Quinnipiac: Romney ahead of Obama

[Tender Branson]

46% Romney
42% Obama

45% Christie
42% Obama

45% Obama
44% Perry

From September 27 - October 3, Quinnipiac University surveyed 2,118 registered voters with a margin of error of +/- 2.1 percentage points. Live interviewers call land lines and cell phones. The Republican primary includes 927 voters with a margin of error of +/- 3.2 percent.

http://www.quinnipiac.edu/x1295.xml?ReleaseID=1656

[Tender Branson]

It suxx that they didn't poll Cain. After all he's stronger than Perry in their primary poll.

[Niemeyerite]

It suxx that they didn't poll Cain. After all he's stronger than Perry in their primary poll.

they didn't know that before they started polling, I suppose.

[krazen1211]

Romney has solid favorables.

[The Vorlon]

Romney wins Republicans 90% to 4% versus Obama, so whatever misgivings the GOP may have about Romney pale in comparison to the dislike of Obama. - I guess we can put the "Romney is unacceptable to the base" argument to rest.  Ideal...no... Acceptable? - 90/4 would suggest "yes".

Obama's favorability has gone negative (very bad sign)

http://huffingtonpost.com/2009/01/05/fav-obama_n_726774.html?xml=http://pollster.com/flashcharts/content/xml/Obama44Fav.xml&choices=Unfavorable,Favorable&phone=&ivr=&internet=&mail=&smoothing=more&from_date=&to_date=&min_pct=&max_pct=&grid=&points=&trends=&lines=

[King]

Vorlon, to your sig, is it possible that the "without stimulus" jobs estimate--like the stimulus estimate--was also an underestimate and we'd be in even worse shape without it?

[The Vorlon]

Vorlon, to your sig, is it possible that the "without stimulus" jobs estimate--like the stimulus estimate--was also an underestimate and we'd be in even worse shape without it?

There is an old joke something to the effect that "......there are only two economists in the world who know how to fix the current mess... and they disagree with one another..."

Question:

A family has annual expenses of $400,000 and an annual income of $240,000

Should they:

     A) - Cut spending and take steps to raise their income to achieve a balance?

or:

     B) - Take out a third Mortgage on the family home and keep on living it up until the bank forecloses on their home?

In the short term, option B) is a lot more fun... be we all know A) is the right answer....

I guess the big question that needs to be answered to place your question in context is to ask if traditional demand based Keynesian economics has reached it's limits, and I would argue that, given the magnitude of the debt and deficit, that it has.

In medicine when a patient is very sick and has several problems that co-exist, the doctors must often balance several treatments at the same time, where a drug that makes one condition better may actually make another condition worse..

In some ways the US economy is like this.

Obama's people are correct that the core problem is a lack of demand in the economy, and the traditional Keynesian approach is to use government borrowing to"prime the pump" and boost demand.

To return to the medical analogy, I believe the "drug" - in this case deficit spending and borrowing - has reached the point of toxicity to the patient and that the traditional drug, which has worked well in the past, no longer works as the patient has entered a new phase where more of the same drug does more harm than good.

I would offer two cold, hard, indisputable facts:

When you look at the rates being paid by US Treasury bills, when you factor in even a very modest inflation rate (say 2% or so) the effective real rate of return on T-Bill is essentially zero give or take a few basis points.  When people have money to invest they typically go for the best rate of return they can get within their risk tolerance envelope.  T-Bill yields suggest that the managers of literally trillions of dollars has so little faith in the future of the US economy that they think that a real rate of zero % is as good as they can do....  Their view looking at the future is that a T-Bill paying ZERO is a better choice that funding a start-up company, or building a new factory, or expanding an existing operation...    This has to be perhaps the most damning indictment possible of what these folks believe is the future of the US economy.  Until that grand psychological calculation is altered, the US economy will remain dead in the water.   Gentle Ben can run the Fed's printing presses until they explode and it will not change the reality on the ground....

The second fact I would offer is that despite sitting on huge reserves of cash (over $1 Trillion worth) US companies are sitting on their hands and not investing.  The question is why has corporate investment ground to a halt?

Some point to things like regulations and Obama's NLRB fight with Boeing over the SC Dreamliner plant....  I personally think while these are real negatives they are not "huge" drivers of the problem...

The REAL problem is that every sane person knows there needs to be MAJOR reform to either taxes, spending (or both) or the US economy will relatively soon collapse under a mountain of debt.  Spending this year will exceed $4 Trillion, the deficit will exceed $1.4 trillion...  Proportionately, these are worse numbers than Greece for heaven's sake.

When you add in Obama's Health care plan (a major reorganization of 1/6th of the nation's economy) you have so much uncertainty that business is simply paralyzed.

