One big question looking forward is whether Obama will once again turn to the Beltway-insider deficit hawks for alleged wisdom. Let’s hope not.

For one thing, the election offered confirmation of something that was actually pretty obvious: some of the most self-righteous deficit hawks are actually much more concerned with using deficits as an excuse to dismantle the social safety net than with, you know, reducing deficits. Notably, David Walker decided, a week before the election, to endorse Mitt Romney — even though Romney had proposed a $5 trillion tax cut to be offset by loophole closing he declined to specify, not to mention an increase in defense spending the Pentagon said it didn’t need.

As an aside, Walker’s timing was interesting. If you were following the election quants, you already knew that Obama was a clear favorite to win — 3 to 1 according to Nate Silver, much more than that according to Sam Wang. So why would Walker — whose popular following might include some but not all of his immediate family — throw his support to the likely loser? Probably because he was listening to the wrong people, and actually believed the stuff about Romneymentum.

Yet despite what should have been a major discrediting of the whole deficit-hawk establishment, the word is that Wall Street is pushing for Obama to appoint Erskine Bowles as Treasury Secretary.

Erskine Bowles? The man who, charged with producing a deficit-reduction plan, decided that a key feature of this plan should be … cuts in marginal tax rates on high incomes? The man who warned, in dire terms, of a looming fiscal crisis, with soaring US borrowing costs, within two years — almost two years ago? Just for the record, here’s how it’s going:

As I said, let’s hope that Obama knows better than to give these people any credence.

So, American voters have spoken and sent the nation firmly on the path of destruction — God’s wrath for gay marriage, you know. So we can relax a bit on that front and turn our attention back to Europe, which remains, as Tim Duy says, very grim.

Europe has been out of the spotlight for a while, partly because of the election focus here, but also because the acute financial strains have abated a bit. The ECB’s apparent willingness to buy bonds has combined with what looks like a surprising willingness of peripheral economies to accept even more austerity; the result is smaller bond spreads and less immediate risk of meltdown. But the macroeconomics of austerity and internal devaluation haven’t gotten any better: unemployment is still rising fast, and at some point the strain will just be too much to take.

And I think it’s worth pointing out that this isn’t just a Greece/Spain issue. If you look at the euro area as a whole, it has in effect been following drastic fiscal austerity with no offset on the monetary side. Here, from the IMF’s Fiscal Monitor, is one measure of the overall fiscal stance for the euro area, the cyclically adjusted primary surplus (that is, what the budget balance ignoring interest payments would be if the economy weren’t so depressed):

That’s a big move toward austerity — 1937 big. And as I said, not at all offset by anything on the monetary side. And Europeans wonder why the economy is in trouble.

Oh, and just to make things perfect, the European Commission is hitting back at the IMF over austerity and reaffirming its faith in the confidence fairy.

I have to say, the gnashing of teeth and rending of garments on the right comes as a surprise. We knew that they would be upset; but the extent to which they were really, truly unprepared for the obvious possibility that Obama would be reelected is remarkable. I suspect that it comes down to two things: self-definition in terms of always being the people with the power, and the right-wing information bubble, which left them completely unaware of information they didn’t want to hear.

One thing that caught my eye, in particular, has been the wailing that Americans have turned socialist. (Conservatives haven’t failed America — America has failed conservatives!) Thus John Hinderaker of Bush is a genius fame declares,

To me, the most telling incident of the campaign season was a poll that found that among young Americans, socialism enjoys a higher favorability rating than free enterprise. How can this possibly be, given the catastrophic failure of socialism, and the corresponding success of free enterprise, throughout history? The answer is that conservatives have entirely lost control over the culture.

Oddly, he doesn’t even seem to consider the more obvious possibility: after decades in which right-wingers have attacked long-established institutions — Social Security, progressive taxation, unemployment insurance — as “socialism”, a lot of young people now believe them, and think that this “socialism” thing really isn’t so bad. A case in point: Sheldon Adelson’s Israeli newspaper just ran the headline “America chooses socialism”, referring to the reelection of a president who enacted a health care reform originally proposed by the Heritage Foundation.

