Counterparties: Sandy Tuesday

By Felix Salmon
October 30, 2012

Welcome to the Counterparties email. The sign-up page is here, it’s just a matter of checking a box if you’re already registered on the Reuters website. Send suggestions, story tips and complaints to Counterparties.Reuters@gmail.com

Hurricane Sandy has killed at least 30 people, and caused somewhere north of $10 billion in economic damages. Will the next casualty be the US general election, which is scheduled to take place next Tuesday?

As Ben Jacobs points out, “there is no precedent whatsoever for a natural disaster of this scale before a federal election”, and the result could be a major constitutional crisis. Voting is organized on a state-by-state basis, and New Jersey governor Chris Christie, for one, says he’s got “much bigger fish to fry” right now than worrying about whether he’s going to be able to get his state’s hurricane-struck population to the polls this time next week. (He’s absolutely right about that, as these pictures from Atlantic City testify.)

If you’re wondering why exactly US elections are scheduled for Tuesdays in November, the most basic answer is “no good reason”. The most detailed response is rooted in what now seems like a historical oddity: in 1845, Congress needed to pick a voting day that allowed farmers a day to travel each way to the country seat to vote without missing any religious services or market day (Wednesday). Tuesday was the only option left.

How to alter that archaic decision in the face of disaster is unclear. A 2007 study by the bipartisan Election Assistance Commission provides suggests looking at “existing State law to determine if the Governor has the power to cancel an election or designate alternative methods for distribution of ballots”. And the Washington Post’s Rachel Weiner has also dug up a 2004 Congressional report stating that “there is also no federal law which currently provides express authority to ‘postpone’ an election”, although states might be allowed to postpone voting under “exigent circumstances”.

Which raises the possibility, in this very close election year, that both Obama and Romney will fail to get 270 electoral votes on Tuesday, and will have to wait some unknown amount of time before New Jersey’s 14 electoral votes finally get added — to the Obama tally, of course. – Ben Walsh

On to today’s links:

Data Points
Sandy estimated to cause $5-10 billion in insured losses and $10-20 billion in economic losses – Reuters

Economy
The broken window fallacy: why natural disasters don’t stimulate the economy – Acton Institute
Why I Don’t Love Frederic Bastiat – Matt Yglesias

Disgusting
The real identity of last night’s Twitter villian, @ComfortablySmug – FWD

Politicking
Romney refuses to comment on plans to eliminate FEMA, 14 times – Gothamist

Central Banking
How the Fed responded to Sandy – John Carney

Yikes
Study: NYC’s subways could take between 21 days and several months to be restored – Quartz

Defenestrations
Apple exec responsible for maps flop on his way out – LAT

Bank Bloodletting
UBS humanely communicates some of 10,000 job cuts by deactivating office IDs – FT

Rebuttals
Look closely at the “prosperity index” – rising inequality is more important than debt – Dan Drezner

Dubious Conclusions
$16-30 trillion? Vague assumptions drive industry estimates of regulatory costs – Peter Eavis

Random
BofA employee background check reveals unpaid omelet bill from 1998 – Consumerist

Quotable
“‘Shut up, nerd’ is not an argument.” – American Conservative

More From Felix Salmon
Post Felix
The Piketty pessimist
The most expensive lottery ticket in the world
The problems of HFT, Joe Stiglitz edition
Private equity math, Nuveen edition
Five explanations for Greece’s bond yield
Comments
7 comments so far

Sandy’s killed a lot more than 30 people, but who am I to correct Reuters? I suppose it’s an editorial decision that depends if the company counts those small brown humans who live in the Carib and Haiti as people, of course.

Posted by ottorock | Report as abusive

Yikes, why even link to that Carter piece on Bastiat? Ugly attack on Yglesias in there, totally off the mark.

Posted by absinthe | Report as abusive

Now the game

Posted by marc21 | Report as abusive

@ottorock: I don’t think race is part of this, I think it’s pretty much just Amerisolipsism. If you hear an unqualified statistic on the evening news about number of people who die each year from breast cancer, it most likely excludes Europeans and includes small brown citizens of the United States.

Posted by dWj | Report as abusive

One of the things confident Romney-backers who disparage Silver, confident Obama-supporters who lean on his forecasts as an excuse to near-complacency, and about 99% of other human beings since the evolution of the species have in common is their misapprehension that 5-2 odds are something they experience as overwhelming. Saying that the campaigns, in their confidence, each believes that it has a 50.1% chance of winning betrays a rather severe confusion about what that would mean. Historically, an NFL team with a one or two point lead and the ball near midfield at the end of the third quarter will win more often than Silver says Obama will. Maybe Silver is right, maybe he’s wrong, but it would be foolish to imagine that a Romney win next week would refute today’s assertion that Romney has almost a 30% chance of winning.

Posted by dWj | Report as abusive

While I’m here, in re Silver, there has been some back and forth about Silver’s use of polls, and I’d like to criticize an argument on each side of the discussion.

1) There are some generally very smart and mathematically adept people who seem to forget that averaging a bunch of measurements, all made with the same biases, will not give you an endlessly improving estimate of the thing to be measured. Some people (largely optimistic Romney supporters) have argued that the polls are skewed because the samples are unrepresentative, and have adduced the party breakdowns of poll respondents as an argument. If you believe there are shared methodological problems with the 25 polls a day (or whatever it is at this point) that go into the averages, you shouldn’t imagine that those will average out.

2) The closest thing to a good response Silver has given has been that the relative fraction of voters who are Republican or Democrat are not constant, and that that is part of what the polls should capture. The problem that I think most of the other side has with that is that it seems easier to believe right now that there’s some methodological flaw in the polls than to believe that Obama will do better in the turnout battle this year than he did against McCain. My response to them is that I think a significant number of the people identifying themselves to pollsters as “independent” are tea party voters who consider themselves fed up with the GOP, but will continue to generally vote for Republicans over Democrats, and in particular Romney over Obama. I think this is why Romney is polling so well against Obama among “independents”, and is why the likely voter party breakdown is skewing toward Democrats.

Posted by dWj | Report as abusive

The anti-Bastiat argument is just goofy. Is the conclusion that we should start breaking windows after all? at least when there is no convenient Keynesian hurricane that will do it for us?

No … for panes of glass or anything else, only the market-clearing price is the market clearing price. That tautology is both true and important: any stimulus policy that changes that price by destruction interferes with the processes of economnic health. Bastiat and Hazlitt are right.

Posted by Christofurio | Report as abusive
Post Your Comment

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/