social Darwinists, and unlike other finance sector-types, they are risk takers. I might also add that some of these men have exceptional academic credentials, but are, as a general rule, stupid. This is partially the fault of their business and economics educations, which are generally deficient to the point of being useless.

            The economics taught in most of our elite universities, in both econ programs, and in business schools is a doctrinaire, laissez-faire, University of Chicago brand of economics, which has garnered many Bank of Sweden prizes, but is essentially bunk. It is an endless academic diet of privatization, globalization, and deregulation. I heard the name Keynes maybe five times in business school, always in derision. Poll the traders in the pits and ask how many know who Piero Sraffa, A. Bhaduri, Robert Haugen (who is a pioneer in the study of the inefficiency of stock, currency and commodity markets), Joan Robinson, Kalicki, or one of the grand poh-bahs of chaos theory, Benoit Mandelbrot, (who has written much about the uselessness of standard economic theory, and models) etc, are? I can tell you with authority, maybe one in fifty will know any one of them. Ayn Rand, on the other hand, has a devoted following in the trading pits, that just about explains their mentality.    

            •  Greenspan (none)
              was, according to the rumor, one of Ayn Rand's puppy dogs. He once advanced a theory that corporate corruption was not possible in a free market place. These people are in charge? Gag.

              "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

              by johnmorris on Sun Oct 10, 2004 at 04:52:35 PM PDT

              [ Parent ]

            •  Also (none)
              thanks for realizing that Mandelbrot did more than compute pretty pictures. And that Keanes' contribution to economics was more important, and more accurate, than the entirety of the modern Chicago school. (at least I think that was the implication)

              "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

              by johnmorris on Sun Oct 10, 2004 at 04:54:55 PM PDT

              [ Parent ]

              •  Keynes (none)
                You're absolutely correct. If Adam Smith is the Isaac Newton of economics, John Maynard Keynes is certainly its Einstein. Keynes was a prophet, forsaken for imbeciles like Robert Lucas, and Milton Friedman. Keynes's theories are the only ones not to be debunked conceptually, or in the real world. The University of Chicago on the other hand, has been a high profile domicile for cranks. They tried the full Chicago School program in Chile during Pinochet's rule, and it was a debacle Chile has still not recovered from economically. Friedman's monetarism failed spectacularly in the UK during the rule of the Iron Maiden. Robert Lucas's seminal contribution to the dismal science, "rational expectations", has since been junked. The latest Clark Medal was bestowed on a Chicago professor who claims to have proved that abortions reduce crime. These nuts are taken seriously in the economics profession, while chaos theorists like Mandelbrot and Doyne Farmer are ignored, just like Sraffa and Bhaduri were ignored after they mortally wounded most of the concepts taken as divine truth in the world of neoclassical theory, little things like general equilibrium and the marginal productivity of capital, for instance.
                •  James K. Galbraith (none)
                  at U. Texas has written a very funny essay on the dominant Economic school. I have a hard copy and will try to find a link for you. His essential point: it is possible to extract 6 broad predictive principles from C school/monetarist theory and all 6 have been amply debunked by experience so Professional papers at the annual economics meeting were limited to econometrics to the exclusion of theory.

                  "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

                  by johnmorris on Mon Oct 11, 2004 at 04:55:49 AM PDT

                  [ Parent ]

                •  Found it (none)

                  "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

                  by johnmorris on Mon Oct 11, 2004 at 09:41:20 AM PDT

                  [ Parent ]

                  •  Thanks for the link (none)
                    The Bank of Sweden committee just gave half the economics prize (I refuse to call it a Nobel, because the Nobel estate did not endow the prize, and disavows the thing) to Edward Prescott, a man who once said his students never heard the name John Maynard Keynes. Which is only about five times less than I heard it in business school.

                    Thanks for the link. Galbraith is a favorite. His father is a treasure.

                    •  Reminiscent of (none)
                      the American Institute of Architects giving their most prestigious prize to Phillip Johnson for the John Hancock Building in Boston. On the day of the award ceremony, the Boston Fire Marshall locked the building up as a fire hazard because of all the plywood replacements for glass panels that had blown out in high winds.

                      "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

                      by johnmorris on Mon Oct 11, 2004 at 07:38:23 PM PDT

                      [ Parent ]

            •  That's a very good analysis. (none)
              I think the intellects are found more in options traders than in futures traders; more in interest rate traders than in commodity or equities traders.  JMO.  