Meanwhile, Karl Rove is accusing Democrats of suppressing the vote. How? By the heinous crime of running negative ads. Cue Monty Python on sarcasm:

Brad DeLong and others are having a lot of good clean fun ridiculing pundits who insisted, to the last, that their psychic guts perceived truths invisible to pollsters. And who knows? This ridicule may even serve a social purpose, making news organizations a bit less likely to treat these pundits as fonts of wisdom.

But I think there’s something else that needs discussing. The rejection of polling evidence wasn’t just a matter of wishful thinking on the right; it was accompanied by intense rage. (Just look at my comment thread here, which now stands as a sort of historical marker of the lunacy of the campaign’s closing days — and you should have seen the stuff that didn’t make it through moderation!)

On the face of it, this makes no sense. The election was going to happen, and somebody was going to win. Why lash out so bitterly at people who you claimed to think would be revealed as fools in just a couple of days?

I’ll try to present some more coherent thoughts on a later occasion, but here’s my quick take: what we’ve just seen is a peek into the modern right-wing psyche, which is obsessed — more than anything else — with power. Policy is one thing; but equally or even more important is the sense of being with the winners, of being part of the team that will stamp its boots on the faces of the other guys. And while conservatives of that ilk would probably concede if pressed on it that there’s a difference between the perception of being on top and the reality determined in an election, emotionally they can’t separate the two: they perceive anyone suggesting that maybe they aren’t going to smash their opponents as a threat.

And we’re not just talking about teenagers blogging in their pajamas; look at Karl Rove’s temper tantrum on Fox.

I’m tempted to say that all the people who went wild over skewed polls, Nate Silver is evil, and so on need to seek counseling. But if I were to say that, this would even drive them crazier. So I won’t. Oh, wait.

There are many lists now circulating of the biggest winners and losers from the election; oddly, however, none of the lists I’ve seen mentions just how bad this result is for Wall Street’s Masters of the Universe.

The story, as you may recall, is that the financial industry — having brought both itself and the rest of the world to the edge of disaster — was bailed out by taxpayers. Yet far from being grateful, top financial types were furious at Obama for occasionally hinting that some of them might have misbehaved a bit. And investment bankers — who normally lean Democratic — went overwhelmingly to the other side, pouring cash into Mitt Romney’s coffers in the no doubt correct expectation that a Romney administration would dismantle financial reform and treat their wealth with the adulation they believe to be their birthright.

But Romney lost and Obama won. The limits of their power have been cruelly exposed, and the reelected president now owes them nothing. Did I mention that Elizabeth Warren is going to the Senate — a Senate that will be substantially more progressive and less Wall Street friendly than before?

Bad move, guys.

So, for a while there during the campaign it seemed very iffy. But in the end, discipline and being on the right side of the issues prevailed. Yes, Elizabeth Warren won!

Oh, and that guy Obama too.

Tomorrow — or I guess today — comes the cleanup; when thousands, perhaps millions, of right-wing heads explode, it makes quite a mess. Also, notice that the polls were right. I wonder if I can get invited when Nate Silver is sworn in as president?

OK, somewhat more seriously: one big thing that just happened was that the real America trumped the “real America”. And it’s also the election that lets us ask, finally, “Who cares what’s the matter with Kansas?”

For a long time, right-wingers — and some pundits — have peddled the notion that the “real America”, all that really counted, was the land of non-urban white people, to which both parties must abase themselves. Meanwhile, the actual electorate was getting racially and ethnically diverse, and increasingly tolerant too. The 2008 Obama coalition wasn’t a fluke; it was the country we are becoming.

And sure enough that more diverse and, if you ask me, better nation just won big.

Notice too that to the extent that social issues played in this election, they played in favor of Democrats. Gods, guns, and gays didn’t swing voters into supporting corporate interests; instead, human dignity for women swung votes the other way.

A huge night for truth, justice, and the real American way.

No, not the election as a whole — the stakes are huge: whether near-universal health care finally comes to America, whether we get any kind of tightening of financial regulation after the bankers destroyed the world economy. But there are a couple of trivial things I probably shouldn’t care about given the really important stuff, but can’t help thinking about.

One is the battle of the nerds versus the traditional pundits. The outpouring of Hate for Nate has been awesome to watch; much of it is coming from the right, but a fair bit also from mainstream pundits who rely on their ineffable sense of “momentum” or whatever rather than polls.

