When someone writes anything on global warming (GW) that gives evidence that we may not be experiencing GW or that CO2 is not the culprit, or that the sun may have far more impact that we choose to admit, or provides data that Earth has been through many warming and cooling cycles, they are usually attacked - not their data, their person. Goes with the territory, I guess.

My latest reading on GW is an interview with Alexander Cockburn, one of America's best known radical journalists. The summary of this article is that he's fed up with the fear mongering that is rampant among those who believe humans, CO2, etc. are responsible for GW. The following are some quotes from this review about his forthcoming book, A Short History of Fear.

While the world’s climate is on a warming trend, there is zero evidence that the rise in CO2 levels has anthropogenic origins. For daring to say this I have been treated as if I have committed intellectual blasphemy.

I have described in fairly considerable detail, with input from the scientist Martin Hertzberg, that you can account for the current warming by a number of well-known factors - to do with the elliptical course of the Earth in its relationship to the sun, the axis of the Earth in the current period, and possibly the influence of solar flares. There have been similar warming cycles in the past, such as the medieval warming period, when the warming levels were considerably higher than they are now.

This turn to climate catastrophism is tied into the decline of the left, and the decline of the left’s optimistic vision of altering the economic nature of things through a political programme.

What is sinister about environmental catastrophism is that it diverts attention from hundreds and hundreds of serious environmental concerns that can be dealt with.

The Kyoto Accord must be one of the most reactionary political manifestos in the history of the world; it represents a horrible privileging of the advanced industrial powers over developing nations. (Mr. Cockburn does not mention that the US, under former President Clinton, refused to sign this manifesto.)

The marriage of environmental catastrophism and corporate interests is best captured in the figure of Al Gore......Gore is not, as he claims, a non-partisan green; he is influenced very much by his background. His arguments, many of which are based on grotesque science and shrill predictions, seem to me to be part of a political and corporate outlook.

One way in which critics are silenced is through the accusation that they are ignoring ‘peer-reviewed science’.....Many people who fall back on peer-reviewed science seem afraid to have out the intellectual argument. (In other words, the emotions are driving decisions while debate or differences are silenced. The entire article is worth the read.)

Mr. Cockburn's book claims to be a factual, insightful while humorous read addressing human fascination with Armageddon like events. You can order his book, A Short History of Fear here.

Labels: global warming????

At a recent local political meeting, one of the MN House representatives made some astounding comments of how the MN DFL legislature is spending our money. Not only did the DFL give themselves a "hidden," tax-free pay raise in the form of increased per diem moneys, they also keep trying to raise our taxes. So far, the Republicans have been able to stop this nonsense. However, the DFL will continue to pursue "more money for ____" which needs to be interpreted as more money from us so they can control us. If we lose control of our earnings, we have lost, period. Uncovered recently is another hidden method the DFL has used to increase its power, perception of prestige, etc.

In 2007, the House DFL expanded the number of standing committees from 27 to 36, an increase of 33%.

To fund that expansion, the House DFL almost doubled the budget for committees, from $324,000 to $646,000.

The number is uncertain, because their make-up and titles shift. If one goes with the conservative number (98), then one might note that Minnesota has 98 legislative panels, 85 House DFLers, and only 87 counties.

This last comment means that there are now more committees, etc. than there are DFL legislators and MN counties.One has to wonder what these people are doing with our money. The actual cost will not appear until January of 2009, two months after the election. One would hope that Minnesotans would wake up to this abuse of our money before then

Like President Bush said in his State of the Union Message (I paraphrase): "If you are so eager to raise taxes, the IRS accepts checks and money orders from you. There is no reason to force others to pay for what you desire." The real issue is control, of us.

Labels: legislature

I'll be on Heading Right Radio at a SPECIAL TIME OF 1PM ct with Captain Ed to talk about the economy.

It appears that the state economist, Tom Stinson, has his eyes focused on the housing sector as the indicator of state recession.

Speaking Tuesday at an event sponsored by Minnesota Council of Nonprofits, Stinson pointed to slumping housing starts in the fourth quarter of 2007 and other measures indicating the state economy is less healthy than the national economy. Earlier this month, Stinson asserted the state is in a recession.

Stinson said Global Insight, the company the state uses in putting together its projections, was less optimistic in its January outlook than it had been in its November forecast.

Even after the Federal Reserve cut a key interest rate by three-fourths of a percentage point last week to stimulate the economy, Global Insight "reiterated their pessimistic outlook," Stinson said.

Stinson said some hints might emerge after December sales tax revenue, which will reflect holiday spending, and some January income tax figures become available in a few days.

Global Insights has already insisted that the recession is baked into the cake, so Stinson is following his modelers. GI had a January forecast for GDP growth for fourth quarter 2007 near zero (vs. the 0.6% announced yesterday) and is below the WSJ consensus for all four quarters. Its scenarios given to the state Council of Economic Advisors has a weight on "recession" scenario of 40%. Some of Stinson's alleged pessimism comes from GI.

The only marker I have on the state housing market and its impact on the budget would be the deed and mortgage transfer tax projections. They are currently running 5% above projections. So that isn't it. We get a second clue in a piece of an interview he gave to PBS:

This time, it looks to me like we're going to be affected a little bit more than the national average. This recession is led by a housing problem. And Minnesota's economy has the usual amount of construction. But the lumber and wood products industry is still an important part of Minnesota's economy.

And yet agriculture, forestry, fishing and hunting together contributed only 0.13% to the 2.9% growth in Minnesota in 2006 (the last year for which we have data.) True, wood product employment is down sharply, but that's about a 2,400 job loss in a 2,800,000 job economy. Do we forecast an entire state based on a sector that is half of one percent of state employment? The same would be true of residential construction employment.

Stinson does offer some advice to our local leaders who think the word recession calls for stimulus from state government:

"There isn't a lot that state governments can do in terms of stimulus," Stinson told an audience assembled Tuesday by the Minnesota Budget Project, an arm of the Council of Nonprofits. State government simply can't keep up with the feds when it comes to giving the economy a "timely, targeted and temporary" boost -- the test Stinson endorsed for a worthwhile stimulus strategy by government. The Minnesota share of the stimulus package approved by the U.S. House Tuesday will likely exceed $2.5 billion -- orders of magnitude larger than anything the Legislature, with its balanced budget requirement, can afford to spend this year.

A capital investment bonding bill is often touted as the 2008 Legislature's chance to pump money quickly into the economy. But building projects don't ramp up that fast, Stinson said. Typically, only 15 percent of a project's authorized spending occurs in the first year. "Years two and three are the big spending years," he said.

By which time the recession should be over, and thus that spending would have the potential to overstimulate.

Labels: economics, Minnesota

Language on Jan. 22:

Appreciable downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.

Translation: "Yeah, we're spooked too. More to come. Please stand by."

