Economic Interests

If you owe the bank £100, that's your problem. If you owe the bank £100 million, that's the banks problem.

Archive for the month “October, 2012”

Can Nigeria Become the Next Leaders of Africa?

Can Nigeria Become the Next Leaders of Africa?.

An article I wrote on another great economics blog. Reviewing whether Nigeria can become the next economic giant of Africa.


The Final Debate

For the last presidential debate in America, the subject was focused on Foreign Policy. Though if you consider all the foreign issues America has to deal with, it was a shame that the questions were fully focused upon just the Middle East and China. Iraq was mentioned, Iran was debated, Afghanistan was agreed on, Iran was debated some more, Syria received some sympathy, China was criticised and Libya was touched upon in parts (though Libya had already been discussed somewhat in the last debate).  The Euro crisis didn’t even get a sound bite despite having a large impact on the future of the American economy, the troubles in Africa and South America were hardly mentioned (though at least Mali’s troubles with an Al Qaeda based group taking over half their country were referred to) while the futures of possible danger countries like North Korea, Russia and China were largely ignored.

A touchy subject is avoided.

This didn’t come as a major surprise really, the debate was always going to be focused upon the latest media stories and the candidates can only answer the questions put in front of them (though they rarely stayed on subject anyway). But some more varied debate could have seen the American public learn more about how each candidate plans to lead America in the future.

Getting back to the debate, it seemed to end in a draw with some positives for each candidate, though both remained expectedly cautious. Barack Obama perhaps got in some “zingers”, like when he caught Mitt Romney out on his criticism of America’s decline in the size of the navy by pointing out America also had less horses and Bayonets and that their current navy was measured more on their capabilities than number of boats. But how did each candidate do respectively?

Starting with Barack Obama, he managed to perform a good debate; avoiding mistakes (a consistency he manages well), appearing experienced in his Commander-in-Chief role and providing a clear answer to the big Iran question. But it wasn’t all rosy, as he didn’t manage to catch out Mitt Romney on any major issues and surprisingly managed to become too aggressive at times (at stark contrast to his timid first debate). He did state clearly that he wouldn’t allow a nuclear Iran during his next term in office, would back Israel if attacked and would pull out soldiers from Afghanistan in 2014. But he was less clear on how he planned to stop President Assad from slaughtering his own people and didn’t offer any detail on how he was going to prevent Iran from gaining Nuclear weapons without using military intervention (with economic sanctions yet to have the required effect). He managed some cheap shot at Mr Romney’s past connections with Chinese companies stealing American jobs and at Mr Romney’s lack of experience in foreign policy. But when you consider this was Mitt Romney’s weakest area of debate, that Barack Obama had the killing of Osama Bin Laden to parade about and had 4 years of experience as Commander-in-Chief, then it was disappointing he didn’t win by a more convincing amount like Mitt Romney had managed in the economic debate.

The chaos in Syria continues, with neither candidate having a clear solution. 

Mitt Romney, as stated before, was facing his hardest debate. He doesn’t have any experience with the armed forces, chose a running mate with similar inexperience and has based his election campaign on America’s economy. So it was little surprise that he tried to bring the subject around to the economy when answering tough questions. He repeatedly suggested America was looking weak to the rest of the world because of its weakened economy and high debt, stating China didn’t respect America because of the amount of money America owed them. This wasn’t a bad argument, but his second point to try and suggest that Obama’s policies were appearing weak and apologetic, did not work quite as well. The argument lacked evidence when you consider Barack Obama had managed to play a hand in toppling Gadaffi (though he overstated America involvement) and had authorised the killing of Osama Bin Laden. Mitt Romney was persuasive though when he managed to direct the argument towards the economy, bringing up a good argument for investing more time with South America as their economy on the whole is as big as China’s and also again pointing out Barack Obama’s increase to the budget deficit. On other subjects Mitt Romney decided to stay conservative, vague and basically agree with Barack Obama, which may not have pumped up Republicans, but could have ensured undecided voters keep him in mind. In fact he managed to completely change his opinion on Afghanistan by agreeing that the troops should leave by 2014 (perhaps based on the heavy criticism Paul Ryan received in the vice presidential debate) and seemed reluctant to attack Barack Obama on the Libya fiasco (again maybe after the criticism he received in the previous debate). The only subject he mainly differed from Barack Obama was on China, where he surprisingly remained consistent in stating he would call them a currency manipulator. There could be drawbacks to this action, with some suggesting it could start a trade war, but again when confronted with this he managed to bring the argument back to economic terms and provide a convincing argument that the current trade deficit with China means it is in China’s favour to refrain from doing so.

