The "Obama the Fiscal Conservative" Fairy Tale

I grew up during interesting times in Turkey. I remember one of the frequent black-outs. We were in a room, dimly lit by a couple of candles and a gas lamp, watching a battery powered 4 inch black & white TV. My father had bought the TV on his way back from a couple of months of forced extra stay in Iran during the worst part of the revolution. The then prime minister Süleyman Demirel was on TV, declaring that Turkey's energy crisis had been solved, and there were no more black-outs. Of course, what made it even more interesting was the fact that we lived practically next door to his house, and knew there was no power there either.

It takes a special person to be able to look straight into cameras, and say something that he knows to be untrue, with firm conviction. I grew up listening to such people. A few years later, it was the leader of the 1980 military coup, Kenan Evren we had to watch on TV when he variously attributed the blackouts to housewives watching day time soap operas while they ironed (can't they learn to do one thing at a time?!), communists in Bulgaria, or greedy businessmen who tried to produce too much. … There might have been more reasons, I've forgotten more than I care to think about.

And, now, we have a very special president of the United States.

Ex-senior Lecturer now-President Mr. Obama claims to have been fiscally conservative because, during his term, the average growth rate of federal spending was low. As support, he uses a claim advanced by an appropriately named Rex Nutting, that people think President Obama has spent like a drunken sailor in part because of a fundamental misunderstanding of the federal budget.

Well, Rex, there is no misunderstanding of the federal budget. We understand that the argument is not about the "budget" itself.

True, Obama's term started well into the budget for the fiscal year 2009 (which ran between October 1, 2008 and September 30, 2009). But that is irrelevant. We know that the President owns the stimulus, and he voted for all the crap that came before it. The President embraces "too big to fail".

The FY2009 budget, TARP, and other assorted spending measures, were passed by a Democratic House and Senate (remember the 2006 elections, where the Democrats took control of both houses of Congress, and maintained their position until the 2010 elections). Then Senator Obama was a willing participant in those shenanigans at the time.

The problem Nutting & Obama have is that we do not care who did what. We were against the rescues, bail-outs, shovels, and the rest at the time even as the so-called Stimulus was proposed and defended by the President and passed by Democratic majorities in the House and the Senate.

We realize that the biggest problems we face are the spending commitments and promises made by this president, and his Democrat accomplices who passed ObamaCare.

We realize that, under the guise of taxing the rich, the President and his allies would have no qualms about imposing the huge burden of a cradle-to-grave welfare society on everyone.

We also realize that the Democrat Senate has not passed a budget in a long time.

Finally, we realize that a budget is an accounting document, and even without it, the Federal Government has continued to spend way more than we think is sustainable. So, let's look at actual Federal Spending, rather than these fictional budgets, using data provided by the Bureau of Economic Analysis:

The chart above shows federal spending (from the National Income Accounts rather than the political document that is the budget) by quarters since 2001. The first thing you notice is that there is an upward trend. The second thing you notice is the big jump in the second quarter of 2009. That is 9.23% increase from the first quarter of 2009, and a 10.8% increase compared to the same quarter in the previous year. By that time, President Obama was comfortably in office, surrounded by a House and Senate with Democrat majorities.

The events during the last few months of the Bush administration, and the opening salvo of the Obama administration sparked the Tea Party movement, which resulted in the current Republican majority in the House following the 2010 elections. Of course, controlling one house of the Congress is not the same thing as running the show, but, if you squint, you might notice that there has been a slight slowdown in the pace of federal spending: Federal spending during the first quarter of 2012 is about half a percent lower than spending in the first quarter of 2011, and 1.2% lower than spending in the fourth quarter of 2010.

However, federal spending during the first quarter of 2012 was still 22.5% higher than spending during the first quarter of 2008.

Nutting & Obama want us to think that Mr. Obama did not want this increase but his hands were tied by a budget that was passed during the Bush administration. First, Mr. Obama was part of the Congress with Democrat majorities in both houses when that FY2009 budget was passed, and, second, he had all the power, with freshly expanded Democrat majorities, following his inauguration, to put a stop to those spending plans if he did not agree with them. Instead, he pushed the Stimulus down our throats.

Remember that.

Note: This post has been updated to fix some typos and grammatical errors.

Was Facebook's IPO a flop?

So, Facebook's share price started at $38 and ended at $38.23. Some reporters seem to think that the fact that the shares did not end up selling for much higher than the initial offering price means the IPO was a flop.

They're missing the point.

