Romney vs. Obama

[mike777]

my first though is if your country is not involved then say so

 

if you or your children are not involved then

 

 

 

if you say nothing....enough said.

[hrothgar]

From my perspective, Obama had a convincing win last night.

 

For all intents and purposes, on foreign policy Romney was reduced to "me too".

He wasn't able to offer any substantive critiques or differences from Obama.

 

Here's the rub: Obama pulled off his foreign policies successes in real time.

Romney is Saturday morning quarterbacking, claiming that he would have be as successful.

This just isn't credible.

[phil_20686]

FP was always going to be Obama's strong suit. I am pretty sure that a convincing win here was expected, so its hard for me to see it moving many votes.

 

It seems to me he was vulnerable on the Economy and Domestic Policies like ObamaCare, and the HHS mandate because lots of independents seem to think that he has done the wrong thing.

 

I am surprised the HHS mandate hasnt made a bigger appearance. It was overwhelmingly opposed by black evangelicals, which almost universally went for Obama in the last election.

[luke warm]

I missed the first part of the debate but caught the last. I believe I can render a verdict. Obama will get a second term.

all i can say is, if even i came away thinking "well maybe if obama wins it won't be the end of western civilization" then i can only imagine that undecided (or even those leaning only slightly to romney) might have had their minds changed by obama... i thought it was the weakest of the 3 for romney, i just don't know how much it matters yet... personally, i suspect it matters a great deal and that obama made it impossible for romney to win... after last night, i can't see romney getting more votes in ohio, wisconsin, and maybe nevanda and iowa... hell, it seemed so bad to me that i wouldn't be surprised if florida and n. carolina are back in play for obama... only virginia looks to not have been affected, because of the military presence

 

my wife thinks it won't matter as much as i do, mainly because of the economy... i see absolutely no way, after last night, for romney to win... for the 2nd debate in a row he dropped the ball on a libya question... before last night, the only real advantage romney had was the relative energy levels of the two campaigns... i can't help but think that his base is less enthused after last night, whild obama's will be more energized... and that shouldn't be underestimated, the ground game on the 6th can be the difference

[kenberg]

I hope you caught the moment when Obama made his comment about bayonets and horses and that it's not a game of battleship. That made Romney look really really bad. So did the part where Romney criticized Obama for for not going to Israel on a particular trip to the Middle East and Obama responded by recapping where he has gone in Israel. As for Romney, he kept repeating that "4 years closer to a nuclear Iran" which seems like a weak scare tactic to me. We are also four years closer to Iran no longer existing, the US sinking into the ocean, Bob Hamman's 100th bridge world championship, and anything else that hasn't happened yet and may or may never happen in the future.

 

I got in too late for the bayonets, but no doubt it will be easy to find on the internet! The interchange about vising Israel was interesting. O's response that he made an extensive visit during his 2008 campaign invites the observation that lots of things are said and done during campaigns. Of course this applies to the current campaign as well.

 

I think the discussion about dealing with Iran's nuclear development was a place where Obama came out looking very good. I have heard the claim before that the sanctions now imposed are the strongest ever. Perhaps it's even true, occasionally things said in debates actually do turn out to be true. At any rate, effective sanctions have to be our best option. No doubt part of the reason such sanctions can be imposed is that much of Europe is at least as concerned as we are about a nuclear Iran. Often, and Iraq comes to mind, sanctions fail because of massive circumvention. In the case of Iran, it seems to be working, at least so far. I don't doubt that Romney would continue this if he were to win, but right now it is showing signs of working and Obama gets some credit here, at least he didn't blow it.

 

I agree entirely that this "four years closer" stuff is just stuff. (Side remark: During the veep debate Biden referred to some things Ryan said as "stuff", the moderator asked for an explanation, and Ryan gets some credit with me for making it clear he completely understood the meaning).

 

The Middle East is a mess. You have oil, you have riches, you have poverty, you have competing religions often with fundamentalist claims of entitlement, all in one place. I remember walking into a bar once and after getting a feeling for the tone of the place deciding I best get my butt out of there before the fighting broke out. Not so easy to do in this case, but looking for the door would be a fine idea.

