Thursday, December 30, 2004
|
Will someone please explain to me why this doesn't say it all? |
Long-term unemployed
(12 months or more)
as % of total unemployed, 2002
U.S.======9%
Britain===23%
Japan====31%
France====34%
Germany=48%
Italy=====59%
OECD data from today's OpinionJournal. |
| Link posted by Steve Antler : 9:43 AM |
Wednesday, December 29, 2004
|
Where you can donate... |
For those just back from Mars, here's one of many lists telling you where you can contribute to the relief effort. Besides these, here's a well known possibility:
My personal favorite is these folks, because my son and daughter were both born in the same Salvation Army Hospital. (And they were born over ten years apart -- uh, it's a very long story.)
UPDATE: Here's Peggy Noonan on the fascination -- and inapprpriate uses -- of this story.
|
| Link posted by Steve Antler : 1:53 PM |
Tuesday, December 28, 2004
|
Picture says it... |
There is no precedent for US productivity growth since 1995.
Simple. It is increasingly looking like most of those "good" jobs we're told are gone forever are still here, being done by fewer people in more-efficient ways.
Via Bruce Bartlett.
UPDATE: Even without the paper, the picture tells a striking story. Up to 1991 productivity never trends upward. The story, rather, seems recession-driven. Each recession is preceeded by multiple quarters of downward-trending productivity. Productivity bottoms out during the recession. Then, magnificently and dramatically like that fountain in the middle of your favorite park, productivity shoots skyward and hits a new height only to fall, then rise somewhat, then fall more, rise somewhat, and so on, trending downward, until it hits bottom during the next recession.
Something new starts happening in 1991. You can see it.
UPDATE: Dave Schuler (The Glittering Eye) sends these thoughts:
May I offer a guess? I think you're looking at IT investment and an accrued benefit from IT investment. The spikes look very suspiciously related to Microsoft Windows release dates.
May 22, 1990 Windows 3.0 (first version to get substantial 3rd party
support)
April 6, 1992 Windows 3.1 (a stable version of 3.0)
August 24, 1995 Windows 95 (more stable and 32 bit support)
June 25, 1998 Windows 98
Note that between 1996 to 2000 a new, fairly stable equilibrium seems to have been reached. Then in 2001 there's another spike. Could that be the massive investment
in IT occasioned by the Y2K issue finally paying off (or at least tapering off)?
UPDATE II: Alger Syme sends this:
I believe the rise in productivity corresponds to the beginning of the world wide web in 1994. As a pre-web user of the internet, I recall that as soon as graphics were implemented on the web, its use just took off. Ease of use and graphic information really made the use of the internet popular. |
| Link posted by Steve Antler : 7:21 AM |
Monday, December 27, 2004
|
Deficits and sustainability... |
Worth knowing about for the title alone.
Via Macroblog. |
| Link posted by Steve Antler : 1:59 PM |
|
New line in the proverbial sand... |
| Isn't this really good news? Doesn't it mean even a modest turnout evidences victory? |
| Link posted by Steve Antler : 1:03 PM |
Sunday, December 26, 2004
Saturday, December 25, 2004
|
MERRY CHRISTMAS! |
 |
| Link posted by Steve Antler : 8:12 AM |
Thursday, December 23, 2004
|
Things are never exactly what they seem... |
As if the development should be considered worrisome, China is now reportedly interested in what we used to call "tar-sands" oil:
"The China outlet would change our dynamic," said Murray Smith, a former Alberta energy minister who was appointed this month to be the province's representative in Washington, a new position. Mr. Smith said he estimated that Canada could eventually export as many as one million barrels a day to China out of potential exports of more than three million barrels a day.
"Our main link would still be with the U.S. but this would give us multiple markets and competition for a prized resource," Mr. Smith said. Delegations of senior executives from China's largest oil companies have been making frequent appearances in recent weeks here in Calgary, Canada's bustling energy capital, for talks on ventures that would send oil extracted from the oil sands in the northern reaches of the energy-rich province of Alberta to new ports in western Canada and onward by tanker to China.
Chinese companies are also said to be considering direct investments in the oil sands, by buying into existing producers or acquiring companies with leases to produce oil in the region. In all, there are nearly half a dozen deals in consideration, initially valued at $2 billion and potentially much more, according to senior executives at energy companies here.
Technology has surely driven costs down do some degree over the past two decades, but I believe Alberta tar sands oil basically remains the most expensive petroleum in the world. (As of 1980 its cost was estimated at an uneconomic $60/bbl.)
But as of that time the extent of Alberta petroleum reserves was estimating as rivaling that of Saudi Arabia itself.
Threatening tone of the NYT article notwithstanding, if Chinese investment can continue to bring these reserves' costs down, the net result may well be beneficial to the US economy.
UPDATE: Urijah Kaplan sends this:
Dr. Antler--
According to this recent Wired article recovery costs are about $10/barrel... |
| Link posted by Steve Antler : 10:18 AM |
|
Duet... |
I doubt this would change any of my friends' minds, but today's contrasting NYT essays seem, to me at least, to speak volumes.
On the one side we have reliable Maureen Dowd, in all her whining cutesyness, predicting total disaster and clearly savoring every last syllable.
(By the way: am I the only one who has trouble knowing when to smile when reading Dowd's columns? How do you tell the difference between the cutesy-ironic "Y-words" like "Bushies" and "Rummy" from the serious ones like "tyranny," "theocracy," and "Sunni?" Or maybe I just don't get it? Maybe I'm supposed to smile when I see any word ending with the Y-sound?)
Right next door is Thomas Friedman's new column -- which includes this:
Many conservatives would rather fail in Iraq than give liberals the satisfaction of seeing Mr. Rumsfeld sacked.
This is really surprising. Anecdotal evidence from Newt Gingrich to Trent Lott suggests conservative Republicans are often more than willing to throw their leaders overboard.
And anyone wanting proof absolute loyalty to flawed leadership can be very much a Democratic trait need only remember the single word: -- "Clinton."
