| The Jobs Outlook (from Fairmodel) |
The forecast employment numbers are astounding. Here they are:
I will double check and change this post if warranted, but so far these are the predictions: 1. Job loss actually zeros out this quarter. By New Year's Day, 600,000 new jobs will have been generated by the recovery. 2. By September of 2004, a total of 3.6 million new jobs will have been generated. 3. By the election, those willing to round 4.458 up to 5 will be able to claim the policies of the Bush administration have "generated" 5 million new jobs. UPDATE: Even better, the model's now looking like the US natural rate of unemployment may be below the 5.5% I worried about since the last run of the model. Here are the annualized numbers: Year UR ------------- 2003 5.9% 2004 5.2% 2005 4.9% 2006 5.0% 2007 5.2% ======= Yes! Things are looking up indeed! UPDATE II: Thanks to Bill Hobbs (who has some cool graphics on employment thru various administrations) for reminding me to clarify where these numbers come from. UPDATE III: But what about those 3 million lost jobs, you ask? The ones everyone agrees haven't come back and may never come back? What about them? The answer is in the definition, of course. Those 3 million lost jobs are the manufacturing jobs. Here, from the BLS, is the picture people usually have in mind: 
Now don't get me wrong if I seem to be downgrading the importance of this sort of job loss. I am a manufacturer myself. This is a sector of the economy have strong feelings about. However: people lose jobs, and they while they sometimes get them back, they also sometimes find new ones. Here's another picture of the job situation from the same source. This is net job loss/gain of the entire civilian labor force, all workers 16 yrs of age and older: 
By this measure the recession at its lowest point wiped out (on a net basis) about 1.5 million jobs, but the loss/gain zeroed out in and around December of last year. Yes, you heard me right. By this way of measuring things, all the lost jobs came back about ten months ago! UPDATE IV: Don't leave this topic without revisiting Robert Musil's absolutely wonderful fact- and link-laden post entitled And Now a Word from the Bureau of Labor Statistics. |
| Link posted by Steve Antler : 1:23 PM |
| NEW NUMBERS FROM RAY FAIR'S MODEL |
| From the Forecast Memo:
Real Growth and the Unemployment Rate: The predicted growth rates for the next four quarters are 4.1, 3.6, 3.5, and 3.4 percent, respectively. The unemployment rate is predicted to fall to 5.6 percent by the middle of 2004. Inflation: Inflation as measured by the growth of the GDP deflator (GDPD) is predicted to rise to 2.5 percent by the middle of 2004. Monetary Policy: The [model] is predicting...the three month bill rate...will rise to 2.3 percent by the middle of 2004. Other Variables: The federal government is now running a large budget deficit, and the model is predicting that the deficit will continue to be large throughout the forecast period (see the predicted values for SGP). By the end of 2004 the deficit is about $400 billion (remember this is the deficit as measured in the NIPA accounts). This $400 billion is smaller than the federal government is projecting the deficit to be, and so the model is more optimistic about the government's budget than is the government. The U.S. current account deficit (variable -SR in the model) is forecast to be extremely large throughout the period (between $595.0 and $744.9 billion). |
| Link posted by Steve Antler : 12:34 PM |
| Two essays |
| The first, by Victor Davis Hanson, explains the second, by Tony Judt.
I think the Judt article might work quite well as background document for a new Wansee Conference. |
| Link posted by Steve Antler : 10:10 AM |
| This Just In: Bush, Krugman, and EconoPundit Agree on Likely Future Growth |
| Rocky Mountain News: Business: "'We are on the right track, but we've got work to do,' Bush told workers at Central Aluminum Co. in Columbus, Ohio. 'We can't expect economic growth numbers like this every quarter.'"
Paul Krugman: "My purpose is not to denigrate the impressive estimated 7.2 percent growth rate for the third quarter of 2003. It is, rather, to stress the obvious: we've had our hopes dashed in the past, and it remains to be seen whether this is just another one-hit wonder." Econopundit on September 12, 2003: 
If you go back to the original post you'll see the jobs picture improves steadily up to and including Q4 2004 (i.e. the election). Growth, however, spikes, goes back to trend, then fall below its "non-Iraq-reconstruction" trend for a full three quarters. Clearly we've got more information now. The model is scheduled for re-estimation and running some time this week or next. You can check directly at the model's URL, or keep checking in at EconoPundit. We'll bring you the new forecast memo as soon as we find it. UPDATE: Check posts above for new forecasts. |
| Link posted by Steve Antler : 5:42 AM |
| From the "Didn't Get Reported but Gets My Vote" Department |
| From the Oct. 30 Columbus, Ohio Remarks by President Bush on Energy:
Small businesses must have affordable health care for their employees. That's why we need association health care plans, so small businesses can pool risk just like big businesses do. Small businesses must be allowed to come together in order to pool risk in order to provide their employees with reasonably priced health care. And we need to have medical liability reform so that the frivolous lawsuits do not drive up the cost of health care. |
| Link posted by Steve Antler : 5:36 AM |
| Today's Krugman |
| So says Paul:
Still, it's possible that we really have reached a turning point. If so, does it validate the Bush economic program? Well, no. |
| Link posted by Steve Antler : 4:55 AM |
| Things don't add up, and even when it's not corruption it's still corruption but just, you know, a different kind of corruption |
| Two paragraphs from Charles Lewis' remarks to the press on the release of Windfalls of War:
Most of the companies that won contracts in Iraq and Afghanistan are political players. According to the Center's analysis, the companies, their political action committees and their employees contributed a total of nearly $49 million to national political campaigns and parties since 1990. Donations to Republican Party committees -- the Republican National Committee, the Republican Senatorial Campaign Committee and the National Republican Congressional Committee -- outpaced those to Democratic committees, 12.7 million to $7.1 million. These two wars in two years and their aftermaths have brought out the Beltway Bandit companies in full force, and there is a stench of political favoritism and cronyism surrounding the contracting process in both Iraq and Afghanistan. I am not just talking about the large political payments and excessive lobbying fees to land these fat contracts, or the already reported, cushy, no-bid circumstances surrounding the Vice President's former company, Halliburton. We found numerous instances in which companies with thin or no credentials landed major multimillion dollar contracts... The above two paragraphs show why the report will persuade no one and will get (as appears to be the case) little or no coverage. Out of "nearly" $49 million, less than half is actually accounted for. Out of this fraction, donations to Republicans "outpaced" donations to the other side by a frankly underwhelming margin of about two-thirds to one. The study also uncovers many contracts awarded to poorly-connected companies who made only modest political donations, but it actually dismisses these contracts as tainted owing to their having been awarded to unsuitable companies with "thin or no credentials!" I would say this isn't worth anyone's time, except it appears to document many contracts awarded to smaller, politically inactive, non-well-connected companies. It presents -- unintentionally, one might guess -- considerable evidence contradicting its central contention. UPDATE: More from Drezner, including a link to this absolutely wonderful and useful utility showing scatter diagrams associated with varying correlation coefficients. (Hmmm, shouldn't we add this to the EconoPundit blogroll? Under EconoData? Maybe a new category, EconoUtilities?...) UPDATE II: Steven Kelman, in the Washington Post, says those who know how the contracting process work simply laugh at the "cronyism" talk. Additionally: The charges of Iraq cronyism encourage the system to revert to wasting time, energy and people on redundant, unnecessary rules to document the nonexistence of a nonproblem...If Iraqi contracting fails, it will be because of poorly structured contracts or lack of good contract management -- not because of cronyism in the awarding process. By taking the attention of the procurement system away from necessary attention to the structuring and management of contracts, the current exercise in barking up the wrong tree threatens the wise expenditure of taxpayer dollars the critics state they seek to promote. |
| Link posted by Steve Antler : 4:20 AM |
Thursday, October 30, 2003
| Ha! Gotcha! You earned some profit! |
| Windfalls of War purports to be the definitive study of Iraq and Afghanistan postwar contracting and comes from the oh-so-nobly-named Center for Public Integrity. What will be batted around the media tonight is the study's assertion that contractors "donated more money to the presidential campaigns of George W. Bush -- a little over $500,000 -- than to any other politician over the last dozen years."
Right now we're slugging our way thru the study to see exactly what this charge means and whether anyone should be scandalized by its supporting facts. So far here's what I've found. First and foremost, this study (of companies who "Reap the Windfalls of Post-war Reconstruction") is written by and for those who're scandalized by capitalism itself. Second, there are seventy (70!) companies -- some large, some small -- who, as the study says (charges?) "shared in the reconstruction bounty": Their tasks ranged from rebuilding Iraq's government, police, military and media to providing translators for use in interrogations and psychological operations. There are even contractors to evaluate the contractors. Presumably we're supposed to be scandalized by this listing of political contributions, but the table provides no links and no breakdowns. I suppose we're seeing total contributions to all parties and all candidates. (Or did GE really contribute $8.8 million to George W. Bush between 1990 and 2002? And, by the way, why is the column titled "contract total?") One naturally wants to know who was the runner-up and what did he get? Did the Clintons, for example, get $450,000? The ghost of C. Wright Mills haunts this study, which I suppose is appropriate given the current Halloween season. Its authors have rediscovered Mills' "power elite:" Nearly 60 percent of the companies had employees or board members who either served in or had close ties to the executive branch for Republican and Democratic administrations, for members of Congress of both parties, or at the highest levels of the military. But I can hear Mills' ghost howl -- "ONLY 60%? THERE'S GOT TO BE A MISTAKE! THE NUMBER SHOULD BE MUCH HIGHER!!! AAAAARGHHHH!!!!" To sum up, as the study says: The results of the Center's six-month investigation provide the most comprehensive list to date of American contractors in the two nations that were attacked in Washington's war on terror. We can only add this: "attacked?" The "two nations that were attacked?" I thought we liberated them. Silly me! |
| Link posted by Steve Antler : 12:03 PM |
| Economy Grows at Fastest Pace Since 1984 |
| AP reports:
The economy grew at a scorching 7.2 percent annual rate in the third quarter in the strongest pace in nearly two decades. Consumers spent with abandon and businesses ramped up investment, compelling new evidence of an economic resurgence. This is about a point higher and a quarter sooner than the forecast generated by my "Iraq Reconstruction run" of the Yale model. |
| Link posted by Steve Antler : 8:10 AM |
| More cultural disconnect... |
| As California burns, a complelling cultural rift comes to be apparent.
Here in the Midwest, lumberjacks are perceived as good guys -- they're fun, the stuff of legend and our childhood. When we camp in Northern Wisconsin, there's always that guy three campsites down who brought an axe so he can break up the kindling for himself. There are all those roadside diners with "Paul Bunyan Breakfast" specials. It is true for housing we're largely a red-brick society, but to us lumber and wood are special. New homes' deluxe features always include granite counters, jaccuzi tubs, and, yes, wood-burning fireplaces. But lumberjacks and the forest industry are spawn of the devil himself on the West Coast, judging by current editorial opinion. How can anyone oppose the Bush "Healthy Forests Initiative" while people are coughing and packing three day's worth of clothing into their cars? Because, as the LA Times says: Essentially, the forests would become "healthier" by cutting them down. The initiative would give loggers greater access to federal wild lands as a means of thinning them, thereby lowering fire risk. (You'll be shocked to learn the White House's point man on forestry is a former logging industry lobbyist.) Indeed, says the paper, the problem is too much forest thinning: And by the way...Southern California got only a tiny fraction of the state's 2003 U.S. Forest Service fire prevention funds. That's partly because [Diane] Feinstein backed timberland clearing in remote areas up north, while we got stiffed down here. Last time I checked, we had a few more people, and greater risks...Does it sometimes appear to you that there's a conspiracy to see Southern California burned to a crisp? As the fire story continues, this automatic and unthinking association of logging with evil will increasingly confuse the rest of the country. Spokepeople for the environmental lobby will only add to this confusion. Their isolation will increase as people continue to ask why it is better for the forests to burn down than be cut down. And, as their isolation increases, West Coast environmentalists will form stronger associations with their terrorist underground left wing. |
| Link posted by Steve Antler : 7:06 AM |
Wednesday, October 29, 2003
| Pollyanna Conspiracy versus the Gloomy Schopenhauer Left |
| Wm. Saffire:
...Why do the [Pollyanna Conspirators] treat...hyperactive inaction by Greenspan & Co. as such good news? Because the Fed knows in advance what Thursday's announcement of the increase in gross domestic product will be. The conspirators guess that the figure for the rate of America's economic growth will be a whopper: it is likely to be over 6 percent for the quarter, which is double the good growth in the previous quarter... But what about the [Gloomy Schopenhauer Left's] mantra, "Bush has caused a loss of three million jobs, a greater loss than any president since Hoover"? ... We [Pollyanna Conspirators]... say, "Wait'll next year." Come 2004, with economic growth steadying near a brisk 4 percent -- and, sustained by the low interest rates justified by productivity's suppression of inflation -- the current 6.1 percent unemployment rate should begin to trend downward. And it is the trend, more than the level, that makes news and affects elections.(Emphasis added) EconoPundit can only add this bit of anecdotal support. Last night I had dinner with a magician buddy who let me in on his plans to add a lunch counter to the front of his "business-is-currently-kinda-slow" retail magic shop. Low interest rates and his great location (across from the local commuter train) made it possible for him to diversify this way. He'd have to staff it with a new person, of course, and as I was driving home I suddenly thought "Wait a second here -- I just had dinner with a guy who had actually CREATED a new JOB!" |
| Link posted by Steve Antler : 1:53 PM |
| The Continuum of Evil |
| This is all around us and it has to be said, even though my friends will call me a McCarthyite.
