Sunday, February 07, 2016

The Economy

I was reading an article on how the Federal Reserve, and just about everyone else, isn't sure whether the economy is doing well or about to tank.

That was bad enough but then I read the comments.

I really love the comments. It's amazing how the government is hiding things when all of the information is publicly available and literally hundreds of people are analyzing that information and often coming to different conclusions.

It's also amazing how everyone seems to know more about economics than those whose career is the study of economics. Luckily I don't have to make a living from being an economist but I do have a degree in economics. Let me tell you, an exact science it's not. Let's start with understanding that the economy is always uneven. It's always the case where some people are doing well and others aren't. The so-called "indicators" attempt to measure whether more people are in the first group or the second group.

The economy is "healthy" if as many people as possible are in the first group and it's growing. That doesn't mean there won't always be people in the second group. Right now the East and West are doing better economically than the Midwest and South. The top five states in median household income in 2014 were Maryland - $70,004, Alaska - $69,825, New Jersey - $67,458, Connecticut - $65,753 and Massachusetts - $64,859. The lowest five states were Mississippi - $36,919, West Virginia - $38,482, Arkansas - $38,758, Kentucky - $41,141 and Alabama - $41,415.

And yes the cost of living in the states with the higher household incomes is higher but it's not that much higher. It's around 25%-30% higher than in the lowest states and a lot of that comes from housing.

So this is part of the problem. Not only is the situation murky but the recovery has been uneven. This is reality and it's what the article is saying. At least consider what the experts say. Don't accept it blindly but do your homework first before you reject it out of hand like I see a lot of people doing. 

We seem to have this knee jerk reaction to immediately reject anything that isn't dripping of bad news and impending crisis. Yes, be skeptical, but accept the facts as well.

Saturday, February 06, 2016

The New Hampshire Primary 1

On to New Hampshire as they say. This was where in 2008 John McCain established himself with 37.1% of the vote and the Iowa Caucus winner Mike Huckabee faded to 11.2%.

To my mind New Hampshire means more than Iowa on the Republican side because it's more representative of the national electorate. Iowa is too heavily slanted towards very right wing evangelical Christians who are also known as the village idiots.

On the Democratic side not so much because the New Hampshire Primary tends to be further left than the national electorate.

So what is fivethirtyeight.com saying.

On the Democratic side it looks like a big win for Sanders. Estimated results are:

Bernie Sanders - 57.0%
Hillary Clinton - 40%

This now looks like it's going to be a long haul which is probably good as it keeps the candidates in the news.

In the meantime Clinton is still way ahead in endorsements with 466 points to Sanders 2 (10 for governors, 5 for senators and 1 for Representatives).

On the Republican side Trump seems headed for his first win but Cruz, may his earlobes be infested with gnats, isn't doing that well. Estimated results are:

Donald Trump - 27.3%
Marco Rubio - 18,6%
John Kasich - 14.8%
Ted Cruz - 12.3%
Jeb Bush - 11.3%
Chris Christie - 6.8%
Carly Fiorina - 4.5%
Ben Carson - 2.9%

I'd love to see Bush get ahead of Cruz but even A fourth or fifth place finish for Cruz here wouldn't necessarily cripple him as he's still holding a close third in South Carolina and the primary in his home state of Texas isn't that far away.

Maybe they'll get around to testing the water in Texas before the primary?

As for endorsements Rubio is in the lead with 60 points, Jeb Bush has 51, Chris Christie has 36 and John Kasich 20. Ted Cruz is next with 19. Donald Trump and Ben Carson have zero. Even Carly Fiorina has three (the only three people in the country that didn't have HP stock I suppose).

The rumor is that Carson is almost out of money. If he drops out after New Hampshire that might unfortunately give Cruz a boost.

Two of my four nightmare candidates (Carson, Cruz, Huckabee and Santorum) are gone and a third is wavering. Unfortunately that means the remaining one, Cruz, gets the benefit of the other wing nuts falling by the wayside.

I'll even take Trump over Cruz.

Thursday, February 04, 2016

The Next SCOTUS Abortion Case

It's called Whole Woman’s Health v. Hellerstedt and it concerns a series of "regulations" passed in Texas to manage abortion clinics and "protect women's health."