Chart showing the trade deficit America has with China. 

So what have these debates resulted in?

The first debate saw Mitt Romney gain a big turnaround in the poles. His performance was good, but the real cause of the boost was the lack of confidence displayed by Barack Obama and the lowly position Mitt Romney had previously held (giving him an almost underdog status). Such low expectations meant that his good performance was perceived as a great one, with vice versa for Barack Obama. The second debate saw Barack Obama act more like his old self, challenging Mitt Romney on his tax numbers and goading him into some costly mistakes (like for example challenging Mr Obama’s word on how he described the killing of an American ambassador – resulting in Mr Romney looking petty). Barack Obama probably edged a victory, though again it was more in the context of his previously poor performance. That brought us to this final debate, where both candidates were rather cautious and nothing new was found out. It was probably a draw, with Barack Obama getting the more headline worthy lines, but Mitt Romney perhaps looking more attractive to the undecided voters than he had previously.

It’s hard to know the effect these debates will have on the actual election in two weeks time, though history suggests they can have a big effect, with Al Gore famously losing to George Bush after being outperformed in the election debates. But despite Mitt Romney probably doing better out of these recent debates (with his polls numbers decisively better off than before the first debate), Barack Obama is still just edging the race, which is how many had predicted the race to be previous to the debates, a tight and narrow win for Mr Obama.

Comparison of Registered Voters' Presidential Preferences, Before and After First Presidential Debate, 2012

Gallup found that after the first debate, Mitt Romney drew even with Barack Obama in the polls.

So while each debate was entertaining, I suspect not many have actually changed their mind on who they are going to vote for (if at all). Mitt Romney promises a better economy based on his vast experience in the private sector, but remains frustratingly vague on his budget plan and flips flops between policies. While Barack Obama promises more clear policies but continually has to defend a poor economic record during his first term. I believe Obama will win as his main weakness can still be blamed on the previous president and his policies, but he will have a lot to prove in his next term if he is to leave the White House with a respectable legacy.

Daily chart: The maths behind the madness | The Economist

Daily chart: The maths behind the madness | The Economist.

A great graph by the economist showing the different debt levels of countries and what the IMF is predicting in the next few years.

Barack VS Mitt: Round Two

A second debate saw Barack Obama pack a lot more punch than his previous debate had seen. He was more feisty, aggressive and confident which resulted in a more evenly matched debate this time round. The venue may have helped in this regard as the two candidates were surrounded by a crowd of undecided voters and given questions that were genuinely troubling the American public. These included among the more general foreign policy and economic questions, subjects like sexism in the job market, gun control and immigration. But frustratingly both Barack Obama and Mitt Romney proved reluctant to answer such questions directly and often went off on tangents on matters scarcely linked. For example when asked about assault rifles, Barack Obama managed to get stuck onto education (with the moderator, Candy Crowley, clearly prodding him to get back onto subject) while even more astonishingly Mitt Romney managed to suggest marriage was the key to better gun safety. In another case, Barack Obama was asked a very clear question on whether he thought it was the government’s responsibility to control gas prices, but managed to answer in such a roundabout manner that Candy Crowley had to repeat the question again at the end (to no avail). The design of how the candidates were supposed to answer questions (with one standing up while the other sat down) also resulted in a humorous standing battle between Barack Obama and Mitt Romney to try and get their opinions across.

But what did we learn about each candidate in this debate?

