New forecast...

Fairmodel has been re-estimated and a new US Forecast Memo is out. Here are some of the numbers: Real GDP and % increase===Unemployment Rate 2003/3 9705.0 +4.1% ====6.2 2003/4 9791.2 +3.6% ====6.0 2004/1 9875.4 +3.5% ====5.9 2004/2 9957.7 +3.4% ====5.7 Doesn't 4.1% GDP growth look great? It would be nicer still to be looking at lower unemployment rates, but at least the number is marginally better than the 6.3% we were going along with this morning. It's worth remembering the consensus this morning was +1.5%, not 2.4% GDP growth. But Fairmodel pumped out that silly +2.7% last April 25. Whoops!

Link posted by Steve Antler : 10:00 PM

Welcome to the war economy...

Reportedly huge increases in defense spending are being "blamed" for the unexpected 2.4% second quarter GDP growth Here's one way of looking at the modest rise in defense spending from 4.29% to 4.67% of GDP: =========GDP /DEFENSE/AS %/INCR 2002:1==9,363.20/ 388.5 /4.15% 2002:2==9,392.40/ 395.8 /4.21% /+0.06 2002:2==9,485.60/ 402.5 /4.24% /+0.03 2002:4==9,518.20/ 413.2 /4.34% /+0.10 2003:1==9,552.00/ 409.7 /4.29% /-0.05 2003:2==9,608.10/ 448.9 /4.67% /+0.38

Link posted by Steve Antler : 1:36 PM

Latest from MEMRI

Translation of columnist Khaled Al-Qishtini's editorial on the US Iraq mission: The coalition forces will not withdraw from Iraq until they complete their mission. They are in Iraq at the will of the overwhelming majority of the people, and their mission is a noble and blessed one. They strengthen their presence [in Iraq] every day, with forces from other countries [whose leaders have] grasped the nobility of the mission carried out by the coalition forces. This mission is to sow the seeds of legitimacy of rule and of law, to establish a democratic government, to liberate women from the slavery and backwardness to which they are subject, to spread transparency in [public] administration, and to spread rationality and the spirit of science in education and in defending human rights.

Link posted by Steve Antler : 10:34 AM

As NYT throws on the last few shovels full...

Okay NYT summary of some viewpoints making up the Boskin controversy ("It Looked Good on Paper"): While Professor Auerbach and his co-authors prepared their paper, other commentators took a whack at Professor Boskin's results. Bruce Bartlett...complained that the government would not be able to sell bonds backed by the deferred tax revenue. 'It's not like a corporation that suddenly discovered an asset that it didn't know it had,' he said in a phone interview last week. 'Everybody realized, after they thought about it for a while, that there was less there than met the eye.' Academics, meanwhile, spotted yet another problem. When people take money out of I.R.A.'s and 401(k) plans, securities like stocks and bonds are sold. Because these people are often retired, they may spend most of the withdrawals. The more they spend, the more the nation's stock of private saving falls. When that happens, according to Professor Boskin's own assumptions, businesses would invest less in new projects, and their ability to generate profits would therefore decline. With smaller corporate profits, the government would lose revenue from the corporate income tax - enough to offset a substantial chunk of the revenue gained from the individuals' withdrawals. But Professor Boskin, it seemed, did not take this into account.

Link posted by Steve Antler : 8:39 AM

Business Week hints at a new draft...

No, not military draft...we're talking about a new draft of a paper. This piece in BW Online ("Is This U.S. Tax Windfall for Real?") is being cited as evidence the revised Boskin is out: If Boskin is right (his paper on this will soon be published by the National Bureau of Economic Research), the forecasts of fiscal crisis when baby boomers retire are overstated. The unfunded liabilities of Social Security and Medicare's hospital insurance total $9.4 trillion. Tax revenues on retirement accounts will cover it. Predictions of gargantuan deficits in the years ahead due to the Bush Administration's huge tax cuts appear wrong as well. Tax revenues may well cover that, too.

Link posted by Steve Antler : 8:34 AM

GDP SECOND QUARTER, +2.4%

GDP just came in at +2.4% for the second quarter, just a bit under April's 2.7% Fairmodel prediction and way above the 1.5% current consensus. Initial jobless claims down to 388,000 as well. These are the data to be released tomorrow, along with times and predictions where available. 12:00 AM Auto Sales Jul - 5.5M 5.6M 5.5M - 12:00 AM Truck Sales Jul - 7.5M 7.6M 7.5M - 8:30 AM Average Workweek Jul - 33.7 33.8 33.7 - 8:30 AM Hourly Earnings Jul - 0.3% 0.2% 0.2% - 8:30 AM Nonfarm Payrolls Jul - 0 K 10K -30K - 8:30 AM Personal Income Jun - 0.3% 0.3% 0.3% - 8:30 AM Personal Spending Jun - 0.4% 0.4% 0.1% - 8:30 AM Unemployment Rate Jul - 6.4% 6.3% 6.4% - 9:45 AM Mich Sentiment-Rev. Jul - 90.3 90.5 90.3 - 10:00 AM Construction Spending Jun - 0.5% 0.4% -1.7% - 10:00 AM ISM Index Notice the all-important unemployment rate buried right in the middle. Fairmodel calls for a tenth of a percent decline, so I'll go along with the crowd and predict 6.3%.

Link posted by Steve Antler : 6:28 AM

Wednesday, July 30, 2003

FRB: Beige Book - Full report

FRB: Beige Book - Full report: "Prepared at the Federal Reserve Bank of Richmond and based on information collected before July 21, 2003. This document summarizes comments received from business and other contacts outside the Federal Reserve and is not a commentary on the views of Federal Reserve officials."

Link posted by Steve Antler : 2:37 PM

Grim reality...

It is becoming slowly and painfully clear this site's permalinks do not work, graphics often disappear for no reason, and loading is haphazard at best. We are going to have to leave blogger.

Link posted by Steve Antler : 12:25 PM

How to blind people with statistics

Mortimer B. Zuckerman says: More than 3.8 million people now draw unemployment benefits, the highest in 20 years. The number looking for jobs has passed 9 million for the first time in 10 years. The unemployment rate has climbed to a nine-year high of 6.4 percent. The economy has lost over 300,000 jobs this year, and unemployment claims are still up around 425,000 a week. Okay, now unglaze your eyes for a second and you'll notice something. First he says bla bla, the highest in 20 years. Then he says bleah, blea, highest in 10 years. Then it's yadda, yadda, climbed to a nine year high. And finally yackda, yacdka this year and this week. Why doesn't he keep the time under consideration constant? The answer is, it might weaken his argument! Here are plots of new and continued claims for unemployment insurance since 1967. I've made no adjustments for the growth in the population and labor force, so you can plainly see what we're going thru is a very mild jobs recession. By standards of the early 1990's (when 6% was about as low as we thought we could go) we are not far from full employment. Jobs data can be really confusing for lots of reasons. Some of our earliest posts had to do with the pain and suffering of explaining to a class how new job searchers increase the size of the labor force and, therefore, the unemployment rate. Another source of confusion is the inexact match between "jobs," "workers," and "work done." Look: many people hold two or more jobs. Say someone like this gets fired and isn't replaced. One job disappeared -- but the person fired isn't counted as unemployed! And consider this: you've got a factory with really low orders, so cut back everyone's hours and put them on a four day week until things pick up. Nobody's fired, but less "work" is being done! To find out what's really going on you've got to look at the hours data as well as the employment/people data. Regards to Bill Hobbs, who sent a reader's queries over to us.

Link posted by Steve Antler : 11:31 AM

It takes one to know one?

This, from the brilliant individual who brought us Saudi Crown Prince Abdullah's peace plan in the desk drawer: The Bush Pentagon has already, idiotically, wasted critical months in Iraq trying to prove it can do nation-building on the cheap and without serious allies.

Link posted by Steve Antler : 9:58 AM

Never had their own Protestant Reformation...

Hobbs sends us to Donald Sensing who tells us (a) the Koran was written down in Aramaic (b) 150 years after the Prophet's death, and (c) in its present form it is possible to read it as an Aramaic rather than an Arabic text. Many links. Go there.

Link posted by Steve Antler : 6:47 AM

A question...

Is anyone who is now calling the Israeli security fence a "new Berlin Wall" on record as having opposed the real Berlin Wall when it was standing? As having celebrated in public when it fell? Anyone know?

Link posted by Steve Antler : 6:15 AM

Tuesday, July 29, 2003

Towards the end...

There's a magic time, that sort of misty twilight just before you move to a new city or take off for summer vacation, or those last three lectures before you leave forever to teach at another university, or that last walkaround the building once you've been fired and you've cleaned out your office and you know you'll never be back again -- you know, that kind of comfy "what-the-hell" feeling when you say what you goddam please because if feels real good even though it's just plain wrong -- well, that's the kind of comfortable magic feeling written just all over Paul Krugman's column today: And when it comes to domestic spin, Mr. Blair isn't remotely in Mr. Bush's league. Whether pretending that the war on terror — not tax cuts, which have cost the Treasury three times as much — is responsible for record deficits, or that those hugely elitist tax cuts are targeted on working families, or that opening up wilderness areas to loggers is a fire-prevention plan, Mr. Bush has taken misrepresentation of his own policies to a level never before seen in America. "Yeah, whatever, who gives a damn anyway..."

Link posted by Steve Antler : 4:25 PM

Dogma, doctrine, and theory...

What's the difference between these three? Frankly I just don't remember but I think it has to do with whether beliefs (a) can or cannot be disproved by fact and (b) are or are not so all-encompassing as to constitute an explanation of the world in its entirety rather than some of its single aspects. Or something like that. Which brings me to Benjamin Friedman's Boston Globe editorial. Frankly, this essay encompasses so many issues, so many aspects of modern life, I suspect it could be the basis of a new religion. I especially like the way bad economic policy gives rise to intellectual inflexibility and white supremacist militias.

Link posted by Steve Antler : 2:07 PM

Tom Joad got out of the old McAlester Pen, it's there he got his parole...

It's the bulldozer scene in John Ford's Grapes of Wrath that makes you feel you're there and wish you weren't. There's the bulldozer under that huge, gray, windy, black and white sky, ready to level the family's shack so the bank can take the farm. There's the dust, and the wind, and you might even cheer if the family really does shoot the bulldozer guy but hey, it's the neighbor's son! They've known him since he was a boy! And he can't help it. He needs this job. And the bank needs the farm to sell. Because they owe money to a bigger bank -- and that bigger bank, well it owes money to an even bigger bank back east. So the shack crashes down under the bulldozer. And the Joads -- along with thousands of others-- are on the road to California. These images -- families owing banks owing bigger banks owing even bigger ones, money flowing East while families flow West -- stay burned in your mind for years. They express the centrality of the Great Depression to America's moral consciousness. The Depression imparted a simple and, basically, a wrong doctrine -- that markets are evil, not to be trusted, and inferior to alternate, more personal forms of economic organization capable of expressing collective conscience. Regular public expression of this belief is now normal activity for the Left, a modern kind of public reaffirmation of faith. But interestingly, at the center of this mistrust of markets was the pernicious 1930's credit pyramid -- so many people and institutions owed more than they owned. This was why banks owed banks who owed banks, half of the disastrous contraction of credit (the other half was supplied by an immature Fed). Which brings us to a number, found in A Rolling Tide, that may surprise you and your friends. Given the skyrocketing public and private debt that's gripped the nation, ask them what percentage of households owe more than they own? You'll get lots of interesting numbers, but here's the real answer: In 2001, 6.9 percent of families had negative net worth—only slightly lower than the 7.3 percent level in 1989...For families with negative net worth in 2001, the median wealth value was $-5,100...Although this group had the lowest levels of wealth, a substantial part of the group had nonnegligible assets—the median value was $7,600. Across the asset distribution, the group with net worth less than $-5,000 had more than twice the assets of the part of the group with new worth closer to zero; however, the poorer group had far more debt as well... Among financial assets, ownership was notable only for transaction accounts (79.7 percent of families with negative wealth) and retirement accounts (23.5 percent); among nonfinancial assets, ownership was notable only for vehicles (64.7 percent) and principal residences (16.4 percent). The proximate cause of negative net worth is that the value of debt exceeds the value of assets; thus, all families with negative net worth have some type of debt... Let's review: in 2001, 6.9 percent of families had negative net worth, lower than the 7.3 percent level in 1989. Is this surprisingly low or disturbingly high? Additional historical data will be interesting indeed.

Link posted by Steve Antler : 1:26 PM

Monday, July 28, 2003

Loading problems continue, counters uninstalled

To address continued loading problems I've uninstalled all counters, hidden or otherwise. (Traffic runs 350-600 visits per day, depending on how you count hits, re-loads, returns, etc. There. Now you know.) UPDATE: Plain vanilla site meter seems to allow loading. We'll leave it alone for a few hours and see what happens.

Link posted by Steve Antler : 12:45 PM

There's no such thing as a future free lunch...

Brookings summarizes William Gale's July 24 Budget Committee testimony: [T]he fiscal problems the country faces are unlike any other the country has faced in their origin and nature. We will likely have to find a new way of dealing with them. The notion that federal spending can be held to its post-WW II norm of about 18 or 19 percent of GDP seems virtually impossible to maintain without severely cutting the major entitlement programs or eliminating the rest of government. In future years, spending on Social Security, Medicare, and Medicaid alone is anticipated to exceed 19 percent of GDP. The unpleasant implication is that a long-term resolution of these issues that does not destroy the role of the federal government in American society will have to include significant increases in tax revenues as a share of the economy. More at DeLong.

Link posted by Steve Antler : 11:51 AM

Two languages, two stories...

Since it was founded, MEMRI has enabled those who're interested to find out for themselves what's being said in the Middle East in languages other than English. MEMRI has made it more difficult, but apparently not impossible, for groups to say one thing to the West in English and another to their followers: In an interview with the Lebanese daily Al-Safir, Islamic Jihad Secretary-General Ramadhan Abdallah Shalah explained: 'Abu Mazen and his government gave [us] assurances that it would not take the steps that Sharon wanted against the resistance factions, that is, disarmament, arrests, and the like.'...Shalah also said, 'The strategy of the Islamic Jihad is to continue the resistance. Suspension of the operations is merely a tactical step - We are not negotiating with the enemy, and we do not recognize him. But preserving the unity of our people and our national interest demands that we extricate ourselves from the trap that Sharon [set] for our national unity through civil war'... Interesting to wonder whether the old West's supposed-native-persons'-saying "he speaks with forked tongue" referred to bad stuff associated with snakes and reptiles, or saying one thing in one language and another in some other language? (Anyone have more info on this?)

Link posted by Steve Antler : 11:11 AM

I don't wear jeans; I like red meat; please could I bring a camera crew?

More on Sabine Herold, not new but I think we missed it first time around. Dubbed France's Lady Thatcher by the newspapers, Mademoiselle Herold has been leading the rallies against the unions who have been crippling her country. Standing on a telephone box in her pearl earrings and high heels, she addresses crowds of 80,000, urging them to rise up against the striking teachers, Metro workers, rubbish collectors and air traffic controllers who are ruining people's lives. With her student friends, she has set up an organisation: Liberte J'Ecris Ton Nom, which has thousands of members, demanding that France reforms. Now, she wants to come to Britain. Her email is simple: 'I would like to spend my time meeting politicians. I don't wear jeans; I like red meat; please could I bring a camera crew?'"

Link posted by Steve Antler : 10:56 AM

NYT teaches economics (not)...

Bill Hobbs finds some really uninformed economic writing at the NYT.

Link posted by Steve Antler : 7:35 AM

New wealth distribution numbers...

Bruce Bartlett explains a new FRB study on wealth (not income) distribution. Now I know from personal experience just how easy it is to drive a class into absolute shock with US wealth distribution figures. (Heck, you can turn a normally middle of the road bunch of students into a 1960's Les Miserables-raging mob in about ten minutes with those numbers.) Bartlett's piece hints at something really new, the possibility the 90's boom capped a sort of revolution in reverse, a revolution in which, as in the 1960's, the baby boomers are somehow leading the way: In [fact], every wealth class became better off. As the Fed study put it, “Over the period from 1989 to 2001, the SCF data show that the distribution of wealth shifted up broadly in real terms — another way of saying that in absolute terms there were fewer poor families and more families who were wealthier.” The percentage of all families with a net worth greater than $500,000 has risen at an especially rapid pace, increasing from 10.1 percent of all families in 1989 to 14.8 percent in 2001. The Fed attributes much of this growth to the aging of the Baby Boom generation, which moved into its peak earning years over this period. And with retirement facing them in the near future, members of this generation are also saving and investing more heavily, a task made easier by the fact that for many their children are now out of school and on their own. Looking at all families headed by someone aged 44 to 55, only 11.8 percent have less than $5,000 saved, while 20.3 percent have at least $500,000. Almost 70 percent of Baby Boomers have a net worth of at least $50,000. The political implications are important, since the Democrats seem unable to learn where to "correctly" draw the political line separating "rich" from the rest of us. Even when tutored by the likes of Tim Russert and Chris Matthews Dem politicians persist in tagging $100,000 and up -- the married-couple-teacher-fireman-Democrat-voter category -- as "rich." These new numbers sure won't help them.

Link posted by Steve Antler : 7:05 AM

Monday

Because today rhymes with "Sunday" but begins with "M" instead of "S," here's your weekly economic calendar. As always, check the EconoData part of the blogroll for an economic calendar with links and more info.

Link posted by Steve Antler : 6:34 AM

Sunday, July 27, 2003

Movin' East...

Via Prestopundit -- California's progress toward underdevelopment and poverty is explained: The state government under embattled Democratic Governor Gray Davis is turning so stridently antibusiness that it threatens to inflict permanent structural damage. Since 2002 the left-leaning legislature has enacted or expanded half-a-dozen laws dealing with burdensome regulations like family leave and overtime pay. Some corporate leaders think California is becoming Sweden-on-the-Pacific. "I've never seen anything like this is 35 years," says Angelo Mozilo, CEO of Countrywide Financial, the big mortgage company based near Los Angeles. "The state is punishing business, yet it's somehow convinced that business will not leave." Wrong: Companies - and jobs - are departing in droves. The state has lost 289,000 manufacturing jobs since 2001. 'The jobs that have to stay here are ones that involve direct contact with customers,' says Liam McGee, head of Bank of America in California. 'The mobile jobs - in systems development, manufacturing, call centers - are moving to other states.' Fidelity National, the nation's biggest title-insurance company, is shifting its headquarters from Santa Barbara to Jacksonville. Scores of the small businesses that form the backbone of California's economy are moving either jobs or headquarters out of state. Buck Knives is going to Idaho, and Coast Converters, a bagmaking company, to Las Vegas. Taylor-Dunn, a manufacturer of cartlike vehicles for airports, is expanding in Ohio and Missouri. Though Countrywide is growing rapidly, Mozilo is shrinking operations in California and shifting all expansion to low-cost states like Texas. By his estimate, the flood of new legislation will increase Countrywide's cost per worker by $4,000 to $5,000 a year. " I wanted to see how many of those 289,000 lost manufacturing jobs I could confirm, and sure enough, the picture is as grim as the article suggests:

Link posted by Steve Antler : 3:17 PM

Forecast of a jobless recovery...