              It's true that Ayn Rand, Milton Friedman, and Friedrich Hayek have big fan clubs on the Chicago trading floors; the less "intellectual" types simply revere Reagan.  Bleagh.

              "Good pitching will always stop good hitting, and vice versa." (Casey Stengel)

              by cinnamondog on Sun Oct 10, 2004 at 06:01:58 PM PDT

              [ Parent ]

      •  I Say Draft Them All! (none)

        Iraq is deja vu all over again.

        by chuco35 on Sun Oct 10, 2004 at 01:33:18 PM PDT

        [ Parent ]

      •  You can add one to the other hand (none)
        I hated Reagan's policies, voted for WJC twice and traded oil for one of the biggest wall streeters.

        Traders fit the selfish model for the most part.  They don't want to give up a bit of that income if they can help it and will dig around in your mouth for your fillings if you leave it open too long.

        The bosses were split though.  

        •  You were the exception. (none)
          I'd put you and your ilk at about 5% of the trading population.  However, that's the 5% I rely on for my sanity, so thank you.

          "Good pitching will always stop good hitting, and vice versa." (Casey Stengel)

          by cinnamondog on Sun Oct 10, 2004 at 06:05:30 PM PDT

          [ Parent ]

          •  thanks (none)
            it's probably why I was solidly mediocre for the first time in my working career.  Lack the killer instinct.  I'd much rather my customers live for another day (does that make me a vampire instead of a murder LOL???)
  •  Didn't they hear? (none)
    9/11 changed everything!  Time to throw out the models.

    It's hard work to love Poland the best we can.

    by Unstable Isotope on Sun Oct 10, 2004 at 09:42:02 AM PDT

  •  Thanks for the futures link!!!!! (none)
    I think they're a tad more predictive though, than your blogger gives 'em credit for: all you have to do is realize there's a HUGE sampling bias in there, stick that bias in, and you've got a massive Kerry victory.

    Why the bias? Simple: the very people playing this game are drank-the-koolaid Georg Gilder types.

    And they're bound to oversample for Bush.

    "It's better to realize you're a swan than to live life as a disgruntled duck."

    by Mumon on Sun Oct 10, 2004 at 09:46:00 AM PDT

  •  I heard Ray Fair on NPR a while back (4.00)
    back a month or two ago, on the Connection.

    And I thought he was very non-defensive of his model. People kept calling to criticize why his model wouldn't work and he was very gracious and very fair. For example, he was very clear that his model assumes voting behavior is steady (ie, people will vote in similar patterns as they have in the past).

    I was struck that lots of people were trying to turn this into a partisan story, but he really was interested in the intellectual problem of forecasting, not in wanting one person or another to win.

    And on a side note, I was amused that the only time in the last six cycles the model failed was Bush 41. I think he should incorporate a "Bush" factor into the model because apparently the laws that govern the rest of us don't apply to them.

    •  Fair, especially has been true to his name (none)
      and has a great sense of humor about it. I'm not picking on the modelers... it's the models and the way the press plays them.

      Here's a Billmon piece on the topic.

      "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

      by Greg Dworkin on Sun Oct 10, 2004 at 09:55:26 AM PDT

      [ Parent ]

      •  Agreed. (none)
        I didn't mean to imply that you were criticizing the forecasters. I was just impressed with Fair when I heard him and thought I would add to the discussion. I love forecasting/predictive models, so I was particularly interested.

        The problem for many people is they take something detailed like Professor Fair's model and think it's equivalent to those stupid "predictors" like the taller guy wins, the one with closer links to the British Royal family, etc.

        •  Agreed (4.00)
          a tool in the hands of the ignorant can be dangerous. I don't think the press should be allowed to get their hands on a weapon of math instruction.

          "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

          by Greg Dworkin on Sun Oct 10, 2004 at 10:06:25 AM PDT

          [ Parent ]

      •  The model's statistical validity is doubtful (none)
        I think Billmon's comments are quite apt.  I can't claim to be an expert on statistical learning techniques, but I do know something about them.  Here are a couple of problems that occur in every one of the models that Billmon mentions:

        (1) The proper methodology is to select one-half of the data at random, and develop a predictive model on that half (without looking at the other half).  Then test your model on the other half to see if it is an accurate predictor.  If you instead use all of the available data to develop your model, then there's no way to test whether your model has any predictive value or not. Thus you run the danger of "over-fitting" the model, i.e., building a model that fits some spurious pattern in the available data but does not correctly predict the underlying process.

