Planet Utah

Stock market cooling...a thought experiment

In America, the retirement income model is a mix of government support, personal savings, and money from former employers (pensions and 401(k)s). Historically, personal savings and pension/401(k) monies have been invested primarily in equities, which have had a 10% nominal return, or a 7% return after inflation. Not bad.

Let's imagine, though, that a group of the country's leading economists called a press conference to announce the following: "Our models show that over the next 100 years or so, stock market returns will gradually decline to a nominal return of about 3% per year, or a real return of 0%. This means that the ability of private savings and employer contributions to support Americans in their retirement will be dramatically reduced. This means, in turn, that if Americans' current standard of living in retirement is to be sustained over the course of the next 100 years, the American government--that is to say, the American taxpayer--will need to raise and set aside many tens of trillions of dollars not contemplated in current budget projections."

Hearing that, how many of us would say, "Okay, I guess I better get out my checkbook"? Very few, I would imagine. I can think of a few other things we might say first:

"Who are these economists, exactly, and what basis is there for believing that they can forecast anything with confidence over a period as long as 100 years?"

"Before we do anything dramatic, maybe we should give this 10 or 15 years...you know, just to see if the predictions pan out over that timeframe, to see if maybe something else changes for the better (maybe we'll discover some super-cheap new form of energy), etc."

"They may be right, but what they're talking about simply can't be done. I mean, we're not even close to being able to pay for our current commitments, let alone taking on tens of trillions of dollars in new commitments. So, we're just going to have to muddle through and adapt as best we can."

Etc.

Now think about global warming science, its predictions, and the stigma associated with resisting those predictions and their implications.

Gotta say, resistance seems eminently reasonable to me.

State of the presidential race

A while back, I called my shot: I said that President Obama would lose the 2012 election. It still looks that way to me.

With about six months left, in the Real Clear Politics average of national surveys, the president leads Mitt Romney by just two points, 47/45. These surveys consist of a mix of likely voters and registered voters. If the surveys were conducted among likely voters only, they'd be even less favorable to the president (because the subset of likely voters is more Republican than the universe of registered voters). On top of that, in a 47/45 race, eight percent of the electorate is undecided. As a general rule of thumb, you can allocate nearly all of that undecided electorate to the challenger. So, looking at the data with a little more care, Romney actually has a modest lead nationally.

Of course, the election will be decided on a state-by-state basis. Looking at the Real Clear Politics electoral college map, Obama has around 166 electoral votes that he can count on, with an additional 87 leaning in his direction. In these "leaning" states, though, the president has 50% support or less against Romney. This means that a modest deterioration in the support the president has now, coupled with a move among undecideds to Romney, will shift some of these states into Romney's column, along with most or all of the "toss-up" states. That will deliver the election to Romney.

Why would I expect "a modest deterioration in the support the president has now, coupled with a move among undecideds to Romney"? The president, I believe, is already at his support ceiling. It's not as if anyone is thinking, "I need to find out more about this Barack Obama fellow...you know, take his measure." Romney, on the other hand, still has room to grow. Inevitably, some people who are weakly attached to Obama right now will move over to Romney once they learn enough about him to get into a comfort zone. (This is a largely passive process, by the way. Beginning this summer, and certainly once the convention gets going, the media will start treating Romney like a potential president. At that point, too, the Romney campaign and various Republican and conservative organizations will be spending hundreds of millions of dollars getting Romney's face and story in front of the public. Anyone who watches television will learn about Romney, whether they want to or not.) It's the same with the undecideds--they've already rejected Obama; they just haven't yet gotten comfortable with Romney. But they will.

What could save the election for Obama? An uptick in the economy. A foreign policy crisis. A gaffe or series of gaffes by Romney. A third-party candidacy that tips a battleground state or two to Obama. An election that, once all of the various vectors have offset one another, comes down to a single state--the way the 2004 election did in Ohio--a state that Obama ends up winning, for any one of a thousand reasons. (Michael Barone talks about this scenario today in terms of a "long, hard slog": http://goo.gl/4fh2H.)