Start with this notice in the Boston Herald: The Islamic organization poised to build the largest mosque in the Northeast on a site in Roxbury has long-standing ties to an Egyptian cleric who praises suicide bombings and a Muslim activist indicted last week in a terrorism financing probe. The Islamic Society of Boston, which has city approval to build a sprawling $22 million Islamic cultural center and mosque on Malcolm X Boulevard, has had a long association with Dr. Yusuf Abdullah al-Qaradawi, whose vocal support of the Palestinian terrorist group Hamas prompted the State Department to bar him from entering the U.S. four years ago. We're dealing not with an "axis" but with a continuum. As in the 30's, 40's, and 50's with World Communism, there exists a non-discrete, perfectly gradated array of activities in support of IslamoFascism. You come in at your own personal level of comfort. If suicide bombing is too demanding, you march in support of the suicide bombers. If marching for is too demanding, you support associated charities, organize for "peace," or open a new mosque whose leaders have certain connections. Always you can raise money thru front organizations, charities, ngo's, etc. It is painful and infuriating for someone like me to admit there actually were such things as Communist front organizations, fellow travellers, dupes, and, yes, even real spies. If cries of "McCarthyism!" succeed in shouting down those who say openly we have all these again, we will lose another few skyscrapers, another few thousand citizens, and maybe even a city or two, before we learn to say, simply: "Okay, we've heard you, now please just shut up and find something else to do. Right now we're busy." Boston Herald story via Andrew Sullivan. |
| Link posted by Steve Antler : 8:19 AM |
| Notice |
| FOXNews reports Democrats -- John Podesta in particular -- are opening a new liberal think tank. Says Podesta:
The conservative movement has really built up an infrastructure of not just ideas, but the ability to kind of get out there and do the kind of hard communications work to sell to the American public... What they seem to be talking about is paying lots of people to do what I do for free. Open Notice to John Podesta: While I think my principles can't be compromised for money, I'm actually not really sure because I don't really have the choice. So if you'd like to explore the matter, contact me at EconoPundit.com with, uh, you know, an offer? |
| Link posted by Steve Antler : 8:04 AM |
Tuesday, October 28, 2003
| Krugman Charges "Willful Ignorance" |
| Krugman says: "we'll lose the fight against terror if we don't make an effort to understand how others think...", but this self-lauditory statement is silly on the face of it. Many scholars -- Bernard Lewis and Fouad Ajami to name two -- have addressed this issue and concluded in specific and important ways the Arab World's thought processes are different from our own.
Interesting, isn't it, how "wilfully ignorant" the anti-Bush left is of this literature? It is as if they espoused a kind of religion that says everyone's just like us underneath -- because it's a small world, after all! Krugman continues, speaking of General Boykin: "Yet because of a domestic political struggle that seems ever more centered on religion, such attempts at understanding are shouted down." How interesting. This is a sort of misdirection, isn't it? If you shout loudly and often about someone else's religious beliefs, nobody will notice your own! UPDATE: Yes, I know Krugman said: "A lot of the speech sounds as if it had been written by Bernard Lewis, author of "What Went Wrong," the best-selling book about the Islamic decline." But Krugman's bizzare misinterpretation of the Mahathir speech seems to show he hasn't spent much time reading Mr. Lewis' work. |
| Link posted by Steve Antler : 10:59 AM |
Monday, October 27, 2003
| John McCutcheon's "Injun Summer" |
| Yep, sonny this is sure enough Injun summer. Don't know what that is, I reckon, do you? Well, that's when all the homesick Injuns come back to play; You know, a long time ago, long afore yer granddaddy was born even, there used to be heaps of Injuns around here -- thousands -- millions, I reckon, far as that's concerned. Reg'lar sure 'nough Injuns -- none o' yer cigar store Injuns, not much. They wuz all around here -- right here where you're standin'.
Don't be skeered -- hain't none around here now, leastways no live ones. They been gone this many a year. They all went away and died, so they ain't no more left. 
But every year, 'long about now, they all come back, leastways their sperrits do. They're here now. You can see 'em off across the fields. Look real hard. See that kind o' hazy misty look out yonder? Well, them's Injuns -- Injun sperrits marchin' along an' dancin' in the sunlight. That's what makes that kind o' haze that's everywhere -- it's jest the sperrits of the Injuns all come back. They're all around us now. 
See off yonder; see them tepees? They kind o' look like corn shocks from here, but them's Injun tents, sure as you're a foot high. See 'em now? Sure, I knowed you could. Smell that smoky sort o' smell in the air? That's the campfires a-burnin' and their pipes a-goin'. Lots o' people say it's just leaves burnin', but it ain't. It's the campfires, an' th' Injuns are hoppin' 'round 'em t'beat the old Harry. You jest come out here tonight when the moon is hangin' over the hill off yonder an' the harvest fields is all swimmin' in the moonlight, an' you can see the Injuns and the tepees jest as plain as kin be. You can, eh? I knowed you would after a little while. Jever notice how the leaves turn red 'bout this time o' year? That's jest another sign o' redskins. That's when an old Injun sperrit gits tired dancin' an' goes up an' squats on a leaf t'rest. Why I kin hear 'em rustlin' an' whisper in' an' creepin' 'round among the leaves all the time; an' ever' once'n a while a leaf gives way under some fat old Injun ghost and comes floatin' down to the ground. See -- here's one now. See how red it is? That's the war paint rubbed off'n an Injun ghost, sure's you're born. Purty soon all the Injuns'll go marchin' away agin, back to the happy huntin' ground, but next year you'll see 'em troopin' back -- th' sky jest hazy with 'em and their campfires smolderin' away jest like they are now. |
| Link posted by Steve Antler : 1:52 PM |
| John McCutcheon's "Injun Summer" |
Fall doesn't seem complete without this.
You can find a larger version with complete text here, and order a poster of it here. Do a google search to find some of the the astoundingly viscious political correctness that killed the Chicago Tribune's annual publication of this hauntingly beautiful cartoon. |
| Link posted by Steve Antler : 1:37 PM |
| Ancient Greeks and Western Civilization |
| Lots of response last week to this post, where we pointed out the Arab World never experienced the same domination by Greek culture as did the Jews during post-Alexander Hellenic Judaism.
Here's a must-read quote in yesterday's NYT: Fouad Ajami, a professor of Middle Eastern studies at Johns Hopkins University, said part of political Islam's antimodern approach was a rejection of the Western scientific method. So when some Islamists declared, for instance, that al Qaeda caused this summer's blackout on the East Coast, that could be accepted without any proof..."When there is a break in cause and effect," Mr. Ajami said, "it's easy to sell these views of the world." This is a must-read article. |
| Link posted by Steve Antler : 10:34 AM |
| From Andrew Sullivan |
| The geopolitical future looks like this:
...the fledgling links now forged between left-wing anti-war campaigners and Islamo-fascism will get stronger in the years ahead. The anti-globalization far left has nowhere else to go. Fanatical political Islam provides them with an over-arching structure for the loathing of the West. Now that Marxism is dead and post-modernism has shown itself inept as a basis for a real political movement, Islam will fill the void. |
| Link posted by Steve Antler : 10:27 AM |
| A response to Brad DeLong... |
| In connection with this post Brad DeLong writes the following to EconoPundit:
AHEM!...I wrote: "The message of Luke 12:13-21 is: "Fools! You need treasure in heaven, not treasure on earth. So sell all you have, give the proceeds to the poor, and follow me." Are you as big an idiot as you seem? EconoPundit responds: Brad, quoting yourself out of context doesn't help here. You were in a conversation with Bruce Bartlett I think. Please answer this question: how is it possible for you to voluntarily sell all you have and give the proceeds to the poor if someone (oh, let's say, just maybe, Big Government?) in effect does this for you? Without asking? Without consent? With regard to the last question, I'd have to mention in passing your insults lack imagination. You might try working around this by being more polite. On the question itself -- Brad, I don't know about you, but I'm way too old to worry about whether I'm smarter than anyone else. |
| Link posted by Steve Antler : 8:28 AM |
| Monday |
| Here's your economic calendar. (But remember the blogroll's version has great links.)
Few postings until I get midterms written, adminstered, graded, and recorded. Go check this out if you missed it. |
| Link posted by Steve Antler : 8:13 AM |
Friday, October 24, 2003
| Syntax of the Annointed |
| It is really hard to read beyond this point:
John Snow, the Treasury secretary, told The Times of London on Monday that he expected the U.S. economy to add two million jobs before the next election -- that is, almost 200,000 per month...[N]othing in the data suggests that jobs are being created at that rate...Still, Mr. Snow may get lucky, and the job market may pick up. "Mr. Snow" get lucky? How about the newly-employed workers? The US economy? All of us? But seriously folks, this is about more than just "luck," isn't it? We're economists here. We deal with models, and numbers, you know, scientific stuff. About ten weeks ago, when the job market was much bleaker than today, EconoPundit reported: ...[I]t looks like all net job losses of the recession will zero out some time in the first two quarters of 2004, with the net job gain picture rapidly reversing itself thereafter. Unforseen events can change this conclusion, but best currently available evidence suggests those willing to round 1.77 up to 2.0 will, by election time, be able to claim the Bush Presidency has "created" 2 million new private sector jobs. (Emphasis added) This statement was based on published assumptions and numbers generated by an economic model of the US economy . Professor Krugman, we issue this public challenge to you. We've published all our data and announced the MODEL that generates PREDICTIONS similar to those of Secretary Snow. On what MODEL do you base your ALTERNATE PREDICTIONS? If you are not using a model are your predictions, rather, based on IRRATIONAL "GUT" FEELING? Maybe ASTROLOGY? Please let us know. Otherwise I think it will be clear you're speaking not as an economist, but merely as a Democrat hoping for bad economic news. UPDATE: Go to Brad DeLong for an alternate view, and check out the comments, especially this one from Jim Glass: "But I do have one complaint. Asking that Bush leave 'the job market no worse than he found it' is setting the bar too high by perhaps 2 million jobs or so." ~~ Very true. And I'm pleasantly surprised to read it here, since "the worst job market in 30 years / 50 years / since Hoover" meme, which I've read here before, depends on declaring it worst *relative* to an unsustainable bubble peak. Compared to the average job market of the last 30 years, the current market with its 6.1% unemployment rate is just modestly below average. Prof. Krugman gives us the Hoover campaign rhetoric: "Bear in mind that the payroll employment figure right now is down 2.6 million compared with what it was when George W. Bush took office. So Mr. Snow is predicting that his boss will be the first occupant of the White House since Herbert Hoover... " etc., etc. OK. So out of curiosity I just ran a 22-year trend line in payroll employment growth from 1973 (before the '74 recession) to 1995. Then carrying it forward from there one finds that during the 1998 to 2000 "bubble" years payroll employment suddenly rocketed up over trend to a top of 2.7 million above trend. What happened? Well, we may remember that in 1996 Prof. Krugman chastised -- in his usual tactful and modest manner -- the "four per centers" who argued for trying to achieve 4% annual GDP growth on the strength of the new productivity gains. Well, actually he ridiculed them for their ignorance in not realizing the obvious fact that 4% average growth for five years would reduce the unemployment rate to only 1.5%, which was clearly impossible so such growth was impossible -- pooh poohing their lame claims about productivity gains making any difference. Then he lectured them that if they couldn't master even such simple economic models as he just used to prove that five years of 4% growth was impossible, "you shouldn't use big words ... you may sound impressive and sophisticated but you will have no idea what you are talking about. And that, my friends, is the irritating truth." http://www.economicclub.org/Pages/archive/fulltext/arch-krugman.htm Immediately after which the US economy experienced five years of 4% average growth with the unemployment rate never dropping below 4%. So what was Prof K's error that his simple model overlooked? That the boom would create extraordinary offers for labor that would attract into the job market people normally not interested in work. During the same period in which payroll zoomed up 2.7 million over trend, the percentage of civilians in the workforce similarly zoomed. (One may remember stories in the business press from those days about people being recruited into jobs by being told they could bring their pets to work, retirees being recruited back to work from Florida, and so on). With the increased work force the zoom up in employment didn't reduce the unemployment rate as his simple model expected. Then the boom ended, the civilian work force participation rate returned to the long-term norm, people took their pets home and returned to Florida, and those 2.7 million jobs went away. And it is the loss of those 2 million+ unsustainable bubble-years jobs that Krugman and other Democrats will use to try to "Hooverize" Dubya during the coming year. Although using the same logic I could say my own "worst income years ever" were the years after I won the lottery -- because never had my income fallen so far! And it hasn't recovered yet! Just as if one could win the lottery every year. And I really don't see how Krugman can give Clinton the credit for creating all those jobs in the first place, as he seems to want to do in this piece, without also giving Clinton credit for the "bubble" that created them too -- and for the downside of the bubble as well. A much more realistic picture of the current employment situation is in light of the 30-year long-term trend. By that measure employment has been flat since 2000, neither rising nor falling significantly, with as Prof. DeLong fairly notes the loss of the unsustainable 2 million+ jobs disregarded. In his 1996 piece Prof. K. said that the minimum sustainable long-term rate of unemployment was probably 5.5%-6%. About that he might well have been right. Even now that he accepts news of the productivity gains, it's not clear what effect they will have on that, if any significant one at all. In any event, being that Prof. K himself noted that the historical optimum unemployment rate was about 6%, for him or anyone else to say that today's job market with a 6.1% rate is the worst in 30 years (look at 1982 or 1991) is ridiculous -- and to say "since Hoover" is ludicrous. And yes, that includes considering the "discouraged workers" who have dropped out of the labor force as measured by the labor force participation rate. Just look at the data. http://research.stlouisfed.org/fred2/series/CIVPART/12/Max Posted by Jim Glass at October 24, 2003 11:33 PM |
| Link posted by Steve Antler : 8:09 AM |
Thursday, October 23, 2003
| The Border |
| This is the kind of crackdown you just don't read about very often. Has the Administration been reading Derbyshire? |
| Link posted by Steve Antler : 12:57 PM |
| You should paraphrase simply, then interpret that... |
| When a renowned leader was addressing a large group, someone yelled out "tell my brother to share his wealth with me." The leader said "I don't have the authority, and why are you so greedy, anyway? You could die this afternoon -- what good would more wealth be to you then?"
