Wednesday, September 30, 2009
Our son participated in a ROTC program and now he is a 1st LT in the US Army and yesterday, deployed to Iraq. Already he's spent a year in Korea but going to Iraq is a bit different - travel, ease of mobility, etc. are not the same as Korea. But, the experience of spending a year in Asia and now, another one in the Middle East - how can one buy that? Can't.
The knowledge he will gain on this deployment will be invaluable - he will be working with the logistics team that must log, value, and transport all the equipment we still have in Iraq. Those who understand logistics will appreciate the magnitude of this project.
Why am I sharing this? We do take our military for granted - for every 200 of us, there is one (1) full-time military personnel. What this subset of society accomplishes is far more than the 0.5% of the population it comprises.
I've taught a number of guys from the MN Red Bull National Guard unit in my classes. To a man, they are more mature, responsible, and confident than most of my students. They can lead, they can follow. They present well.
It is a shame that too many schools now make it difficult for young people to even hear what the military has to offer them. For so many who have spent their years in a dumbed down education system, one more interested in "feeling good" than learning what one can do, the military provides a challenging and yes, rewarding life option.
When I tell people that he is going to Iraq, the comment is too often a bit of a downer, "Oh, well..... How do you feel?" and it goes downhill from there. Our response is this: "Would you give a negative response to someone who joins the police force? the fire department, a personal security firm? No, yet these are dangerous jobs. Why, then, give a negative response regarding someone who chooses the military?" Their approach shifts.
As for our son, this is his choice and we fully support him. Yes, we are very proud of him.
Labels: US Soldiers
Monday, September 28, 2009
What does all this mean? It means that when the economy does begin to recover, when we finally get to the other side of the mountain, companies are going to raise their labour input first by lifting the workweek from its record low. Just to get back to the pre-recession level of 33.8 hours would be equivalent to hiring three million workers. And, the record number of people working part-time against their will are going to be pushed back into full-time, which will be great news for them, but not so great news for the 125,000 - 150,000 new entrants into the labour market every month. They won't have it so easy because employers are going to tap their existing under-utilized resources first since that is common sense.
And that is before this administration makes the economically suicidal move to raise the top tax rate by 10%. The popular image is that those who pay the highest tax rate are Wall Street execs, bankers, and corporate moguls. The reality is that 75% of them are small business owners, and they are responsible for the large majority of new jobs that are going to be needed, not to mention a large part of consumer spending. If you tax them more you are going to get fewer jobs (as they will have less to invest) and less consumer spending.
A tax increase of the size being contemplated, with unemployment at today's level, will guarantee a double-dip recession, which of course means that unemployment will rise, not fall. Go back and look at that chart on unemployment. Notice the very steep rise in the second recession of the early '80s. That's what we could be facing.
Saturday, September 26, 2009
been entirely built in the last ten years. Constructed much like
those newer towns that spring around metropolitan regions, this one
has broad streets and an eye for both retail development and
commercial activity. The school I'm speaking at today (Saturday -- I
do not know if this will post today, because our internet here has
been sporadic) is at the center of this new province.
It is interesting that as you enter the main street into the district
there are two sets of intellectuals featured in the entrance. One is
Chinese, the other western. It is interesting, as my university
president observed this morning, because of the antipathy towards
intellectuals in the Cultural Revolution. It is also amazing that a
country that has a great deal of pride in its own identity would make
a public acknowledgement of the patrimony of Western thought.
It is an area that oozes hope. Built along a river, there's a broad
walking path on which people run, walk and visit. I haven't yet seen
the tai chi practitioners on the plazas or parks, but I keep looking.
The cars here are nice, perhaps nicer than the US and far nicer than
most of the developing world. (They still have the black official
sedans, though apparently they change brands every other year or so.
Honda seems to be the brand of choice right now, replacing Buicks.) I
marveled at one of our Chinese delegates who told me that her new
cellphone cost her RMB100, or about $15. There are over 700 million
cellphones in use in China, compared to 250 million in the US. And of
course there's still a great deal of market penetration still available.
As we were taken from the hotel to the university we saw a sign on top
of a commercial building. In English it declared "Today is today.
Today is OK." That will be how I think of modern China.
Friday, September 25, 2009
Out of more than 277,000 veterans who have filed for the college tuition benefits this semester, more than 200,000 claims have been processed and approved, but fewer than 11 percent of the veterans have received the funding, according to the Iraq and Afghanistan Veterans of America (IAVA).The US government would be responsible for millions of payments under a single payer health care system. Washington politicians who care about their re-election should be unwilling to risk extending demonstrated government incompetence into such a huge and important sector of our economy.
The group says it has been contacted by thousands of veterans who have not received their benefits and that they are forced to take out loans or pay the money out of their pockets.
My husband and I will be attending a departure ceremony at Ft Bragg, NC on Tuesday morning, as our son's army unit deploys to Iraq for a year.
Thursday, September 24, 2009
not posting much as I keep busy. I saw the Forbidden City, Tiananmen
Square and the Summer Palace yesterday. Traffic was incredible; we
hired a car and driver for eight hours, and those three places (two of
which adjoin) took seven hours, three of which were in the car.
Janet will give you some things to chew over. I am gladdened by the
amount of comments I read lately. I appreciate particularly those who
offer opposing views in ways that facilitate debate and hope these
continue. (Yes, Benjamin, I mean you in particular. Keep it up.)
Tomorrow from Tianjin, internet willing.
Wednesday, September 23, 2009
A - Apologize
B - Betray
C - Cave
You can find multiple examples for each verb.
I have always felt that the panda was the perfect symbol for the WWF; it is an odd looking fussy eater that is not very good at sex.
The Senate Finance Committee considered for two hours today a Republican amendment -- which was ultimately rejected -- that would have required the "legislative" language of the committee's final bill, along with a cost estimate for the bill, to be posted online for 72 hours before the committee voted on it.
Instead, the committee passed a similar amendment, offered by Committee Chair Max Baucus (D-Mont.), to put online the "conceptual" or "plain" language of the bill, along with the cost estimate.
Usually, the Senate Finance Committee considers "conceptual" language because the actual legislative language in a bill is filled with jargon and references to existing legal code that can make it nearly impossible to follow.
Sen. Tom Carper (D-Del.) described his attempts at reading the legislative language of a bill: "You read it and say, 'What did that say?'" The committee, he said, uses "plain language so that even I can understand" a bill.
Will notes that the effect of higher tire prices will be for more lower-income Americans to drive on bald tires, increasing accidents and maybe even traffic deaths. This is evidence of the Obama Administration still engages in first degree thinking (as Thomas Sowell might argue.)
In 2000, as a price of China's admission to the World Trade Organization, Congress enacted a provision for "relief from market disruption" to American industries from surges of Chinese imports. Actually, American consumers cause "disruption" in American markets when their preferences change in response to progress -- better products and bargains. Never mind. Congress said disruption exists whenever imports of a product "like or directly competitive with" a U.S. product increase "rapidly" and threaten "significant" injury to a U.S. industry. Examples of disruption include the volume of imports of a particular product, the effect of imports on the prices of competing U.S. goods and the effect on the U.S. industry.
Notice that China need not be guilty of wrongdoing: It can be punished even if it is not "dumping" -- not selling goods below the cost of manufacturing and distributing them. (That we consider it wrongdoing for a nation to sell us things we want at very low prices is a superstition to be marveled at another day.) And China need not be punished: Presidential action is entirely discretionary. So Barack Obama was using the sort of slippery language that increasingly defines his loquacity when he said he was simply "enforcing" a trade agreement.
Also to note from China: I had on Bloomberg, which is my wont when in a foreign hotel; it's the only channel I watch both home and away. When they switch to their Asian desk they often have this smug little man named Bernie Lo hosting a show. (I note he has now changed his name to Bernard. That should help.) The show took about four minutes to stab at Sarah Palin's speech in Hong Kong yesterday. I'll grant you that 80 minutes is too long a speech for anyone to give, but the snideness of Lo's asides were appalling for a major journalist. Would it do for someone to remind him that his target and the owner of his network might be considered competitors for a presidential nomination?
I'll avoid him future mornings.
Recently, there have been videos of undercover work done by two rather rookie reporters (as compared to the NYT, LA Times, Washington Post, along with the alphabet soup group of television networks) exposing ACORN for giving "advice" as to how to set up brothels with underage girls yet avoid taxes and being caught.
The US House of Representatives voted to totally stop the flow of all federal money to ACORN and the US Senate requested the Dept. of Health and Human Services to stop that funding.
Now, it seems that within a week of supposedly losing all their funds, ACORN distributes a fundraising letter to its lists requesting money. On top of this, they have a mystery donor who promises to match all new donations up to $20,000.
