Wednesday, August 31, 2005

A Beautiful Mind II: The Revenge of the Economist

I have discussed this issue a couple of times, how my favorite "economist deserving of a thorough Fisking" Paul Krugman used to actually be a respectable economist. I came across this article of his from the 90s while surfing the web today.

So let's continue. Suppose that our economy initially employs 120 million workers, which corresponds more or less to full employment. It takes two person-days to produce either a hot dog or a bun. (Hey, realism is not the point here.) Assuming that the economy produces what consumers want, it must be producing 30 million hot dogs and 30 million buns each day; 60 million workers will be employed in each sector.

Now, suppose that improved technology allows a worker to produce a hot dog in one day rather than two. And suppose that the economy makes use of this increased productivity to increase consumption to 40 million hot dogs with buns a day. This requires some reallocation of labor, with only 40 million workers now producing hot dogs, 80 million producing buns.

Then a famous journalist arrives on the scene. He takes a look at recent history and declares that something terrible has happened: Twenty million hot-dog jobs have been destroyed. When he looks deeper into the matter, he discovers that the output of hot dogs has actually risen 33 percent, yet employment has declined 33 percent. He begins a two-year research project, touring the globe as he talks with executives, government officials, and labor leaders. The picture becomes increasingly clear to him: Supply is growing at a breakneck pace, and there just isn't enough consumer demand to go around. True, jobs are still being created in the bun sector; but soon enough the technological revolution will destroy those jobs too. Global capitalism, in short, is hurtling toward crisis. He writes up his alarming conclusions in a 473-page book; full of startling facts about the changes underway in technology and the global market; larded with phrases in Japanese, German, Chinese, and even Malay; and punctuated with occasional barbed remarks about the blinkered vision of conventional economists. The book is widely acclaimed for its erudition and sophistication, and its author becomes a lion of the talk-show circuit.

Rather cogent and logical stuff. Even a right wing hack like me could agree with that. Unfortunately he has now fallen into Bush hatred driven dementia where facts and logic no longer matter, only his image of paranoid loss and persecution. Maybe Ron Howard will do a movie on him? Come back to the light side Paul. Don't give in to your hatred. I still see the good in you. OK, I am mixing my movie metaphors.

Tuesday, August 30, 2005

Vets on Campus

As part of my continuing higher education week, I found this an interesting story.

As college students hit campuses across the nation this week, a new generation of young veterans will step off the battlefields of Iraq and Afghanistan and onto the ideological battlefield of our university campuses. For those on the frontline in the war on terror, the antiwar hostility of liberal professors and campus activists will assuredly prove unsettling.

Just ask Marine sergeant Marco Martinez, a veteran of Operation Iraqi Freedom and a full-time psychology major at Saddleback College in Mission Viejo, Calif.

“A woman on campus had apparently learned I might be a Marine. When I told her I was, she said, ‘You’re a disgusting human being, and I hope you rot in hell!’ ”

Indeed, Martinez, who will be the first male in his family to receive a college diploma, says he is receiving more of an education than he bargained for: “There are a lot of people who don’t appreciate military service in college,” Martinez said. “If someone asks me about it, and I think that they’re not too liberal, I might tell them I was in Iraq. But I don’t tell them the full extent of it or anything about the Navy Cross.”

Monday, August 29, 2005

The Trade Deficit

I found this interesting when I was looking at data regarding housing expenditures the other day. Much has been made about the "record trade deficit" recently, and I agree it is a major economic issue, although I don't pretend to know how it will work out. One thing nobody is really pointing out though is this isn't really a result of a lack of competitiveness, in the sense that nobody is buying US goods and services, we are selling record numbers of those. The problem is, we are buying even more foreign goods and services. This is unprecedented, but short of a traumatic currency devaluation, how do you tell US consumers and corporations to quit buying cheap foreign goods? Should you even try?

Anyone got $50,000 I can borrow?

Today is higher education day at the Chief Brief. I am starting grad school in 3 weeks, and am quite shocked by the price of text books. What a scam. In my case easily over $500 a quarter. I saw this article on Poor and Stupid and Marginal Revolution on Kruggy's textbook. All I can say is I am glad I don't have to use it. My faith in academia is restored, at least temporarily. Here is a choice quote.

Sanderson said that the major topics of microeconomics are pretty well agreed upon, and that you probably can’t go too wrong with many textbooks. In this case, though, he said he found Hubbard’s real-world examples to be well-written, and engaging. Still, though Hubbard has “a shorter paper trail” than Krugman, Sanderson is not sure he can be objective enough. One thing is for sure: not everyone is as enthralled with all of Krugman’s writing as Cassing. “[Krugman] writes great economics,” Sanderson said, “but when he writes politics he’s just bad.”

Back to the Future

I saw this on Best of the Web Today. Now maybe I am just a dumb white guy, but I seem to recall a movement over the last 40 years to eliminate the segregation of education in the south. IMHO the biggest thing holding back young blacks in their educational opportunities is not being around whites, it is being around other blacks who do not uphold the value of education as much as whites (or especially Asians) do. But that is just me.

Twenty-seven black freshmen at the University of West Georgia will live together, attend classes together and learn to study together this year as part of the Carrollton school's first learning community for African-American men. It is believed to be the only learning community specifically for black men at a historically white public college or university in Georgia.

Thursday, August 25, 2005

Hell Freezes Over

He couldn't quite bring himself to do it in his last column, but Krugman reluctantly manages to bring himself to admit, not one, but two "inaccuracies" in last Friday's column.

Corrections: In my column last Friday, I cited an inaccurate number (given by the Conyers report) for turnout in Ohio's Miami County last year: 98.5 percent. I should have checked the official state site, which reports a reasonable 72.2 percent. Also, the public editor says, rightly, that I should acknowledge initially misstating the results of the 2000 Florida election study by a media consortium led by The Miami Herald. Unlike a more definitive study by a larger consortium that included The New York Times, an analysis that showed Al Gore winning all statewide manual recounts, the earlier study showed him winning two out of three.

Of course you have to ask yourself, what type of an "economist" just takes numbers out of a left wing conspiracy rant without checking them? And now that much of the basis of his argument has proved suspect, will he admit the weakness of the original source, the "very judicious work" called "Steal This Vote". What type of grade would he give one of his students for such shoddy work?