This is my short, nonpoetic paraphrase of the Luke 12:13-21. Brad DeLong, who interprets this as obviously favoring forced redistribution of wealth from rich to poor (via for example the inheritance tax), should probably stay away from exegesis whenever possible. I also found his sneering reference to Bruce Bartlett's "peculiar [Texas(?)] (sic) form of Christianity" unimaginative and distasteful. UPDATE: Jon Henke adds the following: Regarding people who advocate forced redistribution.....funny, I always thought "thou shalt not covet" covered that territory fairly well. {start libertarian mode} Stealing somebody's property must not violate a commandment, so long as 51% of the population says you can stick it to him. {end libertarian mode} EconoPundit Responds: Now you've got me totally primed to discuss Locke, the labor theory of value, and the precise relationship of these to Genesis (as compared with alternate creation stories), Sinai, and the Third Commandment. However, this can all wait. |
| Link posted by Steve Antler : 10:29 AM |
Wednesday, October 22, 2003
| Okay, let's talk about that "real world"... |
| Nicholas D. Kristof thinks George W. Bush should be reading the Iliad and the Odyssey because
Homer's most powerful lessons include the need to restrain hubris, to cooperate with allies, to engage the real world rather than black-and-white caricatures. If Achilles and Odysseus can learn those lessons, maybe there's hope for Mr. Rumsfeld or even the mighty Mr. Bush. Kristof's warm and fuzzy worldview (presumably we're the Greeks, the world of Islam the Trojans?) misses something we learned in Western Civ (before they stopped teaching it). Ancient Greek culture influences us strongly because it came through three independent channels: (1) Ancient Rome's love of Greek culture, (2) Early Christianity's espousal of "Neo-Platonism," and, earliest but connected to the last, (3) Ancient Judaism's domination by Greece following Alexander. The Arab World never experienced domination by Greek culture. They discovered some of it through the Arab scholarship of the Middle Ages, but this scholarship, and most of the Greek influence, was quickly abandoned. What's the meaning? First and most important our current war is nothing like the Trojan War. There, the two sides shared the same culture. With our enemies in the current war, by contrast, we share little culture -- not even a basic idea of "truth," or the nature of the world itself. Consider this last point. "Truth" isn't really a universal idea at all. To Westerners truth is seeing the world much like the Ancient Greeks did -- as genuine discoverable reality, in other words. In the Islamic World "truth" is more poetic. They see the world as a kind of metaphor, with infinite shading and perpetually shifting, subtle meanings. It is neither a "black and white caracature," nor "racist," nor "Orientalist" to say the world of Islam does not share our definition of truth. The most recent posting at MEMRI illustrates this. A set of stories of castration, magic, sorcery, and witchcraft arrests, it shows just how far Islamic culture remains from anything resembling a "modernizing force." Perhaps we should envy them, living so much closer to magic than we do. Truly engaging the "real world" (once again using Kristoff's words) means appreciating the our opponents' true nature. This means accepting the grim reality of profound historical and cultural differences rather than glossing them over. We are not Greeks, nor they Trojans. At the extreme, in our worst moments, we might feel the current war has more in common with H.G. Wells' The War of the Worlds than it does with Homer's poetic Iliad. UPDATE: What explains Mahathir Mohamad's bizzare leaps of logic? Perhaps, as Paul Krugman believes, he is a rational Western politician masquerading as Islamic leader. Or maybe, just maybe, his thought processes are different from ours. I've always wondered how the same people who persistently demand we mentally walk in others' shoes for better understanding can so easily start singing "It's a Small World After All" when it suits them. |
| Link posted by Steve Antler : 1:17 PM |
Tuesday, October 21, 2003
| Name Withheld... |
| Regarding Don Luskin's important work, an anonymous reader sends us this to ponder:
Luskin on Krugman: "The nervous, stammering, shifty-eyed, twitching, ill-tailored, gray homunculus..." Luskin on DeLong: "This pudgy dweeb..." It's really rather hard to avoid the impression that Mr. Luskin's treehouse is missing a few more slats than Krugman's. EconoPundit responds: I like and respect Don Luskin, but I agree his writing style might not be for everyone. Big deal, so what? If you don't like it, don't read it. It is important to remember in this context that Don Luskin's objection is not that Krugman is un-civil, but rather that he is a liar. The civility part of it is kind of, well, outside Luskin's chosen area of concentration. Others have addressed it. The civility issue is important. I think it is a serious matter when the country's most well known academic economist calls his colleagues liars and worse over issues subject to honest, informed disagreement. My personal feeling is this behavior violates the basic ethics of academic economics. But not everyone cares so much about this civility business, and they have the right to their opinion. If Luskin cares to refer to DeLong in an un-civil fashion, as a "pudgy dweeb" for example, well, I guess I'll just have to decide if the description is apt when and if I finally meet DeLong face to face -- if I remember, that is. I think everyone does or should care about the "honesty" thing, though. Luskin has caught Krugman making a number of factual and numerical misrepresentations. (I've even found one or two myself.) A major public figure who is a professional economist should not be (select one of the following:) (a) making these mistakes or (b) engaging in these misrepresentations. UPDATE: I think we may need a new term for Don Luskin's writing style, which can easily shift from rough edges like those cited to the very sublime -- as when for example he likens Paul Krugman (with all his apparent distaste for markets) to a veterinarian who dislikes puppies. Maybe the right term is "econogonzo?" Has someone else thought of this, or am I the first? UPDATE II: Luskin comments: I get a lot of criticism on this point. In fact that line about the homunculus seems to have inspired particular ire. Sometimes such criticism is used by people who are just trying to find something wrong with my Krugman critiques so they can ignore me in comfort, and other times it's constructive and thoughtful advice that I might be more effective if I stuck to factual assertions, rather than ad hominem ones. Be honest about this -- the factual outnumbers the ad hominem in my posts by so many multiples that the point is almost moot. But perhaps a little bit of ad hominem goes a long way, so let me explain why I do this -- there is method to the seeming madness. The homunculus line is a perfect example. That line did not just show up in that column just to get off a cheap shot. It was part of an essential point that I wanted to make, which was that Krugman on TV was startlingly less powerful, effective and credible than he appears in print, especially when he is draped I the majesty of the New York Times. The full context surrounding that isolated quote makes this abundantly clear. Did you read the whole thing, or just uncritically accept the letter-writer's out-of-context phrase? I am trying to do more than just fact-check Krugman. I am trying to defuse the entire Krugman phenomenon, which involves the hijacking of an iconography of credibility -- New York Times, Princeton, Bates Medal and so on. I am trying to expose "the smallness of evil" as I believe the saying goes. Krugman is not what he seems. He's not a great authority. He's a bumbling little homunculus. That revelation may mean nothing to certain readers (and may put off some, too) -- but for others, it may help them read Krugman in the future in a more critical and thoughtful way. Same thing for DeLong. Have you ever actually looked at his website? Have you ever seen writings of such pomposity, self-aggrandizement and self-importance? It helps disrupt the reality distortion field that he tries to project to draw attention to the truth about the sorry little photographs of himself that he posts on his site, which I believe I linked to in that post where I called him a "pudgy dweeb" (if I didn't, then I did in another similar one). Why does he post the photos if he doesn't expect them to be seen, and their nature evaluated? Are we permitted to react only to the words on his site, and not the pictures? Considering the whole man is part of the argument when what you are dealing with is a media phenomenon where more than ideas are at stake. EconoPundit responds: Look Don -- just hold off on this "Did you read the whole thing?" and "Have you ever actually looked at his website?" stuff. I did and I have. Furthermore, don't tell me to "Be honest about this." It's what I'm doing. Okay, now that I got that off my chest, let me say I think what you're doing is very important and that you're doing it very well. To read is to pay a very short visit to someone else's mind. "Gonzo" invites the reader in for a more intimate stay, allowing access to flavors, aromas, emotions -- stuff like that. Don't get me wrong -- I know you're not Uncle Duke or Hunter S Thompson. (And it should go without saying this has nothing to do with drugs.) What I mean is you've invented a new genre, a fact-based but angry economic journalism that directly and very effectively confronts the now-crumbling hypocritical politico-economic elitist ideology that exalts all things planned by government and sneers at dull, old-fashioned capitalist businesspeople and their workers. What's the first thing a new visitor learns about Don Luskin? "The Conspiracy to Keep You Poor and Stupid" is his chosen blog title. Says a lot, I think. Keep up the good work! And if you want to be vivid in your descriptions of people -- GO FOR IT! |
| Link posted by Steve Antler : 1:24 PM |
| Econopundit makes it to the big time? |
| Well, probably not. Fox News Special Report last night finally mentioned our MEMRI-based story regarding a documented Iraq/Al-Qa'ida pre 9/11 training linkup. |
| Link posted by Steve Antler : 11:41 AM |
| Gee! We squandered all that post-9/11 sympathy! |
| I can't pass this up. Says Paul Krugman:
Thanks to its war in Iraq and its unconditional support for Ariel Sharon, Washington has squandered post-9/11 sympathy and brought relations with the Muslim world to a new low. On 9/12 I seem to remember Palestinians dancing in the street and lots of Paul's friends explaining why the rest of the world correctly hates us. UPDATE: Oh yes, and we lost the sympathy of those who wanted us to bring the matter to the World Court -- but only after we had unidisputable proof Bin Laden was actually involved. We also lost the sympathy of those who felt Bin Laden was popular because of all the day care centers he'd built throughout the Arab world. |
| Link posted by Steve Antler : 11:06 AM |
| More from Mahathir |
| Via Drudge, from the Bangkok Post:
In my speech I condemned all violence, even the suicide bombings, and I told the Muslims it's about time we stopped all these things and paused to think and do something that is much more productive. That was the whole tone of my speech, but they picked up one sentence where I said that the Jews control the world,'' he told Bangkok Post in an exclusive interview yesterday, which covered aspects of his 22 years as leader of Malaysia, as well as his straight-forward views on terrorism, democracy and US policy. Dr Mahathir added, however, that "...the reaction of the world shows that they [Jews] do control the world'." |
| Link posted by Steve Antler : 9:28 AM |
| Wirus? Vorm? |
| Light posting today. I used my laptop in class last night and this morning it doesn't work. |
| Link posted by Steve Antler : 9:19 AM |
| From the "In Case You Missed It" Department... |
| Instapundit has linked to this, so my doing so is irrelevant and unneccessary. Also Don Luskin linked to this, so I don't need to. |
| Link posted by Steve Antler : 9:16 AM |
Monday, October 20, 2003
| Bottom line: we're older... |
| Howard Gleckman of Business Week explains why health care costs keep going up. |
| Link posted by Steve Antler : 1:50 PM |
| The Plan |
| Michael Novak has published the administration's twenty-four point plan for successful postwar Iraq occupation. Point ten is:
Encourage the founding of scores, even hundreds, of newspapers, magazines, and other media of communication, and encourage open public debates, protests, marches, and the free exercise of religion, including pilgrimages and processions: In other words, inspire all of the ordinary expressions of liberty that had been repressed during the long tyranny of Saddam Hussein. Without realizing we were publishing evidence of the plan's success, EconoPundit has been posting links to MEMRI translations of free Iraqi press editorials from the beginning. We'd like to remind you the most recent of these contained evidence of a strong pre-9/11 Iraq-Al Qa'ida link. |
| Link posted by Steve Antler : 8:51 AM |
| Monday |
| Here's your economic calendar.