Language on Jan. 30:

Today’s policy action, combined with those taken earlier, should help to promote moderate growth over time and to mitigate the risks to economic activity. However, downside risks to growth remain. The Committee will continue to assess the effects of financial and other developments on economic prospects and will act in a timely manner as needed to address those risks.

Translation: "Think this might be enough, but maybe not. If it ain't we'll do it again."

Again, from the 22nd:

The Committee took this action in view of a weakening of the economic outlook and increasing downside risks to growth. While strains in short-term funding markets have eased somewhat, broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets.

Today:

Financial markets remain under considerable stress, and credit has tightened further for some businesses and households. Moreover, recent information indicates a deepening of the housing contraction as well as some softening in labor markets.

I read that as the real bias statement, and I'll say we get another 25 bp at the next meeting, and sooner than that if we get a very bad jobs report in March (next meeting of the FOMC is March 20/21, almost two weeks after the Feb jobs figures come out. I assume they have an idea what the January data will look like, after the ADP report suggested +152k.)

Labels: economics, Federal Reserve

Suppose we discover a new sport in America -- out of respect for John, let's say it's curling. And let's suppose a new curler captures the imagination of American youth. Carl the Curler. People buy t-shirts, brooms and other Carl memorabilia. ESPN decides to air Friday Night Curling matches, and they draw a remarkable 9 share on TV when Carl is on.

What happens? Young people who have wanted to be good at sports but for whom the traditional sports do not come easily, and for whom the skills of curling are held at a high level, now receive rents on their skills. Just as many young men and women have made money finishing 12th on the Nationwide golf tour thanks to Tiger Woods, people now make money curling thanks to Carl.

Isn't that the same thing as this Anne Applebaum story about the sudden presence of beautiful Russian women? She plays up the notion of Soviet women dressed like those women in the late 1980s Wendy's commercial (to show all other burgers are the same, the "models" would come out in drab outfits, while the emcee announced "evening vare" "svim vare", etc.) But now there's a possibility that your investment in beauty gets reward.

In the past, you had to play chess or be a champion gymnast to come to international attention if you were born in the Eastern bloc—chess and competitive sports figuring among the few party-approved export industries. Nowadays, stars in fields previously unsanctioned by the party—crime novelists, conceptual artists, computer whizzes—from Russia, Hungary, or Uzbekistan have a shot at fame and fortune, too. As for talented entrepreneurs, the sky's the limit.

Beauty is a matter of luck, but the same could be said of many other talents. And what open markets do for beautiful women they also do for other sorts of genius. So, cheer up next time you see a Siberian blonde dominating male attention at the far end of the table: The same mechanisms that brought her to your dinner party might one day bring you the Ukrainian doctor who cures your cancer or the Polish stockbroker who makes your fortune.

I wonder whether the Russian government, or any other government, would consider taxing the "windfall profit" that has been laid before these beauties, or those doctors, or those stockbrokers? All of them are the result of the market signal "we value X" reaching those who have a comparative advantage in producing X ... and who have the freedom to engage in trade of X.

Russian women have benefited from globalization, as have we, and for more than just some lovely eye candy while we watched the Aussie Open.

Labels: economics

If you just took the headline number -- 0.6% growth in the fourth quarter, worst quarter in five years, versus a market expectation of 1.2% -- you would think the GDP report today lays the foundation for believing recession is imminent and that the Fed's expected move to cut interest rates another 50 bp would be more in line with what one would expect in a recession (though it might not yet meet the Taylor rule expectation.) But some are noting that the disappointment is more than made up by the housing sector and a very sharp selloff from inventories (knzn refers to a near-3% growth rate in " nonresidential final sales", which I think I know what that means.)

Well, nice try. Without the foreign sector, gross domestic purchases rose only 0.2% in the quarter, and real final sales decelerated from 4% in the third quarter to 1.9%. (Which means, btw, that real final sales to domestic purchasers -- not overseas -- was lower at 1.4%.) So while we might have some explanation for missing the expectation of 1.2%, you could hardly say we should have beaten it. The very best interpretation would be that the numbers generated little new information about the state of the economy.

Moreover, I don't know that we should expect anything positive for first quarter 2008 out of the fact that inventories came in negative. As the following graph shows, firms have exhibited a desire to hold less inventories as a ratio to sales for years now, and with retail sales continuing to soften it could be argued that the decline in inventories in Q4 was planned. A negative report from the PWC survey is an argument in favor of this.


The most negative news is the possibility that productivity growth turned negative this quarter, which could mean a stagflationary period, but there needs to be some more data to verify that.

UPDATE: Yup, half a point.

Labels: economics

The Chinese Lunar New Year, also known as Spring Festival is approaching, a time for family and friends to gather together. Family members who moved to larger cities for jobs, futures, education, etc. return home to celebrate this holiday.

Unfortunately for millions of Chinese, 2008 has begun with incredibly cold weather, the worst in 50 years. Millions have suffered power cuts and water shortages as crews attempt to fix the broken pieces of infrastructure. Millions more are without water.

Heavy snows and freezing rain are shutting down much of China's transportation. 500,000 train passengers are stranded in Guangzhou while other cities are closing airports. About 11,000 vehicles were piled up on the highways in eastern Anhui Province.

So far the Chinese are maintaining their calm and the government appears to be working as quickly as possible to either ask people to forego their trips home or provide temporary shelter. At present, deaths have been quite low.

We hear so much about the dangers of global warming but the real danger is global cooling. When bitter cold hits (as we are experiencing now in MN), it can become dangerous to have skin exposed outside for more than a couple of minutes. On a more massive scale, global cooling shortens farming cycles therefore decreasing food supplies. It also makes it more difficult to dry grains resulting in rot or bacterial growth that is harmful to humans. Global cooling means trees don't grow as far up mountainsides. When people have no heat, they huddle together, increasing the chance for the spread of disease.

Perhaps it is time we look at options for global cooling instead of buying into the leftist mantra of global warming. If severe cold continues over the next decade or so, we will have major adjustments to make. This winter has been rough in many places on the planet. What is our real issue? Warming or cooling?

A must read book: Unstoppable Global Warming Every 1500 Years

Labels: global warming????

Several bloggers were invited to speak earlier this evening with Senator Norm Coleman about his upcoming campaign for re-election. It was a small and fairly informal affair, with Coleman holding forth with a group of about six bloggers that I heard for approximately thirty minutes. I heard Mitch, Michael, and Drew on the call. The campaign intends to make these a regular part of their schedule going forward.

The campaign put up a new video today, the first of what they hope to be many positive campaign ads highlighting Coleman's record. This one discusses some constituent service for a couple adopting a child from Haiti. There was some discussion of whether they would run more positive ads or ads contrasting Coleman from Al Franken or Mike Ciresi, but all I learned from this was that they had a plan to have both running and that some will go to TV. There was no commitment to when this would happen.

