Polls appear to be moving in a way that will surprise some. The basic Gallup questions "please tell me whether you have a favorable or unfavorable opinion" of (1) the Republican and (2) the Democratic Party suggest Americans are moving from a distinct and strong to a merely slight preference for Democrats over Republicans. The polling numbera are as follows:
Democratic Party, October, favorable over unfavorable 52%/36%. Democratic Party, December, favorable over unfavorable 46%/45%.
Republican Party, October, unfavorable over favorable 50%/40% Republican Party, December, unfavorable over favorable 48%/45%
Putting the numbers into words:
At first glance, Americans still maintain a slightly favorable view of the Democrats and a slightly unfavorable view of Republicans. However, if the pattern of the last two months holds, that will soon change. I think there is a moral to this story. Making too much of too many negatives aimed at only one party belies a bias in the media and a lack of substantive solutions in the other party. Americans are beginning to see combined efforts of the Democrats and the mainstream media as politically motivated propaganda, and they are turning on it.
UPDATE: Here are a few links (via Instapundit) that seem to confirm everything said above. Not only have the stories backfired, in other words, but the NYT seems to have anticipated the very likelihood of same and changed its behavior accordingly.
The housing market is starting to cool (home and new-home prices are no longer surging). Inflation is starting (albeit very modestly) to re-kindle (many non-housing prices are on their way up).
Get my point? The first moves everything in one direction, while the second moves everything in the other direction, which is good.
Many [Generation-Y young adults] have to rely on their parents to maintain the lifestyle they've been accustomed to. When adjusted for inflation, median salaries for male workers in their early 20s dropped from more than $31,000 to less than $22,000 in the last 35 years, according to the U.S. Census. For those in their late 20s, salaries dropped from $40,000 to less than $32,000. Salaries for women increased slightly.
Okay, first off do the Census numbers include benefits? Do they hold constant skill levels and education? (The intergenerational comparison is meaningless if, for example, there are now more low-income unskilled and perhaps undocumented young adult immigrants pulling average compensation figures more dramatically downward now than in our parents' generation!)
And think for a moment what those numbers really mean. Would you accept $10,000 to move into a world where you can't buy (at any price) modern amenities like the calculator, clean city air, the microwave oven, the home computer, cable TV, permanent-press clothing, VCRs and TIVOs (not to mention affordable color TVs), angiograms and angioplasty, services of credit cards and bank machines, noninvasive surgical procedures, cheap books, the internet, reliable/safe birth control, cars that don't break your neck during 5 mile per hour collisions -- I could go on, but you get the point.
Anyone who actually remembers 1970 wouldn't go back there for twice or three times the $10,000 being whined about in this article. Trust me, a twenty-something earning $21,000 in the year 2005 is much better off than someone of the same age earning $31,000 in the year 1970. There's simply no comparison.
Using readily available BLS data Arnold Kling has annualized five-year average annual productivity growth for all half-decades between 1955 and 2005 and arrived at this striking result: 1955-1960---2.03 1960-1965---2.79 1965-1970---2.09 1970-1975---2.31 1975-1980---1.55 1980-1985---1.38 1985-1990---1.65 1990-1995---1.59 1995-2000---2.28 2000-2005---3.39
The numbers show the average rate of growth of United States productivity during the past five years is the highest it has been for the past fifty years.
Kling calls this "the most important economic news of the year." It may be the most important economic news of the decade.
UPDATE II: And there's this. Perhaps I overstate the case, but it would seem Robert J. Gordon attributes a growing disparity between US and European productivity to -- Are you ready for this? Maybe you should sit down -- none other than WAL-MART!!!!!
I just got an email from a valued old friend. No, it's not Bill Monroe, the famous bluegrass musician on the left, but rather the guy on the right.
I doubt my buddy can rememeber why, but I date a lifelong fascination with the Shakespeare War of the Roses cycle back to events associated with this friendship.
