Economic Report of the President, 2014

Released today, available here.

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14 thoughts on “Economic Report of the President, 2014

  1. Rick Stryker

    This economic report has a chapter on the ARRA that’s full of magical thinking about how the multiplier guarantees that the ARRA was actually successful, despite all the evidence to the contrary. It’s amazing that multiplier magic is still taken seriously.

    Most people think these economic superstitions originated in England in the 1930s. But in fact, they are much older than that. I recently came across a parchment that was buried near Stonehenge. The parchment was written by an observer who apparently witnessed the origin of the first Sacred Relic of the Barbarous Age of Macroeconomics, the multiplier. I have translated the text from Old English and have reproduced it below. To make the text more relevant for the modern reader I have taken the liberty of editing it to simplify the exposition.

    As you’ll see, the text also refers to the Second Sacred Relic of the Barbarous Age of Macroeconomics, the Keynesian Cross but the Third Sacred Relic, the short-term Phillips Curve, is unfortunately not mentioned.
    ——————————————————————————————-R——————————————–
    The Tale of the Multiplier

    Know Ye, that in the Year of Our Lord AD 922, peace and plenty reigned over our blessed land. But then the dark times stole upon us like a cunning thief. The people of the kingdom became idle, and did not work in the fields, nor on the farms, nor in the shops. The fields were no longer fecund, disgorging not their crops and many became barren; the storehouses were no longer full. And the King, being much perplexed, called the wise men to court for counsel. “Is there no remedy,” asked the King? The King’s chief counselor, Sir Postalot of Nassau, stepped forward. “Know, sire, that if thy cut thy royal taxes, and borrow gold from thy people to spend on thy royal projects, thou wilst restore prosperity to the land.” ” I would be most pleased to increase the expenditures on Our royal projects,” exclaimed the King. “But cut Our royal taxes? Thou wouldst have Us deplete the royal treasury, sir?” “Good king,” Sir Postalot replied, “thou only must needs cut taxes for a time. Once prosperity returns, thou may rise thy subject’s taxes even higher still, especially those of thy wealthiest subjects, who have not yet paid an equitable share. ”

    “How now. What sorcery is this?” exclaimed the King. Sir Postalot unrolled the ornate scroll that contained the sacred text given to the people by the prophet John Canard Caines . “A reading from the Book of Caines chapter 2, verses 10 -25,” began Sir Postalot:

    “The produce of the realm, henceforth known as Income Y, shall be the sum of the people’s consumption C, and the just spending G of the most excellent King. Verily, Y shall be written as

    Y = C + G

    In truth, a wise man shall pay his taxes T to his King and then will dispense a portion of his income of the realm on the baubles of the world and save the part of his income remaining. The fraction that a wise man spends from his income shall be henceforth called the marginal propensity to consume m. And for all time, a wise man’s consumption shall be written as the marginal propensity to consume multiplied by his income, which, as decreed by Providence, has been reduced after paying his just taxes to his King:

    C = m (Y-T)

    Now, by conjoining the second sacred writing with the first, the miraculous royal spending multiplier 1/(1-m) may be most wondrously

    Y = -mT/(1-m) + G/(1-m)

    I say to unto you then, if the just sovereign of the land increases royal spending G by a gold crown borrowed, the income of the land Y shall increase by the fraction 1/(1-m) gold crowns. And if the marginal propensity to consume is 1 part in 2, the miraculous multiplier shall be 1/(1-.5) = 2. And again if the just sovereign reduces the taxes of the people by 1 gold crown, the income of the people shall rise by 1 gold crown, as it has been revealed that the mystical tax multiplier shall be 0.5/(1-.05) = 1. “Thus spaketh Caines.”

    “What alchemy is this? Methinks this is passing strange” cried the King. “If the royal treasury borrows a gold crown from the people and dispenses it on a goodly royal project, how can the income of the land rise by 2 gold crowns? Dispense with this abstruse mathematic and speak plainly sir.”