Both Coleman and campaign manager Cullen Sheehan emphasized that there was an uptick in small donations and in volunteer activity, indicating increase in activity. In response to questions about the mood of the base, Coleman pointed to low voter turnout in GOP primaries thus far but thought the issues were so important to people that we would see a response. We need independents to win, he stressed, and we have a way to go.

Questions were asked first about immigration. Coleman felt that the Bush SOTU speech had stressed the right balance about both respect for the law and for our country's highest ideals. Not a path to citizenship that allows anyone to jump ahead of legal immigrants, and nothing that would go ahead of actually securing the border first. Coleman understood that voters did not trust the Senate on the issue and this needs to be fixed, but he also felt that people want to be able to work and not live in fear. Common ground exists, he thought, in first fixing the border and then having people agree on the speaking English, paying taxes and holding employers responsible for hiring legal immigrants. I did not hear enough of how to get from those to the desire to have people not live in fear, but what I heard was stronger on immigration than some have portrayed as Coleman's position.

I asked about the stimulus package and his plans. He gave the standard answer on what I call 3T Stimulation (Timely, Temporary, Targeted) and that he felt all would come together and pass the plan by 2/15. Whether it stays identical to the House bill isn't as certain. He also gave a focused answer on housing, arguing for the Bush position on fixing Fannie and Freddie, modernizing FHA, etc. We cannot have plans like Barney Frank's plan to introduce greater regulation in credit markets, because it would end up denying access to credit to people wanting, for example, to buy their first homes. In five to seven years, he said, people may complain about lack of access to capital. The worst, he felt, would be to raise taxes.

He closed with a rather passionate defense of his position with the base, quoting the 80% rule about who to vote for (as my friend Gary says, your 80% friend isn't your 20% enemy.) I paraphrase here, but I think the line he used was "Leadership is sometimes moving in a direction that people don't yet know they need to move." The last election was not a rejection of conservatism, and on the key issues we agree. He left us with a story that comes from a Charles Swindoll book (I knew I had heard it before, but had forgotten where and had to look it up tonight.) His side was the one with the "Yes" face.

Labels: Coleman, politics

UPDATE and BUMP: This evening, the Drudge Report has linked to a story featuring the NOW remarks discussed below.

***
Originally posted on 1/29/08 at 12:06 pm:

The aging and increasingly irrelevant old guard "feminists" pretend they are interested in women's rights while ignoring the second class treatment of women in so many non-western nations.

NOW (bad pun) they are having a hissy fit because, gasp, Senator Kennedy and other Democrats have decided to endorse Senator Obama for president.

Their whining comes in two flavors: Only women are bullied by men; and guys NOW once supported are backing Obama.

Bullying:

We've all witnessed scenarios where, on the playground little girls are being taunted by little boys while both girls and boys stand idle, afraid to speak up or even cheering. Or, in the workplace males tease young and older female co-workers; make obscene gestures, inappropriate comments, laughing and expecting (often correctly) that everyone will join in...

Because they can't frighten Hillary they've decided to control her with the time-old trick of patriarchal ridicule.

Did you know that only women are picked on by bullies on the playground? That only women are harassed in the workplace? That girls NEVER, EVER pick on other girls or isolate other women who are different. No, it's all a patriarchal conspiracy. These are such biased comments.

Men do not really support women:

Women have just experienced the ultimate betrayal. Senator Kennedy’s endorsement of Hillary Clinton’s opponent in the Democratic presidential primary campaign has really hit women hard. Women have forgiven Kennedy, stuck up for him, stood by him, hushed the fact that he was late in his support of Title IX, the ERA, the Family Leave and Medical Act to name a few...

And now the greatest betrayal! We are repaid with his abandonment! He’s picked the new guy over us.

What NOW and the other old "chickens" refuse to recognize is that their duplicity has come home to roost. These chickens refused to stand up for their professed ideals when it was clear they were being used. They thought that they could curry favor by ignoring bad behavior when their favored politicians exploited women. They tried appeasement. It doesn't work. The men who used these women to protect against the consequences of their abhorrent behavior are showing their true colors. The naivete of NOW is on full display as they profess to be shocked and betrayed (with exclamation points, of course) by their own.

What NOW really misses is that women need equal opportunity, not politically enforced "equality" of outcomes. We differ in skills, talent, drive, etc. Trying to make everyone equal only works in totalitarian societies where equality becomes massive poverty for most with a few elites lording it over everyone.

If NOW had been serious about its objectives (versus operating under an illusion that they would gain power by siding with leftist politicians), they would have kept their organizations open to women who had real ideas. They didn't. Now, they only whine, moan and complain - to deaf Democrat ears.

Hat tip: Kathryn Jean Lopez, National Review Online

Labels: Feminists

The House has passed the stimulus bill.

The plan, approved 385-35 after little debate, would send at least some rebate to anyone with at least $3,000 in income, with more going to families with children and less going to wealthier taxpayers.

It faced a murky future in the Senate, though, where Democrats and Republicans backed a larger package that adds billions of dollars for senior citizens and the unemployed, and shrinks the rebate to $500 for individuals and $1,000 for couples.

Now we know why President Bush said in the SOTU last night that

...my administration reached agreement with Speaker Pelosi and Republican Leader Boehner on a robust growth package that includes tax relief for individuals and families and incentives for business investment. The temptation will be to load up the bill. That would delay it or derail it, and neither option is acceptable.

So what is that point about? Just that the Senate wants to bust that agreement.

Expanded unemployment insurance appears to have a good chance of being added in the Senate. This element was dropped from the House package under a deal House Speaker Nancy Pelosi (D., Calif.) made with House Minority Leader John Boehner (R., Ohio) to get tax rebates for millions of people who don't earn enough to pay income taxes.

Another change being discussed in the Senate would expand eligibility for rebates to about 20 million senior citizens who don't qualify under the House plan. Senate Finance Committee Chairman Max Baucus (D., Mont.) and others on his committee have raised concerns about this group being left out because they lack the $300 in income-tax liability or $3,000 in wages required to get rebates under the House plan. Expanded eligibility would require other modifications to keep the package under the $150 billion limit.

On the Republican side of the aisle, some senators would rather not have an upper-income limit on who could receive rebates, an element of the House plan that Democrats there say is essential. In addition, many senators are pressing for expanded funding for food stamps, which was dropped in the House negotiations, as well as aid to states and spending on public-works projects. There's also a push in the Senate to expand business tax breaks, particularly to let companies carry back operating losses from this year, to gain refunds on previous tax bills.

Senators appear to favor the increase in loan limits for Fannie Mae and Freddie Mac in the House package, as well as modifications to the Federal Housing Administration.

There are arguments for some of the Senate provisions (see for example Menzie Chinn's support for the extended unemployment benefits) but I think the arguments are mostly secondary. What appears to be clear is that the $146 billion is where the bidding has stopped and if so I doubt the remaining issues will prevent this bill from reaching Bush before the stated deadline of Feb. 15.

