Over the past two days, with my posts and your comments, we concluded that voters can't tell which candidate for president of the United States would be the better choice for growing the economy. I actually learned quite a bit through the comments.
My favorite comment was from Tigerfan who said, "When McCain says he doesn't understand economics, people seem to infer he must be an idiot. In fact economics (real economics, not the nonsense you get on talk shows and business hours) is very, very difficult and involves a great deal of complex math. They don't hand out Nobel Prizes for knitting after all."
That summed it up nicely. Our real choice is between two candidates who don't understand economics. And they both want to govern a country full of people who also don't understand economics while thinking they do. That makes the old, senile guy the only person in this scenario that isn't deluded or lying. He tells you up front that he doesn't understand economics.
This made me question my assumptions about the cost of the war in Iraq. Common wisdom is that Obama would pull American forces out of Iraq quicker than McCain prefers, thereby saving a few trillion dollars. But is that how you estimate the cost difference between the two candidate's positions on Iraq?
I think you have to do an "expected value" calculation. In other words, you would value a 50% chance of spending a hundred dollars as if it were fifty dollars. With so many unknowns, that is the only rational approach.
So if, for example, you think the realities in Iraq are that Obama is only 20% likely to draw down troops faster than McCain, you have to value the potential savings as only 20% as large as they could be. That's still a lot, but 200 billion isn't a trillion.
Second, you have to add an "insurance" value to McCain's approach of keeping relatively more forces in the area for a relatively longer time. There is a non-zero chance that having a robust base in the area, and a war hawk as president, would prevent future terrorist threats to the homeland. That has to be worth something. For example, if you think McCain's approach has a 1% chance of better protecting against an attack that would seriously damage the economy of the United States you would calculate the value of staying in Iraq at 1% of that potential destruction. That's a lot.
But you have to balance that theoretical benefit against the "making things worse" aspect of keeping military force in Iraq. Would a major long-term military presence just give the terrorists more reasons to attack the homeland? That depends if you think terrorists could hate the United States less as long as the U.S. supports Israel, which both Obama and McCain do. And of course the U.S. will probably never leave Afghanistan. So I think you have to assume the terrorists' incentive to attack America is permanently pinned at the maximum level no matter what happens with bases in Iraq. From an economics basis, the "might hate us more" element probably has zero value.
In addition, you have to consider the non-zero chance that a long-term American base in Iraq would support the fledgling wannabe democracy long enough (say fifty years) for a true democracy to emerge and become a model for other countries in the region. What is it worth to the United States to slowly "infect" nearby Iran and Syria with democracy? It seems like a lot.
You also have to factor in the economic stimulus of all the war spending. As much as you might not like boosting the fortunes of defense-related companies, that's a big part of the American economy. Cutting a dollar from the defense budget doesn't mean you have an extra dollar to reduce the deficit. When you take that dollar out of the economy, it can't get passed around to generate income taxes and sales taxes. Maybe you ultimately net ten cents in government savings by cutting defense by a dollar. I don't know the real number, but it is far less than a dollar.
The budget impact of the near term clearly favors Obama and his get-out-faster approach. The economics of the long term are unclear. McCain's approach is more of an insurance model; pay now so maybe you don't get in bigger trouble later.
I wonder if McCain's supporters have more insurance than Obama supporters. That would be an interesting poll. And I'll bet McCain's supporters own more stock in defense companies, which is in itself a form of insurance.
After yesterday's post I assumed someone would come up with a link showing which candidate has the most support from independent economists. Unless I missed it, no one came up with such a link.
But I am fascinated by the comments to yesterday's post that got the most up votes. The authors of those comments came up with what appear to be the best and simplest common sense answers to who would be the better president for growing the economy.
The most popular answer was that Obama would reduce the national debt by raising taxes while McCain would increase the debt by lowering them. No one wants debt, therefore Obama is better for the economy. Common sense, right?
First, if it were that easy, all the independent economists would be supporting Obama. It really would be that simple. But there is no evidence that independent economists are lining up with Obama. What do those experts know that the people with common sense don't?
For starters, the economy has grown for decades without a clear link to debt levels. The deficit went down during Clinton's term largely because the economy was hot by coincidence, thanks to the dot-com era.
Second, debt isn't bad per se. The best indicator of a healthy economy is that everyone who can repay a loan gets one. The whole point of debt, either personal or government, is that it stimulates the economy more than it puts a drag on it. Obviously there is a point where debt can be too much, but would McCain reach that point where Obama would not? I don't see the experts lining up behind that prediction.
