2010 Minus 1 - a Media Misinterpretation

Election 2009 is over. What is statistically a dead heat is being portrayed as everything from a rebuttal of Obama to the great hope of Republicans in 2010. It is neither. Trumpets sounding a Republican revival for 2010 neglect the fact that self-identification as Republican is at its lowest point in history, that Democrats in New Jersey and Virginia were not exactly the strongest of candidates running on the strongest of issues and, most importantly, Democrats picked off a district in New York that had not voted Democratic in a century. The Republican loser in New York's 23rd was also the candidate of Limbaugh and Palin. I don't hear the repudiation of the Republicans or their leadership being trumpeted in the press.

But the repudiation of the losers doesn't engender conflict, the thing that makes good fiction readable and that has replaced fact in our news media. It's the winner that has to fail in today's media in order to bring something once called bias now called balance into the equation. So the losses in Virginia (traditionally Republican) and New Jersey (where anything warm would have beaten the incumbent) are great triumphs and New York is a minor victory (which, as a national office, means more to me than 49 gubernatorial races). In this unbalanced equation, no Democratic victory is of the scale of any Republican and it's all the fault of Obama.

It is, I hope, a wake-up call to Democrats in power. You can lose. Beating on Bush and branding a Republican a Republican aren't enough. Democrats were elected to change things and so far the party hasn't created a lot of change. The recession has stayed around long enough that Democrats now own it, particularly after the stimulus and bailouts have produced richer banks and little that can be felt on my street. The message to Democrats is clear: Do something to get your base re-energized. Otherwise 2010 could be a bloodbath and the pundits can point to their analysis of 2009 and say, ain't I smart.

Nineteen Reasons We Should Encourage Texas to Secede

No, Nosy isn't dead. Here are 19 reason thinking Americans should encourage the Lone Star State to go it alone:

1) 49th in teacher pay
2) 1st in the percentage of people over 25 without a high school diploma
3) 41st in high school graduation rate
4) 46th in SAT scores
5) 1st in percentage of uninsured children
6) 1st in percentage of population uninsured
7) 1st in percentage of non-elderly uninsured
8) 3rd in percentage of people living below the poverty level
9) 49th in average Women Infant and Children benefit payments
10) 1st in teenage birth rate
11) 50th in average credit scores for loan applicants
12) 1st in air pollution emissions
13) 1st in volume of volatile organic compounds released into the air
14) 1st in amount of toxic chemicals released into water
15) 1st in amount of recognized cancer-causing carcinogens released into air
16) 1st in amount of carbon dioxide emissions
17) 50th in homeowners' insurance affordability
18) 50th in percentage of voting age population that votes
19) 1st in annual number of executions

Of course, they are number one in wind energy generation but with Rick Perry for a governor, what could you expect? I'd vote immediately to approve secession provided they take everything south of the Ohio River with them.

Why Money is Good

Following that bit of mood music, to the meat of the post.

I've been reading a lot of stuff recently that would lead me to believe a lot of people are beginning to think both capitalism and money itself are bad things. I won't go into why capitalism is actually quite good (under certain conditions) in this post and will simply remind you that we haven't come up with a better system for ensuring peoples' needs are met. And if you doubt it, I'll remind you of the Soviet Union's command economy's legacy of record wheat crops and simulataneous bread shortages.

Money. It's frustrating, money is. And yet it's absolutely necessary. Perhaps in some Star Trek future where anything you want can be assembled out of organic goo there won't be any need for it (but there will still be a market for organic goo!) but in our more realistic world, good old cash is about the best thing we can come up with to use as a medium of exchange.

So, in order to see its importance, let's imagine a world without it. In our world, we have the good old fashioned barter system: A market would develop for goods and services if all money were done away with, it just wouldn't be very efficient. Imagine this. I have chickens, Omar has wheat. My chickens eat Omar's wheat and produce eggs which I give to Omar, perhaps his wife makes pasta or some such. When I want something else, I have to go to Igor for, say, carrots but Igor has chickens so doesn't need eggs. I then have two possibilities: I can look for someone who has something Igor wants, trade them the eggs for that, go back and hope Igor hasn't traded his carrots off already and see what kind of deal I can get. And if Igor has already traded his wheat off, my chickens go hungry unless I can find someone else willing to trade eggs for grain....

Much easier to go to Safeway with $20 and pick up a pound of carrots, right?

So how much is money worth? Short answer is what we agree it's worth. There was a time we had money based on metallic standards, either silver or gold. You could take $35 in to the Treasury and come out with an ounce of gold. Good system, right? Money was really worth something, right? Well, there were a couple of problems.