Of course, if tomorrow's Q4 GDP number is negative, we may see an attempt to increase the size of the bill. As Chinn notes, there's a notable lack of demand for U.S. assets overseas, and pushing up U.S. rates by expanding the deficit would be counteraction of the Fed's moves.

Labels: economics

I held many jobs while in college, one of which was for an auctioneer. In any auction, as you know, you pay not your reservation price but the reservation price of the next-highest bidder plus whatever the increment was. The difference between these is your consumer surplus (if you are the winner.) One thing in a live auction you observe are auctioneers trying hard to keep that increment as large as possible -- the larger the increment, the more of that surplus that is transferred from buyer to seller. Inexperienced auctioneers tend to reduce the increment more quickly, based on my own experience. (I briefly contemplated a career as auctioneer, but Col. King just sounds strange.)

The New York Times has a blog post on the consumer surplus earned by eBay and its consumer surplus, which appears to have reached $19 billion in 2007. (h/t: Mark Perry.) The average winning bid is $4 below the winner's reservation price, and the average auction price is $14. One think that has long bothered me about eBay is the inability of the seller to control the increments at which eBay moves up the bidding. To work well, eBay has to be attractive to sellers, since it's their products that bring buyers to the website. You would think eBay would have some interest in allowing sellers to capture more of that surplus. Perhaps this is why more sellers are interested in a fixed-price sale (towards which eBay is moving its business strategy.) Controlling the increment on the auction might make that format more attractive still.

Labels: economics

It was thought by most individuals on campus that quick, forceful action on the appearance of vandals on the campus would lead to eventually good press. What we get for our efforts instead is an AP reporter running a story that reaches as far as the L.A. Times titled "Racist Displays Persist at Minn. College." (The PioneerPress at least gives us a little more credit: "Swastikas, other displays undermine St. Cloud State's efforts.") The writer dredges up our past bout with an anti-Semitism lawsuit and wonders how a court-ordered settlement that includes a state-funded Jewish Studies program could not solve the perceived problems of the campus.

The writer, Patrick Condon, is an AP writer who usually covers the Minnesota Legislature and state politics, and his writing indicates a great unfamiliarity with the personalities of SCSU. He uncritically quotes our Buster Cooper as "retired faculty", who is once again peddling his letters discouraging minority students from attending here. All to assist Condon to perpetrate a stereotype of St. Cloud and this university:

That was before a frightening six-week stretch in November and December when vandals carved or scrawled more than a dozen swastikas and other racist images on campus walls, elevators and bathroom stalls.

The spate came as a setback to this central Minnesota university, which has spent more than $1 million, thousands of hours and untold energy in recent years trying to undo its reputation as hostile toward racial and ethnic minorities, an image so entrenched that some refer to the surrounding town as "White Cloud."

Frightened, mind you, by graffiti. So what did this "Voices of Resistance" (required!) get you, President Potter? And toward what end does Condon work when he first uses the "White Cloud" smear and then reminds us of the influx of Somali immigrants?

Nor does advertising help. We noted in 2002 that all our efforts to remedy the anti-Semitism case of the time only bought us bad press. I wonder if President Potter, or any other administrator, had read those posts or former President Saigo's letters and the lack of good press we received. Perhaps then this administration would know that appeasement never buys you any peace with the drive-by media.

Yesterday's St. Cloud Times included a column by local lawyer John Reep, which noted the folly of our campus' efforts and suggests a different course of action:

We should stop reporting minor vandalism as hate crime and reserve that designation for more serious events. If we don't report, we should be able to stay off the evening news in Minneapolis.

Too late for that.

We can't control other news outlets, but our local media should be more selective in covering these stories. The continued coverage of every minor event lends credibility to that event, and actually contributes to an atmosphere of fear and intimidation that nobody wants.

Really, nobody wants this? Once again I ask, cui bono?

Labels: higher education, Media, SCSU

Now available for pre-order on Amazon

19-0: The Historic Championship Season of New England's Unbeatable Patriots: Books

Brady delenda est.

(h/t: Bob our crack weather guy.)

As many of you now, we don't watch television. However, I do work out and every once in a while I pay attention to the TV. Sometimes it's worth it, sometimes not.

This morning was worth it. Much of the mainstream media (MSM) focuses on most anything that portrays our soldiers in a bad light, ignoring all the good they have done. Today's story, on ESPN, was about Nick Madaras, an Army PFC, who was killed in Iraq in September of 2006. His death was a very sad event but his zest for life will continue in his hometown of Wilton, Connecticut and all over soccer fields in Iraq.

See, Nick was a gung-ho soccer player from his youth. He played soccer, he refereed soccer, he coached soccer - he LOVED soccer. Summer, 2006, when home on leave, he'd expressed a desire to get soccer balls to Iraqi kids upon his return there. Nick didn't know but his legacy began with his obituary when his dad had mentioned Nick's desire to collect soccer balls for Iraqi kids.

A Korean Vet, Ken Dartly, saw the comment, tracked down the parents and set up a "goal" outside an American Legion post to collect soccer balls from residents. Their aim was 50 or so. Well 1500+ soccer balls later, PFC Nick Madaras has his name in indelible marker on every soccer ball that his home town has shipped to Iraq.

The US Army distributes the balls to kids who rush towards the American trucks shouting, "The Americans are here. The Americans are here!!" (Don't see that on the news.) Now all over lots in Iraq, PFC Nick Madaras' dream has come true. Even the girls were given soccer balls.

Thank you to Nick's family for their sacrifice, the Wilton American Legion and all those who contributed to this terrific project. This is what Americans do.

Labels: Freedom, US Soldiers

The Kool Aid Report has changed its banner in a way the Mayor approves. All other MOB blogs displaying Giant logos on their banners will also be noted here.

From our university email list over the weekend, another report on a "bias-motivated, hateful act" (not a "hate crime" this time) on our campus.

Shortly before 2:30 p.m. Thursday, January 24, 2008, University officials were alerted to the marking of a swastika and a partial swastika on an interior wall of a stairwell in Shoemaker Residence Hall.

Assuming we know the distinguishing features of a "partial swastika"... But what is really interesting is the next paragraph, which I reprint in the type used:

RESISTANCE REQUIRED!

All members of the SCSU community must respond to another hateful threat to our learning environment. Every voice of resistance is needed IMMEDIATELY. If you have seen or know anything about these acts or persons committing such acts please call Public Safety (320) 308-3333.

What "resistance"? It might be tempting to have fun with this in the sense of wearing berets and sounding like LeBeau on Hogan's Heroes, but the next word, "required", is ominous. Required by whom? What are the penalties for failing to meet this requirement? One faculty member on the campus, reacting to the comments on a letter at the St. Cloud Times this AM, suggests that this is why we need racial issues courses in the curriculum. But we already require nine "diversity credits" out of 120 needed for a bachelor's degree. If it turns out the perpetrators of this are in fact students, what's to be done? Increase the number to 12? 18? Sounds like the Racial Issues Instructor Full Employment Act of 2008.

