Which one did he see?

Devin Gordon has seen King Kong: Jackson's updated ape is still king of the jungle, but he's getting a bit long in the snaggletooth. In human terms, he's pushing 50. His jaw is offset and his right eyebrow droops from long-ago scrapes with dinosaurs. His fur is matted and mucky, with bald patches here and there from the scar tissue. And he's developing a potbelly. "Peter really wanted a sense that Kong is old and grizzled and scarred," says Boyens, "because it tells a story of being alone. And of having to survive in the most dangerous place on earth." But photos I've seen (can't find the links now!) show this version of Kong was replaced by a somewhat more-energetic ape that resembles (and I mean this) the venerable Clint Eastwood. Only a few more days and we'll know.

Link posted by Steve Antler : 5:56 AM

Friday, November 25, 2005

"Industrification?"...

In the late 1960's, nobody imagined the market-led, unsubsidzed residential rebuiliding/renewal of the US city we now sneeringly refer to as common everyday "gentrification." And now, as the NYT admits the prosperity allowing most states to rebuild their fiscal positions without being able to avoid these whining paragraph: But the good news is not universal and may prove short-lived. The Great Lakes States continue to be hammered by the loss of manufacturing jobs, and full recovery from the hurricanes in the Gulf Coast States will take years. And experts warn that even though tax revenues are rising in most of the country, demands on state budgets - particularly for education, health care and pensions - are growing even faster. it still misses the real story behind the story -- the relocation of US industrial activity from higher-cost, higher-tax geographical areas to lower-cost/tax ones: I doubt the NYT will abandon the Michael Moore "Roger and Me" model of US economic geography any time soon. What it will take, I think, is somebody somewhere coming up with a catchy name for this new American industrial decentrification.

Link posted by Steve Antler : 12:01 PM

Wednesday, November 23, 2005

The old familiar pattern...

Isn't the real problem not the original transgression, but the ongoing denial and cover-up?

Link posted by Steve Antler : 8:52 AM

King Kong: the Opera

This pretentious insult to true believers has a link to a performance excerpt (I could tolerate no more than about three seconds).

Link posted by Steve Antler : 8:47 AM

Who's your real friend?

More from the Demo/Euro/Antiglobo/MSM alliance -- and impossible to say whether it leads any- or nowhere. UPDATE: More here via Memeorandum UPDATE II: The alliance includes others as well.

Link posted by Steve Antler : 6:02 AM

Monday, November 21, 2005

Bad numbers...

Misleading data, factual errors -- from USA Today (horrors!) regarding Jack Murtha.

Link posted by Steve Antler : 5:40 PM

Nice music...

The orignal Nazi party's interest in and mastery of "modern" mass media (then, film) has been noted by many scholars. And this appears to be part of a new genre -- the suicide bomber advertisement/video. What's different, of course, is the culture. The Nazis, albeit evil, grew out of a culture that helped in great measure to develop the same movie technology they used. As they used film to advance their aims, they were active participants in modern technological culture -- not shameful parasites, using borrowed tools they could not begin to build themselves.

Link posted by Steve Antler : 6:36 AM

Corruption alert...

It now seems Jack Murtha isn't all that he appears to be.

Link posted by Steve Antler : 6:29 AM

Thursday, November 17, 2005

Depressing...

John Hinderaker: There is...an awful possibility lurking in the current Washington panic over Iraq. Our enemies gambled that the American people are soft and are not fully committed to the war against terror. They thought that the American people don't have the patience or the understanding of the stakes involved required to take casualties, especially over a prolonged period of time. They believed that if they simply remained active in Iraq, even at a low level, domestic American politics would, before long, swing against the war. The awful possibility, which seems more likely with every passing day, is that the terrorists correctly judged the American people. Not all of us, to be sure: John McCain, for example, is assuredly not soft. But, sadly, it has become clear that his view of the Iraq war (and ours) is now the minority view. The implications for the future are not good.