Obviously I side, professionally and temperamentally, with the nerds here — not just Nate Silver, but Sam Wang, Drew Linzer, Pollster, and more. I’d like to think I’d be on their side even if the numbers were pointing the other way.

The point is that relying on data rather than hunches is my style; I’d hate, professionally, to see the voices in the air people get this right, simply because the polls were wrong.

The other trivial stake involves economic analysis. I’ve written a lot about freshwater versus saltwater, but that’s not on the ballot today. What is on the ballot, sort of, is the attempt by a number of Romniac economists — economists who have a basically saltwater, Keynesian view of macroeconomics — to deny that there’s anything special about economies trying to recover from a severe financial crisis that pushes monetary policy up against the zero lower bound, to insist that if only Obama weren’t looking at business funny we’d be having a recovery just like the recovery from the Fed-induced recession of 1981-2.

This seems to me to be an obviously cynical move; basically, I think these guys have to know better, since their own textbooks should at the very least tell them that the zero bound matters a lot. And I’d hate to see this kind of cynicism rewarded.

Trivial stuff compared with the tens of millions who will have to live — and, in a number of cases, die — without health insurance if the polls are wrong. But I never said that I’m free from petty motivations.

Wow, it’s hard to post anything interesting today. Everything — not just in America, but around the world — hinges on what happens tomorrow. The odds seem to favor Obama heavily, with national polling having moved modestly but significantly in Obama’s favor over the past few days and state-level polling showing a clear electoral college lead; but I guess we’ll find out soon.

Meanwhile, via Mark Thoma, Simon Wren-Lewis worries whether he has been too rude toward policy makers who forced a turn toward austerity in 2010, helping to derail recovery in advanced countries.

As Wren-Lewis says, objectively there’s every reason to be very angry: policy makers threw out everything we’ve learned about business cycles these past 80 years in favor of doctrines that made them feel comfortable — and millions of workers paid the price. But should we cut them some slack nonetheless?

This is basically an operational question; as Mark says, the goal is to change minds — although the big question there is whether you’re trying to change the minds of the policy makers themselves, or the minds of other people, so we can get a new and better set of policy makers.

But even given that, it matters what niche you yourself fill in the intellectual ecology. Insider-type positions, like that of being the senior economist at the IMF, require tact and euphemisms. Outsider positions, like that of being an iconoclastic columnist at the New York Times, require a lot of effort to get peoples’ attention. It wasn’t nice to characterize the doctrine of expansionary austerity as belief in the confidence fairy, but I do believe that it focused the discussion in a way that a less caustic approach would not have achieved.

And one more point: writing effectively requires that you have a voice, that the passion shows — and too much self-censorship can get in the way, making the writing dull and stiff. Obviously no four-letter words — and while I may sometimes envy Matt Taibbi his vampire squid, rudeness in my part of the commentariat has to be within certain bounds. But pretending to respect views that you don’t isn’t, and shouldn’t, be part of the job description for economists trying to grapple with these important issues.

OK, one last entry. I see some commenters referring to results from betting markets — and some of them reading the numbers upside down. I’m personally not a big fan of the “wisdom of crowds” thing in this case: people laying bets are working from the same information the rest of us have, and in some cases (Intrade) recent movements have suggested that some players are, at the very least, putting their money on the candidate they want to win rather than the candidate they think will win.

But anyway, here’s a site with a convenient summary of several markets. Note that Betfair, a well-established sports betting site, puts Obama’s odds at 77 percent. That’s not as high as Silver, let alone Wang, but it’s surely enough to puncture the notion that only pointy-headed NY Times types believe that Obama is the favorite.

OK, this might be my last post until tomorrow night — life will intrude. And it’s more about polling; sorry, even I am finding it hard to focus on macroeconomics until this thing is over.

Before I get into the substance, such as it is, let me make a point that the many trolls who showed up yesterday don’t seem to grasp: at this point, speculation about the state of the race has no significance whatsoever for the outcome. Somebody will win; my informed guess is that it will be Obama, but if the polls are systematically wrong, it will be Romney. Even if you are a dedicated Obamanite or Romniac, you’re totally wasting your time trying to spin the numbers in your guy’s favor: nothing we say here can change the outcome. The only reasons to talk about it now are (1) general interest (2) as a blow in the longer-term war between traditional political reporting and the rise of the nerds.