        (2) Six or eight samples (in this case, six or eight elections) is far too small a sample to develop a model that has much statistical validity, regardless of whether one uses the methodology I described above.

        From what Billmon says about Fair's model and several others, they all suffer from both of the problems I described above -- thus I think their statistical validity is pretty dubious.

        Here's a link to a book that discusses such issues in more detail:

    •  Ray Fair (none)
      is a Kerry supporter and scrupulous about separating his methodology from his (very good) politics.
      I like the Bush factor idea. There's an interesting variable. How to calculate it?
    •  Fair and Iowa (none)
      I have been debating these with a coworker. I am in the equity derivatives pricing business. I summarized some of my points in my last blog entry. Here it is:

      Kos is discussing the same economic model my coworker and I have been debating. Here are the things to remember about the Fair Model:

      1. He hasn't made a prediction in almost a year, since October 2003.
      2. He uses GDP growth as a proxy for jobs. In this case, we have GDP growth with job loss. Is someone out of work going to care what our GDP growth is?
      3. There is an assumption that the 2000 voter base will be the same as the 2004 voter base. To the extent that we can get participation and registration up, his model is garbage.

      What you should remember Iowa Futures Market
      1. Markets are only good if they are very liquid. This market doesn't have as many participants as the stock market, so the information is less accurate.
      2. The information in the market is only as good as public information people have. If you believe that Gallop has a Republican bias, then you believe that people are pricing on bad information.
      3. A price of 0.58 for Bush does not mean that the market is predicting he will have 58% of the vote. Basically you get a dollar if he wins. So if you are 100% sure that he will win with 50.00001% of the vote, the contract is worth $1.00, not $50.000001.
      4. Popular vote means nothing; look at the electoral vote.
      5. Click through and check out those trends! Do you see which way they are going.

      Another really interesting thing is that the day after the first debate, the market shot up, despite oil prices rising. There could be many reasons for that, but I think the market knows that Kerry will be better for the economy.
  •  the morning after (4.00)
    I think the nation will wake up on Nov. 3 and wonder why it ever seemed like a horse race.  I've felt for a while that polls and pundits and CW are just blind to what's really happening out here - a wholesale, across-the-board repudiation of Bushworld.  We all want our country back.  Some of us are Democrats, some moderate Republicans, financiers, retirees, working people, ex-military, ex-diplomats, the unemployed, draft-age Americans, everyone who's in a position to see the damage that's been done to our nation and reputation.  Only Bush and his base are insulated from the toxic effects of his personal obsessions.

    I'm not complacent, but I have faith in the essential sanity of the American public.  Praise the  Lord and pass the ammunition.

  •  Hell, even the Marxists (none)
    gave up economic determinism a long time ago. It always left its adherents flat on their backs in the road dust of history, going "wha' happened?"

    Thank God people are smarter than they look.

    November 2: We're hacking up a hairball.

    by perro amarillo on Sun Oct 10, 2004 at 09:54:55 AM PDT

  •  I think these economists are really dumb... (3.00)
    They're like so interested in their convoluted theories that they don't just use common sense to look at the current picture.  

    Voters never cared about "GDP growth".  In fact, most voters probably don't even know what GDP is, other than some figure they hear someone on TV mention every few months.  What they care about is whether they have a job and whether their job is rewarding and pays well.  

    I don't care if we were averaging 10% GDP growth a year, if people are not seeing it because jobs are being cut, and wages are declining, they are not going to care!  As it is, the GDP growth of Bush's Presidency has been anemic at best, wages are going down and jobs have been lost (they still are too, that stupid 1.9 million figure isn't even enough to keep up with population growth).  

    The fact that these economic models still project a Bush win just proves that these economic models are pure bullshit.  Personally I don't feel they have any valid correlation to the outcome of past elections.  It's possible that someone's flipped a coin for the past 6 elections and always come out right using that system, but that doesn't mean it has any validity behind it.  

    In Britain they admit to having royalty. In the United States we pretend we don't have any, and then we elect them president.

    by Asak on Sun Oct 10, 2004 at 09:56:31 AM PDT

    •  Many of them are quite smart (none)
      Many of them are quite smart and realize that there is little to no predictive power in these models.

