Will 2016 Be the True Test of Economic Recovery?

Ben Casselman in FiveThirtyEight asks: “Will 2016 be the year that the economic recovery at last translates into concrete gains for everyday Americans?”

“It’s far from certain that the economy will continue on the same path in the new year. U.S. factories are slowing output and shedding jobs as a weak global economy cuts into demand for American products overseas. Low energy prices are leading to job cuts in the oil and gas sector and are pushing a growing number of oil companies into bankruptcy. That leaves the recovery dependent on consumers, who became more confident at the end of the year but whose actual spending is growing more slowly. (Of course, if wages pick up, that could also lead to more spending.)”


“Few economists expect a major slowdown in 2016, let alone a recession. And while such forecasts have a checkered history, there’s little reason to think the conventional wisdom is wrong this time around. The question, though, is whether 2016 ends up being yet another year of tepid and unequally distributed growth, or if it can instead mark a true turning point.”

The Voters’ Mood in Election Year: Sour and Dour

Wall Street Journal: “The election year is upon us, and Republican pollster Kellyanne Conway describes the nation’s mood heading into it this way: ‘Sour and dour. Nervous, on edge, a feeling of vulnerability and a lack of control.’”

“Pollster John Zogby thinks voters are setting up for themselves a fundamental choice, the outcome of which isn’t at all certain: ‘Overriding any particular issue will be whether Americans want to tear things down and start over, or believe that government/politicians are trustworthy enough to make required changes.’”

“Finding somebody who can disperse the clouds appears to be more important than any specific issue or set of issues, though Republican pollster David Winston thinks the basic rule of voter priorities still applies: ‘The election will be about jobs, wages and the economy, with foreign affairs and terrorism having emerged now as the clear next issue of concern.’”

An Obamacare Fear That Didn’t Happen

Washington Post: “During the debate over President Obama’s signature health care law, opponents warned that the law would discourage large numbers of Americans from working, force millions into part-time jobs and make it more difficult to find work. Three new studies released this week suggest that, so far, it hasn’t happened.”

“They found that overall, the Affordable Care Act had little impact on employment patterns.”

One study, published in the journal Health Affairs, “is the latest in a series to conclude that Obamacare did not, in fact, widely result in more firms asking employees to to work part time.”

“The authors examined Census data, and found no increase in the likelihood of working part time, except for a 0.18 percentage point increase in the likelihood of working 25 to 29 hours per week between 2013 and 2014 — a trend that the authors say predated the ACA.”

“The study included another piece of evidence that appears to contradict the notion that the law would cause an increase in part-time work: the number of people working 25 to 29 hours a week in firms not subject to the mandate increased between 2012 and 2015, while the number of people at firms subject to the mandate slightly decreased.”

70 Percent Believe in Climate Change

The Hill: “A new survey finds that 70 percent of Americans believe the climate is changing.”

“The poll from Monmouth University, released Tuesday, found a stark partisan divide on most issues surrounding climate change, including whether it is happening, how serious it is and what should be done about it.”

“The research, conducted mostly before nearly 200 nations voted last month in Paris on an international climate accord, found that Democrats (63 percent) are much more likely than Republicans (18 percent) to see climate change as a very serious issue.”

“Pollsters found that only 27 percent of respondents agree with the overwhelming scientific consensus that human activity is the main cause of climate change.”

Vast Majority of Americans Support Background Checks for Gun Purchases

Carl Bialik in FiveThirtyEight: “In dozens of polls over the past two decades, Americans have been asked if they support expanding background checks for the purchase of firearms … Consistently, at least 70 percent of Americans said they favor background checks. Often, far more do. In October, a CBS News/New York Times poll found that 92 percent of Americans — including 87 percent of Republicans — favor background checks for all gun buyers.”

“The popularity of background checks transcends age, political party, gender, education and even gun ownership. Last month, Quinnipiac University asked Americans whether they support a law requiring background checks for sales at gun shows or online. At least 84 percent of every one of 15 subgroups — including Republicans, men, gun owners and people living in rural areas — said ‘yes.'”

“Summarize all the conflicting views on gun control into one question, as the Pew Research Center has done, and you find a nation evenly split since 2010. Since 1993, Pew has asked the following question: ‘What do you think is more important — to protect the right of Americans to own guns or to control gun ownership?’”