Link posted by Steve Antler : 12:45 PM

Nobody listens...

Because of this story, a host of alternative-energy and high cost petroleum-substitute projects are now doubtful as to their prospects for future profitability. The EconoPundit National Energy Program oil import fee of 27 cents a barrel would have kicked in this morning, stabilizing the US domestic price at $50/bbl, thus maintaining the economic viability of at least some of those projects. I'd be more upset if I didn't know how markets discount most information long before you and I get wind of it.

Link posted by Steve Antler : 6:16 AM

Wednesday, November 16, 2005

It was a setup...

Another case of entrapment of normal everyday workingpeople by serious political strategists has emerged. These hearings were designed, from the start, to make this headline possible. Legal action will undoubtedly follow. Perjury, obstruction, contempt of Congress -- who knows? When will those who don't feel it is a crime to drill for oil, earn a "profit," or otherwise engage in normal everyday business finally realize they are in a death struggle with a politico-media alliance determined to destroy them? UPDATE: Just like we said.

Link posted by Steve Antler : 9:48 AM

None dares call it tr----n...

Bush is out of the country. Bill Clinton is out of the country. And Bill Clinton says this to a world audience, outside the country. I feel like I just don't know anything anymore. UPDATE: And now, from Drudge, this little flashback.

Link posted by Steve Antler : 9:40 AM

Tuesday, November 15, 2005

Der Mensch ist vas er isst...

Does everything else (security, cultural relations, etc.) fall into place once the economics are nailed down? "First feed the face, and then talk right & wrong..."? UPDATE: Entschuldigen sie. Sorry for the bad German spelling. Please substitute "was" for "vas" in the headline above.

Link posted by Steve Antler : 5:30 AM

Sunday, November 13, 2005

Exactly when is that French guy at the head of the ECB a Frenchman, and when is he a European?

Read this carefully. Then, read it again carefully. Then, copy it to a safe place and keep it so you can refer back to it when necesary. UPDATE: Arguably the journalist who wrote the piece was home sick the week this item appeared.

Link posted by Steve Antler : 6:50 AM

Saturday, November 12, 2005

"There's a curfew. So let's take care of this while it's still light out, okay?"...

Reuters and BBC are reporting daylight rioting in the Lyon city centre. Captain Ed comments: The arrests have not stamped out the nightly riots, and neither has a heavy police presence, although the latter seems to displace the violence to other, less-patrolled areas. The French now have suspended speech and assembly rights in its capital to avoid further protest, but have shown little ability over the past two weeks to enforce it. After all, they have hardly been able to enforce the existing laws against arson. Via Memeorandum.

Link posted by Steve Antler : 2:01 PM

Friday, November 11, 2005

One more way to die in war...

I guess all the current "white flag of peace" stories have a special meaning for anyone remembering this incident. Via Memorandum.

Link posted by Steve Antler : 3:39 PM

Oy vay! Jesus Caesar? Julius Christ?

I must admit to being completely addicted to the HBO series ROME (can't wait for Sunday's episode! Only two left!) -- and while lurking in one of the HBO ROME bulletin boards I absent-mindedly went to this site and whoa! -- after a brief first reaction ("another bunch of religious cranks, right?") I thought more carefully about material like this: The Characters and their Actors Caesar : Jesus Pompeius : John (the Baptist) Antonius : Simon (Peter) Curio : Andrew Cleopatra : Mary Magdalene Nicomedes : Nicodemus (Decimus) Brutus : Judas (e.g. the traditional "Brutus sicarius" -- "Brutus the assassin" -- might easily be the historical root of the name "Judas Iscariot") (Marcus) Brutus : Barabbas (Cassius) Longinus : (the centurion) Longinus Lepidus : Pilate Octavianus (Augustus) : John (the beloved disciple) Marius (+ Iulia and Martha) : Lazarus (+ Mary and Martha) The Senate : The Sanhedrin Gaul : Galilee Rubicon : Jordan Corfinium : Caphernaum Rome : Jerusalem Italy/Ionia : Judaea And now I'm beginning to wonder whether there's really something here after all...

