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Bill Whalen

 

If you’re looking for a definitive message out of Tuesday’s elections, you might want to wait another 12 months and Congress’s turn to face the music.

That vote will be a referendum on Obamacare, the federal government shutdown, plus whatever other fires Washington can start in the months ahead. Be it a good or bad night for incumbents, we’ll have a better fix on which party stands to benefit from America’s frustration with an unsavory status quo (a survey released earlier this month showing Congress less popular than hemorrhoids, jury duty and toenail fungus).

Moreover, the November 2014 vote is an opportunity for some sitting governors – Wisconsin’s Scott Walker and New Mexico’s Susana Martinez come to mind – to showcase themes that might factor into the next presidential race. It worked for George W. Bush in 1998, when his easy reelection as Texas’ governor fueled presidential speculation.

As for Campaign 2013, it was an off-year election with some offbeat results.

That would include:

1)  Economically distressed Detroit, with an 84% African-American population, electing a non-black mayor. The last time that happened was in 1970, the same year that the Ford Pinto – “the little carefree car” with the exploding fuel tank – first rolled off the assembly lines (yes, I drove one in high school). Mayor-elect Mike Duggan, a former hospital executive with a “Mr. Fix-It” reputation, now gets a shot at fixing a Motor City that’s $18 billion in debt, two-fifths of its street lights out of service, three-fifths of its population long gone, and Chapter 9 bankruptcy looming on the horizon.

2)  In Colorado, voters rejected union-backed Amendment 66, which guaranteed a minimum of 43% of the state’s tax revenues going to education (similar to California’s Proposition 98, which mandates that 40% of general-fund spending goes to education). Amendment 66 also included a $950 million income-tax increase for, among other things, early-childhood education, at-risk students and English-language learners. Apparently, changing the state income tax from a flat 4.63% rate to a two-tiered formula – a 5% tax for the first $75,000 of taxable income; 5.9% beyond that – was too much for Coloradans to digest. The measure lost by nearly a 2-1 margin.

3)  In Texas, voters approved Proposition 5 allowing seniors to purchase homes using reverse mortgages – the Lone Star State being the lone holdout on reverse mortgages, according to a report by the Texas House of Representatives. Somewhere, mortgage pitchman and former Tennessee Sen. Fred Thompson is smiling. On a sadder Texas-related note: say goodbye to the “eighth wonder of the world”, now that Houston voters have rejected a ballot initiative that would have renovated the fabled Astrodome.

Click to read more.

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Why has the current recovery from the Great Recession been so mediocre? Ed Leamer of UCLA points out that the last three recessions have all had mediocre recoveries of both output and employment. His explanation is that changes in the manufacturing sector have changed the pattern of layoffs, recalls and hiring during recessions and recoveries. The conversation concludes with a discussion of the forces driving the changes in the labor market and the implications for manufacturing.

1) Why the last three recessions all look different (1:44)
2) Employment growth for last eight recessions (4:12)
3) Why have the last three recessions been so different? (6:13)
4) The jobs cycle in manufacturing (8:52)
5) Excess capacity in construction has created a lag (10:33)
6) Manufacturing output versus manufacturing employment (11:14)
7) What’s the solution to the downturn? (12:20)

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Hoover Institution California Poll Released

Between October 15-30th, 2012, a team of survey researchers affiliated with the Hoover Institution at Stanford University polled 600 Californians about their views of state government, policy choices facing the state, and life in the Golden State. Administered by the survey research firm YouGov, the poll has a margin of error of +/-4% for the full sample, +/-5% for the registered voter subsample.

Among the survey’s findings:

Large majorities oppose increasing income or sales taxes on everyone.

Among registered voters, 75% oppose increasing income taxes across the board (12% support, 13% unsure) and 61% oppose increasing sales tax rates (21% support, 15% oppose).

Majority support for increasing income tax rates only for incomes above $200,000.

Among registered voters, 52% oppose increasing taxes on those earning $100,000-$200,000 (33% support, 15% not sure). Broader support seen for taxes on higher income levels: 58% support increasing income taxes on those earning $200,000-$999,999 (25% oppose, 7% not sure); 66% support a true millionaires’ tax, 19% oppose, 15% not sure.

But Californians also oppose freezing or reducing spending for higher education, K-12, and MediCal.

56% of registered voters oppose freezing or reducing spending on higher ed (34% support, 10% not sure). 63% oppose the same actions for K-12 education (20% support, 18% not sure). 56% oppose freezing or reducing spending to MediCal (30% support, 14% not sure).

Nearly 4 in 10 Californians have considered moving out of state in the last 12 months. Large pluralities cite cost of housing, taxes, economic prospects as most important reasons for considering leaving.

37% of all respondents said they had considered moving of the state in the last 12 months. When asked to identify the three most important reasons behind their possible move; 48% responded that they wanted a lower cost of housing, 42% said they sought lower tax rates; 41% sought a better economy and job opportunities. The next most popular answers were less traffic congestion and overcrowding (19%), want to live around people like me (15%), and to be closer to family (11%).

Californians do not think the state’s government serves as a good model for other states.

56% disagree with the statement that the way the state government runs in California is a good model for other states to follow; 17% agree, 27% neither agree nor disagree. Registered voters hold an even less favorable view: 66% disagree the idea that the state is a good model, 17% agree, 17% neither agree nor disagree.

Most of the blame for the state’s budget mess goes to the state legislature.

When asked to assign blame for the state’s budget woes, 10% of registered voters point to Republican legislators in Sacramento, 19% blame the Democrats in the legislature. 15% blame previous governors, while 5% say Gov. Jerry Brown shoulders most of the responsibility, and 11% says it’s the bad economy. 7% blame state employee unions, and 6% selected the state’s initiative process.

The Hoover Institution California Poll is conducted by fellows of the Hoover Institution at Stanford University, in partnership with YouGov. The October 2012 Hoover investigators are Tammy Frisby, Brian Gaines, James Gimpel, Daron Shaw, and Bill Whalen. Survey respondents are matched on a set of individual characteristics and the sample is statistically weighted based on estimates from the American Community Survey, the Current Population Survey, and the Pew Religious Landscape Survey.

Hoover corresponding investigator: Tammy Frisby, frisby@stanford.edu, (650) 387-8465

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The Omnibus

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The Omnibus

  • Rise and shine — Edward Lazear will discuss the jobs report on CNBC’s Squawk Box tomorrow at 5:40am PT/8:40am ET.
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The Omnibus

  • John Taylor with his thoughts about Milton Friedman, who would have turned 100-years-old yesterday.
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The Omnibus

Join us in celebrating Milton Friedman’s 100th birthday today.

With some commemorative words from Thomas Sowell.

And Milton Friedman in his own words on Uncommon Knowledge and in the Wall Street Journal with a piece about monetary policy that he penned, based on his academic work, at the age of 94 – and was published the day after his death.

 

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The Omnibus

  • In the pages of the WSJ, Ed Lazear makes the strongest cases that Obama and Romney can argue about the U.S. economy. The reader can decide: slow recovery or failed agenda?
  • A must read: Charles Murray’s feature in the WSJ Weekend edition, “Why capitalism has an image problem?” Another must read: Hoover fellow David Henderson’s Real Clear Policy op-ed about the crony capitalism that Murray indicts. Start with Henderson’s concise argument about how cronyism destroys wealth. Keep reading with Henderson’s recently released research paper on why cronyism occurs.
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The Omnibus

  • Economist Michael Boskin writes about how California could provide (unhappy) lessons for subnational governments around the world.
  • Dr. Scott Atlas on the digital pages of Forbes with a moral argument for market-driven, patient-centered health care reform.
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