Weakonomics

Fast Forward Through The Commercials

The Weakonomist — Thu, 24 May 2012 14:16:45 +0000

These days a lot of people don’t like watching commercials. Many people record their favorite TV shows which makes it easy to fast forward through the commercials. Some can stream their favorite shows through the internet or on websites. A few even watch pirated versions. It’s not always about the pursuit of not watching ads, but by and large we’re watching fewer advertisements these days than we did 10 years ago.

And television execs aren’t too happy about this. The issue seems to have come to a boiling point with Dish Network announcing a new DVR that lets viewers skip commercials altogether. Folks like Fox and NBC are refusing to air the commercials for the device (the irony is palpable).

But I’m here to say you should keep fast forwarding through ads as much as you want. Avoid ads as much as you can.

Those of us that watch TV on Hulu have become painfully aware of how much ad time eats into a show these days anyway. An hour long show is really more like 42 minutes. The average prime time show has about 14 minutes of ads and 10 minutes of product placement. According to Wikipedia, back in the 1960s a typical hour long program was 51 minutes. It’s no wonder we’re sick of ads.

You just go right on ahead and skips over any ads you don’t want to see. If I were a marketing manager, I’d only want to reach interested customers anyway. So it’s the television execs that are really in a bind. They’ve got a way out but it requires more work than they’d like to put in.

The new era of advertising is much more targeted. Most of the ads you see on my site come from Google which has been analyzing your activity online to try and target relevant ads to you. When I go on my site I see ads for new running shoes. My dog would see Busy Bones and tennis balls.

Television studios have already embraced other forms of advertising like product placement. But the savvy ones are going much deeper. On American Idol two companies have found ways to imbed advertising within the stars of the show themselves. Every week Ford shoots a commercial that features their vehicles and the stars enjoying them while singing some kind of Kidz Bop version of a pop song. The show airs the commercial as if it’s a regular segment and viewers watch it because they want to see their favorite contestant. Likewise, the resident talent expert Jimmy Iovine pimps Beats By Dre (which he co-owns) everywhere in the show. It’s on his hats, the contestants use Beats mics to practice, and various Beats products are dropped into segments. They also air a Beats commercial with a former American Idol star.

These companies and the show know how to do ads in the 21st century. Some do not. GM just announced they will stop advertising through Facebook because it doesn’t work. Ford said they’re sticking with it and GM just isn’t doing it right. Sounds like GM and the traditional networks would get along.

So please keep skipping over ads. Block mine if you want too. If I can’t effectively reach an appropriate audience I deserve not to make money. Those big guys who can’t adapt will likely go down kicking and screaming trying to defend a 20th century business model. Let em die.

Further reading: What if TV networks embraced ad skipping?

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And Here I Thought It Would Be A Slow Offseason

The Weakonomist — Wed, 23 May 2012 14:04:36 +0000

College basketball is over, college and pro football are long gone. And while I have watched more NBA basketball this year than in prior years, falling asleep through one quarter doesn’t quite count. I don’t watch hockey and I hate baseball. So I thought the offseason would be boring.

That is until news broke that two of the biggest athletic conferences announced a partnership for some football games a few years from now. Non sports fans will read that and think it can’t be a big deal.

But it is. And that’s quite sad. The state of college sports has completely boiled down to money. That is all that matters. And the money is in football. If you’re a well known university and not in a major athletic conference, you could be missing out on tons of money. A lot of that money comes from selling the TV rights to games.

This new partnership sets in motion a cascade of potential events and outcomes that could ultimately demolish some conferences. Notably, my beloved ACC. I grew up in the south as a basketball fan, but in college I learned to appreciate the gridiron as well. The partnership could mean schools like Florida State might leave the ACC to be in a conference more aligned with football, which that school is. Florida State is in the ACC which is traditionally a basketball school. But the big money is in football and the ACC could get shut out of the high revenue games.