      They also understand that these are not "economic models."  They are models that try to predict electorate behavior using various economic parameters.  Calling them "economic models" gives them more credibility than they deserve.

      It is a fun and interesting academic pursuit.  But the people playing that game understand that it is just a game.

      Any fool with a spreadsheet and a ream of economic data can, for example, create a model that "predicts" past stock market or individual stock performance fairly well.  Any fool might believe that such a model can predict future stock prices.  Many such fools have gone broke betting on their models.  The same applies here.

      Dump Delay and Blunt - UnDelay and UnBlunt.

      by i dunno on Sun Oct 10, 2004 at 10:04:51 AM PDT

      [ Parent ]

    •  Voters and economy (4.00)
      In fact, most voters probably don't even know what GDP is, other than some figure they hear someone on TV mention every few months.  What they care about is whether they have a job and whether their job is rewarding and pays well.

      Actually, the research suggests that's not quite true.  If you correlate people's responses on survey questions about presidential approval, or prsidential handling of the economy, the best predictor is not "is your personal financial situation better or worse than a year ago?", but, "do you expect business conditions to be better or worse a year in the future".

      In other words, attitudes track news about the economy, and especially about expectations for how the economy will be doing, than they do changes in one's own finances.  

      Which is one reason why the spin put on the monthly job numbers matters as much as the numbers themselves.

    •  GDP no longer connect to jobs and wages (none)
      It's an article of faith among economists-who-don't-get-out-much that GDP growth leads to more jobs and higher wages. It used to be true, but it isn't true today. When we have a slack labor market and it's so easy to outsource jobs, businesses can keep more of the GDP growth as profits. Why, just a couple days ago I caught myself yelling at Glenn Hubbard on NPR talking about how GDP growth leads to more jobs and higher wages. No, it doesn't, Glenn, not any more, or hadn't you noticed?

      Check out this a graph from the Economic Policy Institute's website which illustrates the breakdown in the relationship between GDP and family income. If you all don't know about the EPI, go check it out. It's a leftwing economic thinktank, you know, one of those that you're always complaining the leftwing doesn't have. They have a treasure trove of useful graphs, handy for whipping out for just this kind of occasion.

      Economic  Policy Institute, Sept. 8 2004 snapshot, productivity growth and family income

      Real family income and productivity growth, 1947-2003

      Here's what they say about it:

      Productivity growth hasn't resulted in increased family income in recent years.

      For the past three years, productivity has gone up while median family income has declined, undermining the living standards of the typical working family.

      It is a common mantra among economists that productivity is the main determinant of living standards.   Since productivity is, by definition, output per hour, as it rises, the U.S. workforce is able to create more output per hour of work.   This productivity growth, in turn, implies more income to be distributed among households than during times of slower productivity growth.

      However, as the below chart and recent history reveal, there is no guarantee that this added income will reach the typical (that is, median) family, especially in periods of high unemployment and rising inequality. Between 1947 and 1973--a golden age of growth for both variables--productivity and real median family income more than doubled, each growing by precisely the same amount. Over this era, there was no doubt that the typical family fully benefited from productivity growth. Starting in the mid-1970s, however, this virtuous relationship broke down.

      From 1973 to 2003, median family income grew at less than one-third the rate of productivity. Relative to the earlier years, this was a period of growing income inequality, which served as a wedge between productivity and the living standards of the median family.   Other factors were at play as well, including changes in family size and type, but the main factor was the wedge of inequality.1  That is, while faster productivity growth led to a larger economic pie, growing inequality meant that slices were divided up such that some income classes--particularly those at the top of the income scale--claimed most of the income growth.

      These conditions have certainly been in play over this business cycle as well, as productivity grew each year from 2000 to 2003, increasing by a total 12%. Meanwhile, real median family income fell each of these years, declining by an overall 3%.

      This week's Snapshot was written by EPI Economist Jared Bernstein.

      A word after a word after a word is power. -- Margaret Atwood

      by tmo on Sun Oct 10, 2004 at 01:08:22 PM PDT

      [ Parent ]

      •  When you talk to "moderate" dems (none)
        an argument you will hear over and over is that the 1970's proved that redistributive policies don't work. Sending people to good schools for free, a very progressive income tax, relatively high taxes and high levels of regulation, low unemployment and a large public service sector gave us the economy from 47 to 73, then, because of heavy borrowing for the war in Viet Nam and an oil embargo, we let the monetarists convince us it wasn't working. Now its not working. Question, how do we make enough noise about this subject to deflect the discussion of "god, guns and gays"?