Have you ever noticed nothing seems to rhyme with "calendar?" If someone showed up at your office brandishing a weapon demanding you immediately finish a poem whose next-to-last line had the words "orange calendar," you'd be finished! (What a cruddy thought to start the week with. Sorry.) UPDATE: Dave Ivers sends us this proposed solution: I don't know about calendar, but I've always advocated passing a law to officially make silver rhyme with orange. Maybe we just arbitrarily make calender rhyme with both orange and silver. Think of it as the Krugman Solution. UPDATE II: We have what may be an acceptable solution from Ross Nordeen! "Door hinge collander" might be close enough to same someone's life! (Not really sure about the "collander" part, though.) |
| Link posted by Steve Antler : 6:11 AM |
| Krugman a Victim? |
| Hopefully we will soon get to see Don Luskin on prime time TV once again. Check it out. Oh yes, and there's this -- how do you "stalk somebody on the web?" Are there other potential offenses we should know about? Have some of us been victimized in yet other, more obscure ways, or committed crimes nobody's yet dreamed of?
UPDATE: I'm coming to think none of this is funny. I'd change the post but someone has to keep some kind of sense of humor. Still, think of it. Is it really "stalking" to show up at an intellectual opponent's lecture? If an extremely liberal student registers for yet another one of my courses, is that person "stalking" me? What an astonishingly irresponsible use of language! |
| Link posted by Steve Antler : 6:07 AM |
Sunday, October 19, 2003
| In Memoriam Edward Said |
| D-squared has an obituary poem for the late scholar. |
| Link posted by Steve Antler : 8:09 PM |
| I thought only Reuters used them... |
| Tom Friedman proposes what in the 60's we called unilateral disarmament:
What should America's response...be? We should stop talking about "terrorism" (sic) and W.M.D. and make clear that we're in Iraq for one reason: to help Iraqis implement the Arab Human Development Reports, so the war of ideas can be fought from within. Then we should get out of the way. |
| Link posted by Steve Antler : 8:54 AM |
| Who says math is just for guys? |
| Ann Coulter has been doing some quantitative research:
Rush Limbaugh's misfortune is apparently a bigger story than his nearly $300 million radio contract signed two years ago. That was the biggest radio contract in broadcasting history. Yet there are only 12 documents on LexisNexis that reported it. The New York Times didn't take notice of Rush's $300 million radio contract, but a few weeks later, put Bill Clinton comparatively measly $10 million book contract on its front page. Meanwhile, in the past week alone, LexisNexis has accumulated more than 50 documents with the words "Rush Limbaugh and hypocrisy." That should make up for the 12 documents on his $300 million radio contract. This will have to stand in for this Sunday mornings' In Memoriam Punditwatch. I'm teaching and immediately going off with friends to the Goodman Theater. All of you will get to see the programs long before I see the TIVO replay. Send me your favorite moments and I'll post them. |
| Link posted by Steve Antler : 6:17 AM |
| Ha ha... |
| Ohioans are revolting. |
| Link posted by Steve Antler : 4:52 AM |
Friday, October 17, 2003
| Bad Week for Krugman |
| The economy is recovering and he's discovered the Bush tax cuts really do benefit the middle class.
Oh yeah, there's this too. As he puts it: "Almost every expert not on the administration's payroll now sees budget deficits equal to about a quarter of government spending for the next decade, and getting worse after that." (Don't you especially like that "almost?" It makes everything feel like grade school, no?) Anyway, here's a printout of budget deficits as a percentage of federal spending from 1952 thru 2006 as forecast by the Yale Model (which is not on the administration's payroll as far as I know). 
There are two things to notice here. First, "about a quarter" isn't really "almost" a quarter, as it turns out. It's more like 17% (which I think is almost 15%). And if we project downward in a straight line we don't get to 20% even within this decade. Second, we've been here before and we've done worse! The deficit was a larger percentage of total spending during the early 80's and 90's! What was Paul Krugman saying then? UPDATE: I can answer the question. Check page 77 of Paul Krugman's The Age of Diminished Expectations (1990, MIT Press): "While there are possibilities of disaster, they don't have to materialize. It is not only possible but probable that budget deficits at more or less the current level will continue for the rest of the century. There will be costs to these deficits, but they may never reach the crisis stage." UPDATE II: How is it Robert Samuelson can go over the same material and even reach similar conclusions without misrepresenting the numbers, calling people names, or leaving you with that sour feeling of intellectual violation? Is it that Samuelson is smarter than Krugman? A better economist? Willing to articulate both sides of an issue? More of a human being? UPDATE III: Here's the data smoothed, to better illustrate that the current deficit brings us nowhere near terra incognita. 
UPDATE IV: Don't write to tell me. I know Samuelson is a journalist, not a trained economist. This of course raises these matching question -- Is the problem that Paul is not a journalist? Or is it rather that he is an economist? I think maybe we better not go there. |
| Link posted by Steve Antler : 7:09 PM |
| Just Posted at MEMRI |
| The independent Iraqi weekly Al-Yawm Al-Aakher says training of Al-Qa'ida members, operating under the orders of Saddam's Presidential Palace, took place in Iraq two months before the September 11 attacks:
An Iraqi officer [reports that] a Land Cruiser belonging to the Personal Security Force (Al-Amn Al-Khass, responsible for the protection of Saddam Hussein) arrived and a senior officer from the Presidential Palace stepped out of it..."A few days later, about 100 trainees arrived. They were a mixture of Arabs, Arabs from the Peninsula [Saudi Arabia], Muslim Afghans, and other Muslims from various parts of the world. They were divided into two groups,... and the second...was the group that was trained to hijack airplanes. The training was under the direct supervision of major general (M. DH. L)...who now serves as a police commander in one of the provinces. Upon the completion of the training most of them left Iraq, while the others stayed in the country through the last battle in Baghdad against the coalition forces. Read it all, this could be a smoking gun or directions toward one or more of them. Then again, maybe it's the New Iraqi Free Press National Enquirer. |
| Link posted by Steve Antler : 2:46 PM |
| Maybe it was taken out of context? |
| My Way News: "WASHINGTON (AP) - A senior editor of the New Republic magazine is apologizing for saying in his column that the producers of the hit movie 'Kill Bill' are 'Jewish executives' who 'worship money above all else.'" |
| Link posted by Steve Antler : 11:54 AM |
| 16% of paragraph = "I" or "myself" or "my" |
| "'I know one of the worst side effects of this whole thing is the way it's ravaged my own image of myself, taken my mind off the higher things, restricted my ability to become involved in good causes or with other people -- I honestly feel so screwed up tight that I am incapable, I think, of giving myself, or really loving.'" (Emphasis added.)
William Clinton, writing about the Vietnam War (in or around 1968)... Quoted in Lucianne Goldberg's review of Rich Lowry's Legacy: Paying the Price for the Clinton Years ( Regnery, 470 pp., $27.95) |
| Link posted by Steve Antler : 10:52 AM |
| Percentiles are not people... |
| Truck and Barter on inequality and mobility. Good post, lots of links. |
| Link posted by Steve Antler : 6:52 AM |
| "Because we're important too! -- That's why!" |
| In the great tradition of Robert Nozik's Why Do Intellectuals Oppose Capitalism?, Thomas Sowell wonders why, puzzlingly, American journalists wage a never-ending war on those who are successful. |
| Link posted by Steve Antler : 6:48 AM |
| In case you missed it elsewhere... |
| Here's George W Bush's official blog. (You thought I was kidding, right?) |
| Link posted by Steve Antler : 6:34 AM |
| You gotta just love this stuff... |
| Great little bibliography built into this (Do Budget Deficits Raise Long-Term Interest Rates?), even if you do have to go to the library:
But is there any evidence that long-term interest rates rise because of budget deficits? In the 1980s, economists began to examine the facts.[2] What they found, as Robert Barro reported in his 1987 Macroeconomics textbook, is that 'this belief does not have evidence to support it.'[3] A 1985 analysis by Paul Evans found that historical periods of high budget deficits in the United States did not coincide with high interest rates.[4] A 1993 survey of academic studies by John Seater concluded, 'They are inconsistent with the traditional view that government debt is positively related to interest rates.'[5] Confronted with this evidence, some began to say that it was not nominal interest rates that were driven up by deficits but real interest rates. But the only way deficits could raise real rates without raising nominal rates would be if deficits caused inflation to fall, which does not make sense. We were sent there by Rich Lowry: [I]nterest rates did not cooperate with the Clintonites...The Clinton budget passed and was signed into law August 1993. In February 1994, just six months later, Alan Greenspan raised rates to address new inflation worries. This was the first in a series of seven increases during the next year. By April 1994, long-term rates were 7.4 percent, higher than when Clinton took office, and the 10-year rate peaked around the time Republicans captured Congress in November 1994... Then, there are the other uncomfortable facts. The deficit reached its 1990s high of $290 billion in fiscal year 1992 and fell to $255 billion in fiscal year 1993, a roughly $40 billion reduction even before Clinton got started. Why was the deficit already declining? The deficit tends to rise during recessions, and fall during expansions. It climbed with the recession of 1990-91, before declining again as the recovery took hold. So, just as Clinton was taking office, natural forces were already working to reduce the deficit. |
| Link posted by Steve Antler : 5:55 AM |
Thursday, October 16, 2003
| In the Great Tradition of... |
| The Foundation which bears his name continues in the same spirit to maintain the same tradition he so vigorously espoused. |
| Link posted by Steve Antler : 1:28 PM |
| When Will the States' Fiscal Crisis Heal Itself? |
| The Census Bureau of the Department of Commerce announced today that advance estimates of U.S. retail and food services sales for September, adjusted for seasonal, holiday, and trading-day differences, but not for price changes, were $320.6 billion, a decrease of 0.2 percent...from the previous month, but up 7.5 percent...from September 2002. Total sales for the July through September 2003 period were up 6.4 percent...from the same period a year ago. The July to August 2003 percent change was revised from +0.6 percent...to +1.2 percent...
Sales taxes have been stagnating -- here are actual and (20003:3 and thereafter) Yale-model-forecast total values of indirect business taxes collected by state and local governments. As you can see, substantial recovery of these revenues is slated to begin now, possibly even today with the the above announcement retail sales are up over 7% compared with last year. S&L Indirect Business Taxes Collected ($B) 20023 ==112.4 20024 ==111.5 20031 ==111.2 20032 ==111.6 20033 =113.1 20034 =114.6 20041 =116.2 20042== 117.8 20043== 119.5 20044== 121.2 So when can we expect a recovery of state budgets? Here, finally, is the NIPA surplus/deficit of state and local governments ($B) as forecast by Fairmodel: 20033 ==/-25.4 20034 ==-17.2 20041 ==/-8.2 20042 ==/0.4 20043 ===/7.6 Red ink gives way to black ink during the first or second quarters of next year, largely owing to the sales tax recovery. UPDATE: Here's anecdotal evidence from the GBST (Great Bloggers' State of Tennessee): Strong growth in sales tax collections - an indicator of a growing economic recovery - generated $10.8 million more than was projected in September, and for the two-month period, the sales tax has generated $21.9 million in surplus revenue. |
| Link posted by Steve Antler : 6:19 AM |
Wednesday, October 15, 2003
| Let's Cut to the Chase... |
| I'll finish the Damocles Index series, but let's look at the real issue right now.
Here's the best measure of the burden of all our foreign borrowing, regardless of whether this originated to finance government deficits or imports. This simple measure is total US private plus public interest payments to rest-of-world, expressed as a percent of our GDP. 
(The source of these numbers is the Yale US model database.) As the chart shows, the US changed from international creditor to major international debtor during the mid-1980's. The dramatic plunge into debt stabilized by the late 80's, but around 1992 the downward movement re-engaged for roughly five years, when it apparently stabilized into our current position. And just what is this position? What is the burden of debt? It amounts to just a bit under 1.2% of GDP, denominated in US Dollars. While we might wish the number was lower, it is doubtful any foreign investor or domestic economic analyst -- so long as he is not politically motivated to reach pessimistic conclusions -- could consider this a high enough burden to constitute anything like a default risk. Will someone please enlighten me? What in the world is Krugman talking about?!? |
| Link posted by Steve Antler : 9:58 PM |
| Medicare Premiums to Jump 13.5 Percent |
| I think this is real news:
WASHINGTON - Medicare premiums will rise next year by 13.5 percent to $66.60 a month for about 40 million Americans in the program, the third-largest increase in its history, the government said Wednesday...Reflecting rapidly escalating health care costs, the $7.90-per-month increase in premiums is for the portion of Medicare that pays doctor visits and other expenses outside of hospital care. Meantime, key lawmakers in Congress working on a prescription drug bill moved closer to a consensus to require higher-income seniors to pay more than other beneficiaries for health coverage under Medicare. If enacted, that would mark a historic policy shift for a program that has always provided a standard benefit at a fixed price for every participant. |
| Link posted by Steve Antler : 7:31 PM |
| JUST IN |
| The JEC has just released new reports on the strengthening economy and the incredible shrinking-but-still-massive deficit. |
| Link posted by Steve Antler : 12:34 PM |
| More Damocles Numbers... |
| We continue to apply the Lehman Damocles index to test for weakness in the US economy, in connection with Paul Krugman's inappropriate use of the index.