As a result, the sports media has gone ballistic this week. Of course such speculation about school movement is great for ratings and clicks. School administrators keep saying they will do what’s best for the school. But something about all this is really eating me up inside.

When did switching sports conferences become best for a university? People forget that these places are schools. With the recent conference switching we’ve seen many schools are now having to travel further and further to play games. And it’s not just football. Every other sport will have to do it too. Look at the map of the Big 12 conference. Does that make sense?

All the major conferences are heading in such a direction. How can that be good for students and fans to have to travel? How can that be good for the players who are supposedly students first? It’s not. It’s good for the pockets of institutions that are supposed to be non-profit.

But I understand why college sports want as much attention as possible. Some schools wouldn’t be known nationally without sports. However all these moves, all the power plays and changes smell of corporate mergers and acquisitions more than something that is merely a game where the players don’t get paid.

The ACC is bad enough. They’ll let in any star athlete they can recruit and academics don’t seem to matter. No where in scouting reports does anyone report on a high schooler like this: “he’s got the athletisicm to run the point guard position for Duke but he really needs to focus on his 12th grade chemistry”. It doesn’t matter. But at least the ACC schools as a whole tend to try to keep themselves to a relatively high standard. Half of all the ACC schools (7) are listed in the top 50 national universities by US News. The others are not far behind. If you look at the two conferences that struck a new relationship, they have 7% and 10% respectively. Which amounts to 1 school in each conference.

It’s clear academics just don’t play a role in the decision making in sports at all. It’s all about who can get the most money. And it seems the athletic departments now hold more power than any other group at a school. At this point it’s a pissing contest as the television revenues are already through the roof. The quality of education one gets at said school just doesn’t matter.

That bothers me more than football calling the shots for the other sports. And I understand that football is able to subsidize the other sports for most conferences. But what conference one is in should be secondary to all other things. TV rights should be tertiary, or non-existent.

The “business of college sports” shouldn’t return 1.2 billion results in a Google search. It’s great that college football is slowly moving to a system that brings about more tournament-like play, but now everyone is just making a grab for cash. One would hope amateur sports was about to enter a renaissance, but it’s looking more like the same “greed first, grades second” we’ve had for a couple of decades.

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Pro Bono Before Going Pro

The Weakonomist — Tue, 22 May 2012 15:20:10 +0000

The state of New York is about to start requiring any attorney put in 50 hours of pro bono work before being admitted to the bar. Many in the state are cheering this new rule thinking it will help many of the underprivileged have access to legal expertise. The hope is that young attorneys will at least be humbled by the experience, and at best make pro bono work a part of the rest of their career.

Yeah, that’s just who I want helping me out with my legal problems. A guy who technically isn’t even a lawyer yet and has absolutely no experience. Experts believe there has been a huge disconnect between the learnings in the classroom and what goes on after passing the bar.

Isn’t that what an internship is for? Is the legal profession the only one that doesn’t build internships into their graduation requirements? Both the Sheconomist and myself were saved from careers we would have hated thanks to internships. I personally learned a lot and it was still helpful in my eventual field so the benefits of internships are huge. Have law schools not figured this out yet? I find that truly hard to believe.

New York could really do something better than requiring 50 hours from someone that is not technically a lawyer. How about requiring 50 in their first year, but after they pass the bar? If you really want to ingrain the idea of helping others, require hours every year for the first five years.

But really, does the state actually think that forced labor before taking the bar is the best way to go? Will that make more lawyers want to volunteer time later in their careers? Unlikely. How about instead of forced servitude offering a trade of services? Wave the application or exam fee for anyone that puts in 50 hours of pro bono. It’s hardly worth their time mathematically but a well designed program would make the pro bono work also beneficial to a young attorney’s career.

Lawyers are already having a tough enough time finding work because there just aren’t enough jobs out there. A hungry law school grad might take advantage of the program to get a free shot at being accepted to the NY state bar.

One has to admire the state for trying something new that furthers education and helps the underprivileged get access to some level of legal expertise. But this might be the worst way they could have actually done it.

