Deinonychus antirrhopus

Question

I hear the comment to the effect that Bush has ruined the reputation and standing of the United States around the world and that electing John Kerry will go along way towards fixing this problem. My question is exactly how does having the Germans and the French love the U.S. again stop Abu Musab al-Zarqawi from hacking off heads in Iraq? How will it help prevent another attack like 9/11?

Please leave your answer in the comments. Thanks.

Update: In the extended entry I have responded to some of the comments.

Regarding Sofla's argument about a dead Zarqawi: I am not convinced by the argument that Zarqawi would be dead. Just as when Clinton tried to have bin Laden killed via cruise missiles it is not a given that Zarqawi would have been killed with the plans that were later scuttled. I don't why the plans to kill Zarqawi, but right now I would rather the attempts had been made than not (but to repeat I don't know why the plans were not implemented). I am skepitcal of the claim that Bush et. al. wanted Zarqawi alive to make the Iraq-Terrorism-Al Qa'ida link. The terrorism link was fairly well established with Saddam's funidng of Palestinian suicide bombers. Further, I think it is debatable the benefit of having a guy like Zarqawi running around periodically hacking off heads of innocents he captures. Each time there is such an incident it serves as a reminder to the problems in Iraq and if anything endangers the coalition.

As for the notion of paying attention to the "hair on fire" memo, I'm not convinced. Do what precisely? Amp airport security? Have INS start rounding up muslims without proper visas? Invade Afghanistan? In hindsight, all of these would probably have been good respones, but can you imagine the caterwaulling if the 9/11 plot were foiled? There would be all sorts of wonderful comparisons to the Gestapo, Nazi's and "Shrub-as-Hitler". Remember, prior to 9/11 we had the terrorism is a nuisance attitude. Suddenly elevating it to a magintude of such proportions would have resulted in many of the Left claiming that it is more evidence of Bush wanting to establish a theocracy with himself as the pontiff.

As for Sofla's other claim that Bush went to war for political reasons I find that just silly.

Uhhhmmm...How About Hillary?

Kevin notes this rather disturbing quote from the top official at the Deptarment of Homeland Security,

Set aside what the mass of people think. Some things are so bad for them that you cannot allow them to have them....Therefore, we have to abridge individual rights, change the societal conditions, and act in ways that heretofore were not in accordance with our values and traditions, like giving a police officer or security official the right to search you without a judicial finding of probable cause.

Then Kevin asks if we can think of a single Democrat who might say something similar? How about Hillary?

Recall that Hillary was the primary architect of Clinton's health care initiative in his first term. This would have effectively removed a decision from everybody in the country. Then there was the famous quote about the common good.

"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 whole idea here is taking part of my life. Sure it isn't something as stark as removing the right to be secure in person, houses, papers, and effects but it is an coercive intrusion into the life of every single person who decides to engage in a voluntary exchange that produces monetary income.

Now to pre-empt some of more simple minded commenters on this. I am not saying that what Patrick Hughes said is justified, okay, or acceptable. I find it rather alarming. I am just pointing out that Hillary Clinton's views are problaby just as intrusive into people's lives is not more so. The only difference is that Hillary tries to pass it off as for the "common good" which of course, is so open ended to be almost totally devoid of any serious meaning. Clinton's view and Hughes view are quite similar in that they both believe that it is perfectly justifiable to coercively intrude into people's lives for the "common good".

ECRI's Weekly Leading Index

Right in line with the so-so GDP numbers for the third quarter is ECRI's continued slow decline in the weekly leading index.

The index is suggesting that there is little danger of a recession, nor is there little hope of a re-acceleration in economic activity.

Third Quarter GDP

The BEA's advanced estimate for GDP growth is 3.7%. Not exactly a blistering pace, but not horrible either. Also, the second quarter GDP growth has been revised to 3.3%.

Think BIG!

Warning, this is a rant about local politics again.

Think BIG! is the campaign slogan for the Bistate II sales tax. This is a 1/4 cent sales tax to be levied in 5 KC metropolitan counties.

To go into effect, it must pass in Jackson and Clay counties in Missouri and Johnson county in Kansas. (Wyandotte county KS and Platte county MO are optional -- if it passes in either of these, they get in on the lucre).