Everybody understand that the objective of these regulations is to drive abortion clinics out of business. The law was written in consultation with Americans United for Life and the Texas lieutenant governor at the time the law was passed boasted that it would "essentially ban abortion statewide."

Yet, with a straight face, Texas lawmakers and their attorneys are contending it's not intended to prevent abortions but to safeguard women's health.

Ah yes, another example of Christian and Conservative dishonesty.

They're so convinced they're right that they have to lie about their motives.

Where I come from if you have to lie about your motives then you know damn well what you're doing is wrong.

Now obviously the court can see through the subterfuge but that doesn't mean they're going to do the right thing.

If the state of Texas can make a "good enough" argument that these regulations are within the framework allowable by the 1992 SCOTUS case of Planned Parenthood v. Casey then the court's conservative majority may well ignore the subterfuge and uphold it anyway.

The law would then provide a blueprint for other conservative states to follow suit. All in the concern for women's, and especially poor women's, health. Yeah, right.

Them Damn Welfare Cheats

This idea of lots of people living high off welfare is a myth. Republicans continue to pitch this nonsense while they pass more loopholes for billionaires to avoid taxes and provide more subsidies to oil companies.

Poor people aren't stealing from you. They're in worse shape than you are and would love to make a decent salary so they don't need government support.

Now let's look at the other side. Do you know what "carried interest" is? Your Republican congressman knows because this is the loophole in the tax code that they keep making larger and larger that allows people who make millions of dollars a year to pay Capital Gains taxes rather than income taxes at half the tax rate.

Let's see, what makes more sense, people who are poorer than you and are essentially divorced from the political process (in other words they don't even vote) are pulling strings to steal your hard earned money or people who are richer than you and contribute millions of dollars to Republican campaign funds are pulling strings to steal your hard earned money?

Wednesday, February 03, 2016

Two More Down

Both Rick Santorum, may camels urinate upon his eyebrows, and Rand Paul have announced they're dropping out of the Republican race.

Paul's dropping out should help Trump and Rubio in New Hampshire. Santorum was so unpopular there I doubt anyone will even notice that he's gone.

In the meantime Rubio is now pulling ahead in endorsements with 5 senators and 33 representatives but as yet no governor's endorsement.

Tuesday, February 02, 2016

Iowa Caucus Final Numbers

If these numbers aren't "final" they're close enough I believe. I'm going to talk Democrats first because although Clinton "won," this is an amazing performance for Sanders who no one, including yours truly, took seriously when he first announced he was running.

Hillary Clinton - 49.86% (22 delegates)
Bernie Sanders - 49.57% (21 delegates)
Martin O'Malley - 0.57% (0 delegates)

For all intents and purposes this is a dead heat tie and Martin O'Malley has announced he's done.

Now for the Republicans.

Ted Cruz - 27.65% (8 delegates)
Donald Trump - 24.31% (7 delegates)
Marco Rubio - 23.10% (7 delegates)
Ben Carson - 9.31% (3 delegates)
Rand Paul - 4.54% (1 delegates)
Jeb Bush - 2.80% (1 delegates)
Carly Fiorina - 1.86% (0 delegates)
John Kasich - 1.86% (0 delegates)
Mike Huckabee - 1.79% (0 delegates)
Chris Christie - 1.76% (0 delegates)
Rick Santorum - 0.95% (0 delegates)
Jim Gilmore - 0.01% (0 delegates)

Obviously this is a big win for Cruz but I think Rubio gains even more. The Republican Iowa Caucuses have been much further right than even the Republican Party can stomach and I'm thinking Rubio collects the support of the party stalwarts after this showing.

Mike Huckabee has announced he's done. Santorum should go with him.

Monday, February 01, 2016

Watching the Iowa Caucuses

Right now Clinton and Sanders are basically in a dead heat.

Clinton - 49.96%
Sanders - 49.36%

On the Republican side it's:

Cruz - 27.72%
Trump - 24.42%
Rubio - 22.96%
Carson - 9.30%

At least on the Republican side all Iowa ever manages to do is galvanize the Republican elite. The people that attend the caucuses are so far to the right they're just not representative of anything other than the Iowa caucuses.