With Barack Obama, the current president, this was a chance to settle the score after a tame performance in the last debate. Many wanted to see him fight his points more and importantly question Mr Romney’s policies further. He achieved this well by poking fun at Mr Romney’s 5 point plan, suggesting it as more of a 1 point plan to help the rich. Barack Obama then further attacked Mitt Romney’s economic plans by suggesting even he wouldn’t agree to a financial plan that proposed $7 trillion increases in the budget, yet no increase in the budget deficit and vague plans to increase revenue. He also got a critical political punch in by hammering home his saving of the American car industry (referring to when the government stepped in as lender of last resort to save the failing businesses). At the time Mitt Romney argued against this and suggested private money be used, as government money would stifle the car market and destroy the whole industry. In reality the opposite happened and Mitt Romney was left trying to re-word his past statements. Barack Obama also got in some entertaining “zingers”, as he reflected questions over his pension by pointing out it wasn’t quite as big as Mr Romney’s and caught Mr Romney out when accused over the validity of his statement about the deaths of the diplomats in Libya, with the moderator confirming Barack Obama was telling the truth (to unauthorized applause by the crowd). On his policies, Barack Obama seems to be defending his record, continuing the same for the successful parts and promising improvements in the promises he couldn’t keep.

Barack Obama puts Mitt Romney under more strain. 

With Mitt Romney, the challenging Statesman, a repeat performance of the first debate was expected. He couldn’t quite repeat that this time round, but still held his ground well when arguing over different policies. He managed to avoid questions over his 5 point plan (like which tax loopholes he would close) and did well to challenge the president on his energy record (with oil production on federal land indeed having fallen) and his economic record as a whole. In this regard Mitt Romney has some strong ammo, with the amount of Americans in jobs indeed lower than it was when Mr Obama took over, while he cleverly managed to reflect questions over his similarity to George Bush by pointing out that the trillion dollar budget deficits that Mr Obama had criticised in the past have been more than doubled during his term in power.  Yet he still fell into some traps over simple questions, for example when he was asked on the glass ceiling for women in the workplace, his answers seemed to patronize women when he suggested they would need more flexible hours and that company’s would be so anxious in his new economy that they would have to hire women. Another mistake was that when he was answering a question on immigration, he managed to bring up that he had lost to John McCain, reminding voters that the man Barack Obama had beat 4 years ago was deemed a better candidate than Mitt Romney. On his policies meanwhile we haven’t learnt a lot, as he keeps vague what his tax plan would entail and what exactly he plans to do to create jobs in America (especially shown when he was asked directly how to stop jobs going to China and couldn’t come up with a clear answer).

Mitt Romney catches Barack Obama out on his increases to the budget deficit.

But credit should go to Mitt Romney for making these debate mores about Barack Obama’s track record and less about his own past and future policies. His best chance of winning is by convincing the American public that they can’t afford to keep Barack Obama in power after 4 years of “economic stagnation “. Conversely, his biggest worry is the American public realizing the lack of substance behind his foggy 5 point plan and the controversial moral issues he carries with religion and sex. Interestingly, some key areas of debate have yet to come up. Foreign policy over Iran, Syria, Afghanistan and Israel have yet to come up in detail like they did in the vice presidential debate. While social issues like gay marriage, abortion and religion have yet to be debated, which could provide an interesting divide between Barack Obama and Mitt Romney and perhaps America itself. Hopefully we will see these issues come out in the next debate which I will review as I have in this debate.

In terms of who won, this was probably a draw. Though for undecided voters like those in the crowd, neither candidate managed to clearly show why they should be the man to choose. Barack Obama avoided tricky questions over his 1st term just as much as Mitt Romney avoided questions over his hazy policies. The next debate will give both candidates another chance to win over undecided voters, but if you’re expecting clear answers to the tough questions, don’t get your hopes up.

The number 2’s step up

After a more confident performance in the first presidential debate by Mitt Romney, the vice presidential debate showed a more competitive stance from the democrats, thankfully for Barack Obama. Now you might think this debate doesn’t matter so much when compared with the battle between Mitt Romney and Barack Obama, but to the contrary, they tend to show more about the candidates than they would care to admit. They are important members in the race, with John McCain’s decision to select Sarah Palin as his running mate proving disastrous to his chances in the last election.