    “Of course, good king,” replied Sir Postalot. “If thy borrow a gold crown and spend it, that gold crown will flow to one of thy people, who will save 1 part in 2 of it and spend 1 part in 2 on the meat of the butcher . The butcher, awakened from his slumber in the cradle of Sloth, will go to work slaughtering the cow. The butcher will spends 1 part in 2 of his coin on the crop of the slumbering farmer, who will save 1 part in 2 of it and will spend 1 part in 2 with another of thy slumbering subjects. In this fashion, the industry of thy people will increase and the original gold crown will be miraculously multiplied. Income shall rise by a crown initially, then by half a crown, then by a quarter of crown , then by an eighth of a crown , then by a six-teenth of a crown , and will continue thusly. Upon my life, I pray you to have thy royal mathematicians verify that 1+ 1/2 + 1/4 + 1/8 + 1/16 +1/32 + … = 2

    “Ah, I am much enlightened,” exclaimed the King. “And if We reduce Our royal taxes, will We stimulate the people from idleness just the same?” “Yes sire,” answered Sir Postalot, “although the import on the matter will not be as great. Better to borrow the gold of thy people than to reduce thou taxes.” Just then, the King’s counselor Sir Lucas Freedman spoke with great force. “Sire. This be madness. Thy subjects are not knaves who only ruminate about what is in their bellies this morn. They will expect that thou must raise their royal taxes upon some future time to settle the accounts of thy borrowed coin. They will know that their newfound gold is but a temporary increase in good fortune, to be surrendered later to taxes most severe. In these dark times, thy people will not spend their gold on the profane goods of the world, but will husband their coin. ”

    Sir Freedman continued. “Your majesty will desire to spend thy borrowed coin at thy discretion, but gold so easily borrowed shall not be so easily spent. To build thy roads intricate plans must be first laid. The indolent serf shall not plant his shovel into the ground on the morrow but only after many summers hence. Thy barren fields must be tilled and prepared before thy farmers are aroused from their dormancy. In thy quest to spend thy coin, thou wilst be most sorely tempted to allay thy people’s hunger and to slake their thirst with thy borrowed coin. But thy people, swaddled in the blanket of royal charity, will slumber on in the cradle of Sloth.

    Nay, my King. Do not be deceived. This multiplier is nothing but a shadowy wraith that stalks my good lord to relieve him of his sensible disposition.”

    The king mused. “My most excellent advisor Sir Postalot has shewn Our royal personage a magic elixir which can bring prosperity again to the land. But you, Lucas Freedman, oh most foul sir, have visited a doubt upon the brow of thy King that is most vexing. “ “Sir Postalot,” declared the King, “I fear that We shall borrow the coin but the effects promised will be visible not and yet the wrath of the people will visible be .” “Sire,” replied Sir Postalot, “if the miraculous effects of the borrowed coin are not apparent though must seek a sign from Providence. Thou shalt cast a duck upon thy royal pond. If the duck doth float upon the water then thy people will know that the darkness that has befallen the land was even more dire than the wise men could divine. Thy people will see that thy well spent borrowed coin didst rescue them from calamity even more fearful. Thou must then double thy resolve and double thy spend of the borrowed coin.”

    Freedman began to protest but Sir Postalot mocked, “Stimulus denier. Very serious personage. Blasphemer.” The king’s cheeks flushed with a hue most ruddy. Struck by the piety of Sir Postalot for the sacred traditions, the King drew himself up and pronounced judgment. “Lucas Freedman, thou art banished to that frozen wasteland called Chicago where thou canst reflect on thy heresy and seek forgiveness.” With that, the king and his counselors turned to the Keynesian Cross and genuflected.

    And thus was the Barbarous Age of Macroeconomics born.

  2. 2slugbaits

    Your history needs some correcting. First, there was no king in the Year of Our Lord 922. The last Carolingian, King Charles the Simple was overthrown in 922 by Hugh the Great, who refused the crown and later founded the Capetian dynasty.