In my view, though, this looks like an election that favors Obama slightly now on a state-by-state basis (mainly because he's the incumbent), but is setting up to break against him in the fall. 

Could I be wrong? Sure. But anyone who thinks Obama has this locked up is delusional. In fact, I'd say there's an excellent chance he'll be fighting from behind come October. 

An explanation of excessive Obama bullishness?

I was at a professional lunch the other day and noted to a tablemate that the Intrade prediction market gives Barack Obama about a 60% chance of being reelected. My tablemate replied, "That sounds about right to me." 

It shouldn't sound about right to ANYONE--my belief is that Obama should be considered only a slight favorite at this point--but it's not hard to find many other people, Republicans and Democrats, who share that belief. Staring at my bellybutton this morning, I came up with a theory as to why that might be, despite plenty of objective data suggesting that the president is in real trouble.

If you're imagining that voters will make up their minds this way, "When I think about the person I want to be the next president, would I rather have Barack Obama or Mitt Romney?", then it's not hard to imagine that most voters will choose Obama. On a lot of measures, to a lot of voters, he probably feels like a safer, more comfortable, more appealing choice than Romney right now. I think that's probably why so many people are so bullish on Obama's chances.

But there's a lot of evidence to suggest that when there's an incumbent president running for reelection, voters don't make their choice by weighing the pros and cons of the two alternatives. Instead, they engage in a sequential decision-making process. The process looks like this: "Do I think the incumbent has done a good enough job to deserve four more years? If yes, then I'll vote for the incumbent, no matter who the challenger might be. If no, then I'll vote for the challenger, assuming he meets some basic criteria in terms of acceptability."

See the difference? It's not "Do I want Obama or Romney?"; it's, "Do I want Obama or not?" 

Because I think voters will be asking themselves the second question rather than the first, I'm far more optimistic about Romney's chances than many people are.

Why not "the 'n' word"?

I never use the word "nigger" as an epithet--that is, I never call anyone that name, nor do I ever refer to anyone by that name. Why not? Duh. It's morally repugnant.

BUT, when I'm talking about use of the term "nigger" generally, I will actually say or write the word itself rather than using the euphemism, "the 'n' word."

A couple of friends have chided me for that recently, saying, "You should say, 'the 'n' word' rather than the actual word. Saying the actual word is offensive."

Here's my opinion on that. 

First, are we all so delicate that we'll wilt onto the fainting couch if we hear or read the word "nigger," even in a context like the following: "The word 'nigger' is morally repugnant"? To me, a declaration that the word can't be written down or spoken aloud--even when condemning its use--is just another ridiculous excess of political correctness. 

Second, saying that the word may not be spoken aloud is, in my mind, linguistic affirmative action. It's essentially dividing up the language on racial lines, saying, "African-Americans get to decide what we do with this little piece of the language; the rest of us just have to go along with it. If they don't want us to say that word, we shouldn't say it."

I don't like carving up the world according to the color of people's skin, their ethnic heritage, or their gender, and saying, "Okay, you get to control this little piece, you get this piece, you get this piece over here," etc. Telling me that I must say "the 'n' word" feels like the application of that kind of thinking to the use of language. I will not comply.*

Footnote: Of course, I'm aware that my little screed against affirmative action is written from a position of white male privilege. What can I say, though? I was born white and male. There are non-whites and women who don't like affirmative action for the same reasons I don't, but they have more credibility in criticizing it.

For what it's worth, I'll share with you something a "student of color" told me about affirmative action in graduate school. It always stuck with me. He said, "Here's how I see it. Imagine there's this giant bowl of M&Ms. Then there's a whole roomful of people looking at the M&Ms. The room is mostly white people, and a handful of people of color. Just because of the numbers involved, the people of color are worried that we might not get any M&Ms at all if we don't work out some sort of deal. So we say, 'Hey, what if you gave the people of color here half of the red M&Ms? That's it. If you give those to us--just half of the red ones--you can have all the rest for yourselves." And the white people say, 'No. We're not going to give you anything. Whatever you're able to get on your own, that's fine. But no one's going to give you M&Ms just for showing up. Lots of people showed up here today, and no one expected to be given anything.' So, the people of color ask the whites to set aside a tiny fraction of the M&Ms, and the white people say, 'No, we want a shot at all of them.' It's incredibly greedy."