Link posted by Steve Antler : 2:08 PM

This just in...

Charles Krauthammer endorses the EconoPundit National Energy Programme. Or something like it. UPDATE: I don't think Don Luskin is getting on board with this.

Link posted by Steve Antler : 1:40 PM

Always remember, always stay alert...

Link posted by Steve Antler : 9:48 AM

Thursday, November 10, 2005

"This is a sick state, a state swollen into impotence"...

Disregard the award-winning and rather distasteful mixed metaphor and you'll find a useful article here.

Link posted by Steve Antler : 5:47 PM

So goes The Nation...

Howard Kurz is putting out the following advance copy to be run in the next issue of The Nation: The Nation therefore takes the following stand: We will not support any candidate for national office who does not make a speedy end to the war in Iraq a major issue of his or her campaign. We urge all voters to join us in adopting this position. Many worry that the aftermath of withdrawal will be ugly, and there is good reason to think they are right. But we can now see that the consequences of staying will be uglier still. Fear of facing the consequences of prolonging the war will be worse. We firmly believe that antiwar candidates, with the other requisite credentials, can win the 2006 Congressional elections, the 2008 Democratic presidential primaries and subsequent national election. But this fight, and our stand, must begin now. I suppose this only makes explicit what's been obvious but implicit all the way back to 9/11/2001. UPDATE: More here on who's adapting and who isn't -- so far...

Link posted by Steve Antler : 6:41 AM

Wednesday, November 09, 2005

Yesterday's explanations no longer need apply...

With my Tuesday evening international finance seminar I reviewed a twenty minute segment of this Frontline documentary last night. Interestingly, everyone agreed the documentary combined with the day's headlines would lead to conclusions precisely opposite to the puzzlingly standard current MSM approach: WHEN THE MEDIA began covering the spreading violence in France, it appeared to go out of its way to avoid the notion that Islam had anything to do with the riots or their organizers. After all, even the French viewed the first couple of nights of unrest with a jaundiced eye. A nation that experiences nationwide protests every decade over some real or perceived injustice doesn't react quickly to a few burning cars in the Parisian suburbs. France averaged 80 cars a day lost to arson this year even before the riots began, and they assumed the riots meant little. After a few straight days of increasing violence, however, the only people still believing that comforting line appeared to be members of the French government and the media, who insisted on doing everything they could to miss the story. Twelve days into the riots, even after they had spread across France and inspired violence in Germany and Belgium, the media for the most part still could not bring itself to mention the "M" or "I" words: Muslim and Islamist. The lack of even any suggestion that radical Islamists might have initiated the violence, or at least be taking advantage of it, boggles the imagination. Anyway, read the whole thing for Ed Morrisey's solution to the puzzle. Via Memorandum.

Link posted by Steve Antler : 8:15 AM

Tuesday, November 08, 2005

Oh please...