Read: New York State’s Pro Bono Requirement a Step In the Right Direction

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The Three Biggest Campaign Issues No One Will Talk About

The Weakonomist — Mon, 21 May 2012 14:27:20 +0000

In just a few weeks the presidential campaigns will kick into a higher gear and we’ll have more media coverage than anyone cares to actually be exposed to. Already the ads have started. Obama is all over my Pandora stations and anti-Obama PACs are on the TV. But things are only going to get worse.

And the only thing anyone will be talking about is the economy. I’ve already talked about why that shouldn’t matter at all and what kind of economic situation we’d need to be in for the campaigns to even matter. Though those conversations will undoubtedly dominate headlines (along with unimportant things about Romney’s past and misrepresented statements from Obama’s 2008 campaign), there are some real issues that no one is ever going to talk about.

There are certainly more than three, but these are the concerns I have the most:

Campaign reform and term limits

Politics took a few steps back in progress when PACs were suddenly allowed to collect unlimited amounts of money from anyone, including corporations. We will see in the presidential campaign that tons of money will be spent with likely no measurable improvement in either candidate’s odds of winning. But local elections, and Congressional ones can be heavily influenced now by one individual’s checkbook. Worse though is the continued pandering to donors that our Congressional representatives continue to do. Planet Money has a good profile of how much time is wasted on this process. Part of the problem could be fixed with reforms to the campaigning process but what is really needed are term limits. If our elected officials didn’t spend all their time worrying about getting reelected, they might for once represent the interest of their population.

Odds of this becoming a real issue: 1/100

Education

At the macro level our education system looks to be in good shape. We have some of the best schools in the world. People come from all over the world the study in the US not only due to our economic strength, but because of the quality of education that can be obtained here. Things aren’t so great everywhere though. We’ve got schools being dishonest about graduation rates and salaries. They’re saddling students with a huge debt burden and the schools carry none of the risk of their students being able to pay it off. Public schools are facing huge cuts in the midst of state budget crises. And all the while we’re graduating fewer scientists and engineers than we should be for a nation teetering on the peak of its prosperity. For now, a college degree is still worth the time if you’re smart about where and what you study. But how long will that be? The education system from K-PhD is in need of an overhaul on an Obamacare scale. But who will touch it?

Odds of this becoming a real issue: 1/80

Foreign policy

We like to say Romney has no foreign policy experience. But that’s as far as the conversation goes. When the media starts talking about foreign policy all they really mean is Israel and the wars. Campaigners just shift the conversation from there to defense spending and everyone forgets that will are still playing world police. Not only are we still engaged in two conflicts, but our friends in Israel want to use the multi-billions we’re giving them to pick a fight with Iranians (who are kind of asking for it to make things worse). All the while our president is slowly shifting our military resources to Asia instead of truly scaling it down. Why is it that no politician will stand up and say, “the reason the most of the developing world hates us is because we keep meddling in their business?” We don’t have to be isolationists, but we’re viewed in many parts of the world as war mongers. Foreign policy isn’t just about conflict, but because this has only ever been a superficial issue even in non-election years no one knows anything about it.

Odds of this becoming a real issue: 1/50

Based on the odds, none of these issues will be actual points of contention in presidential campaigns or even your local representative’s elections. But they should be. The media plays a crucial role in making sure we talk about these issues and others like tax reform (not tax increases, real reform) and what role government should play in the economy. We aren’t framing conversations this way though. Why? Because even our very own populous doesn’t care about them. But if we could show them how these issue do affect the individual citizen, you would probably see them start to care a lot more.

Don’t get your hopes up though. Instead, expect an economic pissing match, stupid stories about how much someone’s shirt cost (she ain’t alone people), and some kind of lousy story about how both of them went Harvard Law. You know, things that matter.