UPDATE: And by the way, here's a must-read whose title is almost certain to shortly enter standard US political vocabulary. |
| Link posted by Steve Antler : 6:54 AM |
|
Reregulation in one country... |
Here's a crude example of rent seeking behavior.
But seriously folks, anyone who tries to relate this to "re-" or "deregulation" has to remember this relates to a single level of a multilayered international industry. |
| Link posted by Steve Antler : 6:34 AM |
Wednesday, December 22, 2004
|
Perfect answer to a question which has not been asked... |
Windows without media player:
Whether PC makers will widely offer the stripped-down Windows is unclear. Microsoft has said it will offer the two versions of Windows at the same price, prompting an analyst with UBS, Heather Bellini, to say today that "we do not think there will be many takers." |
| Link posted by Steve Antler : 3:23 PM |
|
What Keynes meant to say was... |
In noting the passing of Seymour Melman, Bruce Bartlett expresses frustration with a basic Keynesian tenet: "fiscal policy" involves the economic impact of perfectly undifferentiated government spending net of taxation.
Keynes would have likely been surprised at C. Wright Mills' "permanent war economy" assertions (not to mention later derivative work, e.g. Baran/Sweezy), but I doubt he meant to claim economists should always treat all federal spending as economically equivalent. By "macroeconomic" impact, rather, Keynesians mean the analytical impact of strictly undifferentiated spending, which is not to say there aren't "other impacts" of differentiated spending to be found as well.
Everyone got that? Anyway, Merry Christmas! |
| Link posted by Steve Antler : 11:25 AM |
|
Who is losing population? Who is gaining? |
Take your pick: supply-side, "elbow-room" Americanized Ricardo, or anything in between, there are a host of potential economic interpretations of this news:
Robust population growth continues to sweep the nation's Southern and Western ["red"] states, according to estimates released today by the Census Bureau.
If the trend continues at its current pace, states in the Northeast and Midwest that have been population powerhouses since the 19th century will lose their dominance to Sun Belt states by 2010.
New York, now the third-most-populous state, will likely be overtaken by Florida in five years. New Jersey, the 10th-largest state, could be passed by North Carolina in three.
...The population trends show that economic and political power is shifting to states attracting suburbanites from congested, densely populated areas, says William Frey, demographer at the Brookings Institution in Washington, D.C.
The 10 fastest-growing states — from No. 1 Nevada to No. 10 New Mexico — are all in the West and South. President Bush won nine of them in November's election. The exception was Delaware, ranked eighth. The Census Bureau classifies Delaware as a Southern state.
Seats in the House of Representatives are reallocated every 10 years to reflect population shifts. The next round will come after the 2010 Census.
Based on the latest population estimates, New York, Pennsylvania, Ohio and Indiana each would lose a House seat, according to Kim Brace, president of Election Data Services, a Washington D.C., consulting firm that specializes in the Census and redistricting. Arizona, Florida, Texas and Utah each would gain a seat, he says... |
| Link posted by Steve Antler : 10:23 AM |
|
Bad start for a holiday... |
| This is bad news, genuine evidence things are not going well. |
| Link posted by Steve Antler : 5:57 AM |
Tuesday, December 21, 2004
|
I seem to remember it differently... |
There's a growing demand for political balance on campus -- and to some it represents a threat to academic freedom:
To many professors, there's a new and deeply troubling aspect to this latest chapter in the debate over academic freedom: students trying to dictate what they don't want to be taught.
"Even the most contentious or disaffected of students in the '60s or early '70s never really pressed this kind of issue," said Robert O'Neil, former president of the University of Virginia and now director of the Thomas Jefferson Center for the Protection of Free Expression.
So: back in the 60's we never tried to dictate what we didn't want taught? I thought I remembered stuff like ROTC OFF CAMPUS! NOW! but maybe I just imagined it.
To think, we thought we could get rid of ROTC and military recruiting and get them to fund stuff like a Department of Peace Studies...what dumb jerks we were.
UPDATE: Reader Joe Kristan sends in this link while while chanting the classic 60's slogan at the top of his lungs: "HEY HEY! HO HO! STUDENTS HAVE NEVER TRIED TO DICTATE CLASSROOM POLICY!" |
| Link posted by Steve Antler : 1:17 PM |
|
Bloggers' Trivial Pursuit |
Over the past twelve months Glenn Reynolds has likened fuss surrounding two popular Christmas items to "cults." Do you know what these two items are?
ANSWER: One of these appears in today's edition of Instapundit. The other, somewhat more obscure, is quite familiar to many guys with daughters. |
| Link posted by Steve Antler : 11:56 AM |
|
Look beneath the veil... |
This thread of readers' answers to Kinsley over at Don Luskin underlines how much we're really not arguing about Social Security at all. We are, rather, arguing over financial markets, what we think they do, and how we "feel" about them.
UPDATE: To see what I mean, read this and try really hard to think beyond all those slathered layers of irony and double standard. (It is only followers of Milton Friedman who talk about markets in "religious" terms; Nation contributors never have anything like religous faith in their positions.) If you're somehow able to get this far, ask yourself what this is supposed to mean:
...after seven decades of unmitigated success in protecting seniors from the vagaries of market forces, the White House now wants to turn Social Security itself over to the vagaries of market forces...
...Wall Street is slavering at the possibility of one of the biggest potential windfalls in human history if the Social Security spigot is turned its way...
...the President would have us believe only stockbrokers can save Social Security, and the stability of the entire fund would be tied to a stock market that has been known to tank now and again...
You read statements like these and you just need to ask the author whether he honestly believes all interest and profit and stuff like that is just one big fake-out? Fraud? Ripoff?
|
| Link posted by Steve Antler : 9:34 AM |
|
A chaotic election can still be an election... |
Fareed Zakaria sees evidence of success even before the election:
I could be wrong about Iraq, in the sense that things could get much worse. Civil war, rampant anti-Americanism and terrorism are all part of the possible future. But what I am not wrong about is that a more decent, pluralistic Iraq would make a huge difference in the Arab world. Already the preparations for Iraq's elections are stirring debate and discussion among its neighbors. Remember, these are the first genuine, national elections in the entire region. As 300 million Middle Easterners watch Iraqis going to the polls, they will surely ask a simple question: "Why not us?"
