When Should You Start to Care About Polls?

The New York Times asks, “When should you start to care about polls?”

Since 1980: “At this point – 167 days before the election – a simple polling average has differed from the final result by about nine percentage points. We expect this average to become more meaningful by the week, until the national party conventions temporarily make it less so, as shown in the bump about 100 days before the election. The average difference begins to flatten about two months before the election. The day before the voting, an unadjusted polling average has been about 3.5 points off the final result.”

Thus, the Times concludes, “The answer is: not quite yet.”

Endorsement Hold Out Distracts from GOP Agenda

CNN: “Speaker Ryan, who shocked the political world by saying he wasn’t ready to back Trump earlier this month, is still wrestling with when he’ll lock arms with the billionaire businessman.”

Said Ryan: “What I’m most concerned about is making sure that we actually have real party unity, not pretend party unity.”

The media firestorm surrounding Ryan’s endorsement for Trump is clearly distracting the Speaker from his policy initiatives.

“Earlier this week, a press briefing with reporters was supposed to focus on the House GOP election-year agenda that he has so carefully crafted. Instead, Ryan and his staff had to push back on press reports suggesting that a Trump endorsement was imminent.”

 

 

Trump Says Wind Turbines Are Killing Eagles

In a rare prepared speech, Donald Trump outlined his energy policy in Bismarck, North Dakota, MSNBC reports.

“Trump is known for bucking conservative orthodoxy but, on Thursday, the presumptive Republican presidential nominee largely hewed to the typical Republican line. Reading from a teleprompter, Trump called for reducing restrictions on energy exploration, opening up more federal lands to drilling, and reducing dependence on foreign oil. He said he would try to reopen negotiations to build the Keystone XL pipeline, which President Obama rejected.”

“Trump’s contempt for regulations did not seem to extend to renewable energy, though, where he complained that wind turbines were ‘killing all of the eagles’ and predicted the industry would fail without subsidies.”

Are Financial Markets “Choking the Economy?”

Time‘s May 23rd cover story, Rana Faroohar’s “American Capitalism’s Great Crisis,” examines the perils of the post-2008 financial system, which is starting to “suck the economic air” out of the economy.

Faroohar laments that the overwhelming majority of Wall Street cash is used for lending against existing assets and stock buybacks, while only “a fraction of all the money washing around the financial markets these days actually makes it to Main Street businesses.”

Blaming a public policy movement started during the 1970s slowdown, Faroohar cites “financialization,” or what University of Michigan professor Gerald Davis describes as a revolution in which “business has reoriented its orbit around the financial sector, as the “single biggest reason for long-term slower growth.”

The current financial order has also created a hazardous atmosphere for innovation, which, according to a Stanford University study, “tails off by 40% at tech companies after they go public, often because of Wall Street pressure to keep jacking up the stock price, even if it means curbing the entrepreneurial verve that made the company hot in the first place.”

 

Corruption or Co-Option: Party Leaders Consider Changes in Primary Rules

New York Times: “Leaders of the Republican Party have begun internal deliberations over what would be fundamental changes to the way its presidential nominees are chosen, a recognition that the chaotic process that played out this year is seriously flawed and helped exacerbate tensions within the party.”

Among the proposals are methods of diminishing the importance of traditional early states, such as pairing them with other primary states “that voted on the same day as a way to give more voters a meaningful role much sooner.”

Both parties are also considering changes of rules that would address voter access for primaries, a question “that cuts to the identity of the modern American political party.” For Democrats, the closed primary system as well as uncertainty regarding the superdelegate process has led Senator Sanders to denounce the nominating process “as unfair and corrupt.” On the flip side, “Mr. Trump won the primaries in New Hampshire and South Carolina, where voters are not required to be party members,” which many party activists fear “dilutes conservative voices.”

Robots and Fast Food: Is the Minimum Wage Fight an Economic Red Herring? 

Former McDonald’s USA CEO Ed Rensi on Fox Business Network: “I was at the National Restaurant Show yesterday and if you look at the robotic devices that are coming into the restaurant industry — it’s cheaper to buy a $35,000 robotic arm than it is to hire an employee who’s inefficient making $15 an hour bagging French fries — it’s nonsense and it’s very destructive and it’s inflationary and it’s going to cause a job loss across this country like you’re not going to believe.”

CNN Money: “In a widely cited paper released last year, University of Oxford researchers estimated that there is a 92% chance that fast-food preparation and serving will be automated in the coming decades.”

Does the American Economy Need Immigration?

Richard Reeves, a senior fellow at the Brookings Institute, criticized Trump’s immigration rhetoric, asserting, “America needs immigration.”

“At the most banal level, this is a question of math. We need more young workers to fund the old age of the Baby Boomers.”

“Immigrants are now twice as likely to start a new business as native-born Americans. While rates of entrepreneurialism are declining among natives, they are rising among immigrants. Immigrant children typically show extraordinary upward mobility, in terms of income, occupation and education. Among children born in Los Angeles to poorly-educated Chinese immigrants, for example, an astonishing 70% complete a four-year-college degree.”