My question? If ACORN can raise this kind of money on its own, why are we taxpayers footing the bill for any of their activities?
Hat tip - Ed Morrissey, Hot Air.
Tuesday, September 22, 2009
out: Sparklehorse, Sad And Beautiful World
in: U2, Elevation
out:Better Than Ezra, Pull
in: Chevelle, Sleep Apnea
out: Gomez, How we Operate
in: Coldplay, Voilet Hill
out: Radiohead, Paranoid Android
out: Foo Fighters, Long Road To Ruin
in: Muse, Super Massive Blackhole
out: Arctic Monkeys, Brainstorm
in: Audioslave, Cochise
out: Killers, Mr Brightside
in: Soundgarden, Spoonman
Blatant forms of racism continue to exist, but more subtle, equally destructive forms continue to have a significant impact in every corner of U.S. society. A new discourse on racism draws attention to continuing problems such as �color-blindness� and tokenism, and newer perspectives such as intersectionality. This more contemporary framework explores the way that other forms of oppression, such as sexism, heterosexism, and classism, sustain injustice and further inequality.So if you pay no attention to race, you're a racist? And help me out here: What is "intersectionality"? Wikipedia says:
A standard textbook definition of intersectionality theory might be "the view that women experience oppression in varying configurations and in varying degrees of intensity".Did that help you? What standard textbook is that talking about? What field? Who's learning from that textbook and what are they learning?
With per vehicle environmental benefits at $596 and the costs at $2,600 per vehicle, the clunker program is a net drain on society of roughly $2,000 per vehicle. Given the approximately 700,000 vehicles in the program, we estimate the total welfare loss to be about $1.4 billion. The welfare loss would be even greater if we fine tuned our estimate of the social cost per gallon to account for the spatial mix of clunkers. Clunkers, especially the trucks that comprise a large percentage of the traded-in vehicles, may have been retired disproportionately from rural locations where the social costs of pollutants are significantly lower. Also, if the average value of clunkers exceeds our conservative figure of $1000, then cost of the program would be higher. Even if the environmental gains were double our estimate, the net drain would still be close to $1 billion. While a more rigorous analysis would no doubt adjust these figures, we doubt that the basic conclusion would change.Burton Abrams and George Parsons of the University of Delaware, in the newest edition of The Economists' Voice. This includes some gain to those who cashed in clunkers, who receive a transfer from taxpayers. It's hard to imagine how this program did not end up throwing taxpayer money down the rathole, but if you throw $1 down the hole for every $1 you give to the UAW, and you're an elected official with lots of money from that union, that might be a deal you'd make.
Liberals make fun of conservatives' patriotism, but in fact liberals' preferred economic policies are more dangerously nationalistic, and full of contradictions.Ben Casnocha. On my way to a conference in China where I am speaking on the third wave of globalization, the one China embraces. I like Casnocha's description of economic nationalism, which I'm sure walks in the neighborhood of Jonah Goldberg's liberal fascism, but is probably less value-laden. Goldberg himself closed his blog for the book using the term "state capitalism", which indicates convergence with my preferred "corporatism".
Monday, September 21, 2009
From the Encyclopedia of taxation at p. 375 (and I stand advised that "if you have to look it up," the President will think that "indicates to me that you're stretching a little bit right now.")
STEPHANOPOULOS: You were against the individual mandate...
STEPHANOPOULOS: ...during the campaign. Under this mandate, the government is forcing people to spend money, fining you if you don't
How is that not a tax?
OBAMA: Well, hold on a second, George. Here -- here's what's happening. You and I are both paying $900, on average -- our families -- in higher premiums because of uncompensated care. Now what I've said is that if you can't afford health insurance, you certainly shouldn't be punished for that. That's just piling on.If, on the other hand, we're giving tax credits, we've set up an exchange, you are now part of a big pool, we've driven down the costs, we've done everything we can and you actually can afford health insurance, but you've just decided, you know what, I want to take my chances. And then you get hit by a bus and you and I have to pay for the emergency room care, that's ...
STEPHANOPOULOS: That may be, but it's still a tax increase.OBAMA: No. That's not true, George. The -- for us to say that you've got to take a responsibility to get health insurance is absolutely not a tax increase.
In economic terms, any appropriate of resources from individuals or firms by the government and be considered a tax. For example, economists frequently talk about the inflation tax, since inflation appropriates resources to the government. Legally, though, it is clear that inflation is not a tax since it does not involve a payment by the taxpayer to the government. Similarly, regulatory requirements can have the same economic consequence as taxes. For example, a legal requirement for employers to provide health insurance to their employees may have the same economic effect as a tax imposed on the employer; the revenues from this requirement are used to provide health benefits to employees. For purposes of economic analysis, the two are equivalent, but from a legal point of view they are not. Public finance economists therefore do not spend much time discussing whether a particular levy is a "tax" or not.The article in the encyclopedia says the legal definition of taxes is malleable. If Obama sees something malleable, rest assured it's getting hit with a mallet.
It's worth noting from this article that, unlike the USA, many countries consider Social Security taxes to be "contributions" and not taxes, as they entitle someone to a benefit. Had Stephanopoulos wanted to press the issue, that was the question: What is the difference between being forced to buy the benefit of health insurance and being forced to buy the benefit of Social Security payments? If there's none, why is one called a tax and the other not?
UPDATE: The accountants, who might know a thing or two different from the legal scholars, say it's a tax:
"If you put something in the Internal Revenue Code, and you tell the IRS to collect it, I think that's a tax," said Clint Stretch, head of the tax policy group for Deloitte, a major accounting firm. "If you don't pay, the person who's going to come and get it is going to be from the IRS."
Then editorial page editor Randy Krebs decides to reveal something about his editing. The crux of his argument:
The teacher asked our class what the purpose of television was and the overwhelming response was �entertainment.� His tart reply: �Wrong! What you see as �entertainment� is merely something to show between the commercials there to get your money.�...So when you watch Fox News or MSNBC, they are giving you entertainment, not facts, and it's because of the almighty dollar. But what motivates the newspaper if not profit? This is after all a newspaper of the Gannett chain, one that prefers smaller papers where they dominate the advertising market. As ad revenues dropped the newspaper got smaller, and as it got smaller so did the amount of news provided.
I will grant you that �objective news reporting� is a subjective term. That�s human nature. I also fully acknowledge that the business realities facing newsgathering entities can impact those efforts, especially these days. And by no means am I comparing broadcast to print media. (They are apples and oranges, but that�s another column � or a book.)
But to be blunt, the bulk of the complaints aren�t that sophisticated. They simply don�t seem to grasp that what they are watching or listening to is more about entertainment. In the words of my old teacher, �it�s there to keep you tuned in until the next commercial.�
As the person at Times Media whose job hinges largely on people understanding �it�s the Opinion Page,� I simply ask you to be a little a more discerning, and perhaps honest.Now remember, this is the newspaper that has said in its very same editorial page that "we've had enough" of Bachmann who "consistently invokes extremism."
This board has never been a supporter of Bachmann, but it was willing to treat her tactics and outlandish statements as errors in judgment and/or a need to get noticed. Sadly, we�ve had enough.I'd love to give you the whole column, but it appears to have gone down the memory hole in the Times' parlous web. No money in that, either, dontcha know!
Two straight years of her consistently spewing misleading snippets about important issues yet never stepping beyond those statements to find realistic solutions make it clear she is all about extremism and cares nothing about crafting viable public policy.
So how about, when you do a report on Bachmann and you bury the tea party story after the jump and append it to the end of the town hall story, "you be a little more discerning, and perhaps honest" yourself.
This woman attends both the town hall by Rep. Bachmann and the T.E.A. party on Lake George across the street as someone opposed to both. (I wonder if she was the one who I watched boo repeatedly from the bleachers at the town hall. I wanted to take a video of her and give it to her children to see; I wondered how she would explain her booing not only of the Representative but also the questioners who were opposed to H.R. 3200. But I have no idea if this is that woman or not, and booing is part of your First Amendment rights.) She gets into discussions with people at both with whom she disagrees, and gets it all in print. Bully for her.
What caught my eye was this passage:
Bachmann�s assumption that the poor should be happy in their hearts to rely on religious charity is simply laughable.Now a woman who's studied "feminist rhetoric", whatever that is, didn't use the same word "ingratiate" twice without a reason. What would be her reason? The word "ingratiate" simply means to bring someone into the good graces of another, most often yourself. Its etymology contains the Latin word "gratia" for "favor, grace." So shall I understand that this woman believes you should be able to get something from another without exchanging anything in return? What does she want in lieu of gratitude?
It ignores the fact that, to many people, charity is ingratiating � and it is always undependable and inconsistent.
Is it really such a beautiful thing that a family trying to treat a member�s terminal illness is ingratiated to begging money off �the generous public� at car washes and charity suppers?