Not to gloat too much, but do you really think he would have ever done this if it weren't for the outrage from the blogosphere?

The 2000 election is still an open sore on the body politic. That was clear from the outraged reaction to my mention last week of what would have happened with a full statewide manual recount of Florida.

Yes, Mr. Krugman, and every time you lie, and then continue to cover it up with obfuscations, we will get outraged again.

UPDATE: And of course the grand conspirator-in-chief of the Krugman Truth Squad, Don Luskin posts on this, and points out that even this unprecedented correction, is not quite what it seems. More on this at the Grand Duchess of the Krugman Truth Squad, Michelle Malkin.

UPDATE 2: Well I was so stunned by Krugman's reticent correction that I didn't even really pay attention to the content of his new column. Econopundit makes a rather good point:

It's also true that the unemployment rate looks fairly low by historical standards. But other measures of the job situation, like the average of weekly hours worked (which remains low), and the average duration of unemployment (which remains high), suggest that the demand for labor is still weak compared with the supply. (emphasis added)

I'm sort of impatient with this because the BLS directly measures the demand side of the labor market in several ways. Paul: instead of measuring demand for labor by inference and guesswork, you can simply check the numbers and see what they are.

Looking at Krugman's words I would have to agree with his assertion that the average of weekly hours worked is down (although in France he claims that is a good thing) but what about the average duration of unemployment? Well once again, let's go to our friends at the BLS:

Currently in July 2005 we are at 17.6 weeks, down from a cylical high of 20.2 weeks in February of 2004. What if we compare it to the last economic cycle, the dotcom boom that Krugman called a "miracle". Well the recession ended 15 quarters ago, so let's go 45 months into the Clinton expansion, or December of 1994, what number do we find (drum roll please) 17.8! Or .2 weeks higher than we have now. Once again Krugman finds that everything is relative. If it is happens under a Democrat it is good, if it happens under a Republican, it is bad.

Wednesday, August 24, 2005

Who are we fighting?

"The Iraqis who have risen up against the occupation are not "insurgents" or "terrorists" or "The Enemy." They are the REVOLUTION, the Minutemen, and their numbers will grow -- and they will win. Get it, Mr. Bush?"

-Michael Moore-

"But now that we have decimated the country, the borders are open, freedom fighters from other countries are going in, and have created more terrorism by going to an Islamic country, devastating the country and killing innocent people in that country."

-Cindy Sheehan-

Amjad and more than a dozen other children from east Baghdad's al-Khalij neighborhood made up the majority of the 27 people killed when a suicide bomber drove into a crowd that had gathered around U.S. soldiers who were handing out candy and small toys, police said. The attack also killed one soldier, according to the U.S. military, and wounded at least 50 people.

The Washington Post

Tuesday, August 23, 2005

I Must Be Playing the Wrong Games

I saw this earlier on Drudge:

CANTON, Ohio -- There are 490 female students at Timken High School, and 65 are pregnant, according to a recent report in the Canton Repository.

The article reported that some would say that movies, TV, videogames, lazy parents and lax discipline may all be to blame.

School officials are not sure what has caused so many pregnancies, but in response to them, the school is launching a three-prong educational program to address pregnancy, prevention and parenting.

Things have really changed since I was in high school, back then teenagers who played video games extensively were less likely to have the opportunity to be involved in a pregnancy. Apparently now it is a cause.

Now Why Can't This Economist Write for the NY Times?

Steven Levitt, who like a famous economist I have mentioned before here is also a John Bates Clark medal winner, has been burning up the bestsellers lists with his book Freakonomics. He also has a blog. He even allows comments on it, and unlike Brad DeLong he doesn't even appear to delete and alter comments from people who disagree with him.

In any case he has a rather good post rebutting a NY Times Magazine article titled "Peak Oil" which is basically predicting the end of oil supplies. His post is rather logical, full of economic principles, and completely devoid of ad hominem attacks on his opponents, paranoid conspiracy theories, or irrelevant screeds against President Bush. All of which will immediately disqualify him for a job writing a permanent column for the Times.

Sunday, August 21, 2005

What changed his mind over the weekend?

You would think Paul Krugman could at least keep his story straight over the weekend. From last Friday:

Two different news media consortiums reviewed Florida's ballots; both found that a full manual recount would have given the election to Mr. Gore.

But by Sunday night:

The second is what would have happened if there had been a full, statewide manual recount - as there should have been. The probable answer is that Al Gore would have won, by a tiny margin.

First of all, what is the basis of his "should have"? Sorry Paul, the Supreme Court, Florida election law, and even the requests of Al Gore and his lawyers overrule your John Bates Clark medal and oversized ego. But most of all, how did he manage to change from a definite statement "a full manual recount would have given the election to Mr. Gore" to the much more indefinite "the probable answer is" in just two days? Did he perhaps realize that he wouldn't be able to get away with fudging the truth from his first column? Who knows, possibly by Friday he will downgrade it to "maybe"?

There are many more problems with this article, but I don't feel like addressing them. This man is giving me a headache, I'll leave it to other bloggers.

Saturday, August 20, 2005

Children Say the Cutest Things

I was at a public event today that the Guard was supporting, just standing there, in uniform, talking to an old NCO friend of mine. I hadn't seen him in a while since he had been in Afghanistan. This young couple walked by with the cutest little girl, about 3 or 4 years of age. They stopped, the mother pointed at us, leaned down to the girl and told her "Thank them for making us safe". The child took a few hesitant steps towards us, looked up at us kind of shyly and repeated her moms words, "Thank you for making us safe".

I know she was just the messenger, but they couldn't have picked a sweeter messenger. Thank you.

A little while later a retired Brigadier General shook my hand and gave me a coin, which was nice, but I will take the thanks of a little girl and her mom over that any day.

Kaus Rebuttal Rebuttal

As pointed out on Instapundit, Mickey Kaus comes to Krugman's defense, pointing out correctly that he stated a "full manual recount". This is true and is somewhat of a defense to Krugman's statement, which is why I pointed that out in my original post on this subject, although some bloggers missed this subtlety. Kaus doesn't mention my comments, either because he didn't notice my humble blog, or because I was right and thus he had nothing to rebut. Krugman's comments are still in the wide scope of things misleading though, because Krugman does not point out that only under certain scenarios and intepretations is this true, and that Gore would not have won the election under ANY recount process which was being conducted at the time.