With that behind us, let me show you a chart, lifted from Real Clear Politics — not my favorite site, but that’s why I chose it: RCP is definitely Republican-leaning, so I hope I can duck at least one charge of bias. Here’s what RCP currently shows for Ohio polling:

That’s a lot of polls, with one tie and every other poll showing Obama ahead. Since Ohio is generally considered crucial, you can see right there why all of the poll aggregators — not just Nate Silver, but also Sam Wang, electoral-vote.com, Drew Linzer, Pollster, Talking Points are showing an Obama advantage. It’s not the political leanings of the analysts; it’s the polls. Again, the polls could be wrong, but they have to be systematically wrong by at least 2 percent to reverse this.

This shouldn’t even be controversial, but of course it is. Partly that’s because it’s news some people don’t want to hear. But I think there’s also a math-is-hard problem: a political universe in which there are lots and lots of polls seems to play into some natural failings of our mathematical intuition.

First of all, from what I can see a lot of people have trouble with the distinction between probabilities and vote margins. They think that when I say, “state level polls overwhelmingly suggest an Obama victory”, I’m also saying “state level polls suggest an overwhelming Obama victory”, which isn’t at all the same thing. We have a lot of polls, almost all of which say that Obama will win Ohio; but they don’t by any means say that he’ll win it in a landslide.

Second, people clearly have a problem with randomness — with the fact that any poll, no matter how carefully conducted, has a margin of error. (And the true margins of error are surely larger than the statistical measure always reported, since sampling error isn’t the only way a poll can go wrong). Specifically, what I think people don’t get is the fact that when there are many polls of a state, some of them are bound to be outliers — not, or not necessarily, because the pollsters have done a bad job, but because there’s always noise in any sampling procedure.

What this means is that if you look at all the polls, you’re very likely to find one or two that tell you what you want to hear: Rasmussen has Ohio tied! Susquehanna has Pennsylvania tied! And it’s very tempting to select those polls and trumpet them — a temptation you really want to resist. The point isn’t necessarily that these are bad polling firms (as it happens, they are, but that’s beside the point); it is that even good pollsters will produce an occasional off result, and you really, really don’t want to start picking and choosing those off results to make yourself feel good.

So in a many-poll world, you really have to adopt some kind of averaging procedure and stick to it. Different poll aggregators have chosen slightly different methods, and it would be worrisome if they were telling different stories. But they aren’t: they’re all saying Obama advantage, mainly because there’s no way to average the Ohio polls and not find an Obama lead.

Oh, and a third point: those margins of error are for any one poll. An average of many polls will have a much smaller standard error. Don’t say, hey, Obama may have a three-point lead, but that’s within the margin of error; as Pollster points out, the odds that this is a true Obama lead are 99 percent.

So again, this comes back to the polls; they, not the quirks of the various analysts, are driving this story. Are the polls deeply biased? We’ll have a strong indication to that effect on Tuesday: Nate gives Romney only a 15 percent chance, Sam Wang much less than that, so if Romney does win it will at least cast the underlying data into doubt.

We’ll soon see. And I can’t wait for this to be over.

Greg Sargent is right: the latest and presumably final Romney attack demonstrates, once again, a remarkable level of contempt for the public — just like the “you didn’t build that” attacks, the “apology tour” attacks, and so on. By the way, one silver lining is that it sent me on a bit of literary research: I had no idea that the line “living well is the best revenge” goes all the way back to the 17th-century poet George Herbert!

One thing Greg doesn’t really point out, however, is how desperate this ploy seems. If you have a campaign strategy that’s working, you don’t roll out a whole new line of attack with just a couple of days left. Furthermore, all these attacks based on out-of-context quotes and/or sheer fabrication have, as far as I can tell, fallen flat: Romney’s successes, such as they are, come from convincing people that he can run the economy better, not from convincing them that Obama is a socialist Muslim atheist terrorist.

It really looks to my eye as if Romney basically agrees with Nate Silver and other poll aggregators that he’s losing; a victory would probably surprise his team as much as it would surprise Axelrod etc.. So they’re lashing out wildly in the hope that something will connect.