There are two ways to do that. You can be moocher, someone who begs money from someone else by being mostly annoying; we give the bum money not out of generosity but to make them go away. It would be great if every time I had a poor person approach me I felt Christian love and charity towards them. I don't; I consider that part of the human condition of being always in sin. I had someone approach me as I went into the Ace Bar on the east side last week and ask specifically for $1.50. I tried to see if I had that exact amount. I had $1.35 and gave it to her. and she seemed disappointed. No thank you was forthcoming. As I turned another man, who had seen me fish for change in my pocket, presented himself looking for some money too. I shrugged and said I had no more. This wasn't true, but all I had was $20 bills in my pocket, and I didn't feel THAT generous particularly when he just asked for "change".
It would be nice to say I felt I had done some good deed, but that wasn't really what I felt as I walked away. We all want, as Adam Smith said, to be seen by others as being good. When I give money and am somehow seen as still coming up short, my desire to do more is diminished.
The other way to get something without exchanging anything in return is to use government to take from someone else and give it to you. The writer identifies herself as "a pro-public-option taxpayer" -- does this mean she would like to use force as a substitute for gratitude? What is the moral argument for that? Dennis Prager explores this:
On what moral grounds can the state force a citizen essentially at gunpoint to give away his legally and morally earned money? Why isn't taxation a form of legalized stealing? The obvious answer is that common sense dictates that citizens have the moral right, even the moral obligation, to vote to give money to, at the very least, enable a government to fund a police force, sustain a national defense, and help those incapable of helping themselves or of being helped by others.But this student of "feminist rhetoric" would rather argue for something potentially immoral than be bothered with offering the simple value of gratitude.
But at some point beyond that, taxation becomes nothing more than legalized stealing. Obviously, people will differ over where exactly that point is, but no rational person disputes that such a point exists. No one could argue that a 100 percent tax -- even if it paid for every need every member of the society had -- was moral and not simply a form of theft.
So moral problem No.1 with taxation is the morality of forcing other people -- under threat of violence -- to give their money away.
Now we have a new piece of evidence (h/t: reader jw):
It�s commonly said that the SAT, taken in a senior year of high school, has only about a 40% correlation with a student�s freshman year college GPA.Here's a (gated) link to the paper. It appears that both Berry and Sackett are psychologists, not economists. Does income and selectivity of universities have a significant correlation? Casually I would think yes, but what I've read of this literature tells me not to be casual.
...I�ve always had a skeptical feeling about the 40% correlation statistic, and so I�ve never relied on it or used it in print. There are two self-selection problems that make it really hard to control the data. First, high schoolers of diverging abilities apply to different schools�the strongest students apply to one tier of colleges, and the average students apply to a less ambitious tier, with some overlap. Second, once students get to a college, they enroll in classes they believe they can do well in. Many of the strongest students try their hand at Organic Chemistry, while more of the less-confident students take Marketing 101. At each of these colleges and courses, students might average a B grade, but the degree of difficulty in achieving that B is not comparable.
Many scholars have attempted to control for these issues, looking at data from a single college or a single required course that all freshman have to take, and their work has suggested the 40% correlation is a significant underestimate. I�ve long wondered what would happen if an economist really took on this massive mathematical mess, on a large scale, harvesting data from a wide selection of universities.
Finally this has been done, by Christopher Berry of Wayne State University and Paul Sackett of the University of Minnesota. They pulled 5.1 million grades, from 167,000 students, spread out over 41 colleges. They also got the students� SAT scores from the College Board, as well as the list of schools each student asked the College Board to send their SAT scores to, an indicator of which colleges they applied to. By isolating the overlaps�where students had applied to the same colleges, and taken the same courses at the same time with the same instructor�they extracted a genuine apples-to-apples subset of data.
It turns out that an SAT score is a far better predictor than everyone has said. When properly accounting for the self-selection bias, SAT scores correlate with college GPA around 67%. In the social sciences, that�s considered a great predictor.
Friday, September 18, 2009
1 - All Americans, even those with pre-existing conditions, should be able to get health insurance. In 2006, a law was passed that would pool high-risk people, in other words, sharing the costs. This pooling does not have to be a government option.
2 - Provide the option for parents to carry their children up to age 25 on parental policies. This would eliminate over 7,000,000 of the currently uninsured Americans.
3 - Provide some kind of reimbursement for people who practice and maintain good health.
4 - Allow a deduction for private purchase of health insurance independently.
5 - Merge small businesses so they can buy insurance as a large purchaser. Let these business owners deduct their insurance costs from their taxes.
6 - Institute tort/medical malpractice insurance reform.
When asked what it will take for Republicans to sign off on a health care reform bill, Congressman Kline who had all the bills on a table on the stage, dropped the thickest one on the floor.
In summary, Congress simply needs to start over, with a clean sheet of paper. There are problems but there also are solutions. Nitpicking flaws in one or the other bills on the table now is not productive. There can be a solution but either the president, an outside committee, or a real bipartisan panel needs to do the work, beginning with a blank sheet. Only then, will we be able to do something.
Boiling the ocean is not the answer (my opinion).
Cross posted at Look True North and mncd2republicans.
On Table 2, we'd be at 25th, with 416 average daily page views for August. Seems about right.
I know some readers will take up the "where in the Constitution does it say" charge. It's a legitimate point, but not likely to be very effective as an argument. And there is the reasonable point that the Federal Reserve does not do compensation studies and has no specific knowledge that makes it more able to do this than, say, the Department of Labor.
Under the proposal, the Fed could reject any compensation policies it believes encourage bank employees -- from chief executives, to traders, to loan officers -- to take too much risk. Bureaucrats wouldn't set the pay of individuals, but would review and, if necessary, amend each bank's salary and bonus policies to make sure they don't create harmful incentives.
A final proposal is still a few weeks from completion and could be revised along the way, according to people familiar with the matter. It requires a vote by the central bank's board, but no congressional approval.
The U.S.'s largest banks, about 25 in number, would get especially close scrutiny. The central bank intends to compare these banks as a group to see if any practices stand out as unusually dangerous to their firms.
Let me set those points aside.
The Federal Reserve is supposed to have independent status. As Dallas Fed president Richard Fisher pointed out a couple of years ago, at times the Fed has been less independent and at other times more so. Less in the 1960s, more in the 1980s and 1990s. Which Fed gave this country better performance? Not versus an ideal, mind you, just better. I don't think you would find many economists who thought the William McChesney Martin Fed performed better than the Paul Volcker Fed. For all the mistakes Greenspan made, his performance was better than Arthur Burns'.
Why? Is its independence part of the reason? Fisher writes:
Under Chairmen Alan Greenspan and Ben Bernanke, the Federal Reserve has been left alone to conduct monetary policy. We are a truly independent central bank. Policy is set by the Federal Open Market Committee. The 17 current participants in the FOMC deliberations consist of five governors, including the chairman, who are appointed by the president of the United States and confirmed by the Senate, and 12 presidents of the Fed�s regional Banks, each of whom serves at the pleasure of his or her Bank�s board of directors. All 17 participate in honest and vigorous discussion of the economy and each offers his or her individual policy prescription at FOMC meetings convened and presided over by the chairman. At the end of these meetings, the chairman calls for a vote.And where does that independence come from? Not the Constitution; monetary policy is the purview of the Congress, and the Fed is an agency delegated powers by the Congress. The question is what powers can you delegate to the Fed and still call it independent?
I think executive pay compensation is a particularly dangerous delegation to the Fed's ability to conduct monetary policy. Money is created not only by the Fed but by bank lending; if a central bank can control pay, it can influence bank lending. This makes the Fed less transparent when most everyone seems to agree that more transparency is needed.
I have the same fears regarding the Fed as a super-regulator. I would point out this wise advice from the Indian economist Ajay Shah last week:
[I]ndependence goes with a narrowing of the functions of the central bank. There is no economic case for having independence from politicians for functions such as running the payments system, regulating or supervising financial markets or banks, running a bond exchange and depository, manning a system of capital controls, etc. The rationale for independence is limited to one specific problem: that of setting the short-term interest rate of the economy. Hence, giving RBI [Reserve Bank of India --kb] independence requires narrowing down its functions to the core where economic logic suggests independence. All other functions need to be placed in conventional agencies, with control in the hands of accountable politicians.There's some places to quibble there -- why short-term interest rates, for example, and not the exchange rate or the stock of money? -- but in general Shah makes an excellent point. You might want another agency that regulates financial firms to be independent of political control. But the best central banks seem to be those that, to use Willem Buiter's words, stick to their knitting and avoid commenting on everything other than interest rate or exchange rate policy.
This proposed U.S. policy goes in exactly the opposite direction. It is a danger to our monetary system, and should be opposed immediately.