Remember, Krugman is not arguing merely that this was a close and poorly conducted election, which nobody would debate, but rather that this was a stolen election on behalf of Bush. He is relying on the (apparently correct) assumption that most readers would not notice the subtlety of his wording and assume that he is saying that it is proven that the Supreme Court stopping the recount somehow gave Bush the election. The weakness of his article is not based on one big lie, but rather than a whole bunch of half truths, innuendos and omissions. Much like a Michael Moore film, he weaves a bunch of items together, which although they may have some loose basis in reality, together form a completely misleading conclusion. It is not a coincidence that Moore in Fahrenheit 9/11, a film that Krugman praised as "performing a public service", also attacked Katherine Harris in a similar manner, also inaccurately represented the "felon purge" and falsely claimed "under every scenario Gore won the election." a claim even more misleading than Krugman's precisely worded one.

Ironically, Krugman also had this to say about Fahrenheit 9/11:

There has been much tut-tutting by pundits who complain that the movie, though it has yet to be caught in any major factual errors, uses association and innuendo to create false impressions.

Aside from the fact that it actually has been caught in major factual errors, Krugman seems to have learned from the master.

UPDATE: Richard Bennett (no relation) looks into the statements of the "judicious" journalist who started this whole thing. Apparently he doesn't know the difference between "under some circumstances" and "every time" either. Powerline does its usual excellent work, as well as pointing to a very detailed breakdown on this in the American Thinker. I am thinking I might be going too easy on both Krugman and Kaus. I can't help it, I am just too nice of a guy.

Friday, August 19, 2005

Military Strategy Courtesy of the Seattle Times

I first saw this on the Best of the Web, since I haven't had a chance to read the paper today.

America's purpose in Iraq is over. The soldiers should be brought home. It can be done, as has been proven in Vietnam, Somalia and other places. When and how it is done is not Sheehan's call to make, nor should it be.

Considering both Vietnam and Somalia were political embarassments, if not military defeats, why exactly did they choose them as examples of "bringing the soldiers home"? They couldn't pick Kuwait, Japan or Germany as examples? Yes, we are still there in some form, but only after we defeated the enemy. What is next, using Grozny or Operation Market Garden as examples of how military offensives "can be done"?

Air America: The Enron of the Airwaves

I don't really have anything to add to this, I just wanted to use the title. The National Review Online has been particularly good today.

Until a few weeks ago, the biggest worry for executives at Air America was what to do about the liberal radio network's alarmingly low ratings. Launched amid much hype on March 31, 2004, Air America, with Al Franken, Janeane Garofalo, Randi Rhodes, and a host of other anti-Bush personalities at the microphone, has, with the exception of a few cities, had great difficulty finding an audience. Even in New York, where the network's true-blue message should be welcome, its daily average ratings are actually lower than those of the Caribbean talk-and-music station it replaced a year and a half ago.

That would be bad enough. But now Air America finds itself fielding questions not only about its ratings but about its connection to a Bronx-based children's charity known as the Gloria Wise Boys & Girls Club. In early July, a little-noticed local online journal, the Gotham Gazette, reported that New York City's Department of Investigation (DOI) was looking into the diversion of "hundreds of thousands of dollars" from the Gloria Wise club to Air America. The first figure was around $450,000, but it now appears that $875,000 was transferred from the taxpayer-and-contribution-supported Gloria Wise club to the struggling radio network.

Environmental Hypocrisy

Jonah Goldberg, great as usual.

The basic situation is that some environmentalists and a company called Cape Wind want to build 130 windmills way out in the ocean to help offset energy costs in the region — and to satisfy all those demands that we find substitutes for evil fossil fuels.

Meanwhile, other environmentalists and conservationists are eager to stop the wind farm from being built, largely because it will mar the view from their extravagant coastal homes. Leading this charge is Sen. Ted Kennedy, whose famous compound would have a nice view of the turbines. (To be fair, though most people say the turbines would be hard to see except on very clear days, and even then they'd be tiny blips on the horizon.)

But Ted wants no such thing spoiling cocktail hour on the veranda. So he drafted his famously green nephew Robert to join the fight — even though Robert is a senior lawyer for the Natural Resources Defense Council, which strongly backs the project.

Thursday, August 18, 2005

Geez Paul Krugman lies a lot

The man is a guaranteed Fisking, it is really lazy work for a blogger. Now his latest attack is claiming BOTH of the last two presidential elections are fraudulent. Of course he only manages this through innuendo and half truths. For example:

Two different news media consortiums reviewed Florida's ballots; both found that a full manual recount would have given the election to Mr. Gore. This was true despite a host of efforts by state and local officials to suppress likely Gore votes, most notably Ms. Harris's "felon purge," which disenfranchised large numbers of valid voters.

Of course what he is leaving out is that these "media consortiums" only said that this might have happened in certain scenarios, NONE of which were called for by the Gore campaign. Krugman's very own newspaper, which he apparently never reads reported:

Contrary to what many partisans of former Vice President Al Gore have charged, the United States Supreme Court did not award an election to Mr. Bush that otherwise would have been won by Mr. Gore. A close examination of the ballots found that Mr. Bush would have retained a slender margin over Mr. Gore if the Florida court's order to recount more than 43,000 ballots had not been reversed by the United States Supreme Court.

Even under the strategy that Mr. Gore pursued at the beginning of the Florida standoff filing suit to force hand recounts in four predominantly Democratic counties Mr. Bush would have kept his lead, according to the ballot review conducted for a consortium of news organizations.

But the consortium, looking at a broader group of rejected ballots than those covered in the court decisions, 175,010 in all, found that Mr. Gore might have won if the courts had ordered a full statewide recount of all the rejected ballots. This also assumes that county canvassing boards would have reached the same conclusions about the disputed ballots that the consortium's independent observers did. The findings indicate that Mr. Gore might have eked out a victory if he had pursued in court a course like the one he publicly advocated when he called on the state to "count all the votes."

