Thursday, January 31, 2008
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????
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.
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.
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.
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.
Wednesday, January 30, 2008
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.)
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.
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.
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????
Tuesday, January 29, 2008
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.
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.
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...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.
Because they can't frighten Hillary they've decided to control her with the time-old trick of patriarchal ridicule.
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...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.
And now the greatest betrayal! We are repaid with his abandonment! He�s picked the new guy over us.
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
Now we know why President Bush said in the SOTU last night that
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.
...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.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.
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.
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.
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.
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.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?
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."
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:
Too late for that.
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.
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?
19-0: The Historic Championship Season of New England's Unbeatable Patriots: Books
Brady delenda est.
(h/t: Bob our crack weather guy.)
Monday, January 28, 2008
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.
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:
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.
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.
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:
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.
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.
Ask again, cui bono?
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.
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.
Friday, January 25, 2008
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.)
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.
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.
Wednesday, January 23, 2008
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.
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?
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.
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.
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.
Tuesday, January 22, 2008
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.)
(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.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.
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)
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?
Monday, January 21, 2008
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?
And for those of you who missed me on KNSI's Morning Show this morning, you can try again tomorrow and Wednesday.
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.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.
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.
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.
Sunday, January 20, 2008
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.
Saturday, January 19, 2008
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.
Friday, January 18, 2008
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????
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.
Did you forget to read this until Monday? Get a podcast.
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.
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.
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 display the genius he was.
I've noted several places in the archives that I coached a school team for Littlest's school. It's hard to compete with the GameStations and XBoxes and we no longer have enough to field a team, but some students enjoy the game still. I wonder how much more they would enjoy it if they had someone who played it in the manner of a Bobby Fischer. We are still searching for the next chess hero but we cannot search for Bobby Fischer now. There will never be another.
Thursday, January 17, 2008
President Robert Mugabe's government, stricken by chronic hyperinflation, announced Thursday it was to introduce a 10 million Zimbabwe dollar note. Economists said they believed it was the highest denomination of any currency in the world.I am going to guess, following Larry White's suggestion, that price increases in Zimbabwe are exceeding the rate at which the central bank could print currency. I have a hard time finding money supply data for Zimbabwe post 2004 so it's hard for me to show this, but it appears money supply growth was under inflation in 2005 and 2006 from what data I can find. Therefore real money supply is falling. Using more zeroes will help monetary growth to catch up.
Central bank governor Gideon Gono was quoted on state radio as saying that the bank would begin releasing a set of three new notes - 1 million, 5 million and 10 million - on Friday.
The issue of new notes follows nearly three months of banking chaos as cash dried up and queues, sometimes hundreds of metres long, became a permanent feature outside commercial banks.
Of course, Zimbabwe has four zeroes to go to catch up with the Yugoslav dinar. But with inflation worth less than 0.05% of what it was 1 year ago, it might set the record yet.
- Should we even bother thinking about something conceived as urban conservatism (as opposed to other basic kinds) to begin with?
- If you were to design a philosophy of urban conservatism, what would it contain? What would it not contain?
- Do you believe it�s possible to build and maintain a sufficiently potent and longterm
- conservative movement in the United States without more than token support in major cities and other urban areas?
- What about the same question in regards to Minnesota? Is it possible to build and maintain a sufficiently potent and longterm conservative movement here with hardly any support in Minneapolis and St. Paul and most inner-ring suburbs? In considering this question and the one immediately above, you may want to take into account various demographic changes well underway across the country, especially significant increases in minority populations.
- And by the way, how do you define conservatism?
I'll use this to ask a simple question to a statement in the symposium by Dane Smith, when he says �[Conservatives] need to say things differently and also back up their words with money.� My question: Whose money? And by what right should we have to coerce money from the public to pay for our ideas?
So, fellow Giants fan, do NOT let me see you in that gear. Let Packer Fan front-run Sunday's game and imitate NFL Films overuse of the words "frozen tundra". They have to do this; they get all verklempt about Favre after all. Wear your blue and be quiet, lest we scare away the succubus of Y.A. Tittle inside the guy that currently wears #10.
Wednesday, January 16, 2008
The movie's photography was breathtaking. It recreated the Parthenon in all its glory, a tribute to the wonders of modern technology. However, the film also made too many statements in support of the current politically correct philosophy. The female narrator, one of the stars of My Big Fat Greek Wedding, made sure she covered her agenda. While it is true that the Greeks had slaves, as did all cultures at one time or another, the Greeks also laid the foundations for western ideas about man ruling himself, republican government and democracy.
The narrator had to make sure we knew Greek women were not allowed to vote. She pushed the "everyone is equal" agenda. First, the Greeks never thought everyone was equal. Second, it was the west that gave women the right to vote. You can argue it took the west too long but the concept and implementation of women's rights occurred in the west; not Africa, not Asia, not the Middle East, not Latin America, only in the northern hemisphere western cultures. Third, one of the main reasons the arts were able to flourish in the Greek world was because they had a strong military that protected them from outside invasions. Yes, they had wars but they also provided a stable enough environment that allowed arts to thrive.
It would be nice if the west's entertainment industry recognized this fact: They could not produce the quantity and quality of film, books, theater, music, etc. without a safe nation state. By having a strong military to protect all of us, these artistic endeavors can flourish. It would be especially heartwarming if the members of these communities recognized this.
"Tom Stinson tends to be a bit on the pessimistic side of things, to put it charitably," Gov. Pawlenty says.
Pawlenty says governors around the country have shared their concerns about the economic challenges facing Americans. But he says it's important to guard against too much pessimism.
"The economy is deeply challenged, nationally and in Minnesota. But I don't think it's helpful - unless it's clearly justified by the data - for people to get overly pessimistic or overly scare people, either," says Gov. Pawlenty.
With all due respect to Governor Pawlenty, what is a state economist's job? As we've noted, there is not anyone else in a position to speak about the state of the state economy; nobody is going to come along and verify state business cycle peaks and troughs. (I wanted to use the word "officially", but does that word apply to the status of the NBER in dating national cycle peaks and troughs?) I will at some point use the Owyang, Piger and Wall method to date the state cycle (and St. Cloud's) but nobody will say anything about it because, well, it's just me, some economist at Somewhere State. Not A State Economist.
When we published the previous (Fall) report on the state of the economy and reported that our first signal of recession from our new model had flashed, most of the reaction was positive. (There are a few local people who, because they are promoters of St. Cloud business, will not agree with us. We agree to be friendly in our disagreement.) People appreciated someone putting together the case for why the economy may do well or not. And I think that's the reaction we have to this recession call. Glad to hear him say it because he deserves our respect, but I wish I had more background.