        "If I pay a man enough money to buy my car, he'll buy my car." Henry Ford

        by johnmorris on Sun Oct 10, 2004 at 02:01:10 PM PDT

        [ Parent ]

  •  models, schmodels (none)
    We need a super model.
  •  you don't understand (3.50)
    something has poisoned repugs into
    a mean-spirited, spiteful, fight-dirty
    cult.  Wingers have gone psycho.

    An animator who moderates a graphics forum
    started a topic to show
    propaganda animations from this election.
    He welcomed animations from both parties,
    and kicked off with a couple from the left,
    hoping others could put up something from the

    All hell broke loose.  The right wing animators
    only posted hate flames.  The administrator
    of the forum scripted him off so he can no longer

    The right wing faction couldn't understand
    that the moderator was not pushing an agenda, and
    was only trying to open up what he thought would
    be an interesting subject for artists.

    The incident made him realize that the difference in
    parties goes beyond politics.

    A challenge for democrats isn't just winning an election -
    it's getting fringe fascists to come to their senses.
    It is scary how many have gone over the deep end, and don't
    see that they are trying to overthrow the constitution
    and end democracy.

    The point is that it doesn't matter how bad a job the administration has done.  It doesn't matter if the country is torn to shreds.  The only thing that matters is one or two tiny

  •  Play "Rate The Zinger" (none)
    Several folks emailed me yesterday to suggest I send this suggested response up to K/E04.  But I don't have a clue how to do that.

    Also, someone suggested that it might not work as it seems to show Kerry siding with Al Qaeda.

    Bush:  You can run...but you cannot hide.
    Kerry:  Mr. President, that's what you said about Osama bin Laden.  I'm not worried.

    •  "You can run, but you cannot hide." (none)
      Dubya's line is so silly that it cries out for mockery. The biggest problem with the zinger is that Dubya to the best of my knowledge has never said that about Osama bin Laden - at least in those exact words - and the Republicans are desperate for their very own version of "I've never met you". I'd prefer this:

      BUSH [pounding his podium]: "Blah blah 20 years in Senate blah blah most liberal senator blah blah. My message to Senator Kerry is that... you can run, but you cannot hide." [smirk]

      KERRY [looking amused]: "I suspect my opponent has watched one too many Westerns." [pause for laughs] [rebut here]

      "I don't understand 'proving to the world that you did it for legitimate reasons.'" -- Condi

      by Fleischer on Sun Oct 10, 2004 at 02:04:08 PM PDT

      [ Parent ]

  •  Betting the ponies... (4.00)
    I have followed models and the markets for about 12 years and I think a simple analogy to understand them is to collectively compare them to horse racing. In horse racing, there are so many theories, angles, dynamic models (with a lot of data input), inside information, "can't lose" tips, jockeys (they sometimes play games), owner's objective (is the race a prep), track conditions (fast, frozen, wet, muddy, sloppy), racing surface (grass, dirt), etc. However, you can never know what is in the body, mind, and soul of animal until after the race. BTW, those who simply look at the horse and "intuitively" determine if he/she/it is ready to run, predict best.    

    A Democracy exists when the "best" of the "incomplete parts" work together to form the "whole".

    by wiserguy on Sun Oct 10, 2004 at 10:28:00 AM PDT

  •  Is there a precedent (none)
    for a US president to be defeated during "wartime?" (LBJ doesnt count)
    •  twice but indirectly (none)
      Eisenhower with korea beat the Dems who were involved in the war. Nixon beat Humphrey the VP of the war.

      Neither Eisenhower nor Nixon actually had a plan.

      Brought up on This Week with george S.

      "Politics is the art of looking for trouble, finding it everywhere, diagnosing it incorrectly and applying the wrong remedies." - Groucho Marx

      by Greg Dworkin on Sun Oct 10, 2004 at 10:51:31 AM PDT

      [ Parent ]

  •  Real world Predictive models and the Crusade(s) (none)
    I believe very, very strongly from my daily observations that the reason why real world models are in doubt is the fact that a significant number of Americans are not now living in the real world. They have turned their critical brain functions OFF in favor for the religious faith model.  George Bush is one of them, and his crusade against the "pagans" that attacked us on 9/11 is an necessary tribute to his (their) God.  No more reasoning is necessary, just blind faith.