And of course he refers to Ms. Harris' s "felon purge" which was not her purge at all, it was called for by the state legislature in response to previous problems with vote fraud and contracted out to a private company. Apparently Mr. Krugman believes you are just supposed to ignore laws passed by the legislative branch. Furthermore anyone who was removed from the lists was allowed to appeal it, and many counties just ignored the lists anyway. Because of this it is entirely possible that more (Democratic leaning) felons were illegally allowed to vote than those who were removed improperly (who statistically should be equally represented)

But both reports show that votes were suppressed by long lines at polling places - lines caused by inadequate numbers of voting machines - and that these lines occurred disproportionately in areas likely to vote Democratic.

Only Krugman could somehow turn long lines into "suppression" of voting. Does this mean if there is a line at my grocery store checkout, it is not because more people showed up to shop then the store planned for at that time, it is because Safeway is intentionally "suppressing" their sales? How can an economist believe in this logic? Long lines are not a sign of vote suppression, they are a sign of the exact opposite, large amounts of people showing up to vote! Furthermore elections are normally run by local officials, who in "areas likely to vote Democratic" would be DEMOCRATS. They are "suppressing" their own vote!

Both reports also point to problems involving voters who were improperly forced to cast provisional votes, many of which were discarded.

Of course he fails to note that this was a nationwide problem, look here at Washington State, even 6 months after the election they were still trying to determine the validity of provisional ballots. Statistically speaking Ohio was one of the better states.

The Conyers report goes further, highlighting the blatant partisanship of election officials. In particular, the behavior of Ohio's secretary of state, Kenneth Blackwell - who supervised the election while serving as co-chairman of the Bush-Cheney campaign in Ohio - makes Ms. Harris's actions in 2000 seem mild by comparison.

How interesting, quoting from a Democratic report on the partisanship of a Republican. Doesn't that sound a little "partisan"? Now why is he so viciously attacking Blackwell, could it be because he is a popular African-American Republican politician who is considered a front runner for governer next year? At least he didn't call him "inscrutable"

And of course the biggest thing he omits from this article, is that despite the thousands of lawyers working for the Democratic party looking into this, John Kerry refused to contest it at all. When they voted in the Senate whether to block the certification of the election, it failed 1-74. They could only get one senator, not even Ted Kennedy would go along with these theories. But I guess inspector Krugman knows better.

UPDATE: Brainster finds yet one more conveniently inaccurate fact. I am sure there will be more.

UPDATE 2: BTW if anyone was interested in Andrew Gumbel, the journalist for the Independent who wrote this "very judicious work" he is a far left journalist who writes for anti-war groups, and whose writing, among other places has shown up at Al Jazeera. He even wrote a book on the secret conspiracy behind the Oklahoma City bombings. I think it was Karl Rove...

Have you driven a Ford lately?

I own a Mustang GT so I found this commercial rather interesting (OK, I nearly cried at the end). During OEF I had a picture of mine taped to the wall of my tent, as it was the closest thing I had to a wife at the time. Unfortunately I had to pay for mine!

The Economics of Hybrids

I have always thought that hybrids were an interesting idea, but are they really economical?

According to a recent study by automotive research Web site that compared the break-even point of owning and driving a number of popular hybrids against conventional gasoline models, hybrid owners would have to drive thousands of extra miles or pay steep prices for gasoline to make up for the additional cost of a hybrid in five years or less.

Has She Listened to Any of Her Speeches?

From a Seattle Times report of a local protest in support of activist Cindy Sheehan:

Joyce Gibson, an anti-war activist since the 1960s, said she is grateful that Sheehan has stepped forward to become an icon of the anti-war movement.

"I've been waiting for someone, an ordinary person, to spark something in me and others that's not angry or mean-spirited," Gibson said.

From a speech in San Francisco, by the aforementioned Cindy Sheehan:

I was raised in a country by a public school system that taught us that America was good, that America was just. America has been killing people . . . since we first stepped on this continent, we have been responsible for death and destruction. I passed on that bulls**t to my son and my son enlisted. I'm going all over the country telling moms: "This country is not worth dying for." If we're attacked, we would all go out. We'd all take whatever we had. I'd take my rolling pin and I'd beat the attackers over the head with it. But we were not attacked by Iraq. We might not even have been attacked by Osama bin Laden if 9/11 was their Pearl Harbor to get their neo-con agenda through and, if I would have known that before my son was killed, I would have taken him to Canada. I would never have let him go and try and defend this morally repugnant system we have. The people are good, the system is morally repugnant. . . .

What they're saying, too, is like, it's okay for Israel to have nuclear weapons. But Iran or Syria better not get nuclear weapons. It's okay for the United States to have nuclear weapons. It's okay for the countries that we say it's okay for. We are waging a nuclear war in Iraq right now. That country is contaminated. It will be contaminated for practically eternity now. It's okay for them to have them, but Iran or Syria can't have them. It's okay for Israel to occupy Palestine, but it's--yeah--and it's okay for Iraq to occupy--I mean, for the United States to occupy Iraq, but it's not okay for Syria to be in Lebanon.

Or a speech she gave the other day:

But I don't care, I'm goin'. And I'm gonna tell them, "You get that evil maniac out here, cuz a Gold Star Mother, somebody who's blood is on his hands, has some questions for him."

And I'm gonna say, "OK, listen here, George. #1, you quit, and I demand, every time you get out there and say you're going to continue the killing in Iraq to honor the fallen heroes by continuing the mission; you say, except Casey Sheehan.'"

"And you say except for all the members of Goldstar Families for Peace' cuz we think not one drop of blood should be spilled in our families' names. You quit doing that. You don't have my permission."

And I'm gonna say, "And you tell me, what the noble cause is that my son died for." And if he even starts to say freedom and democracy' I'm gonna say, bullshit.

You tell me the truth. You tell me that my son died for oil. You tell me that my son died to make your friends rich. You tell me my son died to spread the cancer of Pax Americana, imperialism in the Middle East. You tell me that, you don't tell me my son died for freedom and democracy.'

Cuz, we're not freer. You're taking away our freedoms. The Iraqi people aren't freer, they're much worse off than before you meddled in their country.

You get America out of Iraq, you get Israel out of Palestine

Nope, nothing mean-spirited there.