Thursday, September 17, 2009
This is a good place for a poll. If you like the Fed, choose the last box. If I didn't give you a choice that represents your views, please place that in comments.
Wednesday, September 16, 2009
Does economic growth in developed countries like the U.S. actually lead to greater levels of happiness? Broad social surveys show a roughly constant level of self-reported happiness among Americans from 1972 to 2005 (Pew Research Center 2006, 2) �a period in which average real per capita incomes roughly doubled. Despite this finding, almost half the economists surveyed conclude that economic growth in rich countries does lead to greater levels of happiness, with about a third neutral and almost one in six rejecting the idea. However, �happiness� does not seem to mean the same thing as �well being��and the vast majority of economists (88 percent) are optimistic that continued economic growth in economies like the U.S. does yield ever greater levels of well being.From a new survey of PhD economists by David Whaples, in the latest issue of Econ Journal Watch. In light of French President Sarkozy's new plan to measure French happiness in the country's official statistics, it's worth noting that economists seem to think happiness and well-being are two different things. (For Sarkozy, maybe well-being is a poll number and happiness is his wife.)
Question for my non-economist readers: What do you see as the difference between those two terms? Your answers in comments please.
This morning's Wall Street Journal carries Carl Bialik's column on how to count stimulus jobs, and does a fine job taking you through the math. He begins:
So somewhere in the next 30 days we will have the state of Minnesota (through the MMB department). According to the federal Recovery.gov site, Minnesota has so far expended $1.47 billion of the $4.72 billion approved for the state. Now once upon a time I estimated that the Administration's calculation was that if they spent $93,333 they had "created or saved" one job. So the current estimate based on that $1.47b is that currently stimulus has created or saved 15,766 jobs (rounding up). Steward notes that the original proposal from the Administration indicated the state would earn 66,000 jobs, but to be fair that was over two years. Patience, Tom!
As the $787 billion federal stimulus package was being deliberated by Congress in February, the White House estimated that the act would increase employment by 3.5 million jobs, including 24,000 combined in New Hampshire and Wyoming.
So far, though, those states say the stimulus has added fewer than 1,000 jobs.
Less than a month from now, when every state receiving stimulus funds will be required to make such a report, the numbers will fall far short of White House projections -- whether it's the original 3.5 million job projection or the latest estimate, issued by the White House last week, that one million jobs have been created thus far by the stimulus act.
But Oberstar is also playing funny with the data in claiming that 2900 transportation jobs in Minnesota have already been created. Using my same divisor would make the $99 million spent by the Dept. of Transportation (most of which goes to highway funds) give us 1,061 jobs. Maybe I am not calculating that correctly, so I read on in Bialik's article.
Here's that CEA report. The report is much more careful than Oberstar in noting the tenuous nature of these estimates. However, Bialik explains the method they use is different because the White House numbers will include the multiplier effect, which data from Recovery.gov or the state sites will not.
The most visible figures available to evaluate the job market are unemployment rates, which don't speak well for the stimulus package. The national rate of joblessness last month was 9.7%, up from 8.5% in March, the month after the stimulus act was passed. A week after that number was released, the White House's Council of Economic Advisers reported that the stimulus had increased employment to a level by "slightly more than 1 million jobs higher than it otherwise would have been."
That awkward wording says a lot: It reflects the tough job facing any economist who tries to estimate job creation. In every method used, economists are forced to imagine an alternate reality -- one built on assumptions that are easily challenged. For example, to compare present unemployment rates to past rates may be straightforward but it fails to account for other economic forces that were going to affect unemployment with or without the stimulus.
The White House method assumes that things were getting worse and that the stimulus is the sole factor responsible for stopping the bleeding. So economists imagined an alternative reality whereby the present would have been much worse -- to the tune of one million more lost jobs.
I would disagree with Bialik's characterization of the multiplier as "standard". First, the 1.57 multiplier is a long-run effect; as I've already noted, the additional jobs one would expect from, say, the lunch truck operator who hires another driver because manufacturing plants are adding new shifts, are a long-run thing. The one-quarter multiplier is 1.05 by the estimates of the Administration, and the long run takes a year. They are taking credit for jobs they expect will happen in the future. Even 1.05 might be too high, as Casey Mulligan argues, but again he's looking at an impact multiplier versus a long-run multiplier. It could be 0.2 for one quarter and 1.57 over six quarters.
To arrive at that larger projection, the White House council applied standard multipliers -- reflecting that some spending has ripple effects through the economy, such as hired people increasing their consumption -- to components of the stimulus. For instance, increasing government spending by 1% of GDP would increase the GDP by 1.57%, which is the average of the Federal Reserve's estimate and that of a private firm.
Then the council converted the projected GDP growth into job figures, assuming that a 1% increase in GDP would reduce unemployment by 0.75% -- an assumption based on historical economic figures.
That assumption is based on a decades-old principle developed by Arthur Okun, former chair of the Council of Economic Advisers under Lyndon Johnson. Though Mr. Okun's name wasn't cited in the council's projection, his famous law tying GDP to employment was clearly in effect. The economist proposed that changes in the two were directly proportional -- nearly 50 years ago.
The council had doubts about its numbers for the tax-cut portion of the stimulus, writing in its report, "We confess to considerable uncertainty about our choice of multipliers for this element of the package."
Let me also point to a Time article this week regarding the CEA's use of Okun's Law. The relationship between output and employment has gotten tenuous. Bialik picks up on this as well, and ends up finding the state-by-state figures at least cleaner, if not completely covering all the good things the stimulus might have done.
One last point to make here. As Menzie Chinn noted last month, fiscal policy multipliers are much larger when the monetary authority is accommodating, and you can't be more accommodating than when you are at the zero interest bound. And so it comes as no surprise that Chairman Bernanke is also singing the praises of recovery without notice of what is happening in the local economy (my comments to the local newspaper in that link.)
Tuesday, September 15, 2009
Many of us (including me) are City residents. All of us have a stake in building a just and welcoming community for ourselves, our students and our neighbors.Now the last time I looked, over 20% of our faculty drive from a seven-county metro area to us. The basic reason given for support is to join other groups on campus, and because "all of us spend significant time here and we and our students are deeply affected by the human rights climate of the city."
At its September 8, 2009 meeting, the Faculty Senate passed the attached resolution regarding the preservation of a Human Rights Office in the City of St. Cloud. On behalf of our members I ask you to find a way to restore staffing to the Human Rights Office.
We have a state human rights department. One can argue that we need more local enforcement, but let's look at the city's department. Its last meeting minutes from March 2007 (yes, 2007) included a concern over how many minority children are in youth soccer (a private organization) and whether to try to put "local dolls" into schoolchildren's hands.
The Human Rights Office was budgeted $98,100 for FY 2007. Question to my union: Where would you find this money? What expenditures would you cut to free up that amount? If you say you would tax it, who would you choose to make to pay for YOUR choice? Is part of being a good neighbor asking your neighbor to pay for your preferences?
[The student loan program] has experienced two crises in recent years:Centralized decision-making on prices means that 1) many pricing decisions will be wrong, and 2) any such wrong pricing decisions are almost guaranteed to generate crises.
* In 2006 and 2007, the crisis was kickbacks. In their enthusiasm to win more business, private lenders were offering �inducements� to schools and student loan officers in order to get preferred access to students who wanted loans.
* In 2008, the crisis was a lack of lending. In large part because of the financial crisis, private lenders had no enthusiasm whatsoever for making loans. As a result, there was a real risk that students might not be able to get loans.
As I told my students, I think both of these crises had the same root cause: the fact that the government, rather than market forces, determined how much lenders were paid for making guaranteed student loans. In both cases, the government got the payment levels wrong, and the crises followed soon thereafter.
Back in 2006 and early 2007, the government had set payment rates too high. Lenders thus competed aggressively among themselves to win as much of the market as they could. Some of that competition had arguably beneficial effects (e.g., some lenders passed benefits on to students), albeit at a notable cost to the taxpayer. But the competition also took on unsavory characteristics, as in the kickbacks to the university officials in charge of deciding which lenders would get preferred access to students.
To their credit, the folks in Washington correctly diagnosed this problem. Late in 2007, the Congress passed and the President signed a bill that reduced the amount that lenders were paid.
Unfortunately, those reductions happened at the start of a financial crisis that dramatically increased the cost of private lending. In micro-speak, the private lending market experienced a negative supply shock. And all of a sudden, lender payments were too low. Lenders thus threatened to flee the student loan market, which could have left millions of students without funding for their education.
Again to their credit, the folks in Washington stepped up and eventually found a solution to this problem (which involved more financial engineering than I want to discuss right now). But it was a painful process.