    Now the last minute question for Kerry from me is, can you translate your message to one coming from a Christian God?

    Political censorship is the root of all evil! It is the antithesis to a functional democracy!!

    by truthbetold on Sun Oct 10, 2004 at 10:50:09 AM PDT

  •  Bush is bad for the economy (none)
    Here is why:

    Decreased stability in Iraq ( and other countries)will drag out the reconstruction process. Think risk assessment.  Bush operates under the presumption that companies will flock to Iraq as soon as elections are called.   Is investing in Iraq is a good idea?  Gains and profits will not be made in the atmosphere prevailing in Iraq now, and it will take years to establish a pattern of sound economic development, free of corruption, turmoil, violence, division, and military occupation.  

     Should the United States pay for security of shopping malls, retail outlets, fast food chains, stadiums, hotels, factories, and trade buildings Indefinitely or will that be a cost burden that will have to be integrated by companies?  Without a legal system in place, how will companies be able to rely on contract obligation?  Do we want to be married to Iraq's economy, and for how long?

    High energy costs will continue, and efficiency has not been made a national agenda.  Increased efficiency leads to increased productivity.

    Which candidate is committed to increased efficiency? (input level)  

    Think of the savings if government buildings switched to fuel cells.  Small industry could benefit from this technology, banks, energy-intensive businesses, refrigeration costs could be controlled, the economy would take off.  

    Stem-cell research-   When a cure for parkinson's, alzheimers, or other diseases become available,  who will benefit?   Will it be Singapore, Switzerland?  And will we ban those cures from being used in the United States?  The same people who argue against it, will line up for treatment when it is their kid dying, or they have to make the choice between putting gramma in a nursing home to waste away, or spending a few more good years with the grandkids.

    Technology, and innovation.  If we have a President that does not even respect science, what efect does that have on innovation, research, technological advancement?

    Bush is playing by an obsolete playbook.  If we want to look like a third world economy he is setting us into the right direction.  

  •  Hmmmm.... (none)
    Aren't these the same experts and models that predicted the Democrats taking control of Congress two years ago?

    yeah, that's what I thought.

    "You should run for office like you're one vote behind and if you get there, you should act like you won by one vote." - Tony Knowles

    by Snuffleupagus on Sun Oct 10, 2004 at 11:14:18 AM PDT

  •  If one considers how well (none)
    economy-based models have handled the, well, the economy, these last 4 years, it's pretty obvious that these shitty thingamajigs are even less able to predict election results. Beside, they're obviously right-wing biased since welathy right-wingers are more into futures markets than Joe-six-pack slaving with 2 jobs a day.
  •  I always get a (none)
    laugh when I hear the inflation rate being quoted on NPR...."September's Inflation EXCLUDING volitle ENERGY and FOOD prices is...."

    Who are these people?  Not counting energy and food prices when calculating the rate of inflation...GET REAL.

    GWB will pry my 19 year old son from my cold dead fingers.

    by Momagainstthedraft on Sun Oct 10, 2004 at 11:16:14 AM PDT

  •  Little Man Syndrome (none)
    This bullshit from Bush, "He can run but he can't hide", should be stood on hits ear by Kerry. Not just the obvious parallel to Obama - forget that. Instead, Kerry should say, "This is the taunting language of a little bully - which only works if you fear the bully. Small countries fear the bully, former allies fear the bully, but I'm not hiding. I'm right here Mr. President."

    Canada - where a pack of smokes is ten bucks but a heart transplant is free.

    by dpc on Sun Oct 10, 2004 at 11:16:49 AM PDT

  •  Curses! (none)
    Don't use the back button after previewing a post. I just lost a lengthy, detailed post about forecasting models and the difference between forecasting and explanation, the shortcomings of economic indicators, the politics of forecasters, and the asinine remarks this article has inspired. "Economic determinism"? Sheesh.

    Save your voodoo dolls for a better occasion.

  •  Iowa Electronic Joke (none)
    I really don't understand why anyone, and in particular economists (e.g. the Crooked Timber gang), take the so-called "Iowa Electronic Markets" seriously.  There is no open market in presidential elections.

    If Las Vegas took bets on the elections, and got a reasonable volume of business, then you could say there was a market of some type (the small volume of bets in the UK does not materially affect the US).  Or if these so-called "futures contracts" were traded on the Merc in volumes of millions then one could also say there was a market from which some sort of predictive model could be built and falsified.