Stinson's "pessimism" is largely confined to tamping down revenue expectations so that not too much money is spent by government. (If they do overspend because the revenues didn't pan out, who do you think gets blamed?) Whenever the state budget shows surplus there is a temptation for legislators and governors to spend it on those things that help assure re-election; I think it may fall to someone like a state economist to point out the possibility that the forecast will be in error. You may in fact lean on the scales just a bit. But he has no such incentive that I can see with the recession call. I have to assume it's an honest assessment of the data -- and again, you have to assume he has access to more than we do. I'm trying to reslice the data available to see if I can figure out what he is seeing. So far, I haven't found the right slice, or the right data.
According to respondents to the recent St. Cloud (Minn.) Area Business Outlook Survey, 20 percent expect to hire more workers over the next six months, while 18 percent expect to decrease payrolls; in last year�s survey, 34 percent expected increases and 8 percent anticipated decreases. Overall increases in wages were moderate.Here's the full report. I have given two talks based on it this week; these are only a few of the warning signs we've seen.
According to the aforementioned St. Cloud survey, 49 percent of respondents expect employee compensation to increase over the next six months, about the same as last year's survey.
The Beige Book consensus seems to be for slow growth but no recession. Seven of the twelve districts "reported a slight increase in activity, two reported mixed conditions, and activity in three Districts was described as slowing."
I may come back to this later and relate it to Alex Tabarrok's excellent article that takes a longer run view of the U.S. economy and sees much more. Pay close attention to the end where he discusses the two views of human growth -- are we stomachs, our are we brains? A heavy dose of Julian Simon in there -- you can never get enough.
Tuesday, January 15, 2008
- cost-effectiveness, in terms of what it does to demand relative to what it does to the budget deficit if no other changes are made;
- effectiveness lag, the time that elapses between the time you enact a stimulus and when it takes effect on the economy; and
- effectiveness uncertainty, meaning how sure are you that it will stimulate?
If what matters most is the quickness of the stimulus -- you need it now, right now! -- you would argue either for a tax cut that begins now in 2008 or for extending unemployment insurance or food stamps. But the share of people unemployed more than 26 weeks isn't any higher than it was two years ago. Not sure how that helps.
Everything else in the proposals out there has a variety of issues as well, as the report points out. So the one thing nobody is arguing for -- tax cuts today, on top of the Bush cuts -- appears to be the one that gets a relatively certain effect quickly. But that is probably too expensive for most legislators to bear. No wonder most people are looking instead for monetary policy to help instead.
Menzie Chinn takes a different look at some fiscal proposals, and argues as well that any permanent tax cut is probably not fiscally sustainable. Brad DeLong wants tax refunds, but he admits they aren't well targeted, so their effectiveness uncertainty is large.
I have certainly said publicly that I think we are at risk of going into a recession here in central MN, but I do not think I could make the claim that we are in one right now. I'm interested in what data he is looking at. The last budget update cites the Global Insights forecast that shows an increase to 40% in its forecast of a national recession (Alan Greenspan today says 50-50.) That update, by the way, shows revenues running ahead of forecast so far in the biennium.
Minnesota's unemployment rate climbed to 4.9 percent in December, up from 4.4 percent the month before. The loss of 2,300 jobs last month capped a string of job losses, 23,000 in all, over the last six months.
That's the worst string of jobs numbers since the 2001 U.S. economic downturn. "Minnesota is in a recession," said Minnesota state economist Tom Stinson. "I don't see how you can lable it anything else."
..."We should normally add somewhere around 23,000 jobs or a little bit more just to keep up with labor market growth," Stinson said. Instead, the year-over-year job total fell by 700.
But Stinson has only data for November on which to rely, meaning he is making a call for a recession to have started in Q4 2007. While the potential exists for the recession to have begun in December nationally (see today's retail sales figures nationally and these payroll data for employment in Minnesota, for example) I simply am not ready to be as definitive as Tom's statement is.
Full year 2007 employment in Minnesota firms fell 353 jobs, out of a total of 2.78 million. How sure are we that a revision of this data will not change the result? The LAUS data Stinson is describing (which is where he gets the 700 job loss versus my 353, which comes from the CES survey instead) considers only 0.3% to 0.4% changes in employment to be statistically significant. The decline this time was 0.08%. It argues instead that there has been a 11,000 increase in the size of the labor force (see this), which accounts for a good portion of the increase in the unemployment rate. To put this in perspective, had the number of jobs (seasonally adjusted) in Minnesota increased in December by the same amount as they did in November, the unemployment rate would STILL have risen to 4.7% from 4.4% in November, just because we added so many more people looking for work.
The loss of jobs is no doubt real, and I'm not saying Stinson is wrong. But I see a recession call for Minnesota at this time as premature.
Monday, January 14, 2008
Even if private industry and government take steps to protect society against the costs of obesity, many Americans "will likely continue to choose a diet and exercise regimen that leads to excess weight," because losing weight requires too many lifestyle sacrifices, his book warns.And you can substitute health care for healthy eating too, he says. Who knew? When I interviewed health economists last weekend in New Orleans, I think a quarter of the dissertations I heard reviewed by the new PhDs that had applied were to do with obesity. I think they were all a bit more imaginative.
(h/t: Tim Haab.)
...between Iowa and New Hampshire, almost every presidential contender found himself lapsing into boilerplate assertions that he was the "candidate of change" � or even, as both McCain and Hillary put it, an "agent of change," which sounds far more exotic, as if they're James Bond and Pussy Galore covertly driving the Aston Martin across some international frontier, pressing the ejector button and dropping a ton of government regulation on some hapless foreigners.
But it's capitalism that's the real "agent of change." Politicians, on the whole, prefer stasis, at least on everything for which they already have responsibility. That's the lesson King Canute was trying to teach his courtiers when he took them down to the beach and let the tide roll in: Government has its limits. In most of the Western world, the tide is rolling in on demographically and economically unsustainable entitlements, but that doesn't stop politicians getting out their beach chairs and promising to create even more. That's government "change".
It does not include requested state dollars to expand the St. Cloud Civic Center or to remodel and expand the National Hockey Center at St. Cloud State......two major projects local leaders have had on their minds for quite some time. How long until we hear Sen. "No-no-no", who has in the past pumped for more for the hockey center, has another fit about Governor Pawlenty's thrifty ways?
SCSU is proposed for money for Brown Hall, an old classroom building that has laboratories as old as me. (Rep. Steve Gottwalt told me about touring the facility and the faces of the legislators as they walked through; I think they keep one lab particularly antiquated and nasty-looking for the tour.) In the note from the faculty union reporting this to us, the lobbyist noted,
Concern over neglected transportation infrastructure is causing transportation funding to squeeze other segments of the capital investment bill. This means we have a stake in the outcome of the gas tax debate�if roads and bridges are funded out of a gas tax increase it would mean more bonding authority would be left over for projects such as higher education projects.I wanted to emphasize this point: The gas tax for funding transportation is not used instead of bonds (or in the slang used by DFL legislators, "the credit card") but in addition to bonds. We will pay just as much interest either way -- we'll just have less private investment increasing productivity with which we pay off those bonds with our future taxes. The gas tax makes government bigger; the discussion of the means of funding is just smoke. And it is highly unlikely the Legislature adjourns and the House goes to the voters without a bunch of money spent on bridges; the demand is still there.