Are my 15 Minutes Up Yet?

Yours truely actually got a credit on The Best of the Web (scroll all the way down to see it). Even rarer than an instapundit link, although it doesn't draw nearly as much traffic.

Wednesday, August 17, 2005

Housing Insincerity

"Op-Ed columnist Paul Krugman has the disturbing habit of shaping, slicing and selectively citing numbers in a fashion that pleases his acolytes but leaves him open to substantive assaults. " Former NY Times Public Editor Daniel Okrent

"Let's start with home building. Between 1980 and 2000, which was before the housing boom, spending on the construction of new homes averaged 4.25 percent of G.D.P. In the most recent quarter, however, the figure was 5.98 percent. That difference is equivalent to about $200 billion a year in additional spending, generating roughly two million extra jobs."

Paul Krugman

Is it really this much of a difference though, or is he just selectively slicing numbers? Why for example does he compare a 20 year period with a 1 year period? Well, let's go to the BEA and find out.

In billions of dollars
2000 QII Gross domestic product 9,822.8
Residential Investment 448.8
Percentage 4.57%

2005 QII Gross domestic product 12,376.2
Residential Investment 740.1
Percentage 5.98%

For a total increase of percent of GDP of 1.41%, about $175 billion. A substantial number for sure, but considering we are in the biggest housing boom in several generations is this really enough to threaten the future of the nation?

And what happens if we look back more than 20 years, to an era that he has praised before for its higher growth and more security for American workers.

So, is this a house of cards as he claims, or just a return to the good old days?

Tuesday, August 16, 2005

We wouldn't want them to be able to read their diplomas would we?

I have often criticized the US educational system, but this takes the cake. A study apparently is claiming it is unfair to require high school graduates in US schools to be able to be competent in English, which the last time I checked was the predominate language here. If I decided to move to, for example, France, how far do you think I would get in arguing that it would be unfair to require me to speak French in order to graduate from one of their schools? Only in America...

WASHINGTON (AP) -- Huge numbers of students who don't speak or read English well may be denied a high school diploma based on graduation tests that do not fairly measure their skills, a study suggests.

Many states are struggling to help those learning English as a second language. Such students -- mainly immigrants -- pass graduation exams on their first try at least 30 to 40 percentage points less often than other students, the Center on Education Policy found.

That performance has big implications, as almost nine in 10 limited-English students are expected to face such a high-stakes test in their state by 2012.

The President's Reading List

As I pointed out earlier, President Bush actually reads, despite his opponents wisecracks. Apparently it is a rather interesting list. I might have to pick up that book on Alexander II, he has always been my favorite tsar.

According to the White House, one of three books Bush chose to read on his five-week vacation is "Salt: A World History" by Mark Kurlansky, who chronicled the rise and fall of what once was considered the world's most strategic commodity.

The other two books he reportedly brought to Crawford are "Alexander II: The Last Great Tsar" by Edvard Radzinsky and "The Great Influenza: The Epic Story of the Deadliest Plague in History" by John M. Barry.

Monday, August 15, 2005

Those Crazy Car Making Canadians

Paul Krugman says:

Funny, isn't it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada's universal health insurance system is handling international competition just fine. It's our own system, which penalizes companies that treat their workers well, that's in trouble.

But what does the Canadian Medical Association have to say?

Patients need to think about getting private medical insurance, says the head of the Canadian Medical Association.

It's time for the country to start talking about non-profit insurance co-operatives that patients could use to pay for uninsured medical procedures, "upgrade" their care and cover de-listed services like optometry and physiotherapy, according to Dr. Albert Schumacher.

In a signal of where the organization may be headed, Schumacher called the Canada Health Act a "monolithic dinosaur" carved in stone.

"If this was the auto industry, we'd all be driving Yugos," Schumacher, president of the 60,000-member association, said in an interview.

Err America

I spent a lot of time on the road this weekend, so when not listening to my Sharansky audio CD I was flipping through numerous radio stations. Among other things I caught part of the Air America network, which has been in the news lately. Some woman, whose name I can't remember was on complaining about the economy. She played a clip from Bush, who although nominally is on vacation, met with his Council of Economic Advisors and made a statement that unemployment is at 5%, lower than the average for the 70s, 80's or 90's, that the economy continues to grow at a healthy rate, and that we added over 200,000 new jobs last month. Of course all of this is completely true, so having no real factual argument the radio host called upon her listeners as her own "Council of Economic Advisors" to call the show and complain about how bad the economy was. Of course she was immediately innundated with callers whining about how they were poor and unemployed and life generally sucked and it was all George W. Bush's fault. One generally has to wonder, of course, about the economic viability of a radio network, whose base demographic is a bunch of people who have nothing better to do than call up a radio station, on an August Sunday afternoon, and bitch about how miserable their life is. No wonder they have to steal money from children's charities.

Sunday, August 14, 2005

The Case for Freedom

Americans are a free people, who know that freedom is the right of every
person and the future of every nation. The liberty we prize is not America's
gift to the world, it is God's gift to humanity.

President George W. Bush, 2003 State of the Union Address

With rhetoric like this it is no surprise that President Bush, who is generally accused of being illiterate, was reported lately to be reading Natan Sharansky's latest work, "The Case for Democracy: the Power for Freedom to Overcome Tyranny and Terror", nor is it any coincidence that Sharansky quotes the President often, usually in positive terms. I finally read, or more precisely listened to this book over the weekend, and thought it very enlightening, thought provoking, and well deserving of of a detailed post. Sharansky in short makes a rather convincing argument that we must place our faith in the future of freedom and democracy, rather than the folly of the stability of accommodating despotism.

Can Democracy Flourish?

Sharansky, who spent a decade in jail as a Soviet dissident, refusenik, and human rights activist before moving to Israel and eventually becoming a cabinet minister, begins by describing what a oddly controversial idea democracy is. Many argue, for example, that democracy in the Middle East is impossible, that their society is not cut out for it. He draws parallels with the historical examples of Germany and Japan in the post WWII era, when many thought it impossible that these fascist and militarily aggressive countries could embrace democracy, a view that would be considered silly, and slightly racist in modern times. So why do people say this about Iraq or Afghanistan? Do they have a more intransigent history of despotism? Even in more modern times few experts predicted in the 1970s and 1980s that the Soviet Union would collapse and a relatively democratic Russia would take over. Now the very same experts argue that it was inevitable.