[hrothgar]

A week ago you were stating:

 

right now i'm leaning R to win the general at 52% - 48% with about 320+ electoral votes... if PA and MI somehow squeak by for obama, then romney will only get around 284 or so... final prediction in 2 weeks

 

Now its all:

 

personally, i suspect it matters a great deal and that obama made it impossible for romney to win... after last night, i can't see romney getting more votes in ohio, wisconsin, and maybe nevanda and iowa... hell, it seemed so bad to me that i wouldn't be surprised if florida and n. carolina are back in play for obama... only virginia looks to not have been affected, because of the military presence

 

Seriously, take a chill pill and relax. Debates really don't tend to move the needle that much.

 

The bounce that Romney enjoyed few weeks back was well underway before the first debate. The Obama campaign spent months defining Romney before he was really able to make much of an impression. Once it became clear that Romney wasn't some kind of horrible ogre there was an inevitable reset of expectations and the Obama bubble burst. The first debate probably accelerated this somewhat, but it was going to happen regardless.

 

In any case, if you legitimately believe that Romney was cruising to victory in Michigan and Pennsylvania as you used to claim there shouldn't have been anything to see in the last couple weeks to change your mind.

[Flem72]

The bayonets and horses line was very clever and made for a nice sound bite.

 

Probably pissed off a couple hundred thousand Marines...Am I the only one here who thinks that these comments by BHO made him sound like a kindergarten kid? There was a strange edge of desperation in many of his statements and in his demeanor; I suspect it was b/c Romney did not take on Libya, and BHO had spent a great deal of time planning to win the evening on that issue by further confusing the "who knew what when" stuff and making Romney appear to be floundering in the muck.

[hrothgar]

Probably pissed off a couple hundred thousand Marines...Am I the only one here who thinks that these comments by BHO made him sound like a kindergarten kid?

 

My take on things was

 

# Romney brought up a meaningless statistic

# Obama called him on it in a blunt and disrespectful manner

 

I don't see anything wrong with this.

 

Here's the quote in question

 

"You mention the Navy, for example, and that we have fewer ships than we did in 1916. Well governor, we also have fewer horses and bayonets. We have these things called aircraft carriers and planes land on them. We have these ships that go underwater, nuclear submarines."

 

"It's not a game of battleship where we're counting ships, it's 'What are our capabilities?'"

[phil_20686]

Here's the quote in question

 

Sure, but Obama's response was an equally fatuous statement. Its not a question of what capabilities you have, its whether those capabilities were sufficient for tasks that are likely to be required of them. Obviously, it was a great line for a debater, however, it reflects poorly on him as a statesman.

 

A better response would have been, "The correct framing is whether our Navy is properly equipped for the challenges we are likely to face. The cold war and post cold war era saw our military focus on the possibility of conflict between Nation States. As such the emphasis was on the consolidated power of carrier groups, which with their associated attendant vessels, are capable of providing a full spectrum of military options against a developed power. However, we now have more carrier groups than the EU, Russia, and China combined, a number which is surely excessive. With the rising importance of naval trade routes, and the growing threat of low-technology pirate ships, it may well be necessary to move to a more distributed model of naval power, with larger numbers of smaller groups and ships, capable of simultaneously patrolling the ever growing number of trade lanes. I continue to monitor these issues in consultation with the Joint Chiefs and the Senate Defence committee, and remain committed to preserving our status as the world's dominant naval power at an affordable cost."

[Phil]

Romney and Ryan have lost the last three debates because they have been afraid to leave the security of their talking points, or might need better talking points. Even if you believe Clinton that "no one could have fixed this mess in four years", or believe Biden who thinks that the Republican congress has impeded any meaningful legislation to fix the problem, a bad economy is the ideal environment to take out an incumbent, and not terribly different than having American hostages in a hostile foreign country for 444 days.

 

The economy sucks and it probably will continue to suck well into 2013. Even with the 85% (too lazy to look up the actual number) that are working, there are affected sons daughters, parents, neighbors and friends of people of those that get up every morning and go to work. Everything is secondary to the economy.