There's plenty not to like about the governor's bond request -- I might start with $70 million more down the Central Corridor rat-hole -- but funding of bridges through bonding is certainly something to like. The "benefit principle" of public finance says that the people receiving the most benefit from a public good should be the ones that pay. That's one reason why we ask people to pay fees to enter state parks, for example. The alternative principle is "ability to pay." But in either case bonding can be the preferred option. Bridges last 30-40 years or more, and there is no reason why we should expect the current taxpayers to fund the driving of individuals using the bridge a generation from now; bonding assures that those driving the bridges are paying for them. And if investments in infrastructure like bridges are to increase state productivity, then the income of future generations will be higher than those in the present. If it is enough higher, the tax burden will be lighter on future than current generations, again arguing that some of the cost be shifted forward. Under any reasonable assumptions about the value of future Minnesotans' utility or satisfaction versus the value of present Minnesotans' utility, it is good public policy to use bonding. (Of course this may be controversial, as we've been arguing for some time over the rate of discount of future generations in the global warming debate. You'd have to work the math a bit to convince me it matters here.)
Now part of the problem, in my view, stems from what appears to be a formula that translates the size of the state budget to the size of the bonding proposal (which would put the amount planned here at about 3% of the biennial budget.) I had Rep. Larry Haws while I guest-hosted on the KNSI Morning Show a couple of weeks ago in which he made some reference to this; about the only sense I could make of this -- assuming there is some formula they use -- is that it keeps the rating agencies happy so that the interest cost of debt stays predictable. But one could easily imagine that cost-benefit analysis could be applied to the bridges to argue for an amount of bonding above this formula, as long as the return on investment was sufficient to cover the opportunity costs. Much like Nixon-to-China, it may be up to the DFL to come up with a way to use cost-benefit judiciously to make the case for a larger bond.
UPDATE: Lileks wonders about light rail. See moreover this from the LA Times (h/t: Peter Gordon):
Paradoxically, the MTA's rail projects, which required fare increases and reduced bus services, have cost the transit system riders. Using MTA data, our analysis indicates that they produced a drop in train and bus ridership of more than 3 billion boardings from 1986 to 2007.
Although we've now gotten back to 1985 levels in terms of public-transit use, the county population has grown by more than 2 million since then. That means, on a trip-per-capita basis, the transit system is still not performing -- by 20% -- as well as it did 22 years ago.
Federal Reserve Chairman Ben Bernanke, responding to criticism that the central bank has sent confusing messages about interest rates in recent months, has decided to speak more forcefully and more often about the outlook for the nation's economy.The complaint is that the presidents of the twelve Federal Reserve Banks have been out speaking more often, and that their views have been more contradictory of the views of the Board than usual. We have had presidents for tighter policy (Plosser) and for looser policy (Rosengren). But that just reflects the nature of the economy at this time -- peaks and troughs are naturally points of uncertainty and greater divergence of opinion. Apparently after responding to the Greenspan
...Fed officials are unlikely to cut rates before their scheduled Jan. 29-30 meeting, because Mr. Bernanke's speech has already recalibrated market expectations. But that could change if the outlook worsens sharply in coming days.
The Fed's new communications strategy comes after five months in which Wall Street analysts, academics and some former Fed officials have blasted the central bank for repeatedly implying it wouldn't cut rates further, and then doing just that, and for sending other contradictory signals.
(It could be worse, like in Europe.)
Tim Duy says that Bernanke is only paying lip service to inflation at this point. Perhaps they should pay more than that.
The NCAA limit is 20 hours of mandatory time. From the Chronicle of Higher Education this morning. I suspect in many cases it is voluntary. One should wonder, though, whether there's a "tournament pay" story going on here. To win playing time, you must put forth more effort. As evidence, consider that the survey showed Division I golfers reported 40.8 hours; women softball players, 37.1. Now that's a lot of time for what is likely a dubious return, if all they were investing in is the possibility of pro career.
In a 2006 NCAA survey of 21,000 athletes who were then playing in a variety of men's and women's sports, football players reported spending 44.8 hours a week practicing, playing, or training for their sport. That's on top of the time players spend in the classroom.
The findings shocked campus leaders and athletics officials at the gathering here.
"That's out of control," said Walter Harrison, president of the University of Hartford. "I'm hoping the [NCAA] bodies that oversee football will do something about this, and that the board of directors pays attention to it."
Bob Chichester, until recently athletics director at the University of California at Irvine, wondered whether players were being pressured to train that many hours or were choosing to do so on their own.
"If we're requiring student-athletes who might not otherwise want to spend that much time on their sport to practice and train that many hours, then we really have a problem," he said.
Sunday, January 13, 2008
It would be great if our Vikings did better but if not the Vikings, ok, Green Bay, go for it. That play will be showed again and again. Even if you are not a football fan, this is one to see!
Friday, January 11, 2008
I read Guideposts Magazine because it has positive articles, ones that show ordinary people overcoming whatever befalls them. The January 2008 issue has a great story of a single mom, Mona Purdy, who had gone through a divorce and subsequently overindulged her kids. She took a trip to Guatemala and saw local kids putting tar on the soles of their feet to minimize lacerations and infections from the soil. Typically American, she asked herself what she could do to help these kids.
The question became, "What do Americans do with shoes?" Many of our shoes are in good shape when we get rid of them. She decided to collect shoes from neighbors, friends, etc. On her first trip back to Guatemala City, she went to an orphanage with boxes of shoes. The nun in charge was so appreciative and Mona's project was born.
Today Share Your Soles has operations in 23 states. Mona's project outgrew her garage, a local real-estate business, Center-Point Properties, donated a warehouse. American Airlines offered to do distribution free. These last points most likely have changed since the start but the enterprise is going very well.
As always, the Final Word is heard 3-5pm on AM1280 the Patriot (click that link and then the Listen Now in the upper lefthand corner) or later via podcast when the podcasts gods choose to post our shows. Like monetary policy, shows are posted with long and variable lags.
Back to IRV. Let me help people think about it by a couple of simple thoughts. Why would IRV be bad? After all, we had three viable candidates in the 1998 gubernatorial race won by Jesse Ventura over Norm Coleman and Skip Humphrey. Humphrey came in third. Suppose we had IRV in the state. How would Humphrey's vote been distributed? Would Coleman have gained enough of those votes to overcome Ventura's three percent plurality. At least in one study, the answer is no. So plurality voting -- the system we use most everywhere in the US -- gave us the same result. (My apologies if you can't read that study -- it's good to work at a university.)