Actually, I have been waiting for years for the final DVD appearance of the Orson Welles Henry IV adaptation, so I can gather a bunch of friends for a multi-evening screening of:(a) Richard II (BBC video if nothing better shows up by then), (b) Henry IV parts one and two (Orson Welles' "Falstaff" a.k.a. "Chimes at Midnight" -- the main attraction!) (c) Henry V (two nights for Olivier and Branaugh), (d) the BBC videos of Henry VI parts one, two, and three (unless something better comes along, and finally (e)Richard III -- Ian McKellen and Olivier, all in one night, for the genuine fanatics.
Some parties in Iraq purporting to be Al Qaeda have just announced they've launched missiles at Israel from Lebanon as part of a new offensive. As Reuters evaluates these things, this is the first instance of al Qaeda's claiming to have attacked Israel from Lebanon.
New-age activism continues to kill America's small family businesses:
The never-reported truth is that the family-owned sawmills that survived the decade-long collapse of the federal timber sale program no longer have much interest in doing business with a government they no longer trust. Most now get their timber from lands they've purchased in recent years, other private lands, tribal forests or state lands. Some even import logs from other countries, including Canada, New Zealand and Chile.
You would think environmentalists who campaigned against harvesting in the West's national forests for 30-some years would be dancing in the streets. And, in fact, some of them are. But many aren't. Railing against giant faceless corporations is easy, but facing the news cameras after small family-owned mills fold has turned out to be very difficult. Everyone loves the underdog, and across much of the West there is a gnawing sense that environmentalists have hurt a lot of underdogs in their lust for power.
For extra credit: did you notice how environmental activism increases the current account deficit?
We think the economy is relatively well insulated from interest rate hikes. The household sector is a big net creditor, so rate hikes to date haven't slowed consumption growth. The Fed itself believed monetary policy through November was "accommodative," meaning stimulative and additive to the growth outlook. Regarding energy costs and the consumer, we emphasize the bigger role played by the unemployment rate. We expect some moderation in new home construction after a record 2005. We think this will make economic growth more balanced, not slow it down. In terms of economic output, a slowdown in home construction will soften this sector's demands on labor, management, and materials, benefiting many other sectors. In terms of consumption, we think the benefits from falling unemployment are more important than asset price fluctuations. We expect home equity extraction to slow, but note the much bigger pools of financial resources available to the consumer in net household financial assets.
After reassessing the administration's nine arguments for war, we do not see the conspiracy to mislead that many critics allege. Example: The accusation that Bush lied about Saddam Hussein's weapons programs overlooks years of global intelligence warnings that, by February 2003, had convinced even French President Jacques Chirac of "the probable possession of weapons of mass destruction by an uncontrollable country, Iraq." We also know that, as early as 1997, U.S. intel agencies began repeatedly warning the Clinton White House that Iraq, with fissile material from a foreign source, could have a crude nuclear bomb within a year.
Seventeen days before the war, this page reluctantly urged the president to launch it. We said that every earnest tool of diplomacy with Iraq had failed to improve the world's security, stop the butchery--or rationalize years of UN inaction. We contended that Saddam Hussein, not George W. Bush, had demanded this conflict.
Many people of patriotism and integrity disagreed with us and still do. But the totality of what we know now--what this matrix chronicles-- affirms for us our verdict of March 2, 2003.
Gentiles are allowed to light as many candles as they want tonight! Go ahead, go crazy, just be careful with the matches! Best wishes to everyone at this happiest time of the year.
Hmmm...For whom would I never vote, not for any office, ever?
Bill Frist says: "You'll have to ask individuals who voted against that..." And Captain Ed responds:
No, Senator, you need to ask the Republicans why they voted against it -- that's your job. A real caucus leader would already have known how and why their members would vote and would have held back on calling the question until everyone had gotten back in line. Harry Reid doesn't have too many problems with bloc unity, and he can't offer committee chairmanships and votes on pet causes like Frist can. Lawyers tell you that they shouldn't ask questions during testimony for which they don't already know the answer; doctors shouldn't start surgery unless they know where the abnormality is located. It's called preparation, and we're not seeing a lot of it from the Republican leadership in the Senate.