    But a few hundred people playing inside baseball with a few dozen dollars apiece?  Totally and utterly meaningless, yet they get cited again and again.

    Lunacy in my eyes.


    •  You bring up a good point, (none)
      The trading volume on the IEM is pretty small.  

      But is it a bad thing?  If these inside baseball types have an incentive in being right and are crunching and integrating information to improve their odds then why is the volume relevant?

      Would you rather have a "deep" futures market, like Merc, where a great number of transactions are made by people with no sense of the real value of their commodity?

      My recent post on IEM:

      The Keen Meme Memo
      A Journal of Politics, Policy and Progress

      by Ivy Selensky on Sun Oct 10, 2004 at 12:58:05 PM PDT

      [ Parent ]

  •  These are the same financial genius's (none)
    that robbed Americans' pensions and created great images and investment opportunities for those great companies: you know...Enron, Tyco, Worldcom.

    if they are so good at predicting winds, why are they so bad at predicting losses?

  •  Tell Karen Hughes to...ahem..."shove it" (none)
    She can't make up a false group of moms that supposedly support Bush - that's a lie.

    Let's fight back:

    Click on "Send us your story" to have your story appear on the site.

    Also - check out new draft flyers at

    "would you take a bullet for Halliburton"

  •  Why Voting Patterns Chould Vary From Past (none)
    Everyone recognizes that we have significant new voter registration but uncertainties about participation.

    But we also have a novel information environment:

    *Populist activity on the Internet
    *More aggressive Republican operation of the national information infrastructure
    *Plausibility of staged crisis

    I suppose we should also factor-in our ability to unleash vicious Democratic attack dogs like McAuliffe, Brazille and Lieberman.

    We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy....--ML King, "Beyond Vietnam"

    by Gooserock on Sun Oct 10, 2004 at 01:24:51 PM PDT

  •  Mightier than the sword (none)
    I cannot undestand why a man who volunteered for military sevice in Vietnam, then specifically volunteered for dangerous duty in that conflict, facing all manner of ordinance would be seem to be so afraid to face the 'liberal' bullet being fired at him.

    Senator, you are an intelligent man, an articulate man, and I believe a principled man.   Take this charge head on.  Don't run from it.  The term liberal has many connations, how about finally giving democrats the chance to wear the term as a badge of honour, rather than a cloak of shame.

    One important literal meaning of the word liberal is broad-minded. Tell the American people.  Challenge them to set aside prejudices and any opponents pejorative use of the term.  Tell them that if someone wants to use that term to describe you it is completely appropriate if they in fact mean broad-minded.  

    Replubicans are not afraid to call themselves conservative.  If you try too hard to disavow what most people believe you are, you begin to look insincere.  Tell the american people that there are many words to describe you, liberal/broad-minded is absolutely one of them, but the most important would be principled.

  •  Markets as election predictors (none)
    Here's why futures markets in political outcomes don't predict political outcomes.

    1. Perhaps most importantly, securities markets in general and commodities futures markets in particular exist as a means of buying and selling financial risk.  That's what they do.  Market economies, in general, work better than planned economies because they do a better job at this.  What they don't do is predict the future.  That's not their job.  The political futures markets are basically a parlor game.  Nobody has serious money riding on the outcome.

    2. To work well (e.g., to hedge the most risk at the least cost to hedgers, and to allow speculators the most return with the least undiversifiable risk and thus make them want to speculate), the market has to be (a) very large, (b) have a rapid turnover rate, and (c) have a lot of information available to it.  To get this way, they need to attract speculators.  To attract speculators, you need money.  To get money, you need someone -- lots of someones -- to sell risk to the speculators.  Because the political futures markets don't attract serious buyers and sellers, they aren't efficient.

    3. There's other things that need to be there -- the settlement systems, the market makers, the regulators, the margin requirements, insurance against traders who can't cover their losses -- for it to work efficiently.

    The futures markets don't meet any of these criteria.  That's why they can't predict the election.
  •  Me? (none)
    I think the electronic markets are totally silly as a means of predicting the outcome of an election.

    Didn't stop me from putting a hundred bucks down on Kerry when his price was at the bottom of the barrel.  When he wins, I'm gettin' me an iPod.

    "Next time you see Me comin' you better run." - God (via Bob Dylan)

    by deolmstead on Sun Oct 10, 2004 at 02:13:09 PM PDT

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