Meghan McArdle over at Asymmetrical Information says they're rioting in Paris because it is fun. Fun? Dousing ladies on crutches with gasoline and lighting them to see them burn? Beating old guys to death? Well, maybe: ...it is horrifying to consider how little most people wouldn't do, as long as the group around them ratified it, as this George Will piece attests. That's why I get a creepy feeling when I'm in a group of people all agreeing with each other, even if they're also agreeing with me. But that doesn't really answer the question that everyone is asking: is the peer group ratifying it because they're Muslim/North African, or because they're a member of a segregated underclass? I vote number two. Poor, uneducated, ghettoized people everywhere display a tendency to riot, because they have little to lose, and because they feel little part of the reciprocating bonds that hold us together in a web of mutual exchange, rather than violence. Meghan, please consider this thought: creepy feelings notwithstanding, every so often everyone agrees with each other (and perhaps with you) because what's being said is correct. UPDATE: And at No Pasaran they're claiming the French MSM is covering up a pogrom: Callers on talk radio are starting to reveal what MSM is censuring: the racist, Islamist nature of the ongoing uprising...The Socialist Mayor of Noisy le Grand, speaking on France Culture radio yesterday morning claimed that in his city women were dragged from their cars by their hair and, for all intense and purposes, stoned by rampaging youths (il a employe le terme "quasi lapidees" en fwancais). He also reported that molotov cocktails were thrown into people's homes. He then asked the Army to intervene. The host, somewhat shocked that a Socialist mayor would use such language on a live State radio broadcast, stammered for a few seconds. The reports have since slipped into a French media memory hole...On a State TV France5 talk show, an Algerian writer living in Paris expressed shock at the scenes coming in from the suburbs where jellaba clad big brothers step in to calm youths and negotiate with police. He stated that such images reminded him of the happenings in Islamist neighborhoods of Algiers circa late 80s and early 90s. These images, very common in the first days of the riots, have now vanished from French TV screens which now favor scenes involving disenfranchised youths who repeat endlessly that they are victims of unemployment and racism...

Link posted by Steve Antler : 12:10 PM

Latest from France

It is now getting dark in Paris. Keep in touch with Patrick Belton, who is blogging right on the spot.

Link posted by Steve Antler : 9:49 AM

"What's a nice Newfie kid like you doing in a place like this?"

Gwynne Dyer tells readers of Arab News exactly what his employers want them to hear: The low-income housing estates that ring Paris and other big French cities are the dumping ground for everybody that hasn't made it in the cool 21st-century France of the urban centers, and they include the old white working class as well as immigrants from France's former colonies in Arabic-speaking North Africa and sub-Saharan black Africa and from all the poorer countries of Europe. Unemployment there is often twice the national average of 10 percent. But they are not Muslim majority communities, or even non-white majority. Every ethnic group lives jumbled together in the apartment towers. The kid gangs that dominate the estates steal from strangers and residents alike and fight among themselves for control of the drug trade, but they are models of racial and cultural integration. This can be little consolation to the owners of the 28,000 vehicles that have been burned on those estates so far this year, but what is happening now is neither an intifada nor a race riot. It is an incoherent revolt by kids, many of them gang members, who would once have formed the next generation of the French working class. They are no longer needed in that role and they have no future, so they are very angry.

Link posted by Steve Antler : 9:31 AM

What the rioters want...

Over and over I hear the same thing: The rioting youths, many of whom are children of Muslim immigrants from Africa, have not given any demands. Many say they should simply have the same opportunities as other French nationals. (Emphasis added) How long is it going to take us to get the message? What they want is being communicated by their targets. First and foremost they burn cars. Easiest of targets? Maybe, maybe not. But please note these are, primarily, cars right in their own neighborhoods used by their neighbors to go to work. Or I should have said, "used by their neighbors to go to work outside the neighborhood. They are destroying the livelihood of those who have been relatively more successful at finding work and integrating into French society. I don't think the message is these people want to integrate. Second they are burning schools and community centers. Once again, their grievance seems not to be one of exclusion. Finally they are burning churches and synagogues. Enough said. Frankly, I don't see this a riot about jobs and inclusion.

Link posted by Steve Antler : 9:14 AM

Monday, November 07, 2005

In France customers bag their own groceries. Why?