First, the economy could only grow as fast as the gold supply and there was only so much of it out there. And if the Government wanted to buy more gold, it had to buy it with money so the actual value of the currency did fluctuate with the price of gold. Don't forget, gold was traded for jewelry, for electrical contacts, for foreign currency so your wedding ring literally removed $35 from the US economy (assuming it weighed an ounce of pure gold).

So Nixon did away with the Gold Standard in favor of what's called fiat money. It's ultimately money because the Government says it's money. That allows the economy to grow but, since there can be more of it printed on a whim, can allow for inflation as well.

Still, it beats having to trade my eggs for someone's carrots.

How We Became France

How did it come to this?

The Right, once so proud of hating the French despite L'Enfant and the support that enabled us to defeat the British, has led us to the point where our country is forced to become French.

No, we're not getting the good stuff. We get to keep cheap chain restaurants, bad wine, fear of raw-milk cheese and 60 hour work weeks. No, we get nationalization.

Congress just nationalized a bunch of mistakes made by a bunch of lenders in the name of greed. Never again can we complain about Airbus - we're nationalizing our automakers for making the same mistake year over year, building gas-guzzling SUVs instead of spending some money on basic research into producing fuel-efficient cars. We've become the worst of France.

I really do hope we can become more like them. I want a little socialism. Capitalism is looking worse and worse as it shows its darker side. Often here I've written about markets. French markets are controlled. Ours are not. And the French don't have a mortgage crisis.

So here's a steaming hot plate of Freedom Fries for our friends across the Atlantic. In the 1700s you provided us valuable support and resources, helped us build our capitol and were our major ally against the British. So now with our privately-funded pensions tanking, our health care system collapsing under its own rate and our economy unable to maintain itself due to the distinctly American penchant for laissez-faire capitalism, we may have to look to you, the evil realm of Old Europe, for guidance once again as we attempt to pull out of our national nosedive.

So how many of you would vote for Obama given the chance?

(about two to one)

Poll Reading for Dummies

Dang, I've been waiting a long time for this one....

In the New York Times/CBS News poll released today, Obama leads McCain by 48% - 43%, a margin they point out is within the poll's sampling error. Many journalists are quick to call this a "statistical dead heat". They're wrong. Here's why.

(If you're a mathophobe, stop reading. We're going to talk statistics here.) To begin with, what they're calling "sampling error" is what's called a confidence interval. A poll uses a technique called sampling - you can't very well ask the entire electorate what they think so you can use a randomly selected group to do the same thing, with a reasonable degree of certainty. The generally accepted certainty range is usually 95%, or about two sample statistical deviations either side of the mean (the published poll result - I warned you, there is math in here). I dug really deeply into the poll and found the sampling error to be 3%. So if you're Obama, there's a 95% chance that somewhere between 45% and 52% of the electorate will vote for you. If you're McCain with his result at 43%, the margin is between 40% and 46%

So, again a warning to Mathophobes, that's really a bell curve there. The Mean in this case is the result of the survey. The 95% line is at 1.9 standard deviations, or sigmas (that funny little thing that looks like a flattened "6"). To see what the poll is actually telling us, we draw two of these, one centered at 43% (McCain's results) and one centered at 48% (Obama's results)

The gap between Obama and McCain is 5%. The standard deviation of the poll is 1.5%. The midpoint between Obama and McCain is 2.5 points, or 1.667 standard deviations.

90% of Obama's winning outcomes lie within plus or minus 1.69 standard deviations of his mean, or 48%. Since we're not worried at all about the plus side, the right side of the curve (he still wins), 95% of all the outcomes of the election based on this poll make Obama the winner. Even if I give McCain the right side of his curve, Obama wins 90% of the time in this polling scenario.

Doesn't sound like a dead heat to me. So next time you hear "statistical dead heat," unless the race is tied, if you know the margin of error, you can call "bullshit." Not to mention the fact that a five-point gap in the popular vote is generally an electorial blowout.

Tax Plans Compared

Last I heard, 53% of all Americans still believe Obama will raise their taxes.

After yesterday's$85 billion "loan" to AIG to keep yet another failed business afloat, this chart may be a moot point. In the last couple weeks, we've added $5 trillion - yes, with a "t" to the national debt through the acquisition of Fannie and Freddie. We just added another $85 billion. There's a chance the AIG bailout may actually make us a couple billion. I just want to know if I can get an owner discount on my insurance through them.