    Sir Lucas Freedman also forgot about the great monetarist and fiscal stimulus programs of the 10th century. It was called the Viking raids. Every red headed Ragnar from the land of the ice and snow, from the midnight sun where the hot springs flow, who dreamed of becoming Sir Freedman’s overlord, knew that the first place to hit was the local monastery. After relieving the monastery of all it’s gold and silver, that wealth was recycled into the economy. And as the warlordism of feudal 10th century faded into the royal power of the 13th century, kings engaged in great fiscal stimulus projects called castles and fortifications. Monasteries also fortified by building what later became cathedrals.

    Sir Lucas Freedman also forgot about that great period of fiscal and monetary contraction called the late 4th century western Roman Empire. Roman patricians abandoned their villas and hoarded their wealth as gold and silver and retreated into small urban centers. A negative investment shock brought about by highly risk averse patricians acting out of animal spirits.

    Sir Lucas Freedman sounds like a rich guy who doesn’t understand that peasants and serfs don’t worry about problems of intertemporal substitution because when you live close to the edge you don’t worry about tomorrow. Sir Lucas Freedman should have paid attention to Sir Postalot’s aphorism that rich people might be dead in the long run, but absent royal stimulus most people will be dead in the short run. In any event, Sir Lucas Freedman should have surveyed the local Domesday Book entries to see how many storage granaries there really were in 922. Answer: almost none. No one saved grain across harvests. Granaries only got you to the next harvest. There was no saving. Peasants and manorial lords hedged risk by diversifying small holdings across wide and varied geographical areas.

  3. Rick Stryker

    2slugbaits,

    England may not have had a king in 922 but neither was there a place called Chicago at that time. Methinks you are taking the “translation” a bit too seriously.

    But if you want to be serious, let’s turn from the nonsense in the multiplier chapter and move on to the ACA chapter. First, some context. They start the program with a web site disaster that’s still not fully fixed. Then, fearing the retribution of the voters in 2014, they repeal by executive fiat until well after any upcoming elections every major feature of the ACA: the individual mandate–delayed; the requirement for policies to conform to ACA requirements –delayed; only people under 30 can get catastrophic plans–delayed; businesses must provide ACA-compliant plans–delayed. People aren’t signing up at the expected rate; young people under 30 in particular aren’t signing up at the expected rate; and the ranks of the uninsured are not being significantly reduced, which was the whole point of the ACA. How do they deal with all of this in the CEA report? They change the subject.

    The chapter changes the subject by claiming that the ACA is responsible for the slowdown in health care spending. But, as in the ARRA chapter, there is a bit of a problem with the facts. The slowdown in health care spending started in 2005 or 2006, well before the ACA was passed. The reasons aren’t completely clear, but there are a number of factors at work. Over that period, the number of high deductible policies went up, so that people were paying more out of pocket and thus had more incentive to economize on health care. The growth rate of expensive medical technology slowed, and there was a very large recession. It’s true that rule changes in Medicare that were adopted in the ACA in 2010 may have slowed health care costs some, but we also need to consider the aspects of ACA that would have raised costs: increasing access by putting 26 year olds on their parents’ plan could raise costs for example. Pushing people out of their high deductible plans to comply with ACA would tend to raise costs, since it removes the incentive to economize. It’s not clear what the net effects are, but, as in the ARRA chapter, the CEA gives a one-sided view of the evidence.

    As you may recall, I predicted all of these problems with the ACA in my comments many months ago. I used Rick Stryker Jr. and Rob Stryker to illustrate the incentives for young people and businesses that were produced by the ACA, showing that young people would not likely sign up at the rate that was expected. I compared ACA plans with previously offered plans and pointed out how much more costly they are and how coverage was circumscribed. On the day that Menzie was looking forward with glee to the political hay the Democrats would make with the government shutdown in the 2014 elections, I pointed out that the government shutdown would be quickly forgotten as a political issue. The real political issue was the upcoming Obamacare fiasco. The Republicans, I pointed out, had established in people’s minds their opposition to Obamacare, which would pay political dividends in 2014. That party-pooping comment so irritated a reader, he wished I could be censored and Menzie agreed.