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Black Comedy

The Weakonomist — Sat, 19 May 2012 15:01:53 +0000

The Weakonomist is about as white as drywall. But I’ve said many times before that I was raised in a household and time where race really didn’t make much of a difference. No more than hair color or gender. It’s all indifference. There were people I didn’t like that happened to be of other races, but it was because of their individual actions. I can’t fathom having any true feelings about a population based on generalizations.

But not everyone was fortunate to grow up in such a world. Many people who didn’t are still very much around today. So it’s easy for me to forget about the struggles that many people have been through. Most notably, what African Americans went through in the decades (and centuries) before I was born.

I don’t care much for artistic expression of ideas. Art can depict all kinds of things but as someone that thinks like an economist I tend to prefer the concrete. The literal. That’s why I love stand-up comedy. It can approach issues of all kinds in a literal sense while still being artistic and entertaining.

This week I was introduced to a documentary about black comedy as told by the comedians themselves. In it they point out that many comedians address the issues of their time through comedy. One of my personal favorite comedians is Chris Rock. Without knowing the struggles of black people personally I can only assume Chris Rock’s bit on “Niggas Vs. Black People” (that is the official title, not my words) is somewhat representative of what the documentary is talking about. You can watch him here but I didn’t imbed the video because the jokes are not suitable for children (like children are reading this) nor entirely relevant to the point of this post.

I haven’t gotten a chance to watch the documentary myself but hope to soon. You can read a review of it here and watch the trailer below.

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The Downside To Great Gas Mileage

The Weakonomist — Fri, 18 May 2012 14:10:02 +0000

Between gas prices and government regulation, fuel economy on vehicles has started to climb significantly. Manufacturers fought the regulation, but now they aren’t fighting consumer demand. When the recession hit people stopped buying new cars. There’s now pent up demand as consumers are tired of paying for repairs and dealing with crappy mileage. Millions either now have jobs or at least feel better about the ones they have. As a result, the automotive industry is now doing so well both Obama and Romney are taking credit.

Fuel consumption is falling not only thanks to vehicle efficiency, but also thanks to consumers driving less too. Below is a chart showing the average amount of miles we travel each year per person. Not only has this been falling per capita, but it’s also been falling on a gross scale too.

This is all great news for our wallets, technology, and the environment. But there’s no such thing is a perfect outcome, and better fuel economy is no different.

Think about what you do when you’re in your car. You drive, mess with your phone, flip bad drivers off ignoring your own bad driving, curse the radio for too many commercials, and sit at lights. But you’re also wearing down the roads, and clogging them up. Even with a reduction in driving, we still need new roads and existing ones have to be repaired. A lot of the funding from those roads comes from taxes on gasoline sales. And if we’re buying less gas for a number of reasons, we’re paying less into the fund that pays for the roads.

So we’re left with a couple of options. The easiest one is to just increase the tax on gasoline. But unless the cost of making roads has dropped considerably, consumers are going to lose the savings from better fuel economy to higher taxes.

There may be better ways. We could charge taxes based on your miles driven. Gas taxes attempt to do this at the pump, but that’s really a tax on how long your motor is running. And that’s different than how many miles you drive.

Whatever way we raise money is up for debate. But that is a debate that needs to occur soon before our roads start to become a problem.

Read: New CAFE rules and a stagnant gas tax mean big deficits for infrastructure

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When The Next Too Big To Fail, Fails

The Weakonomist — Thu, 17 May 2012 14:21:10 +0000

One of the issues with the financial crisis was a government that wasn’t sure what to do with failing companies. When a company failed they could either let it go into bankruptcy or bail it out. Some were allowed to fail, and that created a panic that the system would lock up. So most were bailed out to preserve the integrity of the financial system. Whether that was the right choice is a matter of debate, but that’s what happened.

Financial regulation in 2010 sought to make this process a little easier if there was a next time. Agencies were given new powers they’re now getting around to figuring out how to use them.

One of the most powerful agencies is the FDIC, which insures the deposits of banks. If a bank runs out of cash to pay depositors, the FDIC comes in with fresh cash and takes over the bank. Their new system is a bit of corporate trickery, but I’m pretty sure you can keep up.