So here's the part that may be useless. You've probably all seen this chart - it shows the tax plans supported by each of the candidates. It shows in pretty good detail how McCain would cut taxes for everyone but, in classic Republican style, the rich get richer. If you make $2.87 million per year, still middle class by McCain's estimate, you'd get an additional $269,364 off your tax bill. I don't know about you but that would pay off my house and leave enough for a pretty good additional investment. Obama's table cuts taxes for people making less than McCain would give back to the very "middle class" ($226,982 per year) and increase taxes above it. Dang, under Obama's plan, that guy I saw getting off the Gulfstream with his hunting rifle might have to pay $702,885 more to cover the Fannie and Freddie bailouts. Gist is there would be an overall tax cut of 0.3% under Obama's plan, a more reckless 2% under McCain's. Either way you slice it, Obama's plan cuts taxes.

It just doesn't benefit the guy with the Gulfstream.

Here's the same data drawn a little differently. Now both axes of the graph are to-scale. So you can see the percentage of the population on the right side and the percentage tax cut on the bottom. A few other numbers are there for reference sake: The median household income (half the incomes are above, half below), median incomes for males, females, individuals (showing the income gap is alive and well). The benefit of this presentation is it shows in very graphical terms just how many more people would benefit under Obama's plan as opposed to McCains and by how much.

Okay, now I'm not in the bracket that would be hit by Obama's plan. Maybe you are and in that case, it would not be rational for you to vote for Obama. But if you aren't, I'd suggest you take a good long look at your own self-interest.

And if you still believe in supply-side economics, stay tuned. A bit of foreshadowing: It doesn't trickle down.

Charts from Chartjunk.

Economic Disaster: A Primer for Republicans

To start, a graph:

What this shows us is that in the years since Republicans became "Fiscal Conservatives", our national debt has grown by $1 trillion offset by the $200 billion surplus created under the rule of a "Tax-and-Spend Liberal." As my daddy in Kentucky would say, "I don't think we can afford no more of them."

Last week the Bush Regime decided to rescue another pair of failed businesses, Fannie Mae and Freddie Mac. In so doing, he may have averted a global financial meldtown but according to Jim Jubak at MSNBC, the benefits of the bailout accrue to the Chinese, not the American taxpayer. Some of the downers, the bailout:

• Increases the debt on America's books by $5 trillion.
• Of that, the government will either have to raise taxes or borrow between $25 billion and $200 billion.
• This will increase interest rates.
• Which can increase inflation due to the increase in the money supply.
• Which could reduce the United States's debt rating, resulting in more interest payments on the debt.

All of which mean low economic growth (given the Government's biased reporting, recession if not depression).

• The Chinese make out like bandits:
• The investments they'd made are now secured by the Government of our country.
• The Yuan is in good shape for a long time.
• They can now interfere in their financial markets as much as they please citing the United States as an example (financial version of the Russians justifying their invasion of Georgia with the United States's Iraq example).

Invest abroad, the US economy is tanking, helped out by an ill-conceived and badly executed bailout of a struggling business by Bush appointee Paulson. (But wait until the US economy truly tanks, sometime next year, before investing in the foreign stock exchanges).

Zooming back in to focus on the individual, worker confidence is at its lowest level since the 2001 recession. One third of workers report they don't have enough money to make ends meet. And interestingly, workers reported when laid off, the responsibility to help them isn't completely the government's (about a fifth answered this way). The majority said the responsibility lay with the Government, themselves, the companies and other agencies. Sounding more and more like Sozialmarktwirtschaft to me.

I just love Freakonomics, a New York Times blog on economics but not the old, boring supply-and-demand kind. These guys report on the books of gang members to find that an average gansta makes about $2.00 per hour, not the picture most would like to have painted. Anyway, they had a blog not long ago on income equality, a guest post from William Bernstein. The economics of growth inevitably lead to inequalities in income but when policy encourages it, the results can be devastating. Current income disparities match those of the Robber Baron capitalists of the Gilded Age. And the problem is income is not measured absolutely, but relatively. When I'm eating lunch at the Perfect Landing at Centennial Airport and I see someone getting off a Gulfstream with a hunting rifle in his hand, I don't feel rich, even I'm enjoying a better meal than 99% of the planet can enjoy. Read the rest of the article - there are a number of other disparities that track income disparity: Education, obesity, life expectancy, the list is long but most important is a point I've made a number of times before: There is no correlation between tax rates and economic growth. Get it? There is no correlation between tax rates and economic growth. The best mechanism for decreasing the gap? The inheritance tax.