To come full circle and wrap up the argument to your original question, Obama's "stimulus" represents, in my opinion, one last kick at the can at old style Keynesian economics.  The drug is not working any more.  If 787 billion worth of direct spending, PLUS 3 trillion in "quantitative easing" (aka "printing money") PLUS near zero interest rates, PLUS a deficit at 10% of GDP can't fix the problem, perhaps it is time to conclude that the fundamental Keynesian economic calculus driving these decisions is just wrong....

There will be substantial and huge pain as the US rights it's economic house.  There is no way you can be $14 trilliion in debt with a 10% gdp deficiet and magically have everything be ok without there being some pain. - Anybody who says they have a magic bullet is either lying to you, or lying to themselves.. it just ain't so.

I would argue it's time to "eat out peas" to borrow a phrase, shake all the excesses out of the system, and then rebuild again on the basis of economic reality and not upon a "prime the pump" sugar high fueled by more debt...

The "real" economy is not that bad.. Most corporations have their balance sheets in order, productivity is good.  The "drug" of Government (Deficit, Debt, a policy induced housing bubble, etc) have numbed the patient till they can't walk, let alone see straight.  It's time for a painful round of detox to get the drugs out of the system, and then forward once again after we are 'clean and sober".

To quote Winston Churchill...

"Americans eventually always do the right thing... after having first exhausted all other available options..."

The United states is at a crossroad between a tough decade and a tough century. I hope you guys make the right choice.

[King]

tl;dr, but I still see your point.

[The Vorlon]

tl;dr, but I still see your point.

tl:dr, = ....?

Sorry, not up on all internet abbreviations

[King]

tl;dr, but I still see your point.

tl:dr, = ....?

Sorry, not up on all internet abbreviations

Too long, didn't read, but I skimmed it and I understand the gist of what you're getting at here.

[pbrower2a]

Vorlon, to your sig, is it possible that the "without stimulus" jobs estimate--like the stimulus estimate--was also an underestimate and we'd be in even worse shape without it?

There is an old joke something to the effect that "......there are only two economists in the world who know how to fix the current mess... and they disagree with one another..."

Question:

A family has annual expenses of $400,000 and an annual income of $240,000

Should they:

     A) - Cut spending and take steps to raise their income to achieve a balance?

or:

     B) - Take out a third Mortgage on the family home and keep on living it up until the bank forecloses on their home?

In the short term, option B) is a lot more fun... be we all know A) is the right answer....

That scenario is all too obvious. But governments are not people or households. Governments can issue money, which does not become a problem until it creates inflation (little risk in a nasty recession). When the government spends more in a recession it also expands the tax base, and the expansionary activity pays for itself. People who would otherwise be unemployed have jobs and are spending decidedly much more money.

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We are still in the liquidity trap.

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No, this is not a life-or-death situation for the American economy. Deflating the economy as Herbert Hoover allowed shrinks the tax base and creates pointless hardships. But even with your medical analogy, good medicine does what it can to keep people from getting into the position in which the necessary treatment of one condition implies the death of the patient from other causes. Physicians must choose medications and their doses wisely. 

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What is the "toxicity"? That it will take away the work ethic? That it will make people contemptuous of the consumerism necessary for a healthy economy? That entrepreneurs who still have profitable activities will take the money and run (Whoops! They already did that! It's called "exporting jobs", and it began long before President Obama took office.)

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That is a problem... but remember why it was done. The financial system was about to collapse, and if the government didn't back the banks, then we would see a replay of the bank runs that ravaged the economy.

When Dubya was President there was easy money to be made on speculative activity. That can no longer work. Nobody trusts real estate enough to expect a return on investment higher than the meager reward on T-bills. But if housing activity is way down, then so is much else  -- from cutting down forests to get wood to manufacturing the objects that usually go with new housing (like carpeting, furniture, plumbing supplies, and appliances).

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They no longer need the market with high volumes of consumption at low mark-ups. They can manufacture less and sell it for higher prices and higher profit margins to fewer customers and get away with it. Our elites believe in economic competition as a race to the bottom for all but themselves, but see themselves exempt from economic competition as an entitlement.

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That is an issue involving union representation of workers. Labor unions did not cause the speculative boom to implode.

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Debt is relative. $1000 per capita debt in Laos would be a catastrophe; $10,000 per capita debt in the US might be troublesome but tolerable. We have had a higher debt-to-income ratio in other times, like the 1950s, and gotten away with it. Government debt is someone else's asset, a/k/a wealth. 

But even with the household model, how big the debt is and one's income is, and what benefit one gets  before taking on the debt matter greatly.  Physicians typically begin their careers with debt twenty times the full-time earnings of some workers. is medical school a bad idea? Hardly! One can reasonably expect an income far above the mean and comparatively-easy payback of the loan.

Now let us suppose that you go into debt to attend a culinary school whose completion sets you back roughly two years' salary. Of course, cooks make little more than the median at best, so if you are making $25K a year and have $30K in debt, then  you are in a bad position. Not only do you make an unremarkable amount of income, you have living expenses.   

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American companies are relocating to Canada because the total medical costs are lower.