Some thoughts and info on French labor laws and minimum wage. UPDATE: And isn't it perhaps the height of postmodern elitist decadence that the French and Reuters are now discussing the problem as the failure of a "model?" The world -- after all, it is all inside the heads of smart people, right? In a scene that spoke volumes, National Assembly Speaker Jean-Louis Debre -- a close Chirac ally and passionate defender of the republican model -- was shocked and almost speechless on Sunday as he surveyed riot damage in Evreux, where he is mayor. "A hundred people have smashed everything and strewn desolation," he commented. "Well, they don't form part of our universe." UPDATE: A reader from Taiwan reminds us things are different in every country and every culture: Here in Taiwan we have stores that make you bag your own groceries (of course you now have to buy your plastic bags due to government environmental regs) and also those that bag them for you or help a bit. At the same time, there is no self-serve gas. I wonder how much is simply cultural and how much is due to labor cost, since Taiwan has pretty low cost labor. I'm also trying to remember if Carrefour (French) here makes me bag it myself or not? Once Costco opens in my town, I guess I will be able to truly compare!

Link posted by Steve Antler : 9:10 AM

If you can't find a root cause, invent it...

Captain Ed suggests the French riots must be Islamist in origin: Within six weeks of the GSPC announcement, we see a massive and coordinated uprising originating from the ghettoes in which Algerian and other Muslim refugees and their families live. The "riots' have sophisticated coordination between cell leaders, using the Internet and instant messaging as well as cell phones -- an odd tool for a spontaneous demonstration where one neighborhood would hardly have those phone numbers at the ready. France (and I mean its government) is now faced with the challenge of finding or inventing a "root cause" to address. It seems almost certain, to me at least, they will soon "find" evidence of an Islamist, Al-Quaida origin of the riots, if only to avoid facing (a) the failure of the welfare state and (b) the associated failure of assimilationist policies. UPDATE: It is getting increasingly harder to feel sympathy for the poor deprived unemployed rioters. The 61 year old man one of them beat into a coma just died. I wonder how the gasoline-doused disabled burn victim is doing? UPDATE II: Given the amazingly low ratio of arrests to cars burned (what are we looking at, something like 300 arrests to 15,000 cars torched?) it boggles the mind that three arrests are for saying non-approved things on the internet. I don't think this argues well for internationalization of internet control. UPDATE III: And yet, is this perhaps the root cause? The hidden connection?

Link posted by Steve Antler : 8:09 AM

Sunday, November 06, 2005

Riots in better times...

Christopher Dickey tells part of the story: The alienation and anger in these neighborhoods is not new. Riots broke out in the 1980s and 1990s, prompting new government programs supposed to bring hope to the projects. But as memories of the violence faded, so did funding. Outreach programs have been cut and neighborhood-based police have been pulled out. "We haven't paid attention for such a long time, there is a sense of abandonment," says French Sen. Dominique Voynet, who represents the main conflict zone. Go to this page at economagic.com to get this information: FRANCE: UNEMPLOYMENT RATE 1960 1.5% 1970 2.5% 1980 6.5% 1990 8.6% 2000 9.1% 2004 9.8% Here's the whole picture: So you think we've got problems?

Link posted by Steve Antler : 9:12 AM

Three lessons from the trade summit...

LESSON #1 (learned by our South American friends): Given our current relations with China, we have lots more international trade than we really need. You don't want to trade with us? Hey, as we say here in Chicago, "no problema!" (And as a little side issue, you should probably know insults, rock throwing, and window-breaking aren't very likely to persuade us to give up farm subsidies.) LESSON #2 (learned by our friends in the Peoples' Republic of China): We love you dearly, but we may someday soon be trading with our closer neighbors -- those who can learn to do what you're doing right now. LESSON #3 (learned by President Bush): These meetings, in this modern world of rapid telecommunications, are easy to subvert and for that reason likely to be counterproductive. Don't bother with them. Ever again.

Link posted by Steve Antler : 8:49 AM

Read Marx and Wakefield for the details...

For years I've put forward the proposition that British colonialism/imperialism had basic and important cultural differences with imperialism as practiced by the rest of Europe. (Most important, for all its warts, the "British Dominions" imagined a postcolonial world of democratic near-equals.) I think this historical distinction is the most important reason why (1) a New French Civil War is now emerging, and (2) this war is unlikely to spread to England.

