But What Would WOLF say?

One highlight of the term thus far: Joe Landry on the same blog as Stiglitz.  And talking tax expenditures to boot!

The relevant passage on the W&L write-up:

Landry continues his research, which will soon be posted on the Roosevelt Institute’s “Next New Deal” blog. Contributors to that blog include such well-known authors as Joseph Stiglitz, the institute’s senior fellow and chief economist; Elizabeth Warren, the Harvard Law School professor and U.S. senator-elect from Massachusetts; and Jonathan Alter, journalist and former editor of Newsweek.

On the Warhol 15 minutes of fame logic, may you all have your W&L webpage profile one day!  And may Joe's (Landry's not Stiglitz's) fame last more than 15 minutes!

How to reduce the debt burden in four steps...

Okay, maybe not "steps", but rather categories of things one can do.  Consider this a pop quiz.  If the U.S. runs deficits year-in and year-out (because of low tax revenues relative to spending obligations), the debt will increase over time.  How can this trajectory be changed?

I would argue there are actually four things that can be done.  The first two are the most obvious:
1. reduce spending
2. raise tax revenue

The other two are things we have talked about a good bit in the course.

Number 3 could be seen as replacing one economic challenge with another.  (Hint: think about the late 1970s.)

Number 4 is one that just doesn't get talked about as a "solution" to the long-term deficit and debt problem, but I think should be considered as part of the mix.  It is also - interestingly - the policy area where there might be some bipartisan consensus after the 2012 election.  Or least I argued as much in class the other day.

See what you can come up with...

You Can't Cite Something You Never Knew Was There...

In class today, Duncan asked about (something to the effect of) what awaits the next president economically?  My answer was "betting" that whomever is elected will benefit from a recovering business cycle (barring potential policy-induced screw-ups, which are certainly possible) out of the Great Recession.  That's what the economic history of business cycles would suggest after a deep recession accompanied by a financial crisis. 

And as a corollary, the party that wins the White House in 2012 should have a leg up for 2016.  (If I were taking bets, with even odds, I would guess that the winner this year will also win next time around, whether it's Romney or the eventual Democratic nominee following Obama's second term.)

In any event, I was amused to see today an article by a Slate reporter saying basically the same thing.  The dateline is yesterday, and I would have mentioned it, had I known it was there. 

A very different point, but interesting...

In light of my previous post (and obvious rush of stats-and-politics geek adrenaline), it seems fair to note this piece by Michael Gerson.  I think Gerson talks past most of the debate about prognostication, but he does make an interesting-yet-different set of points about whether we should care so much about polls and measurements. 

I think that, ethically speaking, I agree with him a good bit.  As a thought experiment, would the world be better if we had a self-declared blackout on all polling data for 3 months before an election?  I am willing to entertain that we might all benefit.  Deciding whether a set of policies (and what should happen) is right or wrong is simply a very different issue than whether a prediction about what will happen is right or wrong.

More tomorrow.

Election 2012 Special Edition: The Meta-Battle

Of all the things that have intrigued me about this election in the last couple of months, I have to say the one that leaves me most curious is the meta-battle about prediction going on between traditional journalists and statistical analysts. The flash point is probably the set of constantly-updated predictions by Nate Silver of the New York Times. 

The stats guru side of the debate is buttressed in recent years by the likes of InTrade, a prediction (or betting) market.  The basic idea of both, from the point of view of the lay observer, is that the stats types and the markets can help you predict a likelihood of winning, or can give you odds.  It can't tell you who will definitely win (at least not in any reasonably close election), but it can allow you to put your money where your mouth is,.as it were.

But the response from traditional journalists has been entertaining (at least from the perspective of someone who used to teach stats and loves the book Moneyball). Check out replies from Kathleen Parker, Dana Milbank, and Joe Scarborough.  From my point of view, they fundamentally miss the point, and I would bet that they never had to take INTR 202... or have forgotten it all from years of accumulated punditry. 

The whole saga crystallized recently when Silver offered Scarborough (who said the election is a "toss-up") a $1,000 charity bet on the outcome.  There's plenty to say about this, but one of the most compelling sets of post-mortems about this election, I think, will be the debate over how and whether statistical analysis based on publicly available data is increasingly likely to crowd out "gut instinct" or "horse race" journalism when it comes election time.

Something that I will be watching for.  I confess to casting in on the side of the geeks over the impressionists on this one.      

The Economist's verdict: an endorsement that was not a foregone conclusion

Typical Economist for me: I find plenty to disagree with, mixed with a good bit of wisdom, topped off with phrases like “cloud-cuckoo-land” and references to “Southern-fried” headbanger Torquemadas:

http://www.economist.com/news/leaders/21565623-america-could-do-better-barack-obama-sadly-mitt-romney-does-not-fit-bill-which-one

Happy to discuss at Lex Coffee, Macado's, or anywhere besides Huntley 230...