The U.S. 2016 Economic Outlook: Strong But Shaky

Bloomberg: What will 2016 bring for the world economy? Financial markets are sending a mixed message: There’s reason to believe that the U.S. will outperform other major developed nations, but also to be wary about the health of American companies.

“One big question is which economies will expand fast enough to justify [a rate] increase. As of Wednesday, traders in futures markets were putting their money on the U.S.: They expected the three-month dollar deposit rate to reach 1.24 percent by December 2016, a gain of about 0.64 percentage point.”


At the same time, though, markets for credit derivatives — which provide a sort of insurance against defaults — are displaying mounting concern about the finances of U.S. corporations. As of Wednesday, the cost of five-year insurance on $10 million in debt issued by a basket of investment-grade U.S. companies stood at almost $89,000, up more than $22,000 from a year earlier.

“The mixed signals illustrate the complexity of the task facing the Fed. A robust U.S. expansion is crucial for the rest of the world, given decelerating growth in China and a painfully slow recovery in Europe. Yet the planet’s largest economy is still showing signs of weakness, and may be unusually vulnerable to rate increases. As Bloomberg View has noted, this means the central bank will have to act cautiously, and be ready to change course if 2016 doesn’t go according to plan.”

States That Have Surrendered to ISIS

Daily Kos: “Recent polls show that not only are Republicans unhappy with Obama’s handling of Daesh … but so are Democrats. The extreme paranoia exhibited by American politicians, pundits, and terrorism ‘experts’ is so overblown as to be ludicrous … Americans are safer today from outside threats than we have been in a long time, maybe ever. The Daesh threat to Americans is miniscule, and the data prove it.”

“But, but, ISIS is in the news all the time, aren’t they killing lots of Americans? Shouldn’t we be really afraid? Well, actually, no. In 2013, all domestic and international terrorists killed exactly 16 Americans. Three died in the Boston Marathon bombing, the rest died in overseas attacks. Sixteen Americans. So if you live in the U.S.A., your odds of being killed by a terrorist were (and are still) one in 20 million (16 deaths out of 330 million Americans). And if you didn’t leave the country, your chances improved to one in 110 million.”

As the CDC mortality tables show, “more people died from TV and appliance tip-overs (based on 2011 data) than from terrorism. Twenty times more people died from appendicitis than from terrorist attacks. Four times as many Americans died from machinery-related carbon monoxide poisoning. And during the same 12-month period, for every single terrorist fatality, more than 200 people STARVED TO DEATH in America.”


What Do You Call White Guys With Guns?

Christopher Ingraham: “A bunch of heavily-armed white guys walk into a federal building, declare that they’re in charge of the place and say they plan to stick around indefinitely. What do you call them, exactly?”

“In the interest of clarity, here’s how 15 major media outlets are referring to the group as of Monday morning. To keep the tally manageable, I’m counting only the first reference to the Oregon group in either the headline or body of the main story on the standoff on the organizations’ websites.”

“Of the 15 outlets I surveyed, six are describing the group as either “armed activists” or “armed protesters.” That includes The Washington Post, along with all three major cable networks and two network news outlets.”

How Well is Obamacare Working?

The Hill: “ObamaCare left 2015 in a stronger position than it began, though the threats of rising premiums, skittish insurers and challenges from Washington loom for the president’s signature health law during his final year in office.”

“So how well is ObamaCare actually working?

“’We’re through the risk of ‘Oh my goodness, it might not work,’  said Bob Kocher, a former Obama White House adviser on health reform. ‘I think we’re now in the figuring out how to make it work well mode.’”

“’The risk of the law collapsing is very slim if not non-existent,’ Levitt said. ‘Enrollment is still growing, the risk pool is likely improving. At this point, the law seems perfectly sustainable.’”

“Still, it appears unlikely that the sign-up numbers will approach what the Congressional Budget Office projected they would be: as many as 20 million enrollees in 2016. Defenders say that’s partly because fewer employers are dropping coverage and pushing people into ObamaCare.”

LA Times: “Customers are shifting their attention from premiums to deductibles and co-pays, and insurers are testing new cost-sharing designs.”