Most banks operate as holding companies. So a corporate entity owns a collective of businesses that look like one company to the customer. It’s the corporate entity the FDIC will take over. The individual businesses that aren’t broken will be allowed to continue to operate. This keeps the financial system intact. If those businesses need money, the FDIC is allowed to borrow funds from the Treasury.

Stockholders in the parent company will be given nothing. As per corporate law anyway, they should lose their money. Anyone that lent the bank money will exchange the debt for equity (ownership) in a new private company. Presumably, the new private company will include the functioning businesses, the sick businesses will be bankrupted.

This sounds relatively easy on paper, but in practice it could be a nightmare. In fact, some don’t think the FDIC could pull it off. Many expect it would be too hard and they’d just do another bailout. In the old style bailout the government will just lend the company the money directly and help them work through the issues. Stockholders will get hurt, but they may not be wiped out.

It is very complicated though. Stockholders in the failing company may fail themselves if the value of their stock goes to zero. A panic may still occur. But the goal of the new process is to keep the functional units functioning, therefore preserving the banking system. While the plan might not work, it’s better than not having a plan in place at all.

What regulators will have to keep in mind is that nothing ever goes to plan. The unexpected will occur and so they must be prepared to be flexible and adaptable. Hopefully, we’ll never need it.

Read: Avoiding the Next Big Bailout

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Open Letter To The Finite Physicist

The Weakonomist — Wed, 16 May 2012 14:39:14 +0000

Dr Murphy;

I just finished reading your post on your dinner with an unnamed accomplished economist. One must admire your success in getting an economist to talk in circles. But it isn’t really all that difficult as you’re applying legitimate scientific thinking to a subject that is in fact not a science.

Economists try to say their art is a science by applying two very common themes to their work: laws and controlled experiments.

Laws: In physics, there is the well understood law of gravity. Every objects attracts other objects at a rate proportional to their masses or something. This law has helped govern and expand our understanding of physics for hundreds of years.

Economic Laws: The most basic economic concepts are still hotly debated. Is gold a currency? What caused the Great Depression? How do you tax pollution? What is the right measure of the economy? GDP, which is a common topic in your discussion with the economist, isn’t even universally agreed upon as the best measure for the economy. See happiness. There are no laws at which understanding can be furthered. Economics in 2012 is where physics was before Newton was walking. How long did it take for us to understand physics enough from that point to fly even a hundred feet? We can observe economic concepts in markets, but they are rarely consistent and nearly impossible to predict. Thankfully gravity is.

Controlled Experiments: In all manners of science, we are able to further our understanding by conducting controlled experiments. We can isolate almost every variable and change only one to observe the change. These observations have given us cancer-beating drugs, astronauts, electric cars, and the glass your reading this on.

Economic Experiments: Macroeconomists can’t experiment at all. They can only observe the real environment and report. When asked for advice or input they propose solutions “ceteris paribus”. Ceteris paribus is what real scientists do in a lab. But economists can’t hold all other factors equal when talking about solutions to a broken market. Markets are driven by people. At this point in our understanding of people there are too many factors at play to control all of them. So sure, if you control for every other aspect of the economy, you can improve it by having government spend more. But we really don’t know what every other aspect of the economy is.

Even though you have no formal training in economics it’s clear from your story you have a well enough understanding of it. So it was very disappointing that simply for the sake of conversation you limited the capacity for humanity to grow to the confines of the planet. While the pace of space exploration has certainly slowed, to even hypothetically chat about how we’ll be living in 400 years without including at least gathering resources from space is fruitless. Much less live in places other than Earth. No one was enriched by this conversation.

But the biggest problem with your conversation is that neither of you were willing to talk about the possibility of new understanding of your respective fields. Only after the conversation ends and you have time to reflect do you start to get to where some of us already are. I’ve already talked about our limited understanding of economics. But does anyone in your field ever talk about the thought of having it all wrong? Perhaps we can travel 300,000,000 m/s through normal space. To quote Scotty from the most recent Star Trek film: “Imagine that! It never occurred to me to think of space as the thing that was moving!” Our understanding of things could change.

