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Latin America and the Caribbean
Are Honduran Election Polls Reliable?The imminent Honduran presidential elections have been met with polls published by a surfeit of different polling firms. Unfortunately, however, these are notably inconsistent and show significant differences in their results. While the majority project Xiomara Castro, wife of the deposed President Zelaya, as the winner, there is a notable divergence in the size of the lead. In the scant coverage that they have given, the international press has paid almost exclusive attention to the polls conducted by the noted U.S. polling company, CID-Gallup.
Gallup has a lofty reputation in the U.S. as the first modern pollster. It accurately predicted the result of the 1936 presidential election by using modern sampling methods, and in the process destroyed the reputation of the Literary Digest poll, which had previously been considered the most accurate because of its much larger sample. This demonstrated the importance of representative sampling in order to reliably predict voting intentions. However, in Honduras, Gallup’s polling data has been divergent from actual electoral results, suggesting a bias towards the (right-wing) National Party.
This is important as Gallup is the most prolific, widely quoted and one of the longest standing pollsters in Honduras. In 2005, the last relatively free election in Honduras,1 Gallup in two separate polls predicted poll leads of 8 percent and 16 percent respectively in favor of the National Party candidate, Porfirio Lobo. These polls, coming just weeks before2 the actual election, were remarkably divergent from the actual result that Manuel Zelaya won with 45.6 percent of the vote to Lobo’s 42.2. This raises questions about the reliability of the recent poll by Gallup, paid for by the National Party controlled Congress, ahead of the coming election showing Xiomara Castro de Zelaya with a lead —within the margin of error— of just 2 percent.
CEPR and / October 18, 2013
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Haiti’s Apparel Factories: Reports Find Wage Theft, Sexual Harassment, and Poor Safety and Sanitation StandardsCEPR / October 18, 2013
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Morning Edition Says Debt Standoff Will Boost Employment and Create JobsDean Baker / October 18, 2013
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NYT Pushes Bad Arithmetic To Hype Consequences of Debt StandoffDean Baker / October 17, 2013
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Getting China and Japan to Hold Fewer Dollar Reserves Is an Official Policy GoalDean Baker / October 17, 2013
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Medical Device Tax Is Recouping Some of the Excess Profits from the ACADean Baker / October 17, 2013
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Congress and the President Will Focus on Debt Even Though Interest Payments Remain at Historic LowsDean Baker / October 17, 2013
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Sorry Kids, Thomas Friedman Is Not Very Good at EconomicsDean Baker / October 16, 2013
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Nine Facts That Prove Disability Insurance Isn’t A Giant BoondoggleShawn Fremstad and / October 16, 2013
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A Debt Default Is Serious, But Not the End of the WorldDean Baker
Debate Club (U.S. News & World Reports), October 15, 2013
Dean Baker / October 16, 2013
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NPR Says Rivers Will Flow Upstream if the Government Misses a Debt PaymentDean Baker / October 16, 2013
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Seniors Should See an Increase in their Social Security of 1.5 – 1.6 Percent in 2014If the government had not been shut down on October 1, the Bureau of Labor Statistics (BLS) would be releasing the consumer price index (CPI) for September this morning. September’s data, together with the data for July and August, provide the basis for the annual cost of living adjustment (COLA) for Social Security.
While we do not yet have September’s data, based on the data from the prior two months, it is likely that the COLA will end up being either 1.5 or 1.6 percent, depending on exactly what the September data show. It is unfortunate that this number is not yet available.
Dean Baker / October 15, 2013
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Republicans Are Delusional About US Spending and DeficitsDean Baker
The Guardian Unlimited, October 14, 2013
Dean Baker / October 15, 2013
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If the Dollar Stopped Being the Preeminent Reserve Currency It Would Mean More Jobs and GrowthThere's a lot of silliness going around about how the dollar may lose its status as the world's reserve currency if we default. The ordinarily astute Floyd Norris contributed to this confusion in a column last week implying that we may no longer be able to borrow internationally in dollars if this happened.
In reality, it is unlikely that we do risk being the world's preeminent currency in any plausible scenario. (This is also Norris' conclusion.) Furthermore, the immediate result of this loss of status would be positive in any case.
A first point is useful just for clarification. Being a reserve currency is not a zero-one proposition. The dollar is the preeminent reserve currency, which means that most of the world's reserves (@70 percent, last time I checked) are held in dollars. However other currencies like the euro, the British pound, the Japanese yen, and even the Swiss franc are also held as reserves.
If there was a loss of confidence in the dollar, we are presumably talking about a drop in the ratio of reserves held as dollars. Maybe it would fall to 40 percent, perhaps 30 percent. It is almost impossible it will fall anywhere near zero as long as the United States is in one piece with a functioning economy.
The effect of this loss of confidence would not be to deny the United States the ability to borrow in its own currency. Many countries borrow in their own currency, including countries like Malaysia and Colombia, which are not ordinarily thought of as titans of the world financial system.
Less stable countries typically pay somewhat of risk premium based on the risk of inflation in that country's currency and the risk of the demise of the country (think Yugoslavia). In several cases this risk premium is negative. For example, the interest rates on Japanese, Swedish, and Danish bonds are all lower than the interest rates on U.S. bonds. These countries do not appear to have suffered from not having the world's preeminent reserve currency.
There is the second issue of the dollar falling in value relative to the currencies of other countries if the dollar loses its status as the preeminent reserve currency. This possibility should be cause for celebration, not fear. First of all, a lower valued dollar was the ostensible goal of both the Bush and Obama administration when they demanded that China and other countries stop "manipulating" their currency.
In this context, "manipulation" means holding down the value of their currency against the dollar. In other words, it means pushing up the value of the dollar. In spite of it being official policy that we want a lower valued dollar we are now supposed to be terrified that we might get a lower valued dollar. Welcome to economics in Washington.
The reason why we would want a lower valued dollar is that it would make U.S. goods more competitive in the world economy. We would cut back our imports and increase our exports. This is hardly a novel theory, this is econ 101. And, in fact the world follows pretty closely on what the textbooks say should happen. The trade deficit exploded in the late 1990s when the value of the dollar soared following the East Asian financial crisis. (This is when developing countries like China first decided that they needed massive amounts of dollar reserves). The trade deficit then shrank in the last decade, with a lag, after the dollar fell in value. The chart shows the non-oil deficit, since we would not expect the demand for oil to be very responsive to the value of the dollar. (The chart does not include the increase in oil exports, since that data was not immediately available when I put the chart together and BEA's website is now down.)
Dean Baker / October 15, 2013
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The Tea Party and the New York Times Shut Down the GovernmentDean Baker
Truthout, October 14, 2013
The Huffington Post, October 14, 2013
Dean Baker / October 15, 2013
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If China Moves Away from Holding Dollars Then It Will be Doing What Bush-Obama RequestedDean Baker / October 15, 2013
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Italy Is Involved in "Trade" Talks, Not "Free-Trade" TalksDean Baker / October 15, 2013
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Budget and Debt TheatricsDean Baker
The Hankyoreh (South Korea), October 14, 2013
Dean Baker / October 14, 2013
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It's Monday Morning and Robert Samuelson is Confused About the EconomyDean Baker / October 14, 2013
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Lawsuit Filed in Federal Court Against UN over CholeraCEPR / October 13, 2013