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Take it away and see what happens... a double dip. There are medications that, once started, cannot be stopped without dire consequences for the patient. 

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The pain is already there. The solution is investment in what America has always done well -- small business in which owners are workers, customers have to be treated well, the immediate rate of return is poor, and running away isn't much of an option. Big Business isn't creating jobs.
 

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An attempt to pare federal spending will result in a smaller tax base, lower revenues, and increased deficits.

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Corporate America is not your friend.

[LastVoter]

Vorlon, to your sig, is it possible that the "without stimulus" jobs estimate--like the stimulus estimate--was also an underestimate and we'd be in even worse shape without it?

There is an old joke something to the effect that "......there are only two economists in the world who know how to fix the current mess... and they disagree with one another..."

Question:

A family has annual expenses of $400,000 and an annual income of $240,000

Should they:

     A) - Cut spending and take steps to raise their income to achieve a balance?

or:

     B) - Take out a third Mortgage on the family home and keep on living it up until the bank forecloses on their home?

In the short term, option B) is a lot more fun... be we all know A) is the right answer....

I guess the big question that needs to be answered to place your question in context is to ask if traditional demand based Keynesian economics has reached it's limits, and I would argue that, given the magnitude of the debt and deficit, that it has.

In medicine when a patient is very sick and has several problems that co-exist, the doctors must often balance several treatments at the same time, where a drug that makes one condition better may actually make another condition worse..

In some ways the US economy is like this.

Obama's people are correct that the core problem is a lack of demand in the economy, and the traditional Keynesian approach is to use government borrowing to"prime the pump" and boost demand.

To return to the medical analogy, I believe the "drug" - in this case deficit spending and borrowing - has reached the point of toxicity to the patient and that the traditional drug, which has worked well in the past, no longer works as the patient has entered a new phase where more of the same drug does more harm than good.

I would offer two cold, hard, indisputable facts:

When you look at the rates being paid by US Treasury bills, when you factor in even a very modest inflation rate (say 2% or so) the effective real rate of return on T-Bill is essentially zero give or take a few basis points.  When people have money to invest they typically go for the best rate of return they can get within their risk tolerance envelope.  T-Bill yields suggest that the managers of literally trillions of dollars has so little faith in the future of the US economy that they think that a real rate of zero % is as good as they can do....  Their view looking at the future is that a T-Bill paying ZERO is a better choice that funding a start-up company, or building a new factory, or expanding an existing operation...    This has to be perhaps the most damning indictment possible of what these folks believe is the future of the US economy.  Until that grand psychological calculation is altered, the US economy will remain dead in the water.   Gentle Ben can run the Fed's printing presses until they explode and it will not change the reality on the ground....

The second fact I would offer is that despite sitting on huge reserves of cash (over $1 Trillion worth) US companies are sitting on their hands and not investing.  The question is why has corporate investment ground to a halt?

Some point to things like regulations and Obama's NLRB fight with Boeing over the SC Dreamliner plant....  I personally think while these are real negatives they are not "huge" drivers of the problem...

The REAL problem is that every sane person knows there needs to be MAJOR reform to either taxes, spending (or both) or the US economy will relatively soon collapse under a mountain of debt.  Spending this year will exceed $4 Trillion, the deficit will exceed $1.4 trillion...  Proportionately, these are worse numbers than Greece for heaven's sake.

When you add in Obama's Health care plan (a major reorganization of 1/6th of the nation's economy) you have so much uncertainty that business is simply paralyzed.

To come full circle and wrap up the argument to your original question, Obama's "stimulus" represents, in my opinion, one last kick at the can at old style Keynesian economics.  The drug is not working any more.  If 787 billion worth of direct spending, PLUS 3 trillion in "quantitative easing" (aka "printing money") PLUS near zero interest rates, PLUS a deficit at 10% of GDP can't fix the problem, perhaps it is time to conclude that the fundamental Keynesian economic calculus driving these decisions is just wrong....

There will be substantial and huge pain as the US rights it's economic house.  There is no way you can be $14 trilliion in debt with a 10% gdp deficiet and magically have everything be ok without there being some pain. - Anybody who says they have a magic bullet is either lying to you, or lying to themselves.. it just ain't so.

I would argue it's time to "eat out peas" to borrow a phrase, shake all the excesses out of the system, and then rebuild again on the basis of economic reality and not upon a "prime the pump" sugar high fueled by more debt...

The "real" economy is not that bad.. Most corporations have their balance sheets in order, productivity is good.  The "drug" of Government (Deficit, Debt, a policy induced housing bubble, etc) have numbed the patient till they can't walk, let alone see straight.  It's time for a painful round of detox to get the drugs out of the system, and then forward once again after we are 'clean and sober".

To quote Winston Churchill...

"Americans eventually always do the right thing... after having first exhausted all other available options..."

The United states is at a crossroad between a tough decade and a tough century. I hope you guys make the right choice.

We don't have a "Japan" problem here. Our problem is not that dire.