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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.

 
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Apr 11, 2009
Restricted feeding of rodents increases longevity, but its mechanism of action is not understood. We studied the effects of life-long food restriction in genetically obese and normal mice of the same inbred strain in order to distinguish whether the reduction in food intake or the reduction in adiposity (percentage of fatty tissue) was the critical component in retarding the aging process. This was possible because food-restricted obese (ob/ob) mice maintained a high degree of adiposity. In addition to determining longevities, changes with age were measured in collagen, immune responses, and renal function. Genetically obese female mice highly congenic with the C57BL/6J inbred strain had substantially reduced longevities and increased rates of aging in tail tendon collagen and thymus-dependent immune responses, but not in urine-concentrating abilities. When their weight was held in a normal range by feeding restricted amounts, longevities were extended almost 50%, although these food-restricted ob/ob mice still had high levels of adiposity, with fat composing about half of their body weights. Their maximum longevities exceeded those of normal C57BL/6J mice and were similar to longevities of equally food-restricted normal mice that were much leaner. Food restricted ob/ob mice had greatly retarded rates of collagen aging, but the rapid losses with age in splenic immune responses were not mitigated. Thus, the extension of life-span by food restriction was inversely related to food consumption and corresponded to the aging rate of collagen. These results suggest that aging is a combination of independent processes; they show that reduced food consumption, not reduced adiposity, is the important component in extending longevity of genetically obese mice.
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mukesh11
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Apr 11, 2009
Founded in 1903, the American Political Science Association is the major professional society for individuals engaged in the study of politics and government. APSA brings together political scientists from all fields of inquiry, regions, and occupational endeavors. While most APSA members are scholars who teach and conduct research in colleges and universities in the U.S. and abroad, one-fourth work outside academe in government, research, organizations, consulting firms, the news media, and private enterprise. For more information about the APSA, its publications and programs, please see the APSA website.
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mukesh11
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Jul 11, 2008
Smokefoot, Al Qaeda thrives in states that have very weak governments, with vacuums in power. If that weren't the case, Al Qaeda would be thriving in Saudi Arabia, not in the former Taliban government. Obama's plan is to withdraw to motivate Iraq, and McCain supports the surge to keep Iraq stable. Regardless of what candidate you support, no candidate is expecting his or her plan to result in permanent instability in Iraq. Both candidates have good intentions.

I disagree with your view that there will be some big payoff of peace if we just ignore Al Qaeda or cater to their demands. In that case we should return to an America of the nineteenth century as seen in Little House on the Prairie, while we're at it, where a stick of candy at Christmas is an unexpected joy. That's not the America I grew up in. I expect crowded malls at Christmas. If Iraq is unstable in a year or two, Al Qaeda will get a foothold. Let's not ignore the facts to express opinions. Historians will judge to what extent the war in Iraq was necessary or understandable.
 
 
Jul 2, 2008
Smokefoot, all candidates pander to voters before the election. It's a fact of life and has been, I'm sure, since elections first started.

Have you noticed that Obama has been making quick moves toward the middle or moderate wing of the Dems? Of course, because he is the most liberal member of Congress.

Being liberal in itself is no crime, but you might recall that a few years back, the Dems did a survey and supposedly claimed that people will keep on working until they are taxed at a level of 90 or 95 percent. Isn't that ridiculous? Some Democrats would have us become socialists like France has become. They only work 35 hours a week there, and President Sarkozy is trying to get the unions to go back to the 40-hour week, so the country can compete in the global economy.

If you believe we should go back to the liberal version of the Dems that we had before Bill Clinton, then it's clear you will like Sen. Obama. I am very weary of the parties fighting each other while major programs like Social Security and Medicare go bankrupt and aren't fixed. I know that Sen. McCain is willing to work with Senators Kennedy and Joe Lieberman, to name just two, to try to solve the immigration issue, national security and the economic threats we face.

This is no time for Obama, who hasn't visited the Mideast in over 900 days. That's over two years. How could he know what's really going on in Iraq, Israel and other places unless he talks to the generals himself? How could he begin to formulate a withdrawal plan till he does that?
 
 
Jun 30, 2008
Scott, you shouldn't assume that the terrorists are a fixed group who always hate America first. Al-Qaida primary goal is to set up a theocracy in Saudi Arabia and other states, not to destroy America. Depending on what is happening in the middle-east their recruiting and fund-raising can change dramatically. Withdrawing from Iraq can potentially lower their support if it is seen as evidence that America is not attempting to make it a client state.
 