More here.
Via Milt Rosenberg.
UPDATE: William Safire sees some of the same signs. |
| Link posted by Steve Antler : 9:13 AM |
Monday, December 20, 2004
Sunday, December 19, 2004
|
A theory... |
Was Robert Higgs Michael Crichton's model for Norman Hoffman?
"I call it the politico-legal-military complex. The PLM...Politicians need fear to control the population. Lawyers need dangers to litigate, and make money. The media need scare stories to capture an audience. Together, these three estates are so compelling that they can go about their business even if the scare is totally groundless. If it has no basis in fact at all."
Character Professor Norman Hoffman, in Michael Crichton's State of Fear, Harper Collins, 2004, p. 456. |
| Link posted by Steve Antler : 11:45 AM |
|
One of those little ironies of life... |
One of Washington's top tax thinkers sent me a link to this paper election night. Ironic, because (I think) at that point he was wondering whether the markets had already taken into account tax changes of a possible Kerry administration.
I have no idea whether he's on the short list, but my correspondent is an obvious candidate for membership on this panel. And that's ironic as well, because if the paper is correct markets have already discounted all the panel's upcoming decisions and nothing he does will make any difference! |
| Link posted by Steve Antler : 10:29 AM |
|
For fanatics only... |
This is only for fellow members of the ever-diminishing cult of HI-FI -- you know, guys who are perpetually installing new speakers, testing new preamps, deciding if 24-bit DACS really sound better than 20, etc etc etc.
For classical music enthusiasts the Holy Grail is the "live performance standard" -- some combination of software and hardware that can actually duplicate the sound of actual instruments in real space played by real humans.
The 1985-1995 decade were hard ones for these enthusasts. Digital sound was immensely better than vinyl in dynamic range and bass response, but at the high end fine detail was replaced by a wearying digital "fuzz" which washed out fine musical detail and made many instruments -- violins for example -- sound grainy and unpleasant.
But since 1995 steady improvment has been the norm. DACs moved from 16- to 20- and now to 24-bits. And new formats -- DVD Audio and Sony's SACD -- rear their ugly heads as if to ask, "are we the Holy Grail, or merely the new LaserDisc?"
And thus it is we've spent the last few weeks intermittently testing DVD Audio disks and SACDs on our new NAD T-773 to see if the Holy Grail is here. Is it possible a recording can sound like a live performance?
I think the answer is SACDs definitely sound more "live" in subtle and important ways. Last night I stumbled on a reproducible experiment which proves the case. No recording including metallic percussion could ever be mistaken for the real thing, regardless of how good the CD is. On SACD, however, there it is -- exactly how cymbals sound in real life!
And there's more. You can hear the "bite" as the violinist's bow hits the strings. Present is that amazing sense of life woodwinds emote when living human breath goes thru them. You can actually hear the almost superhuman difficulty of pursing your lips exactly right for horns, and what it sounds like when someone breathes out after having done so. All that and more. Original instrument recordings, muddy and unpleasant in the 1990's, now sound like catgut, dynamic bowing, and genuine affection for the music.
So it's here. The Holy Grail has arrived. Now all we have to do is wait another ten years to see if the SACD turns out to be a new standard which replaces the CD, or whether it becomes yet another laserdisc/8-track/LP orphaned format. Time will tell.
UPDATE: A reader sends this in:
I read your post on the "holy grail" of audio hi-fi and thought I'd relate my experience with Hi-Res music. I agree that the difference is like night and day for those who care about sound quality. Three years ago, I took the plunge on a HT/music system that included a DVD-A capable DVD player, and I would find it very hard to go back to CD - in fact I avoid investing in the CD format now as it seems akin to buying VHS tapes instead of DVD.
My latest purchase was a Pioneer 578 combo player that can handle both DVD-A and SACD and also does bass management, and so I'm now collecting classical SACDs (I wanted a better combo player but the budget wouldn't allow it).
Personally I prefer DVD-A due to the higher capacity and "extras" that DVD allows. My understanding is that neither format is superior for sound quality.
Anyhow, the finest quality recording I own is MDG's DVD-A Vivaldi performance by Musica Alta Ripa. If you get the opportunity I highly recommend it. SACDs I picked up recently include this one. I recommend it and the others by the New Dutch Academy if you're into Baraque period music. The stuff by Donald Fagen/Steely Dan is incredible as well if you want to sample some contemporary stuff.
As for which format is going to win, I have my doubts that these hi-res formats are going to become the new standard. The mainstream retailers appear to have given up on them -- the only brick-and-mortar I know of with a selection is Tower Records. I think most people are gravitating to even lower quality formats like MP3, and really can't leverage the better sound quality of the new formats.
Anyway, enjoy your SACDs, and Happy Holidays.
EconoPundit adds these recommendations. First, what may be the best modern Boheme -- first rate from the artistic, vocal, and technical points of view. And second, any of the new Boston Baroque recordings directed by my high school pal Marty Pearlman. |
| Link posted by Steve Antler : 9:06 AM |
Saturday, December 18, 2004
|
Why big goverment? Well for one thing, THEY save so YOU don't have to! (...what's that? Oh, uh, sorry...) |
While pondering the latest TIVO controversy you might want to set yours to record CSPAN2, 5:30pm EST this afternoon (Saturday Dec 18) so you can hear(at your leisure) Robert Higgs discuss his new book Against Leviathan: Government Power and a Free Society . (Via Steve Ziliak. Publisher is the Independent Institute, to whom we have linked quite a few times times.)
