It’s a slow week for blogging, as I am gearing up for travel to Russia and India in the next two weeks. So I promise insights from the road to Moscow and Delhi.
Meanwhile, as we move closer to the election, it is increasingly clear that facts do not matter (much), as perceptions are far more important.
Some people seem to believe that Obama will hurt them economically, or give away the country to gays, socialists, and Muslims, no matter what the facts are — you would think we were back in the 1950s at times.
For example, it just seems obvious to people that if government spends less, the debt will be less, and the government can tax less. So let’s just cut that awful government spending!
In fact, as the IMF has recently argued, during the current deleveraging recession, the multiplier on government spending has risen to 1.0 or higher. What that means is that if government spends less, economic output will drop by as much or more, meaning that the debt will go UP or taxes have to go UP. That is what research shows, but is too counter-intuitive to be widely accepted.
Since facts are beyond the bounds of discussion, the election will depend on impressions. And here it appears that support for both Romney and Obama is soft — so soft that it can easily be moved. That is the only way to explain why one debate could move the polls so dramatically, or why Romney can easily move back and forth between ‘Massachusetts Mitt’ (I want to expand Pell Grants, he said in the 2nd debate) and conservative Mitt (47% will never take responsibility for their lives), without causing any problems to his campaign.
Just a few weeks to go and the race remains suprisingly uncertain.