*Now, would I have the courage to say the word "nigger," rather than "the 'n' word," in a mixed-race crowd? I doubt it. I'd have to be VERY confident in those relationships, and thinking of the relationships I have, I don't think I'd be that confident. I'd DEFINITELY have to say, "Please forgive me in advance for using this word..."

It's not entirely about lacking the courage of my convictions, though. I also think you have to make some accommodations to people's particular sensitivities, even if you disagree with them.

Small/stupid example: I have a friend in Dallas who thinks it's very rude to point; she will shriek, "Don't point!", and literally slap my hand when I point at someone, even if that someone is looking the other way (which is the only time I would point at someone anyway). So, I've learned not to point when I'm with this friend because she's so sensitive about it, even though I think her sensitivity is misplaced.

Welcome, Canadian gun enthusiasts!

There's been a fair amount of traffic here lately from Canadian gun rights types. Primarily, they've been here to read an old, poorly formatted blog post I wrote called, "The inevitable 'I'll be damned' moment in the concealed weapons debate."

The post consists of a series of quotes from law enforcement officials in various jurisdisctions that at some point decided to allow citizens to carry concealed weapons. All of the quotes read more or less like this, "Before this law went into effect, we feared the air would be thick with bullets and the streets would be red with blood. In retrospect, there's been no uptick in violence at all. We're tickled."

For whatever reason, when I wrote that post I failed to mention that the quotes were part of a broader study I did of proposed concealed carry legislation in Wisconsin, which you can find here. 

It's been a while since I've immersed myself in the whole "more guns = less crime" debate and the related research, so I don't want to comment on that issue. I believed at the time of the study, though, and still believe today, that there is nothing to be feared from allowing law-abiding citizens to carry concealed weapons.

That means you, too, Canada.

Political spouses are fair targets...some of the time

Seeing his 20-point advantage with women* threatened by Hilary Rosen's gratuitous slap at Ann Romney, the president declared political spouses off-limits.

But why should they be? In this campaign, both spouses are acting as political surrogates. If they say/do something stupid or offensive in that capacity, they should be criticized. If they continue to say/do stupid or offensive things in that capacity, they should continue to be criticized, AND their spouses' judgment should be questioned (for allowing them to remain surrogates).

Let's look at Hilary Rosen herself. She was publicly slapped down--by Democrats and Republicans alike--because she was seen as a surrogate for the president's campaign. So, the principle has been established: Surrogates who say/do stupid things invite criticism. Why should spouses be any different?

Now, if the president is saying that we shouldn't criticize spouses' life choices because the spouses aren't the ones running for office, fine. But if Ann Romney or Michelle Obama makes a speech somewhere and says something controversial in support of her husband's campaign, then yes, she ought to be criticized and held accountable in the very way that Hilary Rosen was. 

*This is about as real, and will be about as enduring, as the 17-point advantage Michael Dukakis enjoyed coming out of his convention in 1988.

Is it ever okay to root against the president?

It would be interesting to connect Mitt Romney to a polygraph machine and ask him a series of questions about the U.S. economy. Here's one in particular I'd like to ask: "I'm going to read you a statement, and I want you to express a preference for one of two possible outcomes: 'Over the next six months, the economy will produce 500,000 jobs per month, or the economy will produce 5,000 jobs per month.' Which outcome would you prefer?"

(I know that's not really how polygraphs work, but you get the idea...)

I think most of us would say, "Mitt should choose the first one, definitely"--even though 500,000 jobs per month would almost certainly tip the election to President Obama, and 5,000 jobs per month would almost certainly have the opposite effect. Why? Collectively, I think we'd say, "This isn't about Romney's personal ambitions. It's about what's best for the country. You should always want what's good for the country, political considerations be damned."

That's true as far as it goes, but it doesn't go far enough, and it ignores some uncomfortable complexities. Let me give you an example.

In 1982 we had a nasty recession...worse, in some respects, than the one we're still recovering from. That recession wasn't just an inevitable product of boom-and-bust business cycles, though; it was deliberately induced by the Fed.