 

This sells and the Republicans have done a lousy job selling it. Of course, Romney was a lousy candidate, not there were any wonderful choices in the first place.

 

This was their election to win. Maybe they will learn their lesson and start grooming someone for '16.

[Zelandakh]

I can tell you have never tried to persuade the average American floater to vote for you, Phil.

[Phil]

I can tell you have never tried to persuade the average American floater to vote for you, Phil.

 

heh, perhaps.

 

As an aside I did manage two successful municipal campaigns in the late 90's.

[hrothgar]

heh, perhaps.

 

As an aside I did manage two successful municipal campaigns in the late 90's.

 

I suspect that the original message was directed at the other Phil

[luke warm]

Seriously, take a chill pill and relax. Debates really don't tend to move the needle that much.

whew, thanks... i'm better now

[PassedOut]

A better response would have been, "The correct framing is whether our Navy is properly equipped for the challenges we are likely to face. The cold war and post cold war era saw our military focus on the possibility of conflict between Nation States. As such the emphasis was on the consolidated power of carrier groups, which with their associated attendant vessels, are capable of providing a full spectrum of military options against a developed power. However, we now have more carrier groups than the EU, Russia, and China combined, a number which is surely excessive. With the rising importance of naval trade routes, and the growing threat of low-technology pirate ships, it may well be necessary to move to a more distributed model of naval power, with larger numbers of smaller groups and ships, capable of simultaneously patrolling the ever growing number of trade lanes. I continue to monitor these issues in consultation with the Joint Chiefs and the Senate Defence committee, and remain committed to preserving our status as the world's dominant naval power at an affordable cost."

Very true. But one rap against Obama is that he is "too professorial" to appeal to ordinary voters. No doubt you like "professorial," as do I, but evidently that smacks too much of "elitism" for much of the US electorate.

[PassedOut]

One topic that evaded debate is the future of the Federal Reserve, possibly because it seems too professorial. Nevertheless, the presidential election could make an impact: Presidential Election Weighs on the Federal Reserve.

 

Mitt Romney, the Republican nominee, has said that he opposes the Fed’s efforts to stimulate the economy as ineffective and inflationary. And as president, he has promised to appoint a new Fed chairman.

Perhaps he should read Phil's blog before taking action.

[lalldonn]

Sure, but Obama's response was an equally fatuous statement. Its not a question of what capabilities you have, its whether those capabilities were sufficient for tasks that are likely to be required of them. Obviously, it was a great line for a debater, however, it reflects poorly on him as a statesman.

 

A better response would have been, "The correct framing is whether our Navy is properly equipped for the challenges we are likely to face. The cold war and post cold war era saw our military focus on the possibility of conflict between Nation States. As such the emphasis was on the consolidated power of carrier groups, which with their associated attendant vessels, are capable of providing a full spectrum of military options against a developed power. However, we now have more carrier groups than the EU, Russia, and China combined, a number which is surely excessive. With the rising importance of naval trade routes, and the growing threat of low-technology pirate ships, it may well be necessary to move to a more distributed model of naval power, with larger numbers of smaller groups and ships, capable of simultaneously patrolling the ever growing number of trade lanes. I continue to monitor these issues in consultation with the Joint Chiefs and the Senate Defence committee, and remain committed to preserving our status as the world's dominant naval power at an affordable cost."

I like Obama's a lot better.

 

Nate has him back over 70% as of the end of yesterday. I don't think (?) that takes into account anything to do with the debate.

[kenberg]

Bayonets (I came late and missed it, but got it now): Usually I think sarcasm is a poor response but here I think it was appropriate. I can just imagine the Romney team gleefully suggesting this comparison. "Obama won't have any idea how many ships we had in 1916. He will try to wing it. You can call him a liar. etc". An answer that amounts to "Who the hell cares how many ships we had in 1916" seems exactly right.