Here's the best I can come up with so far for Damocles Indicator #4: 
We seem to be moving up there, no? Damocles' alarm threshold is 50%. The index as computed here measures below 35% -- but it is, indeed, testing an historic high. I'm using credit market assets held by rest of world as a proxy here. I'm embarrased to say that, while one can easily swim in international data, it seems incredibly difficult to locate time series of US external and short-term external debt! UPDATE: Don Luskin writes: On the chart of US credit market assets held by the rest of the world as a % of GNP, I think a very important qualifier is in order. It's one made by the Lehman authors, and even by Krugman. It's that in the typical emerging markets Damocles analysis, such debt is denominated in some other currency than the country's own. I would argue that this currency risk component of foreign indebtedness is what gives *foreign* indebtedness its special, and especially risky, character. Without that character, of what significance is it that some or all of one's debt happens to be to extra-nationals? To keep the scoring "fair" then, we shouuld measure the US foreign indebtedness not denominated in dollars. I'll bet the amount is trivial. |
| Link posted by Steve Antler : 12:07 PM |
| Sounds very much like you-know-who... |
| I wonder whether Paul Krugman has been reading Marshall Auerback, who seems to have been saying this for a long time:
A country with an unsustainable external debt burden, an overvalued exchange rate leading to increasingly large current account deficits, a huge and deteriorating fiscal position: Argentina 2001 or the USA 2003?...We have examined this parallel before in the context of trying to assess how the US extricates itself from its current mess... |
| Link posted by Steve Antler : 10:36 AM |
| I never knew you could hear someone rolling his eyes over the telephone... |
| Don Luskin has done major investigative work on Krugman's inappropriate use of the Lehman Damocles index:
Next I called Lehman's UK-based Chief International Economist Russell Jones, the author of the report on Damocles. He'd seen Krugman's column -- I could hear the sound of his eyes rolling all the way from London. He told me "Krugman can be somewhat twisted and bitter on occasion. This analytic tool was not intended to be applied to developed countries. Damocles gave him an in to write a piece he wanted to write. He's making a career out of this kind of thing." Strong words from Jones, who told me at the same time that Krugman is not wrong, in principle, to be concerned about the US's "rapid accumulation of debt," and that indeed the US scores poorly by Damocles' standards. But he firmly admonished, "to apply this to the US is not that relevant." A tip of the EconoPundit hat to Luskin for this investigation and for obtaining the Lehman Damocles documents. And, as well, we thank him for sharing these. |
| Link posted by Steve Antler : 8:10 AM |
| Holding Our Noses |
| Even Kristof is finding some good news:
...some elements of the budget (like much of our Iraq operation) seem too rooted in our own expectations. In northern Iraq, U.S. engineers reported that it would take $50 million to bring a cement factory in the area to Western standards. The U.S. general there, lacking that kind of money, found some Iraqis who got it going again for $80,000. The title, by the way, is Kristof's, but I must admit the words spring to mind every time I see that name. UPDATE: Sorry, had a senior moment there, I take it back! I forgot Kristof is the guy we thank for ending the Wison/Plame spy scandal! |
| Link posted by Steve Antler : 5:51 AM |
Tuesday, October 14, 2003
| Just In |
| New tax report from JEC:
The Internal Revenue Service (IRS) has released its most recent data on the distribution of income and personal income tax payments. The IRS data show that a small group of earners accounts for most federal income tax revenue and highlight how dependent tax revenues are on the incomes of the highest earners (e.g. the top 5% of income earners pay over 50% of all income taxes). Incomes of the top 1% of earners declined significantly in the recession year of 2001 (the data arrive with a two-year lag), leading to lower tax collections. 
More coming soon. UPDATE: From the Committee's data, we find the adjusted gross income floors on top 1, 5, 10, 25, and 50% are as follows: $292,913 $127,904 $92,754 $56,085 $28,528. I'm trying to figure out how these numbers will play to the legendary swing voting Democrat so-far-but-maybe wavering two-income family, you know, the legendary schoolteacher with a fireman husband who together earn 90-100k. |
| Link posted by Steve Antler : 4:59 PM |
| Update on Krugman and Damocles |
Rob Subbaraman, Russell Jones, Hiroshi Shiraishi are the authors of Financial Crises: An Early Warning System. Here's how they present the index:
Econopundit will, over the next few days, present the US data we might use to construct an actual "Damocles index" of our own. We will see if Krugman is correct, or if he is wrong. UPDATE: Okay, starting at the beginning, here's the ratio of US foreign reserves to imports from 1960 to the present. 
Highly variable in the past, many disturbing spikes, but nothing unusual seems to be happening currently to make us worry. What am I missing? Okay here's something interesting. The ratio of money broadly defined to foreign reserves seem to be trending rather than cycling around historical values: 
The problem is, according to Damocles it is trending in a beneficial rather than a harmful direction. Damocles looks for trouble when it moves strongly in the other direction! Now we're getting somewhere. Here's domestic private credit as a percent of GDP: 
Some pretty powerful growth here. And even though its growth is orderly, its recent annual growth rate has been over 5% -- the "Damocles threshold" warning signal. 
Well, actually we're making things a little too dramatic here. (Gotta hold your attention somehow, right?) Damocles' warning switch goes on when domestic private credit is over 100% of GDP and rising faster than 5%/year. We're not exactly there yet. |
| Link posted by Steve Antler : 9:31 AM |
| Oh please... |
| This is misrepresentation, pure and simple. Says (you guessed it!) Krugman in today's NYT:
Lehman Brothers has a mathematical model known as Damocles that it calls "an early warning system to identify the likelihood of countries entering into financial crises." Developing nations are looking pretty safe these days. But applying the same model to some advanced countries "would set Damocles' alarm bells ringing." Lehman's press release adds, "Most conspicuous of these threats is the United States." First misrepresentation: Damocles is not a mathematical model but a very simple index of ten "selected" indicators. Second misrepresentation: genuine mathematical models, like the Yale multi-country trade and US macroeconomic models are definitely not predicting that a "crisis could erupt at any time." (Far from it, they're predicting a robust recovery even in the face of Iraq reconstruction costs!) Third misrepresentation -- when we look at the original article on which the editorial was based, we find Krugman left something out: Subbaraman said that the biggest risk to emerging economies was the developed world, where many countries were exhibiting imbalances "that would set Damocles' alarm bells ringing". Most conspicuous of these threats is the United States, where any financial crisis could cause considerable spillover effects to the rest of the world. However, Lehman Brothers cautions that Damocles could not be used alone to grasp a country's full financial picture. (Emphasis added.) ----------------- Also from the original press release we learn Damocles measures: foreign reserves as a ratio of imports foreign reserves as a ratio of short-term external debt external debt as a percentage of GDP short-term external debt as a percentage of exports current account as a percentage of GDP 'broad' money supply as a ratio of foreign reserves domestic private credit as a percentage of GDP real short-term interest rate stock market index real trade-weighted exchange rate There are many macroeconomic models that use these and additional data in a far more sophisticated way than Damocles, which simply assigns made-up numerical weights to each and then adds them up. |
| Link posted by Steve Antler : 5:53 AM |
Monday, October 13, 2003
| Yeah, I know it's anecdotal... |
| We're now done with the garbage handlers' strike here in Chicago, and now this as well as this continue to make it feel like (1) we were operating below the natural rate of unemployment during the economic boom, and (2) trying to return to anything below 5.5% will wreck the economy.
UPDATE: Now there's this. |
| Link posted by Steve Antler : 11:56 AM |
| What were the sources? |
| Kristof released this on Saturday:
the C.I.A. suspected that Aldrich Ames had given Mrs. Wilson's name (along with those of other spies) to the Russians before his espionage arrest in 1994. So her undercover security was undermined at that time, and she was brought back to Washington for safety reasons. How does he know? Was this common knowledge? Did it appear in print or on the Internet? Even if the answer to these last two is "no," is somebody now supposed to go to jail for telling the American public what foreign intelligence services already knew? |
| Link posted by Steve Antler : 7:17 AM |
| That special day of the week... |
| Here's your economic calendar because it is Monday and EconoPundit cares! |
| Link posted by Steve Antler : 7:05 AM |
Sunday, October 12, 2003
| In Memoriam Punditwatch |
| Jay Rockefeller on Fox News Sunday: "I stipulate, so to speak, that Iraq is as dangerous or more dangerous to our hard-fighting troops and guards and reserve people today than it was when we went in originally and met relatively little resistance." |
| Link posted by Steve Antler : 10:17 AM |
Saturday, October 11, 2003
| What are we paying for? |
| Holman Jenkins sets us straight on OPEC and why we're spending so much money in the Middle East:
...U.S. consumption of Persian Gulf oil totals about $18 billion a year, less than we spend on computer parts from Asia. The price mechanism works: Oil would flow in greater volume from higher-cost sources in the unlikely event of a catastrophic disruption of supplies from the Gulf. Canada, for instance, has 180 billion barrels in oil sands that are producible, judging by a new Shell project, at $15 a barrel. Yet so ingrained are the false assumptions of energy insecurity that many pundits and politicians continue to insist that the U.S. has been remiss in failing to impose monumental costs on itself in pursuit of "energy independence." This is nothing but the isolationist illusion reclothed, and nonsensical even by the assumptions that such people embrace. If we stopped importing oil, oil wouldn't be any less important to the world economy, the world economy would still be critical to our prosperity, and we'd remain the only country with military power to protect the flow of oil. Instead, here's the real reason we care about the security of the Gulf: Oil is wealth, and wealth attracts bandits. For the past 60 years we have been committed to the proposition that the world can prosper by peaceful trade, not by nations trying to seize resources by force. By one count, Americans have spent nearly $1 trillion on this cause since 1973 (and another $1.7 trillion in defense of Israel), an outlay impossible to explain in terms of fuel security. Likewise, the further costs we're courting on behalf of Iraq hugely outweigh the real value of that country's oil to us. This is where Sept. 11 inescapably changed the picture. Spending another trillion dollars and waiting three more decades for the Middle East to grow up politically suddenly seemed like a bum bet. History occasionally calls on us to do more than twiddle our thumbs. In fact, $87 billion to put a democratic Iraq on its feet might turn out to be one of the better bargains Congress has ever seen -- and it has nothing to do with oil. The largest challenge to American Democracy in our lifetimes, I think, is coming in the next Presidential election. The challenge is whether and how "American Interests" will be defined by the two sides, and whether the discussion will remain at least partly within bounds of rational debate. UPDATE: Find discussion and comment at QandO. |
| Link posted by Steve Antler : 12:30 PM |
Friday, October 10, 2003
| Libya Timeline |
| From the BBC:
2002 August - Libya says it is ready, in principle, to pay compensation to families of victims of the Lockerbie bombing. 2003 January - Libya is elected chairman of the United Nations Human Rights Commission despite opposition from the US and human rights groups. 2003 August - Libyan government and lawyers representing families of Lockerbie bombing victims sign compensation agreement worth $2.7bn. Libya formally takes responsibility for the bombing in a letter to the UN Security Council. 2003 September - UN Security Council votes to lift sanctions against Libya. From MEMRI: October 4, 2003 speech delivered to women in the city of Sabha, by Col. Mu'ammar Al-Qaddafi: The war changed and moved from the battlefields we learned about in books, into the homes. In the past, soldiers fought soldiers, and today soldiers fight women and children in Baghdad and Gaza...As long as the woman is home and she is the one targeted, she must be trained...The woman must be trained how to fight within the home, how to put together an explosive belt and blow herself up together with the enemy soldiers. Anyone who has a car must make preparations and know how to booby trap it and turn it into a car bomb...In the past they would say [to us in Libya]: "Why do you train the women? It is not logical that the woman will go out to the battlefield..." Today the face of the battle has changed, and the arenas of fighting have moved to the place where the woman is...We must train the women how to booby-trap the car and blow it up among the enemy, how to blow up the house so it falls on the enemy soldiers. Traps must be prepared. You have seen how [the enemy] check[s] luggage. These suitcases should be rigged so that when they open them they blow up. The women must be taught how to booby-trap their clothes closets, booby-trap their purses, booby-trap their shoes, booby-trap the children's toys, so they blow up on the enemy soldiers. (Emphasis added) |
| Link posted by Steve Antler : 8:23 PM |
| Interest Rates and Iraq Reconstruction |
| The first time I posted this material, I was so enthusiastic about investment results I jokingly glossed-over the interest rate impact of the hypothetical $150 billion Iraq Reconstruction Program (IRP) submitted to the Yale US-economy simulation model. However: it is doubtful everyone would agree with that post's characterization of these interest rate effects as "measurable but trivial."