The IPO is a way for people who invested in Facebook, i.e. dedicated resources to an activity with uncertain reward, to recover their investment.

Of course, they want the highest possible return for what they put in.

If, say, the initial offering price had been chosen as $30, and the share price had ended up at $38.23 by the end of the day, the people who made Facebook what it is would have only received about 80% of what other people thought Facebook is worth.

That is, they would have left money on the table.

The purpose of the IPO is to maximize the returns to the pre-IPO owners of the venture. Not for people who get in on the IPO early on to turn around and make a quick buck.

The people who took the risk have now spread the risk to many other new owners of the firm.

A share in a firm gives you a claim to the net present value of the profits of the firm from now until eternity. That is, the value of the firm is the net present value of the stream of profits it will generate.

If you multiply the current share price by the number of shares outstanding, you get something like $105 billion. Facebook currently has about 900 million active users. Can it make $117 in profit from each of those users from now until the end of eternity?

On the one hand, there are vast untapped markets of connectivity.

On the other hand, there is the coming period of world wide conflict and economic strife.

Now to mention, a-hem, lessons from MySpace.

Who knows?

That's the point of the stock market. The stock price aggregates the beliefs of many individuals regarding the profitability of a firm into a single measure, its stock price.

Is Jay Leno coordinating with Obama's re-election campaign?

So, first, some people get all up in arms, claiming Mitt Romney hurt some kids feelings 50 years ago.

Now, Jay Leno has a "Mitt Romney prank of the day" every night. I am assuming they'll continue this so long as they can find examples of mean things they can ascribe to Romney.

What bothers me is not that he is doing this. It's the fact that he thinks he should be able to campaign as much as he wants using GE's corporate resources on behalf of Obama, but the fact that there is something horrible going on if some other people get together, form a corporation and actually support an alternative to the current administration.

People like Jay Leno, people who've made millions based on their speech, ought to be able to restrain themselves from advocating restrictions on other people's political speech.

Economists understand economics

Just noticed an article that completely misrepresents the ongoing argument. The title of the article is Even Economists Can't Decide The Cause of High Unemployment.

On one side of the argument are Ben Bernanke, Janet Yellen, Paul Krugman. It is disingenuous to refer to these people as "economists" at this point. They are the architects of the current situation, and they are engaged in a propaganda effort.

Their livelihoods, just like the livelihoods of many others who try to spread around non-sense about aggregate demand, depend critically on the citizens believing economists are like car mechanics.

They simply are not.

Hayek explained this a long time ago, and when he finally won his well deserved Nobel prize in economics after Keynesian economists gave us the stagflation of the 70s, he put it in these easy to understand terms.

The reasoning is simple, but it requires economists and politicians to admit that they cannot ever possess the informational and computational resources required to fine-tune the economy.

First, we understand fairly well how demand for and supply of labor respond to wages and prices to bring about equilibrium in the labor market. We know what factors affect people's preferences and choices, and what factors affect firms' desire to hire them. We have indeed good reason to believe that unemployment indicates that the structure of relative prices and wages has been distorted (usually by monopolistic or governmental price fixing), and that to restore equality between the demand and the supply of labour in all sectors changes of relative prices and some transfers of labour will be necessary.

but we never know what the particular prices or wages are which would exist if the market were to bring about such an equilibrium. (emphasis mine)

The situation here is no different than the chewing gum market. In the absence of a free market, no set of economists would be able to sit down and figure out the right amount and variety of chewing gum to be produced and at what price they should be offered for sale in every grocery store, supermarket, and gas station in the world.

Why should we assume they know the right amount of subsidies and taxes that will bring down the unemployment rate and bring up the growth rate?

the chief point was already seen by those remarkable anticipators of modern economics, the Spanish schoolmen of the sixteenth century, who emphasized that what they called pretium mathematicum, the mathematical price, depended on so many particular circumstances that it could never be known to man but was known only to God.

There may be few instances in which the superstition that only measurable magnitudes can be important has done positive harm in the economic field: but the present inflation and employment problems are a very serious one. Its effect has been that what is probably the true cause of extensive unemployment has been disregarded by the scientistically minded majority of economists, because its operation could not be confirmed by directly observable relations between measurable magnitudes, and that an almost exclusive concentration on quantitatively measurable surface phenomena has produced a policy which has made matters worse.

The same kind of superstitious faith in the ability of economists to calculate the right stimuli to bring about economic conditions beneficial to their political masters exists today as it did in the decades leading up to the stagflation of the 70s.