 

On the Fed: I lack the knowledge, and probaly I lack the stamina, to debate proper Fed policy. I worry about a more basic issue. There seems to be a developing faith that neither the Pres nor the Congress have to act responsibly. Just pick a good Fed Chmn and hell, we can just do anything, the Fed will fix it. I think Bernanke himself has been actively trying to discourage the idea that he has magic powers but I am not sure how well it is working. I see it as analogous to taking anti-depressants. Yes, they can help. But then you have to get your life in order. Continually upping the dosage is not a long term answer.

[phil_20686]

Continually upping the dosage is not a long term answer.

 

So basically, it is kinda a long term solution. Although not an ideal one. It seems to me that highly unequal societies always end up with lots of debt. Debt is a way of transferring consumption from one person to another, with the aim of getting it back later. Through inflation, the fed can make this transfer permanent in what is effectively a redistribution from rich to poor. Ideally, you would like the government to aim for sufficient redistribution to insure that all production is bought. If neither entitiy insures redistribution, the economy morphs into providing services that the rich will buy, e.g. lots of servants, luxury produce etc, instead of things that average people will buy like cars, and refrigerators, and that is clearly a bad outcome. Thus, the monetary policy that maximises real production will, in unequal societies, be geared towards producing redistribution in one form or another. The Fed's only option in this regard is transfers from savers to debtors via inflation, and obviously not all savers are rich, which is why it is far from an ideal situation.

 

Its kinda `obvious' that high inequality will always be associated with high debt, since if you have earned more consumption than you are intending to use, basically the only thing to do is to give it to someone else to spend. Reputable companies can nearly always raise capital, so the only `extra' players are poor people. Thus, highly unequal societies tend to have very high personal debt levels. They also tend to have persistently low interest rates, such that it is hard for the returns to beat inflation, and hence, the personal debt ends up as a transfer from the rich to the poor. Its very unclear to me what is the cause and effect. China's high saving rate is really what is controlling the US natural interest rate. If you have too much savings the cost of capital goes down. China has basically the inverse problem, since its rich tend to be heavily indebted (via their companies), because they can borrow at rates well below inflation and thus basically any investment looks attractive. This makes it nearly impossible for your average Joe to save effectively for the future, which drives up the desired rate of savings.

 

It seems to me that in both cases the rich are managing to benefit at the expense of the poor. Higher inflation in the US is progressive, as most debt is held by poor people, and the rich are net lenders. In china high inflation is regressive, since the poor are net savers and the rich are net borrowers. (Especially through SOEs).

 

Still, I don't feel like I really understand what drives this relation between inequality and debt. Its one thing to say that debt and inequality go together, its another entirely to be able to draw out concrete steps as to which one causes the other. I do think that understanding this dynamic will be crucial to understanding optimal fiscal and monetary policy goals in the long term going forward. In the medium term the Fed does have the option of forcing down debt levels by simultaneously doing large scale QE (although obviously you could not do QE on the government bonds themselves) and raising the interest rate. This will shrink the ratio of debt:hard currency, and my intuition is that this would create more equality in the long term, as large net savers would be denied returns, since they would not be able to lend out all of their savings. But I am not totally sure.

[phil_20686]

PS: Also, as I predicted on the other thread, the Fed is expanding its monthly buying program. I suspect it will up the amounts every quarter until inflation looks like it will reach its 2% target. - Basically it looks like it is going to roll operation twist into unsterilised purchases of US treasuries.

[cherdano]

The bayonets and horses line was very clever and made for a nice sound bite.

 

It also did answer Romney's claim that our navy will soon become the smallest since 1917.

 

It really made me smile, it kind of makes me happy that the debate format can be used to make someone looks ridiculous because he has continuously asserted ridiculous things. More generally, it's the only event left in the campaign where the candidates can't avoid being confronted with direct criticism.

(OTOH, I want to fast-forward whenever Obama attacks Romney for having investments in China.)

[cherdano]

This was their [the Republican's] election to win. Maybe they will learn their lesson and start grooming someone for '16.

I don't think that's true. Nate Silver's model has an economic component, and that component alone was always pointing towards a small (2-3%) Obama win.