Link posted by Steve Antler : 8:22 AM

At the top of the schadenfreude list...

Many bloggers are drawing secret and shameful satisfaction from varying aspects of the French riots. Mine is the occasional wide-eyed MSM discovery that the term "ghetto" actually originated in Europe.

Link posted by Steve Antler : 7:48 AM

Saturday, November 05, 2005

Not that you'd really notice...

Molly Ivins is once again confusing "feelings" with "facts." (Hey, they both begin with the same letter -- it's all so dang confusing.) Anyway, Molly writes "I would like America to be a country where we spend more money on educating people than we do on the military." But as Don Surber points out we actually do spend more on money on educating people than we do on the military. UPDATE: I think Surber is getting his numbers from this report. Exactly what numbers Molly is thinking of I'm not sure, but she may be looking at the Federal Budget and in addlepated fashion forgetting about all that additional state, local, and private funding of education.

Link posted by Steve Antler : 3:46 PM

Jihad in France

The best analysis so far, with many great links, is summarized here.

Link posted by Steve Antler : 8:09 AM

Bush -- fa$ci$t, genocidal bea$t...

Glenn Greenwald's view -- from Rio de Janiero -- of Latin American response to US trade initiatives. UPDATE: Check out Jon Henke's thoughts as well. UPDATE II: What the US press seems not to know is that the anti-American economic policies being preached (always, suspiciously, in the vaguest of terms) by Chavez were mainstream orthodoxy throughout the years 1950-1985. All of the anti-market, anti-trade policies were actually tried -- and none of them worked. The region confounded virtually all efforts toward "economic development" until the mid-1980's, when deregulation and regional trade liberalization started raising incomes. Chavez' words are political only. Only the heroic young window-smashers really believe trade barriers and subsidies for "import-substituting" industries will actually raise standards of living. Anyone over 30 remembers the economic stagnation of the years before trade liberalization. UPDATE II: If this summit "fails" (as now appears may be the case) it will be taken as a major victory by the odd alliance of Chavezista/populist/anti-war/anti-market/anti-bush/anti-globalization forces. But all this might have been averted had the administration listened to one farmer's informed conservative opinion.

Link posted by Steve Antler : 7:01 AM

Friday, November 04, 2005

Purity, Cost Benefit, and ANWR

Paul Mirengoff's short essay is excellent and should be read in toto: But caribou are not the real issue. Rather, as Ben Prendergast of the American Enterprise Institute has written, caribou are a pretext of the kind used by environmental ideologues to oppose almost any attempt to develop a pure landscape for the benefit of mankind. Caribou in a desolate arctic landscape; Indian graves in a desert--any pretext will do. The real point is that humans should not gain an advantage through the exploitation of nature. It was this doctrinaire position that Senate Democrats attempted to uphold when they voted with near unanimity against developing ANWR. [This position] on exploiting the environment not unrelated to other positions the [Democratic] party has taken. During the Clinton years, for example, the prevailing view seemed to be that military force should be shunned except where (as in Haiti and Kosovo) its use would not advance any direct U.S. interest, and thus would not undermine our national purity. This aversion to gaining a public advantage at the expense of ideological purity can also be detected in the Social Security debate--thou shalt not benefit from the fact that the stock market works; the debate over public education--thou shalt not benefit from the fact that private schools work; and the debate over faith-based initiatives--thou shalt not benefit from the fact that charitable religious organizations work. The common theme here is anti-pragmatism. A workable definition of political pragmatism could be this: Public policy decisions should be made based on a weighing of concrete costs and benefits taking into account all interests, but with the interests of Americans outweighing the interests of non-Americans and the interests of living humans outweighing those of buried humans and animals... All in all, however, he misses an ironic technical point that probably tickles the fancy of only the orthodox technical economist: "absolute purity" (in our culture at least) has a virtually infinite value -- one which, to ideologues, far outweighs any of its puny associated costs. UPDATE: In the same vein, but from a slightly different angle, we have this from Robert H. Nelson: The symbolic value of great sacrifice explains why [ANWR] has become so important to the environmental movement. Its importance springs not just from the on-the-ground environmental features of the area -- many other equally desolate and isolated places are also important to some group of wild animals. The truly distinctive feature of ANWR is that by leaving it untouched, so much valuable oil would potentially be sacrificed. Protecting the area offers a rare opportunity to make a powerful religious statement. An analysis of the benefits and costs of ANWR oil development thus becomes in major part an assessment of a trade-off between two alternative "uses" of the oil: (1) as fuel for a modern economy, and (2) as a symbol signifying the willingness of society to commit vast resources to preserve a multibillion-dollar cathedral, a religious edifice requiring such large sacrifice that it would stand as one of the greatest {certainly most expensive) testimonies ever made to the glory of the faith. Yes, and by the way -- didn't Ted Kennedy once refer to ANWR as a "cathedral?" UPDATE II: And the evidence just keeps rolling in, doesn't it?

