I'm seeing stories now that this year's presidential campaign will cost upwards of $2 billion. And I'm thinking that presidential elections (and some other high profile senate/governor/etc. races really aren't bad stimuli for the economy.

Think about all the various facets of business that are benefiting from an election. Obviously the media is one of the biggest winners, from radio/tv down to newspapers and online media outlets. But other winners include ad agencies, venue sites, printing companies and merchandise vendors.

The only negative I see is that a lot of the wealth and business is being distributed primarily to the battleground states. So some states which could use the business (like California) don't see that much of the presidential race benefits.

Two ironies to me also. One, much of the wealth (but not all of it) is being re-distributed from wealthy donors to small businesses. So while both parties claim the other is hurting small businesses; at least in an election process, both parties are helping small businesses.

And two - and I'm not sure about this - but aren't most of the products being produced tax-exempt? If so, we're talking about a ton of lost tax revenue.

So the bottom line is a competitive presidential race (like we've had for four straight presidential elections at least) is good news for the U.S. economy.

(10-25-2012 09:27 PM)Fort Bend Owl Wrote:  I'm seeing stories now that this year's presidential campaign will cost upwards of $2 billion. And I'm thinking that presidential elections (and some other high profile senate/governor/etc. races really aren't bad stimuli for the economy.

Think about all the various facets of business that are benefiting from an election. Obviously the media is one of the biggest winners, from radio/tv down to newspapers and online media outlets. But other winners include ad agencies, venue sites, printing companies and merchandise vendors.

The only negative I see is that a lot of the wealth and business is being distributed primarily to the battleground states. So some states which could use the business (like California) don't see that much of the presidential race benefits.

Two ironies to me also. One, much of the wealth (but not all of it) is being re-distributed from wealthy donors to small businesses. So while both parties claim the other is hurting small businesses; at least in an election process, both parties are helping small businesses.

And two - and I'm not sure about this - but aren't most of the products being produced tax-exempt? If so, we're talking about a ton of lost tax revenue.

So the bottom line is a competitive presidential race (like we've had for four straight presidential elections at least) is good news for the U.S. economy.

Not at all. This is Keynseian broken window NONSENSE.

It's not helpful b/c it produces nothing of value. Electronic media ads disappear, paper is thrown out. They vanish. They don't even drive people to businesses (like commercial ads do), they just drive people to vote one way or another...for gov't jobs that pay the same regardless.

Economics is about production. Clothes, homes, tools for more production. Food disappears kinda like media ads...but it provides the nutrition to futher production.

This election does nothing but shuffle money around, but it's not productive. So it doesn't help the economy. And the movement of money always has a cost (kind of like friction in physics) so it will hurt the economy as the movement of non-productive money leads to less money in the economy.

BTW, I haven't seen any articles saying an election is good for the economy. It was just my personal theory. And also BTW, the $2 billion amount is money raised in the election cycle by the main parties - it's not necessarily all being spent this year.

(10-26-2012 06:58 AM)Fort Bend Owl Wrote:  BTW, I haven't seen any articles saying an election is good for the economy. It was just my personal theory

I understand. It's worth thinking through. It's also important to realize that the $2B is gone. Not entirely wasted, since the printers and ad makers spent that money on food, homes, cars, etc. So, it didn't just get burned up (like the WTC disaster caused. That was like taking several billion dollars and burning it.) But, it went through an exchange where little of value was produced, not like if new highways or factories were built.

This highlights a major problem with the left view of economics. Focusing only on consumption, when $2B gets spent, that must be good for the economy, right?

But when the $2B doesn't produce anything of lasting value, then it's resources wasted or squandered. Resources that could have produced something of lasting value and utility had they been spent more wisely. And when as a society you waste resources for generations, you end up broken--and broke.

It's not demand that's broken, it's supply. And so long as BOTH major parties focus only on whether spending or tax cuts are the best way to stimulate demand, we are hosed.

(10-26-2012 07:45 AM)Owl 69/70/75 Wrote:  This highlights a major problem with the left view of economics.

Is it just the left, Owl? Seems like many on the right have that same perspective.

(10-26-2012 07:54 AM)DrTorch Wrote:  

(10-26-2012 07:45 AM)Owl 69/70/75 Wrote:  This highlights a major problem with the left view of economics.

Is it just the left, Owl? Seems like many on the right have that same perspective.

I was yanking FBOs chain a little since I know him and know he leans left. I think my last paragraph makes it pretty clear that I see the problem on both sides--at least, as long as left=D and right=R.

No. There is too much tension and uncertainty. Once the election is over, the economy will get better.

After the election, you're going to see a lot of numbers revised in the wrong direction.

(10-26-2012 08:24 AM)firmbizzle Wrote:  No. There is too much tension and uncertainty. Once the election is over, the economy will get better.

Animal spirits.

(10-26-2012 08:24 AM)firmbizzle Wrote:  No. There is too much tension and uncertainty. Once the election is over, the economy will get better.

Explain the past 4 years.

The uncertainty is Obama's policies. Get rid of his sorry ass and the economy will pick back up.