It's apparent that Frist wants to run for president in 2008, and he wants to run on the Nice Guy Platform. That might work well in peacetime, but not when the nation is at war and issues like PATRIOT and ANWR hold so much strategic significance. The disarray that has come from Frist's leadership of the largest Republican majority in the Senate for at least two generations demonstrates his lack of credentials for both his current job and the one he wants next. The White House had better start pushing for a change if it wants to see its legislative agenda have a chance in 2006, because Frist's willpower will hardly improve under the pressure of midterm elections. (Emphasis added)
...development optimists should be suspicious of fair trade. It could diminish long-run general progress by giving the conscientious an outlet for their charity. By splitting up the market, we are institutionalizing especially poor treatment for one class of workers [as an associated external cost of better treatment for others]. Furthermore the high profits from price discrimination imply that producers will be keen to continue such segregation rather than end it.
I don't know about this. I don't share the commentator's apparent worry supermarkets may (horror!) benefit from "fair trade"-certified brands -- heck, it doesn't even bother me they may get more out of all this than the poor coffee growers. (Distribution of welfare-improving benefits is always a problem.)
The nasty thought that "fair trade" just raises certain privileged coffee growers' incomes while lowering other coffee growers' incomes elsewhere -- now that's a problem. Sounds like a credible re-appearance of our old friend the law of unintended consequences.
Renowned Chicago Democratic cheerleader Jonathan Alter (he's the guy who gave the world the phrase "hail-Monica pass" -- anyone remember?) gives web-exclusive commentary on Bush, the oval office, and the NYT editors:
Bush claimed that "the fact that we are discussing this program is helping the enemy." But there is simply no evidence, or even reasonable presumption, that this is so. And rather than the leaking being a "shameful act," it was the work of a patriot inside the government who was trying to stop a presidential power grab.
No, Bush was desperate to keep the Times from running this important story -- which the paper had already inexplicably held for a year -- because he knew that it would reveal him as a law-breaker. He insists he had "legal authority derived from the Constitution and congressional resolution authorizing force." But the Constitution explicitly requires the president to obey the law. And the post 9/11 congressional resolution authorizing "all necessary force" in fighting terrorism was made in clear reference to military intervention. It did not scrap the Constitution and allow the president to do whatever he pleased in any area in the name of fighting terrorism.
Okay, this is all well and good, and Jonathan is a respected analyst of current affairs. And he's cheering the team on, getting them all worked up to just keep going and going like the energizer bunny toward...well, toward exactly what?
Finally saw King Kong yesterday; moving, worthwhile, see it and see it again. And great essays on the subject just keep showing up.
I have only one original thought all to all of this. I think by virtue of comparison Peter Jackson's King Kong most clearly brings out sad emptiness at the center of every film project Steven Spielberg has ever touched. The warmth of the King Kong project sustains you for hours, perhaps days after seeing the film. But all those manipulative, self-congratulatory Spielberg efforts -- everything from War of the Worlds, Minority Report, A.I., Jurassic Park, hell, even Schindler's list -- what were they about? What did they mean?
We have to ask did it really matter Spielberg filmed these time-wasters when we absent-mindedly walk around the block and ponder, wouldn't it be nice if Kong were actually alive and cared-for somewhere -- maybe at a comfortable ecology park, where we could go on a sunny day and wave from a distance?
I predict a Kyoto-like internal US dispute arising over this new international accord. The only question will be "which side are you on?"
UPDATE: Check this out for a confident statement of anti-trade skepticism. Another way to summarize the essay is that its objections to those things it can't seem to mention without quotation marks -- you know, things like "free trade" and "the market" -- were fresh, exciting, and new somewhere between the years 1945-1982.
I don't care what anyone says or what anyone else does: I'm planning on seeing it three times in the theater and buying the DVD the first day it comes out.
Two graphics from Brookings suggest we may be seeing light at the end of the tunnel. First, attacks on oil installations have stabilized: Second, number of tips received from the public is growing exponentially: In light of recent news I think this last statistic is most interesting indeed.
Why isn't this promotion of certain businesses and certain kinds of business activity as corrupt as alleged Republical promotion of Halliburton, big oil, big pharmaceuticals, and so on? What am I missing?