UPDATE: And thanks to Ben Cunningham we have this:
 |
| Link posted by Steve Antler : 10:50 AM |
Friday, December 17, 2004
|
"Despite the apparent size of the headline reserve accumulation, China's true support for the dollar is much smaller. " |
Manufacturing jobs are moving to China. No, not those manufacturing jobs. These manufacturing jobs:
First-world manufacturers love to point to artificially cheap Chinese wages as the most imminent threat on the global scene. However, the fact of the matter is that artificially cheap Italian wages would hurt them much more. Why? Because most Italian industrial workers are in sectors like autos, chemicals, machinery and technology--sectors competing head-to-head with those in Italy's wealthy neighbors, where even small changes in pricing could shift orders and production between one country and another. By contrast, Chinese export workers make textiles, toys, sporting goods and light electronics, i.e., industries the developed countries mostly gave up a long time ago.
You can see this in the global-trade data. Chinese exports have been penetrating European, Japanese and U.S. markets at a headline growth rate of 35% per year--but total Asian exports have not. Overall Asian market share has in fact grown very slowly, which means that for each additional dollar industrialized consumers spend on Chinese imports, imports from the rest of Asia actually fall. This is not because China is "outcompeting" its Asian neighbors; rather, Asian countries have simply moved low-end processing and assembly functions to China, as a final stop on the production chain before shipping off to Wal-Mart or Tesco. |
| Link posted by Steve Antler : 7:28 AM |
Thursday, December 16, 2004
|
Haiku IV... |
Invisible Hand;
Mother of inflated Hope,
Mistress of Despair.
Stephen Ziliak
Rethinking Marxism, Vol 14, Sept 2002, p. 111 |
| Link posted by Steve Antler : 5:03 PM |
|
Who will put the Vietnam War to rest? |
They still don't get it.
People my age were looking for closure. Instead, the candidate called us a bunch of draft dodging cowards for refusing to go over there like he did and cut off ears, drop napalm on villages, rape women, kill babies, and so on.
He made himself feel better by having it both ways. (I guess Senators can do that.) But he made the rest of us feel much worse, and that's one reason we didn't vote for him.
UPDATE: Sandy Peterson tells EconoPundit to straighten up:
Are you looking for closure or forgiveness/absolution/atonement?
Why was it wrong to fight communism during The Cold War? In spite of all the mistakes, we won it. A certain segment of the population kept it going. And that segment keeps it going today. And while I think you might still have a soft spot for Marxism, Nam is moving along because of capitalism.
This election started putting it to rest, but until the last boomer is put to rest, it will be with us...
PS - Bros. Judd has an interesting post on the $. Certainly not my speciality. But someone jokingly suggested buying FLA REITS and shorting the Euro a couple of days ago cos the Brit, Scot and Irish middle-class are buying up properties near DisneyWorld due to the bargain-basement prices.
EconoPundit responds: First re. Judd, I've linked to the blog as a whole. Their search box doesn't seem to be working and I can't find the post you refer to. Can anyone help?
Regarding communism and the Cold War: yes it was right to fight communism during the cold war, but I didn't think so at the time played the useful idiot right up to the fall of the Berlin Wall -- even a bit after. Dumb, but heck, I can live with it.
Vietnam is something else. How can anyone not be ashamed of having sided with the folks who drove out the Boat People and these folks' delightful Khmer Rouge neighbors? |
| Link posted by Steve Antler : 8:55 AM |
|
No. It means "moderate." No? "realistic." No?... |
Here's the Martin Feldstein paper Mickey Kaus links to today.
I know this stuff is serious and doing so is childish, but I can't help giggling at this paragraph's first word's double meaning:
Conservative assumptions imply that Social Security privatization would raise the well-being of future generations by an amount equal to 5 percent of gross domestic product (GDP) each year as long as the system lasts. Although the transition to a funded system would involve economic as well as political costs, the net present value of the gain would be enormous -- as much as $10-20 trillion.
Fodder for The Onion, I think. "Paper's results questionable because of right-wing assumptions" or something similar, no? |
| Link posted by Steve Antler : 8:38 AM |
Wednesday, December 15, 2004
|
Housing and real estate... |
For the first few paragraphs Bruce Bartlett wisely avoids the over-used term "bubble" in this discussion of current housing price movements. Housing is moving upward faster than fundamentals in some states.
How much of this is like New York City -- where current euro purchasing of real estate may be doing the same poor job for buyers as did similar yen purchasing for Japanese buyers back in the late 1980's? |
| Link posted by Steve Antler : 10:39 AM |
|
(Lemme think for a second...the radio costs $65, the extended warrantee is $19...Hmmm, maybe not such a good idea?...) |
Rahm Emanuel, who represents the 5th Congressional District in Chicago, says the market system is like a product -- and the Democratic Party is just like that product's warrantee.
But since we're talking about elections and consumer choice, he must be talking about the extended warrantee.
And heck, isn't this just about the most stupid analogy he could have used?
Perhaps this is another elected official so far removed from everyday life he just doesn't understand the ideas and words he chooses.
UPDATE: Dave Schuler (The Glittering Eye) writes:
On the several occasions when I wrote [Jan Schakowsky] as my Congressional Representative I received intelligent, considered, relevant responses to my
questions or opinions (yes, I'm one of those poor, benighted souls who actually write their Congressional Representatives).
On the occasions when I've written Rahm Emmanuel I have invariably received form letters that had no particular relevancy to the letter I'd sent. Draw your own conclusions. |
| Link posted by Steve Antler : 7:30 AM |
Tuesday, December 14, 2004
|
Pride goeth before the fall... |
| I had hoped to find more intellectual sustenance from Eric Hobsbawm. |
| Link posted by Steve Antler : 11:15 AM |
|
It's called "capitalism"... |
Latest from David Malpass:
On December 9, the U.S. Federal Reserve released its flow of funds figures for the third quarter. They showed an $804 billion increase in household assets to $57.0 trillion, another all-time high, more than offsetting a $259 billion increase in household debt. Consequently, household net worth increased $546 billion to a new record high of $46.7 trillion. (Household net worth includes mark-to-market gains in equities, 401k plans, real estate and non-corporate businesses. If this concept were considered "savings", the savings rate in the third quarter was 20%. That's $2.2 trillion of additional net worth at an annual rate in an $11 trillion economy.) (Emphasis in original)
UPDATE: Reader Paul Mooney asks:
If increases in the value of a household’s financial assets are considered "saving" are decreases in the same considered "spending?"