The Resistance Required tag is inappropriate in a public safety announcement. It smacks of vigilantism. It smacks of thought control, that all of us must act from some centralized control. Once centralization happens, it becomes used by our academic left for infiltration of other forms of indoctrination. On the university's new site called "Voices of Resistance", which was to inform the campus about these incidents, we have advertising of faculty talks on Hurricane Katrina and Martin Luther King. Is it out of bounds for me to suggest that these faculty are using the incidents to further their own agendas? Is it too much to ask "cui bono?" from exhortations that "every voice of resistance is required immediately"?

Meanwhile, as of the time of this writing, I have not seen a campus safety alert on this:

A St. Cloud man was attacked and robbed by multiple suspects shortly after 6 a.m. Sunday.

The man was approached by seven to eight men while walking home from St. Cloud State University on Fifth Street South. One of the men struck him in the face, knocking him to the ground, according to police reports.

The other men began punching him while he was on the ground and one of the assailants took his laptop computer and brown book bag.

The victim escaped his attackers and contacted police, but was unable to give a description of the suspects. The victim was taken to St. Cloud Hospital and treated for injuries.

Nor has "resistance" been "required", nor has there been any calls for changes in the university curriculum like a self-defense course, let alone some consideration of allowing students concealed carry to protect themselves as they return home.

Ask again, cui bono?

Labels: higher education, SCSU

Many years ago in New Hampshire there was a scandal of legislators staying in the capitol, Concord, for days upon days. The state law at the time said they were paid $3/day and if they could stay longer, they made more. Article 15 of the state constitution was changed in 1889 to say you could make only $200 per two-year term. Later on, the constitution was changed to limit the number of days legislators could take mileage (to a 90-day limit in 1960, t0 45 days in 1984, where it remains.) The Legislature of the state may call itself into special session by petition of 2/3 of each house if it wants, but there is not a dollar to be earned for the bother.

I would suggest that Speed Gibson take this then as a model for a new constitutional rule to Sen. Lyndon Carlson: We'll fix your pay, no per diem, and no extra money for staff, limited number of days for mileage, and in turn you can have special sessions on your own time as often as you can get 2/3 majorities in both houses to sign for them.

The very thought should be enough to get Rep. Tschumper to hug his cows rather than chasing his per diem.

Labels: legislature, Minnesota

Chad the Elder, resident of St. Louis Park and most voluminous writer at (if not mastermind of) Fraters Libertas, has watched his city engage in an attempt to be really cutting edge in its mad rush to soft socialism -- solar wifi. Here are pictures of the plan to put little antennas and solar collectors around the suburban Minneapolis city. Note: all pictures taken on a sunny day. Not sure if sun was the problem or not, but the city now announces that it must scrap the plan. It appears to be $800,000 or more invested in this project, for which they have about 200 families hooked up (not on solar, alas) and news reports indicate that another $3 million might be needed to get the poles transferred to the city so they might complete the project. Chad argues instead to keep them as monuments.

I think the city should keep the poles and panels that dot our city landscape as a reminder of the futility of government getting involved in areas far outside their legitimate scope and trying to provide service that isn't needed. Let them stand as a reminder for the next time some "enlightened" civic leader proposes the next half-baked scheme to improve our quality of life. Especially if it sounds "cool"...

The story isn't very new, of course: Like so many other projects, Tim Wu demonstrates, wi-fi has been almost as incapable of busting the last-mile problem of internet delivery as any other alternative to DSL or cable. The cities cannot really build the systems themselves, nor do they want to: They seek a shared ownership with the private sector. The only thing relatively unique about SLP's attempt was the government putting a green spin on this to either make it sound cool or gain political support from environmental groups that can get you a band of door knockers whenever you need them.

Labels: economics, Minnesota

... we have Peter Fritz, the Carleton student involved in a fracas with Al Franken who Janet discussed here, and Ron Carey of MnGOP on the Minnesota caucus process. And a few wolf tickets will be sold to Mrs. MDE after her Packers failed to deliver Favre to Glendale. Go Big Blue.

Listen in on AM1280 the Patriot live, or pick up the podcast later next week (we seem to be back to a good pattern with coverage there.)

Labels: Final Word, NARN

I hear a lot, given how much I'm around the radio and blogs, but I don't write much. And my guy is already out of the running. So those who watch this and hear caterwauling about the apostate McCain, and who know a little economics, can simplify this a bit. If there's any other candidate one thinks will win against the Democratic nominee, I expect that candidate will win. Every time someone says McCain is the most favored Republican among non-Republicans (including the NYT endorsement), the more solid is his claim "I'm the guy who can keep her out." If Rudy hits the wrong note in Florida, McCain's claim is stronger. We can assume the Republicans would rather win with the apostate than lose with the disciple.

So far, the polls are McCain's best argument for the nomination.

And regarding McCain and economics, let me simply say that Secretary of the Treasury Phil Gramm = WIN.

Some curious bug has been running around the office, and yesterday was my day for it. Utterly miserable. I managed to get up for 30 minutes on Mid Stream Radio (I will have to listen to hear if I made any sense at all) and then went back to bed, and slept through to 7pm. Ish.

Meanwhile, the powers that be have gone ahead and announced that the economy will receive stimulus, much like the shock paddles you see in a TV drama with the guy about to die on the ground and the hero or heroine shouting "Clear!" from his or her knees hovering overhead. (Particularly bad when the guy seems to only have the flu.) I have been providing for the most part the standard analysis -- that the research says something like 2/3 doesn't get spent, and that somehow giving money away to consumers is wasted. And I agree in large part with John Palmer both that the Ricardian story is oversold and that the timing of stimulus is likely to be bunged up.

Let's suppose the recession began in December. Since WW2, the average length of a contraction or recession is 10 months. Now let's suppose this morning's report in the Wall Street Journal is correct that this bill gets through to the President's desk and that the IRS moves with uncharacteristic speed and gets rebate checks out to individuals in May or June. How long does it take for it to show up in spending? Those who are credit-constrained might spend that money in Q3, but the rest if at all not until Q4, when the recession would be predicted to end anyway.* (John points to Bruce Bartlett making the same point, and Ironman has it with full detail.) And this is the most optimistic scenario we can come up with. CBO Director Peter Orszag says it succinctly,

Stimulus delayed is stimulus denied, and could even prove unnecessary and potentially counterproductive if delayed so long that it takes effect after the period of economic weakness has passed.

So watch the timing on this thing.

Greg Mankiw is suggesting still that we have slowdown but not recession and so the stimulus is not needed yet, and that the monetary policy moves should be the tonic. Paul Krugman disagrees, but dislikes the stimulus package anyway. I argue that the ability to target the stimulus towards the poor via unemployment benefits is unlikely to work, and that temporary food stamps don't really give you much help in non-food areas.