And how much do you think the deficit will be reduced under Obama's plan of increasing taxes on the rich while reducing taxes on the poor? Isn't that largely shuffling things from one pocket to another? I don't know the answer to my own question, and the bigger point is that you don't either. But we both know Obama plans to increase spending in a number of social areas whereas McCain might be stingier. Or would McCain just spend more on the military so both candidates spend about the same in the end? I don't know. Neither do you.
Can Obama convince a bunch of rich law makers to increase taxes on themselves and their major donors? I doubt it. Can McCain convince a bunch of law makers who depend on pork to cut the pork out of the budget? I doubt it. So assume both candidates haven't made the math work and are over-promising on the debt. Common sense tells me I can't tell the difference between the candidates.
A comment from Real Live Girl was interesting. She noted that the economy is fueled by optimism, and Obama brings more of that. Those are two true statements. But is all optimism the same? Wall Street veterans believe the market would go up if McCain gets elected. Lower taxes make the titans of business the most optimistic. Raising their taxes and transferring the money to worthy social services might make lots of people feel optimistic, but that isn't the optimism that fuels economies. An unemployed guy can't get too optimistic until a rich guy gets optimistic first and builds a factory he can work in. McCain makes rich guys optimistic. Obama makes students optimistic. Which approach stimulates the economy more? Beats me. You don't know either.
Another comment noted that McCain's support of the gas tax holiday was criticized by almost all economists. Therefore McCain is both clueless about economics and likely to ignore expert advice on the subject. That seems like a common sense way to look at it, until you consider that politicians do things in campaigns that are intended to be symbolic. McCain was sending a message that he's a tax cutter. The gas tax holiday was always intended to be temporary. Message received.
McCain's actual economic ideas - the ones that would matter - involve free trade, taxes, and keeping the homeland safe. Those are either good for the economy or bad, and overwhelm the importance of something like a campaign promise involving gas taxes for a few months. So if you make a decision based on the gas tax holiday, you are basing your decision on trivia.
So which candidate would be better for the economy? I don't know. But I do know that common sense doesn't tell me anything useful, and neither do the experts.
Now here's the interesting part about that particular piece of ignorance: I follow the news more than most people. So why don't I know the answer to the most important question in this election?
I know all about lapel pins and fist pumps and gaffes and ministers. I have a pretty good idea where the candidates are on most irrelevant issues. But I don't know if independent economists have a consensus on who would be the best president, economy-wise.
The best I could find on the Internet in a quick search was a list of (presumably) Democrat economists supporting Obama and a list of (presumably) Republican economists supporting McCain. Does that really tell me anything?
Do you know whose side most independent economists are on, or do you pretend you have that sort of expertise yourself?
I expect some people will leave comments to this post along the lines of "It is obvious that (one of the candidates) has the best economic policy because he will do (whatever) and the other guy won't!" Unfortunately, economics is not common sense. It's a mix of science, calculus, chaos, expectations, and voodoo. In other words, if you think you understand economics, that's proof that you don't.
Here's the question of the day: Who do you think would be the best president for improving the economy, and what makes you an expert on economics?
There are a lot of potential scalable sources for renewable energy, but nothing got me more excited than these bacteria. I think it is the cartoonist in me that wants all the problems of the world to be solved by critters that eat garbage and poop oil.
I fantasize that someday the United States will hold a national lottery to see who gets to tell the president of Venezuela that we no longer need his oil. I think I would approach that conversation this way:
Me: "You know that oil you sell us?"
Chavez: "Si. What about it, Yankee devil?"
Me: "It's the life blood of your economy, isn't it?"
Chavez: "Si. What is your point, demon crud?"
Me: "Oil is the most valuable thing in your entire country, isn't it?"
Chavez: "Si. Where is this conversation going?"
Me: "We invented bugs that eat garbage and poop oil."
Chavez: "It will never work!"
Me: "You better hope so because I put some in your drink."
So I figure these bacteria will create all the oil we need for automobiles and jets, while the new mirror-based solar energy plants going up in the deserts will handle all of our future household and industrial energy needs. Maybe you toss in a few nuclear sites, and problem solved. Someday we'll look back and realize that oil at $140 was the best thing that ever happened.
Obama's tax plan involves taking money from the presumed puppet masters (rich people and corporations) and divvying it up among the people he hopes will vote for him (the masses). The only way that approach could fail with voters is if there really are puppet masters and they really are determining who gets to be president.
Fasten your seatbelt.
Personally, I'm okay with that, even if it turns out to be a colossal mistake. All I ask is that smart people did their best to get it right. Hey, no one is perfect.
That's why I can't generate any genuine anger toward our current bumbling government despite the fact they killed hundreds of thousands of people, steered the economy into a ravine, and ruined two hundred years of International good will. I actually think they were trying to do the right thing as they saw it. And if they weren't smart enough, the voters have to be blamed for that. Our politicians didn't get any dumber after being elected. We knew what we were getting.