EconoPundit answers: no, of course not. I am certain Malpass isn't arguing for any redefinition of BEA constructs. He's saying, rather, that just as you'd check not only at the patient's temperature but also his pulse, blood pressure, heart sounds, etc., you ought to check out the more-sophisticated flow of funds data in addition to the BEA aggregates.
|
| Link posted by Steve Antler : 8:52 AM |
|
Culture of the New Deal (Part II) |
Stephen Moore wants to see Larry Kudlow appointed director of the National Economic Council:
George W. Bush needs an economic communicator...who is telegenic, charismatic, and credible. Of course, it goes without saying that this person must also be a gold-plated supply-sider who has an unshakable conviction that the Bush second-term agenda is right for the country. After all, the Bush administration has an incredibly audacious economic game plan: a tax overhaul, Social Security reform, expansion of free-trade agreements, tort reform, and budget control. If Bush can accomplish even half these priorities, he will leave behind a scintillating legacy of achievement.
For all these reasons, the open position...should be filled by NR's own financial wizard, Larry Kudlow. I recently joined up with a growing band of conservative leaders to try to make this appointment a reality.
It would be thrilling to see Larry get this appointment, but think for a moment what an impossible job he'd be taking on.
Supply side economics is the sad, undernourished stepchild of the Reagan era. Though she somehow survived, supply-side theory never seemed to grow much.
When he debated Robert Bartley on C-SPAN shortly before Bartley's death, Robert Reich laid out an Econ 101 explaination of how fiscal policy works -- and then demanded Bartley explain exactly how supply-side tax cuts work.
Time and again, in his familar adenoidal timbre, Reich prodded and needled:
"What is the transmission mechanism? I've explained to you how tax cuts work. Please, you tell us now -- exactly how do supply side policies work?"
And Bartley -- normally articulate -- had no answer for Reich.
The lesson of this little drama is that Supply Side economics is harder to explain (and more difficult to verify) than simple Keynesian economic theory. For now let's stick to two reasons why this is the case.
First, unlike basic Keynesian monetary or fiscal policy supply side economics operates strictly through the private sector -- and the private sector is, in its size and complexity, massive as compared with the public sector. An adequate supply side model must somehow relate the total level of private sector factor inputs and their costs to aggregate output -- given expectations and the various mechanisms whereby price information gets transmitted throughout the economy.
Face it. This is lots harder than multiplying an increase in government spending by one over the marginal propensity to save.
Second and more important: from the standpoint of our basic economic culture we are still very much in the New Deal. Consider the following assessment of supply side economics:
[Supply-side economics] is not so much an economic theory, as a right-wing political perspective and a rationale for deepening social inequality. The emergence and sudden respectability of supply-side economics in the 1980s betokened the rejection by a substantial part of the establishment of the social reformist consensus that had dominated American politics since World War II.
There is a substantial segment of the American ruling elite that considers any restrictions on the ability to accumulate personal wealth an unbearable burden...
...[Supply siders] are working assiduously toward the goal of subordinating all aspects of life in the US to the unrestricted drive for profit, a state of affairs that could only exist under conditions of authoritarian, police-state rule...
Amazingly, if you simply clean up the over-the-top rhetoric in this statement, you are left with basic, mainstream Democratic Party political economy.
As Director of the National Economic Concil Larry Kudlow would have to give the answers Bartley didn't come up with. In doing so, he'd have an opportunity to once and for all address the ideology expressed in the rhetorically excessive paragraphs reproduced above.
UPDATE: While rushing to a meeting Andrew Coors sends this hasty note:
I enjoyed your latest post [but] disagree with your assessment that supply-side economics is in a dire, misunderstood and unappreciated place. Look around at global fiscal policy and you see a dramatic shift in policy and economic theory over the last three decades. The examples go on and on. I have to go, but I included a good historical piece that we published a while back.
EconoPundit responds: I agree policy is wisely shifting toward supply side. My point is public awareness sorely lags behind. This is Ogburn's "cultural lag" revisited. Supply side thinking is appropriate, but the New Deal paradigm (sorry to use the word) is still the norm -- until someone like Larry helps sort things out, that is. |
| Link posted by Steve Antler : 7:29 AM |
|
Why not to panic... |
David Malpass is pleased with these developments:
U.S. growth remains strong. This argues that interest rates will probably soon rise above the inflation rate, stopping the dollar weakness and leaving only a moderate (3% core CPI) inflation problem in 2005. We expect strong earnings growth into 2005. This should help the equity market make the transition to higher interest rates.
The dollar's recent rebound confirms the sensitivity of the dollar's value to interest rate expectations and the speculative nature of the attack on the dollar. Gold prices have declined from a $456 end-of-day peak on December 3 to $434 on December 10. The dollar's value also rebounded against foreign currencies...We disagree with the idea that dollar weakness is inevitable [-- i.e. that it] is due to the trade and fiscal deficits...
Oil prices have fallen nearly $14 from their October 22, 2004 peak. We didn't think expensive oil would last or cause much of an economic slowdown. The negative economic effect of expensive oil was offset by the stimulus from reflation, huge liquidity, low interest rates, and very narrow credit spreads...Oil prices had gotten way out of line with gold, meaning the oil price increase had gone beyond the amount caused by dollar weakness. This argued for a reversion.
While we don't see a big positive economic effect from the oil price decline (nor did we see a big negative effect from its spike), we do think the decline will have a constructive effect on Fed policy. In its August, September and November post-FOMC meeting statements, the Fed said that expensive oil was a drag on the economy, using it as one explanation for its cautious economic outlook. With third quarter growth at 3.9%, the Fed may think that lower oil prices will allow growth to go even higher (as seems to be the case in the fourth quarter.) This should encourage a less accommodative monetary policy, which we would we take as a positive in the outlook. We expect another 25 bp increase in the fed funds rate at the Fed's December 14 meeting.
UPDATE: Guess he was correct.