As everyone now knows, I'm not persuaded to the recession-in-December story yet, though I'm waiting for the jobs re-benchmarking in March and some income data before I am fully convinced either way. I will say though that those who say this is "a big waste of funds" are somehow saying money given back to consumers by the government is a bad thing. Regardless of how you use it, it's better for you to decide what to do with your money.

*UPDATE: Found this noted by Mankiw that the checks would take a couple of months to process, so some would not arrive until August.

Labels: economics

For those who do not know, Carleton College in Northfield, MN was the employer of deceased former US Senator, Paul Wellstone. As with most college campuses, the majority of its students and staff lean left. A special election was held January 3, 2008 for a MN State Senate seat. The DFL candidate won by a rather large margin. Key votes came from the Carleton precinct. Al Franken, former comedian and candidate for the DFL Senate challenge to sitting US Senator, Norm Coleman, held a rally the night before the election.

After the rally, students posed for photos with Mr. Franken's. Apparently his treatment of one of the conservative students, Peter Fritz, was less than what one would expect from a US Senate candidate. I know Peter. He is the epitome of a knowledgeable, responsible, articulate, intelligent, polite young man. He treats all with respect. According to this write-up in the Mpls. Star Tribune, the same cannot be said of some DFL students nor Mr. Franken. For the record, Carlton does not have a GOP group. If you read the article, you can spot the unwarranted snide comments made against Peter.

Labels: politics

From a campus email:

Associated Press reporter Pat Condon and a photographer spent a day last week on campus to develop an in-depth story on the bias-motivated vandalism and hate crimes experienced by St. Cloud State. The University helped with arrangements for one-on-one interviews with students, faculty, staff and members of the community and provided the reporter with contact information to facilitate telephone interviews. The reporting team also conducted random interviews with students and others across campus and in the community.

Associated Press expects to release the story this week, probably on Wednesday.

Not that we should bury it, but given the coverage we're getting, do you really want to encourage this? You wonder if the President is happy with the local paper referring to actions on campus "stirring fear"? And why do you continue to call it hate crimes when you still have not identified a suspect, let alone the suspect's motivation?

Depending which side of the political spectrum you choose, you will agree or, gasp, disagree with Mr. Theo Caldwell, a writer whose article on American presidential candidates appears in the December 26, 2007 of Canada's National Post.

The summary is this quote: "To wit, none of the Democrats has any business being president." His reasoning is not that the Republicans are without flaw but there simply is no depth, experience, achievement, leadership etc. on the part of the Democrat candidates. He provides succinct detail to support his conclusion.

However, getting people to understand that the Democrat candidates are proposing just more of the same, socialist, empty "we'll take care of you" (aka "we'll take all your earnings") programs, is another issue.

First read the article I wrote, then read the headline. Ask yourself -- did I say we're not in a recession or did I say we don't know yet? The final paragraph...

I am not saying that those who have called the state economy to be in recession are wrong. I mean no criticism of the state economist, who may have more data (and more recent data). And I do not make light of the fact that certain segments of the economy have experienced some turbulent times. But the word "recession" describes not sectoral decline, not a series of anecdotes, but an experience broadly shared. I simply argue that the case is not yet proven.

The headline: Economic signs don't point to 'recession'.

Of course, it could be I find enough data in the next few weeks to agree with others who say we are. That headline doesn't help my credibility one bit.

Labels: economics, Minnesota, St. Cloud

...then children are the second.

A moral cloud hangs over our candidates. Just how much today's federal policies, favoring the old over the young and the past over the future, should be altered ought to be a central issue of the campaign. But knowing the unpopular political implications, our candidates have lapsed into calculated quiet.

(h/t: Craig Newmark.)

Labels: politics

During my next-to-last segment on KNSI this AM we got word that the Federal Reserve had cut the Fed funds rate by 75 bp. Admittedly, that got me excited; I have been wracking my brain looking for similar cuts. Most seem to focus on the 50 bp cut in April 2001 which, James Hamilton notes, turned out to occur one month after the business cycle peak.

(Wouldn't you know it? My letter to the editor on the question of Minnesota's recession and some rather sensational comments from our local editor was just accepted last night. Had I waited two days, maybe I write something different.)

I like what Paul Krugman says here regarding Bernanke's study of the dithering of the Bank of Japan and the long malaise that followed its bubble. It does argue for the Fed to move very quickly. Some have pointed out this paper Bernanke wrote with Kenneth Kuttner in 2004 in which they found substantial effects from pre-emptive cutting in the U.S. on the stock market. In the 2001 case, the Fed cut rates about four weeks before a regular FOMC meeting, and then cut another 50bp at the meeting. (On October 15, 1998, they did an intermeeting cut of 25bp and then followed with another 25 at the regular meeting on November 17.) So it seems most likely the Fed would cut again next week.

I'm reminded though of another, more famous paper that Bernanke wrote with Michael Woodford more than ten years ago (link goes to a draft copy at NBER -- the actual paper was eventually published in the Journal of Money, Credit and Banking.) Alan Blinder discussing it later in his Quiet Revolution refers to them emphasizing "the imporatance of the central bank using its own inflation forecast rather than relying on the market's, which, in the context of their model, is the only way the bank can maintain its independence from the market." (p. 74) Without it, the market cannot find a unique equilibrium. We do not permit the Fed to be independent of government just to become a slave to financial markets; the reason they get independence, Blinder argues, is that we want central bankers to have longer time horizons. If the Fed always tries to stall the bear whenever it roars, it eventually creates instability.

It's worth noting that the move wasn't unanimous, as noted inflation hawk William Poole dissented from the majority. In a speech he gave last September, Poole argued that while recessions are important, they aren't prevented by adding to inflation.

A central bank cannot fix the level of employment or its rate of growth, or the average rate of unemployment. However, the central bank can contribute to employment stability. Avoiding, or at least cushioning, recessions is an important goal. This goal should not be viewed as in conflict with price stability. The most serious employment disaster in U.S. history was the Great Depression, which was a consequence of monetary policy mistakes that led to ongoing serious deflation. Similarly, the period of the Great Inflation saw four recessions in 14 years. Price stability is an essential precondition for overall economic stability.

I believe that part of the policy strategy ought to be to convey as clearly as possible to the market what the central bank is doing and why. A policy strategy that is a mystery to the markets will not serve the central bank well. (p. 6)

If the move had been inflationary, I thought we would see a rally in commodities, but so far it has not happened (save for gold.) So while I thought the move was quite a pre-emptive strike (had I not been on-air I might have issued Dan Drezner's words), so far it appears the Fed is on the right side of stabilization so far. Maybe they have it right that inflationary expectations are "reasonably well-anchored" and I'd like to think, as Hamilton did, that the Fed has just said it sees a recession, but this post on the Fed's own model's probability of recession -- less than 50-50 -- fits mine, and I think I would have voted with Poole if anyone bothered to ask me. Not that they should.