Mitt Romney’s running mate, Paul Ryan, debated well but seemed to lack the experience of his adversary. He found it harder to attack Obama’s term in power, which Mitt Romney himself had found so easy in the previous debate.  He gave clear answers to why he thought the current administration had gone wrong in their foreign and economic policy, but perhaps struggled when confronted with clear questions about his budget and various policies from both Joe Biden and Martha Raddatz. He also struggled when asked the controversial question on Abortion, where his answers conflicted with his previous views on what exemptions there should be (rape etc). But at the end he concluded that America should vote for Mitt Romney and himself because of their honesty, clearly making an effort to point to Barack Obama’s unfulfilled promises. This was a big statement to make and perhaps deserves different answers for both men. Mitt Romney has flip flopped between different polices so much it is hard to figure out what he will do when he is in office, with his biggest skill being his ability to remain convincing yet vague. Paul Ryan on the other hand has expressed his views more openly; with a budget plan to build on, an alternative Medicare reform plan (controversial yet detailed) and his personal views expressed (openly admitting his aversion to abortion). The People of America may not agree with such ideas, but at least they gain an idea of what they would be voting for, the same cannot be said for Mitt Romney.

Barack Obama’s running mate, Joe Biden, showed his experience in the political world (as a state senator for over 30 years and vice president for nearly 4 years) and attacked Paul Ryan regularly on controversial topics. At times this showed his confidence and ability, but at other times it showed his arrogance, while his condescending laughs during Mr Ryan’s answers seemed inappropriate as a Vice President.  Less of the patronizing tone would have probably won Joe Biden more voters, but after Mr Obama’s more conserved performance in the first debate, it was probably needed to regain the offensive in this election. He regained his control in the last stages of the debate to deliver a favourable answer to the abortion question, as he openly stated how he wouldn’t let his catholic religion impact on his role as Vice president and opted for the choice to be with the women facing the decision. He helped regain a footing for the democrats and pursued more aggressively the weaknesses in the Republicans policies that Mr Obama failed to do. His hounding of Paul Ryan to come up with the numbers for his budget plan to work (with the admirable help of Martha Raddatz) was a key moment of the debate as his opponent was left with no answer for the American people.

Joe Biden laughing during Paul Ryan’s answers could cost him popularity.

With the debate clearly not as popular as the presidential debate, I believe it still has great importance. Firstly, the American people have to decide if they can see these running mates taking over in the slight chance of the President dying, a test Sarah Palin spectacularly failed. For Joe Biden it wasn’t such a big moment, he had already been Vice President for nearly 4 years. But for Paul Ryan the public had to decide if he was sane enough to be considered the second choice. His conserved manner and respectable answers seemed good enough for most, and perhaps was a reason why he didn’t go on the offensive straight away, as he didn’t want to scare voters off seeing him as a second choice.

Secondly it showed a glimpse into policies of Mitt Romney and Barack Obama. Neither presidential candidate have faced many foreign policy questions on Iran and Syria yet, so this debate showed a preview of what we can expect. The Democrats seem assured of their record as of now (with the killing of Osama Bin Laden a crowning moment for them to boast) while Mitt Romney seems set to attack them on their inaction in Iran and Syria, the drifting away from Israel and the mistakes made in Libya. On economic policy, both attacked Mr Obama on America’s slow growth and consistently high unemployment, with Paul Ryan the man with the numbers and Mitt Romney providing the charisma to back it up. Together they can be formidable, but apart in these debates Mitt Romney has lacked detail and Paul Ryan the charm to convince the audience what his statistics mean. For the Democrats, Joe Biden seemed ready to defend their economic record by championing the Automobile industry that Obama bailed out and attacked the Republicans in general for the mess they left behind with George Bush. Barack Obama surprisingly failed to do this in his debate, allowing Mitt Romney to take control with his accusations of poor economic mismanagement. In the next debates it should be assumed Barack Obama will argue these points more to help win the economic argument that is so evenly balance right now between the two candidates.

A formidable team, but weaker when split up.

Overall, both running mates did a fine job in proving their worth and fighting their candidate’s corners. Joe Biden edged this debate with his experience and charisma, though the result itself will not have a big impact on the election. The real importance was the detail it gave in the two party’s policies and exclusively what weakness can be picked up on. – The debate in full.

Laos’s economy: growing fast, unequally « Emergent Economics

Laos’s economy: growing fast, unequally « Emergent Economics.

A great report on Laos’s economy and its unequal rise.

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