Huh? What? Why? Whose stupid idea was that? I mean, why would you deliberately do something like that--something BAD for the country? 

Those are good questions. The recession was meant to vanquish the serious (by U.S. standards) inflation problem the country had developed beginning in the late 1960s. And it's true that in the short run the recession produced terrible suffering. In the long run, though, it succeeded in wringing inflation out of the economy. (Ronald Reagan and Paul Volcker took inflation very seriously. Other politicians and economists wouldn't have, and didn't, and don't. But Reagan and Volcker were calling the shots at the time...)

So, something that was painful, harmful, and difficult in the short run led to a long-term good.

Now let's think about the current election year. If you believe the country's future will be better with Mitt Romney in charge than with Barack Obama in charge--as I do, without question or doubt--then you want Obama out. Well, if the economy performs poorly enough this year, then President Obama will, in fact, be out. So, I find myself rooting for the economy to perform just poorly enough to cost the president his job.

Ack! Isn't that terrible? I'm hoping that the country does less well than it could, if only for a brief period... And I call myself a patriot?!

Look, if a little more economic suffering is what's required to dislodge President Obama--if that's the price of the good that I think will come from replacing him with Mitt Romney--then I think that's an okay, if regrettable, thing to hope for. That's what I'm doing.

The alternative is to hope for strong growth over the next six months, which would propel the president to reelection, which, in my mind, would likely put the country on a far worse long-term path than if Mitt Romney were in charge. Why in the world would you want me to root for that? 

Footnote: I'm imagining the critic of this post saying in his/her best busybody voice, "You should hope that the economy does well, AND that the president loses. That's the only defensible position."

Problem--It's a morally defensible position, but it's not a logically defensible one. It's like saying, "You should hope that your adolescent son dedicates his life to ballet, AND that playground bullies respect his choices." I mean, the two just don't go together. If the economy does well for the rest of the year, it's likely that the president will win. If the economy does poorly, it's likely that the president will lose. And if the economy continues on its so-so path, we might very well find ourselves in a 2000 situation all over again...

Anklenote: I can also imagine someone saying, "But maybe if the economy does start doing really well, that would mean that the president's policies were working, and maybe THAT would mean that you were wrong about him, and maybe THAT would mean that he deserves reelection. So what you should hope for is that the economy does well, because that would mean vindication for the president's policies, and better times from here on out." 

I can't think of any argument to be made--in economics, politics, logic, whatever--that the effects of the president's policies would somehow magically begin kicking in in the spring of his fourth year in office. Besides, they are no longer just "his" policies. He's been co-governing with a GOP House and a much more conservative Senate since January of 2011. So I could just as easily argue that any improvement we might see this year would occur despite the president, not because of him.

What is Rush Limbaugh's role in the Republican Party?

This is an important question. Why? Democrats have been trying to argue for years that Rush Limbaugh speaks for Republicans. (There's a large segment of America that doesn't like Rush, so if you can link him to Republicans, maybe you can persuade a large segment of America not to like Republicans, either...) Most recently, for example, David Axelrod, the president's chief political consultant, argued that Limbaugh's sins were worse than Bill Maher's because of Limbaugh's role as "de facto boss" of the Republican Party. Maher's just a clown, but Limbaugh...well, he's the leader of one of our two great political parties!

So, is Limbaugh "de facto boss" of the Republican Party? Before we answer that question, let's answer an antecedent question: What is the Republican Party?

Huh?

You heard me: What is the Republican Party?

I'll tell you what it's not--an entity that has, or responds to, an actual or de facto boss.

American political parties are famously informal, disorganized, leaderless, rudderless, fractured, malleable, and permeable.