Reagan, Sakharov, and Scoop

Of course Sharansky talks at length about his experiences relative to reform, freedom, and democracy. He goes on at length about the simple, yet brilliant idealism of Ronald Reagan, who was widely criticized at the time for challenging the Soviet Union, with his aggressive "evil empire" and "Mr. Gorbachev, bring down that wall!" rhetoric. But Reagan was correct in his insistence on moral clarity and faith in freedom. Another western politician Sharansky speaks at length about is the legendary Washington State Senator Henry "Scoop" Jackson and his Jackson-Vanik amendment linking the right to emigrate in the Soviet Union with trade agreements. By forcing the Soviet Union to address the issue of human rights, Sharansky argues, Jackson brought about the reforms that lead to the collapse of communist despotism, rather than settling for the safe accommodating of detente that was the fashion of the day. How sad that our beautiful state has falling so far that we are no longer represented by such noble statesmen as Jackson, but rather the intellectual embarrassment of Patty "bin Laden day care" Murray. Sharansky also discusses how he worked for a time as the spokesman for the great human rights activist, and a personal hero of mine, Andrei Sakharov. As a short aside, I had the honor of meeting Sakharov's widow, and fellow activist Elena Bonner, when she visited my class (ironically at the Jackson School) in the early 90's. I struck up a conversation with her interpreter, who was rather interested in a "Slava Yeltsinu" (Glory to Yeltsin) button that I had pinned to my jacket, that he insisted I show to Mrs. Bonner. So it should come as no surpise that I found this section very intersting. Sakharov, who spent years in exile before being released by Gorbachev, stated way back in the 60s that states could not compete economically when their citizens lived in fear rather than freedom, would become proven right by Gorbachev himself.

Helsinki vs Oslo

Historical background aside Sharansky's main argument lies in contrasting the success of the Helsinki Accords, which were based on human rights and a respect for the basic dignity of man, as opposed to the utter failure of the Oslo Accords, which were based on the support of the despotism of Yasser Arafat, in the naive hope that by empowering him, he would crack down on terrorism, and therefore enable the Israelis and Palestinians to live in peace. Sharansky rather persuasively argues, that this was impossible, because Arafat's power, in fact depended on maintaining the continuance of a conflict with Israel, and encouraged, rather than discouraged, the suffering of the Palestinian people. Only a democratic government, with a vested interest in improving the lot of the Palestinian people, would seek a long lasting resolution of the conflict, rather than inciting terrorist bombings.

Moral Clarity vs. Moral Equivalence

Sharansky speaks at length about the need for moral clarity, although he disappointingly never really defines what he means by it. He seems to indicate though that it is the opposite of moral equivalence, which seeks to blur the difference between right and wrong. Those who think that way argue that although Iran and Syria violate human rights, so do Israel and the United States, therefore everyone is equally guilty. Sharansky points out, and correctly so, that although free societies do make mistakes, they own up to their violation of human rights, while despots depend on this violation of human rights for their very existence. Both the US and Saddam Hussein did things in Abu Ghraib that were wrong, but Saddam Hussein would never investigate these misdeeds and publish photos of them, therefore acting as there is somehow no difference is naive and dangerous.

On the whole I found Sharansky's arguments profound and rather inspiring. He is not just some Hollywood celebrity or academic, but rather someone who has stood up for what he believes and at great personal cost. We must learn from the past the importance of standing up for freedom, and the folly of appeasing despotism. It will not be an easy fight, the fight against communism lasted 70 years, and in some ways still goes on, but we must never give up our faith in humanity and belief in freedom.

Also, for similar works check out the excellent, if not so idealistic "The End of History" by Francis Fukuyama, and "The Future of Freedom" by Fareed Zakaria.

Friday, August 12, 2005

Where is a Cop When You Need One?

At the local strip club apparently. The Seattle PI reports on the police finally paying attention to rampant car theft, up 61,5% over the last 8 years. So where have our men in blue been keeping busy? Well in the dangerous and ardous business of undercover investigation, getting lapdances at taxpayer's expense.

Seattle officials publicly have said the clubs bring vice problems to the neighborhoods. In statements filed with the finance committee, several Seattle police detectives cited anecdotal evidence of dancers overstepping legal restrictions on performances.

One officer, identified as B. James, paid for lap dances apparently as part of an investigation. He wrote: "The dancers most often begin by straddling me from the front and placing their genitals over my genitals and grinding back and forth.

"They also grab and caress their breasts while they are exposed."

Oh the horror of those poor brave men having to be exposed to strippers caressing their breasts. They probably have nightmares from the experience. Maybe they can get treatment, even a disability pension for PTSD.

And no, that officer mentioned as B. James, has nothing to do with your humble blogger, James B.

Thursday, August 11, 2005

A Glass Half Empty Kind of Guy

Only in the upside down world of Paul Krugman is a country with massive unemployment portrayed as an excellent opportunity for some quality family time, but a country with soaring numbers of families owning larger and nicer homes is on the edge of financial collapse.

More Bad Economics on the Participation Rate

Although I have to give them credit for acknowledging that much of the labor trouble has been among teens, as I previously discussed here, MSNBC still manages to get their facts wrong in its article "Teens seeking work face fierce competition".

“Teens are having a much harder time getting work,” said Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston. “Not just in summer but year-round. … That is partly a new phenomenon. There is something structural going on in the labor market that has made it a lot harder for kids to find work.”

Younger workers always suffer first when the job market turns south in a recession, and the latest business cycle was no exception. But after past recessions, in the 1970s, ‘80s and ‘90s, teen employment snapped back quickly. Not so this time, said Sum.

No, actually it never "snapped back quickly", teenage participation in the labor market has been going consistently downhill for 30 years. Even in the dotcom boom of the 90s it never came close to its 1980's high. Where do these so called "experts" come up with this stuff?