Hayek's main advice bears repeating:

He will therefore have to use what knowledge he can achieve, not to shape the results as the craftsman shapes his handiwork, but rather to cultivate a growth by providing the appropriate environment, in the manner in which the gardener does this for his plants. … The recognition of the insuperable limits to his knowledge ought indeed to teach the student of society a lesson of humility which should guard him against becoming an accomplice in men's fatal striving to control society - a striving which makes him not only a tyrant over his fellows, but which may well make him the destroyer of a civilization which no brain has designed but which has grown from the free efforts of millions of individuals. (emphasis mine)

These clowns only have power if you're willing to give it to them by believing their fairy tales. No one can tune an economy the way they can tune a car: You and I are the economy, it is not some engineering wonder. It is the sum total of all of the interactions of the preferences and constraints of billions upon billions of people.

The president's belief in the magical powers of a Bernanke or Krugman would be funny if their actions did not have tragic consequences for the rest of us.

Too big to fail is a government invention

There is no reason for anyone other than the owners (that is, shareholders) of JP Morgan to care one bit about the losses at the bank.

But, as usual, Mr. President has inserted himself into the situation, by saying:

Obama questioned whether a weaker bank might have required government help in the same circumstances. That’s why Wall Street reform is so important, he said.

There are so many hidden assumptions in that one snippet that it's worth going through them.

Obama assumes: Weaker banks need government help to stay in business.

Bogus. Badly managed banks whose fates depend on everything always going to plan ought to go bust.

The government must not, either implicitly or explicitly, insure the customers of banks because doing so removes the incentive to pay attention to where they're putting their money.

The government must not, implicitly or explicitly, insure lenders to banks because doing so is the same as insuring my loan to the friendly neighborhood crack dealer.

The government must not, either implicitly or explicitly, insure shareholders of banks because doing so means the owners do not monitor the employees adequately during good times leading to bad outcomes when one little thing goes wrong.

The government and the federal reserve must be able to step in, and facilitate orderly dismantling of banks and other financial institutions, but do it according to a pre-established set of principled rules, not in the ad hoc manner in which Bernanke, Paulson, and Geithner handled the 2008 crises.

Obama assumes: Congress can set rules, and bureaucrats can apply such rules, so that no bank ever goes bust.

Creating the impression that mistakes and losses are somehow an aberration to the functioning of a free market economy, and the expectation that somehow the government can make the consequences of every stupid action is more dangerous than any derivatives trade any quant can play with.

Neither politicians nor bureaucrats are capable enough to understand, let along play, the games played in financial markets. The more rules there are, the more profitable it is to find ways they can be exploited in unintended ways while enjoying the insurance provided by the rest of us.

This is a charade. There is nothing wrong with trying to take advantage of modern financial tools. What makes the situation potentially catastrophic is the message that government consistently sends to customers, lenders, and shareholders of these financial institutions: Do anything you want. We'll make sure to confiscate other citizens' livelihoods to save your bottom.

Too big to fail, therefore, is a political invention. It can only be useful to politicians and their buddies so long as you believe in the boogeymen with which the politicians are trying to scare you. You might have to brace for impact occasionally, but the world won't end if big banks declare bankruptcy or if some borrowers have to move from their fancy houses to rental apartments.

The politicians will only be able to keep on exploiting us if we believe them when they yell "fire" in a crowded theater.

Support for same sex unions hasn't grown during Obama's first term

Journalists do the darnedest things with statistics.

There is a story titled Poll: Most Americans support same-sex unions on CBSNews.com today.

Mr. Reals comes up with that conclusion by lumping together the two categories, 1) Same sex couples should be allowed to marry; and 2) Same sex couples should be allowed civil unions, and noting that the sum of those proportions exceeds the proportion of respondents who say same sex couples should have no legal recognition.

If you look at things that way, it's hard to see what the story is. The following picture of a table Mr. Reals includes in his post indicates that those who oppose any legal recognition of same sex couples were outnumbered even back in 2004.

Anyone who actually paid attention in Intro Stats knows that the point estimates matter very little. What matters is whether the change can be explained by chance or not.

Given that all surveys mentioned in the table seem to have used simple random sampling, we can assume they were independent of each other. The CBS article mentions that the number of respondents to the current survey was 615. We are not given any information indicating the number of respondents to the March 2009 survey which was conducted right after President Obama took office. So, absent any further information, I am going to assume the sample sizes were the same in March 2009 and the most recent survey.