I've been able to spend a few quality hours at the FAIRMODEL site, and can report the most bleak of jobless recoveries is what's being forecast there. (Hopefully everything changes radically soon when a new quarterly run takes place.) Here's my EVIEWS chart of the predicted unemployment rate thru first quarter 2006, followed by the numbers themselves. 2003/4 ===5.9 2004/1 ===5.8 2004/2 ===5.8 2004/3 ===5.7 2004/4 ===5.7 2005/1 ===5.7 2005/2 ===5.8 2005/3 ===5.8 2005/4 ===5.9 2006/1 ===5.9 2006/2 ===6.0 2006/3 ===6.0 2006/4 ===6.1 To what might we attribute this disturbing prediction? I've been brooding about possible structural change in the economy during the 90's, but my musings are far less interesting than Ray Fair's themselves: [Investigation suggests] there was only one major structural change, namely the huge increase in stock prices relative to earnings. All other large changes can be explained by this change. There is no obvious reason for the large increase in stock prices relative to earnings. Increased productivity growth does not appear to be an answer since the data show that there was only a modest increase in long run productivity growth in the last half of the 1990s. Also, earnings growth and the share of earnings in the economy were not unusually large. Testing for a New Economy in the 1990s, Ray C. Fair, May 2003

Link posted by Steve Antler : 1:15 PM

IN MEMORIAM PUNDITWATCH

On FOX NEWS SUNDAY Krauthammer points out international law undercuts the occupation and supports Iraqi paranoid rumor-mongering. Why? We can't march any of the captured 37 cards around in front of the cameras to prove they've been captured, since prisoners of war can't be put on display. This is why, he says, it was vital we put the two bodies on display. Putting a dead prisoner on display does not violate intl law. MEET THE PRESS Russert ambushes Wolfiwitz with Richard Lugar's Friday Boston Globe proclamation: "The gap between the cash needed to rebuild the country's economy and revenues from oil, estimated at $14 billion in 2004, could be as high as $16 billion a year..." Wolfowitz: Iraq's oil revenue, sooner or later, will pay for rebuilding the country. ABC THIS WEEK: Fareed Zakaria says controversy over display of the two sons' corpses is the "quagmire or the week;" six months from now we'll be consumed with the real story, which will be Iraqi politics and anti-Americanism in that context. And finally, Newt to the people of California: find a way to rewrite the Constitution of California, because the State is ceasing to function.

Link posted by Steve Antler : 10:03 AM

Maybe France is right after all?

Now looking over NBER working paper Peter H. Lindert, WHY THE WELFARE STATE LOOKS LIKE A FREE LUNCH, here's what will be for many readers the smoking gun: (Parenthetical note: take away Portugal, US, Japan, Swedan and - at least for the males - it is not clear you've got a downward sloping relationship here. Need the data to know for sure.) Here's the abstract: The econometric consensus on the effects of social spending confirms a puzzle we confront in the raw data: There is no clear net GDP cost of high tax-based social spending on GDP, despite a tradition of assuming that such costs are large. The paper offers five keys to this free lunch puzzle. First, the costly forms of transfers usually imagined have not been practiced by real-world welfare states. Second, better tests confirm that the usually imagined costs would be felt only if policy had strayed out of sample, away from any actual historical experience. Third, the tax strategies of highbudget welfare states are more pro-growth and less progressive than has been realized. Fourth, the work disincentives of social transfers are so designed as to shield GDP from much reduction if any. Finally, we return to some positive growth and well-being benefits of the high social transfers, and suggest how democratic cost control relates to budget size. Find out what DeLong thinks here. More to come...Stay tuned...

Link posted by Steve Antler : 7:44 AM

Saturday, July 26, 2003

End of the great refinancing boom?

The Capital Spectator is worried about housing: The end of one cycle plants the seeds of another. Surveying the current economic landscape suggests that the U.S. is about to enter a so-called recovery with heavily indebted consumers and a chastened business sector eager to shed workers and delay spending. The issue that hangs over every economic conversation is deciding what impact rising interest rates will have in this less-than-ideal scenario. The answer, most likely, will come in the consumer sector, starting with real estate. To cheer up look at the five year housing numbers and quietly, to yourself, say the magic words "soft landing" three times.

Link posted by Steve Antler : 3:06 PM

More good news (sorry Professor Krugman)

Latest in a string of recovery indicators, rather than declining new home sales hit record levels: The Commerce Department reported Friday that sales of new, single-family homes clocked in at a seasonally adjusted annual rate of 1.16 million units in June, a 4.7% increase over May's level. Economists were predicting a decline. The solid increase comes on top of a 10.9% jump in new-home sales from April to May...'These are huge numbers. Better yet are the implications for consumer spending for the rest of the year,' said Ken Mayland, president of Clearview Economics in Ohio..."These new homes need to be furnished and they need appliances. That's going to lead to a stream of additional consumer spending, just at the time when consumers are getting child tax credits in the mail, and fatter paychecks from reduced withholdings."

Link posted by Steve Antler : 12:12 PM

Find it at Barnes and Noble...

Diligent EconoPunditistas will immediately recognize the name "Wayne Lusvardi" as the individual who accused yours truly of cross dressing as a sociologist. Lusvardi authored a review of Amy Chua's World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability that deserves a wider readership. Here's a slightly condensed version, find the original here: World on Fire asserts that the disproportionate economic success attained by “market dominant minorities” in third-world nations foments ethnic hatred and genocide. Democracy, coupled with capitalism, provides the catalyst that paradoxically sparks the backlash of “indigenous majorities” against wealthy ethnic minorities... Chua’s views come out of the elitist culture of the American university. Chua, herself a member of the “New Class” of lawyers and knowledge elites, casts a blind eye to the fact that the type of egalitarian state she advocates results in a wealthy class of lawyers, instead of an ethnic group, as the new privileged elites of redistribution…[This] new “knowledge class” in Western societies is a major antagonist to capitalism, due in part that this class finds employment and subsidization in the welfare state... [T]he thesis of the book…was [first] addressed by…Karl Marx and Friedrich Engels over 150 years ago when the First World was undergoing a similar wave of industrialization. Substitute such terms as “bourgeoise” for Chua’s “market dominant minority,” “the proletariat” for Chua’s “the poor,” “control over the mode of production” for “market dominance,” “ethnic conflict” for the “Jewish Question,” and “backlash” for “dialectical conflict” and you have a new lexicon of Marxism.. With the impeccable credentials of Chua one can only wonder how she wrote a book paralleling Marxist diagnostics so closely without even once citing Marx in her book? Chua is mostly right to warn about the exportation of American majoritarian democracy into developing nations, but has got it wrong about markets. Chua’s use of the term “market” is a misnomer. [She] uses the term “market dominating minority” to mean the converse of a market: a cartel, a cabal, a monopoly, a ruling class. Despite the constant denials in her book that she is not against democracy, globalization, or markets, World On Fire is less of a book on globalization or social science as it is an incendiary device that throws fuel onto the fire of the global culture wars.

Link posted by Steve Antler : 11:48 AM

Just exactly where is this guy who "distributes" stuff?

Arnold Kling, in a post with lots of good links to Sowell and Bartlett, poses the following question for discussion:: "In a review of a recent book on the history of the income tax, Susannah Camic comments, 'Some Americans firmly embrace the ideal of “justice,” the belief that, in the interest of fairness, resources should be distributed somewhat equally among citizens. In contrast, others hold that wealth comes as a consequence of “virtue”—work, creativity, thrift—and that the wealthy are thus entitled to keep the monetary rewards of their own talent and good behavior." For Discussion. If you support both 'justice' and 'virtue,' which taxes are the best and which are the worst?" With all due respect, isn't there a basic problem (as Sowell points out) with the last word in that tricky, passive voice phrase "should be distributed?"

Link posted by Steve Antler : 9:34 AM

Deflation: corrosive vs. benign

St Louis Fed has a new handout on deflation. (Thanks BB for link.) Widely misunderstood is the difference between normal upward or downwnward GDP deflator moves and what Greenspan calls "corrosive" deflation. In Greenspan's words, the corrosive variety “essentially feeds on itself, creates falling asset prices, which in turn brings down levels of economic activity…” Let's review: ====SELF CORRECTING?=======INFLUENCES ASSET PRICES? BENIGN======YES ===========NO CORROSIVE====NO===========YES Says the handout, based on accompanying table: U.S. experience with sustained deflation has been limited since the founding of the Federal Reserve in 1914. The results from 1930-1933 are uniformly bad, but deflation may simply have been a by-product of the economic collapse at that time. Japan’s experience is perhaps more relevant for today’s circumstances. Although sustained deflation is not everywhere and always “corrosive,” on balance the evidence suggests that deflationary episodes are marked by subpar growth.

Link posted by Steve Antler : 7:16 AM

(...oh God -- they know !...)

Regarding Klassenkampf, here's the most colorful critique to date (by email from Wayne Lusvardi) -- Good article posted on TCS. However, it seems your'e an economist trying to cross dress as a sociologist, if you'll excuse the metaphor. Reading Ricardo and Marx on class would help, but you missed sociologist Alvin Gouldner (The Rise of the Intellectuals and the New Class) written from the Left, and sociologist Peter Berger on "The New Class" written from a more conservative position. These sociologists wrote about two middle classes (a business class and a knowledge class) since about the 1970's. Many sociologists have recently written that the old class structure of the U.S. has melded into one big class where, except for the underclass, everyone at least appears middle class... More from Lusvardi soon on the California crisis...

Link posted by Steve Antler : 6:53 AM

Friday, July 25, 2003

From the upcoming edition...

From the Weekly Standard, by email, Stanley Kurtz on polyamory: AFTER GAY MARRIAGE, what will become of marriage itself? Will same-sex matrimony extend marriage's stabilizing effects to homosexuals? Will gay marriage undermine family life? A lot is riding on the answers to these questions. But the media's reflexive labeling of doubts about gay marriage as homophobia has made it almost impossible to debate the social effects of this reform. Now with the Supreme Court's ringing affirmation of sexual liberty in Lawrence v. Texas, that debate is unavoidable. Among the likeliest effects of gay marriage is to take us down a slippery slope to legalized polygamy and "polyamory" (group marriage). Marriage will be transformed into a variety of relationship contracts, linking two, three, or more individuals (however weakly and temporarily) in every conceivable combination of male and female. A scare scenario? Hardly. The bottom of this slope is visible from where we stand. Advocacy of legalized polygamy is growing. A network of grass-roots organizations seeking legal recognition for group marriage already exists. The cause of legalized group marriage is championed by a powerful faction of family law specialists. Influential legal bodies in both the United States and Canada have presented radical programs of marital reform. Some of these quasi-governmental proposals go so far as to suggest the abolition of marriage. The ideas behind this movement have already achieved surprising influence with a prominent American politician. I am neither a legal scholar nor anything like a theologian, but I can’t see how groups with seemingly valid historical/cultural/religious claims to polygamy (try Mormons and Muslims for just for starters?) could be denied their own rights to state-sanctioned polygamous marriage once sanctioned homosexual marriage came into being.

Link posted by Steve Antler : 3:38 PM

McDonald's Part II

Our mini-study on obesity and McDonald's, we're relieved to learn, is slightly less likely to support litigation if the US legal profession pays heed to public opinion as measured by new polling numbers: Echoing the legal arguments made by smokers against the tobacco industry, some obese Americans are now trying to blame fast-food chains and other food suppliers for their health problems. The Senate's No. 2 Republican, Mitch McConnell of Kentucky, filed a bill last Thursday -- backed by the restaurant industry, but opposed by the Association of Trial Lawyers of America -- that would shield the food industry from such lawsuits. A new Gallup Poll, conducted July 7-9, indicates that Americans are solidly aligned with McConnell on this issue. Only a third of Americans believe the fast-food industry bears much responsibility for the health problems faced by obese Americans. Just 6% say the industry is very responsible and 27% say it is somewhat responsible. The remainder believes the industry is generally not responsible, including 25% saying "not too responsible" and 41% saying "not responsible at all." ...Even more to the point, nearly 9 in 10 Americans (89%) oppose holding the fast-food industry legally responsible for the diet-related health problems of people who eat that kind of food on a regular basis. Just 9% are in favor. Those who describe themselves as overweight are no more likely than others to blame the fast-food industry for obesity-related health problems, or to favor lawsuits against the industry. We thank Bruce Bartlett for this link and for the data used in the original Mcdonald's/obesity study. (We have not yet given up on the proposition the obesity/McDonald's relationship is more complicated than suggested in our simple regression study.)

Link posted by Steve Antler : 3:28 PM

Krugman writes a column that has something to do with economics...

Paul Krugman's column today seems to be about economics. Well, sort of: [Greenspan's] testimony last week was surprising on several counts. There is very little evidence in the data for a strong recovery ready to break out. As far as I can make out, Mr. Greenspan's optimism is entirely based on models predicting that tax cuts and low interest rates will get the economy moving. But that's what the models said last year, too: the report that accompanied his July 2002 testimony predicted an unemployment rate of 5.25 to 5.5 percent by late 2003 (the rate is now 6.4 percent). Maybe tax cuts mainly for the affluent aren't as effective as the models say...

Link posted by Steve Antler : 11:19 AM

Kling not impressed...

Arnold Kling correctly points out my "iron law" is Baumol's "cost disease." Both derive from Ricardo. (See the just-posted technical addendum to Klassenkampf 2003.) On the over-all political economy of the piece, Kling is, uh, shall we say, not impressed: Beyond the tendency for government workers to prefer political parties that favor big government, I am not convinced that economic interests will determine voting behavior in the way that Antler describes. However, if the Republicans are to become the party of goods industries, then they will be the minority party. Just as agriculture has declined to a small share of employment and GDP, the same thing is happening with the goods industries.

Link posted by Steve Antler : 10:52 AM

Goes back to Ricardo...

For anyone who's interested here's a little technical addendum which goes along with and helps explain my article Klassenkampf 2003.

Link posted by Steve Antler : 10:39 AM

Not bad news...

Today's Durable Goods Orders report for June is in at +2.1%. Apparently this is lower than forecasts but higher than market expected. Newsday interprets: Later in the morning, the department reported that sales of new, single-family homes rose at a seasonally adjusted annual rate of 1.16 million units in June, a 4.7 percent increase over May's level. Economists were predicting a decline.

Link posted by Steve Antler : 8:09 AM

Hobbs: CNN=Complicity News Network

Bill Hobbs links to a report CNN is continuing to suppress news.

Link posted by Steve Antler : 7:16 AM

The worse, the better...

Brad DeLong has posted a great essay on Weimar Germany, based on what he calls "the second saddest book" on his bookshelf, 1928's Quigley and Clark: Republican Germany: An Economic and Political Survey. Writes DeLong: Why did the Communists hate the Social Democrats so? One reason was that the Social Democratic government had assassinated the Communists’ two best-loved leaders--Karl Leibknecht and Rosa Luxemburg--when they were under arrest in 1919 after the unsuccessful Spartakist uprising. But a second reason was that Stalin and his henchmen in Moscow were more interested in making the Moscow-run Communist International the only political force on the European left than in pushing for liberal and leftist parliamentary victories. Since Communism was to be established by a revolution that would sweep away the old order, why bother to try to make the old order better? The only purpose of parliamentary struggles, to Lenin and Stalin, was to solidify the working class and teach them that compromise with the capitalists was a mistake. A more brutal and right-wing government did more to advance the cause: "the worse, the better," in a formulation ascribed to Lenin. So why help the Social Democrats make the Weimar Republic a success? Moreover, Karl Marx’s theory of history guaranteed the victory of socialism. It did not guarantee the victory of Lenin’s Bolshevik brand of Marxist socialism rather than, say, German Social Democrat Friedrich Ebert’s revisionist brand. So from Stalin’s perspective to made sense to spend all your institutional resources trying to discredit the Social Democrats, and to leave the broader task of destroying capitalism and fascism to the Angel of History.

Link posted by Steve Antler : 7:11 AM

Taxation always feels like tyranny?

Truck and Barter is looking for tax information on Iraq: ...Does anybody out there know where I can find information on the former and planned tax structures in Iraq? All I could find was SANCTIONS AGAINST IRAQ: COSTS OF FAILURE by researchers at the Center for Economic and Social Rights, who stated: "One reason for such openness with income data in Iraq compared to many other developing (and indeed developed) countries is that direct taxation is practically unheard of. In many other countries people are worried about disclosing their earnings lest the information gets passed on to tax authorities... There are few taxes in Iraq, so the main part of revenues apparently came from oil and profit transfers from non-oil state enterprises..." [Emphasis added] ...Apparently, there was an implicit tax on farmers some time ago, who were forced to sell their product to the government at below market prices, resulting an implicit tax rate of 25%-35%...It will be interesting to see how Iraqis respond to an entrenched bureaucracy that will tax them directly...UPDATE: I forgot to mention Saddam's loving use of 'the cruelest tax'--inflation... If you have info please respond not to me but rather directly to Truck and Barter (Well, CC. to me wouldn't hurt.). I include the story because its thematic relationship to the following headline in today's Chicago Sun Times just jumped out at me -- IRS is scaring poor from claiming tax credit: Daley: To combat fraud by taxpayers who may claim more children as dependents than they have, the IRS plans to send notices to 45,000 randomly selected recipients of the credits next month to demand verification documents...The papers range from medical and child-care records, marriage and birth certificates to third-party affidavits from landlords, doctors and social service agencies. Daley's concern is that taxpayers will either be too intimidated to subject themselves to the IRS microscope or unable to take the estimated five days off work needed to complete the paperwork... ''What if your landlord refuses to sign an affidavit saying your child lives with you? What if the neighbor who cares for your children refuses to sign? What do you do then--hire a lawyer? They charge as much per hour as some EITC recipients make in a week,'' Daley said...''What happens if they just send it back and say, 'I'm not going to do it. I'm not going to go through all of this.' There are better ways to stop fraud than through intimidation and confusion.

Link posted by Steve Antler : 6:56 AM

Thursday, July 24, 2003

Output gap and deflation

This, one of many comments below a recent DeLong post, is the first persuasive deflation prediction I've seen anywhere. Here's the comment: They never teach 'Output Gaps' in US universities...Aggregate Hours Worked is currently 4.5-5.0% below its trend level, which has always been an excellent predictor of changes in the core inflation rate one year later. On this basis US core inflation will be 0.5-0.8% by end-2004, 0% by end-2005, and even lower in 2006, because the output [gap] won't have closed [yet]. To close a 5% gap by end-2006, payrolls growth has to average 360,000 per month until then.... extremely unlikely.