Here's a close-up view of some results: 
Three month treasuries are bounced up by almost half a percentage point by second quarter 2005; bond and mortgage rates go up by about half that. Still, the interest-impact on over-all investment is nil. The more you work with the Yale model the more you get the impression this is a cast-iron, bulletproof construct pretty much incapable of showing those silly, extreme blackboard results supposedly needed to show students the basics of the IS-LM system. I'd be happy to get feedback, even (horrors!) accept guidance from others using the Yale model, and it is clear it can be pushed to generate extreme results if you input extreme policy assumptions. These having been said, so far I'd have to report it's hard to get Fairmodel to generate deficit-induced interest rate crowding. |
| Link posted by Steve Antler : 12:55 PM |
| The next leading sector? |
| What's next?
What's about to take off like a bat out of heck leaving us coughing in the dust wondering how we didn't anticipate it? What might create a whole new wave of irrational exuberance? Is it? Could it possibly be -- HDTV? Internet trawlers have begun discussing skin issues on their favorite stars that have gone unnoticed until the HD era. Technology analyst Phillip Swann, made a whole Television Week column out of discovering the horror HDTV wreaks on Cameron Diaz's spotty complexion...'It's gotten more interest in HDTV than anything I've written,' he said. 'It's so clear that I can see an actor or an actress in real life. Cameron Diaz comes on, and I can see her pimples.'... There are recent entrants, such as iN Demand's 24-hour-hour movie, sports and "special interest" channels, and HDNet, which boasts being the first cable network to broadcast all of its programming in the 1080i high-definition format. Cable providers now offer HDTV service to 60 million U.S. households, according to the National Cable and Telecommunications Association. And what's there to make of the recently announced Voom, Cablevision System's satellite service sold through Sears, which is due to launch Wednesday? According to a press release, the only information available about the system, the service will offer "as many as 39 HD channels," including 21 from its own Rainbow Media. That means WE: Women's Entertainment, AMC and IFC may soon be available, somewhere in the country, in high definition... |
| Link posted by Steve Antler : 11:32 AM |
| Heard it on Kudlow and Cramer... |
| Somebody quoted "experts" as predicting 6% growth next year. We stick with 4.1% next quarter (and subsequent decline) without Iraq reconstruction, 6% for 2004 Q1 with. Here's the printout, linked to the supporting work:
(As posted below, September 12, Iraq Reconstruction and the US Economy. We hear the $87 billion has got out of committee.) |
| Link posted by Steve Antler : 2:36 AM |
| Asian Stocks Surge as Dollar Steadies |
| Yahoo! News - Asian Stocks Surge as Dollar Steadies: "SINGAPORE (Reuters) - Surprisingly strong U.S. jobs data gave the battered dollar a reprieve Friday and pumped gas into Asia's share markets, lifting the Japanese market more than two percent and the South Korean benchmark three percent.
The unexpected fall in weekly jobless claims soothed worries over the U.S. economy, hoisting the dollar off its lowest levels in three years versus the yen and almost four months against the euro. " |
| Link posted by Steve Antler : 2:20 AM |
| That Arnold... |
| OpinionJournal - Wonder Land: "There's one last, large intangible that Arnold has slipped into the political waters: He's cool.
Like it or not, the force field of celebrity is part of the cultural physics of our era, and it looks as if the first party to get totally wired-in to a mega-celebrity is, incredibly, the GOP. Something weirdly attractive was coming off the Schwarzenegger camp's victory stage on TV round about midnight Tuesday--Arnold, Maria Shriver (a get-out-of-jail-free card for many centrist Democrats feeling trapped in an inhospitable party), Jay Leno's funny introduction, Rob Lowe nearby, Eunice and Sargent Shriver, the extended Shriver clan, and a sea of young, attractive faces. Liberal pundits will mock this scene unmercifully, but in terms of mass-market politics it was as hip as any politician could ever hope for. Arnold, with all that media reach and the aura of living wholly inside the country's popular culture, may be changing ideas of who can live comfortably on election day among the Republicans. " |
| Link posted by Steve Antler : 2:13 AM |
Thursday, October 09, 2003
| (Uh, don't want to say I told you so, but...) |
| From today's CBO announcement:
The federal government incurred a total budget deficit of about $374 billion for fiscal year 2003, CBO estimates, more than twice the deficit recorded in 2002, although less than both CBO and the Office of Management and Budget projected this summer. In dollar terms, that shortfall represents the largest deficit in U.S. history -- well above the $290 billion deficit of 1992. However, at about 3.5 percent of gross domestic product (GDP), it would still be smaller than the deficits of the mid-1980s and early 1990s relative to the size of the economy. (Emphasis added) From The July Fairmodel US Model Forecast Memo: The federal government is now running a large budget deficit, and the model is predicting that the deficit will continue to be large throughout the forecast period (see the predicted values for SGP). By the end of 2004 the deficit is about $400 billion (remember this is the deficit as measured in the NIPA accounts). This $400 billion is smaller than the federal government is projecting the deficit to be, and so the model is more optimistic about the government's budget than is the government. (Emphasis added) |
| Link posted by Steve Antler : 6:09 PM |
| Get working everyone... |
| Here's Clive W.J. Granger's Econ 121 (Applied Econometrics) syllabus. (I have a used copy of Diebold's Elements of Forecasting for anyone who needs it.) |
| Link posted by Steve Antler : 7:28 AM |
| What do the Iraqis really think? |
| At MEMRI, Nimrod Raphaeli summarizes recent Western- and Arab- supervised public opinion polls in Iraq. The title (Iraq: Moving Forward Despite Violence) says it well. |
| Link posted by Steve Antler : 7:20 AM |
Wednesday, October 08, 2003
| Put yourself in their place... |
| Via Drudge, Russia is considering Euro- rather than dollar-denominated crude oil production. We heard similar scare stories about OPEC many months ago, before Iraq was liberated.
Now consider this very simple table, posted by us way back on June 24 (in connection with the Boskin "antibonds" story): ------------------------------------------------------------------------------------------ GOVERNMENT DEBT AND PENSION LIABILITIES AS PERCENT OF GDP (1990) ===net conventional debt=======net pension liabilities CANADA===52================121 GERMANY==22================157 ITALY====100================259 UK=======27================156 US=======35= ===============90 ----------------------------------------------------------------------------------------------- Source: Essays on Pension Reform, Max Alier PhD Thesis, University of California LA, 1997; quoted in R.E.A. Farmer, Macroeconomics, South-Western, 2002, p. 162. OK now you tell me, which major trading bloc's currency do you think is least likely to undergo chronic deterioration in value over the next fifty years? Put yourself in Russia's position. What would you do? |
| Link posted by Steve Antler : 7:52 PM |
| Copper as a leading indicator |
| Via Bill Hobbs: Darren Kaplan saw a huge jump in copper futures yesterday. He explains why this is a major predictor of next quarter's growth.
Based on the Yale Model's last forecast memo EconoPundit has predicted 4.1% and 3.6% growth for the coming two quarters. Expanded spending for Iraq reconstruction would change these to 4.1% and 6% respectively. |
| Link posted by Steve Antler : 11:27 AM |
| Luskin denies scientific objectivity? |
| I didn't like Arnold Kling's patronizing, dismissive poke at Don Luskin in his otherwise valuable open letter to Paul Krugman. I disliked it so much I took the editorial liberty of skipping over most of it out in my post on the subject, so here it is restored:
[Many] of your opponents are stooping to your level. I see type M arguments raised by many of your enemies on the Right. As horse manure draws flies, your columns generate opposition that is vindictive and uninformed. Luskin is not a fly, and if Krugman's columns are manure why bother to write intelligent open letters about them? (I might also add there's a serious word use problem here. Thousands of readers quickly glancing at the column probably left thinking type "M" refers not to "motives" but " manure.") Today Don Luskin addresses Kling's open letter. While lots of what he says adds to the discussion, some is simply wrong. Don is absolutely right to say Krugman deceptively "mixes up" the positive and the normative: ...Krugman's rhetorical effectiveness lies primarily in his ability to do a change-up between Type C and Type M arguments within a single column; he uses his facility as an economist to dazzle the reader with the Type C argument before slipping in the Type M argument -- whether or not the two are really related. And Luskin then pulls a real rhetorical coup. He says exactly what, in alternate form, would have been Krugman's evasive response had not Luskin got there first: In "The Tax Cut Con," Krugman uses many Type C arguments to establish that tax cuts have no benefits whatsoever, and therefore all the claimed benefits amount to lies. This sets him up to offer the Type M argument to "explain" why the lies were being told. In this sense, the Type M argument is, in Krugman's hands, a Type C argument at another level. What Kling distinguishes as mere motive is just a hidden consequence. This is exactly what Krugman would have said, only he would have phrased it as something like (1) the objective scientific evidence is out there for all to see, and (2) those who deny it are ideologically blinded by their quasi-religious commitments to market economics and the privileged upper strata this ideology serves. The proper response to this specious claim is given by Luskin, but using the wrong words and the wrong tone: [T]he real problem, which Kling either doesn't understand, doesn't choose to understand, or doesn't choose to deal with, is that many of Krugman's Type C and Type M arguments are actually Type D arguments -- deceptions. For example, the Type C argument demonstrating that the Reagan's tax cuts produced no faster economic growth necessitates that Krugman hand-picks beginning and ending dates on the economic timeline to produce the numbers he desires. The dates he cites, however, do not (contrary to his explicit claims) correspond to business cycle peaks. Nor did the tax cuts exist in all the years he includes. When the proper years are chosen, faster GDP growth can unambiguously be observed... Yes, Krugman chooses his scientific evidence to support nonscientific, ideological claims. But no, in absolutely no way can one say the evidence on economic growth and the Regan tax cuts is settled science. I'm sorry, but simply choosing the "proper years" to show faster GDP growth, and then claim the case is closed, amounts to playing the Krugman game. Like some radical taking over the administration building, Don Luskin seems close the argument by denying anything like positive economics. Everything, he seems to say, is politics, and nothing is science: If Krugman were an honest writer, I would see nothing wrong with his commenting on motives. I agree with Kling that there is little point in trying to argue against a good consequence just because it sprang from a bad motive (or vice versa, as is more often the case in the government sphere). Yet in analyses that are both economic and political at the same time, motive is not trivial. It can help explain the seeking of certain consequences, and help forecast the consequences that will be sought in the future. I can't agree with this. Economics is not settled science. And it isn't just a political tool, a way of making your opponents look bad by throwing scientific numbers at them. Or at least (as Arnold Kling seems to say) it shouldn't be. UPDATE: Lotsa discussion going on. Here's Sadly No's take on the subject. UPDATE II: Look, I don't think Supply Side Economics can be settled easily because (1) it is so obviously based on simple, true propositions and (2) the macroeconomic theory of aggregate supply is a true quagmire if ever one existed. The problem, as I tell my colleagues privately all the time, is the transmission mechanism. Exactly what it is it and how does it work? UPDATE III: And also I think Don is wrong-mindedy -- maybe even purposefully -- mis-reading Kling's celebrated correlation of years of separation from academia and politically Conservative views. Luskin -- O great one, to whom I partly owe this very blog! (but also Bill Hobbs must be mentioned) -- puhleeze, give us a break, you know Kling was making the very same point you just made a few days ago when you said: In [Krugman's] world-view the sane person would always opt for certainty and safety -- a comfortable safety-net below which one will never fall, even if the cost of that net is that there is also a ceiling above which you will never rise... Think for a moment! You're describing the world-view of the academic, the guy who lives in the comfortable socialism of higher education -- that risk-free world of tenure, no greater challenge than the courses one wants to teach, deluxe health benefits, travel, and a nice pension at the end. Of course the real world looks frightening to anyone who's never left this environment. This was Kling's point. The same as yours. |
| Link posted by Steve Antler : 9:13 AM |
Tuesday, October 07, 2003
| Lots of links... |
| Check out Bill Hobbs on the Bush Bull Market and the Unreported Recovery. |
| Link posted by Steve Antler : 7:27 PM |
| It's not that Arnold. It's this one... |
| Arnold Kling has written an extremely serious open letter to Paul Krugman.