It would be highly unlikely in this environment for the government to stop the rush to stimulate. Peter Orszag reviews the evidence presented at the Senate Finance Committee meeting today. You do wonder, don't you, how things appear to require such drastic measures in the USA while things are so good elsewhere?

Labels: economics, Federal Reserve

Interestingly, the American Economics Association last year decided to ask a committee of its own membership to make recommendations about how to allocate the Association's own portfolio, worth $18 million. Changes were made last April; the results showed the association made 10.2% on its investments, beating the S&P 500's 5.5%. But they did this by changing the mix of investing from 65% stocks/35% bonds with small (10%) European and Pacific stock diversification to 85/15 with a 30% international stocks. So some of that gain comes at greater risk with equities, though with arguably more geographic diversification. I wonder how it's done in the choppy markets this month? (Source, Chronicle of Higher Ed, subscriber link.)

Labels: economics

...it would be that firms are not the champions of free enterprise. It is the outsider, the poor, the immigrant who benefits from them. Andy -- who after this post might need a better title than ex-Mayor, perhaps Chancellor of the Apple -- discovers that organized businesses are just fine with an increase in the gas tax.

The Chamber did not side with the already over taxed and over burdened Minnesota businesses and consumers, but instead want the Government to tax and take more money out of the economy by making goods and services even more expensive.

Should this be a surprise? No. Businesses routinely engage in rent-seeking. Making roads cheaper to use, and having others pay for them, is enhancing to their bottom lines. If it raises taxes to where outside firms are not inclined to come to Minnesota, all the better. It reduces competition for their goods they sell (if they sell largely in-state) and for the labor they hire. They are happy to pay higher taxes and charge higher prices, if they do not face outside competition.

Sometimes rentseeking is easy to spot, like the Amazon story from France. Sometimes rent-seeking leads to capture of bureaucracy. There's a story in the Chronicle of Higher Education this morning (subscriber link) about an audit showing that the National Institute of Health doesn't monitor financial conflicts of interest among biomed researchers. And those researchers don't want the NIH looking at them. The NIH's response? "We're not a regulatory agency."

It isn't a matter of Minnesota being unfriendly to existing businesses that will help Minnesota consumers and taxpayers. What we want is for them to be friendly to new businesses looking to innovate and grow and employ and invest. Is there any reason why you'd expect existing businesses to do that?

Labels: economics, Minnesota, taxes

I'll be on Captain Ed's Heading Right Radio in about 25 minutes.

And for those of you who missed me on KNSI's Morning Show this morning, you can try again tomorrow and Wednesday.

Labels: KNSI, Media

I have argued for years with people that they misunderstand Paul Krugman. He hasn't changed, only his subject matter has. When he writes about economics, I don't see nearly the degree of Today he posts on stimulus packages, and there's much sound analysis within.

The big problem with attempts to provide temporary economic stimulus is how to ensure that the money gets spent. As Milton Friedman pointed out 50 years ago, consumers tend to base their spending on “permanent income” — the income they expect to have over the long run — rather than their income in any given year. So an $800 check from the Treasury tends, other things equal, to be mostly saved rather than spent.

Seems I heard this somewhere before? So yes, I occasionally link to posts that agree with me. Vanity is a powerful motive. But he delivers the best point at the end. Arguing that there are those that don't have savings and therefore will be most likely the ones spending the money, he says

...if you want a stimulus plan to actually affect demand, it should focus on people likely to be liquidity constrained and on sustaining government spending.

But — you knew this was coming, didn’t you? — it seems that the Bush administration wants to restrict the plan to income tax rebates. This means excluding the people most likely to be liquidity-constrained — because people having a bad year probably won’t owe income taxes that year — and shying away from any aid to direct government spending.

The point is that the debate over exactly how the $145 billion or whatever gets allocated is not, as some might think, a second-order issue. It’s probably at the heart of whether this plan has any real effect.

On David Strom's show Saturday, David made almost this exact point -- why not put the money into extended unemployment benefits instead? My argument so far with that is that there just aren't that many people past 26 weeks. Not a bad idea, just not reaching enough people. But Krugman's right that the devil is in the details.

UPDATE: The above doesn't make Mark Perry's analysis wrong. He and Bruce Bartlett are in fact right about the history; we just never have aimed these things correctly. And maybe they cannot be.

Labels: economics

King was pulling for the NY Giants against the Packers. I was hoping Favre would pull out another one. Was not to be. It did look like the Giants were the better team today. February 3 will be another story. If I were a betting man, I'd put my money on New England but in reality, I don't care who wins the Super Bowl - just plan to have a good time.

Congrats, King. Your team MAY pull an upset, then again.....

KING ADDS: Thank you, Janet. I thought the miss at the end of regulation was going to be the killer, but then the fantastic interception. I did NOT want them kicking the FG there, but Tynes could not wait to get on to the field and I thought "you know, that's the kind of kicker I want, the one who forgets the last miss within ten minutes." But I still thought it was too far in Lambeau.

Apparently a three-point difference in Week 17 made no difference, as the Patriots are favored by anywhere from 12.5 to 14 points. I'm hoping the Nihilist picks New England.

Labels: entertainment

Yesterday, Friday, while working out, I had the chance to watch Mrs. Clinton on the Tyra Banks talk show. What I saw greatly concerns me.

First, the film footage showing Mrs. Clinton from a little girl to her present position is quite well done. That in itself is fine, a very good piece of marketing. It's the "care" that bothers me. She grew up in a privileged family and was "encouraged to do" whatever she could to succeed. She has by all measurements. The question is, what does she want for other women or is she in this solely for herself? Has her quest become an end unto itself, or can she actually lead?

Secondly, Mrs. Clinton has an uncanny way of avoiding eye contact. Just watch her. She rarely looks eye-to-eye with anyone talking to her. Tara Banks got some contact but otherwise, Mrs. Clinton's hands were flying all over the place, her eyes going up, sideways, down but not making contact with the camera, the audience or Ms. Banks. Why can't she look people in the eye? Is it because she knows she's using people? women in particular? Is she really unsure of what she thinks she can do?

I lived through all the feminist hype. I watched a good intention - to open doors for women - become a stomping ground for the loudest and brashest of females. I watched education being taken over by people with a "social justice" game plan, another name for socialism.

Do women understand if this woman gets in the White House or anywhere else in power, she is not for them, she is for herself? Mrs. Clinton is a socialist's socialist - look at her goals:

1 - Government run healthcare for all. But no one in America is denied healthcare, it's health insurance where the discrepancy exists;
2 - Mandatory, government sponsored schooling for the children. Parents, it's your three-year-olds who will be subjected to the socialist mindset. What influence you might still have, will be removed. Homeschoolers may be stopped.
3 - Raise taxes and provide more money for her projects and education. Unfortunately, we've learned more money is not the answer to our education woes (standards and curriculum are). Washington DC spends around $14,000/pupil yet is failing most students in the sense that they are not learning what they need to learn; Mpls spends about $11,000, to what end?
4 - If you think you have it financially tough now, wait until the government does it all for you.