Link posted by Steve Antler : 11:50 AM

Knowing when is always tricky

The Capital Spectator provides us with this nifty link which we will be adding to the blogroll, as well as the following informed judgment -- "with the 10-year Treasury yield above 4%, the market is considering the possibility that interest rates are no longer in perpetual free fall...": Knowing when the old regime ends, and the new one begins, is always tricky, in politics as well as finance. Lenders, i.e., buyers of bonds, must decide whether a bit more than 4% is sufficient compensation for turning over greenbacks for a 10-year stretch in Treasuries. Alternatively, is locking up the money for three times as long warranted for a current 5%-plus yield? No one knows the answer, of course, at least not today. The truth will out, courtesy of parsing anything and everything of macroeconomic consequence. Trade deficits, GDP forecasts, consumer price index trends and the like hold the key to the future. If only someone knew how to break the code. The Fed, for its part, keeps telling us the price of money. The real question is whether the price is fair for what lies ahead.

Link posted by Steve Antler : 10:08 AM

Correction

We have to retract, or so far at least partially retract, our latest critique of Paul Krugman. (Scroll down or search -- can't get link to work!) It turns out Wilson's wife was at least something like a covert operative. Luskin has the story: Based on my conversations in the last 36 hours with Washington contacts, here's how I'm very sure it's going to turn out -- and it will hinge on two key questions. Was Plame really a covert operative? Yes, but this will be difficult to officially confirm and there will be debates as to just how covert she really was, and what real harm was done by outing her. Who outed her, the White House or the CIA? Both. Both are understandably furious with Wilson -- the White House for the embarrassment he has caused and for what they see as his disingenuous and partisan statements in the media. But outing Ms. Plame was not to punish Wilson, but to refute him: Ms. Plame's involvement in Wilson's selection for the Niger assignment trivializes him, makes him seem less an expert and more of a hack on a nepotistic boondoggle. The administration officials who spoke to the press probably weren't even thinking about outing Ms. Plame, as such -- after all, Wilson had effectively already done that when he outed himself by going public with his CIA-sponsored work. And therein lies the reason why the CIA is furious at Wilson -- what he has done is an enormous breach or protocol and security.

Link posted by Steve Antler : 9:35 AM

Volatile series, third week of decline

I think what Dept of Labor records as "initial claims" and the released item "new jobless claims" are the same: New claims were far below Wall Street expectations for 413,000 applications, and the lowest since the week of Feb. 8. It was also the first time since then that initial claims were below the critical 400,000 mark, a level viewed by economists as the sign of a soft jobs market. Claims had been above 400,000 for 22 straight weeks. Here's a picture of the context: I've crudely drawn in this morning's data release (approx. 385,000) by hand. We're now in the third week of decline of this very volatile statistic. UPDATE: Caught by The Capital Spectator, missed by me: But wait--there's more. Continuing jobless claims also lend aid and comfort to the notion that a proverbial light is approaching in the economic tunnel. For the second week running, through July 12, this number has dropped, giving additional support to the view that more of the unemployed workers are finding work.

Link posted by Steve Antler : 8:54 AM

Discounted present value of the Limits to Growth?

Richard A. Heddleson writes: I've been following the generational thing since the Boskin paper. I looked at the conclusion of the Gokhale & Smetters paper. I don't know about you, but my eyebrows arch when I see statements like" the Federal government's long-term Fiscal Imbalance is $44.2 trillion as of FY 2002. This is the amount of resouces in present value that the government must produce, either by cutting spending or increasing revenues, in order to put the nation's fiscal policies on a sustainable path...To fully eliminate the existing FI, wage taxes, for example, would have to be increased by 16.6 percentage points for ever. Eliminating all discretionary spending immediately and forever would fall short by $1.8 trillion." I don't know about you but I don't think those things will happen and I don't think this paper will do much to prevent it. One's first instinct is to disregard the entire lot. First Boskin (in a draft that I guess shouldn't have gone out) predicted enough thus-far non-noticed deferred saving tax revenue to pay off the whole of national debt, medicare, and social security. Now Gokhale and Smetters tell us, in effect, fully funding these programs requires tax increases so profound we'll discover what things looks like from the top of the Laffer curve. As I read their paper I have flashbacks to the 1970's and the old "Limits to Growth" arguments, with their wild exponential extrapolations that proved so wrong. But disregard any and all such talk. It's all cheap shots. Each of these papers addresses different aspects of the same issue in differing ways. One hopes what's being generated is an agreed-upon policy vocabulary and database, and that policy discussion (once all these are assimilated) will be that much more intelligent for the experience.

Link posted by Steve Antler : 7:00 AM

The core of the matter...

Just one of many insightful comments on my Klassenkampf 2003 essay in Tech Central Station: Message: The author is a socialist agent trying to send the Republican party down the class warfare rhetoric drain of no return.

Link posted by Steve Antler : 6:30 AM

Wednesday, July 23, 2003

Less than great

I added FRED II to the EconoData part of the blogroll, and in poking around I noticed this: Not exactly what an optimist like me likes to see. We (or at least I) sometimes forget there's an "hours" as well as a "number of persons employed" dimension to employment. If you keep the same staff but give them fewer hours, in a sense (literally number of hours worked) employment has declined even though number of persons employed has stayed the same. The average nonagricultural establishment is giving its staff about an hour less a week since the start of the recession. To complete the picture you need to also look at multiple jobholders, their hours, and so on, but I thought I'd throw this in anyway just to keep you on your toes.

Link posted by Steve Antler : 8:26 PM

Bad timing

From MEMRI'S latest batch of translated Iraqi editorials: An Iraqi lawyer initiated the first lawsuit against Uday Saddam Hussein [dealing with] a house that Uday appropriated without paying any compensations. It is known that several of Saddam's relatives, especially his two sons Uday and Qusay, had taken advantage of their powerful status and their proximity to the former President to usurp properties belonging to the citizens. If you're not among those charmed by lawsuits against dead rapist thugs you might want to look at this new set of editorials anyway. Far more diverse, somewhat more anti-American than the first batch.

Link posted by Steve Antler : 3:58 PM

Notice

With humility we mention Tech Central Station is currently featuring our Klassenkampf 2003 essay.

Link posted by Steve Antler : 1:29 PM

Bartlett: prescription drug benefit leads to price controls

Bruce Bartlett warns: Two economists at the American Enterprise Institute have estimated that the present value of this proposal will be $12 trillion. This is a calculation in today's dollars of all future drug benefits discounted by the rate of interest. In effect, it is the burden on future generations for giving today's seniors - who will have paid nothing for it during their working lives - an extra medical benefit on top of those they already receive. But even this calculation is too low, in my opinion. When the government begins to subsidize something, demand for it rises, pushing up the price. If the Medicare plan ends up subsidizing, say, one-fourth of drug costs, as the Senate bill does, eventually the price of drugs will probably rise by about 25 percent above what otherwise would have been the case. In the end, drugs will be no more affordable than they are today. This will put inexorable pressure on the federal budget. Outlays will rise and rise and rise - even without the program expansions envisioned by Kennedy, which are probably inevitable. If history is any guide, the federal government will respond with price controls in order to save money. Canada already has de facto price controls on drugs, which is why they are cheaper there -- if you can get them. That nation now limits the availability of many new drugs in order to control costs. While an optimist might try to squeeze some sort of upcoming Thurow-style subsidization of an important leading sector out of all of this, I have to admit the Bartlett prediction is far more realistic and supportable by fact. How can legislation on this scale not lead to (almost certainly industry-killing) regulation in the form of price controls? Addendum: Thanks to BB we learn numbers are from Joseph Antos and Jagadeesh Gokhale, "A Benefit That Is Bad for America's Health," Financial Times (June 20), slightly revised version in AEI Publications: The political debate focuses on the $400 billion cost to taxpayers. But that is only for the next ten years. This is particularly misleading because it does not account for the increased cost associated with the baby-boomers retiring. Using the same long-term spending assumptions applied to Social Security, the present value of all future Medicare expenditures associated with the administration's original proposal for extending prescription drug coverage could generate an unfunded federal obligation of $6 trillion. That sounds pretty bleak. And it gets worse. The original White House proposal included strong incentives for competition that would have yielded future cost savings. The proposal making its way through the Senate has dropped those incentives. Take the lack of competition into account and the result is striking. Depending on the future growth of demand for prescription drugs under Medicare, the Senate plan would increase the government's unfunded obligation of between $6 trillion and $7 trillion to $12 trillion. Yet Medicare is already in deep trouble. Under conservative assumptions of future healthcare spending growth, its long-term shortfall amounts to more than $30 trillion. And this is without a new prescription drug benefit.

Link posted by Steve Antler : 6:36 AM

New Poll Shows Correlation is Causation

Just stumbled on this, disregard if you've already seen it: WASHINGTON (AP) The results of a new survey conducted by pollsters suggest that, contrary to common scientific wisdom, correlation does in fact imply causation. The highly reputable source, Gallup Polls, Inc., surveyed 1009 Americans during the month of October and asked them, 'Do you believe correlation implies causation?' An overwhelming 64% of American's answered 'YES', while only 38% replied 'NO'. Another 8% were undecided. This result threatens to shake the foundations of both the scientific and mainstream community. UPDATE: A correspondent writes: This is another case where imprecise wording has spawned confusion. If I were asked whether correlation IMPLIES causation, I was also say yes. If asked whether correlation PROVES causation, I would certainly say no. Consequently, I think you are overstating your point. My two cents is as follows: the "basic linear model" in econometrics 101 is absolutely clear -- we're investigating and testing an "underlying relationship" between two (or more) variables that may or may not be causal. Even the basic models avoid causality. Does a higher price "cause" households to buy less? Does a lower personal disposable income "cause" a lower level of personal consumption? We usually teach "no," saying, instead, changes in the independent variable are associated with changes in the dependent variable. Only when we reach the heights of Keynesian policy economics do we have the temerity to start using the term "causation." A change in an exogenous variable (like govt spending) will cause a change in the equilibrium levels of income, output, and employment, we say. I think the survey (if in fact it's not a big joke) proves how confusing statistics is to the general public, and I guess my feeble attempt at a humorous ironic headline failed miserably. (Note to myself: in the future avoid all ironic humor.)

Link posted by Steve Antler : 6:11 AM

Tuesday, July 22, 2003

New growth industry

There is a major story here on recent academic papers addressing medium and long-term fiscal imbalance, fiscal gap, and the upcoming social security/medicare crisis. First we had Boskin's dramatic announcement of "antibonds" followed by the withdrawal of that paper (another draft is in the works). Next in line was Auerbach, Gale, and Orszag, "Reassessing the Fiscal Gap" which undercut Boskin even before the paper's withdrawal. Now via Asymmetrical Information and and EconLog we have Gokhale and Smetters, "Fiscal and Generational Imbalances", about which we'll get back to you as soon as we've had time to read it.

Link posted by Steve Antler : 5:59 PM

UPS Says Overseas Results Lifted Profits

Globalization and the modestly declining dollar strike again: UPS, whose businesses include logistics and financial services, said its international operations shone in the quarter. International revenue rose 19.8 percent to $1.37 billion and operating profit more than doubled to $158 million from $62 million a year earlier...The company said its strong international showing resulted from increased volume and favorable currency trends. Worldwide export volume increased 6.3 percent, led by a 15 percent gain in Asia...

Link posted by Steve Antler : 2:20 PM

Two coasts, two income/skill levels -- one story

New York Times: I.B.M. Explores Shift of White-Collar Jobs Overseas: Mr. Mehlman, the Commerce Department official, said companies were moving more service jobs overseas because trade barriers were falling, because India, Russia and many other countries have technology expertise, and because high-speed digital connections and other new technologies made it far easier to communicate from afar...Another important reason for moving jobs abroad is lower wages...'You can get crackerjack Java programmers in India right out of college for $5,000 a year versus $60,000 here,' said Stephanie Moore, vice president for outsourcing at Forrester Research. 'The technology is such, why be in New York City when you can be 9,000 miles away with far less expense?' Los Angeles Times: Record numbers of illegal immigrants are pulling wages down: In April, I shopped for a contractor to paint my house trim. I got three bids. One was for $1,600, about $400 less than the others. The only condition was that payment be in cash. [T]his bargain [came] from an established businessman...I asked why the ethical gyrations. He vented: "If I'm going to stay in business, I have to do what the illegals do. They never pay taxes, on profits or on their employees' pay. Right there, I'm at a 20% disadvantage. They'll come in here with about six guys with paintbrushes who work for peanuts, do a fair job, and then they're gone." These competitors have driven every American out of gardening, he added, and are doing it to house-painting, roofing and car repair. He concluded in frustration, "What am I supposed to do?"... After the "please pay cash" painting contractor left my house, I put pencil to paper on the bids. Considering that his line of work is labor-intensive, if I accepted the above-board bid of $2,000, probably about $1,500 would go toward wages, and maybe 10% of that would go to the government. If I went for the underground bid, I would get off cheaper—and the government would lose $200. Multiply that by the countless such transactions in California daily, and a lot of hospitals are going to run short, and a lot of potholes are going to grow. (Even though the math and tax rates are wrong, the conclusion is approximately correct.)

Link posted by Steve Antler : 12:34 PM

What the NYT knew but didn't report...

It becomes increasingly easy to see the paintbrush, the paint, and right there in the corner, the Democratic Party. Here's news gathered but not published by the NYT: A recent New York Times poll of Gotham residents...contained striking information that didn't make it into the paper. New York's minorities, the poll numbers show, don't support the mayor's recent tax increases - in fact, blacks and Hispanics oppose them at higher rates than do the city's whites. The results belie the perception that minorities are friendlier than other voters to tax increases and tend to oppose government cost-cutting - a perception that rests on the tax-friendly, free-spending voting patterns of the city's minority pols rather than on the actual views of minority voters. (Emphasis added.) What's going on? I suspect we're seeing the kind of elitist blindness that demands attention to income inequality while denying the reality of income mobility. As people move up the ladder -- hey, even people like blacks and Hispanics! -- they grow resentful of the increasing share the govt takes out of their paycheck. Full disclosure: the article also reveals an approximately 60% majority in favor of increased taxes on incomes in excess of $100,000.

Link posted by Steve Antler : 10:38 AM

Colgate Profit Up; Weak Dollar Helps

Yes! Let's keep that dollar moving in a smooth, modest downward direction: Sales rose 7 percent to $2.46 billion. Most of Colgate's sales come from outside North America, and the weak dollar boosted sales in Asia and Europe as sales in local currencies were worth more when translated to dollars.

Link posted by Steve Antler : 10:12 AM

Are you experiencing loading problems?

We find it increasingly impossible for the entire blog to come up without pushing the "refresh" button at least a few times. After fiddling with the template, it starts to look like this is some kind of blogger server problem and not our doing. Investigations continue, sorry for any inconvenience. If fonts and colors change temporarily at EconoPundit please bear with us, it's strictly temporary, not your eyes, only our tinkering with the template to get loading problems under control. Thanks for your patience.

Link posted by Steve Antler : 10:01 AM

Hah! Gotcha!!!!

Paul Krugman has finally proved the Bush administration is criminal and unpatriotic. This is because two people say somebody told them that they believed somebody got a job because of his wife's CIA job, which Paul Krugman declares must have been a secret: And while we're on the subject of patriotism, let's talk about the affair of Joseph Wilson's wife. Mr. Wilson is the former ambassador who was sent to Niger by the C.I.A. to investigate reports of attempted Iraqi uranium purchases and who recently went public with his findings. Since then administration allies have sought to discredit him — it's unpleasant stuff. But here's the kicker: both the columnist Robert Novak and Time magazine say that administration officials told them that they believed that Mr. Wilson had been chosen through the influence of his wife, whom they identified as a C.I.A. operative...Think about that: if their characterization of Mr. Wilson's wife is true (he refuses to confirm or deny it), Bush administration officials have exposed the identity of a covert operative. That happens to be a criminal act; it's also definitely unpatriotic. Earth to Krugman: Not everyone in the CIA is a secret spy! As usual, Don Luskin says things a little more plainly than yours truly: " That's not reporting... that's not commentary... it's just plain old making stuff up."

Link posted by Steve Antler : 9:13 AM

Monday, July 21, 2003

If we could only trust them with complexity!

Jonathan Alter seems a little upset over (a) state budgetary mismanagement, (b) hurting taxpayers who need their services, (c) rising taxes, (d) anyone who can't see why devout Christian Bob Riley is right that raising taxes on the wealthy is what the Bible compels, (e) voters who can't be trusted with complexity. Gosh. And I think the title, ‘Let Them Eat Cake’ Economics, means the French Revolution is involved as well: I’m no Gray Davis fan, but let’s be honest about the facts. While some states have been mismanaged, most are simply contending with rapidly growing numbers of hurting people who need their services. Those services are now being slashed almost everywhere. Nineteen states—all of them facing sharply increasing demand—will have smaller budgets than last year, not just smaller budget increases. But telling a laid-off mother with three kids that she can’t see a doctor will not be enough. Governors and state legislatures care taxing everything that moves. Even the most conservative states are doing so. Republican Gov. Bob Riley of Alabama, a devout Christian, says raising taxes on the wealthy to help the poor is what the Bible compels. He’s had enough of so-called religious politicians who turn Christ’s commandments on their head...Explaining all this politically is a “bank shot,” to use a billiards term. It requires trusting the voters with complexity. Will they see that their new $400 child credits are chump change compared with all the new fee hikes and service cuts? Will they understand that they’re paying more in state and local taxes so that a guy with a Jaguar putting up a McMansion down the block can pay less in federal taxes? Will they connect those 30 kids cramming their child’s classroom to decisions in faraway Washington? Now look: I have enough direct, personal experience with the Alters to know Jonathan is as sincere in this business as one can be. The problem is, to the politicians this is all a tax-raising political agenda, not a genuine crisis in any sense. (Heck -- Bartlett has all but proved this mathematically!) The hidden agenda explains why in California some Democrats were accidentally overheard strategizing on how how to to worsen the situation: Assembly Budget Committee Vice Chairman John Campbell (R-Irvine) said he listened to about 20 minutes of the meeting on the squawk box in his office..."It sounded like they were hoping to create a crisis at some point to further their political gains in other areas," he said. "I thought that was outrageous."...Campbell said Democrats also discussed whether delaying the budget would increase the chance of a union-backed initiative that would lower the threshold for new taxes to a 55% vote of the Legislature. The state Constitution currently requires that budgets pass by at least a two-thirds majority, which today would require that a few Republicans join a united Democratic majority. There's plenty of info out there showing overspending during boom years resulted in some states' current financial problems. With all due respect, I think Jonathan Alter needs to read a little more and maybe get back to economics class.

Link posted by Steve Antler : 10:10 PM

"In the end, the deficit is more of a metaphor..."

Rigorous monetarism returns with Bruce Bartlett's latest in NRO Financial; juicy controversial assertions to raise the blood pressure of neo-Keynesians and real business cyclists alike. For example: It wasn’t until 1980...there was a plausible case to be made that deficits were inflationary...The problem is that it just wasn’t true. Inflation is exclusively a monetary phenomenon. It results when the Federal Reserve creates too much money. That is the one and only cause of inflation — meaning a sustained rise in the general price level. Individual prices go up and down continuously. But the overall level of prices cannot rise unless initiated or accommodated by the Fed. [E]vidence doesn’t support [the notion deficits raise interest rates]. Since 2000, the budget has gone from substantial surplus to substantial deficit, yet interest rates have fallen steadily over that period. The reason is that whatever impact deficits may have on interest rates is small relative to the impact of other factors, such as the business cycle, Fed policy, and exchange rates.

