Deinonychus antirrhopus

June Jobs Forecast

The forecast for job growth in the payroll survey is around 250,000. This would bring the total number of jobs created this year to 1.4 million.

"I think the gains will be quite widespread again, and as we saw in April and May, we are likely to create slightly more higher-paying than lower-paying positions," said Lynn Reaser, chief economist at Banc of America Securities.

Even if the unemployment rate does not decline, analysts expect the Labor Department's closely watched payrolls report, due on Friday, to confirm broad strength in what months ago was still only a tepid economic recovery.

It'll be interesting to see what happens when the BLS releases their report for June's employment situation.

Common Good

What exactly is it? Is it rounding up all HIV+ people and dumping them in a large quarantine camp? After all, with nobody with HIV the disease can't spread. If you don't have it this is clearly a benefit to you. Or how about rounding up people who eat fatty foods and don't have insurance. We can force them to exercise so they'll be less likely to have weight related health problems and save the rest of us some money. That is what I start to wonder about when I read pabulum like this from Senator Clinton,

"Many of you are well enough off that ... the tax cuts may have helped you," Sen. Clinton said. "We're saying that for America to get back on track, we're probably going to cut that short and not give it to you. We're going to take things away from you on behalf of the common good."

The problem here is that this idea of the "Common Good" is totally open ended. Is taking 50% of people's incomes for the "Common Good" justified? Depends on what is meant by the "Common Good" doesn't it?

The "Common Good" isn't the same as Public Goods. Public Goods have a precise definition, that is a (pure) public good will satisfy the following criteria,

1. nonrivalrous,
2. nonexclusion.

That is, if I consume the public good it does not reduce the amount available for others to consume, also, people cannot be excluded from consuming the good. The problem is the non-exclusion means that a price cannot be charged and so private provision will tend to result is too little of the (pure) public good.

Theoretically speaking it is possible for the government to provide the (pure) public good and improve everybody's welfare. We could say that this is for the "Common Good".

The "Common Good" is not quite the same thing as externalities. An externality is where an individual, firms, basically and economic actor, does something (consumes, produces, etc.) that reduces the welfare of another economic actor. Again, theoretically the government can intervene and improve everybody's welfare. This too, could be seen as a case of government doing something for the "Common Good".¹

The problem is that I know that Senator Clinton's views go beyond these two special cases of the "Common Good". How do I know this? HillaryCare--i.e., Senator Clinton's legislation that was introduced to Congress when she was still the First Lady and her husband was President. This dealt with the nationalization of pretty much the entire health care industry. Contrary to what many may want to believe health care is not a public good. Health care may have some issues with externalities, but it is far from clear that the solution is to nationalize one seventh of the U.S. economy.

Further, Senator Clinton supports transfer programs like Social Security and subsidy programs such as Medicare. These programs are not designed to address a public goods problem nor externalities. They are basically "gimme" programs from the working to one of the richest demographics in the country.²

So I am not thrilled when I hear invocations of the "Common Good". Nobody else should be either. In fact, they should, in my view, be asking exactly the same question I am. What exactly is the "Common Good"? I'm sure a great many of history's less savory characters have invoked "Common Good" as justification for their actions. I'm not saying Senator Clinton is among history's less savory characters, but I sure would like to know how far she'd go for the "Common Good".

Update: Via Kevin Drum, who also points to these post by Andrew Sullivan.

Notice of course the complete lack of concern in Kevin's post,

This is actually more revealing than his original comment: he was annoyed because HC invoked the "common good." This is apparently all it takes to drive some conservatives nuts these days.

What a sad commentary. Of course the purpose of taxation is to provide for the common good and of course Hillary believes her agenda coincides with that common good. What else would she believe?

As I noted, I'm sure many of history's less savory characters argued they were doing things for the "Common Good", and some of them may have firmly believed it was indeed for the "Common Good". Such a justification for doing something collectively is, to me, hardly sufficient.

Update II: Steven Taylor at Poliblog has a good post on this. As does Prof. Bainbridge.

I should also point out that restricting "Commong Good" to externalities and public goods can be unpleasant as well. My initial example of gathering up and quarantining people who are HIV+ could be argued on the ground of addressing an externality.

Update III: That second update was a bit premature as I've found some more on this at the following sites,

Caerdoria,
Hammer of Truth,

I haven't found anybody so far, besides Kevin Drum, who wants to defend the statement.

Update IV: Ah-ha! Ted Barlow is defending the statement. Of course, he doesn't seem to understand the objection to the statement. Oh well.

Matthew Yglesias is also defending the comment without thought as well. His argument seems to boil down to: its a winning political strategy so therefore it is good. Yuck.
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¹In the real world, things aren't quite as nice as the theoretical world. In theory, the government has access to things like lump sum transfers, knows consumer preferences, etc. Since it the real world these policy instruments and information are not available to the government the improvements that were possible in theory can quite often fail to materialize. There types of problem are handled in the literature called the Theory of the Second Best.
²Granted there are undoubtedly elderly who depend very much on these programs, but in general the retired elderly are actually a rich demographic. Consider that a couple working from 18 to 65 and saving around 5% of their income with a 4% rate of return (and 3% annual raises) would retire with around $285,000. Throw in a house that is paid off and a car or two that are paid off and you could very easily get close to $350,000. Increase the rate of savings by half (7.5%) and the final retirement fund has $430,000 (excluding house and cars). The idea here is that with compounding interest even a modest rate of savings can result in a sizeable amount of money over a working lifetime.

One Reason to Prefer the Two Party System

Canadians elect a minority government.

An era of Liberal minority rule began with a promise from Prime Minister Paul Martin to steer a stable, activist government through Canada's patchwork Parliament

Liberal -- 135
Conservative -- 99
Bloc Quebequois -- 54
NDP -- 19
Independent -- 1

With 308 MPs, a total of 155 is needed to reach a majority. Presumably Paul Martin will be able to form a government, but at what cost? He'll either have to pander to the separatists of Bloc Quebequois, or suck-up to the NDP and the lone Independent.

That could give Chuck Cadman, Independent MP from Brisith Columbia, a heck of a lot of power. The Jim Jeffords of the North? (Not to cast aspersions on Mr. Cadman's character; I'm sure he's a nice person and not at all a power-hungry weasel. It's just that he's in a similar king-maker position.)

In a larger context, it demonstrates to me one of the problems with a multiparty parliamentary system. In order to form a government, the Prime Minister is going to have to adopt planks from the platforms of minority parties who received significantly lower public support.

I fully admit to some ignorance of Canadian politics. For instance, I don't know how easy it is to split individual MP's away from their party's positions, though I imagine that the vote to form a government follows party lines. According to Wikipedia, voting against your party is rare.

Anyway, my point is that it seems that the current Canadian parliament is doomed to a short life. The minority government won't be able to function well, will have difficulties passing laws, will suffer from gridlock.... wait, maybe it isn't such a bad idea afterall....

Brad DeLong's Cultural Revolution

We must have intellectual purity. Michael Ignatieff is now having second thoughts about the war in Iraq. Ignatieff is disappointed in the competence (or more accurately the lack thereof) of the Bush Administration in executing the Iraq war. In response though, Brad DeLong wants more than an admission of error. We must have a public intellectual flogging to satisify Prof. DeLong.

For Ignatieff to say that there is "no excuse" for his assumption that the Bush administration was competent is not satisfactory: Ignatieff needs to tell us what chain of thought could possibly have led him to the assumption that the Bush administration was competent--or to the belief that a successful postwar reconstruction of Iraq was possible without 100,000 Arabic-speaking MPs.

Roger Simon on Paul Krugman

Roger Simon does a wonderful job pointing out that Paul Krugman is a buffoon. He also spots another instance of Krugman casting aspersions on another based solely on being related to another.

Krugman engages in egregious character assassination in the article of Simone Ledeen, Michael’s daughter. This is the kind of personal attack I believe to be endemic to Krugman’s form of partisanship and should not have been allowed by The New York Times. Krugman implied that Ms. Ledeen benefited from nepotism and was not qualified to serve in Iraq. This could not be further from the truth. Simone Ledeen, who did accounting for the CPA, was a fully qualified MBA and exactly the kind of young person you would want to see serving in Iraq (not a simple thing to find, obviously, for a dangerous war zone). I met her for the first time last week, having dinner with her twice. I listened to her detailed analyses of what was going on over there that were in many ways as critical as Krugman’s, but far more subtle and educated because she had spent over half a year in Iraq, visiting many parts of the country, working with and training Iraqis with whom she became friends. I know nothing of the quotes that Krugman cherry-picked for his article or of their context, but can assure you and him that this young woman is no warmonger. The kind of reactionary (word chosen very specifically) character assassination he has engaged in is despicable.