If you have some basic arithmetic ability, you can apply the formula for the pooled two-proportion z-test on this Wikipedia page.

In keeping with standard statistics (the kind that allow Mr. Reals to say things like The error due to sampling for results based on the entire sample could be plus or minus four percentage points. The margin of error for the sample of registered voters is four percentage points. The error for subgroups is higher), we have:

H₀: P₂₀₀₉ = P₂₀₁₂
H_A: P₂₀₀₉ < P₂₀₁₂

In words, the null hypothesis states that there is no difference between the proportion of the population supporting same sex unions marriage between 2009 and 2012. We are testing against the alternative that the proportion of the population supporting same sex unions increased during President Obama's first term.

If the difference between the two poll results is such that the chances of it being produced due to random sampling variation from a population with a given, constant proportion are low enough, we'll reject the null in favor of the alternative.

Now, by Mr. Reals' definition, the support for same sex unions was 60% in March 2009. In the most recent survey cited by Mr. Reals, the support was 62%. That is, the numerator for the test statistic, i.e. P₂₀₁₂ – P₂₀₀₉, is 0.02; 2 percentage points.

The standard error of the difference is:

Therefore, the test statistic is z^☆ = 1.44.

The right tail probability of the standard normal distribution for z^☆ = 1.44, i.e. the p-value of our one tailed test, is 7.5% which is greater than α = 5%.

That is, we failed to reject the null hypothesis that there is no difference in the proportion of support for same sex unions; i.e. there is no statistically significant difference between the support for same sex unions between March 2009 and now.

That doesn't mean there are no differences between then and now.

One subtle but interesting difference is in the number of respondents who are not in any of the categories mentioned in Mr. Reals' story. In 2006, the three categories added up to 97%. In the most recent poll, they added up to 95%. Considering that 90 million votes were cast in the 2010 midterm elections, that 2% represents a non-negligible number of voters, depending on their geographic distribution.

In the mean time, the important thing in the poll is that, over time, while the proportion of those who want some legal recognition of same sex unions has remained somewhat constant, the composition within that group has changed in favor of conferring marriage rights. However, 38% is still not "most," and, in this case, the Mr. Reals' desire to proclaim "Most Americans support same-sex unions" has caused him to neglect the more important story.

No you can't; now eat your greens!

President Obama's To-do list for Congress

Mr. President's to-do list for Congress is almost as big a sham as the vegetable garden at the White House.

Here are the reasons:

1. Reward American Jobs, Eliminate Tax Incentives To Ship Jobs Overseas: Congress needs to attract and keep good jobs in the United States by passing legislation that gives companies a new 20 percent tax credit for the cost of moving their operations back to the U.S. and pay for it by eliminating tax incentives that allow companies to deduct the costs of moving their business abroad.

   Yeah, right, exactly what we need in the tax code. More special treatment for specific corporate actions.

   Instead, get out of the way. Ensure marginal tax rates are competitive with the rest of the world. Simplify the tax code for everyone.

   Otherwise, what you end up with is a lot of time and money sunk into extracting every special provision in the tax code. That does line the pockets of a bunch of accountants and lawyers, but produces nothing.

2. Cut Red Tape So Responsible Homeowners Can Refinance: Congress needs to pass legislation to cut red tape in the mortgage market so that responsible families who have been paying their mortgages on time can feel secure in their home by refinancing at today’s lower rates.

   The situation in the housing market has nothing to do with the red tape involved in re-financing mortgages.

   It has to do with the fact that no one believes the housing market has found a bottom in most areas. Instead, cut red tape so foreclosures can proceed at a fast clip, and the housing market finds a bottom, no matter how low it might go initially. Otherwise, we're going to be destined to live in this funk.

   Not one more cent to people who refuse to face the consequences of their financial decisions. Let me see, if their property were selling for three times as much as they owe now, would they cash in some equity and pay part of my mortgage? Diana Olick examines the so-called responsible homeowner myth better than I could ever hope to, so please do drop by and read her piece once you're done with my rant here ;-)

3. Invest in a New Hire Tax Credit For Small Businesses: Congress needs to invest in small businesses and jumpstart new hiring by passing legislation that gives a 10 percent income tax credit for firms that create new jobs or increase wages in 2012 and that extends 100 percent expensing in 2012 for all businesses.