Angry Bear has some charts and links on the new narrative of the spendthrift Republicans. I don't think you can generalize safely without (a) going back before 1970, (b) including state and local spending in the picture, and (c) taking some note of the way public spending varies with the ups and downs of the economy regardless of governments' intentions one way or the other.
Accordingly, here's total federal, state, and local spending since 1952 as a proportion of GNP -- with recessions shaded in gray. (Go here to find the data.)
So what do we learn? First, the most recent upward swing in government's share of the economy started a few quarters before the Bush presidency (dashed red line); subsequently it rose for about 14 quarters, and stabilized during the past 16 quarters. It is not "rising ever on and upward" as some seem to believe.
Second, most of the dramatic upward movements in government's share since 1952 seem associated with recessions.
Finally, since the mid-1970's combined federal+state+local spending has regularly cycled around 33% of GNP, suggesting to me this is roughly (if not exactly) what the American public want.
What's being tested in Iraq today is whether naive postmodern insistence on cosmic justice can stand up against practical political manipulation of democratic procedures like, for example, public trials. Captain's quarters comments:
A defendant has a right to attend court and face his accusers, to cross-examine witnesses and to argue on his own behalf. That doesn't equate to a necessity of the defendant to attend the trial. If a defendant refuses on his own accord to show up and exercise those rights, then the People still have a right to continue the trial. Even if the defendant does want to attend, the rights of the defendant to participate do not automatically override the rights of the People to a fair trial. Disruptive behavior can and should result in removal of the defendant from court when it becomes contemptuous of the court's authority.
Check it out, keep noting every detail. This trial shows exactly why the battle against Islamofascism is a military rather than a legal one.
Jack Black's Carl Denham runs through a list of 1930s big names, adding "Fay's a size four but's she's doing a picture with RKO" - that would be Fay Wray of the original King Kong.
UPDATE: And I have a question about the widely-maligned giant bugs. Will anyone who knows from real gorillas tell us if they are strict vegetarians, or if like bears and some other mammals they subsist on shrubs and grubs?
If the latter, it seems giant bugs complete Skull Island's ecology quite nicely. The dinosaurs live on the plants (and to some smaller degree each other) while giant grubs live on dinosaur poop and smaller plants. Kong, meanwhile, lives on larger plants and giant grubs.
I realize this makes his giant-gorilla breath less pleasant than would be the case with pure vegetarianism. But his diet would be more balanced, and this would be better for overall health and well-being, no?
After issuing a general call for the removal of foreign troops from the Gulf, where the US has military bases, Mr Bagheri referred to the American military presence in Iraq, saying Iran backed a "gradual" pull-out. (Emphasis added)
This story gives rise to a nightmare scenario. This may actually happen.
Close to Teheran, in the middle of the night, a nuclear explosion suddenly annihilates thousands, throws the nation into chaos, and sets back Iran's nuclear program by ten years.
At the UN angry delegates line up to denounce the United States, Israel, world imperialism, international Jewery -- everything -- but nobody has anything more than theories and rhetoric. Nobody really knows why the explosion took place.
In the halls of the UN, Western diplomats quietly shake their heads and wonder what really happened. Was it Iranian technical incompetence at fault? Was it the CIA, or the Mossad?
But everyone knows that even it if were Iranian incompetence the Arab nations would angrily denounce Israel and the US anyway. In reality, the truth doesn't matter one bit.
What does matter, however, is Iran no longer has a nuclear programme. And everyone quietly wonders: was this merely a large-scale suicide bomber blowing up his own neighborhood, or was it the very first suicide bomber, using one of those legendary suitcase nuclear weapons, from the State of Israel?
Brad DeLong has declared Don Luskin to be, using the expression on which Brad seems to think he possesses a trademark, the "Stupidest Man Alive."
First off, shouldn't that be "most stupid" man alive? (If I were a prestigious senior professor at the University of California I would avoid grammatical errors. Such errors can cause people to think you are, you know, more stupider than the people you're calling stupid. But anyway I digress...)
Second: congratulations Brad! You caught Don in an error similar to one of the many Paul Krugman errors he exposed! And how could you have failed to mention the irony! I suppose it just slipped your mind.
Finally: Brad, as a major and very smart economist shouldn't you know the PSID isn't anything resembling the kind of random sample you lecture Don Luskin about?