While on the concept of science fiction, there are some things about economics that can be learned from Star Trek and Star Wars. The Star Trek universe had largely given up money. In such a hypothetical situation how would we measure the economy? Likewise, the Star Wars universe spans thousands of years without any significant change in technology or energy usage. The powerful were simply the ones that could gather the most resources and influence the most people. Again, how do we measure economy there?

The concept of unlimited growth is merely a way for economists to frame their limited understanding of their “science”. If GDP is ever constrained by the physical limits of growth they are likely to achieve some new understanding of economy. But that has not occurred yet. Until then, or until an economics Einstein comes along, the concept of unlimited growth is as sound as the speed of light. It provides a constant for which they can expand their knowledge.

Economics is not a mature field. Nor is it sophisticated. But they are trying. To apply real scientific logic to something that at this point, for the sake of argument, is an art, leaves a taste of snobbery in my mouth that was evidenced all over your post. At the very least you should disclose who the economist was, so they can confirm the events of your article, or perhaps offer a more well thought out response.

I am no fan of any economist (or politician) that thinks they actually understand the economy enough to explain how one action will result in a specific opposite reaction in a market. I prefer to look at economics the way we do psychology. We’re only beginning to understand how the brain works and apply real scientific methods to understanding it. But no one is trying to break psychology because physics and biology can’t explain where the soul comes from. This would have been a much more interesting starting point for your conversation I think.

Please continue to poke holes in economics where you see a chance, it’s enlightening to see those outside the field take an interest. But if you want to add real value do it within the confines of the discipline, not by applying another one to it.

Exponentially,

The Weakonomist

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Six Things The Bachelorette Can Teach Us About Money

The Weakonomist — Tue, 15 May 2012 14:15:27 +0000

Being married to the fairer sex, one often finds themselves watching television shows that don’t normally show up on their radar in order to spend quality time with said partner. Funny, as when Star Wars comes on I find myself quickly alone in the room. Marriage is about sacrifices though and so last night I sat through 90 minutes of what I can only imagine the CIA refers to as water-boarding.

But that doesn’t mean I can’t exploit my discomfort to find some pop-culture references that can be tied into something for this blog. Usually, I prefer to do these lists with things I actually like (see below), but I can make an exception.

So what can a reality show that by its very nature defies the statistics behind matchmaking teach us about money? Just see:

If something is profitable, make more: And it doesn’t have to be good, it just has to make money. This is really what The Bachelor and The Bachelorette have always been about. Television and movie producers will happily take concept and run it into the ground. Not only have the original shows had many seasons, but offshoots of the concept like Joe Schmo, Joe Millionaire, and Flavor of Love and more have also had varying degrees of success. It doesn’t have to be good, it doesn’t even have to be a success based on the fake premise of one person finding love among dozens of members of the opposite sex. It just needs to be entertaining. This model isn’t limited to TV. We see this in toys, video games, and just about any form of entertainment because product and content executives really have no idea what will work until it’s in front of the people.

Nothing is safe, there are no guarantees: On The Bachelorette one beautiful woman is given 25 guys that will try to court her. Through a long and drawn out process of elimination she will get the group down to just one and then that one must choose to be with her or not. Many times the show ends with the two engaged or at least caught up in a fairy-tale style romance. The reality is that the couples don’t normally last. This is easily evidenced by the fact the current bachelorette won on the last bachelor and then they broke up. The same thing of course applies to our finances. No investment is perfectly safe. Any investment, even the cash in your bank account could go away. Most people assume their money is always safe because that’s how it’s pitched by bankers and investment advisors. Investments and cash are much safer than a relationship formed on a reality show, but by its very nature money is never safe. Even under your mattress.