Wednesday, August 10, 2005

Brad DeLong is the Most Dishonest Man Alive

Don "The stupidest man alive" Luskin and Brad "Jabba the economist" DeLong are exchanging insults. I have posted a couple of times before how I made some comments on DeLong's site arguing against his response to a debate I started, which were then edited, deleted, and eventually resulted in my total banishment from his site for the sin of contradicting him. The thing I found most amazing reading the comments on this thread, is that he edits out comments that contradict him, even from posters who largely agree with him. All dissidence must be stopped!

"However, your second point is tricky. Selling off assets makes us poorer in the future relative to what we would otherwise be...

[Exactly. That's what the Post asserts. That's what Luskin denies. Stop there.]"

I just read Luskin's article, and I don't see where he denies it. He denies that it makes us poorer overall, and (as I noted in the part that you cut out of my previous post) he could be right depending on what discount rate you apply.

However, having read his article, I see he also fails to recognize that currency held abroad is a form of debt, so perhaps he is as stupid as you say.

Posted by:
knzn August 7, 2005 11:48 PM

Paul Krugman: Advice Columnist

For web econo-bloggers this is one of the funniest things I have seen in a long time. I am having flashbacks to my college Russian Studies days. I am dizzy with success. Hat tip Scrivener.

Tuesday, August 09, 2005

Challenge and Education

This article supports what I have been saying for a long time, the main problem with our schools, especially in poor and minority areas, is not money, but the fact that we don't expect enough from our students. If you challenge them, they will perform. If you make excuses for them, they will live up to them. What is really sad is we hear this from the students themselves. The professionals we pay to take care of this are clueless.

WASHINGTON (AP) -- The campaign to make high school more demanding seems to be picking up support from the people who have the biggest stake in the matter: the students themselves.

Almost nine in 10 students say they would work harder if their high school expected more of them, a survey finds. Less than one-third of students say their school sets high academic expectations, and most students favor ideas that might add some hassle to their life, such as more rigorous graduation standards and additional high-stakes testing.

Sunday, August 07, 2005

More on the President's fitness

I discussed the Democrats and their fits over fitness before. Mark Steyn has an hilarious editorial on this, as well as a couple other issues. Well worth a read.

Fortunately, the Dems have found a new line of attack to counter the evil election-stealing moron. A few days ago, the Democratic National Committee put out a press release attacking Bush for being physically fit. It seems his physical fitness comes at the expense of the nation's lardbutt youth. Or as the DNC put it:

"While President Bush has made physical fitness a personal priority, his cuts to education funding have forced schools to roll back physical education classes and his administration's efforts to undermine Title IX sports programs have threatened thousands of women's college sports programs."

Wow. I noticed my gal had put on a few pounds but I had no idea it was Bush's fault. That sonofabitch chicken hawk. Just for the record, "his cuts to education funding" are cuts only in the sense that Hackett's performance in the Ohio election was a tremendous victory: that's to say, Bush's "cuts to education funding" are in fact an increase of roughly 50 percent in federal education funding.

Some of us wish he had cut education funding. By any rational measure, a good third of public school expenditures are completely wasted. But instead it's skyrocketed. And the idea that Bush is heartlessly pursuing an elite leisure activity denied to millions of American schoolchildren takes a bit of swallowing given that his preferred fitness activity is running. "Running" requires two things: you and ground. Short of buying every schoolkid some John Kerry thousand-dollar electric-yellow buttock-hugging lycra singlet, it's hard to see what there is about "running" that requires increasing federal funding.

Perhaps America could have a Running Czar or a National Commission on Running that would report back on the need for a Cabinet-level Runner-General. Perhaps Title IX needs to be expanded to provide a federal sneaker subsidy: a woman's right to shoes.

The Laffer Curve

Paul Krugman, the world's most dangerous liberal pundit, and former award winning economist has been attacking supply side economics and "the Laffer Curve" a lot recently. In last week's column;

Mr. Kristol led by example, using The Public Interest to promote supply-side economics, a doctrine whose central claim - that tax cuts have such miraculous positive effects on the economy that they pay for themselves - has never been backed by evidence.

As well as numerous times before.

This of course is a strawman argument, since the Laffer curve, the basis of this part of Milton Friedman style supply side economics never claims that tax cuts "pay for themselves rather, quoting from Wikipedia:

The Laffer curve, developed by economist Arthur Laffer and often used to justify tax cuts, is intended to show that government can maximize tax revenue by setting a tax rate at the peak of this curve. The curve is clearly accurate at both extremes of taxation --zero percent and one-hundred percent-- where the government collects no revenue. At one extreme, a 0% tax rate means the government's revenue is, of course, zero. At the other, where there is a 100% tax rate, the government collects zero revenue because taxpayers have no incentive to work or avoid taxes and the government collects 100% of nothing. Somewhere between 0% and 100%, therefore, lies a tax rate percentage that will maximize revenue.

Now if I could figure this out, with my grand total of two undergraduate economics courses, then you would think that a John Bates Clark award winner could. Of course John Nash has a Nobel Prize in economics and he only took 1 economics class in his academic career, so maybe too much exposure to academics is harmful...

In any case, what seems truely amazing is that Krugman seems completely unaware of the basic economic fact, that tax rates have a major impact on the economy. You can't just get a 50% rise in tax revenue by increasing taxes by 50%, as he has been saying should happen, first with his claim that we should be getting 28% of GDP in federal tax revenues, and then in his recent debate in which he proclaimed "I don't know why not" when asked about the possibility of raising federal tax revenues by 50%.

Bob Doyle has a great letter posted on the Conspiracy to Keep you Poor and Stupid, on the history of tax rates vs revenues in the United States. He basically points out that even when the top tax rates were 90%, we still didn't get much over 20% of GDP in tax revenue, so where was this money going to come from? I highly recommend you read it, but I wanted to look at another part of Krugman's claim, "the total tax take in America would go from roughly 27 percent of GDP, including state and local, up to 35 percent. In many advanced countries, the take is close to 40 percent."