   First, it probably costs close to $50,000/year to hire someone at a $30,000 annual salary. Business owners do not hire people to so they can sit around and watch them all they long: They hire workers if they believe the worker's output is worth more than what it costs to hire them. What is Mr. President talking about? Should the government pay everyone? Is he going to figure out how much each job is worth?

   Second, have you ever looked at what's involved in getting that 100 percent expensing deal if you're self-employed? More work for accountants and IRS agents. Instead, cut marginal rates, simplify the tax code.

4. Create Jobs By Investing In Affordable Clean Energy: Congress needs to help put America in control of its energy future by passing legislation that will extend the Production Tax Credit to support American jobs and manufacturing alongside an expansion of the 30 percent tax credit to investments in clean energy manufacturing (48C Advanced Energy Manufacturing Tax Credit)

   I am sorry, what part of NO MORE SPECIAL TREATMENT FOR YOUR FRIENDS do you not understand?

5. Put Returning Veterans to Work Using Skills Developed in the Military: Congress needs to honor our commitment to returning veterans by passing legislation that creates a Veterans Job Corps to help Afghanistan and Iraq veterans get jobs as cops, firefighters, and serving their communities.

   Why do you assume that returning veterans can only work as cops and firefighters? Or, are you only willing to support them if they are willing to become union members? There are veterans working in professions (in the fields of information technology, finance, theoretical physics etc) that require a lot of skill. Why do they need your Job Corps? Incidentally, what color will their uniforms be? Why not encourage them to run in local elections against liberal mayors who've committed years and decades of property tax revenue to benefit insatiable teachers' unions?

   Now, that would free up a lot of productive resources.

*Sigh*

I hurt somebody's feelings once

The line is from Ronin.

Is this the best the White House and their allies can come up with against Romney? Stop the presses! He might have hurt someone's feelings in high school!

I must admit, I have a hard time understanding what kind of mud they'll be able to throw on him come this fall. It seems like they've thrown everything including the kitchen sink in his direction. Do they really think they can keep this up for six months, or are they relying on macroeconometric models that project rosy growth and employment scenarios to make up for the lack of "content" in their arguments against Romney?

This summer will be tough one for the world. There is chaos, bloodshed, destruction, and lot of suffering in the cards. I know, Idiocracy was a funny movie, but living in it is not.

Reasoning about failure

One of my all time favorite books is Reasoning About Knowledge. No, it's not "easy reading" by any stretch of the imagination, but this post is not about the math.

On the first page of the third chapter, there is an Arabian proverb which I saw for the first time in this book:

There are four sorts of men:
He who knows not and knows not he knows not: he is a fool—shun him;
He who knows not and knows he knows not: he is simple—teach him;
He who knows and knows not he knows: he is asleep—wake him;
He who knows and knows he knows: he is wise—follow him.

Arabian proverb

President Obama decided to run before there ever was a financial crisis. His mind was already set that a bigger government that increasingly inserted itself in the middle of private decisions was necessary to restore fairness and spread wealth around. The crisis was just his excuse:

This is supposed to be a new era of bipartisanship, but this bill was written based on the wish list of every living — or dead — Democratic interest group. As Speaker Nancy Pelosi put it, "We won the election. We wrote the bill." So they did.

The president's basic argument during the campaign was that things were going badly because the Republicans, especially President Bush, were idiots. When Mr. Genius himself and his smart people took charge, everything would come up roses again. World peace and prosperity for all would flow from the detailed plans of the chosen people.

Well, reality had different ideas.

The President's current excuse for the current state of the economy is: I think we understood that it was bad, but we didn't know how bad it was.

So, Mr. Obama did not know how bad it was and he also did not know he did not know how bad it was.

Quite simply, he was a fool.

Now, most politicians are fools, so this is hardly a strong condemnation of him.

Yet, he claimed, very strongly, that he knew how to deal with the crisis and lead the country to better days.

He applied for the job with the job description staring him right in the face.

His foolish ways have left the U.S. economy in limbo, made the world less safe and stable, and created social instability.

In February 2008, there were 113.6 million people working in the U.S. In February 2012, that number was 108.9 million. Meanwhile, the government has accumulated many trillions of dollars more in debt and has grown without checks.

Hardly a ringing endorsement for you to vote for him again. That's why he and his supporters will talk about anything other than these real issues we're facing.

Is there hope for change?

John Cochrane talks about the Harvard Stimulus debate between John Taylor and Larry Summers. I cannot recommend Cochrane and Taylor's blogs enough. However, they're both more fun to read if you at least have a good understanding of intermediate micro and have taken one of those silly intro macro classes with ISLM curves.