It is also hypocritical.

I moved several times in the 1990s. Basically, I'm a trailing spouse. Here's the sequence: when my future wife and I began seeing each other, I was at MIT and she was teaching in England. The commute was wearing us down. Then she got a job in the U.S. - but it was at Stanford Business School. So I asked Stanford if they wanted to make me an offer, and they did. Then MIT made us an offer to get me back, which we chose to accept because my wife disliked business-school teaching. Finally, Princeton made us an offer we couldn't refuse - partly because the details of the offer were very good, partly because Princeton was clearly the up-and-coming department. It also worked out well for family reasons: my parents are living in a retirement community not far from Princeton, and my mother-in-law, who hated Boston, has purchased a house nearby.--link

In other words, Krugman's wife was given a job at M.I.T. because they wanted to keep him. I suspect the same is true for Princeton as well. Also, would his wife be able to write an econ text book and get a publisher without her husbands name? I doubt it (his wife, Robin Wells, is only a member of the Princeton research staff and not a professor). Now of course, it is Princeton and getting on the research staff is impressive, but lets face the facts. The facts are that Krugman is famous and wherever he wants to go any institution would offer his wife a job. They would be stupid not too.

Calabresi, Part II

I'm with Spoons on this one. Calabresi's comments strike me as being partisan no matter how much bullshit one smears on them.

I'm also a bit disappointed in Eugene Volokh almost coma like response on this.

“This is a very good response,” said a law professor at the University of California at Los Angeles, Eugene Volokh. “I don’t see anything else to be done about it.”

Now if only Saddam would apologize and show contrition and promises not to attack the U.S., everything would be fine, we could simply re-install him as the dictator of Iraq. Sheesh.

Spoon's final comment pretty much sums the whole thing up.

Calabrisi said, "Vote against Bush!" If that isn't partisan, then the word has no meaning.

Michael Moore Supporting the Carlyle Group

Yes, folks it is true. Michael Moore's movie is putting money into the hands of the BFEE (Bush Family Evil Empire for you uninitiated), the Saudi Royal family and the bin Laden family. Heck, it is even possible this money is finding its way into the coffers of terrorists!

[Note to the unwary reader, please use a dictionary.]

Carnival of the Capitalists

Is up over at the Egoist.

As usual, if you want to host, go to the main page for information on how to do that. Also, if want to submit an entry for next week, samething, go to the main page and all the information will be there.

Pledge of Democratic Allegiance

Well, Moore only has to register himself 8 more times and he'll have fulfilled his pledge.

What a dope.

Ahhhh!! The Cognitive Dissonance

I was reading this article and I came to a screeching halt right at these two paragraphs,

"They basically don't care what happens to all these poor people because they think the only thing that really matters is to concentrate as much power and wealth in the hands of the good guys as possible, people who share their values," he said.

The $1,000-a-plate dinner, along with a private reception, raised an estimated $500,000 for the Democratic State Party, said party spokesman Jon Summers.

There is something weird about a rich guy (Clinton) taling about the poor people (like they are some sort of idiot step child) while at an event with other rich people eating $1,000 plates of food (which probably cost at most $8/plate).

Clinton said Bush has convinced Americans that he can provide important services while cutting taxes.

"It sounded almost too good to be true, and sure enough, it was," Clinton said.

This reminds me of the insanity that afflicted both parties at the start of the Great Depression. Both sides felt that if only the budge could be balanced the world would be right. The Depression would end, and cats and dogs would live together in peace and harmony.

He pointed to massive cuts either instituted or proposed in the federal budget, saying public safety, education, defense and security is suffering.

Hmmm seems to me that education spending is going through the roof. I haven't checked, but I bet there has been a fairly decent increase in defense as well. This only leaves public saftey for the Big Me to hang his hat on.

Fahrenheit 9/11

This is via Henry Hanks:

In one instance, Moore comments that while the FAA closed all the airports in the U.S., some planes were authorized to pick up members of the bin Laden family and transport them out of the country. That is one of the harshest criticisms in the movie. However, Moore neglects to say that those flights were green-lighted by the same man Moore uses to bash Bush in the movie: Richard Clarke. (Clarke SOT). Moore also hints that the Bush family's financial ties to the Saudis may have made him less vigilant before 9/11. (Moore SOT from "This Week"). Clarke says "That's nuts." Finally, when Moore criticizes the war in Iraq, he uses idyllic pictures of life under Saddam Hussein. Moore admits he made no attempt to be balanced....

Well there you have it. Moore isn't interested in presenting facts and letting people decide for themselves, he is producing propaganda.

I'm sure this movie will win the Oscar in the documentry catagory demonstrating once again the inherent bias in Hollywood.

Tell a Joke About France and...

...suddenly you are "a foot soldier in the Bush Administrations culture war". Talk about needing an eye-rectomy, that reviewer sure is a candidate...maybe we should start up a collection fund for her operation. Sheesh.

Well, Looks Like Sovereignty Has Been Handed Back

We have given back control of Iraq to the new interim Government. In a secret ceremony today sovereignty was handed back by Ambassador Bremer. The ceremony was two days early and was done in secret, apparently to deny the insurgent/terrorists an obvius day in which to conduct attacks to try and embarass the Bush Administration.

Officials said the surprise move was designed to outflank insurgents who had threatened terrorist attacks to disrupt the handover, and to avoid the complex security arrangements that a public ceremony would have warranted. But it also showed an Iraq too dangerous for top US and Iraqi officials to publicly mark the most significant date since the fall of Baghdad.--emphasis added

I have to say that last part sounds true and looks really bad. I've been starting to move more and more towards the viewpoint of Daniel Drezner on Iraq. That more troops were needed to make the notion of democracy in Iraq viable. I suppose it can still work, but I see it as a far less likely outcome.

Update: Roger Simon has a good post on this. I agree that the early handover was a good idea from the stand point of taking away an obvious day for killing people and destruction. Also, I agree with him that calling the people doing the killings insurgents is misleading. They are terrorists and fascists.

No, Not a Collective Action Problem

It is hypocrisy. Matthew, in responding to Daniel Drezner, tries to square a circle.

Now I'm a free trader, so I don't carry any particular water for these mercantilists, but I don't think that's a particularly irrational or unusual way to behave. I walk past beggars on the street every day, and I never give them any money. I'd be happy, however, to pay a bit more in taxes as part of a campaign to raise several million additional dollars to spend on the program, provided we could fine a well-designed program (I've read recently in The Atlantic that the Bush administration's point man on the issue is doing good, and unfortunately neglected, work in this area) to spend the money on. I'm willing, in other words, to sacrifice my share in order to really change things, but I'm not going to sacrifice to make a purely symbolic gesture.

Here is the problem: Matthew could pick one beggar and donate to that person every day. This could make more than just symbolic difference. How much does a cheap housing and food cost? $40 a day? What is that 2-3 hours of work for Matthew. So what is the problem? This would get this one beggar a place to live and food. Grab a friend who feels the same way and split the costs and it is even cheaper. So why not do it? Because I might decide not to do it out here on the Left coast?

Matthew is willing to "spend the money" when he knows he can spread the cost to the 138 million plus workers. This way Matthew wont have to spend $20-$40 a day to give this guy a roof and food (something I and the other 138 million work for) for "free". By forcing everybody else to kick in Matthew can reduce his costs to a miniscule fraction of what it would otherwise be (we are talking a few cents a day vs. $20 to $40 a day).

Matthew is generous not with his money, but with everybody elses money.

Matthew closes his post with this,

I suppose to the libertarian mind all this business of "I'll do x if and only if I can force everyone to do x" sounds rather dodgy and immoral, but fortunately enough we live in the real world, where people understand the vital role coercion has to play in building a better tomorrow.

That should scare most of his readers, but it probably wont. What this is is Matthew saying, "Okay fine, you disagree with me, but most people think this is swell so we are going to force you to do it. Enough discussion time to put up or we will do really bad things to you." And this isn't about a legitimate issue like a public good (which actually is a collective action problem, in that the way to get such goods tends to be through collective action¹) that has a very serious problem with things like free riders. No, this is a transfer program that takes from those who work and are productive and gives it to those who are not.

It is a good thing we have a government that does stuff like this already. You know like taxing some of the poorest people in the country to give to some of the richest (a.k.a. Social Security and Medicare). It is jut a collective action problem you see.