Monday, September 14, 2009
Trade relations between two of the world�s biggest economies deteriorated after Barack Obama, US president, signed an order late on Friday to impose a new duty of 35 per cent on Chinese tyre imports on top of an existing 4 per cent tariff.It's the magnitude that caught my eye. We are celebrating the reduction in job losses in this country to only 220,000 workers a month. And the President is risking a trade row over 7,000 jobs?
In his first big test on world trade since taking office in January, Mr Obama sided with America�s trade unions, which have complained that a �surge� in imports of Chinese-made tyres had caused 7,000 job losses among US factory workers.
I'm not at all sure what the President means by the $4 trillion claim. My assumption was that it's an "infinite-horizon" estimate. Not too long ago liberal think tanks like the Center for Budget Policies and Priorities was nicking the Bush Administration for using similar methods to discuss the cost of delay for fixing Social Security. Since the infinite horizon deficit in Medicare is $36 trillion, what President Obama's calculus would have to say is that we can reduce this to zero just by cutting the growth rate of national health expenditures by 1%. (Again, we have to be careful about the share that goes to government versus employer versus individual, but let's suppose some set of redistributive taxes takes care of getting that reduction into government's hands.) Does that seem reasonable?
If the size of that number hasn't given you pause, Dallas Fed President Richard Fisher's speech from last year should.
One other caveat: It is impossible to assume, as I did, that the rate of growth of health care spending can continue to rise that much faster than GDP as a whole, otherwise you end up with health care spending more than 100% of GDP. It has to decline over time anyway, as the CBO has argued. I could perhaps impute some regular decline value and then speed it up, if that's in fact what Obama meant (he does not say this, but I'm trying to find as generous an interpretation of his comments as possible.) They assume that private spending on health care falls faster than Medicare and Medicaid, and Medicaid falls faster than Medicare because states share Medicaid costs and will have more trouble shifting money into that program, thus restraining it. Obama's proposals have to do better than that to generate the expected $4 trillion.
The Wall Street Journal, at least, has taken notice.
Vern's documents are all published at Scribd. The feds, of course, would like to get a judge to simply throw out these cases, but Judicial Watch is currently on this case.
Last December, Mr. McKinley sent a FOIA request to the Fed to find out what Fed governors meant when they said a Bear Stearns failure would cause a "contagion." This term was used in the publicly-released minutes of the Fed meeting at which the central bank discussed plans by the Federal Reserve Bank of New York to finance Bear's sale to J.P. Morgan Chase. The minutes contained only the vague warning of doom, without any detail on how exactly the fall of Bear would destroy America. Mr. McKinley's request sought the supporting documents for this conclusion.
He also requested minutes of the autumn FDIC board meeting at which regulators approved financing for a Citigroup takeover of Wachovia. To provide this assistance, the board had to invoke the "systemic risk" exception in the Federal Deposit Insurance Act, and therefore had to assert that such assistance was necessary for the health of the financial system. Yet days later, Wachovia cut a better deal to sell itself to Wells Fargo, instead of Citi. So how necessary was the FDIC's offer of assistance?
After Mr. McKinley sued the agency this summer, the FDIC coughed up a previously undisclosed staff memo to the FDIC board. Again, the agency redacted the substance, providing roughly two pages of text from the nine-page original. The section of the memo titled "Systemic Risk" was entirely erased. As for the Fed, it blew off Mr. McKinely's initial request and has since responded mainly with some highly uninformative letters from the Fed staff to Congress.
Many of FDIC's actions are relatively routine. Its closure over this weekend of $7 billion Corus Bank of Chicago, however, contains a "private placement" of $4 billion of Corus assets. How private is this? Who is the purchaser, and how many bids are there? One would think this is public information. Researchers like Vern are simply interested in writing the history of this unique moment in international finance.
The WSJ concludes:
A public debate on which banks really needed a bailout via the government's AIG conduit has hardly taken place. And did all of Bear Stearns' creditors, including hedge funds, need to be made whole to ensure the survival of American capitalism?
A year after the epic meltdown, this is the debate Congress needs to undertake before legislating any new federal authority. Regulators should not receive a blank check to prevent systemic risk without even defining what that term means.
Bank Rossii cut the refinancing rate to 10.5% from 10.75% (note, double digit) and lowered the repurchase rate charged on central bank loans to 9.5% from 9.75%, effective September 15. Russia's benchmark refinancing rate is the second highest in Europe, after Serbia's and Iceland's who pay 12%.
Russian output shrank a record 10.9% last quarter after a decline in global trade undermined demand for Russia's commodity-reliant exports of raw materials from steel to oil....Consumer prices rose an annual 11.6% in August.
If we continue on the Democrats' desire for centralized control, we will have far more to worry about than just the debt we're leaving our kids and grandkids.
Sunday, September 13, 2009
This article in the 9/12/2009 Wall Street Journal discusses the Obama plan that calls for the U.S. Dept. of Educ. (DOE) to increase its current 20% share of student-loan origination market to 80% on July 1, 2010. The remaining 20% in the private sector will simply fade away.
For decades, federally backed student loans were the most common way to borrow for college. Money was raised in the private sector, loans made and the private institutions paid a fee to the government for each loan. In return, the government covered most of the defaults which in turn, allowed the private lenders to make a regulated return.
All that changed in 2007 after Democrats won control of Congress. They legislated a return so low that no private lender could make a profit holding these assets. To keep the tap open, the feds began buying loans from private originators in 2008. This was to be a temporary move that was to expire in 2010. Guess what... now the Democrats want the DOE to be the exclusive banker to college students.
Concerns about the government's poor customer service had resulted in borrowers choosing private lenders. Education institutions now are concerned that the feds will not be able to pull off their desired takeover in eight months (hm, wonder why).
So what, say Dems who have already greased this fall's budget reconciliation to pass all of this on a mere majority vote. In addition, they are helped by rigged government accounting that disguises the cost of making these below-market loans to unemployed 18-year-olds. Democrats claimed savings of $87,000,000,000 but in reality, the real savings are about half that amount, $46,000,000,000. If a private sector lender tried to pull this stunt, it would be criminal fraud.
Defaults are expected to increase across the board.
The second area where the Dems want more control includes the Pell grants. Detail on this Pell Grant takeover is at the CD 2 Republican website, where the efforts of Congressman Kline who caught the 25% low-ball estimate are described.
Government take over of: automotive industry? health industry? education industry? what next?
Thank you all for coming today. Thank you to the Central Minnesota Conservative Coalition for the opportunity to speak.
Today is a reminder to those we send to St. Paul and City Hall, and to those in Congress and the White House, that we feel forgotten.
�Forgotten?� you ask.
The economist William Graham Sumner wrote a century ago about the way in which we are forgotten by those who would help others in the name of humanitarianism but not with their own money.
A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes � is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C's interests, are entirely overlooked. I call C the Forgotten Man.
Look around you and say hi to Mr. C and Mrs. C.
What Sumner understood was that in order to produce the good they want to distribute, they must draw on the energy that you create. Your labor, your savings, your creativity, your humanity. Sumner noted �that the State cannot get a cent for any man without taking it from some other man, and this latter must be a man who has produced and saved it. This latter is the Forgotten Man.�
And when government takes the produce and savings of the forgotten man, his choices are two. One: You can shrink. My friend and radio host Dennis Prager said it well this week: �When government gets larger, citizens get smaller.� People forget to take care of themselves, they rely on government, they don�t feel like working when they can�t keep what they earn and besides government will give it to them.
If you�re that kind of person, you�re at the wrong party.
Your other choice is to stand on your feet. And shout �forgotten no more.�
You have important work to do here today. If you do not want to be forgotten, you must remember why we are here. You cannot hold up a sign that says �Taxed Enough Already� if you don�t know what your government is supposed to tax you for. The other speakers here today are going to tell you that. They will tell you how to stop shrinking, stop being forgotten.
Because we have forgotten, as Alexander Solzhenitsyn said, what our �unifying purpose� is. �All we had forgotten,� he said, �was the human soul.� We live in a great country in an unbelievably prosperous time. Life is great in 21st Century America, if we just would understand why. All we have, Solzhenitsyn said, is �a delicate trial of our free will.�
You are on trial. If you fail, you will be forgotten. You will shrink to insignificance.
But I know many of you, and I know you will succeed. You will hear the words that remind us of our great purpose as a nation. And our country will succeed when we can say as one �Forgotten no more.�
God bless each of you today, and God bless our great country. Thank you.
Friday, September 11, 2009
Janet Adds: Today was doubly memorable for us. In addition to our remembrances of 9/11/2001, we saw our youngest son off at the airport this morning. He is an army 1st Lieutenant, deploying to Iraq at the end of this month, so it will probably be a year before we see him next. [End Janet.]
While I'm at it, for those who are wondering about the St. Cloud T.E.A. (Taxed Enough Already) Party, here's how you get to Lake George -- and pay particular attention to the construction in the area.
