Posted: 05 Nov 2013 06:36 PM PST

The New York Times reports Chris Christie Re-elected Governor of New Jersey.

Gov. Chris Christie of New Jersey won re-election by a crushing margin on Tuesday, a victory that vaulted him to the front ranks of Republican presidential contenders and made him his party's foremost proponent of pragmatism over ideology.

In a state where Democrats outnumber Republicans by over 700,000, Mr. Christie won decisively, making impressive inroads among younger voters, blacks, Hispanics and women — groups that Republicans nationally have struggled to attract.

The governor prevailed, according to exit polls, despite holding positions contrary to those of many New Jersey voters on many issues, including same-sex marriage, abortion rights and the minimum wage, and despite an economic recovery that has trailed the rest of the country. But he attracted a broad coalition by campaigning as a decisive, even swaggering, leader who could reach across the aisle to solve problems, unlike the bickering politicians of Washington.

Republicans panicked by the surge in activist support for the rabble-rousing Tea Party wing represented by Senators Ted Cruz and Rand Paul were cheered by Mr. Christie's success, saying they hope the party will learn not only from the size of Mr. Christie's margin over Barbara Buono, a Democratic state senator, but also from the makeup of his support.

"We'll be led back by our governors, and Chris Christie is now at the forefront of that resurgence," said Ed Gillespie, a former chairman of the Republican National Committee. "He's proved that a conservative Republican can get votes from Hispanics and African-Americans, that a pro-life governor can get votes from women. This means that those voters are available to us, that we're not shut out demographically or geographically — that it's worth the effort."

His national profile will only increase later this month as he takes over as head of the Republican Governors Association. That position gives him sway over which state races the party chooses to spend money on, allowing him to rack up favors with other Republican politicians and create relationships with local leaders in key presidential states.

On Tuesday morning, well before polls closed on his re-election, Mr. Christie said he would be appearing frequently in "places like Ohio and Michigan and Florida," all states with incumbent Republican governors up for re-election next year, and he offered that he was also willing to help Republican incumbents in Iowa and South Carolina, states that appear early on the presidential campaign calendar.

Democrats in New Jersey who supported his re-election would not go so far as to say they would support him for president. Still, even they praised his potential for his party.

"For the sake of the nation, somebody needs to rebuke the crazies," said former Gov. Jim McGreevey, a Democrat who now works with prisoner re-entry and praises Mr. Christie's commitment to rehabilitation programs. "This is the party of Lincoln, of Eisenhower, this is one of the great political parties in the history of democracy. What Christie has done speaks to the notion that Republicans can win if there is an adherence to principle that is guided by a healthy pragmatism."

Exit Polls

The NYT has some interesting exit polls. I put them in table form.

Gender	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Male 46% of voters	61%	+8 pct. pts.	37%	-3 pct. pts.
Female 54%	55%	+10 pct. pts.	43%	-7 pct. pts.
Race and Ethnicity	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
White 72% of voters	68%	+9 pct. pts.	31%	-3 pct. pts.
Black 15%	20%	+11 pct. pts.	79%	-9 pct. pts.
Hispanic 9%	48%	+16 pct. pts.	48%	-17 pct. pts.
Asian 3%	N.A.	N.A.	N.A.	N.A.
Age	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
18-29 10% of voters	47%	+11 pct. pts.	53%	-4 pct. pts.
30-44 21%	52%	+2 pct. pts.	46%	+2 pct. pts.
45-64 46%	60%	+12 pct. pts.	38%	-8 pct. pts.
65+ 23%	64%	+9 pct. pts.	35%	-5 pct. pts.
Education	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
No H.S. diploma 3% of voters	N.A.	N.A.	N.A.	N.A.
High school grad 21%	62%	+14 pct. pts.	37%	-9 pct. pts.
Some college 24%	61%	+12 pct. pts.	37%	-7 pct. pts.
College 29%	61%	+7 pct. pts.	37%	-2 pct. pts.
Postgrad 24%	48%	+4 pct. pts.	50%	0 pct. pts.
Religion	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Protestant 34% of voters	59%	N.A.	40%	N.A.
Catholic 42%	72%	N.A.	27%	N.A.
Jewish 5%	N.A.	N.A.	N.A.	N.A.
All other 9%	N.A.	N.A.	N.A.	N.A.
Party	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Democrat 42% of voters	31%	+23 pct. pts.	67%	-19 pct. pts.
Republican 27%	92%	+1 pct. pts.	7%	+1 pct. pts.
Independent or something else 31%	64%	+4 pct. pts.	33%	+3 pct. pts.
Income	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Under $50,000 28% of voters	51%	+11 pct. pts.	46%	-9 pct. pts.
$50,000-$99,999 33%	57%	+11 pct. pts.	41%	-6 pct. pts.
$100,000 or more 39%	62%	+7 pct. pts.	36%	-4 pct. pts.
Ideology	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
Liberal 26% of voters	29%	+20 pct. pts.	68%	-15 pct. pts.
Moderate 49%	60%	+12 pct. pts.	39%	-6 pct. pts.
Conservative 25%	85%	+3 pct. pts.	14%	-1 pct. pts.
Sex, Race and Ethnicity	Chris Christie		Barbara Buono
	Share of vote	Change from 2009	Share of vote	Change from 2009
White men 34%	69%	+6 pct. pts.	29%	0 pct. pts.
White women 38%	67%	+11 pct. pts.	32%	-6 pct. pts.
Black men 6%	23%	+12 pct. pts.	77%	-8 pct. pts.
Black women 9%	18%	+11 pct. pts.	80%	-10 pct. pts.
Hispanic men 4%	N.A.	N.A.	N.A.	N.A.
Hispanic women 5%	42%	+14 pct. pts.	54%	-16 pct. pts.
All other races 4%	47%	N.A.	46%	N.A.

