David Brooks Votes For Marco Rubio

Jeb Bush and Ted Cruz are no longer viable candidates.  The only candidate left standing according to David Brooks is Marco Rubio.  We are told that Rubio is candidate of this century and not the last century like some of the other Republicans.  He also harvests ideas from conservative think tanks which are developing something that Brooks calls "Reform Conservatism".  Brooks has just packaged his favorite candidate.  He is a 21st Century, Reform Conservative, who like David Brooks, harvests the ideas incubated in conservative think tanks.  The American Enterprise Institute is one of the leading conservative think tanks.  If you are interested in Reform Conservatism you may want to find out more about the ideas and the staff at AEI.  The Heritage Foundation is another of the leading conservative think tanks. I have a hard time finding 21st century ideas at these sites.  Reform Conservatism seems to be pretty old hat to me.

Betting Odds On Presidential Race In US

A large number of people are betting on the primaries and on the 2016 election.  The betting odds change over time as do poll results.  However, the betting odds have usually been a better predictor of the eventual results.  The latest betting odds provide good news for Marco Rubio and bad news for almost every other GOP candidate.  There were slight declines in the odds for Trump and Carson and a 10% drop for Jeb Bush.  Rubio's odds improved by 8.5%, which is almost equal to the decline in Bush's odds.  In fact, one of Bush's billionaire backers switched his support to Rubio after the last debate.  Unless things change rapidly for Bush his campaign may be history.  Rubio is now the front runner and more wallets will open up to him as long as he avoids a costly mistake.

There has been little change in Democratic nomination. Clinton is the odds on favorite for the nomination.  She is also is the favorite in the general election.  This is partially because she is assured of being one of the candidates in 2016.  However, the odds in her favor exceed the odds for the of total  for the entire group of GOP candidates.  This will change, of course, when the GOP gets behind the candidate who has the best chance of winning in 2016.  Right now that is Rubio.

Lessons From The Republican Debate

Catherine Rampell has a tough job.  She is a fact checker for the Washington Post.  She checks the claims made by politicians and she gives them a truthfulness score.  The last GOP debate taught her a few lessons.   The first lesson that she learned is that it pays to tell lies.  The candidates tell big lies that the GOP base wants to hear.  There is an art to telling lies and how to deal with fact checkers in the media.  She provided several examples of this art form from the last debate.  Apparently, its OK to lie as long as your followers like what you said.  Several candidates were asked questions about there fiscal policy proposals.  Marco Rubio discovered a great way to explain why his plan did not add up.  He gave an arithmetic lesson to explain why rich people get a bigger tax break than poor people from his plan.  He said that 5% of a million is larger than 5% of a thousand.  The audience applauded his response and many in the media awarded him with points for handling a tough question with force.  The third lesson that she learned is how to deal with a question for which you have no good answer.  Several of the candidates blamed the media for asking the question.  That worked well for them.  If you can't blame the Obama Administration or Hilary Clinton for something you can blame the media for their liberal bias.  That strategy works even when CNBC, which moderated the debate, is much closer to Fox News than it is to the "mainstream media" which does not follow the Fox script.  

Rampell reached a conclusion that must be discomforting to her.  The media are partly to blame for the state of politics in the US.  Much of the reporting following the last debate focused on which of the liars did the best job of getting a favorable response from the conservative audience which attended the debate.  The media seems to be primarily concerned about the relationship between the candidates performance and its impact on their poll numbers.  I'm getting pretty tired of reading about Jeb Bush's poll numbers and about the rise of Ben Carson and Donald Trump in the polls.  The media defaults on its primary responsibility to inform the public.  That doesn't attract an audience. It also provides free advertising to candidates who make the most outrageous claims.

What Do Exxon And Tobbaco Companies Have In Common?

The US tobacco industry hid their own evidence about the deadly relationship between smoking and cancer (among other deadly diseases).  They continued to fight the mounting evidence about the impact of smoking on public health and they questioned the motivation of scientists who attempted to inform the public about the dangers from smoking as long as they could.  It turns out the EXXON has been doing the same thing for 40 years.  They hid evidence from their own research department about the impact of carbon emissions on climate change, and they have funded the climate change denial industry for 40 years.  They have been getting a lot of help from Congress in the process.  The Republican representative from Texas, who heads the House Science Committee, has been doing what he can to intimidate climate researchers who publish research that he does no like.  The GOP controlled House has granted him the right to demand all of the supporting data in the government's files on his own authority.  His behavior is consistent with one of the major platforms the Republican Party.  All of the GOP candidates for the presidential nomination are global warming deniers.  It would be death for any of them to admit they have been lying about global warming for decades.  It would be equivalent to telling their true believers that God was dead.

The GOP base does not have much faith in science when it provides data that counters its belief system.  They will probably find a way to find fault with visual evidence that shows how global warming is causing the ice to melt in Greenland.  They will blame on the liberal bias in the media.

The Natural Rate Of Interest In US Is Around Zero

The natural rate of interest is the rate at which the economy operates without a risk of inflation or deflation.  In other words, it is the rate of interest which ought to be the policy goal of the Fed.  Paul Krugman reports on a study which shows that the natural rate of interest has varied over time and that it is currently around zero.  This suggests the current Fed inflation target of 2% may be too low.  The real interest rate is the nominal rate of interest minus the inflation rate.  A 2% target rate does not provide much room for the Fed to lower the real interest during a recession. 

The Fed has been accused of using monetary policy to keep interest rates too low.  This study suggests the zero rate of interest is exactly what the economy requires.  That is, it is the natural rate of interest.

US Treasury Secretary Is Concerned About Congressional Blackmail

There is a limit on the borrowing authority of the US government.  It is called a debt ceiling.  The US Treasury cannot borrow funds that are needed to pay for its current operations when it comes up against the debt ceiling.  It will hit that ceiling in 8 days.  Congress has the authority to raise the debt ceiling but it uses that authority as a form of blackmail.  It refuses to raise the debt ceiling unless the Administration agrees to policies which it believes to be harmful.  This form of blackmail can have harmful effects.  A government that cannot pay its bills may lose its AAA credit rating;  a government that must agree to policies which may be harmful is not an effective government.

Paul Krugman Offers His Explanation For Weak Global Economy

Krugman's argument is rather simple.  Emerging markets borrowed in dollars and didn't invest the funds well. Consequently, the flow of funds from investors has shifted from emerging markets to developed economies.  The developed economies have not responded to the flow of capital and low interest rates by making productive investments.  Secular stagnation is the outcome when interest rates close to zero do not stimulate investment.