Link posted by Steve Antler : 1:13 PM

Krugman: Admin Economists Lied Under Pressure, Part II

Though he moves on to a kind of willful misunderstanding of the MPC. Luskin gets to the crux of the latest Krugman scandal here: Yet for the apparent gravity of this accusation, Krugman does not offer even the slightest shred of evidence. No details on how numbers were 'cooked' or 'fudged,' no testimony from analysts who were 'pressured.' Nothing. Just baseless accusations by a Princeton economics professor writing in the pages of the 'newspaper of record.' By the time a week is out, these charges will be repeated elsewhere, as facts, with the New York Times cited as their authoritative source. The best comments remain those of Bruce Bartlett, who gave me a mild reprimand for willful naivety: Look, Krugman is right up to a point. ALL administrations tend to fiddle their numbers to make the budget look as good as possible...But this is important: they do it in VERY PUBLIC ways...Independent analysts can and do subject these assumptions to rigorous analysis and make their own judgment calls...If anyone is fooled, it is not because of administration trickery, but because everyone was wrong. Anyway, what was to stop Paul Krugman from putting out his own budget numbers[?] I don't recall that he did...[T]here is some outside check and accountability with OMB that does not exist elsewhere in many cases. And don't forget that the OMB director has to defend his numbers at hearings where the opposition party can ask questions. So the idea of comparing OMB to the CIA, or whatever it is Krugman is trying to do, is ridiculous. (Emphasis added) Clearly what's needed is a blog set of budget numbers, a public run of Fairmodel under known assumptions and with a public data set. 2B continued...

Link posted by Steve Antler : 12:34 PM

Deflation? Nah, don't think so...

Now that the NBER has dated the end of the recession, Economagic charts with "show recessions" specified are making more sense. Here we've got the basic test for deflation -- what's been the performance of the GDP deflator over the entire post-WWII period, and how does the current picture compare with the over-all history? Looks to me like an orderly decline since the 1991 recession -- largely competitive markets doing what the textbooks say they're going to do, namely, putting continued pressure on firms to tighten up and lower costs in face of increased entry and competition. Look over the whole period 1992-2000. Amazingly smooth, orderly, just the way we wish markets would work all the time. Downward spike for the last recession, and, now that we see where it ended, nice upward move which looks like the last decade's trend is continuing. Deflation? Doesn't look like it.

Link posted by Steve Antler : 11:50 AM

Resources are not. They become.

Excellent response to Reuters' Klaus Toepfer story ("World can't afford rich China") -- good interview, links: While it is counterintuitive to many people, natural resources are not fixed and finite; they are created by mankind, not by Mother Nature. Since resources are a function of human knowledge, and our stock of knowledge has increased over time, it should come as no surprise that the stock of physical resources has also been expanding...We could examine the size of the world's 'proven reserves' of a given resource for clues about scarcity [for example]. Proven reserves...have been growing larger, not smaller. Oil reserves...are 15 times larger today than when record keeping began in 1948 and about 40 percent larger than in 1974. The weakness of reserve data, however, is that reserve estimates only reflect resources that 'can be recovered under present and expected local economic conditions with existing available technology.' Data about oil reserves, then, [are] akin to data about what is presently in your kitchen cupboard. Many exploitable fields are not proven reserves because they have yet to be developed (usually because of the lack of profit opportunities in the current market). Moreover, projections based on such data presume no further advances in extraction or energy efficiency technology...As long as human knowledge and technology continue to advance, our ability to create resources for human use will likewise continue to advance.

Link posted by Steve Antler : 10:31 AM

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Link posted by Steve Antler : 10:18 AM

Hey! This sounds like Fun!

Look we're all too serious about most things, but this really sounds like it's the fun party, the party you'd like to join because folks there have lots of fun, you know... Those who wanted a presidential candidate who would run the strongest possible campaign were asked to stand in one area. Those who wanted someone who would run only in areas where electoral votes would not be pulled from the Democratic presidential candidate stood in another. Those who wanted to skip the race altogether and, instead, support the Democratic candidate stood in yet another. Gotta read the whole article to find out whether each group was then asked to sing its own song.

Link posted by Steve Antler : 8:20 AM

Monday, Monday...

Here's the economic calendar for this week, and don't forget to check the blogroll as well.

Link posted by Steve Antler : 7:57 AM

Sunday, July 20, 2003

"...the vast majority of the population supports our objectives ..."

Email from Iraq received by Chicagoboyz: I travel with a loaded 9mm pistol on my lap. This place reminds me of Max Max and the Road Warrior movies. ... We are fighting former regime-backed paramilitary groups, Iranian-based opposition, organized criminals, and street thugs. We have stood up governing councils from neighborhood to district to city level. We have conducted humanitarian action in numerous areas to include repair of electricity, water, sewer, hospitals, and schools; created refuse collection systems; and built numerous recreational facilities (particularly soccer fields). We have cleared hundreds of tons of UXOs and weapons caches. ... On any given day I deal with the political realm of the Coalition Provisional Authority, the humanitarian realm of the NGOs, and the military realm of firefights/improved explosive devices/snipers/mortar attacks. [The brigade] contains active duty, reserv ists, and National Guardsmen. [It] has lost 4 soldiers since taking over the sector. The soldiers are staying focused and disciplined, and are getting more effective with each passing day. Our snipers have had some success of late - enough said. Even though we are still being shot at daily, the vast majority of the population supports our objectives and just want to get on with their lives. We are doing some excellent humanitarian work, but it doesn't make the news because all the press wants to talk about is the attacks. The infrastructure is up and running and the shortfalls in electricity, water, sewage, etc., are being addressed. We have local advisory councils of Iraqi citizens set up in Baghdad and a functioning city council. The people we kicked out of power can't stand our success, however, and will do everything they can to try to make us fail. Thus the ongoing gun battles in the streets...

Link posted by Steve Antler : 5:15 PM

Liberalism's inherent contradiction?

Brad DeLong writes: ...we may well have just convinced a lot of people around the globe that U.S. foreign policy is not a (moral) drive to suppress terrorist madmen but an (immoral) attempt to accomplish some large imperial mission. The next year or so will see the extent to which our attack on Iraq has gained Al Qaeda and its like more recruits and sympathizers. Why should they believe we are on an immoral drive to accomplish some large imperial mission? Throughout the 1960's, 1970's, and 1980's the mainstream economics profession tried to answer the Lenninist/Monthly Review proposition of imperialism and unequal exchange with simple Ricardian trade theory, i.e, both sides always benefit. Then World Communism collapsed, markets expanded, and renewed world trade proved Ricardo was right and the Monthly Review was wrong. There is an objective reality to all this. Clearly the U.S. is not an immoral imperialist power. Unless, of course, you believe the world is so subtle -- filled with so many innumerable grays there's no room for any black and white -- that you can't find the ground you're supposed to be standing on.

Link posted by Steve Antler : 3:00 PM

Emergent themes...

The talk shows revealed a number of upcoming controversies. The first two are easy. (1) What's the "true" cost of maintaining US presence in Iraq? Clearly this will generate controversy as war opponents/supporters argue over how much fixed military cost can be thrown into the Iraq heap to make it look bigger. (2) How much Iraqi oil revenue is there in the near or medium term future? Will this revenue be adequate to finance reconstruction? The third is difficult, because it involves the loose and sometimes bizzare European/US Liberal alliance. The European Left is waiting for something to replace the mostly discredited notion "American sanctions are killing Iraqi children." Under the banner of a renewed anti-imperialism, we'd expect the European Left to start demanding US reparations to Iraq, perhaps with US unilateral disarmament thrown in so nothing like this can ever happen again. The trigger for a new round of demonstrations could easily be any proposed US taking of Iraq oil revenue for reconstruction. What do the Democrats do when Europeans push so far to the Left even Dennis Kucinich could be sickened?

Link posted by Steve Antler : 2:30 PM

In Memoriam Punditwatch...

Fox News Sunday: L. Paul Bremer on continuing attacks: "these are professional killers, not disgruntled factory workers." All attacks have been in a small geographical area, he says, and pose no genuine strategic threat. "Problem we face with reconstruction is not repairing damage from war, but from what was done by former regime for years before the war." Dennis Hastert continued that theme -- "war didn’t destruct Baghdad or Iraq," he said – "Infrastructure’s been neglected for 30 yrs…Saddam put all money into palaces and guns, what’s being rebuilt is getting country back to normal level." Hastert predicts lots of money to come from Iraq oil revenue, feels US dollar expenditure can and should be kept to a minimum. A gloomily critical Jay Rockefeller rounded out the guest roster: Programs of weapons of mass destruction don't mean immanent threat, intelligence facts really do matter, yadda yadda, stuff like that. Panel: Kristol, on State of Union Address "scandal" -- even the then-doubtful State Dept said “avail evidence indicates Baghdad is pursuing at least a limited effort to maintain and acquire nuclear weapons capability...This is an utterly phony scandal." White House should now refuse to address issue any more. Juan Williams – lots of Americans worry “it’s just dragging on.” Meet the Press: Bremer again -- “small group of trained killers who are trying to hold back the tide of history, flowing toward democracy. We simply have to overpower them, and we will.” Hastert again: oil revenue ought to be used for restoration of Iraq. UN presence is part of their responsibility. On budget deficit: war and economic downturn are the causes (editor's note: I thought there was a recovery?)…need to get economy rolling again. Hastert faced Russert's Ambush of the Week: Center on Budget and Policy Priorities figures appeared on screen, from their Causes and Significance of the new Deficit report. 2003-2004 Tax cut, says the Report, will “cost” 3 times combined cost of fighting and occupation in Afghanistan, etc.; Hastert: gotta give a horse enough oats to work, tax cut's got to be big enough to get economy moving again. Joe Biden is next guest, pushing the edge of the envelope on Vietnam analogies. “We have to go back to UN giving Europeans authority to go in to provide money and troops.” Refusing UN assistance the “dumbest thing in the world.” “My goal is to bring American forces home, supplant them with international forces.” Iraq recovery cannot be self-financing, Biden charges. Total oil revenue will be $18 just billion, he says (presumably per year?); it’s costing us $1 billion a day just to keep troops there now. Biden on N. Korea: we need a pre-emptive diplomatic effort, not a military strike. Diplomacy works everywhere else. Why not with N. Korea?

Link posted by Steve Antler : 1:27 PM

Saturday, July 19, 2003

Meanwhile, at The Nation magazine...

"End the U.S. Occupation:" [The Bush] Administration seems more concerned with preserving its postwar imperial position than with creating a stable and democratic Iraq. The result has been a badly bungled occupation and an increasingly embittered Iraqi population that blames the United States for the lack of progress on everything from the disruption of basic services, to the continued civil disorder, to the slow movement on giving Iraqis a real say in their future...The Administration will continue to deny what it has created in Iraq. Therefore not only Democratic and Republican elected officials but all concerned citizens must demand that the White House change course. Shifting public sentiment offers an opening: A late June Gallup poll found 42 percent of Americans now believe things are going badly in Iraq, up from 29 percent in early June. At the same time, a June PIPA/Knowledge Networks poll found that 64 percent of Americans wanted the UN to take the lead in building a democratic government in Iraq, up from 50 percent in April. Reflecting that desire, Senator Edward Kennedy, in a July 15 interview, urged the White House to give up its "arrogant" attitude and "bring in the international community" in Iraq. To raise tough questions about the Bush Administration's handling of Iraq is not partisan politics--it's the test of a strong democracy. Without those questions, Bush's illegal and unnecessary war will become an even greater tragedy, for America and for the people of Iraq. To the extent both express opinions on how well or poorly the "occupation" is going, it would be very interesting to compare the results of the Gallup poll (can't find links) showing what "Americans think the Iraqis think" with the C4 poll which shows what Iraqis think. Might want to look at the CSIS Report as well.

Link posted by Steve Antler : 4:09 PM

Available for study and download...

C4 News survey of approx 800 Baghdad residents, purports to be first independent survey. Examples of results: If you HAD to choose, would you rather live under Saddam or the Americans? Prefer Saddam ========9 No preference======== 47 Prefer Americans ======29 Not stated ==========15 Right now, would you prefer to see the US (and Britain) stay in Iraq or pull out? Should stay for a few years =====================31 Should stay for about a year==================== 25 Should stay for a while, but leave inside 12 months ====20 Should leave Iraq IMMEDIATELY ==================13 No opinion/not stated =========================11 In 5 (FIVE) YEARS time, what sort of government do you expect there to be in Iraq? British/American style democracy ================32 Islamic rule, but tempered to modern ideals ===============20 Islamic rule in strict accord with the Koran =================5 A single presidential ruler, but not Saddam ================5 A single party state, with open elections for political posts ======5 Saddam Hussein will be back in power====================4 Other========================================== 4 Don t know/not stated =============================26

Link posted by Steve Antler : 3:36 PM

For all who haven't tried it yet...

Go to www.google.com, enter "weapons of mass destruction" (include the quotation marks) in the search field, and click the "I'm Feeling Lucky" button just below the search field.

Link posted by Steve Antler : 12:54 PM

All sizzle, no steak?

Chris Edwards and Tad DeHaven weigh in on the inherent contradictions of compassionate conservatism: The administration should be supporting conservatives in Congress who actually want to get federal spending under control. Yet Bush wants to show that he is 'compassionate' with his conservatism...What is also disturbing about this administration's budget policies is that 'reforms' always seem to cost taxpayers more money. For example, the administration's statement applauds Congress for spending an added $129 million on Medicare appeals, but then asks that the process be 'streamlined.' Shouldn't a streamlined process save taxpayers money, not cost them more? Similarly, Medicare reform is supposed to be about cutting costs to avert the program's coming financial crisis. In theory, prescription drugs should cut costs by reducing hospital stays. Yet taxpayers are getting walloped with an added $400 billion burden over the next 10 years because of the Medicare drug 'reform' plan.

Link posted by Steve Antler : 11:42 AM

Can't take out more than what everyone puts in...

Wm. F. Buckley on the prescription drug benefit : The emphasis is of course on help to older people, the principal beneficiaries of whatever the reduced cost would be in buying drugs. Older people have more to worry about in looking after their health, but less in looking after school bills and mortgage payments. It would be very difficult to prove, over the long run, that older people will, as a class, benefit from the pending bills. There is no tax bill on the table that exempts older people from taxation, and it probable that they will devote the same percentage of their income as before to medical expenses.

Link posted by Steve Antler : 11:35 AM

Evolution of the McGovern reforms

Dale Henninger writes: Welcome to the Democratic Party in the 21st century. Actually, the Democratic Party, as understood by most people who think of themselves as Democrats, no longer exists. It has evolved into the political version of a shell corporation. Money flows in and out of something called 'the Democratic Party,' but most of the politicking is now done by literally dozens of largely independent political groups, of which the NAACP is but one. In fact, left-of-center politics has become one of the most crowded, Darwinian marketplaces in America, and within that market, the NAACP's share-price has fallen.

Link posted by Steve Antler : 10:14 AM

In case you missed it...

Monday was the 25th anniversary of the 8086: The first x86 processor started life as a general-purpose chip, without knowing the grand role it would play in today's PC industry. The turn of events came in 1982, when IBM incorporated a less-expensive version of the chip, dubbed the 8088, into its first IBM Personal Computer, the grandfather of today's PC.

Link posted by Steve Antler : 6:10 AM

Friday, July 18, 2003

Krugman: Admin Economists Lied Under Pressure

We can only assume the NYT columnist and distinguished professor Paul Krugman has supporting evidence to back up this new and serious charge directed at his economist colleagues in the administration: There's no mystery about why the administration's budget projections have borne so little resemblance to reality: realistic budget numbers would have undermined the case for tax cuts. So budget analysts were pressured to high-ball estimates of future revenues and low-ball estimates of future expenditures. Any resemblance to the way the threat from Iraq was exaggerated is no coincidence at all. And just as some people argue that the war was justified even though it was sold on false pretenses, some say that the biggest budget deficit in history is justified even though the administration got us here with cooked numbers. We look forward to Professor Krugman's producing evidence backing up this charge in the very near future. UPDATE: Bruce Bartlett writes: Look, Krugman is right up to a point. ALL administrations tend to fiddle their numbers to make the budget look as good as possible (defined as the lowest deficit possible or largest surplus). But this is important: they do it in VERY PUBLIC ways, by assuming faster growth, higher inflation, lower interest rates and such--data which is published. Independent analysts can and do subject these assumptions to rigorous analysis and make their own judgment calls. Outfits like Goldman Sachs put out their own budget numbers--not to mention the CBO. If anyone is fooled, it is not because of administration trickery, but because everyone was wrong. Anyway, what was to stop Paul Krugman from putting out his own budget numbers[?] I don't recall that he did. There's a difference between lying and stretching the truth. My main point is that whatever is done is done openly and publicly. It's not as if OMB puts out its budget numbers without telling us their assumptions. Interestingly, the Joint Committee on Taxation does exactly that--its numbers all come out of a black box--but no one in the mainstream media ever complains about that. My point is that there is some outside check and accountability with OMB that does not exist elsewhere in many cases. And don't forget that the OMB director has to defend his numbers at hearings where the opposition party can ask questions. So the idea of comparing OMB to the CIA, or whatever it is Krugman is trying to do, is ridiculous.

Link posted by Steve Antler : 9:52 AM

WHAT?

Body Found Near Home of Missing Weapons Adviser: "LONDON (AP) -- A body found in central England was tentatively identified by police as a missing Ministry of Defense adviser who was named as the possible source for a disputed news report that claimed the government doctored intelligence on Iraqi weapns to strengthen the case for war."

Link posted by Steve Antler : 9:35 AM

It's all about the trade...

Check out Roger Bate at TechCentralStation: 'Climate Change has always been the implicit driving force in the trade and environment debate. From the EU perspective, the economic imperative to achieve WTO cover for protectionist actions, which might be taken pursuant to the Climate Change Convention, has always been strong' says trade expert Jane Drake-Brockman. Miss Drake-Brockman was speaking at the Commonwealth Business Council meeting in London last week and she is concerned that green protectionism will fatally derail a new trade round. As an Australian trade economist she is acutely aware that the entire trade and environment debate 'should never have been on the WTO agenda'. Her thesis is that businesses, predominantly but not entirely in Europe, are using the WTO to shift the heavy domestic costs of transition to 'environmental sustainability' onto actual and potential international competitors, through the use of trade measures.

Link posted by Steve Antler : 8:44 AM

Brad DeLong Says:

I'm annoyed by people who claim that Robert Nozick's Anarchy, State, and Utopia presents a strong rights-based case for a minimal-state capitalist regime as moral, just, or in some sense defensible.... Okay...