There’s always enough idiots to fall for a scam: The financial crisis exposed Bernie Madoff’s ponzi scheme and since then government agencies have cracked down on dozens of other investment scams. But there will always be enough morons to fall for the next one. Just like there will always be enough potato-brained viewers to buy into the premise of The Bachelorette. Keep in mind, the premise is that 25 guys would all magically like the same girl and compete for her love. The only place that’s reality is China. But like an investment scam, to get viewers the show sells the idea that something that is too good to be true is actually true.

Stick with the boring options: Advisors and bankers commonly convince their clients to put their money in products they don’t understand. But they look interesting and have all the bells and whistles. On the show the best person for the man or woman is likely the most boring contestant. The one that doesn’t cause trouble and stays out of the way of the other suitors. The one that doesn’t do cheesy things to get attention of viewers or the opposite sex they’re courting. But those people aren’t entertaining, and don’t last long on the show. It was clear in the premier who the producers of the show like, and they will somehow last much longer than the view would expect because they’re fun to watch. Stick with boring investments that are easy to understand, they’re the only ones that will still be around when you’re old and grey.

Past performance is not an indication of future returns: We see this all the time on the documentation you receive about mutual funds. They must disclose this in the marketing materials because those materials contain nothing but carefully framed charts showing their past performance. It’s good they must disclose this. On The Bachelor this is not disclosed, but it is implied in the premise. The show’s track record for successful relationships is actually terrible. The simple fact that they bring back someone that was matched in a prior season is enough. This year the beauty has a kid too. I’m sure that kind of baggage will certainly get the guy to stick around after he wins.

People will do what their incentives tell them to do: On the show, every person has an incentive to win. Winning gets you celebrity status for at least a short time. If you can “win” you can parlay that into a career in Hollywood regardless of your relationship status. The winning couple can make quite a bit of money in endorsements and other celebrity related goodies. So is this really about love? Love of money perhaps. Pretending to love a pretty girl long enough to get there is a small price to pay. This is exactly the same problem we have everywhere in the world: politics, business, school, sports. People have various incentives and they may not be perfectly aligned with the intent of their position. This is why we are constantly disappointed but really shouldn’t be surprised when these people do something bad that lines their pockets.

There is much to learn in the world of television. Look all around you and try to learn lessons from other peoples mistakes.

Other “Six Things Can Teach Us About Money” Posts:
Star Wars
The Ferengi
James Bond
World Cup
March Madness

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The Magic Number For A Robamney Fight

The Weakonomist — Mon, 14 May 2012 11:15:45 +0000

This is the line drawn in the sand. If the American economy averages about 175,000 news jobs a month then Obama should win the election. If it’s below 100,000 jobs a month then Romney is moving in. Anything else in between then we have a fight.

That is at least according to some analysis by the NY Times:

“Historically, nothing — not social issues, campaign advertisements or gaffes — has influenced voters more heavily than the direction of the economy in an election year. In only three races since World War II has the outcome been different from what the economy’s direction would have suggested: 1952 (when the popular Dwight D. Eisenhower was running), 1968 (when the Vietnam War hobbled the Democrats) and 1976 (when Watergate hobbled the Republicans).”

In the absence any kind of scandal against a party, this looks like a race that comes down to jobs. And last month the economy added only 115,000 jobs. But the 6 months prior averaged almost 200,000.

This should be interesting then.

But it’s also sad. I’ve talked before about how candidates play games with economics. When it suits them, they will take credit for something in the economy. When it doesn’t, they won’t or their opponent will use it as an attack point. The reality is the role of the president in the economy is marginal at best. Even if a president put in different policies, there is no guarantee they would have been more effective.

No one really knows what the magic button is for jobs. But any candidate with a good smile (and both do) can convince you their policies did or would work.

The fact that the economy plays such a role in our elections is disappointing. Who was president really doesn’t matter. But in an election where the media is more focused on alleged high school bullying than a campaigner’s actual stance on issues tell us all we need to know about how rational voters will be come November anyway.

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