We would say that Ventura was a Condorcet winner -- he would have won in a pairwise vote against either Coleman or Humphrey. And perhaps one reason why Ventura would have won is that he turned out people that would not have voted otherwise; 7% more voters participated in 1998 than 1994, and the study cited above indicates that the Ventura presence could account for just about that size effect. An exit poll taken that day indicates that of those who did vote, Ventura voters preferred Coleman over Humphrey, 56-44.
So IRV would not have made a difference there. Where would it? It could if you ended up with cycling, where in a pairwise contest between each of the three candidates you wouldn't find one that beats the other two in heads-up. And it would be perilous if we found instead that Coleman would beat Ventura and Humphrey would beat Ventura in pairwise voting, but Ventura wins in a three-way, plurality-voting contest. That would seem to be something we would want to avoid and could be a case for IRV. And yet, as we joke a bit about voting for bacon, there is a very serious question whether we might end up with a Condorcet loser in the primaries with some states using winner-take-all allocation of delegates. On the Democratic ticket, let's suppose Sen. Clinton is the plurality leader. She would be a Condorcet loser if she would lose a two-person race against either Sens. Obama or Edwards. (I make no claim that this is so.) I'll let others think about how that applies on the GOP side, but I think it fair to say IRV would make the GOP primary different.
I find it interesting that the claim made by MVA is that IRV is too complex. Indeed, the best case one can make for plurality voting is its simplicity. (Try reading the rules for the DFL's walking caucus sometime. They aren't easy.) There are other good reasons to oppose IRV, though they are a bit harder to explain, having to do with lack of single-peaked preferences and the number of parties in play. I've not worked on electoral theory for awhile so I am not going to try to say I understand every bit of this; I don't. Suffice to say, for example, that it can be shown that you can get different electoral outcomes by changing IRV rules only slightly to drop the candidate with the most last-place votes rather than the fewest first-place votes. This is known as the Coombs rule. You could argue Coombs is a better rule, but it would be no less confusing.
A last thought, and a question I'll ask Andy tomorrow: Suppose we could show empirically that IRV increased voter turnout, since one could vote his preference first and then between the two major party candidates later. Would increased turnout be a good thing, and wouldn't you want to support IRV then if so? I know they argue that it hasn't, but would finding enough counter-examples to theirs be persuasive?
This site has the best photo, showing a dad and his son smiling while watching the scene emerge from the sky. It has been close to 100 years since snow fell in Baghdad. It does snow in the mountains of the Kurdish north.
Another site quotes more residents. All seem to be pleased with the event.
HT - Dennis Prager
Labels: global warming????
A T-shirt using a yellow Star of David to liken the treatment of smokers in Germany to that of Jews during Nazi rule has angered German Jews.The story should disturb both pro-smoking and anti-smoking groups. Please use the comment box to discuss the story; if I'm wrong and it doesn't disturb you, please tell me why. If it does, how does it?
...The shirt features a yellow Star of David similar to the one Jews were forced to wear under the Nazis. The world "smoker" is written across the star instead of "Jew."
Graumann said the sale of the T-shirt did nothing to help German smokers. Instead, it reminded Germans � Jews and otherwise � of worse times, he said.
"It is unimaginative, brainless and tasteless," he said....A statement on the site said the shirt had been designed to highlight what it called the "disgraceful exclusion" of smokers by society.
"After decades of tolerance, the smoker is being denounced as an outcast, a second-class human being," the online statement said.
The office of the public prosecutor in Itzehoe said Friday that it was investigating whether the shirt broke any German laws.
"We are checking if this case can be treated as a criminal offense," prosecutor Ralph Doepper told The Associated Press.
State Rep. Mindy Greiling, DFL-Roseville, and chairwoman of the House K-12 finance division, argued that such findings show that "the chickens have come home to roost" in terms of the state's inadequate funding of education.And the usual whining occurs that the scoring of these items is somehow unfair:
Advanced degrees, experience and national board certification seem to be overlooked in favor of state-mandated tools, which can be dicey, he said. "A lot of these things are best addressed at the local level," [Rob Panning-Miller, president of the Minneapolis Federation of Teachers] said.The scores are here though, and I encourage you to look at a comparison of MN to other states nearby. Wisconsin scores better than Minnesota in school finance, spending 4.1% of its taxable resources on education versus 3.5% in this state. But that is simply grading inputs as if it were outputs. If the schools of Minnesota wanted to score better, they could have looked at the actual scoring within the area of teacher quality. What do we lack, looking at their scoring?
- Unlike any of our neighbors (IA, ND, SD and WI), MN does not require any formal coursework in the area they will teach in. They are required to take a test in the subject matter, however. That means the person teaching economics in the ninth-grade class might not have had any more than a single course in it (a "baby principles" or "econ for poets" as we call it.)
- Teacher evaluation is not tied to student achievement. Why would this be? What evaluation we do is not annual, either.
- Mentoring for beginning teachers. Think of one of the main reasons we support teacher education in the state university system (we used to be St. Cloud Normal School before we were SCSU). Yet we do not mentor new teachers, which may need some to leave the system. That money is thereby wasted.
So do we give aid to teachers? We do, just not in the way that they want. The important story in this report is that we are not doing well in evaluation of what we're getting for the money we put in. We need more transparency, we need more attention to young teachers, and yes we need more evaluation. Perhaps when we have those things it would be easier for schools to raise money from levy referenda.
UPDATE: Leo has a grade for the writers at the STrib.
Thursday, January 10, 2008
Why favorite? I'm not sure. Perhaps Thom Yorke got some of his electronica jones from his solo "The Eraser" last year. (If you have iTunes, go get Skip Divided and The Clock. If you like them, buy the rest. My guess is you won't.) "In Rainbows" is really rock, not that anyone who isn't a fan of the band will give a damn about this.
Other CDs issued in 2007 that I liked plenty (no particular order):
- Van Morrison -- At the Movies: Soundtracks. Just loads of fun for a guy in his 50s; you know the songs, but you have to guess the movies. Several cuts are live, which is great if you are a Van Morrison fan.
- Sia -- Lady Croissant. Speaking of live: The singer of Zero 7 fame, this sounds like it should be a chillout album but it's not. All but one cut is live, and she sounds so different and very sexy. It sounds like a nightclub but it rocks. Good late night listening.
- Charmparticles -- Alive in the Hot Spell. LA pop kind of fills my Britpop desires. It is the most played album I have this year except for one...
- The Clash -- The Singles. Do I own most of these songs? Probably, if I wanted to dig out my vinyl and borrow someone's USB turntable. But now I do not need this. It is for this reason my car stereo goes to eleven.