Link posted by Steve Antler : 8:32 AM

Doublethink Watch

In the world of 1984 Oceania, it was every citizen's duty to cultivate the skill of "doublethink," defined by Orwell as the ability to perceive mutually contradictory statements as simultaneously true. Here, now, is a post from OMB Watch: The NBER has announced that the recession bottomed out over a year and a half ago in November, 2001. (This, of course is no consolation to the people who had one of the 2.6 million jobs that were lost since the recession began.)... which seems to us a clever, ironic way of expressing the author's sentiment that higher defict spending would have resulted in a more moderate recession. Now here is the next post: The White House Office of Management and Budget (OMB) recently projected that the US federal budget will see an unprecedented $691 billion deterioration in its budget situation – moving from record surpluses of $236 billion in 2000 to record deficits of $455 billion in 2003. This paper outlines some of the basic characteristics of the current situation and places them in the context of recent history... which seems to us a clever, ironic way of expressing the author's sentiment that lower deficit spending would have been preferable to current policy. Of course OMB watch (unlike EconoPundit) has a large staff. Perhaps this accounts for the confusion? Nope. These two were posted by the same individual ten minutes apart from each other.

Link posted by Steve Antler : 8:12 AM

FDR and Keynes

Asymmetrical Information sends us to Noam Scheiber in TNR. He's worried Howard Dean is running on Herbert Hoover's economic platform. If memory serves, the reason Herbert Hoover was such a colossal failure as president was that he elevated the balanced budget to the level of fetish--insisting upon raising taxes and slashing spending even as the nation teetered on the edge of one of the worst economic disasters in history. So dogmatic was Hoover's commitment to budget balance that even in June of 1932, near the depths of the Depression, he complained bitterly about the wastefulness of two bills adopted by Congress to provide unemployment relief, largely by funding public works projects. Noam: -- the prewar Franklin Roosevelt wasn't much of a Keynesian. His first Presidential campaign was strongly centered on the balanced budget. Once in office he met with and tried to understand Keynes, true, but his acceptance of Keynesian (as opposed to, shall we call them, Hooverovian?) fiscal principles was so qualified it took WW II to bring us out of the Great Depression. If my memory serves, the legend of FDR the Keynesian significantly exceeds the reality.

Link posted by Steve Antler : 6:09 AM

The long view...

Now that the recession is officially over let's look at how we stand right now, and how the past months compare with recessions of years past. Here's real GDP and smoothed percent change in real GDP. (The smoothing is extreme, enabling you to see the percent changes as trends rather than the jerky ups and downs they really were. Check out how easy it is to see the "double dip" recession of 80-83 with this kind of smoothing, for example.) First, note the recession we've had is one of the mildest ever. Second, note we come out of all of them. Unless history is being made this very month, we are in a recovery. Finally, look at the 1992-2000 growth trend. That's the history having been made. The only thing close was 1962-1965.

Link posted by Steve Antler : 5:39 AM

Thursday, July 17, 2003

And then there's this... Abstract of Alan J. Auerbach, William G. Gale, and Peter R. Orszag, "Reassessing the Fiscal Gap: Why Tax-Deferred Saving Will Not Solve the Problem": A variety of recent studies have found that the United States faces a substantial fiscal gap — that is, a sizable imbalance between projected federal outlays and receipts. A recent study by Boskin (2003) suggests these findings are overstated because they largely or entirely omit projected revenues from tax-deferred saving plans. This paper reassesses estimates of the long-term fiscal status of the United States in light of Boskin’s analysis and draws three principal conclusions. First, the nation continues to face a substantial long-term fiscal gap, as conventionally estimated. Second, Boskin’s projections of revenue from tax-deferred accounts have only a very modest effect on the long-term fiscal outlook because almost all of the relevant revenue is already incorporated into the revenue projections that generate sizable fiscal gaps. Third, the primary focus of Boskin’s analysis is the overall effect on the budget from retirement accounts — not how much of that effect is already included in the budget projections. We also find that his estimated overall budgetary effect is substantially overstated.

Link posted by Steve Antler : 7:59 PM

Just In: -- Friends and Colleagues: I recently sent out for comment a preliminary draft of a paper, "Deferred Taxes in Public Finance and Macroeconomics". Much of what is in that paper: - the asset of about $3 trillion of taxes on future withdrawals from retirement accounts that the federal government has accrued; - the fact that accrual accounting for deferred taxes would offset roughly half the increase in the national debt from 1981 to 1992 and a multiple thereafter; - the addition of a third side to the future political economy of deferred taxes with pressure to lower taxes coming from the larger number of voters withdrawing funds; - the understatement of historical estimates of real returns to stock and bonds as current BLS methods would substantially lower historical CPI inflation used to deflate nominal values, -- to name a few remains valid. However, the part of the paper projecting the future contained a programming error that in turn resulted from a word-processing error which I should have but did not catch. The term for the share of after-tax withdrawals consumed was inadvertently dropped from the investment equation. While the qualitative discussion remains valid, this did lead to a considerable overstatement of future deferred taxes. I am in the process of correcting this problem, but as the preliminary draft, circulated for comment, has gotten into the public domain (given the Internet age, people have been citing and writing about it before I have had a chance to correct it), I especially want to alert you well before the revised draft is ready for Working Paper status. Please do not cite or quote anything from the original paper without explicit permission. I apologize for any inconvenience this may have caused you. The fault is entirely my own, not that of anyone who may have quoted the preliminary draft. Best, Michael Boskin July 17, 2003 (Emphasis and slight re-formatting added for clarity.)

Link posted by Steve Antler : 7:39 PM

Mere coincidence? I don't think so... Well, to tell the truth our own pathbreaking research on McDonald's and obesity almost certainly has nothing to do with this story: WASHINGTON (Reuters) - A top Senate Republican tried to head off a potential wave of lawsuits against purveyors of high-fat foods on Thursday with a bill to protect the food industry from suits alleging they cause obesity. 'You shouldn't be able to sue someone else because of your own eating habits,' said Kentucky Republican Mitch McConnell, the second-ranking Republican Senate leader and sponsor of the 'Commonsense Consumption Act.'

Link posted by Steve Antler : 2:20 PM

T.E. Lawrence Revisited? Amir Taheri (National Review Online) reports on Bedouinisation in Kuwait : The...trend is reflected in lifestyle patterns. More and more people are decorating their luxury villas, built on Western designs, with furniture fit for traditional tents in the deserts. The chic de chic is to squat on the floor, smoke a hubble-bubble, and eat boiled rice and lamb stew with one's hands. The desert, once identified as a symbol of backwardness, is regaining part of its mystique for a growing number of Kuwaitis. Despite election of "tribalist" representatives, hard to say what this really means. Could be reversion to tribalism and rejection of modernity. Could also be very modern "back to the roots" lifestyle movement.

Link posted by Steve Antler : 12:09 PM

Copycats... Guardian Unlimited has excerpts from the 'Saddam tape'. Suddenly what Bush knew and when he knew it is an important Baathist matter. This illustrates the fundamentally imitative nature of Euro/Third World radicallism, which since the sixties has relied almost exclusively on the American Left's images and ideas: What will the two liars Bush and Blair say to their people and to humanity? What will they tell the world? What they said was wrong and baseless. The lies were known to the president of the United States and to the prime minister of Britain when they decided to wage war on Iraq. (The document goes on to refer to Arab officials who have "beaten the drums [of war]." Didn't this "drums of war" business start with Barbara Streisand? Oh wait, it was Shakespeare, right? No?) And then again, just as bitterness seems to overwhelm us, we stumble on this report: "'This is the best July 17th I've seen so far because there is no Saddam and no Baath,' said Fadil Amin, an out-of-work translator. 'We're better off without them, even if we don't have any electrical power or water and security is abysmal.' "

Link posted by Steve Antler : 11:34 AM

Lack of polish on both sides... Joe Katzman says Truman wasn't anti-Semitic: Truman was being importuned on behalf of Jewish refugees. He was also being lobbied, hard, about Israel. Was that lobbying diplomatically polished? Not really. Comes with not having any diplomats, you see, or many people with experience in positions of authority...No judgment on world affairs? Again, probably not. Recovering from the shock of the Holocaust...Jewish leaders at the time can be forgiven for not having much patience or global perspective... Result: Truman is on the receiving end of an unpolished lobbying effort, one which does not treat the Jews within the decision-maker's context (which is the refugee problem of all Europe and the beginnings of the Cold War) but remains narrowly focused on one sub-set of issues relevant to Jews alone: their own refugees, and Israel. Could that look "selfish"? Absolutely.

Link posted by Steve Antler : 10:22 AM

Just In The NBER has announced the recession is over (or rather that it's been over for about twenty months): CAMBRIDGE July 17 -- The Business Cycle Dating Committee of the National Bureau of Economic Research met yesterday. At its meeting, the committee determined that a trough in business activity occurred in the U.S. economy in November 2001. The trough marks the end of the recession that began in March 2001 and the beginning of an expansion. The recession lasted 8 months, which is slightly less than average for recessions since World War II. In determining that a trough occurred in November 2001, the committee did not conclude that economic conditions since that month have been favorable or that the economy has returned to operating at normal capacity. Rather, the committee determined only that the recession ended and a recovery began in that month... (Thanks to DC.)

Link posted by Steve Antler : 8:33 AM

Did you know? World leaders in agricultural subsidies are Switzerland and Norway. This, however, can't be the real problem -- the root cause, if you know what I mean. The real problem must be, as Oxfam notes, The U.S. spends more in cotton subsidies than the entire GDP of Burkina Faso–a country in which more than two million people depend on cotton production. Over half of these farmers live below the poverty line. and surely this comparison says it all. To many. Thanks to Drezner (whose article is worthy and more serious than this post).

Link posted by Steve Antler : 8:07 AM

Military Coup in Sao Tome & Principe Bill Hobbs has background, commentary, and plenty of links.

Link posted by Steve Antler : 7:58 AM

FrenchRev 202 Find entire editorial at http://online.wsj.com/article/0SB105821907468731900,00.html (subscription required, thanks BB). Excerpts from: A Real French Revolution By EDOUARD FILLIAS, STEPHANE ROUDAUT, SABINE HEROLD, GONZAGUE BASSET-CHERCOT AND MICHEAU FREDERIC PARIS -- Something has changed in France. Suddenly there's hope that the overwhelming weight of the state can be made lighter, that power can be taken back from the unions and the civil servants...This may sound surprising to outsiders, who might not know that...[we] are ruled by a collectivist vision of the economy and society that draws its inspiration from old-fashioned socialist philosophy.... With the help of other civil-society movements, our association mobilized 100,000 people on the Place de la Concorde on June 15. They responded to our very basic message: first, that our right to work must be protected against the right to strike; second, that we, the silent majority, want the necessary reforms to be implemented by the government as soon as possible. We voted for that government, which ran on a reformist platform. Who governs France, we asked... We believe our country has opportunities to become once again a great place for freedom, enlightenment, innovation and prosperity. We have in France thousands upon thousands of well-educated, young success-oriented and industrious entrepreneurs. We have great companies, whose successes would be even greater if they were not supporting one of the heaviest tax burdens in the European Union. We have a beautiful country that attracts to its shores millions of visitors each year. Our exports do well, representing more than 25% of our gross domestic product. On top of that, we have succeeded in building a strong sense of national community that has been forged through centuries of a tumultuous history. We have had periods of prosperity and happiness as we well as times of darkness. But we remain united, looking forward to our common future. The French include Muslims, Christians and Jews. We are from Europe, North Africa, Asia and other corners of the world. But we are all French citizens, tied together by the invisible link of a common love for freedom and justice. Such an ideal is today, more than ever, in danger, however. After decades of increased state control, France is now facing one of the greatest challenges of its history: choosing between the road to freedom or the road to serfdom, as the Austrian economist F.A. Hayek once put it. Fully a quarter of our active population, or those between 20 and 60, is working in the public sector. The state eats up around 55% of our gross domestic product. Our labor laws are so unfair and complicated that it is hard to tell whether anyone in the country knows what purpose they serve. We are ruled by a corrupt political class, unable or unwilling to implement the changes an uncontrollable state administration clearly needs. And the reason they don't implement the changes is that most of them were originally civil servants... France has been let down by the unions too. They do not strike to defend the interests of all workers; they fight for public-sector workers and civil servants. Privileges have become the rule, not the exception. Lifetime-guaranteed employment, smaller retirement contributions, fewer working hours, free electricity or free train tickets -- these are among the numerous perks of our public sector. Even more insulting is that these benefits are protected on behalf of some "common interest." ... France must now return to its very own philosophical classical liberal roots. Inspired by the still shining minds of Voltaire, Constant, Bastiat, Condorcet and de Tocqueville -- all French and all freedom writers. We have to help our country out of this dead end. We need state and institutional reforms, reforms in our welfare system, reforms to our fiscal system. We need to protect the right to work. And we need to defend the right of the French to use public services they are being taxed for, but which strikers often prevent us from using. "Liberte, j'ecris ton nom," our association, will contribute as much as it can, with its modest means, to this great endeavor. We do hope to succeed, but we already know this will not be easy. We need help, from anyone at anytime, in France or in foreign countries. We call every freedom lover around the world to stand by our cause…

Link posted by Steve Antler : 6:41 AM

No, not that Arnold... Bruce Bartlett sends us to an interview with Arnold Harberger in this month's IMF Survey: LOUNGANI: The effects of some economic policies are better understood thanks to your academic contributions. You did path-breaking work on whether capital or labor bears the burden of the corporate income tax. HARBERGER: There are interesting developments to report on that front. In the closed-economy case that I analyzed in the 1960s, the natural result is that capital bears the burden of the tax and can more easily bear the full burden. But my students and I have now analyzed the open-economy case, which is more applicable to today’s global economy. The result in this case is that labor bears the burden and can more easily bear the full burden. LOUNGANI: That’s quite a flip.Why does it happen? HARBERGER: Think of the so-called “tradable goods” sector of an open economy, the sector that produces goods that are traded on a world market. The prices of these goods are determined in the world market. And, with an open economy, the rate of return to capital is largely determined in the world market, because capital can flow from country to country in search of the highest return. Now the government gets in there and tries to impose a corporation tax on capital.Well, who bears the burden? Capital can move across national boundaries to try to escape the tax. So it’s labor, the factor of production that can’t easily escape national boundaries, that ends up bearing the burden of the tax. (Emphasis added)

Link posted by Steve Antler : 6:29 AM

Says it all I can't do better than this (found at The Capital Spectator): These are strange times in economic circles. Depending on the pundit, fears run from deflation to inflation; from recovery to sustained slump; from the threat of falling interest rates that turn retirees dependent on money markets into paupers, to the worry that the Fed’s easy money policy and rising federal budget deficit will spark a sharp rise in rates. Everything and nothing is possible, and the solutions are as broad as a congressional debate on how best to stimulate the economy.

Link posted by Steve Antler : 5:46 AM

Wednesday, July 16, 2003

The dollar is falling... Matt Young sends us this from The Asia Times: By the end of 2003, according to JP Morgan Chase economists in Hong Kong, the combined countries of Asia are expected to hold an astonishing 70 percent of the world's currency reserves...Is this a danger to the world economy? For many years, America's strong-dollar policy served the world and chiefly the United States very well. Their currencies cheap against the US dollar, Asian manufacturers profited by making relatively inexpensive exports and selling them in the United States at a healthy profit...Americans benefited by getting cheap goods that kept their consumer-led economy roaring. The financial communities benefited from the repatriation of those profits as the funds flowed back in a ceaseless waterfall into US stock markets, treasury and corporate bonds, money-market funds and other financial instruments...But perpetual-motion machines don't work. The monumental scale of Asia's dollar reserves and the size of America's deficit are starting to make economists and strategists nervous. Wayne Godley, an economist at the Levy Economics Institute in New York, writes: "If the balance of trade does not improve, there is a danger that over a period of time the United States will find itself in a 'debt trap', with an accelerating deterioration both in its net foreign-asset position and in its overall current balance of payments (as net income paid abroad starts to explode). Such a trap would call imperatively for corrective action if it is not at some stage to unravel chaotically." It has been widely reported that the US must take in about $1.3 billion a day - about $55 million an hour - in foreign investment to finance its overseas debt. If that river of money falters or dries up, the difference must be made up by an inexorable fall in the value of the US currency. Indeed, if it had stopped already, the fall in the US stock markets since equities began to lose their luster in 2000 would have been catastrophic. Okay, now here's my insightful commentary -- I've been hearing this same warning since 1985 -- and while serious and sudden exchange rate adjustments are always possible, the current problem seems the dollar's value moves downward a little too slowly rather than otherwise. The subtexts of this story are two old journalistic staples, probably left over from the 1920's. The first might be called "good times is sinful times" -- here, prosperity is simply Sodom and Gommorah, a selfish, materialistic orgy for which we must surely be punished. The second is "markets always fail," a kind of conjurer's trick where specific market adjustments (which always hurt some particpants) are exhibited as proof of the overwhelming wickedness, inefficiency, and cruelty of the market system in toto.

Link posted by Steve Antler : 7:13 PM

Just In We've obtained an advance copy of Bob Graham's "Opportunity For All" economic plan (full document to be released tomorrow -- thanks KAH). Tax details are: 1. Repeal the Bush dividends and capital gains tax cuts. 2. Stop the phase-out of the estate tax at its 2009 level with an exemption of $3.5 million ($7 million for couples), and extend it permanently. 3. Reset the top rate at 38.6 percent – lower than the rate when President Clinton left office – and create a “Millionaire’s Bracket” at 40% 4. Step up enforcement efforts to close the gap between taxes legally due and those actually being collected, which the Internal Revenue Service estimates at $30 billion a year. 5. Repeal the tax advantages – and impose new penalties – for individuals and corporations who transfer assets offshore or renounce US citizenship to escape taxation. In terms of tax policy, it starts to look like a race to Left. And by the way to see Graham arriving at his Bluegrass Fundraiser in, uh, an expensive, well-polished Jaguar, click here.

Link posted by Steve Antler : 4:06 PM

Reuters Headline: Fed Concerned About Deflation From the actual story:: 'If it occurs, it is a very major event and even though its probability is very small, the size of the problem should it occur is sufficiently large to have engaged our attention,' Greenspan told the Senate Banking Committee. Translation: forget about it. If anything bad is gonna happen, which I doubt it will, trust me, you'll notice it.

Link posted by Steve Antler : 1:04 PM

Bad idea...Bad While remaining tastefully non-explicit, Bruce Bartlett opposes the newly-proposed Balanced-Budget Amendment as (a) an ultimate substitution of judicial for legislative power, and (b) as inevitably leading to Supreme-Court-imposed and enforced socialism: ...even with a majority of Republican appointees, the current court has thrown the Constitution out the window whenever some 'higher purpose' demanded it. No doubt, the same majority that just found constitutional protection for racial preferences in college admissions, in blatant violation of the 14th Amendment, would also see the need for higher taxes if a balanced budget is not achieved after enactment of an amendment requiring it.