UPDATE II: Guess he was correct again. |
| Link posted by Steve Antler : 6:49 AM |
Monday, December 13, 2004
|
Pills that work... |
Here's a new Posner/Becker dialogue on pharmaceutical patents. Says Becker:
I do not like the hype and some other salesmanship of big pharma and bio-tech companies, but this industry has made enormous contributions to raising world health. It is likely to become even more important in the future as drugs are developed to match individual genetic differences. One does not want to kill this goose that is laying golden eggs by ill-thought out and counterproductive "reforms". |
| Link posted by Steve Antler : 1:43 PM |
|
A whole new world... |
Here's John Fund on blogging, Daschle, and journalism in South Dakota:
In July, [Patrick Lalley] explained to readers that "true believers of one stripe or another, no longer content to merely bore spouses and neighbors with their nutty opinions, can now spew forth on their own blogs, thereby playing a pivotal role in creating the polarized climate that dominates debate on nearly every national issue. If Hitler were alive today, he'd have his own blog."
EconoPundit responds: Hilfe! Hilfe! Sie haben entdeckt, wo ich mich verstecke!
UPDATE: And via Milt Rosenberg, here's Dick Morris on blogging:
In a way, this mass expression of grassroots opinion has its parallel in the financial markets, which have put global economics out of the control of presidents, prime ministers, chancellors and even international bankers. The markets have ruled economics for a decade now. In 2004, public opinion, spontaneously generated, came to rule politics. |
| Link posted by Steve Antler : 6:09 AM |
|
Future textbooks will note two sucessful trade policies... |
#1: the dollar sank, but did not plunge.
#2: China "voluntarily" imposed tariffs on its own textile exports.
|
| Link posted by Steve Antler : 6:00 AM |
Sunday, December 12, 2004
|
Global Warming: the Numbers... |
In connection with Michael Crichton's new book I poked around on this bulletin board and found this link (you can, apparently, ignore the system's login request; but be patient, this is a large database):
http://www.dsllc.com/download/GlobalWarming.xls
which included this map:
and this scatter chart:
So -- Being more comfortable with time series analysis I took the database 1900-2002 "record highs" series and calculated a polynomial trend. These are the results:
So you tell me. Is this evidence of global warming? Proof fossil fuels are (via the greenhouse effect) changing the weather? What does this show? Anything?
UPDATE: And by the way: going to a database from link on a strange bulletin board, being surprised the huge database has loaded because you've (inadvertently) nullified the password screen by pressing "CANCEL," idly processing some of the data and being surprised at the resulting graph (which shows little sign of global warming) -- this is all just like stuff that happens in Crichton's novel!!!!!
UPDATE II: And continuing in our eugenics vein, here's a marrow-chilling set of links from Inkling University.
UPDATE III: At mobjectivist our old friend dsquared contributes this comment:
That "scatter chart" isn't a scatterplot. It's visibly a time series plot - the clue is that the x axis is showing time. His "time series" plot below with its polynomial trend (Chart - Add Trendline - Polynomial) is just the same chart as the "scatterplot", but with lines joining the points.
I think that Econopundit might have become confused and thought it was a scatterplot because some enemy of the state had set "line style" to "None" in Excel. In general I have long campaigned for the removal of the polynomial trendline option because it is overused by people who like the spuriously smooth lines. In almost all contexts, the "linear" or "moving average" trendlines are more accurate summaries of underlying data.
EconoPundit's response is the following:
(1) I guess I was really confused, because I thought I used microTSP (i.e. EViews) to do the the statistics. Excel (uh, I thought) was just the format the numbers came in. But I supposed I was confused.
(2) Hey -- "in almost all contexts 'linear' or 'moving average' trendlines are more accurate summaries of underlying data" you say? Whoa, how dumb I've been! I always thought you had to use those pesky adjusted r-squared numbers, and those complicated Akaike and Schwarz information criteria, to decide the issue! If only I had known. I could have just used linear or moving average trendlines and everything would have been more accurate. What a dummy I am! Oh! This is so embarrasing!
UPDATE IV: Meanwhile, Gary L. Burke sends us to those who know more:
My favorite Climatologist was on Tech Central last month. George Taylor is the Oregon State climatologist and the person that first got me to the"Still Waiting for Greenhouse" site... Here is a link to George's article on the Artic from Tech Central last month.
|
| Link posted by Steve Antler : 6:49 AM |
Saturday, December 11, 2004
|
Deconstruction... |
David Brooks:
Before we get lost in the policy details, let's be clear about what this Social Security reform debate is really about. It's about the market. People who instinctively trust the markets support the Bush reform ideas, and people who are suspicious oppose them.
Since this is a blog, I'd like to add my opinion. This debate is also about the culture of the New Deal -- still all around us -- and how we now feel about this culture.
UPDATE: And from the Department of "Oy vay! It's sharper than a serpent's tooth!", here are comments from my son in California:
You [say] the New Deal is still all around us??? You're delusional if you think this is the case. The only thing left of the New Deal is Social Security, Medicare, and Medicaid, and all three are being done away with! SS is being wiped out due to privatization, or investing income in an unstable stock market since this public fund was replaced by the GOP's fantasy of privatization (you know, Bush would tell people to invest in Enron had it not collapsed!). Medicare premiums have gone up 17%, which is OK if you can afford it, but if you stopped working 20 years ago due to disability retirement, life is not good! Medicaid is still around, but give Dubya until after January 20th, 2005, his inauguration (who knows, he might even mention how much he supports it!). It will go away in time! This administration is doing less and less for poor people as time goes on, and there are numerous articles about this sad fact even from newspapers that endorsed George W. Bush (go figure!!!!!!!!!!!!!!!!!!).
EconoPundit replies: Well, this may only be my imagination (I am delusional, after all), but to me your response demonstrates exactly what I mean.
I said the culture of the New Deal is still very much with us.
And what is culture? It is a set of values, and some means of transmitting these values from one generation to the next.