Via Catallarchy where Jonathan also has a good post on this.
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¹Although with a small community such problems are probably not that large.

A little fluff prior to the weekend

I saw Shrek 2 this week. It was a little slow to start (I sympathized with Donkey when he kept asking "Are we there yet?" on their endless journey to Far Far Away), but once they got there it was a riot. I'd say it was even more loaded with subtle references that kids won't get but their parents will enjoy, e.g. Pinnochio doing the suspended-by-wires scene from Mission Impossible.

Best part: the spoof on "Cops": "We've got a white bronco headed east..." being chased by hot-air balloons, using peppermills to subdue the suspects, finding a bag of catnip on Puss-in-Boots, etc.

SpaceShipOne Fallout

The Instapundit has several links regarding the first private space flight. I particularly liked this quote from The Economist:

The craft's sponsor, Paul Allen (who co-founded Microsoft), could have spent as much, or more, on a luxury yacht. Furthermore, there is cause for modest optimism about the changes that the flight of SpaceShipOne signals in the broader space business, as a new breed of entrepreneur creates a thoroughly modern industry.

Granted, private spaceflight might never reach the mass appeal of regular flight, dismissing Rutan as an idiot (caption: "Oddly enough, they are rocket scientists") is just stupid.

Light Posting

Due to some issues at work tomorrow blogging will be very light to non-existant (tomorrow only...okay maybe Saturday too).

Are Austrian Economists About to Lose Their Cherished Position?

One of the big issues economists with the Austrian school take with the mainstream economists is the issue of equilibrium vs. market process (you can get some idea of what "market process" means here).

The problem seems to be that Austrians are banging on a horse that is either dead or is dying: general equilibrium models. As I noted in this post the Sonnenschein-Debreu-Mantel theorem basically did in general equilibrium models. Now the new hot area is game theory, and game theory has taken a couple of interesting turns of late. The first is the theory of learning in games. Much of the early literature in game theory focuses on the equilibrium--i.e., how the game is played. There was little research into, how did you get to that equilibrium. Now this research looks at precisely that quesiton, how do you get to an equilibrium. From the synopsis of the book (see the link above),

In this work the authors develop an alternative explanation that equilibrium arises as the long-run outcome of a process in which less than fully rational players grope for optimality over time. The models they explore provide a foundation for equilibrium theory and suggest useful ways for economists to evaluate and modify traditional equilibrium concepts.--emphasis added

You can read up on this stuff here in a paper by Dekel, Fudenberg and Levine. From the paper,

Our premise is that equilibrium in games arises as the result of learning, and that just what people will learn depends both on the true distribution of Nature's move and on what they observe when the game is played. One of our goals is to illuminate some of the issues involved in modeling players’ learning about opponents’ strategies when the distribution of Nature’s moves is also unknown.

The idea here is to get away from the standard justification for looking for a Nash Equilibrium. The standard justification can be accurately called hyper-rationality. For example, if you have a game with Bob and Jane, Bob would know about Jane's possible moves and payoffs. Jane would also know these things. Bob also knows that Jane knows, and Jane also knows that Bob knows these things. Bob also knows that Jane knows that Bob knows, and so on ad infinitum. It is almost silly.

The next new development is Evolutionary Game Theory which I mentioned here. Again one of the goals is to get away from the hyper-rational justification for looking for Nash equilibria. Using the machinery of evolutionary game theory, it turns out that a Nash equilibrium are also either evolutionary equilibrium or an evolutionary focal point, and that an evolutionary equilibrium or focal point is also a Nash equilibirum.¹

Again the idea is to look at the process of how an equilibrium is achieved. The way this achieved in evolutionary game theory is through what is called the replicator dynamic. Under the replicator dynamic the frequency with which a strategy increases in the population depends on how much that strategy's payoff is above the average of all strategies.

Also, in standard game theory one of the main tools for finding a Nash equilibrium is the best response function. The best response function for any given player is a function of the opponents' strategies taking the player's strategy as given. This is brings in another objection of the Austrians: perfect knowledge. In constructing a best response function I have to know what the other guy is going to do (or might do) and respond accordingly. The replicator dynamic is not a best response function.

Finally, in looking at some of the Austrian literature on the market process it is notable that the Austrian's refer to the market process as an evolutionary process (link, link, link). But if you look for an Austrian response to game theory you wont find much (at least I haven't found much so far). By ignoring game theory and the recent advances that look at the process of arriving at an equilibrium, the Austrians risk having one of their very complaints voided (or reduced to arguments over methodology).
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¹I'm omitting alot of mathematics here, but don't read the above sentence as meaning that all Nash equilibiria are evolutionary equilibria and vice-a-versa. For example, the first part that states that a Nash equilibrium is also an evolutionary equilibirium or focal point is a tad bit misleading in that a Nash equilibrium is a fixed point (of the replicator dynamic). There are three types of fixed points asymptotically stable fixed points (evolutionary equilibria), neutrally stable fixed points (evolutionary focal points)--i.e., the system moves around in a given "area" and never leaves the area. And then there are unstable fixed points. So a Nash equilibrium could be one of the latter.

I'm Not A Lawyer, But...

...this settlement and law seems rather strange. Two police officers were shot and disabled by a criminal use used a Ruger 9mm. The officers sued the store (based on the name it sounds like a pawn shop) for making a "straw sale". According to the article a straw sale is when somebody with a clean criminal background buys guns and then turns them over to those who would not pass the background check.

Now I can understand why such sales should be illegal, but why go after the store? Unless the store knew before hand that the sale was a "straw sale" what can they do?

Segal said the settlement "shows gun retailers they have to be careful about who they sell their guns to and under what circumstances."

Okay, but how do we go about doing this? My guess is that this is really just a ploy by the anti-gun special interests. Barring that the store personel knew the sale was for purposes of buying a firearm for somebody who legally could not how have they done anything worng? The person who should be punished is the person who made the purchase. Of course, that person probably does not have a million dollars lying around.

Unless there is something I am missing (which is quite likely) this strikes me as an attempt to prevent the sale of guns. If a retailer cannot tell who is engaging in a legitimate sale and who is engaging in a "straw" sale, and there is a significant penalty for mistakenly engaging in a "straw" sale, then retailers will simply stop selling firearms. In other words, iut looks very much like Scott Segal is lying.

Wal-Mart's New Suit

Nope, this isn't a new product, but a huge class action lawsuit. According to the news story there are as many as 1.6 million women who would be covered in the lawsuit.

The lawsuit is a sexaul discrimination lawsuit. While 70 percent of the Wal-Mart workforce is women only 15% of the managers are women.

That'll Teach 'Em

South Korea is going to try once again to buy off the North Koreans. South Korea is offering help to North Korea on its energy needs in exchange for denuclearizing (is that even a word?).

The South Korean government has promised to provide North Korea with energy assistance and a provisional security guarantee once the Stalinist regime complies with its proposed denuclearization plan, Seoul's top negotiator to the six-party talks said Wednesday.

Gee, hasn't this been tried before? And what does North Korea do? When they need more "help" (i.e. freebies supported by tax payers in another country) they start up their nuke program or reveal that they never really stopped.

This is insane if you ask me. We already know this does not work, and if anything has the exact opposite effect of encouraging North Korea to keep going with its nuclear program as a bargaining chip down the road.

Why keep doing something that you know will not work?

"Non-Partisan" Watch-Dog Groups...

...are turning out to be rather, well, partisan.

According to the nonpartisan PoliticalMoneyLine, officials at Common Cause, the Center for Responsive Politics, Democracy 21, Public Citizen and the Center for Responsibility and Ethics in Washington have donated a total of $62,000 to Democrats over the past decade.

During the same period, the watchdog groups have given just $2,000 to Republicans...Said one House GOP leadership aide: "It seems 'nonpartisan watchdog' is Latin for 'active Democrat contributor.' Why they continue to get quoted as independent observers blows my mind."

Whoops. There goes your objectivity and pretensions of non-bias. From Common Cause both Lauren Coletta and Sally Davis contributed only to Democrats (John Kerry and Howard Dean in 2004).

And when you go to OpenSecrets.org (run by the Center for Responsive Politics) you get zero hits when you search for donations by employees from the Center for Responsive Politics. Editing the data boys?

It doesn't stop there either,

There's more the story could have added. According to one Hill source, nearly all of these watchdog groups are funded with money from the hyper-partisan Bush-basher George Soros: Public Campaign, $1.2 million; Public Citizen, $100,000; Common Cause, $600,000; Democracy 21, $250,000.

