Two Charts

First, the Dow from September 16, 2008:


Second, the RealClearPolitics Average of Polls from September 17, 2008, the last time Senator Obama and Senator McCain were tied:



Is there a correlation?

Is there causation?

More

In response to the blogfather, one reader notes:

One of my hedge-fund readers emails:

The thumbnail future market history of this month is likely to include the phrase "correctly discounting the economic fallout of an Obama presidency and hard-left Congress repeating the failed frenetic economic policies of the 1930s". Let's just hope it doesn't take a re-run of the 1940s to extract us.

Ugh. Thanks for that comforting thought. And those enthusiastic for New Deal type solutions should be required to read Amity Shlaes' book on the subject.

Or at least this: FDR's policies prolonged Depression by 7 years, UCLA economists calculate.

P.S. Thanks for the comments!

McCain, Life and Human Rights (brief)

I also want to get to Senator John McCain on his response to the human rights of a baby question. I think that while he answered the question in a manner that, say, a devout Roman Catholic might agree with, his past vote does not square with his answer. Again, from the Saddleback Civil Forum:

Q: AT WHAT POINT IS A BABY ENTITLED TO HUMAN RIGHTS?

A: AT THE MOMENT OF CONCEPTION. I HAVE A 25-YEAR PRO LIFE RECORD IN THE CONGRESS, IN THE SENATE. AND AS PRESIDENT OF THE UNITED STATES, I WILL BE A PRO LIFE PRESIDENT AND THIS PRESIDENCY WILL HAVE PRO LIFE POLICIES. THAT'S MY COMMITMENT, THAT'S MY COMMITMENT TO YOU.

Unlike my post below, this will be a brief one (for now - I may revisit).

The problem is, that while John McCain opposes "fetal farming" or the creating of human embryos for stem cell research, he is also in favor of using human embryos already existing for such research.

In addition, he has voted to fund such research:

Q: Would you expand federal funding of embryonic stem cell research?

A: I believe that we need to fund this. This is a tough issue for those of us in the pro-life community. I would remind you that these stem cells are either going to be discarded or perpetually frozen. We need to do what we can to relieve human suffering. It's a tough issue. I support federal funding.
Source: 2007 GOP primary debate, at Reagan library, hosted by MSNBC May 3, 2007

As quoted from here.

I respectfully submit, then, that he does not believe a baby is entitled to human rights at the moment of conception.

Obama Wins!

Here we are on the cusp of John McCain's acceptance speech to be given to the GOP convention and we can already predict that Barack Obama will win the presidency. This is based on a set of "keys" developed by Political Scientist Allan Lichtman with Russian geophysicist Voldia Keilis-Borok.

Over the past two years, Prof. Lichtman has consistently predicted a GOP loss, no matter who is the nominee for either party. See, for example, this column from June 2008.

The following are Lichtman's 13 keys, with my answers given (if close, I will break the tie in McCain's favor):

1. The incumbent party (i.e. George Bush's party - the GOP) holds more seats in the U. S. House of Representatives after the midterm election than after the preceding midterm election. NO ( In 2002, the GOP won 229 seats, in 2006 it only won 202.)

2. There is no serious contest for the incumbent-party nomination. (close - I'd say yes there was, but on the other hand, McCain wrapped this up on Super Tuesday- therefore tie goes to McCain) Yes. (On the other hand, Lichtman doesn't see this as close and also give this a "yes" answer.)

3. The incumbent-party candidate is the current president. NO

4. There is no significant third-party or independent candidacy. Is Barr or Nader significant? I say no, so advantage McCain - Yes. (Lichtman has the same answer)

5. The economy is not in recession during the campaign. While not doing well, the economy is technically not in a recession. - Yes. (Lichtman scores this as uncertain)

6. Real (constant-dollar) per capita economic growth during the term equals or exceeds mean growth for the preceding two terms. NO See, for example, the recent Fed Beige Book, this post by Lane Kenworthy. But see this column by Robert Samuelson.

7. The administration has effected major policy changes during the term. This is iffy - what would the major policy change be? I say the answer is NO. (Lichtman also sees this as a "no")

8. There has been no major social unrest during the term. Yes.

9. The incumbent administration is untainted by major scandal. Yes.

10. There has been no major military or foreign policy failure during the term. Iraq - part 1 was a failure - NO

11. There has been a major military or foreign policy success during the term. Iraq - part 2, the Surge, was a success - Yes. (Lichtman disagrees - he scores this as a "no")

12. The incumbent-party candidate is charismatic or is a national hero. McCain is a National hero - Yes. (Lichtman disagrees - see below, for discussion on this and number 13.)

13. The challenger is not charismatic and is not a national hero. Barack Obama is a rock star, a celebrity as McCain acknowledges. NO. (Lichtman scores this uncertain.)

If six or more of these statements are false, the incumbent party loses. I score six No's, therefore Obama wins. Lichtman scores four yes's, seven no's and two uncertain.

Now, for some longer discussion:

Although Prof. Lichtman has long said these are objective keys, I think there is a lot of subjectivity. What is "major social unrest?" Who is a "national hero?" What is charismatic? And obviously, we disagree on whether the surge was a sucess or not - perhaps this is his partisanship showing - in 2006 he ran for the Democratic party nomination to the Senate based, in large part on his opposition to the Iraq war.

• Real per-capita Economic Growth compared
  

This is a long-term economic key, which compares with the recession key - the short term economic key. I spent a long time reviewing data from, among others, the Census Bureau, the Labor Department, the Fed, the OMB, the GAO, and some other places, I've forgotten. I should have recorded all the details, but I'm convinced, contrary to Samuelson, above, that this is a NO for the incumbent party.

• Major military or foreign policy success and failure

These are interesting keys, because Lichtman does split them up, allowing for both a success and a failure. It's clear, despite what the Obama camp would have you believe, that the surge was a success. Nevertheless, what led to the surge in Iraq was a failure. I think perhaps here is an area where the Lichtman keys may need fine-tuning, becuase McCain was opposed to the Bush strategy which led to the early failure in Iraq and backed the surge - prior to that failure. Accordingly, it could be he will escape the damage of the failure key.

• Charismatic / National Hero
  

Personally, I see McCain as a 100% National Hero - however, Prof. Lichtman says he is not:

[the commenter would turn] the charisma/hero key in favor of John McCain when the definitions of the keys, established in 1981, would clearly exclude him. The definition includes national leadership in wartime as exemplified by Grant and Eisenhower. It does not include heroic performance in war.

If you scroll down in the discussion you will see that Lichtman believes that McCain was a Charismatic Figure when he initially ran, but is no longer. All of this seems very subjective to me.

Now then, having said all this, there is still an election to take place. Those of us who follow sports know there is no way an NAIA school with 800 students could beat the number one ranked Virginia Cavaliers and Ralph Sampson. Chaminade?