Meanwhile, I don't know all that much about the Republican bench (Christie, Bush, ...), but there seems no shortage of potentially good candidates who chose to wait until 2016.

[kenberg]

 

(OTOH, I want to fast-forward whenever Obama attacks Romney for having investments in China.)

 

I just poured some more wine but yeah, I agree.

[hrothgar]

Debt is a way of transferring consumption from one person to another, with the aim of getting it back later. Through inflation, the fed can make this transfer permanent in what is effectively a redistribution from rich to poor.

 

Your argument is flawed on any number of levels.

 

First and foremost, you're completely ignoring rational expectations. Borrowers and lenders both bake expectations about inflation into interest rates. The only time that you end up having any kind of real wealth transfer is when the real inflation rate deviates from the expected inflation rate. Almost by definition, these unexpected shocks can operate in either direction. The real inflation rate can be higher than expected, in which case there will be a wealth from lenders to borrowers. However, just as likely that the inflation rate will be lower than expected in which the wealth transfer moves in the opposite direction.

 

Equally significant, you seem to be assuming that there is some strong causal relationship between income level and borrowing. My understanding is that demographic characteristics tend to define borrowing habits. People take out large loads to purchases houses and pay for education. There are definitely some members of society who get trapped in revolving credit cycles, payday loans and the like. However, give the ridiculous interest rates that these folks are paying, I'd be hard pressed to claim that there is much of a wealth transfer going on. (Indeed, given the high interest rates that these folks are paying, deviations from expected inflation is trivial at best)

[phil_20686]

Your argument is flawed on any number of levels.

 

(1) First and foremost, you're completely ignoring rational expectations. Borrowers and lenders both bake expectations about inflation into interest rates. The only time that you end up having any kind of real wealth transfer is when the real inflation rate deviates from the expected inflation rate. Almost by definition, these unexpected shocks can operate in either direction. The real inflation rate can be higher than expected, in which case there will be a wealth from lenders to borrowers. However, just as likely that the inflation rate will be lower than expected in which the wealth transfer moves in the opposite direction.

 

(2) Equally significant, you seem to be assuming that there is some strong causal relationship between income level and borrowing. My understanding is that demographic characteristics tend to define borrowing habits. People take out large loads to purchases houses and pay for education. There are definitely some members of society who get trapped in revolving credit cycles, payday loans and the like. However, give the ridiculous interest rates that these folks are paying, I'd be hard pressed to claim that there is much of a wealth transfer going on. (Indeed, given the high interest rates that these folks are paying, deviations from expected inflation is trivial at best)

 

(1) This is true, but it isnt the point. A savings glut can drive the natural rate of interest below inflation. Rational expectations are irrelevant: I know that my loan will only earn my 1%, which is less than inflation, but it is still better than 0% which is what I get for cash. We are living in a time when real interest rates in China are about 4% below inflation there, and yet people still lend money in huge amounts. Any time the interest rate is below (expected) inflation, there is a wealth transfer to the borrower. That much, at least, is clear.

 

(2) So debt is very complicated. You are right, that in the US, right now, borrowing and lending vary over life cycles. This is because most of the (visible) borrowing most people do is tied up in their mortgage. But this is not the only story. For example, it seems clear to me that lower interest rates persuade people to bid more for houses, and take out bigger mortgages and hence the debt level tends to increase as interest rates fall. Thus a correlation between low interest rates and high inequality looks causative - people naturally take on more debt when interest rates are lower. Also, unsecured debt, like credit cards, has expanded hugely over the last twenty years, and cannot be explained by demographics. Also, I did specifically say that I was unsure of the direction of causation, but the data shows a huge correlation between debt levels and gini coefficients.

 

I think part of it is that the rise of the professional classes has led to a lot of workers who expect to be paid more every year as they get more experienced. Lawyers, programmers, finance professionals etc. All these jobs the value of the worker goes up with experience. In such cases it is clearly more rational to take on debt early on, and pay it off in your fifties when your kids have finished college and you are entering the highest paid segment of your career.