"You know the difference between a hockey mom and a pit bull? Lipstick." -Gov. Sarah Palin-

"The media are not above the daily test of any free institution." -Barry M. Goldwater-

"America's first interest must be to punish our enemies, then, if possible, please our friends." -Zell Miller-

"One single object...[will merit] the endless gratitude of the society: that of restraining the judges from usurping legislation." -President Thomas Jefferson-

"Don't get stuck on stupid!" -Lt. Gen. Russel Honore-

"Woe to those who call evil good and good evil, who put darkness for light and light for darkness, who put bitter for sweet and sweet for bitter." -Isaiah 5:20-

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Monday, January 14, 2008

Are Polls Worth Anything? And A Recession On the Horizon?

It is damn near impossible to turn on a TV news show, or pick up a newspaper or magazine without hearing or reading the words "According to the latest poll ..." I get sick and tired of it for the simple fact that no one from Gallup or Rasmussen or Zogby has ever polled me. Nor have they ever polled any of my friends or family.

What gives? We are average people with average lives. Aren't we the very type of people that the polls claim to represent?

Well, yes, but the polls almost never reflect our views. Why?

Because polls can be manipulated and twisted, that's why.

Writing for Human Events Online, Timothy P. Carney has this:

Pollsters don’t just call a random, representative sample of the electorate and tally up their responses. They make many assumptions: how many independents will vote, who counts as a “likely voter,” how many seniors will vote, and so on. If the pollster’s sample has 15% senior citizens, but he estimates that seniors will comprise 20% of the electorate, he will weight his results. There’s tons of guessing and tweaking. A couple of tweaks in the wrong direction, and you’ve got the wrong guy winning.

And it is not just the guesswork that should be questioned, it is the geography of the demographics as well. For example, if I took a poll of 5000 inner-city residents across the United States, I could rightly claim that it was a nationwide poll. But did the results actually reflect the nation as a whole? Not likely.

Thus, it can clearly be seen that Carney's most profound observation is right on the mark: Polling is an art, not a science.

Carney also offers three pieces of advice, of which the first is most important:

Basically, don’t trust polls.

You can access the complete article on-line here:

Why The Polls Were Wrong In New Hampshire
Timothy P. Carney
Human Events Online
January 14, 2008

I know, most people don't like to talk about a slowing economy if they can avoid it. In fact, back before the big crash of 1929, people absolutely refused to listen to any naysayers who would question the strength of the U.S. economy during the 1920's. Well, they got a pretty big shock on Black Thursday (or Black Tuesday depending on when you think the Great Depression kicked off).

Irwin M. Stelzer, writing for the Weekly Standard has a few observations about the current market trends:

Economists and analysts are rushing to revise their 2008 forecasts, and journalists are competing for page one placements with scary stories about evicted homeowners sleeping in the streets, and consumers filing for bankruptcy. Western singer Kris Kristofferson did not have fallen CEOs and other investment bankers in mind in mind when he sang about the man who "Once ... had a future full of money, love, and dreams, which he spent like they was goin' out of style," but it is an apt description of many shell-shocked bankers and investors.

They have reason to worry. Oil finally hit $100 per barrel, sending share prices tumbling, gold prices soaring in anticipation of renewed inflation, and developing nations deeper into poverty. Food prices continue their upward trajectory and, combined with gasoline prices that are due to break new records, are reducing consumer discretionary-spending power to a mere shadow of its former self. Latest surveys suggest that even soaring exports will not keep the U.S. manufacturing sector from slowing down, with falling sales of autos a particular drag. So desperate are dealers to clear inventory-laden lots that one has taken out a magazine ad offering 12-year financing to anyone who thinks he can afford the gasoline guzzled by one of the Rolls Royces sitting on his lot. Most important, last month the unemployment rate soared from 4.7 percent to 5 percent, with more industries losing than gaining jobs.

I think there is reason for concern. So, one of my New Year's Resolutions is to have a nice long talk with my financial advisor and figure out a strategy. No, I am not going to do any kind of advertising here. I am simply offering the advice that now is the time to start thinking about a major economic downturn and how to ride it out.


We know, too, that as the greenback depreciates in value, foreign central banks are less and less inclined to keep stores of pictures of American presidents in their vaults, and more interested in diversifying their currency holdings. The dollar's share of central banks' holdings of foreign reserves has fallen from 66.5 percent to 63.8 percent in the past year. Equally important, oil-producing nations, which until now have accepted dollars-for-crude, and have pegged their currencies to the dollar, are finding it increasingly difficult to hold to that policy. The dollars they are getting, which they use to pay the large foreign workforces on which their work-shy citizens rely, buy less and less when remitted to the wives and families of these workers. That is causing social discontent of the sort that horrifies the ruling classes in the Arab countries. My guess is they will begin pegging their own currencies to a basket of currencies that includes the dollar, but in which the euro is importantly represented. A negative impact on U.S. influence in the region is one possible consequence.

And that all points to trouble. Now, the U.S. economy will survive but how well individual citizens weather the storm will depend on who takes the situation seriously.

You can access the complete column on-line here:

Uncertainty Reigns
Irwin M. Stelzer
The Weekly Standard
January 8, 2008

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