Richard Mellon Scaife, eat your heart out!

Ha Ha Ha...

Guess it is hard to stop lying once you start.

In his August 1998 grand jury testimony, Clinton said he began an inappropriate sexual relationship with Monica S. Lewinsky in "early 1996." His testimony, as was widely noted at the time, was in conflict with Lewinsky's story: She testified the relationship began on Nov. 15, 1995, in the midst of a government shutdown.

Starr's prosecutors, in their report to Congress, accused Clinton of lying about the date of their relationship in order to avoid admitting that he had sexual relations with an intern, as Lewinsky still was in the fall of 1995 before being hired for a paying job in the winter.

Without explanation, in his memoir Clinton departs from his grand jury testimony and corroborates her version: "During the government shutdown in late 1995, when very few people were allowed to come to work in the White House, and those who were there were working late, I'd had an inappropriate encounter with Monica Lewinsky and would do so again on other occasions between November and April, when she left the White House for the Pentagon."--link

Dammit

This kind of thing is really pissing me off. And I'm totally with Bird Dog on this, Kim Sun-il was not killed or executed, he was murdered.

Whoops There Goes the Moral High Ground

Looks like Air America just lost the moral high ground (if they ever had it in the first place) when it comes to discussing corporate behavior. Looks like there is a good possibility of some rather shady business practices.

Of course, since they are Democrats with a just cause, that should excuse such behavior.

Update: I love John Cole's idea, we should call it: Air Enron. Seems fitting.

One More Reason Why I Favor A Minimalist State

Michelle Malkin, who also has her own blog, has the story. And it is a sick and creepy story.

In the months following the rape, Sclater looked back more closely at incidents that at the time hadn't seemed to her to indicate abuse Now, she wonders about the cause of the nightmares that awakened Suzy during the night, about bruises on her back that mirrored the pattern of her shower gurney, about her hymen being broken. Sclater's conclusion: "I think they'd been using her for years." DSHS lawyers take a different view of the matter, suggesting that Suzy could have gotten the bruises in a series of falls and inserted the semen into herself....

Right. Somebody with the developmental level of toddler would think to insert semen into herself. It happens all the time.

The Liberal Academia

This is something I wanted to blog on awhile ago, but just forgot about it. A few months ago Kevin Drum and Jesse Taylor noted that the donations by teachers, professors, and universities is not as lobsided as was previously thought. They noted that while 65% of the donations when to Democrats 34% went to Republicans. Thus academia is not all that liberally biased...or is it.

In typical Kevin Drum style he makes a leap that this this means about 1/3rds of academics lean towards Republicans. But can we conclude this? I don't think so. First, when you look at the top donors (for 2002) you see that the perecentages are much more skewed than the total indicates:

Also, in looking at who they gave too in Congress they seemed to be practicing that age old strategy of covering all the bases. That is, they gave to both sides, but the amounts that were given to the Democrats were much larger.

Clearly the preference is generally for the Democrats party (i.e., there is a Liberal bias). To conclude there is not a liberal bias or it isn't that bad is premature. Isn't it amazing what one finds when you look a little deeper into the data. The initial conclusion turns out to be very much suspect.

Another Article on Liberal Media Bias

This article looks at the results of a Pew Research Center poll and concludes that journalists are much more likely to be liberal than randomly selected Americans.

While this does not look at the actual articles, but the journalists instead, when combined with this article a picture is starting to emerge. The journalists tend to be liberal, and their beliefs are influencing how they cover stories, who the quote and so forth.

Guido Calabresi

Moron.

Energy Policies

Anonymous may know alot about intelligence, Al Qa'ida and terrorism, but when it comes to economics and energy he is does not know very much.

Clearly we need an energy policy, not just in the United States but in the West, that makes us less dependent on oil out of the Gulf.

This is a very popular and oft repeated mantra of economic know-nothings. If we buy the oil from some other place it will have zero effect on the total world demand and the power of OPEC to set prices. Even if we buy from Russia and other countries such as Venezuela, the oil fields in Saudi Arabia and the Middle East will be targets as somebody will be buying that oil.

The only real alternative is alternative energy sources and these are currently not sufficient to meet current demands, at least not without a huge investment in these alternatives (e.g., covering the Mojave with solar panels). And why should we do this? Because we'll be less dependent on Middle East oil and less vulnerable to price changes? Well the losses we will incur (and probably more) due to price volatility we will incur by switching to alternatives. No matter how you slice this the typical blathering about an energy policy isn't going to do much.

Oh and can we knock off the idea that high-oil-prices-will-trigger-a-global-recession,-but-we-must-switch-to-alternatives-to-oil-and-everything-will-be-perfect? If switching to alternatives made economic sense we'd have done it already.¹ The implication is that these alternatives are more expensive than oil (at least right now). Hence if the current high prices or prices a little bit higher are sufficient to trigger a recession, so is switching to the damned alternatives. Let me repeat that somewhat differently. If the high price of oil can trigger a global recession, then swithing to alternatives will also trigger a wolrdwide recession.

This kind of talk is alot like those idiotic gasoline station boycotts that go around in e-mails periodically. You know, the crap like, "Don't buy and gasoline from Exxon gas stations on July 8,9 and 10. We'll teach these guys a lesson."

You want an energy policy that will reduce dependence on oil, here it is in simple terms. Put a tax of $10/gallon on gasoline. There, done. People will start car pooling like mad, nobody will touch an SUV with a 10 foot pole. And our gasoline consumption will drop like a rock. So will our economy, but hey we'll be less dependent on foreign oil. We don't need any of this national debate bullshit the economic idiots blather about. A tax of $10/gallon would do the trick really quickly and nicely. You'll see people lining up to buy hybrid cars, cars will have 4 or 5 people in them during commute times (traffic congestion will disappear). And last, but not least oil consumption will plummet. No more driving the RV 1,000 miles for a vaction. No more recreational driving on the weekends. No more quick runs to the grocery store (unless it is buy foot, bicycle, etc.). Yet, whenever these economic dunces talk about a "national debate on an energy policy" they never come up the obvious answer. You get a lot of dimwitted chatter about alternatives, upping milage standards and other bullshit.
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¹The only way for this argument to work is for their to be large externalities that would disappear with the switch to alternative sources of energy. I think this is wishful thinking as covering the Mojave with solar panels would entail its own form of environmental costs.

What a Load of Economic Crap

I can't believe the head of the Economic Policy Institute wrote this,

Of course, economists contend that economics is a science. "Tell me what you want to do and I will tell you the best way to do it" is the economist's usual stance. (Actually, as one economist said, his role is to say, "Tell me what you want and I'll tell you why you can't have it.") Clearly, there's no room for values. The underlying assumption is that unfettered markets produce the best outcomes, except in a few very specified situations: externalities (such as pollution imposed on society but not reflected in producers' costs), monopolies, and other "market failure" cases everyone has had to study in Econ 101. Some economists (Martin Feldstein, for one) have contended that inequality is not a proper concern for economists. They should be concerned only with determining how to maximize the output of goods and services.--emphasis added

This thing pisses me off. This guy looks like he is an expert. He's the head of the Economic Policy Institute, but he write this kind of drivel. Here is my list of things that cause the market to fail:

• Monopoly,
• Externalities,
• Oligopoly,
• Public Goods,
• Information asymmetries,
• Taxes,
• Boundedly Rational agents.

This guy has managed to get only 2 out of the 7. Further, he is highly misleading with his comment "The underlying assumption is that unfettered markets produce the best outcomes, except in a few very specified situations:". This is completley false. Why does he have to present such a misleading case? I'm quite pro-market, and yet I'll tell you that in most cases the idea that the market is not going to fail is laughable.

I'd say the vast majority of economists would agree that the assumptions that allow for the outcome Mishel is talking about are extremely restrictive. That is, the unfettered markets = good outcome relies on the First Fundamental Welfare theorem in economics.

Mishel continues,

The U.S. economic-policy debate is in fact dominated by the assumption that unfettered markets work best, a view that's applied to our domestic economy and to that of other countries through international financial institutions that the United States controls. John Kerry's recent statement that he is "not a redistributionist" indicates how dominant this view has become.

This is almost delusional. If the dominant view is that unfettered markets is the way to go, why is there so much government inferference? I have to wonder if this crud is due to ignorance or a deliberate attempt to mislead the readers.

Are We Heading for Another Recession?