Those exit poll results are from 7:57 p.m. E.S.T. Please check back in with the New York Times for updated returns.

Reflections on Christie's Win

Without a doubt Christie is now a national frontrunner for the 2016 election.

Is that a good thing?

Here is my answer in context. Readers know I preferred Christie over Mitt Romney in 2012. It was a case of the unknown vs. the known. Romney wanted a war with Iran and a trade war with China. That coupled with his stance on abortion made him unelectable.

Why?
Independents would not and did not vote for him.

Where Christie stands on unions is known and welcome. However, we still do not know much else about Christie.

Where does he stand on war-mongering, military spending in general, security, Obamacare, the NSA, the Fed, and trade policy?

Those are all unknowns.

But we do know his strong right to life message is not going to play well with most pro-choice independents, including this one. Republicans really need to throw that issue into the trashcan where it belongs. It can (and did) contribute to national election defeats.

Here's the deal. Voters, in general, can live with some restrictions on abortion. A huge majority cannot accept the viewpoint that abortion should be totally outlawed.

Republicans would be smart to adopt a middle of the road approach, as opposed to the religious-wrong approach of overturning Rove vs. Wade.

Similarly (right, wrong, or otherwise), the majority of Americans are in favor of "some" gun control measures. I can debate this form either side. But debate is pointless. The simple fact of the matter is that Republicans do not do themselves any favors by nominating extreme candidates on these issues.

In contrast to Christie, we know where Rand Paul stands on all of those issues. And while I do not agree with Paul on everything, this time I will take the known (Rand Paul) as opposed to the unknown (Chris Christie).

Given they seem to agree on my one key dispute with Paul, my position is highly unlikely to change. Still, Republicans can do far worse than Christie.

Mitt Romney was a complete disaster. Hopefully the Republican leadership learned a lesson. If they didn't, and if Republicans nominate another extreme right basket-case, Republicans can expect to lose the election to Hillary Clinton in 2016. Don't blame me, I am only the messenger.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

In Praise of Pronounced Unhappiness

Posted: 05 Nov 2013 12:28 PM PST

Today, I sing in glorious praise of unhappiness. Lest you think I lost my mind, first consider an Op-Ed in The Hill by life-long friend David Wise. He writes on Ending the Budget Wars.

For the second time in two years the U.S. has stepped back from the precipice of default.

In January, absent agreement to the contrary, a second sequestration will go in effect and on February 7, 2014 the nation would face yet another debt ceiling crisis. The inability of the so-called supercommittee to reach a compromise when given a similar task in 2011 is enough reason for pessimism.

A long-term solution requires that no one come into the talks with preconditions and that everything be on the table. One sign that a successful accord has been reached is that no one walk away from the table completely happy. It is necessary. The time has come.

Common and Uncommon Ground

I am not in complete agreement with everything my life-long friend says. For starters, I disagree with his stance that a default would have been catastrophic.

That's a moot point however, and cannot be proven either way because the precipice was essentially an illusion. We may have been on the edge, but there was approximately a zero percent chance of falling off.

Those small differences aside, I wholeheartedly agree with the three key ideas in Wise's article.

We need to fix the budget problem
Everything should be on the table
No one should walk away completely happy

Compromise Misery Needed

In regards to point number 3, Wise did not go far enough. I propose what's needed is for Democrats and Republicans alike to both walk away from the table, not only unhappy, but downright miserable. Here are my proposals for mutual misery.