    Read that ACA chapter if you want spin. But if you want to know what they really think, reflect on the fact that the failure of young people to sign up at the expected rates so worries the White House that the President was willing to submit himself to this interview to sell the plan.

    1. 2slugbaits

      Rick Stryker First, Charles the Simple and Hugh the Great were Frankish, not English. Of course, England didn’t have a king in 992…they had lots and lots of petty warlords who called themselves kings. In fact, London was part of a Viking kingdom at the time (that’s where we get the “Danelaw”…it was from a treaty with the Vikings in 886). But I don’t think I was taking your comments too literally. If anything, I think Sir Lucas Freedman was taking Ricardian Equivalence (RE) too literally. One of my points was that many (perhaps even most) people don’t have the ability to engage in intertemporal substitution, which pretty much makes RE a dead letter for them. Lucas assumed that the mere recognition of RE was in itself a sufficient condition for realizing it. Only a very rich person would believe that.

      As to your comments on ACA, I actually agree with much of what you said. Not all, but a fair amount, although some of what you said overstates things. For example, it’s true that actual enrollments for the young have been lower than expected, but they haven’t been that much lower. Enrollments have been higher than those who opposed ACA predicted. And this despite a godawful web rollout and relentless lying ads from Fox News, Karl Rove and the Koch geezers. And let’s be clear, that unholy trinity has been lying big time. Just recently the Detroit Free Press caught them in a whopper with some woman with leukemia who claimed to have been dropped by BC/BS and was now unable to get healthcare at an affordable rate thanks to Obamacare. When confronted with the actual facts and shown policies that were available offering her comparable or better coverage while still allowing her to keep her doctor…and all this for substantially less than she was paying before, the holy trinity simply put out another ad with this clueless woman in which she whined that it wasn’t true because it couldn’t be true. And it couldn’t be true because she honestly believed it wasn’t true despite what the numbers showed. She was just going to continue believing what she believed because she believed it and no amount of facts would change her mind. The perfect conservative echo chamber. Unfortunately, low information voters like that probably will show up in Nov 2014. In any event, ACA is here to stay, so embrace the change.

      As you said, the rate of healthcare cost growth was slowing down before ACA; however, nothing about ACA has reversed that trend, which contradicts what the opponents of ACA were predicting. And healthcare cost growth continues to fall despite all of the things about ACA that tend to push up costs; e.g., keeping kids on their parents’ plan until age 26, abolition of pre-existing condition denials, abolition of lifetime caps, etc. So surely there must have been other aspects of ACA that were pushing costs down to offset those factors. And there were. For example, there were huge changes to the way Medicare pays doctors. The ACA also funded the digitalization of medical records. Hospitals committed in advance to cost growth targets. The ACA penalizes “Cadillac” plans that drive up costs. The ACA absorbs some of the risk to private insurers as they feel out the market. And of course there’s a larger pool of subscribers. We know these are working because job growth in hospital administration has stopped according to the BLS.

      I don’t recall you or your kin folk calling for higher penalties or being against delaying many of the ACA provisions. On the other hand, I did support higher penalties and I opposed delaying most of the provisions. So are you saying that I was right afterall? That seems to be the natural interpretation of your comments. And you might want to alert your kin that if the penalties get increasingly stiffer each year that they avoid buying health insurance. They also go up with income. After a few years they could find themselves trapped and paying out a lot more in penalties than they would be paying in premia.

      Finally, despite all of its problems and Rube Goldberg kludges, the ACA is a significant improvement over what we had before. That point is simply unarguable. The perfect should never be the enemy of the good. No one wants to go back to the bad old days before ACA. So get with the program and start offering up some constructive ways to improve ACA.

  4. Ricardo

    Rick,

    A joy to read. I hope you will continue your archeology.

    It appears that our amature historian, Slug, believe that Sir Lucas Freedman should be a sooth-sayer since he states that he forgot events that happend after these events that happened in the first century. LOL!!