The shaping of the New Deal's culture was the most important event of the twentieth century in the United States. Administrations change, political alliances shift, economic theories rise and fall, but once established, cultures do their damn best to live forever. (Well heck -- where would be be without 'em?!?) |
| Link posted by Steve Antler : 10:13 AM |
|
US Senators? Michael Moore? Fahrenheit 911? |
They preach war, demand kids go off to fight -- but when it comes to their own children, they do everything they can to keep them out of battle:
Salman al-Awdah, a popular preacher who had close ties to al Qaeda in the '90s, signed, along with 25 colleagues, a declaration that made fighting the U.S. in Iraq an obligation for able-bodied Muslims...The reformist newspaper al-Watan revealed that Mr. al-Awdah subsequently enlisted the aid of the Saudi security services in order to prevent his son Muadh from joining the jihad in Iraq. Muadh, it seems, had decided with some friends to go and fight America. "God permitting," he said in a message to his family, "we have an appointment with paradise." In an effort to prevent him from keeping this date, Mr. al-Awdah contacted Prince Muhammad bin Nayef, No. 2 at the Saudi ministry of Interior. The authorities quickly found the young men, and returned them safely to their families.
|
| Link posted by Steve Antler : 9:01 AM |
|
Da dollar (continued once more...) |
I always admire Tim Clayton's (investica.co.uk) writing -- he's clear, to the point, and has enough confidence in his economics to write 95% hedge-free paragraphs:
The dollar weakened to fresh all-time lows against the Euro early in the week, but the US currency then made a significant recovery. From a low point beyond 13470, the dollar strengthened back to 1.3150 and was just weaker than 1.32 in New York on Friday.
Next week will be important for the US currency with vital data on growth and balance of payments data. The US external position will be under close scrutiny with data on the trade balance, current account deficit and capital inflows all due for release. Another poor set of data would revive underlying negative dollar sentiment and fears over a financing shortfall. There is also still the risk of longer-term selling, especially as central banks diversity their reserves away from the dollar. The US currency is, therefore, liable to hit selling pressure on any significant rallies. There will, however, be greater caution over selling the dollar aggressively ahead of the year end and there is still the potential for some covering of short dollar positions.
The US Federal Reserve will meet on December 14 and a further increase in interest rates to 2.25% is the most likely outcome. An increase would push US rates above equivalent Euro rates for the first time in over three years. The US also has a significant yield advantage on long-term yields and this will offer some dollar support if underlying sentiment stabilises. The statement from the Fed will also be important to assess whether rate increases will continue. If the Fed signals further increases during the first quarter of next year, there will be some dollar support.
Overall, intervention appears unlikely below the 1.35 level against the dollar and the banks will also be very careful not to fall into the trap of defending set levels for the markets to attack. Nevertheless, covert intervention remains a significant possibility if the Euro weakens back towards 1.35 and especially if it weakens beyond this level. (Emphasis added -- EconoPundit's agreed with this point in recent posts!) |
| Link posted by Steve Antler : 7:25 AM |
Friday, December 10, 2004
|
Why didn't I think of that? |
Solutions from Mickey Kaus: Problem: Hamid Karzai may be the new elected president of Afghanistan, but much of his country's economy is based on cultivating opium poppies for the illegal heroin trade. Various warlords (and, apparently the Taliban) are using drug profits to in effect challenge Karzai's government. ... Development: New strains of genetically modified poppies produce medicines, not opium. Other strains produce non-opiate painkillers. ... Solution: Get the Afghan farmers to plant these kinds of poppies. Duh! ... |
| Link posted by Steve Antler : 1:18 PM |
|
Speaking of junk science... |
It is worth buying Michael Crichton's State of Fear for the supplementary material alone. Check out his postscript essay highlighting a major scientific-social movement with high ideals, massive research supporting its scientific principles, and virtually unanimous support in the scientific community for most of its lifetime.
We speak, of course, of the eugenics movement of the 19th-20th centuries. Until we can find Crichton's own words (he or someone else will post the essay soon, I hope) here's a good paper on this topic. |
| Link posted by Steve Antler : 7:36 AM |
|
Relax, no loud "pop" anytime soon... |
The New York Fed is on the job, and assures us there's no housing bubble ready to burst.
Via Angry Bear and macroblog. |
| Link posted by Steve Antler : 5:52 AM |
|
Blogs advertising blogs? |
| Marginal Revolution, whose advertisement now appears on our Google Adstrip (what?) has some interesting new info on Germanic symphonic privatization. |
| Link posted by Steve Antler : 5:46 AM |
|
This has all happened before... |
Tom Ella thinks Paul Krugman's latest column is "poorly written" and an "embarassment."
The central issue -- do government bonds really earn interest? -- seems oddly familiar. Oh yes, now I remember! Marx said if you hide your savings under the bed it earns no interest, but if you throw it out there in circulation, it becomes capital and that's why it earns surplus value.
Government bonds are kind of like savings kept under the bed, no?
UPDATE: Don Luskin has more, with links.
|
| Link posted by Steve Antler : 5:36 AM |
Wednesday, December 08, 2004
|
You're entitled to your own opinions, but not your own facts... |
Picked this up yesterday. (I bought it at Wal-Mart, so the copy must definitely be cursed in some way.)
Some of the angry reviews at Amazon.com are fun reading. Additionally, I suspect this new bulletin board will in a few days (maybe hours) turn into a major internet focal point. I am waiting for a link from one of the board's early contributors. He posted this information:
If anyone's interested, I'd be happy to send you an Excel spreadsheet with measured temperatures at 1062 locations throughout the U.S. that have been consistently monitored over a long period. 158 of these historical records begin before 1900. These are summarized as daily record highs and lows. The entire data set is 700MB and is freely available from NOAA. These data do not support global warming.
UPDATE: I am still waiting for the URL.
Meanwhile, something strange has emerged. Crichton is being angrily denounced as a hypocrite, because he's now pointing to the emptiness of previous catastrophe warnings (e.g. overpopulation & global famine, killer bees, global cooling) while having made a career out of novelizing many of these same (or similar) warnings. I just don't get this. Isn't someone who's gone along with bad science in the past but now sees the error of these theories more credible rather than less? Is there something wrong with examining both sides of an issue and, on the basis of all the evidence, changing your mind?
|
| Link posted by Steve Antler : 11:03 AM |
|
Family outing... |
Last night my mother had dinner with Aunt Ellie and Uncle Aaron.