Mike Huckabee won in 2008 and Rick Santorum edged out Mitt Romney in 2012. Huckabee had something like 34% of the vote and was never heard from again.

Here's hoping Ted Cruz is never heard from again.

Looking at the numbers I have to believe that the big winner here is going to be Marco Rubio because he's someone that the party elites can live with and can rally behind. I thought it was going to be Bush but he looks like he's got no hope. Rubio has endorsements from 4 Senators and 23 Representatives. Cruz has endorsements from 18 Representatives. Trump has endorsements from no one.

Martin O'Malley has officially announced that he's suspending his campaign and Ben Carson says he's going to take a break from campaigning. Hopefully that's the last we'll see of Carson.

I've just seen that Mike Huckabee is suspending his campaign as well. Well Mike, we hate to see you go; we hate to see you go; we hope to hell you never come back; we hate to see you go. Good riddance.

Sunday, January 31, 2016

So Who Do I Like?

On the eve of the Iowa caucuses I feel compelled to consider who do I intend to support. I'm going to admit that Sanders has surprised me. I find it hard to believe that he may yet make a race of this. 

I'm going to list my preferences regardless of what I think their chances of winning either the nomination or the general election are.

1. Bernie Sanders
2. Hillary Clinton
3. Martin O'Malley
4. John Kasich
5. Jeb Bush
6. Chris Christie
7. Donald Trump
8. Marco Rubio
9. Rand Paul
10. Carly Fiorina
11. Mike Huckabee
12. Rick Santorum
13. Ted Cruz
14. Ben Carson

Primary Predictions #3

Well, here we are, on the eve of the Iowa Caucuses. The final predictions for Iowa from  fivethirtyeight.com are as follows:

Iowa Caucases - Republicans  - Probability of winning:

Donald Trump - 48% (31%) +17
Ted Cruz - 40% (53%) -13
Marco Rubio - 11% (10%) +1
Ben Carson - 1% (3%) -2

Jeb Bush dropped of the list.

Iowa Caucases - Democrats - Probability of winning: 

Hillary Clinton - 79% (83%) -4
Bernie Sanders - 21% (17%) +4

To be quite honest with you this has been so volatile and there are so few people involved that even minor things could shift this one way or the other.

Predicted results are:

Donald Trump - 28.5
Ted Cruz - 25.2
Marco Rubio - 16.8
Ben Carson - 9.3
Jeb Bush - 4.7%
Rand Paul - 4.6%
Chris Christie 3.3%
Mike Huckabee - 3.0%
John Kasich 2.6%
Carly Fiorina - 2.4%
Rick Santorum - 1.4%

Hillary Clinton - 50.0%
Bernie Sanders - 43.1%
Martin O'Malley - 5.4%

Of course what would really shake things up would be is someone did significantly better, or worse, than expected. 

Saudi Arabia and Oil

With the price of oil pushing $30 a barrel I'm seeing all sorts of hand wringing about how Saudi Arabia is on the verge of bankruptcy.

My response is, oh please, give me a break.

It was the Saudi strategy to drive the price of oil down to drive the shale producers, who's overhead is higher, out of the market.

It costs the Saudi's about $10 a barrel to produce oil so they're still making money just not as much money.

So how do you go broke when you're still making $20 a barrel on oil? Like anyone else goes broke. They're spending more than they take in. Their oil revenues in 2016 are estimated to be about $100 billion but their budget is at $223 billion. They get about $37 billion from other sources so that's going to leave them about $87 billion short. Since their GDP is around $632 billion that's 14% of GDP.

To put that in perspective, the US 2016 budget was $4 trillion with a $474 billion deficit which is about 2.6% of GDP.

At an $87 billion deficit and a $624 billion reserve, plus an A+ bond rating from S&P so they can borrow money at reasonable rates, they're good for at least 10 years and probably more.

By that time production will drop and prices will increase because just about everyone else will be losing money on oil at $30 a barrel.

So, you'll excuse me, but I wouldn't worry about the Saudis one bit.