Mrs. Clinton is either ignoring or has little clue of the real threats to our society. Maybe she thinks she can be nicey nice and in return the people who want all of us (including Mrs. Clinton) to submit to their belief system or be murdered will be nice, too.

Tyra's audience appeared awed by Mrs. Clinton. Ladies, wake up. When a politician says she/he will solve all your concerns, you can bet they will take away your rights and freedoms in the process. While it is tempting to want someone else to "fix" our problems, the basic belief of the Founders was that people were smart enough to solve their own. Ladies, Mrs. Clinton will remove any options that still exist. This is not a good sign.

Labels: Feminists, Freedom

Right now in MN, we are in the midst of very cold temperatures. Last weekend I was in CA and the weekend before, in TX. While it's quite cold right now (-7 F), the thermometer is expected to drop even more.

We are concerned about frostbite - which occurs when skin exposed to the air can freeze in a matter of minutes. When you see Minnesotans and other northern state residents covered from head to toe, this is why. As tough as we like to think we are, when it gets this cold, we stay inside and keep the kids indoors for the most part.

If you are interested, go to this site and then appreciate how warm you are!! :)

Enjoy your weekend.

Labels: global warming????

While reading around on the Times, I ran across this comment on an editorial encouraging us to celebrate Martin Luther King.

Our view: Celebrate King, his principles in St. Cloud

King Baanian?

It is about time an economist was crowned for messing with our consumer confidence!

If you can take the pressure, I'll be messing with David Strom's confidence when I appear on the his show on AM 1280 the Patriot at 9am, to talk about recession, stimulus, Huckapessimism, etc. Should be a good hour.

The Final Word will appear as always 3-5pm on that same station. We are hoping to talk to people about the bonding bill, the NTSB report on the I-35W bridge collapse, and we'll talk after 4pm with David Bossie, recently author of President Hillary and producer of Hillary the Movie and, previously Border Wars. (A 2006 WaPo bio is here.) We'll have an eye on the upcoming Tsunami Tuesday caucuses, and if I know my co-host, he just might mention Al Franken or Mark Ritchie. Just a hunch, that.

Did you forget to read this until Monday? Get a podcast.

Labels: Final Word, NARN

Thanks to the plans of Generals Petraeus and General Odierno, and the execution of these plans by the US Military, deaths in Iraq have plummeted since December 2006. Go here to see the charts. (HT Powerline.)

It is extremely unfortunate that the MSM refuses to tell Americans and the rest of the world the whole story. Their bias and agenda driven behavior may well backfire and we will be in a far worse place that today. The Iraqis get it, the American Military gets it, people honestly concerned about freedom get it. Why won't the Dems? They don't want to get it, they want power. Remember this when you vote this fall.

Labels: American Heroes, Iraq, soldiers

President Bush has decided to replay his 2001 tax cutting plan by calling for a temporary tax cut. He seems set on the size of the cut -- $145 billion, which he directly tied to the concept of it being 1% of GDP -- and wants it focused only on tax cuts that are immediate and temporary. That's broadly what the politicians want and what Bernanke argued for. Economists, not so much. "The same old shinola" says Angus, pointing to the Shapiro and Slemrod analysis. The textbooks typically say so as well. Indeed, in a certain macro textbook I find this paragraph:

The accompanying table compares various components of national saving in the first quarter of 2001, before the tax cut was enacted, and in the third quarter of 2001, after taxpayers had begun to receive rebates and to benefit from reductions in tax rates. Government saving fell by $277 billion (at an annual rate) from the first quarter to the third quarter in 2001, reflecting the losses in tax revenue. But during that same period, private saving increasesd by $180 billion, so that national saving fell by much less than government saving...Private saving increased by about two thirds of the decrease in government saving, so that national saving declined by only about one third of the decrease in government saving. (p. 126)

One of the authors of that textbook said yesterday:

To be useful, a fiscal stimulus package should be implemented quickly and structured so that its effects on aggregate spending are felt as much as possible within the next twelve months or so.

Watch this video provided by the WSJ wherein they interview people on the street about what they would do with a tax cut. Count the number of people interviewed (I had 12) and the number who say they would save the tax cut or pay off debt. I saw 8 or, mirabile dictu, 2/3 of the people interviewed.

Interestingly, the only candidate left who has said we do not need a fiscal stimulus is Fred Thompson. Maybe he read the textbooks.

Worth also reading on this topic: Mish, Jim Hamilton (who argues that Bernanke was being clever in outlining a fiscal policy that cannot be done) and for my grad students, a reading list from Gerald Prante.

UPDATE: Andrew Samwick: "Forget the "stimulus" label, this is merely additional deficit spending." Professor? Mr. Thompson, line one.

Labels: economics

Like Ed, I was a childhood chess player who adored Bobby Fischer. (I had no idea Ed was a tournament player until reading that post.) I played very few tournaments but played on a high school team all four years. I had a friend who played too, and we would hang out at his house with our boards and watch the commentary on PBS by Shelby Lyman, two junior high kids learning about chess in between playing our own games of chess, Blitzkrieg and Gettysburg. (We got Diplomacy right around that time too, but I don't recall us playing it until eighth grade. After that, my friend went away to a military academy and I stayed in Manchester, and we haven't seen each other since.) This is what geeks did in the pre-Apple days.

But watch we did, as if it were a soap opera. There was no chess club in the city, so we got together ourselves. For those of you who followed Olympic hockey, Bobby Fischer was our Herb Brooks. Every book I read on chess involved a Soviet grandmaster or a dead guy, so for there to be an American champion meant breaking a very small piece of Soviet power. And Fischer was brash. He hated the computers, the use of teams of masters to memorize and script out positions.

I follow the old chess, I follow all the pre-arranged matches, like the last Kramnik-Kasparov match. At the highest level it is all pre-arranged, move by move. You have very interesting, beautiful pre-arranged games being created by very intelligent players, working with computers, working in teams. I have no objections to people creating such games, but they must say these are pre-arranged games, but they must not claim that they are finding the moves over the board.

He developed a different game, Fischer Random, where the starting position was randomized and thus defeated all the thick books with openings and the teams of seconds. He wanted the beautiful game, the one in which genius, HIS genius, would shine through. Chess is always in the end the argument between two people about how to play chess. The winner announces "my way is better!" Tipping one's king in defeat is bowing to that genius. (It is why I hate computers for chess -- one does not bow to them.)

Of course we know how the story turns out tragically for Fischer, whose paranoia was known even when he won the championship and for whom it got worse and worse and destroyed his ability to disp