 
Jun 30, 2008
McCain says he doesn't understand economics, but still supports the gas tax holiday, which means that either:
1) He doesn't understand and doesn't care enough to ask an economist.
2) He is primarily interested in the vote-getting aspects of bad economics.
3) He wants to increase oil company revenues in a sneaky way.
None of these possibilities are all that good...
 
 
Jun 26, 2008
Scott, as usual, I love your logic. I totally agree that McCain would be the best choice as our commander in chief. He has the years of experience we desperately need to let our troops win in Iraq and provide stability in the region for the next four, eight or more years.

Sen. McCain is no devil. He is highly respected by former secretaries of state, including Henry Kissinger, Jim Baker and George Schulz. Not only is he respected for his service to our country in Vietnam, but during his 25-plus years in Congress he has gained the knowledge and humility to sort through new information and make wise decisions based on new information. Something George W. Bush has clearly been unable and unwilling to do.

Comparing the senator from Arizona to our current bumbling president is like comparing a Cadillac to a Toyota.

Car comparisons aside, I'll take the candidate with a strong track record of fighting for reforms such as campaign finance and someone who, like Ronald Reagan, is secure enough to admit when he needs to learn more about an issue.

This is no time for neophytes. Sen. Obama is untested and uncertain. Our choice is clear: John McCain has the abilities to lead from day one.
 
 
Jun 24, 2008
You wrote "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." Assuming that Iraq won't descend into chaos after we pull out, Obama would have to pull every single soldier out and not keep a small vanity force in there. Remember that the fatalities of our soldiers occurred not hundreds at a time, but four or five or a dozen at at time and it began to add up. So even if Obama pulled the majority of soldiers out, we still would have daily casualites. When the surge occurred, there was much more stability than before the surge, and the attacks occurred less frequently as well as less sectarian violence. The only way a withdrawl would prevent more fatalities is to have a 100 percent withdrawl over a rapid period of time. I don't think Obama will do that or be capable of doing that. Sorry my post was late, but I didn't think I could post. Thanks for the opportunity.
 
 
+2 Rank Up Rank Down
Jun 24, 2008
Economists are beginning to think that the consumer (more exactly, a large body of consumers' general opinion) might have some bearing -- they might actually have a clue...

http://money.cnn.com/2008/06/24/news/economy/confidence_recession/
 
 
Jun 23, 2008
KevinKunreuther: You can take as much offense as you want - somebody always does, and there's plenty to go around. Take seconds if it makes you happy.
 
 
0 Rank Up Rank Down
Jun 22, 2008
My gut said "Of course, McCain voters are better insured--they're white, conservative and old. Then I remembered that Obama's supporters are better educated, richer, professional types--they need insurance to buy homes and cars so they HAVE to have insurance.
 
 
Jun 22, 2008
You are such a liar! Ever thought of running for office?
 
 
Jun 22, 2008
The best thing about American economics that has always made long term sense is the right to own private property unlike the rest of the world.

This is obviously being undermined one step at a time by the democrats every time they are in power. The next time they are elected you may find the idea of equalization of wealth laying its foundtaions and the Unions rooting for a share of the government's loot. It really doesn't matter whom they nominate as their figure head. They have always been a rat-pack.
 
 
Jun 22, 2008
Contrary to what Tigerfan says, the noble prizes in soft sciences like economics are indeed handed out for knitting.
As any number of professsionals in the financial markets know, a number of noble prizes have been awarded for theories attempting to understand the working of the stock markets - and all of them having been proved nearly ridiculous a few years later. Some theories have even been later repudiated by their own inventors (ie the persons who got the noble prize for it.)
Also one may recall a firm called Long Term Capital Management which was formed by about three-four noble prize winners to trade in bonds and make money for their clients. The firm promptly went belly up at the first sign of trouble and had to be bailed out by the government and other financial institutions.
A noble prize in economics means little except a recognition of your ability to churn numbers.
 
 
Jun 21, 2008
In all this entertaining - but really not very productive - philosotainment, you said something very, very important.

They do not hand out Nobel Prizes for knitting!!!!!!!!

How come?

Is this some discrimination against knitters? I mean, come on, if even Gore can get a Nobel Prize for a movie the same week the British courts rule that it is a load of dingo's kidneys and full of lies and untruths, why are knitters ostracized?

And, Mr. Adams, you would be an ideal speaker for 'ESTABLISH NOBEL PRIZES FOR KNITTING' movement!!! Yes, I can see it now! Knitting now, basket-weaving next!
 
 
+1 Rank Up Rank Down
Jun 21, 2008
Not that I totally expect a completely rational, productive discussion here - it's all healthy philosotainement, fun food for thought (not yet convinced its anything else) - not that there's anything wrong with that....