Halfway thru the meal she announced she'd voted for Bush. |
| Link posted by Steve Antler : 9:54 AM |
|
Revisiting Kaus Klassic |
| Daniel Patrick Moynihan as source of evil in modern society. |
| Link posted by Steve Antler : 8:07 AM |
Tuesday, December 07, 2004
|
Top Ten Reasons Why Glenn Reynolds Should Add Milt Rosenberg to His Blogroll |
The following is being sent to Instapundit via email:
TOP 1O REASONS TO ADD MILT'S FILE TO YOUR BLOGROLL
REASON #10 Radio and blogging are intimately linked in both style and tradition. Aren't we bloggers the modern ham radio operators, after all, calling in news when the nation is threatened by natural disaster, flood, famine, and so on?
REASON #9 Aside from all the other good stuff, Milt links to really cool music almost every day.
REASON #8 Milt is an academic. You are an academic. All academics should support all other academics (except of course when they're jerks).
REASON #7 If you imagine what William F. Buckley looked like 25 years ago and you squint and then look right at Milt he looks very much like Bill Buckley. (This photo doesn't really show it, but here's the link anyway.)
REASON #6 Sooner or later you will be on his show. Face it.
REASON #5 The last two syllables of your blog's title are "pun-dit." The last two syllables of my blog's title are "pun-dit" Milt Rosenberg is on my blogroll, so he should also be on your blogroll, right?
REASON #4 Hugh Hewitt is right there on your blogroll but Milt Rosenberg isn't. It isn't fair.
REASON #3 Lake Michigan is beautiful in the month of April, and if you walk three minutes from Milt's office you can see the Lake.
REASON #2 Chicago is so absolutely Democratic that if you're into the Bible you can easily imagine Milt as some kinda prophet surrounded by city folks who listen, and listen, and listen, but don't hear.
REASON #1 Glenn, we need you. This is Democratic Chicago. Milt, me, all the other holdouts have these basements, and Democratic Committeepeople sneak these pods into the basements and the inside the pods these lookalikes grow and if we go to sleep even for one second we get replaced and I've got to stay awake, not nod off for...the lake...it really looks beautiful ... in ...
Wow. Glenn, I'm really sorry for all this silly nonsense. Forget everything I just said. Really.
Stephen D. Antler
(formerly EconoPundit) |
| Link posted by Steve Antler : 9:18 AM |
|
"But right now it seems important to...debunk the hype about a Social Security crisis..." |
Imagine highway #1: a normal highway maintained by gasoline taxes.
Now imagine highway #2: a perpetually deteriorating tollway which must be feverishly maintained 24 hours a day, 7 days a week, crews constantly on the job. And here's the problem: the maintenance crews are financed by current tolls. If lots of cars are crowding to get onto the tollway maintenance crews are well-financed and the highway runs smoothly. Once all those cars crowd onto the highway and few new entrants provide new tolls, well, things kind of slow down.
Paul Krugman would have us believe the Social Security System works exactly like highway #1, but I think everyone knows by now it works much more like highway #2.
Interesting how his analogy assumes away the basic problem. It's almost as if he, well, destroyed the argument in order to save it?
UPDATE: I can't help worrying it is part of some new strategy -- rather than adding to the debate by discussing things with those who are informed, perhaps, the idea is to take "ownership" of issues by having opinion leaders like Paul frame basic, aggressive talking points directed strictly at those who come to the issue with no prior knowledge.
Krugman's current editorial is so bad had it appeared somewhere on the web rather than in the NYT, it would be dismissed in three minutes as a hoax. |
| Link posted by Steve Antler : 8:12 AM |
Monday, December 06, 2004
|
135 South Lasalle Fire |
Class is out and I am back in my office, looking West out the 8th floor of the Auditorium Building, roughly four blocks Southeast of the fire. Direct view blocked by buildings but can see three stationary helicopters (news?) and hear repeated waves of sirens. Can't see smoke or glow from fire, feel like ghoul for even looking for these signs. Can't get live video on this computer. Hope it's out by now, but hear more sirens as this is typed.
UPDATE: And now I can see what looks like smoke -- lots of it. Glad to pack up and go to radio station now. Hope things get under control soon.
|
| Link posted by Steve Antler : 8:01 PM |
|
A matter of principle... |
Via Instapundit this story, which inspires the following announcement:
A very confidential informant has sent me a link to this paper which reveals the elasticity of taxable income changes with respect to reductions in income tax rate is about .4, but I will never reveal my source because bloggers' sources are privileged and no, I won't say, not even if they pull off my toenails.
UPDATE: Actually, maybe I'll talk if the toenails get involved.
UPDATE II: Spoons Experience has more on the topic. And by the way be sure to tune in to WGN (720 on your AM dial) tonight at 9pm central to hear Chris Kanis (SPOONS EXPERIENCE), Pejman Yousefzade (PEJMANESQE), radio host Milt Rosenberg (of MILT'S FILE and host of WGN's nightly Extension 720) and, oh yes, Steve Antler (ECONOPUNDIT). Scroll up for details.
|
| Link posted by Steve Antler : 3:22 PM |
|
Slower growth ahead? |
| Don't get too worried by the headlines. They sometimes get it wrong. This is a prediction not of negative growth, but of a slowdown in growth of roughly 1%. |
| Link posted by Steve Antler : 1:14 PM |
Saturday, December 04, 2004
|
Bush Economic Policy Starting to Emerge |
N. Gregory Mankiw ...
On tax reform:
At first, the idea of taxing consumption rather than income can sound like a radical change from the status quo. But the idea seems more natural when one realizes that the current tax code, while nominally an income tax, is actually a hybrid of an income tax and a consumption tax. Over the past several decades, Congress has amended the income tax many times to encourage saving. Policies such as individual retirement accounts and 401K plans exempt saving from taxation and, in doing so, move the tax base from income toward consumption. Si | |