Link posted by Steve Antler : 10:56 AM

And we expected otherwise? The pension time bomb is ticking, Samuelson warns: An aging workforce and the collapse of the stock market have combined to create massive underfunding of traditional corporate pensions. The Pension Benefit Guaranty Corporation (PBGC), the government agency that insures these pensions, estimates the underfunding at $300 billion, a total that was only $23 billion as recently as 1999." Here's the PBGC home page. Look your plan up. When done, consider whether at least some of this merits some sort of "well what did you expect" type response? Says Samuelson: The same generational conflicts -- workers vs. retirees -- that assail the federal budget also afflict corporate America. Rising pension costs may cause companies to limit workers' wage increases, just as rising increasing Social Security and Medicare costs threaten younger workers with higher taxes. Though either could provoke a backlash among workers, generational competition seems certain to intensify. In 1985 there were about three workers for every retiree in pensions insured by the PBGC. Now workers and retirees balance, and by 2006 beneficiaries are expected to outnumber workers by nearly 12 percent. I was once fairly close to the first-contract negotiators in a newly-certified collective bargaining unit. For years I'd taught -- with skepticism -- what I sneeringly called the "standard textbook" ideas collective bargaining benefits older workers over new hires, raises wages but lowers employment, you know, all that stuff. Well, powder my puff! Our new contract actually did all those things! What did I expect?

Link posted by Steve Antler : 10:20 AM

The clock is ticking... Check out the California ISO. Looks like it may be an interesting day, energy-wise that is.

Link posted by Steve Antler : 10:08 AM

Personal UAV's? A California NPR affiliate is running a great story on the UAV (unmanned airborne vehicle) industry. Though they can't see it, this is clearly a new huge upcoming growth sector. (They're more interested in ACLU's fears about technology moving faster than our laws.) But let me ask this: aren't all the pieces in place for personal UAV's? We've been "learning to fly" on Microsoft Flight Simulator for just under a quarter century now. We have tiny TV cameras easily installed in the nose of the little radio-controlled toy gas airplanes that've been around since the 1950's. (We even have GPS systems to help out.) Kick me if I'm wrong, but I think we'll be seeing these real soon.

Link posted by Steve Antler : 9:42 AM

Technical issues... EconoPundit has received several complaints of slow/erratic loading in older browsers. Archives weren't working properly, posts were going to archives and accumulating on main page. So we experimentally deleted an old post...and apparently destroyed the (06/29/2003 - 07/05/2003) archive which housed it. If you needed something there, we're really sorry and will try to get it back. Meanwhile, is there anyone out there who's experienced similar problems and can give us a hand? Thanks.

Link posted by Steve Antler : 9:32 AM

A story with no legs Jane Galt (Asymmetrical Information) says the Niger uranium scandal is going nowhere: When the president's critics are reduced to quibbling over grammar, the battle is lost. This scandal may hurt the president, as the clever arguments about the meaning of the word 'is' hurt Clinton. But I think it has far greater potential to damage the opposition, who, by engaging in such arguments, make themselves look like pettyfogging quibblers out to injure the president by any means necessary.

Link posted by Steve Antler : 6:11 AM

Tuesday, July 15, 2003

Long read but worth it Fiamma Nirenstein, Jerusalem correspondent for La Stampa says you need to understand Durban, European anti-Semitism, and European anti-Americanism to fully comprehend the fundamental weakness of the European Left: [In Europe the] new anti-Semitism has materialized in unprecedented physical violence towards Jewish persons and symbols, coming from organizations officially devoted to human rights. Its peak occurred at the United Nations summit in Durban when anti-Semitism officially became the banner of the new secular religion of human rights, and Israel and Jews became its official enemy. [At Durban] the human rights movements that we will later find on the streets demonstrating against the war in Iraq chose Israel as their primary target and enemy. This choice constitutes a great success for Palestinian propaganda, but also a very serious [sign of weakness]. The ideologically and politically cornered Left chose to adopt [as its central cause] a very controversial...struggle, marked heavily by terrorism. A Left incapable of confronting the capitalist globalization system, decided to appoint the state of Israel as its main target. In a word, the Left decided to make Israel pay for what they think America should pay.

Link posted by Steve Antler : 9:02 PM

Just In Dept of Treasury press release (thanks to BB for forwarding this to us) indicates they've used the Macroeconomic Advisers (MA) macroeconometric model to hypothetically eliminate the tax and spending provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001, the Job Creation and Worker Assistance Act of 2002, and the Jobs and Growth Tax Relief Reconciliation Act of 2003. The findings (which assumed unchanged monetary policy) were as follows: By second quarter 2003, in the absence of fiscal stimulus: * The unemployment rate would have been nearly 1 percentage point higher. * The economy would have created as many as 1.5 million fewer jobs. * Real GDP would have been as much as 2 percent lower. By the end of 2004, in the absence of fiscal stimulus: * The unemployment rate would be as much as 1.6 percentage points higher. * The economy would have created as many as 3 million fewer jobs. * Real GDP would be as much as 3.5 to 4 percent lower. UPDATE: I really don't mean to be cute, but all this influenced the size of the deficit, no? Shouldn't we also have an hypothetical absence-of-fiscal-stimulus estimate of the deficit? (Hypothetically lower because of lower govt spending and no tax cuts, also hypothetically just a bit higher owing to lower GDP and consequent lower tax revenue.)

Link posted by Steve Antler : 6:06 PM

Gotta disagree here... Under normal circumstances I gladly -- no, eagerly -- defer to KnowledgeProblem's superior understanding of energy matters. For example, she's correct in recommending you go to the Senate Energy and Natural Resources Committee's info web page on the Senate energy bill proposal (which also tracks proposed amendments). But here we draw the line. Lynne says: it's not that we don't have an energy policy, it's that we keep trying to control and manage energy markets through politicized processes and institutions, giving politically motivated special interest groups (such as environmental activists and the oil industry) the incentives and the means to try to control and manage energy markets to achieve their personal objectives (Emphasis added) Let's think for a moment about these two "politically motivated special interest groups," environmental activists and the oil industry. Now the oil industry produces oil, which we use to run our cars, heat our homes, and so on. The environmental activists produce ... uh, wait a second now, what was it they produce?

Link posted by Steve Antler : 12:57 PM

Here's Greenspan's testimony

Link posted by Steve Antler : 10:27 AM

Friendly publicist or opportunistic intruder? Barney Frank is spinning Alan Greenspan's upcoming comments before they are delivered: Rep. Barney Frank (D-Mass.) told CNNfn Tuesday that Greenspan's comments to the House Financial Services Committee, set for 10 a.m. ET, will include a warning about the drop in the federal net savings rate associated with the larger government deficits...Frank quoted Greenspan's comments as warning, "If not reversed over the longer haul, such low levels of national savings could eventually impinge on the formation of private capital that contributed to the improved productivity performance of the past half decade." One wonders how Greenspan feels about this?

Link posted by Steve Antler : 9:28 AM

And the banks are made of marble, with a guard at every door...

Link posted by Steve Antler : 9:18 AM

Are these dots 2B connected? Is Howard Kurtz laying out for us the fragments of an upcoming compromise? California Republicans are mostly behind the recall, but White House Republicans have made clear they'd rather run against a battered and bloodied Davis in '04 in an effort to win the state for Bush...Would Davis step aside in an effort to help his party?..."It wouldn't be the best thing for Gov. Gray Davis," the Washington Times observes, "but his resignation might ultimately prove the safest course for the California Democratic Party. If Mr. Davis were to resign in the next few weeks, before a date for a recall election is set, he would be succeeded -- at least immediately -- by Lt. Gov. Cruz Bustamante.

Link posted by Steve Antler : 9:15 AM

The cast keeps changing... Take a look at Bartlett today in NRO Financial: On June 26, readers of the New York Times saw this headline at the top of page one: “Very Richest’s Share of Income Grew Even Bigger, Data Show.” ...Those reading only the front page...missed the qualification that many more than 400 people occupied the top 400 list during the nine years. In fact, according to research by Congress’s Joint Economic Committee, 2,218 taxpayers were on the list at some point during the period. Amazingly, three-fourths were among the top 400 for just one year and 87 percent were on the list for two years or less. Less than 1 percent made the cut every year...In short, there is substantial mobility in and out of the ranks of the very wealthy... Once again, EconoPundit Says: To talk about "the very rich" or the "very poor" is to discuss an abstract category, not a real group of living, breathing persons.

Link posted by Steve Antler : 7:54 AM

Monday, July 14, 2003

Primary documents now available... MEMRI is now translating editorials from scores of new uncensored independent and party-affiliated Iraqi newspapers. Don't rely on NYT and WAPO to tell you what's going on -- read the bloggers who are there and what the Iraqis are saying to each other in their own language. For example: From what we see and observe we are led to say firmly and objectively that there is nothing that can be called organized guerrilla warfare as some are inclined to conclude based on confrontations with American forces stationed across the Iraqi provinces. In fact, what is happening are private efforts by zealous youths who refuse to accept the presence of American forces in the residential areas of the capital and the provinces. Guerrilla warfare is carried out daily and in organizssed [sic] fashion and with premeditated planning… what is really happening [here] are small skirmishes…'

Link posted by Steve Antler : 9:55 PM

Getting Steamed Up a Bit! I was way too nice in my earlier post on the Barlett and Steel energy piece in Time. Anyone who's followed energy policy since the seventies knows this enviro-energy version of moral equivalence is factually incorrect: Why are Congress and the White House responsible? As part of a long-standing ritual involving Democrats and Republicans, lawmakers and Presidents have devised energy plans that add up to no plan at all—not deliberately but by default. In pursuit of different agendas, competing interests tend to cancel one another out over time, leaving the nation with no coherent direction on energy. When it was first issued, the Report of the National Energy Policy Development Group was condemned by some Democrats as simply more of "big energy's" constant clamor for exploration and development. They were correct. The Cheyney Report merely repeated what the industry had been urging for a quarter century. The problem is this moderate, pro-development plan has been successfully countered by a coalition of junk scientists and political, academic, and media opportunists -- all of whom have imposed their own energy policy on the US from the late sixties to the present day. We are heading into an energy crisis. This is not because we don't have an energy policy, but because we have the wrong energy policy. UPDATE: I want to apologize for the Krugmanite phrase "Anyone who's followed energy policy since the seventies knows..." This is intellectual bullying and a poor way to frame an argument. I promise to watch things more carefully.

Link posted by Steve Antler : 1:00 PM

Monday Calendar Alert... Thought I'd forget, right? Here it is. Also check out the better one on the blogroll EconoData section.

Link posted by Steve Antler : 11:20 AM

The long view... Gotta grade exams and get ready for class, but since I prepared this for class tonight I thought I'd post it as well: What are the most-likely thoughts of someone focused just on the 1974-1994 period of this time series? (This pretty much was the economics' professions view until very recently!) The data seemed to show an absolutely insoluble problem of structural unemployment -- an unemployment rate for African Americans that for all practical purposes averaged 11.5% and could not go below 10%. The exciting question, of course, is "where do we go from here?" What do the next fifteen years of the current twenty-year trend hold in store for us?

Link posted by Steve Antler : 8:09 AM

Sunday, July 13, 2003

Anniversary!. Our first post on EconoPundit was dated exactly one month ago today. As this is written we are first in Truth Laid Bear's weekly New Weblog Showcase. Things could of course change radically by the time the weekly contest ends tomorrow morning, so let's try not to hyperventilate and instead wish a hearty "good luck" to EconoPundit (me) and also to everyone else in the running! Here are a few of EconoPundit's worthy opponents: SoonerThought: The General Who Would Be President The Usurer: For want of a fly-swat TerraFirmaDiaries: just because you can does not mean we will UPDATE: NOW IT LOOKS LIKE WE DROPPED DOWN TO #2! This is life, we can't get too upset, the other entrants are great, everything will be okay, yes...uh, yes...

Link posted by Steve Antler : 2:08 PM

We need more funding and more research! No? Uh, wait... Time Magazine reports Congressional discussion about the fuel of the future: Hydrogen offers us great potential as a fuel for the future,' said Representative Charles Vanik, Ohio Democrat. Representative Robert Wilson, a California Republican, was equally excited: 'We can now look forward to running our automobiles on water.' Wait --these comments about hydrogen fuel were recorded way back in the 1970's. Let's get really clear on this point: virtually everything called "alternative energy" has been going around the block for about a quarter of a century. Any future energy policy will be incomplete without a frank quantitative cost/benefit assessment of energy and environment policy and regulation over the past thirty years. It is time to identify and quantify failure wherever failure has been generated.

Link posted by Steve Antler : 1:43 PM

Saturday, July 12, 2003

Klassenkampf 2003 in action? There is an unmistakable, market-driven movement from traditional hands-on health care, which is an expensive major component of the service sector, to alternate medicine and pharmaceuticals. Though the pharmaceutical industry includes a large service (research) component, in total it comprises one of the most profitable industries in the goods-producing sector. Can the current profound and puzzling Democratic hatred of the pharmaceutical industry detailed by Doug Bandow be part of the class struggle predicted by Klassenkampf 2003 ? --- While Americans have yet to agree with Al Gore's grotesque comparison of the drugmakers to the tobacco companies and "big polluters"...they are increasingly turning on an industry that has done so much to improve their lives. HarrisInteractive reports that those who believe the drugmakers are doing a good job of serving consumers fell from 79 percent to 57 percent from just 1997 to 2001. Yet new pharmaceuticals are responsible for almost half of the reduced mortality among different diseases between 1970 and 1991. Columbia University's Frank Lichtenberg figures that every new drug approved during that time saves over 11,000 life-years annually. And the benefits continue. He estimates that fully 40 percent of the increase in average lifespan between 1986 and 2000 is due to new drugs. UPDATE: It is not a good idea to start thinking about this stuff too much. I am starting to wonder, for example, whether the Dems see themselves as the good guys in some sort of Terminator or Matrix -style struggle between "men" (the service producing sector) and "machines" (the goods producing sector)? UPDATE II: Samuelson's take on the Supreme's Kasky/Nike decision makes it feel like it's even more Klassenkampf 2003, especially given his predictions: What's occurring here is that trial lawyers are road-testing a new form of corporate shakedown. First, advocacy groups would attack a company or industry. Next, companies would face a dilemma: be silent and let the attacks stand, or respond and face an expensive and embarrassing suit. Finally, companies that ended up in court might face a daunting standard of proof -- not whether what they said was true, but whether it might be misleading. Nike said that its contractors' average workers received double their government's minimum wage. Suppose a court found that 1 percent, 10 percent or 20 percent didn't. What would be misleading?

Link posted by Steve Antler : 7:48 AM

Friday, July 11, 2003

Reappearance or new version? Michael Barone may have a new version of the Krauthammer Fundamental Thesis: Core Democrats have an emotional investment in the idea that George W. Bush is an idiot; if conservatives believe they are conservative because they have more common sense than other people, liberals believe they are liberal because they are smarter than other people. At the heart of their hatred of Bush is snobbery. Gephardt, Lieberman, Graham, and Edwards don't exude this snobbery. Dean and Kerry do. This could give whichever of them survives New Hampshire an edge with core Democrats.

Link posted by Steve Antler : 12:13 PM

Anecdotal evidence alert... US News reports good news: According to a new survey by the out­placement firm Challenger, Gray & Christmas, it's now taking managers and executives far less time to find new jobs than it did in the first quarter, when concerns over geopolitical issues like Iraq walloped the economy. In the second quarter, it took out-of-work managers about 3.4 months, on average, to find new work, which represents the shortest job search time in nearly two years...This marks the first decrease in job search times since the second quarter of 2001 and represents a significant drop from the record 4.2 months it took the average executive to find a job in the first quarter...

Link posted by Steve Antler : 12:08 PM

Thursday, July 10, 2003

But while we're on the subject... I think class struggle is the sort of idea I had in mind for something needing a laundry tag. EconoPundit believes (and remember you heard it here first) this fundamental bit of left wing ideology will migrate from the left to the right in a few years. There exists in modern capitalism an elemental divergence of interest between two important economic groupings. These might as well be called Marxist "classes" because each has its own distinct relationship to the means of production, and its own interests growing out of this relationship. I am thinking here not of workers and capitalists, but rather of the goods-producing and service-sectors, the latter of which includes government at the federal, state, and local levels. Goods can be easily stored; services less easily so. Goods are produced with capital-intensive, technology-utilizing methods of production; services still largely rely on humans moving or deciding things. Goods production advances in a manner more amazing than the most profound science fiction -- for example, I am composing this post on a machine much more powerful than what was known a scant fifteen years ago as the monster "Cray Supercomputer." Services production, in contrast, advances slowly. When finished composing this I will go to my friendly neighborhood barbershop where the owner will do to my hair essentially what a barber in the middle ages did to his own customers' hair. Why is there a fundamental class conflict between goods and services? The former sector constantly discovers how to produce more and more per hour, while the latter sector's hourly output stays relatively constant. You can't manufacture time. This means services inevitably get increasingly expensive relative to everything else. It also means participants in the service sector have a basic economic interest in maintaining any and all conditions favorable to this discrepancy. Finally, it suggests a much broader context for all pro- or anti-regulation, or pro- or anti-government political debates than that usually considered appropriate. As with other topics, I drifted into this area with the encouragement of Bruce Bartlett. In adding OECD economic data to my blogroll and in connection with yesterday's McDonald's-obesity study, I briefly looked over the statistical relationship between OECD nations' growth in health care spending as this correlates with OECD nations' GDP growth. The diagram above illustrates the results. The figure shows there's about a three-quarter percent increase in health care spending for each percent increase in GDP, but this is added to a positive constant large enough to assure health care costs will occupy an increasingly large share of GDP. I believe all services work like this. They just get more and more expensive relative to everything else until something "outside the system" comes along to break the inevitable cycle. One example: the social changes and technical advances that allowed household service to be replaced by home appliances in the post-WW II era. Another: first adding machines, then computers (the machines) replaced computers -- the word originally referring to the guys who book-kept and performed all the other computing chores. Another: all services generated by the public sector get more and more expensive (taxes continually go up) until a charismatic leader comes along who dramatically cries "enough!" -- and we have a Reagan revolution or a Bush tax cut. I use the words "outside the system" after a great deal of thought on the matter. I don't think there's any inherent market mechanism to solve the services-goods sectors conflict. Sooner or later, the conflict generates its own a socio-legal, socio-technical, or socio-political solution. To get a feel for how it works, in other words, you don't read Adam Smith or Milton Friedman. Instead, you read Karl Marx, or Ronald Coase. Class conflict, modern style. Let's give it a laundry tag right now: Klassenkampf 2003. It's what's coming.

Link posted by Steve Antler : 10:27 AM

Laundry tags are not memes... Memes -- an idea oh-so-overused and trendy and misunderstood -- are not the same as the laundry tags I'm calling for. Find a good definition at Memetics: A meme is a cognitive or behavioral pattern that can be transmitted from one individual to another one. Since the individual who transmitted the meme will continue to carry it, the transmission can be interpreted as a replication: a copy of the meme is made in the memory of another individual, making him or her into a carrier of the meme. This process of self-reproduction (the memetic life-cycle), leading to spreading over a growing group of individuals, defines the meme as a replicator, similar in that respect to the gene (Dawkins, 1976; Moritz, 1991).