Democrat Misery

Huge reductions in entitlement spending
End collective bargaining of public unions
Scrap Davis Bacon and all prevailing wage laws
Increase Social Security Retirement Age
Food Stamp Reform along the lines I suggested in Treasury Secretary Pleads for Higher Taxes, More Government Spending, Big Farm Bill, No Cuts in Food Stamps
Stop disability fraud&

In return for the above much needed Democrat misery, I would be willing to accept a modest increase in taxes. Of course that would make Republicans unhappy. But unhappiness is not what we need, we need outright misery as follows.

Republican Misery

Modest tax hikes
Huge decreases in military spending
All US troops on foreign soil come home within three years
Huge reductions in military spending

Some issues are non-partisan. For example food crop supports are promoted by farm-state Republicans and Democrats. Drug imports fall along similar lines. Thus we need to spread the misery.

Non-Partisan Misery

Elimination of all tariffs
Elimination of all crop supports
Drug imports from Canada and foreign countries

Food Stamp Misery

To get people off welfare and on to workfare, we need to reduce the incentives to collect welfare. This is what I suggested earlier.

Prohibit food stamp purchases of potato chips, snacks, soft drinks, candy, pizza, frozen foods of any kind except juice.
Limit food stamp users to generic (store brand vs. name brand) dried beans, rice, peanut butter, pasta, fresh vegetables, fresh fruit, frozen (not bottled) juice, canned vegetables, canned soup, soda crackers, poultry, ground beef, bread, cheese, powdered milk, eggs, margarine, and general baking goods (flour, sugar, spices).
Calculate a healthy diet based on current prices, number in the family, ages of recipients, and base food stamps allotments on that diet.
In the interest of health and cleanliness, expand the food stamp program to include generic soap and laundry products.

My proposal would do something positive for food stamp recipients' health and the budget.

And what better way to make people miserable than to make them eat healthy? Hopefully, miserable enough to seek a job.

I am open to still more misery, as much as it takes, on each side, to balance the budget and lay a foundation for growth.

Make All the Politicians and Lobbyists Miserable

I nearly missed this key point: We need to make all of the politicians, public union advocates, and lobbyists on both sides of the aisle completely miserable. The way to do that is institute serious campaign finance reform.

Vote buying and political pandering on both sides of the aisle are key reasons we are in this fiscal mess in the first place.

To date, the word "compromise" means both sides get all the spending they want, deficit be damned. Worse yet, politicians are all too happy to let lobbyists write the legislation in return for donations. The result is the worst legislation money can buy.

Footnote

I revised the ending paragraphs with some small changes regarding food stamps, and more importantly to include campaign finance reform, vote buying, and the current meaning of compromise.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

Non-Manufacturing ISM Beats Expectations Sending Bond Yields Higher

Posted: 05 Nov 2013 10:46 AM PST

The October 2013 Non-Manufacturing ISM Report On Business®, released today, came in at 55.4.

This was above the bloomberg consensus estimate of 54.5

ISM at a Glance

Non-Manufacturing							Manufacturing
Index	Oct	Sep	Percentage Point Change	Direction	Rate of Change	Trend in Months	Oct	Sep	Percentage Point Change
NMI™/PMI™	55.4	55.4	+1.0	Growing	Faster	46	56.4	56.2	+0.2
Business Activity/Production	59.7	55.1	+4.6	Growing	Faster	51	60.8	62.6	-1.8
New Orders	56.8	59.6	-2.8	Growing	Slower	51	60.6	60.5	+0/1
Employment	56.2	52.7	+3.5	Growing	Faster	15	53.2	55.4	-2.2
Supplier Deliveries	49.0	50.0	-1.0	Faster	From Unchanged	1	54.7	52.6	+2.1
Inventories	54.5	54.5	+0.0	Growing	Same	9	52.5	50.0	+2.5
Prices	56.1	57.2	-1.1	Increasing	Slower	49	55.5	56.5	-1.0
Backlog of Orders	50.0	50.5	-0.5	Unchanged	From Growing	1	51.5	49.5	+2.0
New Export Orders	53.0	57.5	-4.5	Growing	Slower	3	57.0	52.0	+5.0
Imports	55.0	51.5	+3.5	Growing	Faster	5	55.5	55.0	+0.5
Inventory Sentiment	62.5	62.0	+0.5	Too High	Faster	197	N/A	NA	N/A
Customers' Inventories	N/A	N/A	N/A	N/A	N/A	N/A	47	43.0	+4.0