Despite most people trying to say the news is good, there have been a series of reports this week that point in the other direction. From the morning memo of The Economist:
American retailers announced lackluster sales in the all-important month of December. While Wal-Mart enjoyed a small increase in same-store sales of 2.4 percent, numbers were down at Target, Macy's, and the Gap, among others. Piling on with more bad news is Capital One Financial, which lowered its full year guidance by 20 percent on rising loan delinquencies.We will get the retail sales figure on Tuesday, and it would be hard to imagine it going up very much on a seasonally adjusted basis. Menzie Chinn has a look at the current data and a collection of articles saying we're already in a recession or at the precipice. I doubt we will know the peak of the expansion for several months yet, but if the NBER is releasing new memos on dating of the business cycle I'd assume they are closely scrutinizing the data.
The Bush administration is looking at a small fiscal stimulus, largely in the form of tax rebates and investment tax credits. A mix of tax cuts and spending increases seems likely, particularly in an election year. But researchers don't think the tax stimulus package will be very effective, and perhaps not well-timed.
Moreover, most of the softness in job growth seems to be coming from credit-sensitive areas like construction, retail sales and financial services. Areas like education and health, or professional and business services, have proven to hold up a little better. So it may be that the path of interest rates over the next six months will be determinative of where we're going. Greg Ip notes that it might matter to the incumbent party as well -- when the Fed has lowered interest rates (usually for countercylical macroeconomic stabilization reasons) in an election year, the incumbent party is only batting .200 for re-election. Bernanke signaled this morning that the risks of recession have gotten worse, not better.
Although economic growth slowed in the fourth quarter of last year from the third quarter�s rapid clip, it seems nonetheless, as best we can tell, to have continued at a moderate pace. Recently, however, incoming information has suggested that the baseline outlook for real activity in 2008 has worsened and the downside risks to growth have become more pronounced. Notably, the demand for housing seems to have weakened further, in part reflecting the ongoing problems in mortgage markets. In addition, a number of factors, including higher oil prices, lower equity prices, and softening home values, seem likely to weigh on consumer spending as we move into 2008.Bernanke will testify before Congress on the 17th, and I expect a similar signal at that time. The last meeting of the FOMC was a bit chaotic with divergent opinions, and I think that might be because Bernanke was still hedging the two poles of high employment and price stability. It appears from those remarks that his mind is made up, and I'd expect his leadership will lead others to follow suit (though it appears at least one Fed president is still whistling the inflation hawk's song.)
John Palmer worries about overreaction in Canada.
Remember what happened back in the late 70s and early 80s? ... Our economies faced sectoral dislocations and rising unemployment as we encouraged search via the provision of a higher social safety net. Trying to avoid and correct the rising unemployment rates, gubmnts provided additional stimulation to the economies, and mostly what we got was an upward spiral of stimulation, inflation, stimulation, inflation, etc.He is not hopeful of the Harper government heeding that caution. If we're to avoid that, I expect it falls to Chairman Bernanke to save us rather than the Bush Administration.
Let's hope the gubmnts and central banks of today can do better. For sure, one thing they must do is avoid the temptations and pressure to over-stimulate aggregate demand.
UPDATE: After Bernanke's prepared speech today he took questions, and was asked whether he expected a recession. The WSJ reports his response:
Let me tell you a story. Before I got this job, before I was even on the [Federal Reserve] board, I was a member of the NBER business cycle dating committee which is actually the official body that determines the dates of the R-word as you referred to it. And one of the things that was striking about that operation is we didn�t even sit down and think about it until six months after the event. And the reason we didn�t do that was because economic data being as volatile as they notoriously are and as subject to revisions as they notoriously are, you really can�t make a determination about that kind of thing until well after the event. And so that�s what we did in that particular episode.Interested readers should refer back to this post by Jim Hamilton FMI on the controversy of whether the last recession started in 2000 or 2001.
What was ironic about it was even though we waited quite a while to make a determination, subsequent to our determination there was yet further revisions of the data, further information, that you know cast doubt eventually on our dating. It just goes to show you how difficult these things are to interpret and evaluate.
The Federal Reserve is not currently forecasting a recession. We are forecasting slow growth. but as I mentioned today there are downside risks and therefore it�s very important for us to stand ready as I mentioned to take substantive action to address those risks and provide some insurance against those negative outcomes.
The �Paper or plastic� question is coming to mean something different: Less evil, or utterly unsustainable, sir? Uh � less evil, please. The unloved and unlovely plastic bag, once a symbol of ease and progress, is being banned in city after city. Chicago and New York are considering a ban. San Francisco has banned them already. There�s another approach: tax them. Ireland charges 15 cents a bag � not a lot, but enough to make people think about bringing their own reusable hemp tote. Not me; I need paper bags. Without paper bags I don�t have anything to put the recycling in. It�s a vicious cycle. Sometimes I have two bags left over; one bag goes in the other, and they�re set out for collection.We use plastic for the recycling (or paper if we're of a mind) but the paper bags hold more and ergo are preferred. So what happens to your leftover bags?
You can�t recycle one bag. You could, but if you just set it out, open and empty, I wonder if the recyclers would take it. Sorry, that�s garbage. It has to have a recyclable material inside for me to take it. But the item itself is recyclable! Sorry, the container doesn�t count. It's a rule. Keeps us from carting off recycling bins made of mud and wattles.I prefer Mike Munger's test: If someone will pay you for the bags, they're a resource. If nobody will pay to take it off your hands, it's garbage. (Here's a related podcast on EconTalk.) If you have old copper pots and put them out, people will take them -- heck, people will steal them. There was a phase in antique collecting in the 1970s where glass insulators were collected by enthusiasts. As a college student, I found it therefore profitable to climb abandoned telephone poles along railroad tracks to get the insulators off them (abandoned meaning no wires. Why were the insulators left behind? Because when the wire was taken down, the glass was considered garbage. When it ceased to be such, college kids climbed the poles to get them. (As you'll see in that last link, there's still a market for them, so my guess is all the poles are now barren.)
Of course, there is the possibility that plastic taxes will happen because of rentseeking by large retailers. My local co-op has reusable cloth bags, but it's unlikely the mom-and-pop grocer will be pleased to spend its revenues on bags labeled "mom-and-pop". (The co-op bag has also that cachet of "I'm green!" written all over it.) It isn't always about less evil. It's sometimes about more profit.
Yesterday the Hornets' ownership signed a lease extension with the state of Louisiana that says, in short, "we'll stay only if there are more fannies in the seats."
Oklahoma City wants a team, and to hear friends from Oklahoma tell it (Angus, you got something here?) the area is crazy for basketball. They are trying to lure the Seattle Sonics to the city as well. But this lease seems designed to set a price for the Hornets to exit New Orleans. It's worth remembering that the Hornets were last in the league for attendance before Katrina. True, that's pre-Paul, but it's hard to see how New Orleans ever has been a basketball city. The lease isn't saving basketball in New Orleans. It's terms of surrender.
"The extension essentially makes up for the time the team spent when it relocated to Oklahoma City following Hurricane Katrina in 2005," a joint news release from Gov. Kathleen Blanco's office, the arena's managers and the team said Wednesday.