Yes, it is true that there are "advanced countries" which receive close to 40% of their GDP in tax revenue. The OECD lists the following countries as having over 40% of their GDP as tax revenues in 2003:

Austria 43%
Belgium 45.8%
Denmark 49%
Finland 44.9%
France 44.2%
Iceland 40.3%
Italy 43.4%
Norway 43.9%
Sweden 50.8%
Average 44.69%

Unites States 25.4%

So, would the US be able to increase tax revenues by 50%, to 38.1% of GDP merely by raising taxes 50%? Well, maybe, but what Krugman doesn't mention, and what the Laffer Curve shows, and any economist not named Paul Krugman knows, that doesn't mean total tax revenues would increase by 50%. Raising taxes by this amount would give you 38.1% of a much smaller economy. For example let's run those high tax rate countries through Excel and figure out how much tax revenue they are getting per capita:

Austria $12,900
Belgium $13,282
Denmark $15,288
Finland $12,257
France $12,155
Iceland $12,453
Italy $11,631
Luxembourg $22,922
Sweden $13,614
Average $14,305

United States $9,601

So these 10 countries are on average paying 76% more of their GDP for taxes, and but on a per capita revenue basis only getting 49% more. This gets worse though, if you remove tiny Luxembourg (think Brad DeLong and Botswana) this decreases to only 39% more.

These are just rough estimates of course, since to be completely accurate you would have to adjust for population and other factors, but to be completely honest, if Krugman wanted a 50% increase in tax revenues, he shouldn't be calling for a 50% increase in tax rates. Using these comparisons he would have to call for something approaching a 100% increase.

So maybe there is something to the Laffer curve after all?

Thursday, August 04, 2005

The Krugman Money Quote

From a debate in Harper's. I can imagine the veins in his forehead popping out as he said this:

HUBBARD: Well, there’s a substantial body of economic research to suggest that the lower marginal tax rates since then have stimulated savings, investment, entrepreneurship. And to solve our entitlements problem with tax increases, it would not just be a matter of restoring 1970s tax rates. It’s not just that top rates would have to go up. I am describing a tax increase of 50 percent. And I don’t mean for the rich. I mean every tax collected in America.

KRUGMAN: Every federal tax.

HUBBARD: You could not raise that amount of money on a soak-the-rich strategy.

PETERSON: A tax increase can’t provide the bulk of the solution.

KRUGMAN: I don’t see why not. Even if we raised it all through taxes—something I wouldn’t support, by the way—the total tax take in America would go from roughly 27 percent of GDP, including state and local, up to 35 percent. In many advanced countries, the take is close to 40 percent.

His claim that he wouldn't support this by the way, stands in marked contrast to his previous statement that we should be getting 28% of GDP in federal revenues. I guess he was for it, before he was against it.

Monday, August 01, 2005

In Defense of Profiling

It drives me nuts to be at the airport and watch some little old lady being practically strip searched. There is one constant in security, you can't cover everything, you will never have enough resources. In order to defend against the threat the most efficiently you have to target your resources against the most likely targets, that is why you are likely to find greater security at the airport, then say, Bob's Bait Shop. So why is it when it comes to the people carrying out these attacks we pretend that they are all equal? We know that the overwhelming majority of the people who carry out terrorist attacks against us are Islamic males in their 20s and 30s of Middle Eastern, East African and South Asian descent. Does this mean that we should put everyone of this description in jail? Absolutely not. But if the police are searching people in the NY subway and they have a choice between searching a 50 year old black female, and a 30 year old Moroccan man, they are obviously going to accomplish a lot more searching the man. But this is something we can't say because it is insensitive. Well, I don't care, people's lives are at stake, I will say it, and so should everyone else. Charles Krauthammer has an excellent article saying this too.

The American response to tightening up after London has been reflexive and idiotic: random bag checks in the New York subways. Random meaning that the people stopped are to be chosen numerically. One in every 5 or 10 or 20.

This is an obvious absurdity and everyone knows it. It recapitulates the appalling waste of effort and resources we see at airports every day when, for reasons of political correctness, 83-year-old grandmothers from Poughkeepsie are required to remove their shoes in the search for jihadists hungering for paradise.

The only good thing to be said for this ridiculous policy is that it testifies to the tolerance and good will of Americans, so intent on assuaging the feelings of minority fellow citizens that they are willing to undergo useless indignities and tolerate massive public waste.

Pragmatism vs Principle

There are two sides forming on the blogosphere as to whether our decision to stand up for human rights in Uzbekistan, at the cost of losing our base at K-2, was the proper thing. Austin Bay has a little discussion of this. Personally I think it was the right decision. Karimov is a vicious dictator who presents more of liability to us than an asset. It is unfortunate to lose the base, especially after spending so much money on it, but giving the appearance of supporting this type of a government just for political expediancy would be even worse. Yes, Karimov may have so legitimate concerns regardining Islamic fundamentalists, but his repressive policies are going to make the problem worse. By banning practically any display of Islam, he is going to drive otherwise moderate Soviet style vodka drinking Muslims towards the extremists.

Wahhabis in Seattle

I heard about this on Brian Suit's show. I used to drive past this mosque all the time when I lived in North Seattle. It will be interesting to see what becomes of this.

A microcosm of the Wahhabi War of the Worlds was seen in the Emerald City on July 23, when one of the preeminent Iraqi Shia clerics in America, Sayed Mustafa al-Qazwini, Imam of the Islamic Educational Center of Orange County, California, stopped for afternoon prayer at the Idriss Mosque, located at 1420 NE Northgate Way in Seattle. Idris in Arabic is the name of a Prophet, but considering the behavior that occurred there recently it might better be called Iblis or the Devil's Mosque. For when Sayed Mustafa al-Qazwini appeared at the sacred house to pray on American soil, he was rudely insulted and ordered to leave by two Wahhabi thugs, identified as an Algerian and Egyptian, who called him an "unbeliever" because he is a Shia Muslim!

I know Sayed Mustafa al-Qazwini quite well and have defended him in the past. He is a man of religious moderation and cultivation, but he is also independent-minded and has spoken critically about the situation in Iraq and other sensitive issues. He has participated in meetings of radical Islamist groups. But he is nobody's puppet. He is not my front man or President Bush's servant or a Zionist pawn. He is a learned and sincere Shia cleric. Above all, he does not counsel separatism or violence to Muslims living in America; he supports the argument of the Iraqi Shia marja, or clerical authority, Ali Sistani, who
writes that a Muslim living in the West has given, and must abide by, an oath to live in peace with non-Muslim rulers and neighbors.