“Of course, while immigration might be good for the economy as a whole, that does not mean it is good for everyone. Competition for wages and jobs will impact negatively on some existing residents, who may be more economically vulnerable in the first place. Policymakers keen to promote the benefits of immigration should also be attentive to its costs.”

“America First” and Increased Defense Spending Popularity Signal Public Opinion Shift

Pew Research Center released a report on May 5 investigating the American public’s view on the U.S.’s role in the world.

Among the findings were a sharp uptick in support for increased defense spending.

“Most of the increase has come among Republicans. Fully 61% of Republicans favor higher defense spending, up 24 percentage points from 2013. Support for more defense spending has increased much more modestly among other partisan groups. And the gap in support for higher military spending between Republicans and Democrats, which was 25 percentage points three years ago, now stands at 41 points.”

“Still, 57% of Americans want the U.S. to deal with its own problems, while letting other countries get along as best they can. Just 37% say the U.S. should help other countries deal with their problems. And more Americans say the U.S. does too much (41%), rather than too little (27%), to solve world problems, with 28% saying it is doing about the right amount.”

The logical contradiction of growing public support for increased defense spending and a growing desire for subdued international activity may be explained by threat recognition: Americans are far more likely to see non-state actors as a threat than Eastern rivals.

How the “B-Minus” Economy Is Impacting the Race

New York Times: “As the political scientist Lynn Vavreck… has pointed out, people are generally not angry about the economy, at least by historical standards. Donald Trump and Bernie Sanders will certainly keep highlighting what they see as big weaknesses in the economy, and Hillary Clinton will keep talking about how she would improve it. But if most voters are doing sort of O.K., this approach may have a limited impact.”

The evolving condition of the American economy may transform the race for each of the presumptive nominees.

For Trump:  “Indeed, the lack of stark economic problems may have allowed Mr. Trump to push unconventional policies. If the economy were repeating the plunge of 2008, fewer voters might be prepared to support a candidate whose policies would disrupt world trade and whose tax cuts would almost certainly lead to a far bigger budget deficit.”

“But think about it: If there is one force that can derail him, or restrain him, it’s the threat that the economy won’t tolerate his more unconventional policies.”

For Clinton: “George H.W. Bush won in 1988 against Michael Dukakis by promising to take the country on much the same course as President Reagan did. But while the economy has achieved steady gains under President Obama, Mrs. Clinton might not gain a big advantage by portraying herself as his economic standard-bearer. The economy just hasn’t been growing fast enough. Economists expect the economy to grow at around 2 percent this year. In the second half of 1988, it grew at nearly double that rate.”

What If No One Sells In an Obamacare Marketplace?

Sarah Kliff: “There are at least three states that currently have just one health insurer planning to sell on their Obamacare marketplace in 2017: Alaska, Alabama, and Wyoming.”

“The health care law doesn’t have a backup plan if any of those states have their sole carriers drop out… A federal official told the Wall Street Journal he was “pretty confident” there would be no areas with zero carriers — but he also couldn’t rule out the possibility.”

“An Obamacare market with no sellers would leave thousands of enrollees unable to use tax subsidies to buy insurance coverage. And the government doesn’t have any particular legal power to cajole carriers into setting up shop in the markets they find undesirable. The most they can do, it turns out, is ask really nicely.”

Germans Were Actually Paid to Consume Electricity

Quartz: “On Sunday, May 8, Germany hit a new high in renewable energy generation. Thanks to a sunny and windy day, at one point around 1pm the country’s solar, wind, hydro and biomass plants were supplying about 55 GW of the 63 GW being consumed, or 87%. Power prices actually went negative for several hours, meaning commercial customers were being paid to consume electricity.”

https://www.agora-energiewende.de/en/topics/-agothem-/Produkt/produkt/76/Agorameter/

Trump Asks Conservatives to Revamp Tax Plan

“Donald Trump’s campaign has enlisted influential conservative economists to revise his tax package and make it more politically palatable by slashing the $10 trillion sticker price. Their main targets: Lifting the top tax rate from Trump’s original plan and expanding the number of people who would have to pay taxes under it,” Politico reports.

“Trump’s initial proposal, rolled out with fanfare at Trump Tower in Manhattan last September, has been in the spotlight since he became the presumptive Republican nominee last week and promptly declared that it was only a starting point for any negotiations with congressional Democrats, should he become president.”

“But it turns out Trump’s team is open to revamping it far sooner than that; the campaign last month contacted at least two prominent conservative economists — Larry Kudlow, the CNBC television host, and Stephen Moore of the Heritage Foundation and a longtime Wall Street Journal writer — to spearhead an effort to update the package.”

Economic Myths from the Presidential Campaign

New York Times: “If you want to learn about the economy, there are good and bad places to go. Probably the worst source of reliable information is the current crop of presidential candidates. Dissembling and exaggeration are no strangers to politics, but this year’s campaigns have been particularly egregious.”

“Here are six economic myths that underlie much of the recent rhetoric.”