It also allows the Hornets to opt out after next season, albeit with penalties ranging from $50 million to $100 million. The precise cost would depend on inducement reimbursements by the team to the state and a relocation fee imposed by the NBA.
The lease says the Hornets may leave only if average attendance is worse than 14,735 for the final five months of this season and next season. The benchmark is close to the team's average attendance for the three seasons before Hurricane Katrina. Such an average still would leave the Hornets in the bottom third of NBA attendance, league officials said.
Wednesday, January 09, 2008
It is commonly believed that business cycles �cleanse� industry with waves of creative destruction. New research shows that entry is higher in booms than busts, but exit rates and the type of exiting firms, are steady over the cycle. Plants entering during recessions, however, are larger and more productive ��creative entry� rather than �creative destruction�.From a synopsis of a new paper by Yoonsoo Lee and Toshihiko Mukoyama, with a synopsis at VoxEU. In short, troughs are accompanied by lots of new entry. The paper itself suggests that a subsidy for hiring new workers during recessions will help stabilize output. Ideas become more prevalent during expansions and more expensive, so lots of firms can enter into a market when a boom occurs. Those with new ideas will find it harder to implement them during a recession, thus making the subsidy desirable.
"If perfect is the enemy of good, then what is the enemy of not good enough?"In a companion post this PM Foot adds,
However, the one object in that post that was meant to be taken literally was the bacon. By which I meant (if you haven't already figured it out) that if Huckabee is the GOP nominee, I will be writing in "bacon" in the presidential space on my ballot in November in a very real, nonmetaphorical way.I would make that two votes for bacon, and I may leave the polling place, go across the street and cook up a rasher with a Coleman stove that hopefully would set the MoveOn
*--with due apologies to Messrs Richardson and Kucinich on the one side and Messrs Paul and Hunter on the other. It pains me to consider Mr. Edwards seriously, I should add, and if by some chance should become the Tic nominee, I may revise my comment above.
Long time readers of SCSU Scholars are aware of the sensitivity training, of democratic citizenship and its descendants, of mandatory diversity training and the use of diversity in "strategic planning" to mean anything other than permitting students to hear fully the western canon. Will anyone admit this is a failure? No -- and Dick argues that someone should ask why.
First, I see a one-dimensional approach to diversity. When some people at St. Cloud State talk of prejudice, discrimination, insensitivity and related hostility, they assume that only white, Christian, heterosexual men are capable of these sentiments. To these people, diversity is the exclusive empowerment and increased opportunity for non-whites, non-Christians, non-males and non-heterosexuals.
To satisfy this approach, the university has accommodated a curriculum that differs from traditional Western academic curriculum.
Many students do not know much about Western concepts such as rationalism, enlightenment and the industrial revolution and their connections to modernity.
On the other hand, multiple courses are offered in democratic citizenship without a clear identification of its theoretical, historical, substantive content and academic value. Students are required to take sensitivity training courses, all of which focus largely on passive accommodation of protected groups.
Indeed, when current President Earl Potter arrived, I had hoped that there would be focus on academics; someone reported to me that in a meeting with local leaders this president wondered whether or not the university was in the education business or the diversity business. Perhaps others were worried about the answer he might find...
The second approach I find unique at St. Cloud State is the focus on problem identification without acknowledgment of successes in dealing with those problems. Evaluating efforts to solve problems enables us to see which efforts work and which ones do not work. Complaints should be fully investigated, findings and actions taken by the university or the community made public.
A third unique issue at St. Cloud State is the tendency to allow dealing with complaints to become the major agenda of the university.
One would have expected that because the previous president introduced so many changes, the institution would be able to put those problems behind and allow the new president to focus on the real mission for the university.
That these issues have surfaced at this moment suggests a persistent tendency to make sure that bigotry continues to be the university's main agenda.The most recent incident, within a campus dormitory after students had left for semester break, might raise some question whether it is a group of jackals from off-campus or -- could it be? -- someone interested in making sure which business we stay in? Surely you'll say I'm just being paranoid, engaged in fantasy. And I hope you're right. Oh, Kerri Dunn says hi, and don't think it can't happen here. It did.
I've stated on a campus discussion email list that these acts are acts of vandalism first and foremost. They can be prosecuted that way. Because they also invade private spaces, they are criminal trespass. But the university has labeled all these acts hate crimes, which Dick finds objectionable.
Based on the above, I suggest the president require a shared and inclusive definition of harassment, discrimination and abuse-related conduct to which everyone is held accountable.
I suggest further that complaints, allegations and claims are reported as such rather than as facts. Such complaints should be handed to the police for careful investigation and appropriate criminal justice interventions.
Referring to anonymous bathroom graffiti as a hate crime, rather than juvenile acts of vandalism, is overreacting, which makes a mockery of real acts of hate that might occur.Another colleague of mine shared with me a letter sent to President Potter. It makes the point of what we are setting up when we promise so much more than we can actually deliver, in a free, pluralistic society:
President Potter announced two weeks ago that there will be a forum "that will invite broad perspectives on characterizing and dealing with hate crimes, as well as provide support and information about resources to help those in our community who are feeling threatened or intimidated." There has so far been no forum planned on free speech, but never has one been more needed. To both of my colleagues, bravo.
... I think your administration does a disservice to our students and our community when it simplifies a complicated issue, and when it assumes that all students will have the same reaction to these incidents. I read a comment of yours that some students are now afraid to be at SCSU and are thinking of leaving the university. But where will they go? Which university in this country can promise a better environment, or guarantee that similar incidents will never happen there? Not one. And, while I understand and genuinely sympathize with those students [who express hurt and fear --kb], legally their reaction has to be "reasonable." The entity that decides whether a victim's fear is reasonable is the jury, but only after all of the evidence is presented. Unless we want to be judge, jury, and executioner, we should not jump to conclusions that may or may not be supported by the actual evidence.I think it is important for our students to understand how the law works and how the first amendment works because, ultimately, these will be used to decide the fate of the perpetrator. For all of the outrage being expressed now, how will you and the university community react if the perpetrator's conduct is adjudicated to be legally protected speech? Will you condemn the first amendment in equally harsh terms, because it rendered a result with which our community must disagree? Will you backtrack and explain that the law was always a part of the (non-existent) discourse as these events unfolded on our campus? Will you tell our students that their disappointment in the court's finding is understandable, and that you, too, are disappointed? I would hate to see our students set up for a fall -- waiting for the system to come down hard on this person who has so grievously injured our community, only to find him/her exonerated?
Tuesday, January 08, 2008
Or maybe they finally implemented Phase II.
