The Final Debate

Posted by Jeff Carter
on October 23rd, 2012

Not too much there. A lot of people tuned in to see fireworks and there were very few. Based on my twitter stream, a lot of people thought Bob Schieffer didn’t moderate well-and others thought he was the best. Out of the three, Candy Crowley was the worst.

One point that was made by Ace that can be extrapolated into a metaphor for a lot of what’s gone on the last four years is this:

Obama’s whole campaign — and his debate strategy — has been to “win the newscycle” and lob a bunch of small-bore attacks and micro-appeals. He keeps doing that and doing that.

I’ve been saying this for a while: You can win every newscycle and still lose. Because people don’t vote on whatever dumb story you pushed into the newscycle. They’re voting the the future, and the country, and their children.

Bob Lucas won the Nobel Prize for Economics back in 1995 because of his work with expectation theory. Essentially, it’s this:

“Conventional macroeconomists only thought about what was happening at the current time, and not what effect macroeconomic policies might have on the future,” Rosen said. “Lucas’ model of rational expectations says that if citizens anticipate the reactions of policy-makers in the future, then they are going to change their behavior now in a way that could make those policies less effective — or completely nullify a policy’s effect.

Obama’s policies (and to a certain extent Bush’s policies) were about the here and now. Bail out the banks, bail out the automakers, stimulate this, pass Obamacare and Dodd-Frank but have a lot of fill in the blanks. Obama has consistently made decisions with a bent toward the short term. That doesn’t provide a cohesive structure for the country to make decisions on. It’s why we have so much uncertainty in the economy, in government and in our daily lives.

Romney offers certainty. He has telegraphed what he will do. He isn’t going to be unpredictable like Obama. Especially with regard to economics. In addition, Romney can speak with authority when it comes to economics and business because he lives in that world.

The business world is as foreign to Obama as Pock-ee-ston is to most Americans.

The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.