The tax is expected to raise about $1.2 billion over 12-15 years, which will be used to fund several projects:

1. Maintenance and improvements to the Truman Sports complex, where the Royals and Chiefs play -- $600 million

2. Build a new downtown performing arts center -- $50 million.

3. Local and regional arts fund -- the remainder of the $$

I've got several problems with it.

1. Location, location, location

The major projects are all located in Jackson County, and within the Kansas City city limits. The promoters of the tax have been extolling the virtues of increased local business near the performing arts center -- more shops and restaurants,leading to increased sales tax and property tax revenues.

That's a tired argument, and has been disproven by previous examples. Neither the Truman Sports complex (when it was originally built), nor the Union Station restoration (the beneficiary of the first Bistate tax), spurred any commercial growth in their neighborhoods.

But even assuming that these projects will increase local business growth, it's no incentive for those of us out in the suburbs -- the growth will be occurring in another city / county.

2. Matching funds

The Performing Arts Center is allegedly going to be financed with an additoinal $254 million from private contributions, from unnamed and unknown contributors.

Bwaahahaha. I have a sinking suspicion that they'll never get that much money from private / corporate interests. I'm betting that the project will cost more than the $300 million price tag, and that at least half of that will come from the Bistate II tax.

3. Corruption

The remainder of the tax is supposed to go into a fund that is "...dispersed through competitive grants to local and regional arts organizations. No single institution or program is guaranteed money from this fund and each will be required to outline what the money is for, who will benefit from it and then be accountable for how it is spent."

Sounds vaguely slush-fundish to me.:

The process for awarding funds is open and accountable. All grant proposals will be reviewed by a citizen's advisory committee in each of the counties and by a regional citizen's advisory committee. The Kansas and Missouri Metropolitan Cultural District Commission, which is constituted under Missouri and Kansas laws and includes members from both states, will make the final funding decisions.

4. Chief's Tickets

This is minor, but it irks me nonetheless. Currently, maintenance on the Truman Sports Complex is paid by Jackson County residents from their property taxes. As a benefit for this expense, Jackson Countians are given first-shot at buying single-day Chief's tickets. There is no provision in the Bistate II tax to change this.

In summary, I'm voting a big fat NO on this issue.

Medicare Waste, Fraud and Abuse

In the comments to this post Brian, a commenter, questioned my assertion of waste, fraud and abuse of the Medicare program. Brian also suggested that a possible solution for the abuse of Kerry's system is legislation. Both positions are ridiculous.

As for the issue of waste, fraud and abuse here is some 1995 testimony from the Congressional Budget Office. Here are some examples of what many might consider abuse of the Medicare program,

• A technician mistakenly takes an X-ray of a patient's left leg, then takes a second X-ray when he discovers his error. The hospital bills Medicare for both X-rays.
• A physician admits a patient to a hospital to ensure that drugs are paid for that would not otherwise be covered under Medicare.
• To offset lower fees paid by Medicare, a physician begins recommending follow-up office visits for certain conditions that previously did not warrant such visits.
• A managed care plan markets itself in a way that attracts relatively healthy beneficiaries, thus increasing its profits by reducing the costs of care below those envisioned in the risk-contract reimbursement formula.

Maybe we can just pass some laws prohibiting x-ray techs from taking two x-rays when only one is needed. If he shoots a picture of the wrong leg...too bad. Or maybe we can pass a law that says Medicare will only pay for one x-ray if there is a mistake...of course this means you'll need to have somebody evaluating all those instances when a bill is submitted for two x-rays. And what kind of bureaucrat will know when only one x-ray is needed? Will that bureaucrat have to be a doctor, a nurse practioner, or merely a nurse? Will we need one, and oh we'll probably have to pay them a salary pretty close to if not equal to what they could earn working in the field they are actually trained in. Yeah, that sure would be a nice efficient way of curbing that abuse. So much for John Kerry's claim about the doctor and patient making decisions. Now we'll have some bureaucrat in the decision making process.

Also, there are currently quite a few programs for detecting and preventing Medicare waste, fraud and abuse. Tens of millions are spent on this each year. Why spend this money if there is little or no gaming going on?

