Sunday, August 29, 2010

Answering Krugman: Why the Obama administration isn't panicking about the elections

Paul Krugman doesn't understand why the Obama administration isn't panicked about a pending electoral catastrophe.

I think he believes they're delusional.

That could be. Denial is a prerequisite for the happiness of a sentient organism. We're good at denial. We're also prone to assume that our local slice of humanity is representative of the nation.

So it would be normal primate behavior for Team Obama to expect catastrophe will be averted.

Except -- they're smart, they're professional politicians, and they don't hate science. So I don't think they're delusional. I think they know what's going to happen this November.

They know the GOP will take at least one of the House and Senate, and probably both. They know this will be very bad, but they expect the Senate will not be able to override a filibuster or a veto. (I will applaud if the GOP ends up trashing the filibuster, though the consequences will be short term terrible.)

They also know that this outcome was decided when the the economy failed to recover. It doesn't matter what they say or do; American elections are decided by "undecideds" and "independents", and those voters typically have no connection to reality [1]. They respond to personal circumstance and mass feeling -- and there's no way either of those are going to change as the Great Recession grinds on.

So Team Obama isn't panicking because that would be pointless. We have already entered a state of political paralysis, and this will probably persist from 2010 to 2012. There will be some opportunities for "lame duck" actions and recess appointments -- and that's where the political pros are fighting now.

Will Obama lose in 2012? It's certainly possible. I fear the Great Recession is going to grind on well into the Peak Oil era, in which case we'll start calling it GD II. On the other hand, I never expected him to win either. Don't underestimate Obama.

[1] Really. The political science profiles are definitive.

10 comments:

Jake Wagner said...

Actually I think we have already entered the peak oil age. Too bad Obama hasn't figured that out. He could use that fact to push for a massive infrastructure project, say coast-to-coast electrified high speed rail. That would create jobs and help bring unemployment down.

rjs said...

if not peak oil, plateau oil:

http://gregor.us/wp-content/uploads/2010/08/Global-Crude-Oil-Supply-2002-2010-in-kbpd1.jpg

polo said...

It's condescending and also self-delusional to say: "those voters typically have no connection to reality [1]. They respond to personal circumstance and mass feeling"... What else would you (or the White House) expect an unemplyed voter to do but vote about his situation? Experience shows they do that; would you expect them to vote about the prospect for Palestinian-Israeli peace? Polls have shown even that the budget deficit is far less an issue than jobs. And that's where team Obama has really failed -- a larger stimulus could have bought the jobs needed to carry them into a second term, but for some reason they thought it not necessary. I support Obama, but hell, I also understand people who would vote over jobs. I don't understand though the people, like one I heard the other day, say they appreciate that unemployment insurance and other benefits were extended, but otherwise they oppose Obama for "ideological" reasons. But those people aren't independents.

John Gordon said...

Polo,

I was too harsh about swing/independent voters. I went looking for a survey or profile to back up my prejudices but couldn't find anything substantial. I'd need a poli sci major to help me out.

As to voting over one's job - sure. That's only rational, however, if the voter chooses the party most likely to help them get or keep a job and survive the unemployment experience. If they simply choose the "other party" that's irrational and consistent with my post.

Understandable of course, but irrational.

The people I read and trust seem to feel Obama got the biggest stimulus he could get. Bigger might have been better, but it wasn't available. Even Krugman, though he berates Obama for the small stimulus, doesn't say Obama could have gotten anything bigger.

In a magical world where Obama could have gotten the bigger stimulus, would it have worked to either win the election or bend the employment curve? I don't know of course. Krugman (and Reich) obviously believes it would have, but I think DeLong is less confident.

I'm more of a DeLong guy than a Krugman guy myself, though it is a fine distinction.

John Gordon said...

rjs, SciAm's "End" issue had 2014 for the date after which output falls. Since I usually think of "peak" oil as when growing demand surpasses growing supply, then a 2014 absolute output peak would be consistent with my style of "peak" in 2010.

It doesn't feel that way though. Even with the US in the GR I'd expect gas prices to move higher. On the other hand, I could see prices moving up in 2012 unless China craters.

If the GR drags on, we'd move into that range.

rjs said...

john: a year here, a year there, it hardly matters to us, when it hits china has the dollars to buy what they need...

witness:
DOE Saying Possible Peak "Liquid Fuels" by 2011 -
http://www.theoildrum.com/node/6337
http://www.eia.doe.gov/conference/2009/session3/Sweetnam.pdf
see page 8 for "unidenified" oil needed...
• The Oil Crunch: a Wake-up Call for the UK Economy
http://peakoiltaskforce.net/wp-content/uploads/2010/02/final-report-uk-itpoes_report_the-oil-crunch_feb20101.pdf
A report from the American Joint Forces Command published March 15 predicts that in 2015, the world capacity for petroleum prouction could be 10 million barrels per day less than the demand.
The Joint Operating Environment 2010 (United States Joint Forces Command)
http://www.fas.org/man/eprint/joe2010.pdf
Sustainable Energy Security: Strategic Risks and Opportunities for Business (insurer Lloyds of London with Chatham House, June),
http://www.chathamhouse.org.uk/files/16720_0610_froggatt_lahn.pdf

neroden@gmail said...

*I* believe Obama could have gotten a stimulus ten times as large.

In some cases, all that is required is chutzpah. The psychology of Congressmembers -- who generally have no real grasp of large numbers -- means that asking for a larger number doesn't make it any less likely that you get what you want than asking for a smaller number.

John Gordon said...

Neroden, I appreciate your confidence!

rjs said...

neroden, notwithstanding the stupidity of congressmen nor their ability to understand numbers, there's no way they could have borrowed 10 times as much money, and the Fed wasnt gonna print it...

John Gordon said...

Today's Krugman post [1] confirms an earlier comment of mine. Even Krugman is not convinced Obama COULD have gotten a bigger stimulus -- though Krugman, DeLong and others I respect all said then (and now) that it was too small.

[1] http://krugman.blogs.nytimes.com/2010/08/31/brother-can-you-paradigm/

PS. Sometimes I wonder if Krugman actually reads this blog - esp. if Brad links to it. Delusions of grandeur on my part.