Intrade is predicting the odds of an Obama presidency at over 75%:
The Democrats are forecast to maintain control of the Senate:
And the Republicans are currently forecast to hold the House, but the trend is going against them, and without a change, is likely to flip to Democrat control by Election Day.
All three graphs show *something* ghastly (from a Republican POV) happened between Sep 10-13, but I don’t know what.
The graph shows what I call Cheatham’s intrinsic growth rate, which shows how much faster Cheatham is growing than the state as a whole. (For you FRED types, it’s TNCHEA1POP – TNPOP, with the two census-related peaks at 2000/2010 smoothed by averaging the year before and after)
Cheatham has serious problems. Cheatham’s growth rate has been slowing for decades (the red line shows the average trend). Between 1983 and 2000, the intrinsic growth rate hovered in a “trading range” centered at 1.85% (dark blue line). The two blue lines on either side show the mean +/- 2 standard deviations.
Before 2000, Cheatham was growing faster than the state. After 2000, growth suddenly decelerated, and it appears to be getting worse. The long-term state growth rate is 1.05% a year, so that last data point shows the county’s population is dangerously close to shrinking in absolute terms.
I am much less interested in pointing fingers than solving the problem before it gets worse. My own research shows the impact fee (and probably the sprinkler requirement too) are serious culprits. There are also contributing causes (AO Smith acquisition of State, lack of infrastructure in the county, and being in a long-term secular bear market since 2000), but as far as I can tease from the data, they are only accessories, not the prime suspect.
The impact fee and sprinkler requirements raised the cost of the average new housing start here, and the price difference between a new house in Cheatham and a new house in Nashville started shrinking, to the point that between 2005 -2007 it was actually cheaper to buy an equivalent new house in Nashville than here. 20- and 30-somethings decided to move there instead of here, and took their kids with them.
The spread has widened in recent years, but growth did not come back. I suspect this is due to the Great Recession making it difficult/impossible for most folks to just pick up and move somewhere, so I have hope that when things get better, growth will take back off. I hope.
Republicans and Democrats constantly argue about how the other side is going to explode the country’s debt. Let’s examine the historical data and see who’s been telling the truth (or more realistically, who’s lying less).
Here is a graph of the growth rate in real per-capita Federal debt (ie, how fast your own personal slice of the Federal debt pie is growing every year) in percent since 1967:
The raw data for this graph is available at FRED by clicking here.
I did a regression assuming the debt is partly based on political factors (which party the president belongs to, and which parties controlled the House and Senate), and economic factors (the Mankiw rule uses inflation and unemployment to predict the Fed Rate, which is a useful measure of how healthy the economy is).
Estimate Std. Error t value Pr(>|t|) (Intercept) 6.68666 0.82734 8.082 7.36e-10 *** President_Dem -1.62684 0.74319 -2.189 0.03465 * Senate_Dem -2.82414 0.91880 -3.074 0.00385 ** House_Dem 6.01083 1.00856 5.960 5.89e-07 *** Mankiw -0.83762 0.07538 -11.111 1.19e-13 *** Multiple R-squared: 0.8057, Adjusted R-squared: 0.7858
And here’s a graph so you can see that this model does a fairly good job of describing what actually happened:
Here’s the debt growth that strictly due to economic factors:
Before 1980, the average debt growth due to economic conditions seesawed below 0%, which is good. Afterwards though, it started on a slow, ugly upward trend. I am uncertain of why, though it may reflect slowing productivity growth, growing income inequality, or demographics shifts increasing entitlement outlays (or it may be something else altogether).
Now let’s see which political party has been better at controlling debt:
The answer is “neither”, though Clinton and the Republican House did a much better job, and Reagan and the Democratic House did a much worse.
Here’s how each possible combination of party affects the debt growth (from best to worst):
President Senate House Debt Growth D D R -4.5% <- Where we are today R D R -2.8% D R R -1.6% R R R 0.0% D D D 1.6% R D D 3.2% D R D 4.4% R R D 6.0%
I notice some interesting things:
So what are the likely outcomes of the 2012 election? Intrade says that Obama is likely to keep the Presidency, the Republicans are likely to keep control of the House, but the Senate is still in play. My numbers suggest that if Republicans capture the Senate, it will increase the growth in Federal debt by (-4.5% - (-1.8%)) = 2.9%. The average year-to-year change in the growth rate is only 2.8%, so an additional 2.9% swing in a year is huge.
The growth in Cheatham County’s working age population suffered a serious slowdown starting around 2000:
Mostly due to the fact that people stopped moving into the county then:
It appears to be due to the impact fee raising the cost of housing:
This has discouraged young families (who are just starting out in life and don’t have much money) and their children from moving in, and is setting the county up for a huge demographic problem just a few years down the road:
This has the potential to have strong negative effects on schools, taxes, home values, businesses catering to those demographics, etc.