Even if some of the terminology and references are not familiar to you, these economists have an ability to really get to the heart of the issue without obfuscating the argument with appeals to authority. As Taylor explains, you cannot evaluate whether the various stimuli we were hit with did anything beneficial using the very same models that generate them:

The problem with using these existing macro models to answer the question of this debate Did fiscal stimulus help the economy? is that they will simply repeat the same prediction story over and over again. You learn virtually nothing if you use the same models to evaluate the impact that you used to predict the impact

If tomorrow, real productive resources (not paper money) fell from the sky (similar to finding a new oil field, if you are allowed to get it out), of course, it would help the economy grow. But, stimulus is not manna from heaven, as Cochrane points out:

Stimulus has to be paid for. In evaluating stimulus for the whole economy, you have to count the loss of demand from the paying-for-it side equally with the raise in demand or employment from the spending-it side.

Back in 2009, when Mr. President was pushing stimuli, he said:

There is no disagreement that we need action by our government, a recovery plan that will help to jumpstart the economy.

President-Elect Barack Obama, JANUARY 9, 2009.

A lot of us economists took issue with that put our names on CATO's response.

Three years later, we are still listening to fairy tales of recovery.

There is a reason for this. It is one Keynesian economists ought to be familiar with, but somehow either ignore or don't fully comprehend. It's called expectations.

Simply put, groundbreaking research in Economics in the 60s and 70s showed that expectations matter and can nullify a planners well laid out input/output tables and macroeconometric estimates in a jiffy. Karl Shell and David Cass introduced the concept of sunspot equilibria where people's beliefs drive where the economy ends up. As Karl sums up: The current financial meltdown is largely financial and partly sunspot driven.

I agree with that statement, and the way I see it, the housing bubble was going to burst at some point no matter what. However, what happened afterwards has a lot to do with expectations and beliefs.

The best example I can give to explain my perspective is the Miracle on the Hudson.

The engines were out. The plane was not going to continue to fly indefinitely no matter what the pilot did.

Sure, Sully was a great pilot to be able to land the plane on the river. But, he was an even better leader because of the way he handled the crisis.

Can you imagine anyone would have survived the landing if Sully had gotten on the intercom and started listing all the things that could go wrong before, during, and following the emergency landing: People, we're probably all going to die. We have no engines, and I am trying to land on water. The slightest error, and the wings might shear off the body, and you might spill into the freezing Hudson river, the fuel on board might explode and you might all burn to a crisp. Even if I put the plane down on the water successfully, you don't have much time to escape. Run for your lives people, run for your lives!!!

He could have landed the plane just as safely as he did only to have the passengers die crushing each other to death and blocking the exits in a panic.

Instead, he said, brace for impact.

Unfortunately for us, George W. Bush was not that leader in early 2008. I can understand that. He did not have the intuitive understanding of how these things work. Not many people do. He trusted Paulson and Bernanke, who promptly proceeded to do exactly what Sully did not do. Told us that if they did not save Bear Stearns, we would be transported back to 1929.

Seizing on an opportunity in an election year, opportunists of all sorts filled the field. Democrat candidates started pumping full crisis propaganda. Mr. Obama's future treasury secretary, "Turbo Tim" was managing the crisis in New York. It was full on we're all going to die mode.

Instead of a simple brace for impact.

And, then, managing the impact.

This panic was seized upon by Mr. Obama as a tool to push his agenda. I have to grow the Federal Government to control every minute detail of your lives, because, if you don't let me do that, we're all going to crash and burn was the message.

In response to today's disappointing job numbers, Reuters mentions that:

Fed Chairman Ben Bernanke said last month the central bank is providing enough support for the economy but kept open the possibility of a further round of bond purchases to push interest rates lower should the economy weaken.

We're beyond fiddling with interest rates. We're at the point where the only thing that will prevent the U.S. from recreating Japan's Lost Decades here is an actual shift in expectations. We (rationally) expect inflation. We (rationally) expect higher and higher tax rates. We (rationally) expect greater and greater intrusion into our lives. Some (rationally) expect not to have to work to feed the children they create. Some (rationally) expect government to fund their businesses.

On top of that, we (rationally) expect widespread conflict in many regions of the world that will disrupt the free flow of oil, the life blood of today's world.

These things all must change for the dynamism of the U.S. economy to be restored.

It is not certain that they will under a Romney presidency.

But, it is certain, after three full years of his stimuli, they are not going to change under this president.