Lake George is across the street from Technical High School (233 12th Ave S, St. Cloud MN 56301), so using your GPS for the high school will take you there. That area is also your best bet for street parking. There is a parking lot on the south side of the lake as well. The organizers plan to set up in the northeast corner of the lake, which is where there is still construction for a new bridge and the 9th Ave underpass.
If you are coming from the east, remember that the bridge on Highway 23 over the Mississippi is still closed, so you will want to follow the detour signs. From any other direction, my advice is to come off Interstate 94 or U.S. 10 to State Highway 15, and turn east onto Division Street (which is labeled as Highway 23, Crossroads Mall will be to your west.)
I will be speaking around 10:15, just before Rep. Bachmann, and then hopping in the car to head to the Patriot. Live call-ins from St. Cloud will be on NARN Volume I, which is going to be hosted by Ed this week (Mitch will probably be there after noon.) So if you can't be there, you can at least listen to all the fun you're missing!
P.S. Yes, I'll stop by the MOB gathering too tomorrow night at Keegans. But I leave very early due to Sunday church singing, so if you snooze, you lose.
P.P.S. I'm glad Andy Levy preserved that Twitter stream. I was stretching before bed -- it's the only way my back can stay moderately healthy any more -- and as is my wont, I usually go to bed around 12:30am. My iPod Touch gave me the usual last hundred posts, which I read while listening to either Dennis (Miller, Prager) or music, and last night I chose Red House Painters. Stretching is about twenty minutes. I start reading and half my tweetstream is AllahPundit's stream. I got up, sat down, and refreshed until Twitterrific wouldn't let me any more. Music ran out at the same time, and I went to bed. I slept poorly.
Thursday, September 10, 2009
Yesterday's deans and dummies brought forth the local campus health service to discuss the H1N1 virus. Given it hits 5-24 year olds more than the rest of the population, we are a flashpoint for the "hiney flu" (we have lots of pork producers 'round here, so the other popular name for this flu is banned from this blog.) The school has turned its emergency page into a flu info location, asking students to develop a "personal flu plan."
It's actually a serious matter, since 2,500 of Washington State's 18,000 students are suspected to have H1N1. "Suspected" since it's been decided by most health care officials that if you aren't hospitalized you don't get tested for which flu you have. (Also, no sick slips for students to be excused from classes -- we are being told to "let 'em go" even if we think someone is using the flu as a dodge to get out of mandatory attendance.) And the advice is to have them "self-isolate". Most students are more than happy to isolate themselves from a classroom, but from each other is another matter.
I talked about this in class today, about the norms for behavior. Would you call people you were in contact with 24 hours earlier to let them know you have hiney flu? Do students more try to come to school when sick or dodge classes for any old reason? There are norms of behavior, and they differ from school to school.
So imagine my surprise when I discover in the middle of this article:
California's Pomona College has a new mandatory course for freshmen: the proper way to sneeze and cough (the answer: into one's sleeve).Let me remind you that Pomona is a rather elite institution. At which we need to teach students to sneeze? What other element of higher education does this course replace?
"I share a bathroom with seven other guys," said Alex Efron, a Pomona student. "That's a bit of a concern for me."
If they're like us, they're a university where you have to have hot air blowers in lieu of paper towels in the bathrooms to "save the planet" (and where they put the trash bin just below the blower)? Where part of my deans-and-dummies treat yesterday was a discussion of whether we could use state funds to purchase hand sanitizers? (I kid you not: that was 3.5 minutes.)
Thanks to Charles Johnson and Matt Reynolds for parts of this story.
One thing that you may notice: none of us went to college to be economists. I bounced through two pre-professional programs plus philosophy before landing on economics (I took the GMAT, LSAT and GRE in a six-week stretch.) The other thing I notice is we all went to liberal arts schools and had the traditional education of taking courses in areas you didn't know you were interested in. I wandered into economics as someone interested in pre-law (it's great for that) and got talked out of law by "Professor Kingsfield".
Public colleges and universities not only rely on billions of dollars in government subsidies (which he says the public option would not receive), public colleges and universities do indeed crowd out private colleges, largely because of these subsidies. For a California resident, UC-Berkeley (probably the best public university in the nation) is indeed a lower-priced substitute for Harvard University. To say otherwise would show ignorance of basic economics.But of course not every state has a Berkeley (and, I'd argue, there are other universities that are good substitutes for an Ivy, such as Virginia, Michigan, or North Carolina.) Those students go to Tier 3 or Tier 4 schools. They get less-good higher education. So will we equalize health care across the states? Will every state get a Mayo Clinic, with equal access?
And how will innovation occur? In higher education, even with the ubiquity of state universities, costs are enough that private concerns are competing and dwindling enrollments for public institutions at a time when we have fewer students graduating high school. There are demands for more. And so how do public schools respond?
The Education Department is making plans to create free, online courses for the nation's 1,200 community colleges � which teach nearly half of undergrads � to make it easier for students to learn basic skills for jobs. The courses would be offered as part of a "national skills college" managed by the department.One of my lectures in public finance (when I taught it years ago) was that we could separate the public role in allocation to public provision of goods and services and financing of those goods and services. Trash collection can be public financed through taxes yet a private hauler hired to provide the service. Private prisons and defense armaments were other examples I used in class. But I have wondered aloud whether financing eventually leads to provision? Is the box where you have private provision, public financed goods stable, or is there a tendency to have those goods drift into the public-public box (in some 2x2 grid)?
I don't think I have to worry that Blue Cross is going to operate its own hospitals some day. Firms find their specialization and stay on it until technology changes and their comparative advantage with it. But government can vertically integrate anywhere it wants -- it can be both in the insurance and the hospital administration businesses.
I particularly concern myself over non-profit hospitals like the St. Cloud Hospital. Their mission derives from the social concerns of the Catholic church. If you perceive the government will fill that need, does the hospital have a mission? Will it withdraw? This is what I think of when I hear Dennis Prager say "the bigger the government becomes, the smaller the individual citizen becomes."
He said,Arnold Kling, late last night. And he said "there will be a provision in this plan that requires us to [find] more spending cuts if the savings we promised don�t materialize." Translation: If we break that promise, we'll make another one.Reducing the waste and inefficiency in Medicare and Medicaid will pay for most of this plan.And if we don't pass this plan, does he intend to keep the waste and inefficiency, out of spite?
Many people asked wherein the 46-to-30 million reduction in the number of uninsured came from. I saw the answer first via Jake Tapper on Twitter. That number itself may be too high yet, but it's progress. (Yes, folks, I saw that Census report this morning, but it includes the two groups the White House is now excluding.)
See also a fact check: Those are two very brave AP reporters who are probably working on their resumes this morning...
Though there's no final plan yet, the White House and congressional Democrats already have shown they're ready to skirt the no-new-deficits pledge."New suit, emperor?"
Wednesday, September 09, 2009
out/in: Pink Floyd, Brick in the Wall
out: Motley Crue, Smokin in the boys room
in: Lupe Fiasco, Superstar
out: Chicago, Saturday in the Park
in: Green Jelly, Three Little Pigs
out: Better Than Ezra, Our Last Night
out: AC/DC, Big Gun
In: Yul Brenner, A Puzzlement (because the night before while with Mitch I said something about playing The King and I.)
out: Prodigy, Breathe
in: Meatloaf, I would do anything for love
out: Ted Nugent, Great White Buffalo
in: Bob Marley, Buffalo Soldier
out: Counting Crows, Mrs Potters Lullaby
in: Kid Rock, All Summer Long
out: The Black Crows
In: AC/DC, Runaway Train
out: Foo Fighters, Learning to Fly
in: Coldplay, Politik
out: Gomez, How We Operate
out: Van Halen, You Really Got Me
in: Free, Alright Now
out: The Refreshments, Banditos
in: Radiohead, Just
out: Marvelous 3 (Butch Walker), Freak of the Week
in: Gorillaz, Feel Good Inc
out: ZZ Top, Tush (at which point I wondered where was my normal outro!)
I was contacted initially by the Coleman legal team only on January 20th, a mere days before the contest phase of the recount was to start. I had just a week between that first call and the deposition -- in which I was supposed to look at the data, come up with an analysis, prep for a deposition process (for the first time) and go through it. I had all of two meetings with lawyers beforehand, both on the weekend.
What I was asked to provide was a demonstration that the rate at which ballots were rejected by county officials differed in a statistically significant way from each other. Rejection rates are normally the domain of binomial or Poisson distributions, and we economists don't use those distributions as often as the normal or Student's t. So I took some time re-familiarizing myself with those tests, looking up some books, digging up my old college text, and arrived at what was pretty obvious looking at the data casually -- those rejection rates didn't vary due to chance.