  5. baffling

    stryker,
    not sure what world you are living in, but it is becoming clear obamacare is not the “end of the world as we know it” event conservatives have been screaming about for the past couple of years. millions of people have obtained affordable health care. my own insurance has not been affected one bit. and i’ll bet your insurance has not been affected one bit either. all the heartbreaking stories of lost insurance and outrageous price increases in the past year in the faux news world have been shown to be FALSE-nothing more than koch brother propaganda! your comments on rick jr and rob were simply statements that the young should break the laws of the land. that is what you advocated. face it, the world is leaving you behind because you refuse to adapt. you know about as much as the fools who predicted a romney win in the last election.

  6. don

    Keynes just tried to explain an empirical result that confounded the existing theories, sort of like the experiments that contradicted Newtonian physics. But instead of adjusting the theory as they did in physics (with the theory of relativity) the fresh water economists continue to deny the empirical evidence and have been rightly crucified by sir Postalot.

  7. Rick Stryker

    2slugbaits,

    I don’t think you got the memo. I hope you haven’t been listening to the clueless Sir Postalot, who is still shilling for the ACA. The serious Democratic politicians already understand that the policy has failed and are maneuvering to get the best fix they can with the minimum political damage.

    Why do you think the White House has essentially repealed Obamacare until after the 2014 elections? Do you really think they’d do that if they thought it was working?

    When the website failed, there were a lot of panicked Democrats. However, they were kept from rebelling by the promise that the program, if they stuck with it, would pay the political dividends they all expected. The fact that current policy holders would have their policies cancelled was a feature, not a bug, that every Democratic politician was aware of. They understood the political problem with that but they were counting on two things: 1) The insurance that replaced the cancelled policies would be something that most people saw as beneficial or at worst neutral; and 2) a large number of the 40 million uninsured would sign up for the program, which, with their subsidies, would be a lot of grateful voters.

    When the policies came out, I looked at them closely and saw the problem, as did a lot of people. Even with the subsidies, they don’t seem like a reasonable deal for a lot of uninsured people, since these low income people are being asked to pay hundreds of dollars per month for insurance with high deductibles and constrained networks. And they certainly don’t look like a good deal to the young or to most of the currently insured.

    As the months rolled by, those observations were being reflected in the numbers. Current policy holders were being pushed into more expensive insurance, with higher deductibles, and narrower networks. Uninsured people were not purchasing the insurance in great numbers. In fact, most of the new people covered that were previously uninsured were signed up for Medicaid. The young were not purchasing at the rate expected. Young people are about 25% of the total when they were expecting 40%. Ultimately, that will be a real actuarial problem. So, now you have angry voters who feel that they got a raw deal and no new beneficiaries to counter them. That’s a political disaster.The Administration and the Democrats in Congress understand that they won’t lose the political support of the insurance companies in the short run over the demographic problem of too few young and healthy people because of the risk corridor subsidies, but that won’t work in the long run.

    The Administration and their allies also understood that they could not approach the Republicans about a fix before 2014, since the Republicans have no incentive to negotiate. Thus, they’ve delayed the program until after 2014 to try to contain the political damage in the Senate. They hope to retain control of the Senate and then attempt to negotiate some fixes that won’t change the program too much.

    Of course, there is always the possibility that the White House will wait until after 2014 and then start enforcing the program. Or just keep delaying it. But I don’t think the Democrats in Congress will tolerate this, since it will damage them further and affect their chances in the 2016 Presidential race.

    The race in Florida suggest that things aren’t looking good for the ACA to be retained in anything like its present form. That race could have swung either way and the Republican, who was not a strong candidate, made the race a referendum on Obamacare. The Democrat also tried out the strategy that Democrats are hoping to use this fall: fix but don’t repeal Obamacare. But it didn’t work. Many of the Democrats in the Senate who are up for reelection are in Republican-leaning states and so face more difficult fundamentals than in the Florida race. So, the Democrats really could lose the Senate over this and they know it.

    It will be interesting to see how this plays out. My guess is that the ACA will be modified significantly after 2014 and will contain a number of concessions to Republican health policy ideas. If Obamacare is not fixed after 2014, it will damage Hillary’s candidacy in 2016.