Obviously the answer is yes, the question is will a recession start sooner rather than later. As I noted here, the Weekly Leading Index from ECRI is declining in terms of its growth rate. Also, in reading the Beige Book for June, it looks like consumer spending in April and May was soft, but with a cautiously optimistic outlook. Overall the report isn't that good,

Although reports from the twelve Federal Reserve Districts indicated some signs of increased economic activity in April and May, conditions remained sluggish in most Districts.

Also, most people are expecting interest rates to start to rise pretty soon. This along with the rise in gasoline/oil prices will tend to dampen economic activity.

Comerica's National Recession Watch Index put an 11% probability on a recession for the next 6 to 12 months. Overall though the article has an up-beat tone,

"This marks the 34th consecutive month below 12 percent and suggests that the U.S. economy will experience above-average real GDP growth over the next 12 months," said David Littmann, chief economist at Detroit-based Comerica Bank. "A slow drift upward in the Recession Watch Index may have begun. A similar pattern of strength prefaced the 1994-95 expansions."

I'd say keep a sharp on on the leading economic indicators in the next few weeks.

First Civilian Space Flight Lifts Off

SpaceShipOne is to attempt to fly to the outer reaches of Earth's atmosphere. If successful this will be the first civilian financed, constructed and flown space flight.

Update: Well this is a bit late, but the flight was a success. My son and I watched it on television. Didn't get to see much, but the landing was smooth. It was actually rather exciting.

Intelligence, Iraq, Al Qaeda and Onions

After reading this article I'm reminded of the movie Shrek. What do ogres, intelligence and onions all have in common? Layers.

John F. Lehman, a Reagan-era GOP defense official told NBC's "Meet the Press" that documents captured in Iraq "indicate that there is at least one officer of Saddam's Fedayeen, a lieutenant colonel, who was a very prominent member of al Qaida."

The Fedayeen were a special unit of volunteers given basic training in irregular warfare. The lieutenant colonel, Ahmed Hikmat Shakir, has the same name as an Iraqi thought to have attended a planning meeting for the Sept. 11 attacks in January 2000, in Kuala Lumpur, Malaysia. The meeting was also attended by two of the hijackers, Khalid al Midhar and Nawaf al Hamzi and senior al-Qaida leaders.

I started wondering...would Saddam want a guy inside Al Qaeda? Maybe, they may have the same enemy at the moment, but they aren't exactly on the same side of the coin ideologically speaking. Then I thought, might Al Qaeda want somebody inside the Iraqi regime? Sure, for the same reason. Of course, this is very, very tentative as the article notes,

Lehman said that commission staff members continued to work on the issue and experts cautioned that the connection might be nothing more than coincidence.

So don't get too excited over this.

Sounds Like His Presidency

The New York Times review of Clinton's book is a bit harsh,

The book, which weighs in at more than 950 pages, is sloppy, self-indulgent and often eye-crossingly dull — the sound of one man prattling away, not for the reader, but for himself and some distant recording angel of history.

Plans to Indict Ken Lay

Well it looks like ol' Kenny-boy is gonna finally get his day in court. Federal prosecutors are going to ask a grand jury to indict Ken Lay.

Lay is likely to be charged with some type of fraud, possibly similar to the charges against Skilling and Causey. They are charged with insider trading, securities fraud, wire fraud, conspiracy and lying on Enron financial statements.

Bush Playing into Bin Laden's Hand?

Well that is part of the story according to book, Imperial Hubris: Why the West is Losing the War on Terror and the gist of this article. The article is pretty harsh which ends with,

Anonymous believes Mr Bush is taking the US in exactly the direction Bin Laden wants, towards all-out confrontation with Islam under the banner of spreading democracy.

He said: "It's going to take 10,000-15,000 dead Americans before we say to ourselves: 'What is going on'?"

The author also suspects there will be another attack in this country, but that it will be aimed at keeping Bush in office. Frankly I find this kind of forecasting ridiculous.

The author seems to be (note I said seems to be in that the book isn't even out yet) so full of anger and frustration he his lashing out at Bush and the Administration in anyway possible. My problem is this,

Anonymous, who published an analysis of al-Qaida last year called Through Our Enemies' Eyes, thinks it quite possible that another devastating strike against the US could come during the election campaign, not with the intention of changing the administration, as was the case in the Madrid bombing, but of keeping the same one in place.

From what I have read about the Madrid bombings, one of the things that seemed to piss people off was how the current government was trying to pin the blame on the Basque speratist movement very early on. When it started to come out that it was Al Qa'ida people were upset with the games that were being played. If this is the case how could the Al Qa'ida operatives know the government at the time would run in the wrong direction? The overall suggestion here is that terrorists can induce politicians in other countries to behave in very precise ways by taking certain actions. This strikes me as a rather strikeing display of hubris which is rather ironic I think.

Still despite this, I wonder if there aren't some good points in the book and the article. For example,

"What I think we're seeing in al-Qaida is a change of generation," he said."The people who are leading al-Qaida now seem a lot more professional group.

"They are more bureaucratic, more management competent, certainly more literate. Certainly, this generation is more computer literate, more comfortable with the tools of modernity. I also think they're much less prone to being the Errol Flynns of al-Qaida. They're just much more careful across the board in the way they operate."

How much truth is there to this? Overall, I think there may have been mistakes made in the War on Terror. For example, I am not convinced at all that our intelligence agencies have done much to improve their operations in terms of preventing similar attacks as 9/11 or in Madrid here in the U.S. Frankly, I'm not sure if I'd rally around the President if there was another attack. I'd be wondering how come this happaned again. Hasn't anything changed at the CIA, the FBI and the rest of the alphabet soup of agencies that are supposed ot prevent these things? Maybe we would have been better off spending the extra billions on education on keeping the terrorists out.

Krugman's Entitlement Problem

This is a very nice article by Keith Burgess-Jackson points to a problem not only with Paul Krugman, but with many on the Left in general. This idea of entitlement. The question of who is entitled to what does not even enter the picture. Should people contintue to recieve entitlements that they are currently recieving? Is reducing those entitlements really like robbing these people? No. And that is where Krugman and many on the Left go wrong.

ECRI's Weekly Leading Index

Declines. The Weekly Leading Index from ECRI has declined and the growth rate is approaching zero. This indicates that there will be slowing in economic growth in the future.

Update: The Conference Board's U.S. Leading Index is up.

The Conference Board announced today that the U.S. leading index increased 0.5 percent, the coincident index increased 0.3 percent and the lagging index increased 0.1 percent in May.

Note that this does not necessarily contradict the ECRI data. The ECRI data is for June, and is weekly. In looking at the ECRI chart the growth rate in the Weekly Index was positive meanig that the index was increasing in May.

Media Bias

Via Steve Antler comes this paper on media bias that has come up with a pretty neat way of testing whether or not the media has a liberal bias or not. This is the first decent quantitative analysis that I have seen on this. Typcially the work revolves around the party affiliation of reporters, who the voted for, and so forth. While such information is better than nothing it does not provide direct evidence of bias in the actual news stories. This paper actually checks stories (note that editorials, letters to the editor, and book reviews are not counted).

The method, as far as I can tell, works like this. First the Congressional record is used to set up a correspondence between members of Congress and their mention of various think tanks. Then they performed a similar process for various newspapers and news television programs. Also recorded are the legislators ADA scores. Using this information they authors estimate an ADA score for various media outlets (and the think tanks) and it turns out there is indeed a liberal media bias.

For example, the Economic Policy Institute is noted for being rather to the Left/Liberal on many issues and recieves an ADA score of 71.68 (using sentences as the measure) and 70.68 (using citations). The Heritage Foundation by contrast scores 6.17 and 13.75 respectively.

So how much of a liberal bias is there? Well the New York Times comes out pretty liberal (using the back-of-the envelope ADA scores) with estimated ADA scores of 64.6 (using sentences) and 71.2 using citations. Fox News by comparison comes in at 26.4 and 34.7 respectively. Using the estimated numbers using a more sophisticated technique gives the New York Times and Fox News ADA scores of 59 and 29 respectively (using sentences). and 67.6 and 35.6 respectively (using citations).

How "liberal" is this? Well when you consider the average of the medians for the House and Senate is an ADA score of 38 it strikes me as fairly biased. Every evening news television program save Fox News is "to the Left" of the average legislator in Congress.