Actually, I pretty much disagree with Don's characterization of the PSID's reliability -- but Brad, heck, try to check your facts before calling someone the "Stupidest Man Alive," because when you gravely lecture somebody about a topic of which you know nothing you can sometimes make yourself look, well, uh, was that word -- stupid?
UPDATE: A reader sends this from the O.E.D. with the critical comment "Ouch! Right in the Glass House!":
Stupid adjective (stupider, stupidest) 1 lacking intelligence or common sense. 2 informal used to express exasperation or boredom: your stupid paintings! 3 dazed and unable to think clearly.
We currently have passed legislation that delays the onset of full Social Security to 68, and there is a good deal of talk that we're going to push it to 70 -- a good deal of talk in Congress. At the same time, people are retiring earlier. The average age of retirement is now around 62, which is pretty high compared to Western Europe. It's 59 in France. So, it's very likely that by the time my son retires, there'll be 10 years of no government support for retirement, which he'll have to finance himself. So, that's more than 50 percent privatizing the retirement system.
We're probably going to shift gradually, despite the opposition to it, to private accounts, which exist in some countries, which require everyone who enters the labor force to put aside 30 percent of their income into a fund to cover retirement, health care, and education. In some countries, they permit you to borrow against that fund to buy houses.
And, it's approaching what American academics have. You cannot teach in American universities without having TIAA-CREF. In American universities, you're required to put aside between 12-and-a-half and 17 percent (it varies from university to university) into this fund so that when you retire you don't end up with a tin cup sitting on the administration building saying, "I was a good teacher once, please help me."
So, that's a forced retirement system. It has the advantage over Social Security that the government can't take it away.
Secondly, 24 hours a day I can call up and find out what am I worth today. It's my money and, I can leave it as a legacy to my children or grandchildren. Not only that, everyone who did as I did, when CREF became available, and took three-quarters in equities and one-quarter in bonds, is a multi-millionaire today.
A good friend and business associate just reported receipt of a business fax including the following request: "If you don't receive this fax, please call me." (Apparently the sender is an M.D.)
It is amazing. Everything is negative. When bond yields rise, it is considered bad for the housing market and the consumer. But if bond yields fall and the yield curve narrows toward inversion, that is bad too, because an inverted yield curve could signal a recession.
If housing data weaken, as they did on Monday when existing home sales fell, well that is a sign of a bursting housing bubble. If housing data strengthen, as they did on Tuesday when new home sales rose, that is negative because the Fed may raise rates further. If foreigners buy our bonds, we are not saving for ourselves. If foreigners do not buy our bonds, interest rates could rise. If wages go up, inflation is coming. If wages go down, the economy is in trouble.
This onslaught of negative thinking is clearly having an impact. During the 2004 presidential campaign, when attacks on the economy were in full force, 36% of Americans thought we were in recession. One year later, even though unemployment has fallen from 5.5% to 5%, and real GDP has expanded by 3.7%, the number who think a recession is underway has climbed to 43%.
This is a real conundrum. It is true, bad things have happened. Katrina wiped out a major city and many people are still displaced. GM has announced massive layoffs. Underfunded pension plans are being handed off to the government. Oil, gasoline and natural gas prices have soared. Despite it all, the U.S. economy continues to flourish.
Well, partly the negative spin has to do with (horrors!) politics. But in a very real sense it is always correct to look at economic reversals in the future.
The reason the economy functions like a self-regulating machine is because it has a multitude of feedback mechanisms -- public and private -- which always force it in the opposite direction whenever it surges too strongly upward or downward. The basic price mechanism, the Keynesian automatic stabilizers (progressive taxation, unemployment insurance compensation, etc.) all push us down when we move strongly upward, or upward when we move too strongly down.
This is one reason why any forecasting model worth the time needed to understand it will always predict a "boom" or a "recession" in the far, far future (out there at the horizon where the statistical probabilities of accuracy are very low). It is also why the predicted reversal always moves forward -- like a mirage on hot pavement that dances far away in front of you at 50 mph -- when the model is updated and rerun each new quarter.