I don't think I'm alone in my opinion. Otherwise we'd be in the middle of the impeachment process.
(Sorry about the line spacing. The blog interface is random today.)
Add the "eight hours of sleep" myth to the eight 8-ounce glasses of water you were supposed to drink per day, the food you weren't supposed to eat before swimming, and the huge amounts of bread you were supposed to eat for a healthy diet.
Seriously, is there ANYTHING I learned when I was a kid that is true?
I'm reasonably sure that if I make a funny face, it will not get stuck in that position. If I go outside without a jacket, I won't catch a cold no matter how much the words cold and cold sound alike. And all of my friends who smoked cigarettes ended up taller than me.
What baloney did you learn as a kid?
I am totally slapping myself in the head now because I never once thought about including a secret underground party lair in the plans. Now it's too late. And I suspect Shelly will be closely watching the construction phase, asking a lot of questions such as "Is that the pantry or the entrance to a secret underground party lair?"
To make things worse, I am exactly the sort of person who would build a house with a secret underground lair. But I probably wouldn't use it for parties because I'm selfish. I would just say I was on a business trip and go hide in there. All I'd need is a TV, refrigerator, and a toilet. It could all be in one room. I wouldn't even need overhead lights as long as the TV was always on. And obviously a chair would be redundant if you have a toilet. Easy peezy is the way I like it.
I'd use my secret lair to watch all the TV shows I can't watch with my family, such as Battlestar Galactica, and Southpark. The only risk is that it might sound a bit pathetic when the authorities raid my house for Garfield copyright infringement and discover that I have an underground television lair. There is no type of beard I can grow that would make that situation seem cool.
Check out my previous blog and the comments. If you use the ranking feature you can see the top several arguments for voting for McCain versus Obama. I found it fascinating to see which arguments were most persuasive to the extra-smart readers of this blog.
Personally, I think neither McCain nor Obama meet the minimum requirements to be president. I think we're hosed either way. But I am inspired by your arguments to come up with my own best case for each candidate. First, McCain:
Argument for McCain
You've heard the saying, "Only Nixon could go to China." If not, here is some background: http://en.wikipedia.org/wiki/Nixon_in_China_(phrase)
Likewise, only McCain, the ultra-hawk, can make peace with Iran or North Korea or Cuba. No one could accuse him of being soft. If a hawk like McCain decides to make peace, it must be because peace is clearly the best option.
Likewise, only McCain could draw down troops in Iraq without it appearing to be a defeat. All he'd have to say is, "We'll be back tomorrow if needed," and it would seem credible. That promise wouldn't be credible coming from Obama. And the threat of return is the only thing that would make a withdrawal work.
McCain went hard to the right to get the nomination. And he appears to have been inconsistent on some issues just to get elected. That proves he is a practical guy who knows how to get the job done. Once elected, he could be expected to drift back to the middle, where things can be accomplished in this country. Even if you like more of Obama's plans compared to McCain's, only McCain could get the support from congress to get anything done. Obama will be stonewalled, especially when he tries to pay for his plans by raising taxes on corporations and the wealthy. Even if you like that idea, it can't happen in this country because corporations and the wealthy control congress.
If you like any two ideas from McCain, and you like ten ideas from Obama, you're still better off voting for McCain because his two ideas can happen. Obama's ideas are too left to get the support needed.
Argument for Obama
McCain is simply too old to be trusted with his finger on the nuclear button. While it is entirely possible that one particular 70+ guy could defy the rules of aging and remain sharp, it is a fool's bet for voters when so much is on the line. He's clearly sharp enough today, but at that age, the drop will come quickly.
McCain supported the gas holiday over the objections of every economist. That proves he's either dishonest or willing to ignore experts, even when all of them are on the same side. Either explanation disqualifies McCain for the job of president.
Presidents don't have much impact on the economy. And as different as Obama and McCain seem on Iraq and Iran, they would end up in the same place: stuck in Iraq and talking tough with Iran but doing nothing. So you can discount the economy and foreign affairs in your voting calculation. Presidents make their biggest impact on how we feel. That was Reagan's gift and Kennedy's too. Obama makes people feel inspired and hopeful, and those things have a huge impact on the economy and even education. The very existence of an African-American president would change who we are as a country in a way that everyone agrees is positive.
If you agree that presidents have little power over economics, and both candidates will end up on the same place with international affairs, you have to decide between the inspiration of Obama and the senility of McCain. Those are the two most predictable elements.
And if you happen to be a social lefty, you need Obama to nominate the next few Supreme Court justices.
I reiterate that I don't think either man meets the minimum qualification I would like in a president. I just like the challenge of coming up with good arguments. How'd I do?