Here is part of the conclusion of the paper,

Although we expected to find that most media lean left, we were astounded by the degree. A norm among journalists is to present “both sides of the issue.” Consequently, while we expected members of Congress to cite primarily think tanks that are on the same side of the ideological spectrum as they are, we expected journalists to practice a much more balanced citation practice, even if the journalist’s own ideology opposed the think tanks that he or she is sometimes citing. This was not always the case. Most of the mainstream media outlets that we examined (ie all those besides Drudge Report and Fox News’ Special Report) were closer to the average Democrat in Congress than they were to the median member of the House.--emphasis added

So the next time you here Atrios, Eric Alterman, Paul Krugman and the rest talk about how there is no liberal media bias, think about who is saying it: hardcore Liberals.

The Saddam-Al Qa'ida Link

There has been much chattering on the Left about the 9/11 Commissions finding that there was no evidence suggesting a "collaborative relationship" between Saddam controlled Iraq and Al Qa'ida. There is so much chatter I actually considered titling this post the Schizophrenia of the Left. It is amazing how the Left on the one had talks almost breathlessly about intelligence failures with regards to WMDs in Iraq, but with amazing credulity accepts the intelligence that there clearly is no relationship between Iraq under Saddam and Al Qa'ida.

However in reading the news reports one thing is clear. The "conventional wisdom" that religious fanatics and the secular dictatorships would not try to work together is completely bogus.

The staff report said that bin Laden "explored possible cooperation with Iraq" while in Sudan through 1996, but that "Iraq apparently never responded" to a bin Laden request for help in 1994. The commission cited reports of contacts between Iraq and al Qaeda after bin Laden went to Afghanistan in 1996, adding, "but they do not appear to have resulted in a collaborative relationship. Two senior bin Laden associates have adamantly denied that any ties existed between al Qaeda and Iraq. We have no credible evidence that Iraq and al Qaeda cooperated on attacks against the United States."--emphasis added

In other words, they seemed to overcome their differences enough to at least engage in contacts. Also note, that the commission report is a bit more cautious in its conclusion by using the word "appear". In other words, it is precisely as Tacitus has pointed out: The absence of evidence is not evidence of absence.

AEI-Quality Numbers From Brad DeLong

Tyler Cowen defended a post of his from a rather snotty comment from Brad DeLong. The gist of Prof. Cowen's defense is that Prof. DeLong erroneously concluded that because Prof. Cowen linked to an A.E.I. report on cutting government bureaucracies Prof. Cowen endorsed the entire report and not just the part pertaining to Bush. But Prof. Cowen also points to this post by Brad DeLong. What I find so amusing is that here Brad DeLong is misleading with his numbers. He reports the following changes in the Federal Budget as a percentage of GDP from 1981 vs. 2001,

• Military: 4.9% to 2.9%
• Health: 2.1% to 3.8%
• Income Security: 3.2% to 2.7%
• Social Security: 4.5% to 4.3%.
• Net Interest: 2.3% to 2.0%
• Other: 4.7% to 2.6%.

If you total everything up you go from 21.7% of GDP in 1981 to 18.3% in 2001. Brad DeLong then concludes that the Soviet Union would have collapsed anyways without the build up in military spending he notes in his other post. Maybe it would have, maybe not. But I think it is misleading to pretend the collapse of the Soviet Union at that time was a foregone conclusion. If the Soviet Union could have gone on for another decade it would have mean Clinton probably wouldn't have been able to score the big decrease in spending he did.

DeLong is also inconsistent when he writes the following in the post bashing Prof. Cowen,

First the Good: It doesn't want you thinking that Clinton-era reductions in the size of the government were three times as big as Reagan-era reductions.

But then writes the following in the post on the catagory "Other",

Now the Bad: Without Reagan, it is pretty clear to me that we would have two percentage points more of GDP in "other" spending than we do now (and taxes higher by a smidge: debt interest would be a *lot* lower).

So which is it, those cuts are good or bad? In fact we can't even tell if those cuts to "Other" occured on Reagan's, Bush's (the first one) or Clinton's watch. Way to obfuscate Brad, the boys at A.E.I. would be proud. Of course, lets not mention that part of "Other" could very well be education spending which that rotten no good chimp, Bush, has been increasing like crazy.

Update: Daniel Drezner responds as well and shows that "big idiot" Brad has half a point, but fails to mention another point. Here is the key part:

However, the point of the AEI report was to examine the efforts by presidents to cut government spending, not government spending as a percentage of GDP. A big reason Clinton does so well in Brad's figures is not because of Clinton's containment of government growth (the numerator) but because of the economic boom of the 90's (the denominator). Clearly, Clinton had some role to play in the latter as well -- but to go back to Pearlstein's WaPo article:

In this country, presidents don't "preside over" economies, and they certainly don't control them. They can implement a limited range of economic policies that affect the economic cycle at the margin.

For example, if you go to Brad's post on the Cinton administration's fiscal legacy, his "rough numbers" for how America's fiscal situation improved during the nineties give about 64% of the credit to events beyond Clinton's control (the end of the Cold War, Bush I's 1990 budget deal, the information age boom). The Clinton team gets credit for most of the rest of the improvement -- which sounds about right to me.

In other words, when you are looking at a ratio of two processes you have to also look at both the denominator and numerator if you are interested in the fiscal restraint or lack thereof for a given President. Some of Clinton's success encapsulated in the the government spending as a percentage of GDP is due to the exceptional economic growth during Clinton's time in office. This is what Daniel Drezner calls a sin of omission, and it was Brad DeLong committing this sin. This ironically is the same sin that Brad blasts the A.E.I. report for. Now when reading Brad's posts you should always remember that "you don't trust, you verify, and then you think hard again about how Brad is trying to pull the wool over your eyes."

Also note that during recessions government spending as a percentage of GDP would increase even if spending were held constant as GDP is contracting. That is probably one factor in why spending as a percentage of GDP increased during The first President Bush's term. It is also a likely factor in the current increase in spending as a percentage of GDP. Of course, I still think the spending under Bush is excessive.

Hmmm...This Is A Bit Disturbing

This article talks about the spread of the Patriot Act to criminal issues not involving terrorism. One thing looks a little disconcerting,

Swire said one little-noted impact of that law on the judicial system is that prosecutors can add more charges against defendants, even when terrorism isn't involved.

"Prosecutors like to have more arrows in their quiver - it gives them more leverage in plea bargaining," he said. Plea bargaining is the process where prosecutors offer to drop some charges in return for a defendant's guilty plea in order to avoid costly, time-consuming trials.

I'm not terrible concerned about the issues about check cashing businesses, casinos, and so forth as it seems like a place where money laundering for terrorism could take place. But the idea of adding more charges even in cases that don't involve terrorism is troubling, but I'm not a lawyer so who knows maybe it isn't a big deal.

On a more abstract level the whole Patriot Act thing strikes me as a typical response of government. When something goes wrong instead of fixing the existing institutions so that the same thing can't happen again and then moving on we get a slew of new laws. More regulations, more red tape, more bullshit. We saw it after 9/11, we saw it after the corporate scandals involving Adelphia, Enron, World Com, etc. Instead of using the existing laws to bust the malfactors and making sure that the current institutions do their jobs better we get new laws. I find it hard to believe that there aren't enough laws out there, enough regulations in the Federal Register, let alone the stuff states do to not deal with these issues. As for intelligence what was done to prevent the oversights that allowed the 9/11 plot to come to fruition? We get the Patriot Act, but over the past few years it seems to me the issues is that the current intelligence agencies could have and should have detected the 9/11 plot but didn't. Did we really need the Patriot Act or do we need to overhaul the intelligence agencies including the F.B.I. and the I.N.S.?

Even More on the L.A. Times Poll

Well we still can't tell if the L.A. Times polling group are dishonest or idiots (or both), but at least we now know they did indeed over sample Democrats.

"Not counting independents, the Times' results were calculated on a sample made up of 38 percent Democrats and 25 percent Republicans -- a huge and unheard-of margin," ROLL CALL claims.

Let me see, we have almost half again as many Democrats as Republicans. Gee that wouldn't bias the results at all.

Carnival of the Capitalists

Well it is up, a bit late, and Jay Solo has done an excellent job on such short notice. For such a short notice fill-in Jay already has a good number of posts to select from.

Personally I find this one by Prof. Bainbridge to look very interesting. If you sent in an entry for this week, but didn't know there was a problem or that Jay is filling the gap at the moment, send in your post as Jay will likely include due to this weeks mix up.

Remember That L.A. Times Poll?

Well here is some more on it.