Link posted by Steve Antler : 7:06 AM

Thursday, November 03, 2005

Not intifada, but war...

One can only hope Captain Ed is wrong: The French still dither when they should act instead, sending the message even more clearly that they will not act in their own defense. The Muslim Uprising will soon become an al-Qaeda rallying point; not an intifada, as some have surmised, but an actual military front in AQ's war on the West. They intend to turn the sink estates into holy land and ensure that their bloody rule cannot be dislodged. UPDATE: There is at least one prominent scholar who agrees with this analysis.

Link posted by Steve Antler : 10:04 AM

Was Bernanke wrong?

There's lots to think about in this letter to the Financial Times. (A colleague showed me his paper copy of the issue yesterday.) Is the "Bernanke-East-Asian savings glut" the genuine article, or was it perhaps artificially created? As the correspondent puts it: ...Mr Bernanke [either] glossed over...or failed to recognise, that the local funds, which the east Asian central banks borrowed from their citizens, were not the accumulations of Asian individuals; they were the bank deposits these same central banks created when they intervened in the foreign exchange market to buy dollars...Intervention creates bank deposits, but not savings. Asian central banks issued bonds to offset or "sterilise" [the] inflationary potential [resulting from their actions]. In other words, [they] temporarily suppressed an unwanted local inflationary credit expansion that otherwise would have resulted from intervention in the currency markets to support the exchange value of the dollar...Purchases of dollar assets by the central banks transferred the inflationary credit expansion to the international financial markets. Propping up the dollar has kept Asian wages and product prices, measured in dollars, from rising as much and as rapidly as they otherwise would have. In addition, the extent of inflation has been obscured in the US by excluding commodity prices and house prices from "core" consumer price indexes. In China measured inflation has been suppressed with the aid of price controls. Nevertheless the spread of global inflation is well under way and cannot be easily stopped. The sharp price increases for basic goods such as energy, metals, iron ore, cement and shipping reflect booming global end demand from sectors that are stimulated by easy credit, particularly construction and motor vehicles. Okay, what are we to make of this? First and foremost it must be noted this interlocks almost perfectly with the ongoing and seemingly perpetual Krugman/Greider meme of upcoming dollar collapse. Supporters can claim the dollar did collapse offstage, even as Chinese onstage support made it look (to the uninformed) like nothing was happening. Second, the argument lends support to the ever-popular cult of "conspiracy-mismeasurement" -- those who insist the government is out to deceive us by, for example, excluding discouraged workers from the unemployment rate calculation, or (in this case) excluding housing and commodity prices from "core" inflation. The principle of Lucas supply has always been, for me, the bad auto accident I can't stop staring at as I drive by. I know inflation generates a multitude of costs and inefficiencies. But it can also shake things up -- sometimes to the degree necessary to create the sort of surprising spurt of real growth being predicted by Fairmodel even as we speak.