So it's a very compressed time period. Some people seemed to enjoy having fun picking apart the deposition, but to that I would just say the following:
- The decision to not call myself a statistician was mine. Any social scientist uses statistics, pretty much as an everyday activity. I don't use sampling theory daily, but something or other in statistics, sure. But what you might call a statistician would hold a PhD in statistics. I don't. The fellow we thought would be used by the Franken people didn't either -- he was a sociologist. But once some court accepts you, you're in, as best I can tell. He was, I had not before, and so the attack to exclude me was pretty standard procedure. (I taught college statistics for social sciences at the Claremont Colleges, and I teach economic forecasting at SCSU.)
- What I was initially asked to look at was to show the distribution of rates of rejected absentee ballots among counties was not random. I assumed what they were trying to prove was the Bush v Gore point that voters did not enjoy equal protection of their absentee ballots. The contest panel, and eventually the Minnesota Supreme Court, did not accept the precedence of Bush v Gore. Without that, there was no reason for me to testify based on what I had given the Coleman lawyers at that time. Where many, even Ed, imply that I was denied the ability to testify because I was not an expert, that is not what the court said. They were not interested in the Bush v Gore argument, thus they had no need to hear of me regardless of whether or not I was an expert. They had decided, in Ed's words, to " on individual ballots rather than categories and generalities." From their decision:
The only question that can be decided in an election contest is which party received the highest number of legally cast votes, and therefore is entitled to receive the certificate of election. The Court will be reviewing all ballots presented according to the uniform standard contained in Minnesota Statues Chapter 203B. It is irrelevant whether there were irregularities between the counties in applying Minnesota Statutes � 203B.12, subd. 2. prior to this election contest. The Court does not believe Banaian's testimony would assist in determining the issues properly before it.And with that fact's irrelevance, I became irrelevant to the court. As I am not a lawyer, I have no opinion on their decision.
- At no point during the weekend before the deposition was I asked by the Coleman team whether I thought opening which ballots would lead to a Coleman victory. So when I told Ed my thoughts -- that had they opened the ballots I thought they could make an argument for, those from counties with excess rejection rates compared to the state average, they would not have enough net ballots to win -- that was my own speculation done actually the day AFTER I had been deposed. Had I gotten to the stand, based on what I knew when I was deposed, I had no answer. Based on what I did afterward, I did not think I could argue that even the statistical argument had any real chance of succeeding, particularly after the court had awarded Franken a net 87 additional votes in opening 351 ballots previously rejected. At that point, I thought, the game was up, though I admit to some cognitive dissonance over it -- I didn't really want to believe what I had found, and since I couldn't talk about it while the trial was going on, I pretty much buried that from my consciousness.
- My analysis of those counties where rejection rates were statistically significantly above the state average, was that an 'extra' 1,924 ballots had been rejected. If those were distributed as the recorded vote was, Coleman would have gotten 841 additional votes and Franken 737 additional votes (the remainder to Dean Barkley and the other candidates.) But that called for an "add factor" -- you can't pick the ballots that were rejected wrongly based on a spreadsheet, which is all they gave me. And as I say, the court rejected that idea.
Let me close with an agreement with Ed's premise for his article, which was butchered by the Townhall editorial staff when they chose the title. Franken did not steal an election. They played hard, harder than the Coleman team. As I said to someone after the deposition, it's one thing to take a knife to a gun fight, it's another thing to be the knife. Perhaps I was a fallback plan they came to late in the process; far be it from me to criticize the Coleman strategy when I know so little about it. But it appeared that after the decision to reject statistical argumentation -- which Ed argues should have been known to the Coleman lawyers based on the Rossi-Gregoire recount -- that the energy of the Coleman argument was lost, at least at that stage.
Tuesday, September 08, 2009
They attribute to the stimulus the current state of affairs � but not anything regarding the current state of affairs, just anything that can be construed as better than something else that could have happened.Mario Rizzo, on the whole notion that somehow the stimulus is working, an analysis he calls "magical". And not in a good way.
Sunday, September 06, 2009
While some sports are mentioned, at no place in the article or comments to date does anyone deal with a very basic issue: kids can no longer play games that give them real exercise at school because someone may lose. Excuse me - dodge ball, banned; keeping score in the few games left, banned; tag, banned. Sure the bans do not occur in all schools but once we started down the road of attempting to make school life 100% safe, by definition we removed those activities that actually provide physical outlets for kids.
Do I want my grandkids to be overweight? No. Do I want them to be able to run, play, laugh, win, lose, etc., absolutely. It's called LIFE.
Saturday, September 05, 2009
Details on the address, which tackles the irresponsible behavior of far too many Democrats in Washington, will be posted at Scholars later today.
The video will be available here. It will provide valuable information on the damage the current health legislation will create.
Friday, September 04, 2009
Polling closes at 3pm Saturday -- keep those votes coming! We will purchase the selected item at 4pm and be ready for me to consume at 4:30.
NARN on a Stick continues from the State Fair today 5-7pm, with Mitch Berg and myself, on AM 1280 the Patriot. We're on Dan Patch Blvd just inside the Snelling gate across from the Farmers Union building.
The change in total nonfarm payroll employment for June was revised from -443,000 to -463,000, and the change for July was revised from -247,000 to -276,000.So if you added that extra 49,000 jobs that weren't previously accounted for to the 216,000 loss reported for August, would you call this good or bad? If you buy the idea that deceleration is what matters (the second derivative, for you calculus types), then you'd say those revisions are positive.
I think the White House has actually portrayed these data well, with the president saying "we have a long way to go", and judging from this collection of business economists' reactions, there's not much really good in here. Meanwhile the surge in productivity is huge, which means output will turn around and grow well before employment does, which supports the idea that we could end up in December 2010 with 2 million fewer working than at the end of 2008.
No one seems to be protesting war anymore, so I became curious. Was this because of the differences between Iraq and Afghanistan, the handling of each war�s goals and objectives, or the change in presidential administrations?Read the whole thing, which tells you how at least these local groups justify their change in stance. Unions and anti-war protestors: is there anything wrong with this picture?
Remember, these people are not marching even though Obama this spring committed 21,000 troops to fight an invigorated Taliban; a report due soon may seek more. Meanwhile, the 45 U.S. casualties in August were the highest in the war�s eight years.
But on that corner Saturday health care overshadowed war.
Pax Christi and Alternatives for War marched in support of health care reform. Some other groups represented were Isaiah/GRIP and Service Employees International Union. Signs such as �Honk For a Public Option,� �Healthcare is a Human Right� or �Medicare is Socialized Medicine� evoked approval.
Meanwhile Cindy Sheehan keeps a lonely vigil...
This Saturday, MN's Congressman John Kline, now the Senior Republican on the Education and Labor Committee will be giving the National Weekly Radio Address. His topic will be health care. The video will be available here.
The Democrats keep moving their �solution� semantics from health-care, to reform, to insurance, etc. Since they cannot decide what "problem" they are supposedly solving, a review of basic components might be valuable.
Health: The general condition of the body or mind with reference to soundness and vigorBecause there appears to be no consensus as to what is in the House version of this bill, no consensus as to what is being proposed other than government control, we must continue our efforts to defeat anything this absurd that takes from all of us, the right to make our own health decisions. Big Brother is looming and he must be stopped.
Health-care: The field concerned with the maintenance or restoration of the health of the body or mind
Health Insurance: Insurance against expenses incurred through illness of the insured
Reform: The improvement or amendment of what is wrong, corrupt, unsatisfactory
Thursday, September 03, 2009
This competition is everywhere. When I lived in Ukraine in the mid-90s, there was an area which contained most of the bars that Westerners, particularly men, would hang out. This place had most of the attractive women. Some, of course, um, provided fee-based services. But the more common female was one searching for a mate. They were quite aggressive, much like the Lebanese story Tyler tells from a couple years ago. Many Western males ended up ensnared in trysts that lead to demands that they dump their wives back home and bring these Olgas and Natashas back with them. The success rate of these women with married men was surprising and depressing.
Pick then a city of your choice in a country of your choice. Ask where, in that city, can the beautiful women be found. Will you find them in the most globalized parts of the chosen city? Probably so. Will the least globalized parts of the city have less attractive women or perhaps even the least attractive women?
I also believe, in accord with my previous hypothesis, that you'll find the most beautiful women in the parts of the city where different income classes mix and there is lots of inequality among passersby. That's in a museum, or in the Village, not in a Tiffany store or even in most of the upper East Side.
In his interview with Russ Roberts, Christopher Hitchens noted that Orwell once observed that the most attractive, or most intelligent, or most athletic Indian male could not enter the British club in Burma, but the most attractive woman could get in by marrying a British officer. If location theory is right, there should be some excellent colonial stories that fit.