They published one poll result that said that Kerry was seven points ahead of Bush. This is the poll that Matthew Dowd showed was patently fraudulent. Mathematically, it's very simple to prove: Bush is ahead of Kerry among Republicans more than Kerry is ahead of Bush among Democrats; and Bush is ahead of Kerry among Independents. The only way to combine those three results and get Kerry strongly ahead of Bush is if the Times's poll wildly oversamples Democrats (if the two groups were roughly equal, then Bush's lead among Independents and the fact that he picks up more Democrats than Kerry picks up Republicans would put Bush ahead, not Kerry).

I'd read the whole thing as it looks like the L.A. Times polling group is either run by idiots or are up to some dishonest shenanigans.

This one is a funny satire of the L.A. Times poll. Media bias? I see no stinking media?

Thanks to Pejman for the links.

My initial post is here.

The AARP Lies

This Flash Ad (via Glenn Reynolds) tells a flat out lie. It states that a person's Social Security contributions are "saved for you", this is false. The contributions are used to pay current retirees and anything over and above that are used to buy government bonds. Ideally these surplus contributions will be used later to pay future retirees. These surpluses will be drawn down starting in 2013. I don't know about most readers of this blog, but in 9 years I'll still be working (i.e., not recieving Social Security). Further, by the time I actually retire the program, if nothing changes and current projections turn out to be correct, I'll only be able to collect for a few years before the system can no longer support payments.

The ad also uses a scare tactic that without Social Security you'd have to save $250,000 over the course of your working years. But suppose you make $30,000 (in real terms) every year. How much is that? Try $1,050,000. Now if you manage to save $140.25 every two weeks for 35 years you'll have that $250,000.

And as we have seen with Medicare it is quite enticing for politicians to vote for increases in benefits. This is along with the movements in demographics are the risks of the current system. As the make up of the U.S. changes (in this cases ages dramatically) we face an increased burden due to Social Security. Both political parties are quite keen on "protecting" these benefits to the point of expanding them (Prescription Drugs anyone? Awww c'mon you don't have to pay for them Joe Schmoe Taxpayer does! C'mon help yourself.) Plans such as Laurence Kotlikoff's would be fully funded in that there literally would be an account with your name on it and money--your money, in it. The plan would not be subject to the problems with demographic shifts and there would be no way for the government to vote for pay raises for the elderly in exchange for votes.

The AARP's use of blatant scare tactics is disgusting.

We Are All Going to Die

While true, the big question is when. This article from the NBER Reporter looks at Lifetime Annuities and Uncertain Lifetimes. The basic idea is this, with advances in medical technology and overall knowledge about things like diet and so forth people face increasing life expectancies. This raises a potential problem for retirees. Suppose there is no bequest motive, and you have $500,000 in retirement savings. How much do you draw down your savings each period given you face the following probabilities:

• A 0.50 probability of living 5 years.
• A 0.25 probability of living 10 years.
• A 0.10 probability of living 15 years.
• A 0.10 probability of living 20 years.
• A 0.05 probability of living 25 years.

If the math here is making your head spin, imagine what the real problem is like when you don't have an upper bound on the problem and face a continuous distribution. A lifetime annuity offers a way out and leaves all the math to the actuaries at insurance companies. The lifetime annuity allows the individual to exchange a stock of wealth for a stream of income that continues for life. As some people die their assests are used to fund the income for those who live.

The big question is why is the market for lifetime annuities so small. Nobody is completely sure yet, but the article looks at some possible explanations.

Yellowstone Adventure

For the last week I was a sponsor on the mission trip for my church. Twenty-eight youths and six adults at a camp site outside of Livingston, MT.

We spent three days doing maintenance and refurbishment on some of their cabins, then took a couple of days for touristy-fun stuff, including driving around parts of Yellowstone National Park

That's a buffalo hunkering down for the snowstorm we got caught in. It wasn't a light flurry either. It got better when we managed to reach a lower elevation, but snow in June was a shocker to some of the kids.

Accurate Data

This is rather disconcerting. You'd think that after 9/11 there would be greater focus on ensuring that accurate data gets into such reports. Guess not. Sheesh.

Some Perspective on the Budget Deficit

This chart (Via the Joint Economic Committee) sort of helps put the current deficit in perspective a bit in terms of its size relative to past budget deficits. Now this doesn't mean the deficit is not a pottential problem because it is, IMO. In a few more years the government will not have the luxury of continuing to borrow the surplus from the Social Security Trust Fund. Further, we can see that there was a very rapid rise in the deficit, which is rather disquieting.

Granted one can point out that there is a global war on terrorism so expecting government spending to rise is natural...but this is rather staggering. And I suspect that one reason why the deficit will trend downwards is due to current tax cuts expiring as well as good economic growth.

Jobless Claims

Looks like the jobs situation is going to keep getting better for a little while longer, IMO.

On another note this sort of highlights why I think the date for the start of the last recession is off. Unemployment/employment is a lagging indicator. That is it changes direction after the economy has changed direction. That is if a recession starts on date t, then the unemployment/employment situation deteriorates t + n months later. When the start date for this recession was set jobless claims had been rising and the unemployment situation was starting to look bad. If you look at the employment level of civilians (BLS series LNS12000000) employment reachd its peak back in January of 2001. The unemployment rate (BLS Series LNS14000000) reached its minimum in April of 2000 and was on its way up since December of 2000. If you look at the Payroll data (BLS Series CES0000000001) we see that series reached its peak in March of 2001. So no matter how you slice it and dice it, the lagging indicators were looking bad either prior to the recession starting or right when the recession started. Either we need to change the definition of lagging or move the start date of the recession.

No, this isn't a slam on Clinton. He did a good thing by doing his part to keep the economy expanding. And Clinton most likely wanted Gore to win (my understanding is there was some...issues between the two) and why leave your side holding the bag with a recession, and finally Clinton probably didn't want to see people lose their jobs and struggle to make ends meet. The fact is Presidents have very little control over the economy and on top of that many forecasters didn't see this recession coming. Or to put it differently, it is about getting the start date of the recession right.

Graph via the Joint Economic Committee website.

Don't Mess With a Big Dog

Daniel Drezner rips apart his opponent.

Matthew Yglesias: Intelligence Expert

Matthew Yglesias points to this article at the New York Times on intelligence failures and sarcastically concludes the answer is to torture more prisoners. Yes, I suppose that might be funny in a black humor sort of way, but it glosses over the problem with intelligence gathering. That the otherside is actively misleading you. For example in the article is this part,

But according to a senior defense official and two former intelligence officials, there were also indications that some intelligence had been wrong, and might have reflected deliberate disinformation from Iraqis enlisted as spies by the United States or from Iraqis who suspected that American intelligence agencies were listening in on their communications.

If you think the enemy is listening in on conversations you can gain an advantage by discussing misleading information.

Isn't it about time Matthew grew up?

What to Make of the L.A. Times Poll

The L.A. Times has a poll showing basically a complete meltdown for the Republican party when it comes to winning seats in the House of Representatives. What should you make of this kind of poll? Not much, IMO. First there is this post from Marginal Revolution showing that in 1996 the opinion polls were often wildly off the mark. For example, in early August (if I'm reading the graph right) CBS predicted a margin of Victory for Clinton of 35%! The actual margin of victory was 10%.

Another thing to keep in mind is what I talked about in this post. We have dozens of polling organizations doing polls regularly. So if we have 100 polls wouldn't we expect to see a few that are well...just really whacky just on dumb luck? Of course. This doesn't mean the poll is wrong, but given that it is way out there that would be a safe bet.

Nathan Newman on Social Security

Nathan Newman has an older article on his main page about Social Security Privatization that is highly misleading. There are quite a few problems in that article.

First off there is this quote,

"They promised to preserve the benefits of all current retirees and those nearing retirement."

Which is a nice promise and when you bullshit the public, you often can get short-term political gain. But read the sentence again. What is says first is that there is no promise that most working people paying into the social security system will get full benefits.

Nathan is quoting Vin Weber about Social Security privatizatin. He is right that there is no promise, but what Nathan is implicitly stating is that current people paying into the system should be entitled to full benefits. Should they? If you favor means testing you disagree with Nathan. If you favor some sort of opt-out scheme you disagree with Nathan. If you think the current system can be salvaged by doing things like lowering benefits in the future and raising the limit on incomes that that the Social Security tax applies too, you disagree with Nathan.

The next part is an outright false statement,

Second, if you take a big chunk of social security taxes and put them into private accounts, that means you have to use a chunk of income taxes or other general revenue to pay for current retirees.