Says Kling: Type "C" arguments have to do with policy consequences, while type "M" arguments have to do with your opponent's (supposed) motives. Krugman is asked to say (1) whether he knows the difference and (2) why he favors the type "M" line of attack: I am not going to try to guess your motives for relying on type M arguments. However, I can tell you some of the consequences...One...is to lower the level of political discourse in general...Another...is to lower the prestige and impact of economists. We are trained to make type C arguments. Instead, you are teaching by example that making speculative assessments of one's opponent's motives is more important than thinking through the consequences of policy options. If everyone were to use such speculative assessments as the basis for forming their opinions, then there would be no room for economics in public policy discussions. You could express your point of view using type C arguments and still take strong stands for what you believe is right. In fact, you might find that doing so would make you more effective. Even if that is not the case, even if there is a sort of media version of Gresham's Law in which specious reasoning drives out careful analysis, then that is a challenge for all of us who are trained as economists. I believe that we have a professional duty to try to be part of the solution, not part of the problem. We eagerly await Krugman's reply. |
| Link posted by Steve Antler : 11:44 AM |
| What California means... |
| In explaining what happens today, historians will say something like the following:
What Californians have witnessed is what the modern liberal coalition looks like in power: a gerrymandered majority dominated by the 'progressive' special-interest trinity of trial lawyers, unions (especially of public employees) and environmentalists... [Even] with their Governor at risk of being recalled, these liberal interests have shown no restraint. As their final, pre-recall act, they pushed through a radical new mandate requiring all California businesses with more than 50 employees to provide health insurance. Governor Davis, trying to save his skin by pandering for more liberal votes, signed it during the weekend. Mr. Davis...did not start out on this same left-wing course. For a couple of years he rode the dot-com boom and governed from the middle...But then the energy crisis hit, and rather than tell voters the truth he embraced his party's anti-business base to survive. The result has been spending that has climbed 40% in four years, a $38 billion budget deficit, and business and energy costs that have caused tens of thousands to flee the state. (Emphasis added) And more from Andrew Sullivan: ...this comfort with pleasure and irony and laughter, is made even more dramatic in contrast with the dry, political paste represented by Governor Davis - a spectacularly bland and corrupt hack who seems to come from some political factory. That Arnold should represent this and the Republican Party is threatening to all sorts of people: to the joyless, paranoid scolds who run the Dixie-fied GOP; to the professional political class (although AS will likely coopt and manipulate them to no end); and to the new left that likes to believe it has a monopoly on politicians who aren't horrified by sex, drugs and rock and roll. There's no one else in today's Republican or Democratic parties who comes close to this. Who else could enrage both Rick Santorum and Katha Pollitt? Clinton is and was a schlubby, sexually guilt-ridden Rhodes Scholar who desperately associates with Hollywood dreck in order to get some smidgen of cool rubbed off on him. Hillary's even more frumpily puritan. Dubya is relaxed but in a post-recovery, Bible-class kind of way. McCain came close to being real and genuinely cool, but has nothing like Arnold's pop-cultural draw. In this universe - where your options are drones like Kerry or Lieberman - Arnold is a cultural revolution...[His] election would do an enormous amount to ameliorate the disconnect between culture and politics in this country. His election would be a sign of a tectonic plate shifting in the culture... And best of all: Arnold doesn't think all businesspeople are the spawn of Satan! |
| Link posted by Steve Antler : 9:55 AM |
| Dagmar reports from Israel |
| My arrival concluded...in terror...[While] nursing a cup of coffee in an Arab cafe just below the gardens, a suicide bomber, a young (29) woman lawyer from Jenin, only a few miles away, blew herself up, taking with her 19 innocent lives, injuring about 60...
This was not an act of desperation but clearly of revenge for two of her brothers, terrorists themselves...(who were felled by Israeli Armed Forces in one of the battles in Jenin earlier this year)... The act must have been well planned, for the locale, a family restaurant, Maxim, has been known for welcoming families with small children. On any sabbath the place would be full, especially for lunch. And so it was also this time. It was a matter of being at the right/wrong place at the right/wrong time, as it always is. Luckily for me, I happened to be around the Carmel, beyond the point where the mountain (a hill, really) is jutting into the sea... Clearly the blast and its consequences hit sharp and deeply...but unless one is directly touched, losing a relative, a family member, a friend, the hurt lasts no longer than the birth of a new day, for to allow onself to be paralyzed is out of the question, as life proceeds at a pace, as anywhere and everywhere else... [It is] both surprising and worrisome, this seeminly callous and superficial approach to dealing with serial murders; on the other hand, perhaps the only way how to survive and function in an environment at a constant brink... Yom Kippur eve in Jerusalem. A perfect calm and quiet. The traffic completely stops. All one sees are people, somber and contemplative, bedecked mostly in white (the traditional color of the day, pure and "without blemish") walking to their places of worship. I ended in a mostly English speaking "progressive" congregation, women and men praying together, most fathers with children in their arms, mothers in their laps, without a rabbi, just a lay leader leading in the prayers. The atmosphere overflowing with love and kindness, verve and devotion. Yom Kippur day. The quiet of a desert. Just the chanting and prayers emanating from within the thick walls. (Jerusalem has a building code: all buildings are clad with a pinkish Jwerusalem stone which glows in the sunset.) Calm and peace... And in the north of the country, just south-west of the border town of Metulla (on the Lebanese border), a young 21-yr old soldier is killed by a Hezbollah rocket. We later learn that the Israeli Air Force had [bombed an Islamic Jihad] training camp...outside of Damascus. The Book of Jonah was read and a new exegesis offered, with a discussion that followed... This in a sanctuary of Kol Haneshama, which too belongs to the Movement of Progressive Judaism. The yizkor and the N'ila services were similar to the ones we are used to, less religious, more cultural/academic. A modest place by American standards, quite grand within the Israel concept of a "shul." After a tiring walk in rather oppressive heat, the air conditioning was balmy and welcome. When night fell, the city awoke, the traffic began streaming, the holiness retreated into the background and the profane entered, the sounds of everyday bustling city. It seems I am moving close to the action. Soon, I shall leave Jerusalem and head north, close to the Lebanese/Syrian border, to one of the kibbutzim in Upper Galilee. Let's hope "a new front," which filled the papers today, will not erupt with a fierce force... I will try to write again from beneath the Golan. |
| Link posted by Steve Antler : 9:07 AM |
| Vide, Domine, et considera, quoniam facta sum vilis... |
| In direct violation of Krauthammer's theorem Don Luskin concludes Krugman is not merely stupid, but also evil::
[Krugman says] if you didn't know in advance where you'd end up in America's economic structure, you'd never want to come here...He..sees the pursuit of [of growth, or opportunity, or social mobility] as so fraught with risk that no sane person would take it on. In his world-view the sane person would always opt for certainty and safety -- a comfortable safety-net below which one will never fall, even if the cost of that net is that there is also a ceiling above which you will never rise. How does he explain to himself the fact that millions of people are clamoring to get into America, risking life and limb to get into America by hook or by crook, and entering it at the lowest possible level -- anything to avail themselves of an opportunity for freedom and advancement. His is the fearful world-view that sees libertarians...as dangerous radicals. And the cheering audience suggests that there's quite a market out there for fear. On leaving, says Luskin, he felt like taking a shower. |
| Link posted by Steve Antler : 8:55 AM |
Monday, October 06, 2003
| Cost Shifting Rediscovered |
| The value (and real tragedy) of the Clinton Health Care fiasco was Ms. Clinton's abortive, half-hearted attempt to educate the public on the nature of cost shifting in the American health care system. Greg Blankenship at A New Can of Worms re-opens this important issue by sending us to the Chicago Tribune with these words: "We have collectively deceived ourselves with the illusion that health care is cheap. It's not." |
| Link posted by Steve Antler : 8:24 AM |
Sunday, October 05, 2003
| Reiner Revisited |
| Regarding the Reiner gaffe, most of the angry denials are from commentators who, even though they didn't really see the interview, are still sure (on the basis of pure logic) Reiner must have intended no disrespect.
Over at Sgt Stryker there are a few comments from people who actually saw or heard what happened: Who, of Reiner's defenders here, have heard the line Reiner delivered? I heard it replayed on the radio, and Reiner delivered it in a very demeaning way. And doing it in the way he did, knowing full well that the overwhelming majority of the audience wouldn't know the difference between the proper pronunciation of Yiddish, Kurdish or Spinach, it's hard not to conclude that it was anything but a deliberate insult delivered under the cover of double-entendre. Yes, I believe, based on Reiner's tone, that he meant to be as insulting as possible, and was taking full advantage of the double-meaning. I've mentioned before (link) that this is a cowardly way to insult people, and it is. Understand, I'm not defending any actions or statements by Arnold, Rush, the Queen, or whoever, I truly could not care less. What I am doing is pointing out that there is a very different set of standards applied by the press, and by many people in general. You see, Reiner does what he does, and everybody & his brother who didn't hear it defends him, and makes excuses for him. But have a conservative do it, and the walls come tumbling down. The only apology I see needing to be said is the one from those who excuse this type of behavior by anyone. (Posted by: Sparkey at October 4, 2003 11:23 PM) To the very few who the saw the interview and deny anything unusual happened, I'd say okay -- on this as on most other matters, reasonable people can disagree. I hope they'd be willing to say the same for those of us who saw the event and, for our part, feel we witnessed an inappropriate jokingly-delivered slur. UPDATE: MORE DOUBLE STANDARDS. Via Drudge, LA Times sits on evidence DAVIS MAULS WOMEN: Another woman, a policy analyst, had the unhappy chore in the mid-1990s of informing Davis that a fund-raising source had dried up. When she told Davis, she recounted, Davis began screaming the f-word at the top of his lungs...The woman stood to demand that he stop speaking that way, and, she says, Davis grabbed her by her shoulders and 'shook me until my teeth rattled. I was so stunned I said, 'Good God, Gray! Stop and look at what you are doing. Think what you are doing to me!'' After my story ran, I waited for the Times to publish its story. It never did. When I spoke to a reporter involved, he said editors at the Times were against attacking a major political figure using anonymous sources. |
| Link posted by Steve Antler : 7:57 AM |
| Public Offer |
| At this time I'd like to offer Maureen Dowd the same deal offered to everyone else. |
| Link posted by Steve Antler : 6:49 AM |
Saturday, October 04, 2003
| The union sector versus the competitive sector |
| At our factory and at home, we're struggling with a major teamsters' garbage haulers strike here in Chicago. Work is harder for our employees, costs are higher for us, and everyone feels less than fully sympathetic to the strikers, most of whom hold those "good jobs" Al Gore seems to think are all gone.
Now the Chicago Sun Times tells us about the current stage of Chicago Teachers' negotiations: The [proposed] contract, the longest ever negotiated, includes a 4 percent raise in each of the next five years, an increase in health insurance premiums that would eat up some of that pay raise, a shorter school year and longer workday...Though the raise was the most generous in 11 years, delegates said it wasn't enough. 'We work hard, under very difficult conditions -- we deserve better,' said teacher Colleen Dykas." Says Greg at A New Can of Worms: They are rejecting 4 percent increases over the next 4 years because they only received 2 percent over the last 4 years. Somehow, I don't think they'll get much public sympathy in the current economic climate. Teachers have a hard job, but...they are...well paid...and in later years they are very well paid. Yet, their results are totally lacking. They'd be wise not to push their luck. It feels like (a) everyone who's able to is grabbing everything that's not tied down, and (b) public sector/big labor wages/benefits will be bitterly contested in the next major election. |
| Link posted by Steve Antler : 5:02 PM |
| Droits des Seigneur |
| Jonathan Foreman on the Arnold/Rapist news converence:
Apart from the testimony of the groping victims, both of whom were convincing, the most honest thing I heard came from film producer and Codepink activist Patricia Foulkrod...She admitted that Bill Clinton's sexual peccadilloes were as inexcusable as Arnold's[, but] 'The difference is that Clinton was so brilliant,' she said. |
| Link posted by Steve Antler : 1:55 PM |
| Economics of the Limbaugh Effect? |
| Sports economics is kinda out of my line, but I think you might want to check this out:
In summary, we have shown evidence of a statistically and economically significant black quarterback effect. Monday Night Football games featuring black quarterbacks have Nielsen ratings 11% higher than otherwise identical games with two white starting quarterbacks. This effect is robust across specifications, increasing in magnitude upon introduction of measures of observed quarterback ability. The effect is largest among young males and roughly identical within the other two demographic groups for which we have data. The behavior of network executives responsible for scheduling the Monday night games suggests that these individuals took this effect into account in later years. Finally, the effect appears to be largely contained to the more popular Monday night broadcasts... (Emphasis added.) (via Brian McKim.) |
| Link posted by Steve Antler : 8:10 AM |
| Let's make a deal... |
| To all the Carl Reiner correspondents who brought up Arnold's Hitler comments, I offer the following deal.