Many state and local governments incur costs for services associated with unauthorized immigrants, particularly in the areas of education, health care, and law enforcement. Some of those costs are incurred because of rules governing federal programs, court decisions, and state-level statutory or constitutional requirements. CBO�s review of the literature finds that the amount of spending involved is a small share of total state and local spending on these services, but the tax revenue collected from unauthorized immigrants at the state and local level does not offset the costs involved. The result is probably a modest negative net impact on state and local budgets.Emphases mine. For the state of Minnesota, a document released by the Pawlenty administration in 2005 put the net cost to the state budget at $148-188 million (including $17 million for public health), out of a budget of $30 billion. Approximately $39 million of that were education expenditures for children who were citizens but whose parents were undocumented. Eliminating ALL those costs would have reduced the FY04-05 state budget by 0.63%. Not exactly an overwhelming figure.
There are enough arguments for controlling immigration without making mountains out of molehills.
Last week the school dropped the email charge but says he still has to go through an "appeal" process -- he's already been found guilty of other charges heretofore unspecified. Our Chinese Josef K. finds out that he has been charged with 1) "Behavior in the classroom which includes delaying the class with repeating of questions that had either previously been covered or knowledge that you should have had prior to coming into the course;" and 2) "Inappropriate behavior toward college personnel including behavior on or about October 10th 2007 , when you were verbally abusive towards the Chemistry department secretary as witnessed by two members of the department." (It is worth noting that the 10th is also the date of the first email indicating to the class that K. is leaving the course.) Nine witnesses have been assembled. K. has six days to assemble his defense against these charges now at last revealed.
The charge in the department office could be quite serious -- it's not unheard of for a student to get a little hot while under stress and venting anger in a department office. But how is it that the punishment for this crime is identical to what was heard before? And as a professor I will say, there are times you think the student asking the question has not done the homework, and you might say to him or her "look, you really should have known that already, so I am going to move along in my lecture and tell you to go back and read the assignment again." I am sure I have said "that's in the reading you were supposed to have done" but I don't think I've blown off the question. And I most certainly would not file a complaint against the student. Perhaps the student's English skills made for a difficult time in o-chem, and maybe he was using a lot of time asking questions. You can get the student into an ESL class. You can even ask him to withdraw from the class because he's not prepared to succeed. But you don't use the disciplinary process to punish a student who cannot understand the class. If that's what happened. We really do not know. Remember, our K. has a PhD from the Chinese Academy of Sciences. He's probably not a dolt.
Is STLCC just looking for cover, punishing first and finding improper behavior later? It certainly has that appearance. At minimum, the school should delay the hearing to permit the student sufficient time to prepare a defense against these charges.
Labels: higher education
This image, from a new article in Foreign Policy by Stefan Theil, should concern us with attitudes towards trade internationally going forward. But there's plenty more where this came from. I listened to Littlest last night ask Mrs. S a question from her U.S. history text: "What would a white Southerner in 1860 think of the 13th Amendment?" What do you think the answer was that the questioner was looking for? Such examples abound in discussion of economics as well. (And note, Littlest goes to a private school. There will be a discussion of this later with the teacher.)
A survey of attitudes in the US in 1980 and 1989 (discussed here) came to the conclusion that the American public is generally favorably inclined towards capitalism. An interesting paragraph:
An interesting difference exists for an item drawn from the writings of Robert H. Bork, erstwhile Supreme Court nominee: "Capitalism is more than an economic system-it is a complex of institutions, attitudes, and cultures." Eighty-four percent of the general public in 1980 agreed with this statement, compared with 77 percent in 1989. This suggests that perhaps people perceived capitalism somewhat differently in 1989 than they did in 1980. It is possible that the general public viewed capitalism more simplistically in 1989 than in 1980.The survey also found a sharp increase in the number of males in particular responding positively to the statement, "Capitalism Must Be Altered Before Any Significant Improvements in Human Welfare Can Be Realized."
I think that emphases on "new-school paternalism" or "populism" are part of this continuing process of believing we can alter market outcomes without worrying about the "institutions, attitudes and cultures" that underlie it. David Strom argues that we are "woefully undereducated when it comes to the real roots of our enduring prosperity." But it wasn't always so.
Monday, January 07, 2008
Susan Athey of Harvard makes a broader point though:
On a broader level, the panelists disagreed about whether the core should be imagined as a set of crucial, substantive facts or as a package of techniques that would allow students to take more specialized courses in the second year and begin their own research. Ms. Athey argued for the latter approach. "Instead of trying to think about every possible thing that every economist should know," she said, "we should be thinking about, What's really going to help these second-year courses move along very quickly into the substance?"It is reported that most panelists did not think the core would change much, because who teaches in the core will both teach the topics they prefer, and if like me they teach grad macro regularly, are loathe to toss away too many of their notes.
We were one of many schools interviewing for a health economist this year, and the breadth of topics these candidates worked on was amazing. But all involved some variation of a model of individual choice by households or firms. In some cases there was an insistence on rationality, in some cases it was bounded or thwarted by something else. (For instance, until this weekend I had never heard the words "rational addiction" used together, but of course the idea has been there for twenty years.) It seems to me that the topic "health" was simply an environment in which the techniques we all recognized as being "economics" were applied. Perhaps students are getting this without us having to be intentional in teaching techniques. And so, perhaps, it's not as big a problem as argued in the article.
DN: Are you comfortable with the arrangement between the government and baseball and the fact that the government came after McNamee in the first place?So if they had leverage on him, isn't he compelled? Rocket believes so based on the quote he has on point 27 of the petition (starts here).
WARD: No, we're not comfortable with it. But we were in a position where we were asked to provide truthful information and we provided that information to the government. The government then requested that we speak with Sen. Mitchell. Although the investigation was a private investigation, we felt compelled to provide the same information to Sen. Mitchell.
EMERY: If the government asks, you listen....
DN: How did that play out? Did the government say, "We'll come after you and prosecute you, if you don't talk?"
WARD: No. McNamee was obligated to cooperate with the federal government because they called him in. They indicated he was not a target of the investigation, but that he had to provide truthful information to them, or he could be charged with lying to federal investigators. So he provided truthful information to them. During the course of his cooperation with them, they requested that he speak to Sen. Mitchell, and he had no problems.
DN: The government came first, then Mitchell?
WARD: Right...They had information that he was involved, because they had checks from Brian to Radomski.
EMERY: They had leverage on him.
McNamee's lawyers say they will counter-sue, and what they are hoping for is for Clemens to get himself in hot water with the Congressional testimony he is now obliged to provide. Taking the Fifth, or alternatively lying after being granted immunity by Congress, is what they are angling for. I have no idea why Harry Waxman would do this (Gary Huckabay thinks even less of the move than I do), but so far Clemens is saying the right thing -- will testify, needs no immunity, will not take the Fifth. For all our sakes, I hope he carries through with this. But on an ESPN SportsNation poll, Roger is down to McNamee on believability by a 2-1 margin. Perhaps because Clemens seems spoiled -- Rob Neyer points out (in a blog post for ESPN Insider, subscriber link)
...it sure would help if he'd learned at some point to come across as something other than a spoiled, petulant millionaire who thinks he did something for baseball. Rather than the other way around.Pat Jordan, whose book A False Spring is one of the most poignant baseball stories I've read, sounds off on Clemens. Until he can make a convincing case, it appears this is how it will go for Clemens from here on.