“‘Consumers haven’t been used to shopping’ for the most cost-effective plans, says Tim McBride, a healthcare economist at Washington University in St. Louis … Insurers are experimenting with how to make deductibles and co-pays more effective in keeping costs down.”

Despite ‘War on Cops,’ 2015 Was One of the Safest Years for Cops

Vox: “For much of 2015, Fox News and the New York Post decried a “war on cops,” specifically blaming the Black Lives Matter movement — and its criticisms of excessive use of force by cops — for enabling a wave of violence against police officers in the US.”

“Yet with the year over, it looks like 2015 was one of the safest years to be a police officer in America. Since 1960, only 2013 had fewer on-duty police officer deaths than 2015.”

Screen Shot 2016-01-04 at 12.37.13 PM

“The Officer Down Memorial Page, which tracks police officer deaths, estimated 129 police officers died in the line of duty in 2015, down 3 percent from 2014. This continued the long-term trend downward, based on the organization’s statistics going back decades.”

“The single biggest cause of death in 2015 was gunfire. Out of 129 deaths, 39 were gun homicides and two were accidental shootings. But deadly shootings were down from 2014, when 49 cops died to gunfire.”

Survey: Government is Top Problem

Gallup: For the second consecutive year, dissatisfaction with government edged out the economy as the problem more Americans identified as the nation’s top problem in 2015.


“Americans were most likely to mention some aspect of the federal government in 2015 when asked to name the country’s top problem, but this category still averaged less than 20% of all responses during the year. Even when mentions of terrorism, immigration and gun laws briefly flared, the percentages citing these stayed below the 20% threshold.”

“This lack of a prominent public concern provides an interesting setup to the 2016 presidential election … This contrasts with the last three presidential election cycles when at least one issue commanded significant public attention in the year prior to the election. In 2011, for example, the dominant issues were the economy and unemployment; in 2007, the Iraq War; and in 2003, the economy. Those concerns provided a clear framework for the campaigns, something that is thus far lacking in the race for 2016.”

Look to State Polls for Signs of Early State Success

Harry Enten in FiveThirtyEight: “Just as during the 2012 general election, state polls and national polls disagree. And our advice this year is the same as it was then: Trust the state polls. In fact, there’s evidence the national polls may be a negative indicator once you control for the state-level survey results. If you’re a candidate who wants to win one of the first two contests, you’d rather have good state polls and bad national polls than good state and good national polls.”

“So what might be going on? I can’t be sure, but the candidates who underperform in early states are often those with the highest name recognition … It could be that a disproportionate share of these candidates’ support in the early states is due to high name recognition, which the national polls pick up on, and not because they line up well with the state’s voters. As the voting gets closer and more voters tune in, name recognition tends to even out, and voters may decide there are better options out there.”

“Relatedly, the phenomenon I found could be due to news coverage. Sometimes celebrity candidates receive a lot of national media coverage that helps drive their support in the national polls higher than it would be based on how well they’re actually liked.”

“It could simply be that early state voters — who are paying more attention and getting more candidate exposure than national voters — are seeing something in the candidates that people outside the state are not.”

The Secret to Truth in Polling? Money.

Neil Irwin comments on two new studies about partisan bias in The Quarterly Journal of Political Science, one from four scholars led by John G. Bullock at the University of Texas at Austin, the other by Markus Prior of Princeton and two colleagues.

The results show that “the partisan bias in how people answer factual questions about the economy is diminished by this one weird trick: Pay people.”

“When survey respondents were offered a small cash reward — a dollar or two — for producing a correct answer about the unemployment rate and other economic conditions, they were more likely to be accurate and less likely to produce an answer that fit their partisan biases.”

“The paper by Mr. Bullock, Alan S. Gerber, Seth J. Hill and Gregory A. Huber found that offering a $1 payment for a correct response and a 33-cent payment for an answer of “Don’t know” eliminated the entire partisan gap between Democrats and Republicans on questions about the economy.”

“The good news is this: No matter how politically polarized society might seem, there is an objective reality we can agree upon on how the economy is performing and on other measures of national well-being. It just takes a little skin in the game to get people to acknowledge those facts when they are at odds with their political instincts.”