Link posted by Steve Antler : 7:47 AM

Wednesday, November 02, 2005

What? 5.2%? Give me my glasses...

Ray has at last finished this quarter's updating, re-estimation, and re-running of Fairmodel. Here are some rather striking predictions from this quarter's Forecast Memo: Real Growth and the Unemployment Rate: The predicted growth rates for the next four quarters are 5.2, 2.9, 2.3, and 2.2 percent, respectively. The unemployment rate at the end of 2006 is 4.6 percent. The jobs variable, JF, is predicted to increase in the four quarters by 2.7, 2.8, 2.4, and 2.0 percent, respectively. The reason for the large change in 2005:4 is a large predicted increase in inventory investment. In the last two quarters real final sales have grown more rapidly than real output, and the model is predicting a positive inventory correction. Inflation: Inflation as measured by the growth of the GDP deflator (GDPD) is predicted to be 4.6 percent in 2005:4 and then 4.4, 4.4, and 4.3 percent in the next three quarters. These predicted values are higher than the actual values in the past few years and probably higher than most others are predicting. If the model is right, inflation is going to be a problem in the next year. Monetary Policy: The estimated interest rate rule...is predicting that the three month bill rate (RS) will rise to 4.4 percent by the end of 2006. Other Variables: The federal government budget deficit is predicted to be around $310 billion in the next four quarters (on a NIPA basis)...By the end of 2009 it is predicted to be $395.7 billion. The U.S. current account deficit...is forecast to be around $790 billion in the next four quarters (on a NIPA basis), which is large by historical standards. Whoa! Can you say -- in a deep dramatic voice -- BOOM!!!!!

Link posted by Steve Antler : 2:45 PM

Tuesday, November 01, 2005

Static scoring?...

Larry Kudlow says: The new tax-reform package from Connie Mack and John Breaux is a classic Washington compromise between Democrats and Republicans. You can see that in the static scoring and progressivity of the plan, as well as in the way that it double-taxes interest. However, there are many pro-growth aspects to the plan, in particular in that it reduces the top income-tax rate for corporations and individuals. The plan also offers cash expensing for business investments and profit calculations on a territorial basis; slowly phases out the housing deduction; puts family health care insurance purchases on a pre-tax basis; and reduces capital costs overall. While there is no pure flat tax, or consumption tax, in the package, the good should not be the enemy of the perfect. Washington economist Kevin Hasset estimates that GDP would be 3 to 4 percent stronger under this plan, though it perhaps would be 10 percent higher under a single-rate flat tax. Interest groups are planning a tax-reform initiative to spur White House efforts to put a tax-reform plan in the next State of the Union. It is rumored that House Ways and Means chair Bill Thomas wants a big-bang package that includes comprehensive tax and Social Security reform. UPDATE: By the way, be sure to check out Larry's new spot at MSN Spaces.

Link posted by Steve Antler : 6:04 PM

Hegemony revisited...

A liberal Bahraini journalist has called for extended overthrow of Mid East regimes by the United States: [The Islamists, the pan-Arab nationalists, and the Arab regimes] are the ones who hate America. The ordinary Arab and Muslim citizens are mere blindfolded hostages in the hands of this alliance...The U.S. must respond [to the hatred against it] not by appealing to the hostages and convincing them of the good things in the U.S. – because they are incapable of seeing them even if they wanted to...They must be helped first of all by freeing them of their [Islamist, pan-Arab, and Arab government] abductors. Particularly disturbing is the author's statement (easily confirmable from many other sources) that all major sources of information in the Middle East -- including publishing, news, and the all-important non-Shiite mosques and schools -- are branches of government propaganda ministries and nothing more.

Link posted by Steve Antler : 11:55 AM

Tax complification revisited? We hope not...

Here's backround, and here's the tax panel's final report. (Tip of the hat to Bruce Bartlett)

Link posted by Steve Antler : 11:16 AM

 
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