Today’s Financial Times bears a banner headline on p.1: “US election hangs on a knife edge”. Aside from everything else, surely this gets the cliche wrong: you rest on a knife edge, don’t you? If you try to hang on one, I think you just cut off your fingers.

More important, though, this headline deeply misleads readers about the state of the race — and in so doing, it echoes a lot of political reporting right now. Quite simply, many of the “analysis” articles being published in these final days leave readers worse informed than they were before reading.

As Nate Silver (who has lately attracted a remarkable amount of hate — welcome to my world, Nate!) clearly explains, state polling currently points overwhelmingly to an Obama victory. It’s possible that the polls are systematically biased — and this bias has to encompass almost all the polls, since even Rasmussen is now showing Ohio tied. So Romney might yet win. But a knife-edge this really isn’t, and any reporting suggesting that it is makes you stupider.

Worse yet, some reporting tells readers things the reporters have to know aren’t true. How many stories have you seen declaring that “both sides think they’re winning”? No, they don’t: the Romney campaign is visibly flailing, trying desperately to find new fronts on which to attack Obama. They clearly know that it will take a miracle — sorry, a last-minute surge — to prevail on Tuesday. It’s OK, I guess, to report campaign spin; but surely it’s not OK to report campaign spin as the truth, which is what these stories are doing.

Again, as Nate says, it’s definitely possible that the polls are systematically wrong. The obvious ways they could go wrong, cell phones and Latinos, favor Obama rather than Romney; but maybe pollsters are overcompensating for these factors, or maybe there’s a large Bradley effect distorting poll responses. Reporting about these possibilities would be interesting.

But reporting that suggests that this is a too-close-to-call race doesn’t get at any of this; it’s just lazy, and a disservice to readers.

Some readers have been asking me to reply to Casey Mulligan’s latest attack on my recent book. Um, no. Life is short, and if I spent my time responding to every attack on yours truly — or indeed, every thing Mulligan himself writes that I consider foolish — I would have no time to do anything else. So let me just outsource this to John Quiggin.

Now, Quiggin’s post takes on both Mulligan’s specifics and the broader claim that increased use of the social safety net is a cause rather than a result of the depressed economy. As one of his commenters points out, this amounts to the claim that soup kitchens caused the Great Depression. Quiggin does an admirable job of refuting this claim. I would, however, add one more point. If you really believe that the problem is that excessive generosity to the downtrodden is reducing the incentive to work, so that what we really have is a supply problem rather than a demand problem, you should expect to see upward pressure on wages. What we actually see:

Oh, and feel the hyperinflation.

Zombie ideas — a phrase I originally saw in the context of myths about Canadian health care — are policy ideas that keep being killed by evidence, but nonetheless shamble relentlessly forward, essentially because they suit a political agenda.

The controversy over the withdrawal by the Congressional Research Service of a report showing no connection between tax cuts for the rich and economic growth is a reminder that in U.S. politics, at least, the tax cuts/growth notion is the ultimate zombie idea.

I mean, when the CRS report first came out I didn’t write about it because it was basically old news (which is not to criticize the report, which did a fine job of putting the evidence together). Nobody has ever been able to find clear evidence of a link between high-end tax cuts and growth. The raw fact, after all, is that the US economy did better in the first half of the post World War II era, with high top marginal rates, than it did in the second half: growth was both somewhat slower and much more unequal in the years after Reagan’s 1981 cut than before.

And the tax-cut faithful have delivered one forecasting debacle after another. I’m old enough to remember not just the predictions that the Bush tax cuts would unleash a huge economic boom, but the claims that Clinton’s 1993 tax hike would cause a deep depression.

Yet the tax-cut dogma remains politically intact, and it is at the core of Romney’s alleged plan for recovery.

There is, of course, no mystery here: just ask who benefits from the dogma that ever-lower taxes on the wealthy are just what we need, and you understand why there is always plenty of money for both economists and politicians who promote the dogma.

But it’s kind of sad to realize that our public discourse is so obviously, nakedly corrupt.

Given my access issues, I can’t search for something new. So here’s a repeat, albeit from some time back — appropriate if only for the lyrics So when the lights cut out/ I was left standing in the wilderness downtown.