Now it's time for another chart:
It had been declining, roughly, since 1992. What things happened then? Clinton was elected President and eliminated a number of tax cuts. Poverty began to drop until about 2000. What happened then? Bush was elected and implemented new tax cuts. It would be interesting to see the twelve years prior to 1992 but I can make a prediction: The trend was upward. In short, it seems tax cuts do have an effect on poverty or put another way, there's a correlation between tax cuts and poverty increases. Goes against supply-side economics. There's an article I'll digest later in the week at the Center for American Progress but if you want to read ahead, here's the abstract: There is a nugget of truth to supply-side economics but like most right-wing ideological points, rigid application yields expected consequences, in this case, economic disaster.

Right-wing economics doesn't work. We don't want another minute of them, much less four more years.

Bristol Palin By the Numbers

It's been a while since I've posted here. Got to get back to it.

I do not look down on Bristol Palin. She had the disadvantage of a poor sex education probably caused by her mother's ideology but she has the advantage that her mother has a good, if after the last weekend dead-end, career. She also has magnificent access to services (who wants to piss off a Governor known for abusing authority to get people fired) and, unfortunately, she's being presented as the model of virtuous teenaged womanhood for bearing her child to term.

She is not a role model we can afford to have splashed on screens everywhere, not for ideological reasons but for sheer facts. This from Janet Currie via Freakonomics:

• Bristol Palin is not alone. She is one of 750,000 American girls ranging in age from 15 to 19 who will likely become pregnant this year. It would be unfortunate if media reports about high-profile people like Ms. Palin help legitimize teen pregnancy.
• Given the decision to carry her pregnancy to term, Ms. Palin’s available resources and support will give her the best possible chance of a good outcome. But on average, teen pregnancies are more likely to result in premature births and low-birth-weight babies. This is not a good start in life. Babies with a low birth weight are more likely to have A.D.H.D. and are less likely to graduate from high school.
• Teen moms are less likely than other women to attend or complete college, and their marriages are more likely to end in divorce; about 50 percent of women who married younger than age 18 are divorced after 10 years, compared to 20 percent of women who married at age 25 or older. In turn, single mothers have the highest poverty rates of any demographic group, and 60 percent of the U.S.-born children in mother-only families are poor.
• Statistics are not destiny, and one can only hope Ms. Palin has a healthy baby, a long and happy marriage, and a sense of fulfillment as a homemaker, a career woman, or both. But the fact remains that for most women, a teen pregnancy considerably diminishes the odds of any happy ending.
• High teen pregnancy rates remain a serious problem in the U.S. Although they have declined since they peaked in 1990, rates are still twice as high as in Canada or England, and eight times as high as in the Netherlands or in Japan.
• These international differences are due to low contraceptive use in the U.S.; most of the recent decline in teen pregnancy in the U.S. is due to more consistent use of birth control, although teens are also waiting longer to have sex than in the past. In 1995, almost 20 percent of girls had sex by age 17, compared to 15 percent in 2002. Let us hope that attempts to normalize situations like Ms. Palin’s do not help to reverse this trend.

Some observations, not to Ms. Palin's liking:

• Abstinence-only education does not work. Her own daughter is a case in point.
• Contraception is the only known way to limit or prevent abortions; however, if conception begins at birth, contraception is abortion and is to be outlawed.
• Since they don't want contraception and they don't want abortion and they want to preach abstinence-only despite its failure, I can only conclude the Right is anti-sex, although Ms. Palin appears to have enjoyed (or tolerated) it at least five times.
• Statistically, teen mothers have it bad throughout life. They're less educated, the babies are more likely to be underweight at birth, they're more likely to have economic problems through life.
• Statistically there are always exceptions: Palin with her support network and successful mother will most likely be one. Lance Armstrong was one. There are people without high school educations making over $100,000 per year. They are rare.
• Single mothers have the highest poverty rate of any demographic group.

I'm not advocating abortion. I'm advocating prevention, the use of our God-given intelligence and a few fortuitous chemical reactions in the body to prevent unwanted pregnancies. I advocate sex education in schools, fact-based and frank, to give women like Bristol Palin the tools they need when abstinence fails. I'm advocating the morning-after pill, readily available and pulling the licenses of pharmacists who refuse to sell contraceptives. I'm advocating a fact-based approach to reducing abortions in this country.

Unfortunately it's not faith-based, as Bristol Palin's education must have been. She and her baby will most likely do well. 750,000 other teen mothers and their children have a much lesser chance of doing so. And given the Right's refusal to provide aid to those mothers and children, indeed their tendency to ignore them until they're old enough to enlist, I dub the Right the party of Right to Birth.

And here's a link to what the average teen mother can expect from life. And that's why we can't have Bristol Palin paraded before the country as a paragon of virtue and an example for teens.

Links to the original Freakonomics blog post here, including links to Janet Currie's papers.