You want to be a Republican? Well, just declare yourself one. Bam! You're a Republican. You don't need anybody's permission. You want to run for office as a Republican? Go ahead and do it. Nobody has to sign a form for you. Just put on an elephant pin and start running. Now, of course, if you lose to another Republican, you won't be the party's official nominee, but you can still run as a Republican write-in candidate. Let's say you believe in abortion on demand, tax increases, and meddling with local schools. Can you still be a Republican? Sure! What if you're the Republican nominee for president of the United States, and you don't like the platform that the platform committee came up with at the convention--do you have to abide by it? Nope. Let's say that you're a Republican member of the Senate and the Republican president of the United States calls up and demands that you vote for a particular bill. Do you have to vote for it? Nope. Let's say that you were shopping for guava juice at your local Fiesta Market and you bumped into Reince Preibus, chairman of the Republican National Committee, ostensibly the highest ranking official of the highest ranking Republican institution in the country. Would you recognize him? Nope. But if you did, and if you said to him, "Hey, Mr. Preibus, why doesn't the party just end this nomination contest by telling all the candidates but one to clear the field?", he would say, "Oh, you're adorable. The national party doesn't have that kind of power, silly! We're mostly a fund-raising vehicle. Speaking of which, are you a Republican?" At that point, fearing that you were about to be hit up for cash, you would say, "I hereby renounce my party membership," and you would no longer be a Republican. Then, once you had your juice and were safely home, you could declare yourself a Republican again.

Getting the picture? There is no institutional Republican Party in which someone like Rush Limbaugh could play any kind of role as "de facto boss." That means that the only differences between Limbaugh and Bill Maher germane to the recent debate are: (a) Maher's words were far more vulgar; (b) Limbaugh's audience is much bigger; (c) Maher has given a million-dollar donation in support of President Obama, whereas Limbaugh has not yet endorsed or given cash (as far as I know) to any of the GOP candidates; and (d) Limbaugh is a political talk radio host, whereas Maher is a comedian and TV talk show host who frequently discusses politics.

If David Axelrod wants to make a substantive distinction on one or more of those bases, fine. But let's not allow him to pretend that Limbaugh is something that he's not in order to avoid an uncomfortable discussion.

Our damned Constitution: UPDATED

Back in 2008, the Supreme Court (finally) declared that the 2nd Amendment guarantees an individual right to bear arms. That left all the gun controllers struggling with this question, "So, how are we going to confiscate everyone's handguns over the next 10 to 20 years?"

Answer: you're not. The Constitution won't allow it.

We may be coming to a similar juncture on health care. If the Supreme Court knocks down the individual mandate, I think the goal of universal health care coverage in this country is probably dead.*

There are just certain things our Constitution renders impossible. Most are features. Some are bugs.

*The only other way you could get there is single-payer, and that seems like a political impossibility to me.

UPDATE: I received a request for a cliche check on the two sentences that read, "Most are features. Some are bugs." The judges' ruling was that the phrase, "It's a feature, not a bug," is a cliche, but that simply referring to features and bugs in close proximity does not constitute a cliche. 

The ridiculousness of Bill Maher

I don't watch Bill Maher's show for the same reason I don't put habanero seeds in my urethra. I have been watching a lot of clips lately, though, and I noticed something interesting (though hardly surprising).

On the one hand, when Ann Coulter called Maher a misogynist for things he'd said about Sarah Palin and Michele Bachmann, Maher defended himself by saying, essentially, "I don't hate them because they're women, I hate them because of the things they stand for." On the other hand, when conservatives criticize President Obama because of the things he stands for, Maher says, "Bullshit; they hate him because he's Blacky McBlackman" (seriously, he actually says that: "Blacky McBlackman").

Apparently, Maher was born without the gene for irony (or maybe he just has a genetic predisposition for double standards).

Footnote: Coulter definitely missed the chance to posterize Maher on this one. I've noticed that she's fine when writing a column, giving a speech, or answering friendly questions. I'm not sure, though, that she's got the processing speed and confidence to square off with someone who's smart, shameless, and a complete dickhead...someone like Maher. When the time comes to start throwing elbows to the nose and knees to the gut, Coulter tends to laugh, as if to say, "I'm not comfortable with serious, high-stakes confrontations. Maybe if I laugh, it will help keep the situation from escalating...or at least will make it seem as if I'm not taking this too seriously, which creates a built-in excuse for me if I end up looking foolish."

Andrew Breitbart's dead, Ann. We need more from you now.