    1. baffling

      stryker,
      the race in florida really does not tell you much, especially with regard to the aca. you are putting on some major spin. this congressional district had been held by republican bill young since 1971-nearly 42 years! bill young was reelected by 57% of the vote in 2012. jolly worked for young, and could only muster 48.4% of the vote-not even a majority-and won by less than 2%. the last time a democrat held this seat was 1954! this race was not a barometer of future congressional fights.

      now let the conservatives continue to crow about obamacare. and also continue to pursue the dismantling of social security and medicare. stryker, this district is dominated by old white retirees-check out the demographics. and the republican candidate could not even win a majority of the vote! now set up the scenario in the next couple years if obamacare is repealed and reductions in social security/medicare occur-the stated objectives of the republican party. how good are your election prospects going to be in 2016? of course, you can buy your votes by not modifying the entitlements of the baby boomers-but that is simply bribery and not reform. are you willing to cut current entitlements or will you pass the buck as well?

  8. 2slugbaits

    Rick Stryker Now you’re just making stuff up.

    The insurance that replaced the cancelled policies would be something that most people saw as beneficial or at worst neutral

    I don’t think Obama believed he could make people accept the facts. The fact is that for 95% of the population, Obamacare offers choices that are at least as good as what they had before, and for less cost. It may well be that the world is full of gullible and clueless people like that sorry woman in Michigan who is paying more and getting less simply because she is too stupid to do the arithmetic. But if people are as stupid as you imagine, why do you always preach rational expectations?

    a large number of the 40 million uninsured would sign up for the program

    Where did this come from? There were roughly 40 million uninsured, but do you think that uninsured toddlers would sign up? The Administration’s optimistic goal was 7 million new subscribers. It looks like the final number will be somewhere between 6 and 6.5 million. That’s not a disaster. Mildly disappointing at worst.

    Young people are about 25% of the total when they were expecting 40%.

    No. The Administration never expected 40% in the first year. They always expected that it would take about 3 years to bring that number up to their final target. The 25% figure is pretty close to what they expected for the first year.

    The Administration and their allies also understood that they could not approach the Republicans about a fix before 2014, since the Republicans have no incentive to negotiate.

    Huh? The Republicans are never going to talk about fixing Obamacare. Can you imagine any Republican agreeing to fixes to Obamacare? Get serious. Remember, back when the ACA was being debated a couple of GOP senators tried to offer some serious and substantive suggestions, but Mitch McConnell told them to sit down and shut up. They didn’t come to the WH meeting to improve the ACA, but to bury it. And then there was Sen. Grassley bragging to his supporters about how successful he was in lying to Obama about the ACA. Grassley didn’t know that the YouTube cameras were rolling. You forget just how dishonest and unscrupulous the GOP really is.

    You’ve posted a lot about the ACA. We all know that you don’t like it. What I can’t figure out, and I suspect quite a few others here cannot figure out, is what exactly is it about the ACA that you dislike. I don’t think you are opposed to offering people a larger menu of affordable plans, which is what the websites do. I don’t think you are opposed to abolishing fraudulent policies. I don’t think you oppose the provisions in the ACA that allow parents to keep their kids on their plans until age 26, or the provisions that prohibit arbitrary cancellations, or the provisions that do away with pre-existing condition denials. And I don’t think you are opposed to the changes in the way doctors are reimbursed for Medicare. So what’s left? Are you worried that your kin won’t be able to freeload? Is that what has you upset? You and your kin want the freedom to be as irresponsible as a frat boy and hand the bill to someone else? If so, how about this idea. Let everyone who doesn’t want to get health insurance at age 26 publicly commit to never wanting that insurance…forever. Have a “Do Not Help Me” message tattooed on their forehead so that EMTs will know to deny life saving medical care. But if you decide to opt out, you opt out forever. No chance to go back and renegotiate when you’re 55 and feeling some chest pains. An arrangement like this would have Darwinian consequences by weeding out the asocial losers, thereby improving the breeding stock. Deal? If you and you’re kin won’t take that deal, then shut up and buy your insurance.