Link posted by Steve Antler : 9:09 AM

Wednesday, July 09, 2003

Research Proposal The political right now owns much of the political left’s former property. How many voters know "political correctness" was once an element of communist ideology? Who knows "elitism" originated in the rarified left-of-liberal heights of 1950’s sociology? (Remember C. Wright Mills and his best sellers: Listen Yankee! and The Power Elite?) Does anyone remember Republicans were once the balanced budget party? We need laundry tags for ideas. Future generations would thank us if we could invent them. I think we should start working on it right now.

Link posted by Steve Antler : 9:27 PM

This just in... McDonald's can actually make you fat. We've looked at OECD and McDonald's data (thanks B.B.), and here's a partial picture of the results: When we regress OECD's reported percent incidence of obesity on McDonald's reported restaurants per million and per capita income for each OECD nation, we find a statistically significant association of about a quarter to a third percent increase in obesity for each additional McDonald's per million inhabitants. The figures are less dramatic when the U.S. data point is excluded from the regression even though a statistically signficant association remains. The actual variation in obesity explained k by the equation is only about 30%. And the results vary in detail with alternate measures of income, as well as with inclusion of an additional proxy for median population age. All this notwithstanding, the numbers tell us more McDonald's means more fat folks. UPDATE: Correlation and causation, yeah, I know, jeez, I meant "McDonald's can actually make you fat" in an ironic, humorous way! Let's try to cut EconoPundit some slack here -- he worked all day in the econometric vineyards just to find a few silly numbers. And by the way, in accordance with our cherished EconoEthics and EconoMission, all the data and full results of the McDonalds study will soon be available right here!

Link posted by Steve Antler : 2:08 PM

Tuesday, July 08, 2003

I guess I'm getting a little choked up right now... Some time ago EconoPundit was started by Bill Hobbs. Later, Bill was kind enough to look over my University weblog, Suggested Supplementary Reading. On the strength of that work he decided to let me to migrate to a weblog with the precise name I'd have chosen had it not already been taken -- you guessed it, EconoPundit! Bill is a nationally known authority on the theory and practice of blogging. He's based in the great blogging state of Tennessee, so you know he knows what he's doing! To find the best in blogging practice just go to his main site, Hobbsonline. To get info on blogtheory and Blogpraxis, go to Belmont Blogs Central -- his blog about blogging. Either way, you can't get away without learning something. I'm honored to learn Bill has nominated EconoPundit as a contender in the New Weblog Showcase. Here's his post about it, telling you how to vote if you want to get a wider audience for EconoPundit. But look, more important than voting for EconoPundit: -- if you're not familiar with Bill Hobbs' weblogs, spend a few minutes checking out all the humanity and wisdom you'll find there. UPDATE: Especially check this out -- an important cause to support.

Link posted by Steve Antler : 8:52 PM

A great idea... Robert Scheer of The Nation, who blames Bush for California's budget problems, ends with this surprise: Californians provide much more to the federal government in taxes than they get back in services. The feds should bail out the states, which cannot indulge in the red-ink financing that has become a specialty of the Bush Administration. This is interesting. Let's think for a moment -- yes, I like it! Maybe everyone who, like California, pays more taxes than services received and can't indulge in red ink should be bailed out by the federal government! Yeah! We could call it, uh, maybe something catchy like, say, a "tax cut?"

Link posted by Steve Antler : 6:44 PM

Disappearing Sidebar We are working on the template. If you can't find the blogroll, scroll down to bottom. Sorry.

Link posted by Steve Antler : 7:15 AM

Blow Up Here's the "hate crimes" photo circulating around the web. I haven't seen anyone enlarge the provocative sign at the back, so here are two enlargements as well. UPDATE: We got this from WSJ Best of the Web, and decided to add a bit of value with the enargement. Here are comments which appeared there yestereday: Almost immediately after we noted it yesterday, Sen. Hillary Clinton deleted from her Web site a photo of her speaking at a press conference with someone in the crowd carrying a sign that appeared to read RELIGION IS IMMORAL. Luckily, we saved a copy of the photo, which is shown alongside...Several readers have pointed out that the top of the sign is not visible in the photo, so it's possible that the sign's message is quite different from what it appears. Perhaps it actually says NO RELIGION IS IMMORAL, or KILLING FOR RELIGION IS IMMORAL. It's also true that Hillary isn't actually carrying the sign herself, and can hardly be blamed for the (perhaps) nutty views expressed by a denizen of the peanut gallery...Still, the photo, cropped in this way, did appear on her Web site, and the speed with which it disappeared suggests the senator, or her staffers, was embarrassed by it. It's an amusing lapse on the part of a politician who's known for being savvy and calculating.

Link posted by Steve Antler : 6:45 AM

And future history books will say...? Bruce Bartlett's diagnosis of the prescription drug benefit states the benefit is bad policy -- and since demands for program expansion are inevitable, it is bad long run politics as well: When Bush refuses to expand the program...Democrats will be more than happy to say they will. And should Republicans ever suggest anything in the future to restrain the inevitable growth of the prescription-drug program, Democrats will predictably attack them for slashing it and killing untold numbers of seniors by denying them life-saving drugs. These attacks will work, leaving Republicans as the bad guys once again, even though no prescription-drug plan would exist without Republican support...In short, the political calculation is penny-wise/pound-foolish in the extreme. Any prescription-drug plan will be an albatross around the Republican Party’s neck for generations to come. It’s a bad deal. Read it all. But just for the sake of argument, here's a good discussion question. Maybe future historians will say: “See what extremes they had to go to in order to avoid price regulation in the very-important pharmaceutical industry?” And here's a second discussion question: Imagine we're back in the year 1980, and government announces a huge new entitlement called the "home computer purchase benefit." How does the tech sector change as a result? Does Intel arrive at the 286 and 386 chips earlier as a result? What's the impact on tax revenues and the trade deficit? Just thinking out loud. UPDATE: While discussing the IMF's appointment of Raghuram G. Rajan as its new chief economist, Bartlett reinvokes the Smithian tradition of being, shall we say, realistic about the likely pattern of business behavior: A good example of how businesses manipulate government for their own benefit is the prescription-drug subsidy bill now before Congress. Although marketed as a benefit for seniors, the true beneficiaries are big businesses that would be able to greatly reduce the cost of their retiree health programs. According to a July 2 report in the New York Times, Ford Motor Company alone would save $50 million per year. The Times notes that the biggest companies are mainly those that still offer drug benefits to their retired workers and would save the most. In the aggregate, they would save billions of dollars per year if the federal government takes over a big chunk of their retiree health expenses by paying for prescription drugs. That is why they are lobbying very heavily for passage of the legislation. By contrast, seniors are unenthusiastic about the new benefit that is to be showered on them. According to a Zogby poll for the Galen Institute, a significant majority of seniors are satisfied with the drug coverage they have now and many fear that they would actually be worse off under a mandatory government plan. They are right. Many will be worse off. In short, to increase their profits, many of our nation’s largest corporations are pushing a budget-busting government-spending program that eventually will lead to higher taxes on all Americans. Sadly, the Bush administration often supports policies that benefit big businesses at the expense of average people, as it did with steel tariffs and agriculture subsidies

Link posted by Steve Antler : 5:06 AM

Monday, July 07, 2003

Nonintuitive Analogy From Indianapolis, Brad Skolnik uses phrases like ones last heard at annual "Farm Aid" concerts: In January alone, the SEC adopted 11 new rules, nine of which were required by the Sarbanes-Oxley Act. More rules are on the way...While all this may please lawmakers on the stump...it takes its toll on small business. Believe it or not, the business of Wall Street is small business. Of the NASD's 5,300 member firms, about 50 percent have only 10 or fewer registered people and approximately 75 percent have no more than 50 brokers...Merrill Lynch and other Wall Street behemoths have compliance departments staffed up to handle this regulatory onslaught. But when it comes to compliance, the regional and small firms are at a distinct disadvantage compared to the big firms. The combination of new regulatory red tape and the prolonged bear market can be deadly for small firms, which are folding or merging at a disturbing pace. Back then it was all about small family farms and large outfits like ADM. You all know about ADM, right, but does anyone remember those small family farms? Anyone?

Link posted by Steve Antler : 3:45 PM

Better Late than Never! Here's your Monday morning economic calendar for the upcoming week.

Link posted by Steve Antler : 2:16 PM

Boskin Revisited Jodie T. Allen joins the select company of pundits who've discovered what this blog has called the Boskin/Bush surplus.

Link posted by Steve Antler : 12:47 PM

Okay, but couldn't we use more nuclear plants as well? U.S. News says domestic natural gas is in short supply, so we're now looking overseas: [T]here are major reserves of "stranded" natural gas in poor countries or remote locations around the world that can be captured as [liquid natural gas (LNG)]. Until this year, LNG accounted for less than 1 percent of U.S. natural gas use. Four import terminals built in the 1970s saw little use. LNG production was expensive, while domestic natural gas was cheap. Now energy companies have improved methods and reduced costs some 30 percent. Production is soaring and LNG has begun steaming to U.S. shores. This summer, for example, the updated import facility at Cove Point, Md., owned by Dominion Resources, will receive its first LNG shipment since it was mothballed in 1980. Shell, slated to import there, also has a deal to use the old Elba Island, Ga., facility, and wants to build its own Gulf of Mexico site.

Link posted by Steve Antler : 12:32 PM

You can buy anything on the web, right?... Anything but wine, that is, because thirty four states have laws interfering with direct online sales. Bill Hobbs has info on a new FTC report slamming these state laws, and additional posts discussing the cartel-like power exerted by Tennessee wine wholesalers protected by state law.

Link posted by Steve Antler : 11:30 AM

Definitive treatise on bracket envy? Brad LeLong has struck the latest blow in the "tax-cuts-are-related-to-growing-income-inequality" struggle by posting a link to the NBER's for-$5 download of Piketty and Saez (2001), "Income Inequality in the United States, 1913-1998." Here's the paper's abstract, which you can read for free: This paper presents new homogeneous series on top shares of income and wages from 1913 to 1998 in the US using individual tax returns data. Top income and wages shares display a U-shaped pattern over the century. Our series suggest that the 'technical change' view of inequality dynamics cannot fully account for the observed facts. The large shocks that capital owners experienced during the Great Depression and World War II seem to have had a permanent effect: top capital incomes are still lower in the late 1990s than before World War I. A plausible explanation is that steep progressive taxation, by reducing drastically the rate of wealth accumulation at the top of the distribution, has prevented large fortunes to recover fully yet from these shocks. The evidence on wage inequality shows that top wage shares were flat before WWII and dropped precipitously during the war. Top wage shares have started recovering from this shock since the 1960s-1970s and are now higher than before WWII. We emphasize the role of social norms as a potential explanation for the pattern of wage shares. All the tables and figures have been updated to the year 2000, the are available in excel format in the data appendix of the paper. Now I'm all for the ongoing study of income distribution, but at first blush Piketty and Saez seems the definitive study of income brackets in the United States rather than people in those income brackets. We've discussed the issue below: briefly, if you study brackets alone you may confuse changes in immigration, or in the population's age structure, with actual changes in income distribution. All income distribution studies that have included longitudinal as well as cross-section data have found a greater degree of equality than studies based on cross-section data alone. Please correct me if I am wrong on this. FULL DISCLOSURE: In the Comments section of DeLong's post, someone has posted a link to a free PDF file of the paper.

Link posted by Steve Antler : 10:59 AM

Noted with Relief We're happy to see Robert Bartley has recovered from his flirtation with transnational progressivism and appears back on track. Today's WSJ provides a well crafted counter to the Democrats' current "starve the beast" line: Since the Roosevelt years, the Democrats have run out of "poor." Back when Bill Clinton kicked off his first presidential campaign, pollster Stanley Greenberg [spelled] it out with brutal honesty: Democrats need to be "defending and enlarging social insurance initiatives that reach the lower and middle classes rather than constructing safety nets that protect only the poor."...Senator Kennedy is point-man in the Democratic strategy of making voters dependent on the government. You tax middle-class Paul to pay middle-class Paul; you tell him the money comes from a beneficent Washington, and, by the way, he'd better remember this when he votes...[M]aking even "the rich" dependent on government for prescriptions would, as Senator Kennedy sees it, be a good salami slice toward his ultimate objective--a $400 billion slice over 10 years...

Link posted by Steve Antler : 8:16 AM

Marxist Crisis Alert This is precisely the kind of story tracked by ex-Marxists still worrying about signs of impending economic collapse. Why worry? Answer: today autos, tomorrow homes?

Link posted by Steve Antler : 7:47 AM

Sunday, July 06, 2003

Size of Public Sector and Economic Growth Matt Young sends us a link to this fascinating piece in the Moscow Times: Andrei Illarionov, the man behind Putin's challenge to the government to double the economy within a decade, unveiled on Wednesday what he says is the first step to achieving that lofty goal -- slash public spending...All the government has to do, essentially, is remain on the sidelines, spend less and stop interfering in the marketplace, because what it has done so far to put the economy back on track is nothing to write home about, was the message Illarionov had for reporters during a PowerPoint presentation at Alexander House. "The role of the public sector is excessive," he said. "We should reduce the role of the public sector to an optimum level." That "optimum level," however, is nothing less than roughly half of what federal, regional and municipal governments currently spend, or some 37 percent of gross domestic product. Our correspondent sees measurement problems in varying reports of the size of the US public sector: ...Bill Buckley says the US total goverment take in the economy is 40%, and the Heritage Foundation on economic freedom seems to agree that the Russian public sector, cited here as 37% is equal to the US [public sector]. The BEA puts our total public sector at 30%, according to taxes, but I think the underlying economy under that public sector must be counted as part of the load, and not ascribed as private sector spending (I'm trying to get a consistent method of counting and relating this article, Buckley, and the BEA)... Buckley's 40% surprised me as well, but I'm very used to shrugging my shoulders and saying "So long as you're consistent it doesn't matter -- all measurement is arbitrary."

Link posted by Steve Antler : 7:47 PM

Global Disinflation “Useful” and “important” come to mind in describing a new BOJ Research Paper, Morimoto, Hirata, and Kato: Global Disinflation (BOJ Research Papers) -- but in light of other words that come to mind in similar discussions, “politically opportunistic” and “nationalist” for example – I suspect the most accurate description of this new study would be simply “grownup.” (Thanks to Bruce Bartlett for sending us the link.) The study establishes disinflation not merely as a matter of "global concern", but rather as a genuinely global event: Using vector autoregression technique in a controversial way (to analyze dynamic impact of alternate-sourced random disturbances) the study purports to sort out the constituent causes of disinflation -- not only for the US and Japan, but for their major trading partners as well. Here are the US results: Now, truth be told, was a little reluctant to post this without additional work because this applicaton of VAR always draws critics and more important, I'm kinda hazy on how this figure purports to relate to actual, measured percent CPI changes. (I'd be glad to accept instruction in this area.) Regardless how this sorts out I think this emerges: the impact of emerging-economy supply shocks on US disinflation has played itself out for the time being. Finally: a major conclusion of the study will remain controversial for those still challenged by market advocacy: the economies which fared best in the face of the disinflationary shocks of the 1990's were the more-flexible, less-regulated ones.

Link posted by Steve Antler : 7:03 PM

Sabine Herold Update Shot In The Dark has found an English portion of Sabine Herold's website. Go directly using this link. Here's an excerpt from the English portion: I would also like to mention that France’s foreign policy is another evidence of our growing moral weakness. We were known to be freedom lovers and defenders, everywhere in the world. So why are we supporting dictatorships, like Saddam’s one ? Why do we receive Roberto Mugabe in Paris, while no other occidental country wants to host him ? Why do we keep a low profile when Kadhafi is nominated head of the human right commission for United Nations ? Why do we promote an alliance with Vladimir Poutine, ex KGB spy, whom hands are stained with Tchetchene rebels blood, while we reject our natural ally and friend, the United States of America ? I am ashamed by this foreign policy, that makes no sense to me, as a patriot We've stumbled across this Telegraph editorial as well: Paris, May 1968: Daniel Cohn-Bendit leads student protests, supported by striking unions. Paris, May 2003: Sabine Herold leads protests against striking unions. Mlle Herold is the 21-year-old student who has put herself at the head of a popular uprising against the tyranny of union militancy to which President Chirac constantly kowtows [report, 4 June]. She has already been compared to Joan of Arc, and her impatience with her Gaullist government is certainly reminiscent of the saint's frustration with the French monarchy. Unlike St Joan, however, Mlle Herold is unlikely to be martyred for her hostility towards the Anglo-Saxons. Rather the reverse: she loathes Anglophobia and has demonstrated in support of the war in Iraq outside the American embassy. Whatever else she is, Sabine Herold is a courageous young woman. She has embraced a liberal, cosmopolitan conservatism that has become almost extinct in France since the Left established its intellectual hegemony in the 1960s. Chirac's France is a frightened and frightening society in the grip of economic sclerosis and demographic decline: at home, riven by ethnic hatred, anti-Semitic and resistant to reform; abroad, anti-American, protectionist and arrogant towards the "new Europe". Mlle Herold thinks her nation deserves better than this. She has a memorable phrase for those, Left or Right, who are leading France to perdition: "reactionary egotists". Her movement may mark the beginning of the end of the organised egotism that has held France (and countless visitors) to ransom for so long. For France's sake, let us hope that it is not a revolt, but a revolution. Sabine, we salute you! UPDATE: Kikuchiyo News sends stories from Investor's Business Daily and Times of London...Excerpts here: Investor's Business Daily July 1, 2003 Tuesday Germany's Gerhard Schroeder wants to accelerate tax cuts to get his nation's economy going again. Sounds eerily familiar, doesn't it?...The German economy has had a rough three years. It's basically not growing,...and joblessness is back over 10%...That's why Schroeder -- who downplayed German economic woes to instead bash America during the 2002 campaign -- decided to step up $28.5 billion in earlier promised tax cuts...Pardon us, but that sounds suspiciously like Bushonomics - you know, the economic policy of the American "cowboy" whom Schroeder and others on the European Continent like to ridicule...We're happy to see signs that Europe understands its dilemma. People are fed up with high taxes, too much red tape and subsidies that ruin their markets. Schroeder's cuts won't cure all of Germany's problems, or Europe's, but it's at least a good start. Sunday Times (London) June 29, 2003, Sunday AT the age of 20, Anna Luhrmann is already worrying about her pension. The youngest member of the Bundestag, the German parliament, she is at the forefront of a new campaign against what many regard as increasing exploitation of the young by the old...As the governments of Germany and other continental European countries struggle to rein in generous welfare provision - often at the risk of mass popular protests - a new concept is gaining currency: inter-generational justice. Lurhmann, a Green, joined the youngest MPs from each of three main parties last week to demand changes in a system that forces those in work to pay more and more in taxes each year to keep Germany's growing band of pampered pensioners in the style to which they have become accustomed. The campaign is gaining support across the political divide; Daniel Bahr, leader of the free-market Young Liberals, who has staged several publicity stunts to draw attention to the plight of the young, was among those calling for change. "For the past 100 years the real division was between rich and poor," said Jorg Tremmel, 33, the founder of the Foundation for the Rights of Future Generations, a pressure group. "For the next 100 years the real social divide will be between young and old."... Not all the anger on the streets is directed at the government, however, and the summer of trouble in Paris has produced a French Thatcherite movement dedicated to battling "the dictatorship of the unions". It attracted a crowd of 30,000 to a demonstration this month and is led by Sabine Herold, 21, a student who believes her country is essentially lazy. "The workers," she says, "are just greedy for more money, more pensions and less work."...