Not true at all. You can pay for it via debt. Arnold Kling notes here that the concern raised by many liberals on this score is misleading. The transition cost argument is bogus.

• Under the current system who pays for today's retirees? Current workers.
• Under the current system who will pay for today's workers? Future workers.
• Under a privatized system who pays for current workers if you issue debt? Future workers.
• Under a privatized system who pays for current workers? Today's workers.

Future workers are on the hook no matter how you do it. Today's workers are on the hook no matter how you do it. There is no magic money problem that those on the Left try to claim. They are simply being misleading...perhaps purposefully so.

Nathan then debuts his ignorance of some of the privatization plans for the world (or at least the readership of the Progressive Populist).

So here is what social security privatization means for younger workers:
(1) Your guaranteed benefits will be slashed and if your personal account goes south in an Enron-style mess, you will be eating cat food in retirement.

Bzzt, wrong. Guys like Laurence Kotlikoff has suggested a plan where the principle amount in private accounts are insured by the government, much like the current system of insuring bank deposits. So the idea you'll have to eat cat food is just stupid. Also, Kotlikoff's plan has only one fund that you are forced to invest a fixed percentage of your income. You will have no choice, so there will be no attempts to time the market, follow up on a hot stock tip from Uncle Jimmy and so forth. It is much like the current system with the difference that there actually is an account with money in it and your name on it.

(2) While it sounds like free money, you will actually be paying for those private accounts through increased income or other taxes.

True, but you wont have to pay the Social Security tax. One could argue that the fixed portion that is invested by force is like a tax, but it is actually forced savings. If Nathan doesn't like this then why does he like the current system which uses just as much force, but takes a workers money and gives it to a current retiree? Kotlikoff's plan actually means you'll have some savings in 30 or 40 years when you retire. If it is the corecion that is troublesome to Nathan then how can he justify his support in general for taxes?

(3) Therefore, the scam is that young workers get to pay double taxation, for present retirees and again to cover the costs of their own accounts.

Not if you cover the costs of current retirees with debt. The costs will then be borne by future workers (who are already on the hook to pay for today's workers).

Cute bait and switch, huh? The GOP gets to sound all progressive and pro-young worker, when they really are screwing them as thoroughly as possible. Economist Paul Krugman at the New York Times has long been skewering Bush over the deceptive math involved in these proposals.

Actually no. As Arnold Kling has noted, it is Paul Krugman who is being deceptive.

The standard political story of social security privatization is that seniors will hate it politically, but that young people will be won over to the GOP on the issue. The actual politics is really the reverse. Most present retirees won't feel a thing, but younger workers are the ones who should be up in arms at the GOP playing these deceptive games with their future.

The reality though is that many young people feel that there will be reduced or no Social Security for them anyways, so being up in arms is pointless from the young person point of view.

Near the end of the article, after Nathan pretends the whole universe of Social Security privatization plans is the Archer-Shaw bill, he states,

There are other variations on social security privatization, but they are all based on lies and financial manipulations-- the end result being the same. The deficit increases, average folks lose out, and rich retirees are the only ones who benefit.

Again, not entirely true. While it is the case that the deficit would increase, it is not clear the working class would be screwed. In one sense they'd be guaranteed at least the value of the principle and given a balanced fund it is unlikely this would be total amount available to the retiree. For example, a person who earns only $670.00 every two weeks and pays in 12% to his personalized retirement fund after 30 years with a 4.5% rate of return this fellow would have $132,000 for retirement. Not great, but considering the person has made only $17,420/year for the last 30 years what do you expect.

It woud be nice if people stopped with the misleading rhetoric about privatizing social security. While a transition wont be painless it can be done and there are indeed some good reasons as to why it should be done.

Was it Reagan...or Clinton?

Matthew Yglesias has an interesting article about how Reagan killed conservativism. The basic story goes like this, Reagan came into office talked about big government being bad, cut taxes, but was unable to cut the spending side (i.e. reduce government). Thus Reagan provided a cathartic experience for conservatives. We got to purge ourselves (conservatives and libertarians) of the desire for smaller government, and in the end we lost the desire to create smaller government. To prove his point Yglesias poits to Bush. Bush talks the talk, but comes nowhere close to walking the walk in terms of smaller government.

But is this true? I went to GeorgeWBush.com and looked. Here was one interesting passage,

I want to thank all the small business owners who are here. Thank you for being dreamers and doers and employers. Thank you for taking risk, and thank you for following your heart. I mean, I love the entrepreneurial spirit of America. It's an incredibly important part of our country and our future. You see, the role of government is not to create wealth; the role of government is to create an environment in which the entrepreneurial spirit can flourish.--link

Sounds like somebody who sees a definite place for government. Further, the context of that comment is that the rhetoric of smaller government is pretty much just that. Occassional there is a toss away phrase to less regulation, but it is precisely that, a toss away phrase. When you read that speech it is full of things like,

• Pass this law...,
• Pass that law...,
• Restrict this or that...,
• I submitted a bill...,
• Stop this and that...,
• This plan will...,

There is no sense of, "Lets get out of people's way." In fact, there is precisely the opposite,

And there's another way we can help control the cost of health care. I mentioned Congressman Greenwood. He is fighting the ultimate entrenched interests and special interests, and that is the lawyers who love the fact that you can sue right and left in America -- that's what he's fighting. He understands available and affordable health care is affected by frivolous and junk lawsuits. It's an issue, it's a national issue.

Now, I do think there are too many lawsuits in the U.S., but clearly this idea here is to restrict people's ability to do something--engage in lawsuits to address wrongs. Bush does try to use the rhetoric of smaller government, but it comes off forced and just lame.

Thirdly, we passed what's called health savings accounts. (Applause.) You're going to hear an interesting discussion on health savings accounts. Part of the purpose of the discussion is to put meaning behind, like, letters. In Washington you hear, "Oh, we got you HSAs." And the average person out there goes, "Huh? HSA?" So we're going to talk about health savings accounts to explain what they mean. They basically work this way: You or your employer buys a low-cost insurance policy to cover major medical bills. And what happens, by the way, if you trust the market, if you devolve away from federal control of health care, then the market begins to respond, and now more insurance companies are beginning to provide policy that provide coverage for major medical.

First off, the whole idea behind the Health Savings Account (HSA) is this, you put money into a tax deductible savings account and you can use those funds to pay for the high deductible on a policy with a low monthly premium, but high deductible.

This isn't government getting out of the way, this is government getting involved. Instead of getting out of the health care market the government is right in there creating incentives for some people to purchase insurance. Will it work? I don't know, I'm sure some people who are on the margin will see this and get insurance. But that isn't the point, the point is George W. Bush clearly sees a role for the government in trying to get people to do things. It is precisely the opposite of the picture Yglesias is painting of Ronald Reagan.

How about this. The Reagan philosophy was alive and well right up to the point where Gingrich put forward the Contract With America (i.e., several years after Reagan had left the White House...so much for that cathartic release). It was successful in putting the Republicans in charge of both houses of Congress. However, Clinton was very adroit at turning the cuts the Republicans wanted to make into public relations fiascos.

The whole shutting down the government periodically always came off as the Republicans wanting to do bad things. They want to gut education spending...your kids will suffer. They want to gut Medicare and Social Security, they want Grandma crawl off in a corner and die quietly. While Clinton wasn't successful in putting Congress back into Democratic hands, he did manage to defeat Sen. Bob Dole, and brought to a close the idea of making substantial spending cuts.

Matthew is correct when he writes,

With that angst wrung out of the body politic, we're left with the fact that Americans really do want the government to solve their problems, clean their air and water, educate their children, cure their sick, and keep them safe from terrorists and defective products alike.

But he has gotten the reason wrong, IMO. It isn't because of some cathartic purge. The American public does not want to take responsibility for their behavior. Have to many kids, that is okay the government has a plan. Can't find a job, we'll give you money, vouchers and so forth. The costs of making bad decisions has been lowered, so now people are not as worried that any given decisions will lead to bad outcomes. Is this so shocking or unthinkable? Think of it in more simplistic and abstract terms. Suppose we have a bet. You can put down a dollar and if you win you win $100, but if you lose you lose your dollar. The probability of winning is 1/200. Would you place a bet? Suppose we changed the bet. Suppose now winning gets you $100 and losing costs you nothing (i.e., you get your dollar back). Now will you bet?

Positive and Negative Rights

Lots of discussion going on about this. A good place to start is Eugene Volokh's blog post. Follow that with Prof. Bainbridge and then