If you agree to forgive Arnold these past statements I will forgive Teddy Kennedy's saving himself and leaving Mary Jo Kopechne to die in the car. I'll even forgive the ten hour delay before he went to the police, even though she might have lived had he gone immediately. But what the heck, all that happened so long ago! Let's just move on, you know, forgive and forget! |
| Link posted by Steve Antler : 6:03 AM |
| Is it all about money? |
| Does Arnold's accuser have a financial stake in this story? Today's NYT buries this little tidbit way at the end:
In 1997, Mr. Butler first began circulating his proposal for unflattering book about Mr. Schwarzenegger, including references to his comments about and mimicry of Hitler...Mr. Butler sold the book proposal to St. Martin's Press for about $500,000 but never completed the book. He said this week that he decided against it on further reflection. But executives at St. Martin's said that in early 2001 he sought unsuccessfully to dissuade them from canceling the project and demanding return of the advance. (Emphasis added.) |
| Link posted by Steve Antler : 5:41 AM |
Friday, October 03, 2003
| More on Reiner... |
| EconoPundit has never had this much traffic or email. Here are a few quick answers to recurring questions on our Carl Reiner post:
Q: Was Reiner maybe absent mindedly saying the name in German? A: It sure didn't seem so. He was definitely telling a joke -- one which Matthews first thought was funny, then inappropriate. Q: Isn't the Yiddish word "schvartzer" really much milder than the N-word? Sort of like "darkie" or "blackie"? A: All my life I've had friends who on the one hand use the S-word very much like the N-word, but on the other hand claim it is really okay. They say it is much milder, not really so bad. I don't think you can have it both ways. My mother taught me when I was ten "schvartzer" is a bad word. I'll stick with what I was taught. Q: Why do you spell this bad word so many ways? A: Yiddish, a dialect of German, is written with Hebrew rather than Germanic/Latinate letters. When written in "English" Yiddish is written in transliteration -- spelled out as it sounds, in other words. Q: Why would Reiner hurl a racist insult at Arnold, who is not African American? A: I don't think he was insulting Arnold this way. Rather, he was expressing disdain for the man by broadly and distinctly saying his name in its Yiddish pronunciation, which in all its wry irony sounds like the N-word appended to the S-word. Presumably this is funny for certain of Arnold's opponents who say things analogous to "Hymietown" and "Barney Fag" behind the scenes to their friends. Q: Why do you have it in for Reiner? A: Politics aside, I've always really liked Reiner and his son Rob. "Your Show of Shows" was one of those important events on the family's little B&W TV, right up there with Captain Video and Howdy Doody. But, all these warm and cuddly feelings aside, I think it stinks how the Left gives itself pass after pass for behavior they righteously condemn in others. Far from acting like a journalist, Matthews hushed things up and covered for Reiner. I felt it was wrong to let the matter slip off into oblivion without someone at least mentioning it. |
| Link posted by Steve Antler : 5:10 PM |
| Significance of today's jobs data... |
| Prior to the announcement we've had to take it on faith the economy would start moving up from the second "dip" of the infamous jobs dubya we posted in early August:
This morning's announcement allows us to draw the black arrow, which roughly points to the economy's current position. Slowly but surely the economy does its thing, and employment recovers. 
The red arrow points to the politically important point where all previous recession net job loss has been "zeroed out" by recovery net-new-job gain. As of July, the Yale model predicted this will take place Q4, 2004, just in time for the election. We shall see. |
| Link posted by Steve Antler : 1:54 PM |
| Unemployment Numbers Due This Morning |
| Here are some basic numbers we reported from the last Yale model forecast memo.
GDP,% increase=========Unempl 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 I know things have been slow and I've been pessimistic, but I'd have to go with 6.1% or better rather than fallback to 6.2%. UPDATE: Yes, it has now come in at a nice solid 6.1%. More important, there's been a net gain of jobs, less than Yale model predicted (approx. half?), but still moving in the right direction. We're now generating more jobs than we're losing -- just like the computer model said! Whew! |
| Link posted by Steve Antler : 6:02 AM |
Thursday, October 02, 2003
| Hymietown and Barney Fag Revisited |
| Carl Reiner just slipped up on Chris Matthews' Hardball show. He absent-mindedly pronounced Arnold Schwarzenegger's last name the way, apparently, he and his anti-recall friends ironically pronounce it privately among themselves.
I'll have to write it in transliteration and do a bit of explaining. What Reiner said, with a kind of comfortable, humorous familiarity, was "Shfartze-negger." Chris Matthews stopped him, laughed nervously and moved things along as the camera cut away from Reiner's confusion and embarassment. Reiner returned to a modified, less-offensive version of the pronounciation later in the conversation, but what remains recorded for all to hear is kind of ugly. The first half of "Shfartze-negger" is the Yiddish version of the N-word. The second, appended to the first half with humorous irony, was apparently intended to mean what it sounded like. |
| Link posted by Steve Antler : 7:33 PM |
| Exodus... |
| Anecdotal evidence of business flight from California is starting to look so plentiful as to really amount to proof of something or other:
In many cases, the cost of workers' comp premiums has more than tripled in the past few years...There are...laws specific to California, such as those requiring paid family leave and stricter ergonomic standards...[California]...requires overtime pay [not] for work in excess of 40 hours in a week, [but rather] for more than eight hours in [any] day...Legislation just passed will require employers of more than 50 to provide health care......California landed 49th in a business-tax friendliness ranking calculated this year by the Tax Foundation...In addition to personal income taxes, California has the highest corporate tax rate in the West, as high as 10% in some places, an estate tax and an inventory tax... There appear to be no systematic measures of state business outflow/inflow. But consider this: One-fifth of 400 businesses surveyed early this year by the California Chamber of Commerce and California Business Roundtable said they were planning to expand elsewhere or relocate entirely. That's a big sample, and a huge percentage planning to expand or relocate out of state. |
| Link posted by Steve Antler : 12:05 PM |
| New Jobless Claims |
| ABCNEWS.com: "The Labor Department reported Thursday that new applications for jobless benefits rose by a seasonally adjusted 13,000 to 399,000 for the work week ending Sept. 27. That marked the highest level in two weeks...Around half of the rise was attributed to people who initially couldn't file claims because of disruptions related to the storm, which pummeled the East Coast, but were eventually were able to do so last week, a Labor Department analyst said."
Did you get that? We haven't seen numbers this bad for two weeks! UPDATE: Find a nice little discussion of divergent job statistics over at centrists.org. 
UPDATE II, from SMD: For a pretty comprehensive dissection of the emerging disparity between the Payroll and Household surveys, check out the JEC's latest report on the subject. |
| Link posted by Steve Antler : 8:41 AM |
| "GOVERNMENTS THAT APE OUR WORLD VIEW" |
| According to the Washington Times these are the words Joseph C. Wilson IV uses to refer to foreign democracies. |
| Link posted by Steve Antler : 6:05 AM |
| The document might prove something -- if it existed... |
| Today's NYT on Investigating Leaks:
Mr. Wilson wrote an Op-Ed article for The Times, published on July 6, that said he had investigated Saddam Hussein's nuclear ambitions at the request of the C.I.A. He wrote that he believed the Bush administration had misrepresented intelligence when it asserted that Mr. Hussein had tried to buy uranium from Niger, in Africa, to foster a nuclear weapons program. Mr. Novak identified Mr. Wilson's wife in his column on July 14 and said administration officials had told him that she had suggested sending Mr. Wilson to investigate the Niger story. The administration was ultimately forced to admit that the information about Niger was wrong. It is that last passive-voice sentence that is so interesting, suggesting but not saying there's a link between Wilson's trip and the administration's alleged admission. We'd like to link to the unclassified portion of Wilson's report so we could judge for ourselves, but he never turned in a written report. |
| Link posted by Steve Antler : 6:03 AM |
Wednesday, October 01, 2003
| Islamic Postmodern Multiculturalsim |
| The new Egyptian Mufti's latest fatwa (in translation at MEMRI) demonstrates how the language and analysis of the EuroAmerican Left gets recycled and redirected as radical Islamic ideology:
...The Islamic nation is, in the recent period, subject to cruel aggression on the part of the forces of oppression and tyranny, primarily the Zionist forces and the American administration, led by the extreme right, that acts to impose [their] hegemony on the nations and on the peoples and to change their curricula and their social systems... (Emphasis mine) |
| Link posted by Steve Antler : 10:31 AM |
| Ha ha... |
| Robert Kuttner thinks the Republicans are revolting. |
| Link posted by Steve Antler : 10:26 AM |
| Baghdad Police Open Fire on Demonstrators |
| Good old former Marxist that I am, I have often argued US culture comes to the nonWestern world "encoded," kind of like a strong subliminal message, in all our movies, music, clothing -- everything. The more "advanced" (i.e. educated, Westernized, etc.) the culture, the more strongly the encoded message gets thru.
Of course in nonWestern culture the traditionalism of nonmarket transactions -- bribes for example -- always pushes against any growing modernity fostered by market expansion. Rule of law always pushes against rule of tradition. But this little bit of news from Baghdad, police firing over the heads of demonstrators demanding jobs, seems to show just how strong is the push to modernity. Yes, the story involves bribes. But its Western flavor can't be ignored: One protester, Yassin Khudier claimed he paid a $100 to the driver of the chief of the Facilities Protection Force in order to get a job. "I was deceived by this person (the driver) and I want my money back..." What could be more advanced, more Western, than that? I want my money back! |
| Link posted by Steve Antler : 6:57 AM |
| Not that anybody really cares... |
| Just a reminder EconoPundit did substantially better than this week's consensus predictions of the Chicago PMI and Conference Board's Consumer Confidence Index.
Wouldn't want you to forget. |
| Link posted by Steve Antler : 6:21 AM |
| Who writes this stuff? |
| WSJ Online gives us an excellent summary of the situation, then seems to suggest even if he's guilty, Karl Rove should be protected. In a quote that will obviously be misused by opponents of the administration the editorial ends: "We trust that Mr. Bush and Republicans on Capitol Hill understand that if they throw Mr. Rove over the side, the blood in the water will really be theirs. " |
| Link posted by Steve Antler : 5:54 AM |
| DarrenKaplan.net: Was Joseph Wilson's Employment by the CIA in Violation of Federal Law? |
| DarrenKaplan.net: Was Joseph Wilson's Employment by the CIA in Violation of Federal Law?: "Insofar as Wilson evidently secured his appointment with the CIA as a result of his wife's influence, did the appointment itself violate federal law? There is a federal anti-nepotism statue (5 USC Sec. 3110), which makes it illegal for an employee of a federal agency to:
recommend individuals for appointment, employment, promotion, or advancement in connection with employment in an agency . . . It's impossible to tell for certain whether the statute was violated because we don't know all the circumstances of Wilson's appointment or his wife's postion at the CIA and her activities on Wilson's behalf. Wilson is quoted in The Washington Post as claiming that, 'the mission to Niger was unpaid except for expenses,' but we don't know if Wilson is telling the truth and I'm not even sure that would be a defense to a violation of 5 USC Sec. 3110. The Washington Post's report, if accurate, suggests that an investigation into Wilson's appointment may well be in order. And that's the only reason I can see why anybody in the White House would have leaked this information in the first place." Via Instapundit. |
| Link posted by Steve Antler : 5:42 AM |
| I think I can do this with Nash Equilibrium? |
| Bill Hobbs has this all worked out:
If you are one of the six reporters, but you don't know about any of the others, there's just no way credible way to write the story. You can't write that the administration (or whoever-I'm guessing the CIA has dirty hands) is leaking a story that criminally blows a CIA covert operative's cover because you have no proof. All you have is your word that someone leaked the information to you. If you name the source, in a story accusing them of a crime, they can deny it - and sue you for libel. Unless you have tapes or an email - and I can't imagine the leaker was that stupid - you have no proof...Now, though, the six reporters all know they aren't alone. The dynamic has changed. If the six work for six competing news organizations - I'm betting they do - then there is intense competition under way right now to break the story by finding the secondary sources and confirming evidence to expose the leaker. The problem is, the confirming sources are the other, rival, journalists. I suspect that, right now, there's a delicate dance going on in the executive suites of two major newspapers (NYT? WaPo?) and four news networks (CNN? Fox? NBC/MSNBC? ABC? CBS?) as each seeks to convince two of the others to collaborate on breaking the story and exposing the leaker. However, Novak today is denying the existence of the six who abstained: During a long conversation with a senior administration official, I asked why Wilson was assigned the mission to Niger. He said Wilson had been sent by the CIA's counterproliferation section at the suggestion of one of its employees, his wife. It was an offhand revelation from this official, who is no partisan gunslinger. When I called another official for confirmation, he said: 'Oh, you know about it.' The published report that somebody in the White House failed to plant this story with six reporters and finally found me as a willing pawn is simply untrue. But of course we have to ask how he knows others weren't called? Finally, this tidbit (from Drudge) is just too good to pass up. On PBS "A former counter-terrorism official at the CIA and the State Department claimed Tuesday night that outed CIA agent 'Valerie Plame' was under cover for three decades and was not a 'CIA analyst' as columnist Bob Novak has suggested...Larry Johnson made the charge on PBS's NEWSHOUR. Drudge then sends us to (washingtonpost.com): "As the world now knows, Wilson is married to Valerie Wilson, nee Plame. She is his third wife. She is 40, slim, blonde and the mother of their 3-year-old twins. In the photos in his office, she has the looks of a film star. " So she started her CIA undercover work at the age of ten? |
| Link posted by Steve Antler : 4:40 AM |
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