What do you want from lifeI'll bet I played that nightly for my first semester in grad school. I have no idea why.
Someone to love
and somebody that you can trust
What do you want from life
To try and be happy
while you do the nasty things you must
Well, you can't have that, but if you're an American citizen you are entitled to:
- a heated kidney shaped pool,
- a microwave oven--don't watch the food cook,
- a Dyna-Gym--I'll personally demonstrate it in the privacy of your own home,
- a king-size Titanic unsinkable Molly Brown waterbed with polybendum,
- a foolproof plan and an airtight alibi,
- real simulated Indian jewelry,
- a Gucci shoetree,
- a year's supply of antibiotics,
- a personally autographed picture of Randy Mantooth
- and Bob Dylan's new unlisted phone number,
- a beautifully restored 3rd Reich swizzle stick,
- Rosemary's baby,
- a dream date in kneepads with Paul Williams,
- a new Matador, a new mastodon,
- a Maverick, a Mustang, a Montego,
- a Merc Montclair, a Mark IV, a meteor,
- a Mercedes, an MG, or a Malibu,
- a Mort Moriarty, a Maserati, a Mac truck,
- a Mazda, a new Monza, or a moped,
- a Winnebago--Hell, a herd of Winnebago's we're giving 'em away, or how about
- a McCulloch chainsaw,
- a Las Vegas wedding,
- a Mexican divorce,
- a solid gold Kama Sutra coffee pot,
- or a baby's arm holding an apple?
You're right, Chad, She's A Beauty is horrible. It's a good reason not to see the band, which still tours. But at least one Tuber redeemed himself when Fee Waybill brought Rocky Horror to stage.
Let's see if producer Tommy plays this on Saturday.
A number of you have asked why I would do this. Most people know that vegetarians always work towards keeping a balance of proteins, carbs and fat in the diet. I'm kind of naturally inclined towards a high-carb diet, which accounts for my carrying a spare tire around my midsection. Since my gallbladder came out last year, some of the things I used to consume for proteins, in particular eggs, no longer work for me. (You do not want me to explain this.) The diet has, in my mind, gotten worse rather than better. At one time I was vegetarian for ethical reasons, but mostly now it's health and laziness and fear. Like many, I don't want to put weird stuff in my mouth and stomach. Particularly after that surgery.
And that leads me to why I would do it this way. When faced with doing something difficult, making a commitment that's difficult to break can get you over the hump. What could be more embarrassing than me NOT going through with this on my own radio show? It would be rather humiliating. But committing to do something five days later is easier than committing to doing something five minutes later. So I built this up not just to have something humorous for Saturday's show, but to make the cost of backing out higher. It's a bit more than a nudge, but has the same effect.
UPDATE: To be clear about this: This isn't a stunt; I am intending to put small amounts of meat back in my diet for the foreseeable future, and have intended to do so for a few months. It's intention is to make me commit to doing it on a date certain, and to do so in a way that's fun and might get a few more people to listen to the show and stop by the booth. And by small amounts, I mean just leanest meats, just a few times a month, mostly prepared by me at home. For now, Mrs. S and I agree not to cook meat in the home, but on my grill is OK. (I should note, she eats fish, but does not cook it at home because the smell of fish -- and meat -- cooking mostly makes me ill. Neither of my children are vegetarian.)
Wednesday, September 02, 2009
I don't have an answer to any of these questions -- it's just one of these things I wonder about.
This year there are 13 questions covering such topics as funding for a Vikings stadium, unallotment, medical marijuana, early voting and budget cuts versus tax increases. ...First, isn't it always the ideas of the people you represent that should be the ideas you take to the Legislature, Mr. Haws?
Every year more than 6,000 Minnesotans take the House of Representatives State Fair Poll. I encourage you to show up at our booth and cast your ballot. Although this poll is not scientific, the ballot results highlight high-profile issues.
Participating in this poll is a wonderful opportunity for Minnesotans to share their concerns and opinions. Frankly, some of the best ideas come from listening to the suggestions of the people we serve at the State Legislature.
Second, what are these "high-profile issues"?
2. Should Minnesotans be permitted to fish with two rods at once?That's five of them, Mr. Haws, that I would say you easily not answer for me next year. Hey, your 2010 just got easier! What is important is the budget mess you fellows left behind. And what are you asking about this?
3. When a person registers for a driver's license or state identification card, should they automatically be registered to vote?
8. Should speeding violations be placed on a person's driving record if the driver was traveling no more than 10 mph over the speed limit in a 60 mph zone?
9. Should the state lottery be permitted to operate slot machines inside the ticketed area at the Minneapolis-St. Paul International Airport, meaning only air travelers with valid tickets could use the machines?
13. When a homeowner prevails in a court action against a contractor or builder to have a warranty enforced, should the homeowner also be entitled to attorney fees and other costs related to the legal action?
5. Under current law, the governor is permitted to unallot to prevent an anticipated budget deficit. Should he or she have this power?To use a State Fair metaphor, hasn't that horse left the barn already?
6. Should bill and budget negotiations between the governor and legislative leaders be required to be open to the public?Really? You guys need more time on camera? What you say in a public room and what you say in a private meeting differ. Meetings on the budget need total candor, and candor and cameras do not mix. And you'll forgive me, sir, if I don't believe that this would be a high-profile issue if not for the fact that the governor currently doesn't wear the dark-blue DFL label.
7. Do you generally support budget cuts as opposed to increasing certain taxes in times of economic distress?"Certain" taxes? Would you care to be a little more specific? I realize this isn't one of them fancy "scientific polls", as you say sir, but when you pass "certain" taxes in the past, you end up funding crappy arts via a sales tax that can't even pay off the advance you gave it. I'd like to be certain I have enough money after taxes that I can pay my bills, and I'd like to be certain that taxes I pay get used for the things you told me they'd certainly be used for. And I'd like to be certain it's not crap.
Tuesday, September 01, 2009
State-subsidized health insurance for 31,000 legal immigrants here will no longer cover dental, hospice or skilled-nursing care under a scaled-back plan that Gov. Deval Patrick announced Monday.Emphasis added. h/t: Tyler Cowen. Interesting spin in this story, making a reduction of coverage to legal immigrants "an extraordinary accomplishment." If a private plan did this...
Mr. Patrick said his administration had struggled to find a solution �that preserves the promise of health care reform� after the state legislature cut most of the $130 million it had previously allotted immigrants, to help close a budget deficit. Although their health benefits will be sharply curtailed in some cases, Mr. Patrick portrayed the new program as a victory, saying the services that the affected group tends to use the most will still be covered.
�It�s an extraordinary accomplishment,� he said in a conference call with reporters, �to offer virtually full coverage for the entire population that�s been impacted in the face of really extraordinary budget constraints.�
The new plan, which will cover permanent residents who have had green cards for less than five years, will cost the state $40 million a year. Some of the affected immigrants will be charged higher co-payments and will have to find new doctors, said Leslie A. Kirwan, Mr. Patrick�s finance director.
Still, Mr. Patrick described the new coverage as comprehensive and said it could be a model for less expensive state-subsidized benefits as health care costs continue to rise. Under the 1996 federal law that overhauled the nation�s welfare system, the 31,000 affected immigrants do not qualify for Medicaid or other federal aid. Massachusetts is one of the few states � others are California, New York and Pennsylvania � that provide at least some health coverage for such immigrants.
Over/under for time until pictures of dying immigrants not able to get hospice appear in the Boston Globe: three weeks.
Labels: health care
Why is this important? In the 1973-75 case the answers given by the government (Nixon/Ford) and the Fed (Arthur Burns) were a combination of "we're all Keynesians now" and the disastrous wage and price controls and incomes policies (culminating in Whip Inflation Now buttons.) The 1981-82 period was the Volcker disinflation, Reagan tax cuts, etc.
The facts we face today are very different than the grim reality Americans confronted between 1929 and 1932. True, this recession is not over. But it would have to get improbably worse before it came close to the 42-month duration of the Great Depression, or the 25% unemployment rate in 1932. Then, the only safety net was the soup line.
The current recession is also much less severe than the 1937-38 Depression. A more accurate comparison is to the 1973-75 recession. Today's recession is as deep and most likely won't be much longer than the one we experienced some three decades ago. By pointing this out, I do not intend to minimize the damage that the economic crisis has had on individuals and businesses. But as policy makers make decisions in order to alleviate the recession, they are not helped when economists overstate its severity.
The table nearby compares the current recession, the 1937-38 depression and some past severe postwar recessions. If the recession ends this summer�as many experts predict�the record will show that it was not very different from other postwar recessions, but very different from the 1937-38 and 1929-32 Depressions.
Which worked out well? Which worked out poorly? And which does current policy remind you of more? Maybe more than students of the Great Depression, we need policymakers who are students of the 1970s.