A sentence you never hear in America is “I wonder what the smart people think we should do.” — Scott Adams, creator of “Dilbert”
People aren’t dumb. In fact, I find that most people are actually a lot smarter than they give themselves credit for. But humans have biases, irrationalities, misconceptions, and other cognitive glitches that do sometimes make you wonder (and occasionally drive me bug-nuts).
You can argue all day which color is prettier because there is no absolute right or wrong answer. On the other hand, if you think “2 + 2 = potato”, that’s not your opinion, you’re simply incompetent.
Most people understand that, most of the time. But election season is always the exception that proves the rule.
If I asked people to rebuild a jet engine that they would then have to bolt to a jet and fly across country on, 99% of them would run for the exits. Rebuilding jet engines is complex and takes years of study to get right so you don’t crash in a cornfield. The iron laws of physics don’t care a whit about your opinions. Not surprisingly, most people understand this.
If I asked the same people how to fix the economy knowing their jobs and wealth depended on it, 99% of them would start passionately regurgitating whatever ideas they’ve heard on Fox News or Mother Jones which, by a staggering coincidence, just happened to coincide with what they themselves believe. Economics is a complex, often paradoxical field (that’s why there’s a Nobel Prize in economics), and like physics doesn’t care a whit about your opinions in the real world. Surprisingly, people *don’t* understand this.
(The same phenomenon happens in other fields. People who understand they aren’t qualified to diagnose a medical case of megaloblastic anemia, consider themselves constitutional scholars when the Supreme Court releases a decision they disagree with.)
Now realize that a) these people vote, b) they often don’t know what they’re doing, c) because of that, they often vote for politicians who don’t know what they’re doing either, and d) because of their sheer numbers, your personal fortunes as well as the country’s fortunes will often be dictated by them. That’s when it starts to Get Real.
That’s why education and good teachers are incredibly vital, both for the individual’s sake and for our society as a whole: because it lets you see lies for what they are, both the lies other people tell you, and the ones you tell yourself. A good education is a mental vaccine against stupidity.
I *think* I have a good grasp of economics. But I *could* be deluding myself. But since I have A’s in the economics classes I’ve taken, it means other people with Ph.D.’s in economics also think I have a good grasp. That’s a reasonable sign that I actually *do* have a decent idea what I’m talking about and am not simply deluding myself.
My Vandy MBA econ grade. Thanks Prakesh…
But education in itself is insufficient. I’m a big believer in listening to differing view points and dissenting opinions because it makes you *test* your beliefs. Because sometimes you’re wrong and the other side is right.
There are very smart conservatives like David Frum, Bruce Bartlett, Ryan Avent, and Richard Posner, and very smart liberals like Ezra Klein, Paul Krugman, Jared Bernstein, and Felix Salmon. Whether you agree with them or not, they’re worth following because when they’re right it will rub off on you, and when they’re wrong, they’re often wrong for very thought-provoking reasons.
On the other hand, there are also some blisteringly stupid politicians and commentators out there who do a very good job of lowering our society’s collective IQ. I don’t mean “stupid” in the sense that “I don’t like what they say”, but in the sense that anyone with a pencil, paper, and a basic understanding of arithmetic and logic can disprove them on a regular basis. Their goal is not enlightenment, but rabble-rousing, either because they’ve drunk their own Kool-Aid, or because rabble-rousing has made them wealthy and powerful.
And there are a distressing number of these types <cough>Glenn Beck<cough> taken seriously by large swaths of the public, who do not in fact have the first clue what they are talking about. They wear expensive suits, have well-coiffed executive hair, are well-known and regularly appear in the news media, defend their beliefs with pulpit-thumping conviction, and are complete utter idiots.
In my fantasy world, any time someone in the media offered their opinion on academic subjects like economics or government policy, they would first have to state the grades they got in that particular subject. It’s the educational equivalent of having the Surgeon General’s warning on a pack of cigarettes.
(In my even-more-fantasy world, this wouldn’t be necessary because kids in high school would be required to pass economics and politics before they were allowed to get their drivers license and so could tell when the Emperor had no clothes.)
I don’t pretend to have all the answers myself, I’m not 16 anymore… But I wish people would think differently about the questions. Sometime this fall, when a politicians says “We can’t elect Kim Kardashian to Congress because she’ll impose Sharia law” or “Austerity will help our economy the same way that dieting helps Ethiopians”, ask yourself:
“Education is a better safeguard of liberty than a standing army.” – Edward Everett