    baffling I’m less optimistic. Most voters are idiots. Old Tea Party voters are dumber than most. They have an astounding tolerance for cognitive dissonance. They carp about government handouts and Obamacare one minute and then tell a congressman to keep his government hands off Medicare. They protest about deficits and then get angry when anyone tries to modify Medicare in a way that cuts doctors’ incomes. They blame the Democrats for imagined cuts in Medicare benefits and then rally behind Paul Ryan’s plan to deeply cut benefits for future retirees. The greedy geezers. They can’t pass from this world soon enough. To paraphrase Max Planck, humane politics advances funeral by funeral.

  9. Rick Stryker

    2slugbaits,

    No, I never make up facts as you should know by now. But you have a consistent tendency to make assertions without any support. Just to take a couple of examples.

    The administration did indeed say that they needed 40% of the 7 million forecasted to enroll by March 31 to be young people. So far, the 18-34 sign up rate is running about 25%. You can find references to this all over the internet. The 40% number was based on Kaiser studies of the demographics of the uninsured population. Liberal Washington Post Columnist Dana Milbank just wrote about this again here..

    Also, where did you get the 6-6.5 million number? The Administration announced that 4 million had signed up by end of February. Even if we assume that March sign ups are at a quicker pace than February, so that 1.2 million sign up in March, that’s 5.2 million sign ups. However, the estimates are that about 20% of signups don’t pay past their first premium. so, that’s 80% of 5.2 million, or 4.16 million enrolled, which is significantly below the 7 million they claimed.

    That’s just a couple of examples. You really should provide links to your assertions to back them up.

  10. Rick Stryker

    Baffles,

    You’ve obviously read some superficial news reports about the Florida race. Yes, the Republican congressman was there for a long time, but in the last few years it was the power of incumbency that kept him there. The demographics of that district have recently changed so that it leans Democratic. It’s about equally Republican and Democratic by party registration, with most of the rest independents; however, the President won that district in both 2008 and 2012.

    If you had been following this race, you’d know that the Democrats fully expected to pick up the seat. The dem candidate had a significant funding advantage over the Republican. The Republican was also not a compelling candidate, having been a Washington lobbyist. Plus, there was a libertarian protest candidate in the race who was going to siphon Republican votes. So, the Dems felt confident and polls were against the Republican even a week before the election. However, the Republican successfully nationalized the race by making it about Obamacare. That brought in money from outside conservative groups that equalized the funding deficit. Although Bill Clinton campaigned for the Democratic candidate, Paul Ryan campaigned for the Republican to limit the libertarian candidate, who, despite the fact that he won 5% of the vote, did not prevent the Republican from winning.

    You are naive if you don’t realize that the professional Democratic political people are very nervous about what happened in this race. Obamacare is a potent political problem for them.

    1. baffling

      stryker,
      I didn’t “obviously” read some news report. I actually looked up the data on the race. You on the other hand “obviously” understood the race through the eyes of a political pundit.

      “Yes, the Republican congressman was there for a long time, but in the last few years it was the power of incumbency that kept him there. ” and the republican running for office there previously worked for the former incumbent congressmen-you think there is no incumbency effect there? this district is historically republican, and registered republicans outnumber registered democrats. this is particularly true during off year elections. those elections tend to attract senior citizens-who vote republican in this district.

      “Plus, there was a libertarian protest candidate in the race who was going to siphon Republican votes. ”
      do you know anything about this libertarian candidate? he supports gay marriage, opposes our perpetual foreign war policies, opposes military trade, and supports federal legalization of medicinal marijuana and hemp farming. will this candidate siphon off more Republican or Democratic votes with this liberal social policy? The pundits see “libertarian” and immediately think republican candidate-but that is not necessarily true.

      the reality of the situation is the election was not nearly as bruising to democratic hopes as you would like us to believe. republicans brought significant outside funding into this race. this effort cannot be duplicated in a nationwide election cycle. there is a limit to the number of elections the republican party can buy!

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