The New York State Office for the Aging notes the following scams,

One or more persons, often wearing white lab coats, show up and introduce themselves as working for a local clinic. They say that they visit seniors to make sure that people are getting the medical care they need. They'll tell you their services are free. They may offer to take your temperature, pulse and blood pressure.

They'll suggest that you need some additional testing. They'll ask you to come into their clinic. Again, the services are free - absolutely no charge. They may even offer to pick you up if you can not get to the clinic.

Once they have your Medicare number, they bill Medicare for the tests and clinic visit as well as the "ambulance trip." They won't contact your doctor.

There have been door-to-door salesmen offering nutritional supplements. The canned drink was of course free to the beneficiary. Medicare would pick up the cost and they only needed their Medicare number. Each month someone would drop off a case. They claimed the government wanted them to have the product.

Don't open the door to these people. If you do, tell them you're not interested and close the door.

Don't give these people your number. If you believe you need what they are offering, call your doctor.

Report these people to Medicare, or the Office of Inspector General (OIG) Hotline. If you believe they have broken State or local laws, call the local police or the State Attorney General's Office.

Through the Mail -- These marketers often represent themselves as being endorsed or recommended by the government. Note the envelope.

See how much it resembles the envelope in which you get your Social Security check or tax refund. Same color. Same size. Note the "eagle" emblem. Inside the envelope, they make their pitch.

Under federal law, marketers are not permitted to use words, letters, symbols, or emblems to give the false impression that what they are selling is approved by the Social Security Administration, the Health Care Financing Administration (HCFA), or the U.S. Department of Health and Human Services.

If you receive such communication through the mail, Internet, or your FAX machine, report it to the Office of Inspector General Hotline.

Health Fairs/Free Screening-- Health care institutions sometimes offer free health screening. They are often seen in shopping malls, county fairs and senior centers. They typically offer services ranging from taking your pulse and blood pressure, to chest x-rays, to even blood tests.

The legitimate ones never ask you for your Medicare number. Take advantage of these free tests, but know that some unscrupulous persons have used free health screenings as an opportunity to steal from Medicare.

How do you tell the honest screener from the dishonest one? If the screening is free as advertised, they do not need to see your Medicare number. If they ask you for your number, walk away. If they want the number, they plan to bill. They've lied to you.

Maybe we should make it illegal to wear white lab coats in public.

Medicare itself has "detection tips",

• The test is free; he only needs your Medicare number for his records. NOTE: For clinical laboratory tests, there is no co-payment and a provider may in good faith state that the test is free, since there is not cost to the person with Medicare.
• Medicare wants you to have the item or service.
• They know how to get Medicare to pay for it.
• The more tests they provide the cheaper they are.
• The equipment or service is free; it won't cost you anything.

Here is a nifty tidbit from the Medicare Commission,

^eIn fiscal year 1997, the HHS Inspector General estimated $20.3 billion in inappropriate payments; the portion attributable to fraud is unknown.

$20 billion in 1997 for "inappropriate" payments. Nothing to see here...move along.

Finally, let me point out that the Medicare system is about the same size in terms of budget as the Department of Defense. Nobody has a problem believing in the $600 hammer, the $4,000 toilet seat, or the $95 nail. But waste, fraud and abuse in the Medicare system...perish the thought.

Update: This testimony from Inspector General from the Dept. of Health and Human Services puts the 1996 estimate for "inappropriate" billing at $23.2 billion. About 7% of Medicare's total budget or about 14% of their fee-for-service expenditures. Of course, that is the midpoint of the 95% Confidence interval, the actual amount could have been $17 billion, $28 billion (the two endpoints for the confidence interval), or anywhere else in the interval or even more or less.

Polling News

Well Kevin, like me, decided to avoid news over the weekend. Can't say as I blame him. I'm really looking forward to this election being over. Anyhow, I was amused to see that Kevin thinks Kerry is starting to pull ahead. Using RealClearPolitics.com's latest polling news, it looks like Bush is still ahead in the polls. Using a weighted average Bush is up about 2.4% over Kerry. Also, the electronic markets both show Bush still in the lead, although it has narrowed quite a bit over that past few weeks.

Also, on the somewhat silly side, when looking at Presidential masks, