Survey of the damage

And here's The Onion with a hilarious hurricane-like report on the damage done to the nation by the Bush presidency:

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It's getting difficult to guard the optimism

As I said on Tue, the polls for Obama look great and if this holds, he should win in 23 days. As of this morning, fivethirtyeight.com shows him with a 91% win probability, a 5-point popular vote spread (51.9:46.6)and 348 EV (270 needed), Pollster gives him 320 EV and an 8-point popular vote spread (49.8:41.9), while Intrade has him with 80% probability to win.

One of the neat things you can do is go to 270towin and play with the states to see various outcomes for the election. Taking for granted a win in all the 2004 Kerry states, it appears that Obama has also solidly locked in Iowa and New Mexico, bringing him to 264 EV. Amazingly, all Obama has to do is win one of the remaining tossup states: FL, OH, VA, NC, IN, CO, NV, or MO. McCain has to sweep every one of these swing states to win...and that's why sites that run probabilities like fivethirtyeight have Obama winning with 9:1 odds given current polling data.

Basically, my predicted map is shown below, in which Obama wins OH but loses FL, wins VA but loses NC, wins CO but loses NV, wins 1 of the 5 NE districts (Omaha) but loses both MO and IN. This would give Obama 307 EV to McCain's 231. I also predict Obama to win around 51% of the popular vote and I think McCain will get around 48.5%, with third-party candidates drawing less than expected due to the financial crisis:

Aren't prognostications fun?

And here's a countdown clock for the election:

Golden line

From Gail Collins' column in today's NYT (links added by me):

Palin has been pressing the line that people don’t really know “the real Barack Obama,” and who could make the argument better than a woman who we’ve already known for almost six weeks? Really, she’s like one of the family.

We’ve gotten so close we’ve already learned that she didn’t actually sell the plane on eBay, didn’t actually visit the troops in Iraq and didn’t really have a talk with the British ambassador. As soon as we get the Trooper thing and Alaska Independence Party thing and the tax thing figured out, she’ll be an open book.

*drum sting*

PS: Economists who once backed McCain's economic plans are now balking at his proposal to buy mortgages directly from banks.

PSS: Someone should lose a hand (or at least a finger) over this.

Nostrobamus

He saw this coming from a mile away:

(H/T: Digg for "Nostrobamus" line)

Politics notes

Alaska's bipartisan investigation ends with the conclusion that "Gov. Sarah Palin abused her power by violating Alaska Statute 39.52.110(a) of the Alaska Executive Branch Ethics Act." Read it for yourself. It's obvious that she got in trouble for lying about it more than anything else. And the stonewalling didn't help either.

The whole ACORN thing deconstructed.

After seeing his inflammatory rhetoric result in lots of blowback, Sen. McCain tried to walk back the harsh attacks on Obama's character today at a rally. He was booed. He called for "respect"...simultaneously, and with no hint of irony, McCain is running the "blind ambition" ad accusing Obama of "lying" about Ayers. Not that they'll bother to document this "lie" since it would expose their own.

Meanwhile, Cindy broke the irony meter when accusing Obama of running "the dirtiest campaign ever..."

Maybe Obama should release a video smearing Palin? Never mind.

Nobel Prize-winning economist Joe Stiglitz explains the causes of the current financial crisis:

The new populist rhetoric of the right—persuading taxpayers that ordinary people always know how to spend money better than the government does, and promising a new world without budget constraints, where every tax cut generates more revenue—hasn’t helped matters. Special interests took advantage of this seductive mixture of populism and free-market ideology. They also bent the rules to suit themselves. Corporations and the wealthy argued that lowering their tax rates would lead to more savings; they got the tax breaks, but America’s household savings rate not only didn’t rise, it dropped to levels not seen in 75 years. The Bush administration extolled the power of the free market, but it was more than willing to provide generous subsidies to farmers and erect tariffs to protect steelmakers. Lately, as we have seen, it seems willing to write blank checks to bail out its friends on Wall Street. In each of these cases there are clear winners. And in each there are clear losers—including the country as a whole.
...
The federal government needs to give a hand to states and localities—their tax revenues are plummeting, and without help they will face costly cutbacks in investment and in basic human services. The poor will suffer today, and growth will suffer tomorrow. The big advantage of a program to make up for the shortfall in the revenues of states and localities is that it would provide money in the amounts needed: if the economy recovers quickly, the shortfall will be small; if the downturn is long, as I fear will be the case, the shortfall will be large.

These measures are the opposite of what the administration—along with the Republican presidential nominee, John McCain—has been urging. It has always believed that tax cuts, especially for the rich, are the solution to the economy’s ills. In fact, the tax cuts in 2001 and 2003 set the stage for the current crisis. They did virtually nothing to stimulate the economy, and they left the burden of keeping the economy on life support to monetary policy alone. America’s problem today is not that households consume too little; on the contrary, with a savings rate barely above zero, it is clear we consume too much. But the administration hopes to encourage our spendthrift ways.

What has happened to the American economy was avoidable. It was not just that those who were entrusted to maintain the economy’s safety and soundness failed to do their job. There were also many who benefited handsomely by ensuring that what needed to be done did not get done. Now we face a choice: whether to let our response to the nation’s woes be shaped by those who got us here, or to seize the opportunity for fundamental reforms, striking a new balance between the market and government.

BTW, Stiglitz is the most-cited economist in the world.

Politics notes

Following up an earlier item about the growing gulf between the GOP's policies and science's reality, the 63rd Nobel Prize winner has now endorsed Obama. The text of the letter which the signatories affirm:

This year's presidential election is among the most significant in our nation's history. The country urgently needs a visionary leader who can ensure the future of our traditional strengths in science and technology and who can harness those strengths to address many of our greatest problems: energy, disease, climate change, security, and economic competitiveness.

We are convinced that Senator Barack Obama is such a leader, and we urge you to join us in supporting him.

During the administration of George W. Bush, vital parts of our country's scientific enterprise have been damaged by stagnant or declining federal support. The government's scientific advisory process has been distorted by political considerations. As a result, our once dominant position in the scientific world has been shaken and our prosperity has been placed at risk. We have lost time critical for the development of new ways to provide energy, treat disease, reverse climate change, strengthen our security, and improve our economy.

We have watched Senator Obama's approach to these issues with admiration. We especially applaud his emphasis during the campaign on the power of science and technology to enhance our nation's competitiveness. In particular, we support the measures he plans to take – through new initiatives in education and training, expanded research funding, an unbiased process for obtaining scientific advice, and an appropriate balance of basic and applied research – to meet the nation's and the world's most urgent needs.

Senator Obama understands that Presidential leadership and federal investments in science and technology are crucial elements in successful governance of the world's leading country. We hope you will join us as we work together to ensure his election in November.

Do remember that my question to CNN involved retaining the USA's status as a scientific superpower.

Following up an earlier item on blaming the poor and minorities for the current financial crisis, Newsweek tackles the argument head-on:

The Community Reinvestment Actapplies to depository banks. But many of the institutions that spurred the massive growth of the subprime market weren't regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. These institutions worked hand in glove with Bear Stearns and Lehman Brothers, entities to which the CRA likewise didn't apply. There's much more. As Barry Ritholtz notes in this fine rant, the CRA didn't force mortgage companies to offer loans for no-money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on subprime debt.

Second, many of the biggest flameouts in real estate have had nothing to do with subprime lending. WCI Communities, builder of highly amenitized condos in Florida (no subprime purchasers welcome there), filed for bankruptcy in August. Very few of the tens of thousands of now-surplus condominiums in Miami were conceived to be marketed to subprime borrowers, or minorities—unless you count rich Venezuelans and Colombians as minorities. The multi-year plague that has been documented in brilliant detail at IrvineHousingBlog is playing out in one of the least subprime housing markets in the nation.

Third, lending money to poor people and minorities isn't inherently risky. There's plenty of evidence that in fact it's not that risky at all. That's what we've learned from several decades of microlending programs, at home and abroad, with their very high repayment rates. And as The New York Times recently reported, Nehemiah Homes, a long-running initiative to build homes and sell them to the working poor in subprime areas of New York's outer boroughs, has a repayment rate that lenders in Greenwich, Conn., would envy. In 27 years, there have been fewer than 10 defaults on the project's 3,900 homes. That's a rate of 0.25 percent.

On the other hand, lending money recklessly to obscenely rich white guys, such as Richard Fuld of Lehman Brothers, or Jimmy Cayne of Bear Stearns, can be really risky. In fact, it's even more risky, since they have a lot more borrowing capacity. And, here, again, it's difficult to imagine how Jimmy Carter could be responsible for the supremely poor decision-making seen in the financial system. I await the Krauthammer column in which he points out the specific provision of the Community Reinvestment Act that forced Bear Stearns to run with an absurd leverage ratio of 33:1, that instructed Bear Stearns hedge-fund managers to blow up hundreds of millions of their clients money, and that required its septuagenarian CEO to play bridge while his company ran into trouble. Perhaps Neil Cavuto knows which CRA clause required Lehman Brothers to borrow hundreds of billions of dollars in short-term debt in the capital markets and then buy tens of billions of dollars of commercial real estate at the top of the market. I can't find it. Did AIG plunge into the credit-default swaps business with abandon because ACORN members picketed its offices? Please. How about the hundreds of billions of dollars of leveraged loans—loans banks committed to private equity firms that wanted to conduct leveraged buyouts of retailers, restaurant companies, and industrial firms? Many of those are going bad now, too. Is that Bill Clinton's fault?

Indeed.

Polls show a very good chance to win for Obama

Things are looking good in Obamaland. He's predicted to win with good odds.  Of course that means McCain will grow more and more desperate with each passing day trying to sling mud and hope that some of it sticks.  One wonders if McCain's "honor" of which he's written often (and his ghost writer Mark Salter) over the years will give him any sense of shame down the road.

fivethirtyeight.com's current analysis has him at 345 and pollster.com has him at 320.

As a supporter who has seen a lot since January 2007, it is amazing and I never knew if we'd ever get here. Like many Dems, there's a nervous gnawing sense that something will go wrong. But I just think, despite the best efforts of Faux Noise and the right wing, Obama will win absent a cataclysmic new revelation or gaffe during a debate. The problem for McCain is that the voters are, by now, almost all cemented in their choices with very few undecideds left and very few "swayable" decideds.

I'm showing two maps below:

fivethirtyeight's map:

And Pollster's map, which currently (10/7) gives Obama 320 with 55 tossup:


...my fingers remain crossed...

Keating economics: McCain's defining scandal

This is gonna hurt:

keatingeconomics.com

Here is the video link to the 13-min documentary and here is the video link to the 35-sec preview/trailer. The full 13-min documentary is embedded below:

McCain's shady associations and bad judgment

**UPDATE: I just got an email from David Plouffe sent to Obama supporters that directs to this website, where a 13-min documentary on McCain's role in the Keating 5 scandal and its parallels to today's financial crisis will be up today by noon. You can see the preview now. Ouch.**

So it seems that the McCain campaign will be slinging as much mud as possible in its last desperate attempt to win. They're now dialing up the volume on Obama's "character and judgment" based on his past associations.

Okay, let's play.

Palin is talking about Ayers. If talking about William Ayers, a man Obama barely knows and met as a fellow Professor at the University of Chicago, is germane then surely talking about Charles Keating is. The fact that McCain was formally investigated by the Senate Ethics Committee, while Obama has never been formally investigated by any panel, despite all the media digging, is telling. It's also telling that McCain's running mate is under ethics investigations, (despite all the stonewalling) as well.

If talking about how Rezko helped Obama by buying a part of his parcel then later re-selling it to him at fair market value is germane, then surely talking about how McCain's first failed marriage, followed by his mistress-turned-wife Cindy and her father launched McCain's campaign with their own money, then invested $350K into a Keating shopping mall in April 1986 is.

And it isn't like McCain's ability to be bought off by corporations ended 20 years ago. Far from it. In 1998 and 1999, McCain worked hard on behalf of a corporation with a hot lobbyist, writing letters to the FCC to push for deregulation to make those companies more money. Vicki Iseman (very sexy lady) schmoozed McCain for years, herself working as a lobbyist for Paxson and Glencairn, telecom companies who benefitted from McCain's influence to deregulate the telecom industry. Rumors abounded that McCain was fu&*ing the broad, but whether or not that's true, he definitely did her clients favors.

I just don't know if the McCain campaign wants to go down this road. If they do, then it's past time to counter-punch. Given the relevance of the McCain's ties to the S&L banking scandal of the 1980's and his ties to today's financial crisis through Phil Gramm and deregulation, I say, as King George famously said, "Bring 'em on."

Economists favor Obama by huge margins

Academic economists overwhelmingly favor Obama to win:

The detailed responses are bad news for Mr McCain (the full data are available here). Eighty per cent of respondents and no fewer than 71% of those who do not cleave to either main party say Mr Obama has a better grasp of economics. Even among Republicans Mr Obama has the edge: 46% versus 23% say Mr Obama has the better grasp of the subject.

...

A candidate’s economic expertise may matter rather less if he surrounds himself with clever advisers. Unfortunately for Mr McCain, 81% of all respondents reckon Mr Obama is more likely to do that; among unaffiliated respondents, 71% say so.

...

On our one-to-five scale, economists on average give Mr Obama’s economic programme a 3.3 and Mr McCain’s a 2.2. Mr Obama, says Jonathan Parker, a non-aligned professor at Northwestern’s Kellogg School of Management, “is a pragmatist not an ideologue. I expect Clintonian economic policies.” If, that is, crushing federal debt does not derail his taxing and spending plans.

On his plans to fix the financial crisis, Mr Obama averages 3.1, a point higher than Mr McCain. Still, some said they didn’t quite know what they were rating—reasonably enough, since neither candidate has produced clear plans of his own.

Where the candidates’ positions are more clearly articulated, Mr Obama scores better on nearly every issue: promoting fiscal discipline, energy policy, reducing the number of people without health insurance, controlling health-care costs, reforming financial regulation and boosting long-run economic growth. Twice as many economists think Mr McCain’s plan would be bad or very bad for long-run growth as Mr Obama’s. Given how much focus Mr McCain has put on his plan’s benefits for growth, this last is quite a repudiation.

Mr McCain gets his highest mark, an average of 3.5 and a clear advantage over Mr Obama, for his position on free trade and globalisation. If Mr Obama “would wake up on free trade”, one respondent says, “I could get behind the plans much more.” Perhaps surprisingly, the economists rated trade low in priority compared with the other issues listed. Only 53% say it is important or very important. Neither candidate scored at all well on dealing with the burgeoning cost of entitlements such as Medicare and Social Security.

The economists also prefer Mr Obama’s tax plans. Republicans and respondents who do not identify with either political party see Mr McCain’s tax policies as more efficient but less equitable. But the former prefer Mr McCain’s plans—43% of Republicans say they are good or very good—and the latter Mr Obama’s. Of non-affiliated respondents, 31% say Mr Obama’s are good or very good.

Either way, according to the economists, it would be difficult to do much worse than George Bush. The respondents give Mr Bush a dismal average of 1.7 on our five-point scale for his economic management. Eighty-two per cent thought Mr Bush’s record was bad or very bad; only 1% thought it was very good.

The Democrats were overwhelmingly negative, but nearly every respondent viewed Mr Bush’s record unfavourably. Half of Republican respondents thought Mr Bush deserves only a 2. “The minimum rating of one severely overestimates the quality of Bush’s economic policies,” says one non-aligned economist.

A nice thing to mention on the campaign trail. Plus the fact that McCain is advised by a bunch of financial lobbyists, while Obama is endorsed by economists 2:1 over McCain.