Link posted by Steve Antler : 6:42 AM

Saturday, July 05, 2003

As his July 4th special Bill Hobbs (HobbsOnline A.M.) has a brief history and complete text of "The Battle Hymn of the Republic." Worth reading indeed. I want to know about the melody to John Brown's Body -- presumably it existed before John Brown, a hymn perhaps? Anyone know?

Link posted by Steve Antler : 4:11 PM

UPDATE(S) Check out update to the Ronald Coase post below...

Link posted by Steve Antler : 12:09 PM

Friday, July 04, 2003

Data Pre-Alert... Okay, so far this year-2000 essay by Bruce Bartlett has the most complete listing of useful distribution studies I've been able to find on the web. No links. None seem to be available on the web. Yet.

Link posted by Steve Antler : 7:53 AM

Thursday, July 03, 2003

Data alert... About half of all families in the lowest quintile moved up the income ladder during the seventies. A somewhat smaller percentage -- but still about half -- also moved up during the nineties. This difference in relative mobility of 4% -- and a similar upward shift in the ability of those in the top quintile to hold onto their position -- appears to be the entirety of numerical support for this assertion: When inequality rises—as everyone concedes it has—and mobility falls, American society becomes much less fluid, much more stratified...Keep in mind that inequality rose and mobility decreased in the 1990s, when taxes were raised on the wealthiest. Bush administration policies—sharply reduced marginal rates, a gradual abolition of the estate tax, a reduction in the dividend tax—will surely amplify the trend. To borrow another phrase from Schumpeter, our bias in recent years has switched from creative destruction toward creative preservation. The rich have figured out how to use the federal government to help them stay that way. More to come.

Link posted by Steve Antler : 5:02 PM

I am still waiting... Ever since I was a little boy and the Sunday supplements told me about life in the future I have waited for wall-to-wall TV (preferably 3-D). Is this the announcement I have been waiting for, or is it a false alarm -- just like all the others?

Link posted by Steve Antler : 1:42 PM

Let's try to solve this for him... Brad DeLong is puzzled: Take a moderately optimistic forecast for real GDP growth over the next 18 months--say, growth at 3.5% per year. Subtract the 2.6% per year of trend labor productivity growth from it. That tells you that if real GDP grows according to the forecast, then hours worked are likely to grow at an annual rate of 0.9% per year between now and the end of 2004. Hope that hours worked per employed person remain constant. Then the economy creates 1.8 million net new jobs between now and the end of 2004, leaving the economy down 600,000 in employment relative to the start of 2001. Either output growth will have to average something close to 4 percent per year, or labor productivity growth will have to be slower than its trend since 1996 for there to be more people at work in America at the end of 2004 than at the beginning of 2001. Moreover, the labor force is growing at 1.0% per year. So this pace of job growth is likely to be accompanied by an unemployment rate that is slowly drifting up for the next year and a half. The headline number the first friday of each month--the unemployment rate--is unlikely to provide consistent good news over the next year and a half. The curious thing is that it did not have to be that way. George W. Bush has had many opportunities over the past twenty-two months to propose and push a serious short-run economic stimulus package through the Congress--something that would have been good for the country and good for his own political future. Yet he has not done so. The standard pattern seems to be to say that something that is not a short-term stimulus package is a short-term stimulus package, and as a result get extraordinarily little pre-election employment-generating bang for the buck. The CEA and OMB are presumably still using the same Macroeconomic Associates forecasting model that I am familiar with. It's not that analytical judgments at the staff level are greatly at variance with those of us outsiders. It's not as if our current situation--with the economy disappointingly still shedding jobs and with the Federal Reserve out of its conventional monetary policy ammunition--is outside the range of the forecasts that were made on every day since September 12, 2001. So what has been going on inside the White House to block the serious short-term stimulus package we clearly need is a mystery to me. But someday I'll figure it out. Let's try to look beyond Brad's tired irony --"someday I'll figure it out" -- and help him figure it out right now. First consider the simple politics of the matter. Does anyone doubt for a moment if a majority of Democrats were demanding an immediate, lavish, go-for-broke run up of the deficit to expand jobs, the Bushies wouldn’t go for it immediately? The problem is, that's not what they're demanding. They're using DemDoublespeak – simultaneous clamor for expansionary fiscal policy with zero or negative deficit. As with all applications of doublespeak, the purpose is to forward ideology – here the left-Democratic philosopher’s stone, taxation of those deemed “very rich” and ending what’s dubbed “corporate welfare.” So that's the first part of DeLong's puzzle's solution. Second, even if you are less familiar with the CEA and OMB Macroeconomic Associates forecasting model than big bad economists like DeLong and myself, you can see from simple charts like this we're going thru something like the 91-92 jobless recovery experience. Close up, the data suggest a pattern: each new employment recovery seems to lag farther behind each new spending recovery. Aside from suggesting structural change that can't be picked up by any of the big forecasting models, this shows if you solve the spending recession (already done) the employment recession must end -- albeit not as soon as we might wish. Third we have the following tidbit from this morning's BLS Employment Situation Summary: The number of unemployed persons increased by 360,000 in June...The civilian labor force increased by 611,000 over the month to 147.1 million. The labor force participation rate rose by 0.2 percentage point to 66.6 percent in June. The rate is up from its recent low of 66.2 percent in March. Total employment in June was 137.7 million, and the employment-population ratio was unchanged at 62.3 percent. Far from unambiguously "shedding jobs," in other words, the employment situation appears to be recovering as more workers enter the labor force to look for jobs. You can't find a job unless you look for it. Once you start looking for it, you increase the unemployment rate. Further, that intuitive measure of economic success -- the number of jobs per capita -- remains rock-steady at 62.3%. Finally, you've got to think not only about where you'd like the unemployment rate to go, but where it's been. In and around the year 2000 we experienced an unemployment rate substantially below what we called, from 1980 to 1995, the natural rate of unemployment. Put simply: we didn't think it could go so low! Now we know different, but we don't know why we were so wrong for so many years. To simply demand we push that nasty unemployment rate back down right back to where we never thought it could could go could strike one as, well, maybe a little political? Just a bit simplistic perhaps? Or just maybe, just maybe, lacking a bit in scientific curiosity? But heck, anyway, what do I know?

Link posted by Steve Antler : 9:23 AM

Wednesday, July 02, 2003

More Kiesling translates Sabine Herold: Writing liberty's name is not free. Those who claim liberty always take a risk. Those seeking liberty are often suspected of being ambitious gold diggers, at best drunk on their discoveries, at worst embittered by their unsatisfied quest. People of action and realists, we run the risk to bring this high ideal into existence. Faithfulness to this risk drives us to make our way freely before our destiny. "Thus let us see this fear as a salutary future, which causes us to take care and fight, and not the kind of soft and idle terror that cuts down and annoys the heart." --Tocqueville while Bill Hobbs sends in this google search with more information.

Link posted by Steve Antler : 5:53 PM

In honor of the holiday... Bartlett has a report on Sabine Herold: Herold had no plans to become another Joan of Arc, but that seems to be what happened. As striking workers marched through her hometown of Reims, northeast of Paris, she spontaneously denounced them from the steps of city hall on May 25. Suddenly, there were 2,000 citizens cheering her on and listening intently to her attacks on the strikers, the federal government, and a loss of French dynamism, and entrepreneurial spirit...On June 15, she addressed a crowd of 18,000 in Paris with the same message. Beautiful, articulate, and willing to say things that no national leader has been willing to say in France in decades, Herold became a heroine to the oppressed middle class. Squeezed on all sides by taxes, high unemployment, slow growth, and an unresponsive political class, all they needed was a leader when she burst on the scene. Also in honor of the upcoming holiday and Bartlett's important story, here's the Paris Statue of Liberty (normally found by the Seine) on its return from a Japanese tour in 1999: UPDATE: Marian L. Tupy sees the latest draft European Constitution as the "last gasp of European socialism": There are two ways to deal with increasing competition: one is to become more productive and the other is to form a cartel. The first way encourages economic and social progress, while the second enforces the status quo. By creating the "United Fortress of Europe," the European Convention opted for the latter way of dealing with the forces of globalization. (Thanks to Econlog.)

Link posted by Steve Antler : 11:56 AM

Am I paranoid, over-imaginative, or...? We now hear the announcement of a (no longer!) US secret project involving mobile germ factories like the ones found in Iraq, and of the participation of Dr. Steven J. Hatfill in the project: The heart of the effort,...officials said, was a covert plan to construct a mobile germ plant, real in all its parts but never actually "plugged in" to make weapons. In the months before the war against Iraq, American commandos trained on this factory...The secret trainer is similar to the mobile units that the Bush administration has accused Iraq of building to produce biological weapons. Neither its existence nor Dr. Hatfill's work on it has previously been disclosed publicly. Thesis I: We built the labs. Thesis II: Intelligence leaks allowed the design to move from the US to Iraq.

Link posted by Steve Antler : 11:13 AM

So easy it's not worth it... The ongoing, personal, and angry identification of states' fiscal crises with Bush personality and policy seems as indestructible as it is dumb. Here, Bob Herbert does his part to flood the zone: The president, buoyed by the bountiful patronage of the upper classes, seems indifferent to the increasingly harsh struggles of the working classes and the poor...As Mr. Bush moves from fund-raiser to fund-raiser...states from coast to coast are reaching depths of budget desperation unseen since the Great Depression...If help does not materialize soon...some states will fall into a fiscal abyss...That already seems to be happening in places like California, which has been driven to its knees by a two-year $38.8 billion budget gap, and Oregon, which has seen drastic cuts in public school services and the withholding of potentially life-saving medicine from seriously ill patients. The ease with which this can be answered trivializes it, making the project seem worthless. For those interested, a systematic treatment has been carried out by USA Today. But simpler, hand-rolled verifications can be found during anyone's coffee break. Check out this graphic, generated from Economagic data in about five minutes: Source: Economagic Now ask yourself: exactly which features of the Bush tax cut caused Oregonians, during the years 1989-2002, to maintain an average 7% higher level of public sector presence, relative to their economic base, than residents of the great state of Tennessee? Indeed, what insidious feature of the Bush policy worked backward in time, bringing forth this overspending even before the cause was present? l Update: okay, now that we're done hyperventilating, this is informative and this (Gray Davis: "a governor who is as useful as an artificial appendix") is fun. Thanks to Ben Muse for the links.

Link posted by Steve Antler : 10:43 AM

A catchy phrase indeed... Today we remember Medicare's establishment in July 1965 as a ringing affirmation of the ideal of social insurance. Less well remembered is how close Washington came to creating a very different system. Not long before Medicare's passage, the Kennedy administration seemed on the verge of a compromise with Senator Jacob Javits, the moderate Republican from New York. Senator Javits and his allies wanted to give private insurance a leading place in the new program so government could play a smaller role — an idea opposed by liberal Democrats and organized labor. The opposition won out, and the private insurance idea seemed consigned to the dustbin of history. "Dustbin of history?" What a way with words this guy has, or, uh, maybe someone else said it first? UPDATE: Leon Trotsky 1879 - 1940 -- "You (the Mensheviks) are pitiful isolated individuals; you are bankrupts; your role is played out. Go where you belong from now on - into the dustbin of history!" Found at Modern European History.

Link posted by Steve Antler : 8:01 AM

Goodness takes its stand... I continue to be surprosed at the intensity of material like this: As I've said before, the failure of the Bush Administration to take any significant steps to boost aggregate demand over the past two years is remarkable and strange. The most they've done is to lie and claim that their tax cuts are effective recession-fighting tools. But even if it is the case that there is next to nobody in the White House who cares about the substance of domestic policy, there are lots of people in the White House who should be scared at the idea that there will be millions fewer Americans at work when the New Hampshire primary comes around in 2004 than when the New Hampshire primary came around in 2000. Nobody -- and I mean nobody -- tells the truth and cares more than your genuine Californial liberal economist. But seriously folks, doesn't anyone on the other side remember arguing in a good natured way with a Republican friend over the possibility of an upcoming recession and the possibility this bumbling, funny candidate Bush's proposed tax cuts might actually wind up as appropriate policy? Ooops, sorry, I forgot -- they don't have any Republican friends! They only bond with those they agree with! I need to read and re-read the Krauthammer Fundamental Thesis to keep my blood pressure down: To understand the workings of American politics, you have to understand this fundamental law: Conservatives think liberals are stupid. Liberals think conservatives are evil...Liberals tend to be nice, and they believe -- here is where they go stupid -- that most everybody else is nice too...Accordingly, the conservative attitude toward liberals is one of compassionate condescension. Liberals are not quite as reciprocally charitable...[The basic] article of liberal faith -- that conservatism is not just wrong but angry, mean and, well, bad -- produces one paradox after another. If you somehow missed this the first time, go and read it now. It is a classic.

Link posted by Steve Antler : 6:40 AM

Why bother now? For those who want to learn details of Senior Health Benefit before House-Senate Conference is done, there's this in the NYT. We're warned of the very real, worrisome danger the new bill may actually help some businesspeople -- possibly even indirectly!

Link posted by Steve Antler : 6:14 AM

Tuesday, July 01, 2003

Warnings and a possible corollary The California recall movement is a well-deserved reward for Gray Davis’ vicious, opportunistic demagoguery – or so we thought until George Will said "well, actually, no." Rather, the recall movement is for the Republicans a train wreck waiting to happen: One in eight Americans lives in California, which has 55 electoral votes, slightly more than one fifth of the 270 needed to win the White House. In 2000 George W. Bush tried to carry California but did not even manage to make Al Gore break a sweat: Bush did not much better than Bob Dole did in 1996. Bush hopes to carry California in 2004 or at least to make it costly for the Democratic nominee to hold it. That hope would be best served by Davis, whose job approval has plunged to 21 percent, continuing in office, and the electorate’s continuing to seethe. A second potential disaster is the upcoming senior drug benefit, more modest in benefits than the more lavish proposals. The most-feared scenario is a repeat of 1988: What seniors wanted, they had been telling Rostenkowski and other members of Congress for months, was what they had paid for with a lifetime of contributions to the Social Security and Medicare trust funds. They wanted their benefits, and they didn't want to have to pay more for them. Wasn't that the deal? Wasn't that what they had worked all their lives for?...But just as with their Social Security benefits, few of the elderly understood the math. Though both programs were in fact huge transfers of money from working Americans to retirees, and from the better-off to the less well-off, politicians almost never dared explain the issue that way. The elderly had long ago come to the unshakable belief that everything they got came from the contributions they made during their working lives, and the idea that they should be forced to pay again for what they had already bought with their contributions struck them as pure theft. Is it too ridiculous to hope there’s a corollary of the Feiler-faster rule lurking around somewhere? Specifically, might the faster news cycle mean the voting public has the potential to be smarter than it was in 1988? One guesses it depends on whether all the new information voters have is like noise, lots of zeros and ones that mutually cancel to produce meaningless grayish nothing, or whether voters will actually sift and winnow infobits until they’re left with something like, well, capital-T truth? In November 2004 we will know for sure.

Link posted by Steve Antler : 3:06 PM

With a glowing feeling... As a once-Canadian who listened religiously to the late Barbara Frum each night on CBC Radio, I note with warmth Wm. F. Buckley's reporting on her son's, that is, David Frum's, analysis: "To oppose same-sex marriage effectively," Frum writes, "you have to believe that marriage is more than a contract between two consenting adults. . . . that unmarried cohabitation is wrong, even when heterosexuals do it. Lose those beliefs and the case for marriage has been lost. It has been lost in Canada. It has been lost in Scandinavia, the Netherlands, and France. . . . It will be lost very soon in the United Kingdom. Will it lose in the United States? It is difficult to be very optimistic."

Link posted by Steve Antler : 1:39 PM

Recovery now underway Samuelson's Boeing story nothwithstanding, here's evidence the recovery, weak though it may be, is under way right now. On the other hand there's this and this. Source: Economagic Just to add a final contradictory story there's this news from Reuters, which includes the following: The euro's hefty rise has hurt European factory exports to the benefit of cheaper U.S., Japanese and U.K goods. British manufacturing rose to its highest level of the year, close to the dividing line between growth and contraction.

Link posted by Steve Antler : 1:06 PM

Adjuncts in academialand... For a quick fun read check out D-squared (Don't you love the name, right out of X-men!) on the adjunct crisis in academia.

Link posted by Steve Antler : 8:13 AM

You choose for now... The headline to this disturbing story could be either "Manufacturing Exports Continue Decline" or "This Just In: Monopolies aren't Forever."

Link posted by Steve Antler : 7:45 AM

More prosposed new regulations... Sen. John Edwards demands equal time for side effects and interactions in prescription drug TV ads. I think we should also demand a full record of mistakes, false statements, etc., in all House/Senate campaign TV spots.

Link posted by Steve Antler : 7:20 AM

WebDems to the Left of Dems? Taranto analyzes the Moveon.Org internet primary, its results, and its historical significance: ...Just what kind of voter participated in the MoveOn poll? How representative is it of the party as a whole? The group provides no demographic information on its survey participants; it's not clear if it even collected any such information. It stands to reason that participants in an Internet poll would tend to be young and well-educated. Beyond this, it's instructive to compare the MoveOn results with those of a Gallup poll, also released last week, of the preferences of 697 "Democrats or Democratic leaners" (rankings in parentheses): =========MoveOn=========== Gallup Dean =====43.87% (1) =========6% (6) Edwards ===3.19% (4) =========7% (4) Graham ====2.24% (6) =========6% (6) Kerry =====15.73% (3) ========13% (3) Kucinich ===23.93% (2)========= 1% (9) Gephardt ===2.44% (5) ========15% (2) Lieberman ===1.92% (8)======= 20% (1) Moseley Braun =2.21% (7) =======6% (6) Sharpton =====0.53% (9) =======7% (4) It seems clear from these contrasting results that the MoveOn participants are well to the left of Democrats in general. Not only did Dr. Dean finish in first place, but more than one in five MoveOn "voters" backed Rep. Dennis Kucinich, a man so far to the left that he couldn't even bring himself to support a resolution supporting the troops in Iraq. (He voted "present.")

Link posted by Steve Antler : 6:44 AM

 
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