I would like to add some expert input (not mine, I'm just an ametuer opinion-maker...) regarding what you (Scott) called an "expected value calculation":
> 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.
While it is clear that this IS the rational approach, Behavioral Economics must take into account real people, who are seldom rational and FAR more often "more subtle and ornery".

Instead of trying to requote and misinterpret what it means, i'll refer you to a post by Bruce Shneier (one of the leaders in security and risk management, my field btw, which is not so far away from the concepts of economics, albeit non-financially....). Anyway, his post... http://www.schneier.com/blog/archives/2008/05/how_to_sell_sec.html

To summarize (I know I said I wouldnt, but I'm sure some of your readers are too lazy to go there unless they know what they gonna find...), according to Prospect Theory 50% chance of 100$ is NOT equal to 100% chance of 50$. Moreover, whether it is worth more or less depends if it is viewed as a loss or a profit....
Based on this (expert economists, who for this discussion are COMPLETELY independent since they weren't even talking politics!), a lot of the rest of this discussion is moot....

Then again, are the potential savings (whatever they may be) of bringing troops back to be considered a profit, or is keeping them there a loss....??

---

On the other hand, I do completely agree with your basic tenet, that voting is more or less pointless.... (not to mention voting is giving your moral support for a corrupt, broken system....)
 
 
Jun 21, 2008
That's very complex, one might even say circuitous, rationalizing. You seem to want us all to be complicit in your notion that your preference for McCain is well-reasoned.

Clinton, who is by analysis slightly to the right of Eisenhower and would have made a good moderate Republican candidate in pre-Nixonian times, appointed, hired, and listened to professional economists, just like traditional Republicans did, which is why the Clinton Administration was an oasis of prosperity unequaled in the rest of the past 28 years. And that's what we need to know about the candidates: not what kind of expertise they have, but what kind of expertise they'll avail themselves of.

In fact, you can very easily understand 98% of the economic models that have had the most influence on national policy from Reagan to Bush II. They're very simplistic, especially the bigger ideas. To understand what they are, I recommend "The Big Con" by Jonathan Chait. A brief, simple primer of Neoconomics from a skeptical viewpoint. You'll understand it fine.
 
 
+3 Rank Up Rank Down
Jun 21, 2008
If the chance of democratic "infection" (aka "the demonstration effect") is not zero, it is very close to zero. What effect has a democratic India had on Pakistan, China, Nepal or Burma? Cite, if you can, one case in which having a democratic neighbor has influenced an authoritarian nation to become democratic.

Also, a professional understanding of economics does indeed require fairly complicated mathematics. But there are many concepts (e.g., comparative advantage) that an intelligent, non-math-adept lay person can, and needs to, understand. Policy makers don't need a professional understanding of economics, although they should have professional advisors. They need an informed lay understanding.

 
 
+3 Rank Up Rank Down
Jun 21, 2008
I am a 20 year old student halfway finished with his BS in Economics. I usually consider myself to be in the Chicago school of thought, but most of the things that I read are written by Austrian economists. I'm not an expert (yet), but I think that I know more than the mean bear.

Also, I direct a web show about pirates. (http://sytykap.com)

The only part of this post that made me cringe was the bit about the economic stimulus of war spending. By definition, government spending is incapable of generating new wealth, it can only forcibly redirect wealth from one group to another. Any money that is floating around in the economy will stimulate the economy. The only thing that government spending does is ensure that resources are used in accordance with the bureaucrats ends and values as opposed to the people the money was taken from. Remember, even money that is in savings will be lent out again to other people, maybe even to private scientists developing alternative energy (something that people think that only the government can invest in).

If the key to economic growth were a state taking money away from its citizens and dictating its use then there wouldn't be any economic problems in America, and command economies like North Korea would be utopias. Unfortunately that's not how things work.

As for the election, I am wholeheartedly convinced that voting is for !$%*!$ I only get to vote once, and unless my state (a deep-south red one) comes down to one vote, I am just pretending like the Leviathan obeys me. Furthermore, politicians are self-serving douchebags intent on furthering their own careers, and I refuse to support any of them in any way whatsoever.

But, that being said, if a gun were put to my head and I had to choose between Obama and McCain, I think I'd have to pick McCain.

Only because I'll take the devil I know over the devil I don't.
 
 
Jun 21, 2008
By the way, a lot of people get these multi-trillion dollar war cost estimates by adding up the military budget.

But cutting the war doesn't actually cut all that away.
 
 
 
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