UPDATE (9pm): ESPN has posted the audio of the tape recording, which Clemens played for the media.
Does McNamee refer to himself in the third person? And does he know he's being recorded? Hearing that, the story Jordan tells about the relationship between Clemens and McNamee sounds more credible.
Tice links to an article that does the cost-benefit analysis. There's a good chance John Edwards hasn't read it.
I think there's less disagreement than Ming believes. As I mentioned in a comment, there are many kinds of such places around the world, often placed by emigres to these places (my favorite being the Vietnamese family who had fled to America, and then were lured by their daughter to set up a Viet-Thai restaurant in Budapest because they loved that city.) People don't disagree about food, they value heterogeneity.Culture that represents modernity inspires people in the rest of the world to follow its path. Sadly, these disciples have often chosen to copy the superficial quality of the modern leaders. There may be twenty factors that contributed to the success of the United States. MTV and baggy pants are not one of them. To understand and to learn the true ingredients of success is hard. To buy the lifestyle of citizens of the modern world is relatively easy. Such is the unification of the low culture, an unnessary yet inevitable product of economic globalization.The last frontier that is resisting this process is cuisine. History and geography has dictated what we prefer to put into our mouth. True, MacDonald and Pizza Hut have evaded much of the space in the second world (Europe) and the third world (the rest). But in most cases, they only add to the existing heterogeneity.
Today, in a upscaled mall in Tsim Sha Tsui, Hong Kong, I ate in a food court that featured Chinese, Japanese, Korean, Vietnamese and Italian cuisine. And mind you, this is not a unique phenomenon, not a single observation point. No matter how alike we dress, food is where people disagree.
Indeed, in travel and at home what we value is what we are served. Sometimes we want food fast, or we want to experience "typical American life". When I ate at a Pizza Hut in Cairo I would see many average Egyptians there. When I ate in the food court at the Hyatt, the Egyptians there were mostly of upper income levels. Prices matched this. When I travel in business or first class, the type of service I get from international airlines differs greatly from that which I get from local. American business flyers want space for their laptops; they work on the plane. So perhaps the quality of the service isn't that big a deal. When in Europe or particularly Asia, the travelers more often read and relax, so service quality has a higher value.
Markets are efficient at providing to each group that which they value more. Prices adjust -- I have always wanted to know on what price scale they measured these bundles of food eaten around the world -- and diets adapt. But we value means to extremes, and we value both heterogeneity and consistency. These are improved as we trade more.
Friday, January 04, 2008
"Alarm -- Looks like strobelight
Sounds like whoop tone."
Not quite Engrish, but pretty damn funny, I think.
Labels: New Orleans
Thursday, January 03, 2008
UPDATE (1/7): The Tax Foundation blog has linked a set of articles on Fair Tax. See also this discussion by Justin Fox.
If you give up,
I could have left the second one home.
Festivities for the BCS Championship game are already ongoing; we saw a guy walking the hallway of the Marriott with an LSU helmet and a Sharpie looking for autographs. The hotel I'm in is missing its bartender, which is a bad deal for a bar when you've got economists in the house. I'm sitting in it, alone.
Stunning how many people I see that I know just sitting for 45 minutes in a lobby bar (the one with a bartender and ergo booze.) I guess I have been doing this for a long time. No sign of last year's comrade in crime, but it looks like most of the sports economists are here. No in-room wi-fi, so if I post about politics it will be tomorrow.
P.S. Dani Rodrik has the right idea for staying warm and for camel-jockeying. I have been about there, on a horse instead, about ten years ago. My cousin paid for someone to steer the horse. I asked about a camel, but was told it would not be a good idea.
Wednesday, January 02, 2008
If you're interviewing with us, you're allowed to say you read this blog.
But if markets can inflict pain...Who in the hell said they cannot? Of course they do. People make loans on too-favorable terms. People perform swindles on other people. There are, in Charles Kindleberger's famous words that are the title to one of the best ten books in economics ever, "manias, panics and crashes."
The 'false idol' is worshiped by those who think they can prevent this.
- As the post immediately below points out, if you make around $30k a year, your payroll taxes (Social Security and Medicare) take a bigger bite out of your paycheck than your income tax. That has been true for many years. But those people not in the labor force (which is far less than 70 million, by the way). An increase in employment of 13% would add 18 million workers "in the long run". Where would they come from? And why do we think what they did before wasn't valuable (like homemaking, or being a student?)
- You can use any tax you want to increase burdens on the wealthy if you wish, but taxing only labor income through a payroll tax means all the non-wage means of earning money would be missed by this plan. Is that really what Drayton means?
I probably have mentioned this here before, but I used to work while in graduate school for a private consulting business operated by Craig Stubblebine, a professor specializing in public finance at Claremont McKenna College. With my check I would receive a very elaborate "stub" showing both what was withheld and what I paid in. Let's use Ironman's data to show what I mean. Suppose you work for me as a research assistant and I pay you a salary of $30,000 to be distributed biweekly. You're married, have no children, and you can throw 3% of your pre-tax dollars in a retirement account, which I match. You also set aside $1000 a year to a flex medical account. You work in Minnesota. Craig would write out for you something like this.
Wages $1153.84 $14.42/hr
SocSec -$71.53 -$0.89/hr
Medicare -$16.73 -$0.21/hr
FIT -$50.83 -$0.64/hr
contrib $1014.75 $12.68/hr
401(k) -$34.61 -$0.43/hr
FlexHlth -$38.46 -$0.48/hr
Paycheck $942.11 $11.78/hr
Wages $1153.84 $14.42/hr
SocSec +$71.53 +$0.89/hr
Medicare +$16.73 +$0.21/hr
Unemploy +$26.77 +$0.33/hr
cost $1268.87 $15.86/hr
It took me a couple of times to figure out what he was getting at. But what he was trying to define was the size of the tax wedge created by income based taxes. I haven't included worker's comp or other such payments the government might require on the employer (in CA at the time there was a worker disability fund that he had to pay into and showed up on the employer half of the stub.)
I wonder whether people who advocate Fair Tax wouldn't be helped by using Craig's stub as a way to show how distorting income taxes can be. In short, my researcher's labor has to be worth almost $16 an hour for me to hire her, but she must not value her time more than $12.68 for it to be rational for her to give me that labor. (And this assumes she's perfectly willing to consume those bundles of retirement plan and health care.) An hour of her time worth between $12.68 and $15.86 are not going to be bought, so I will hire her less than I would otherwise.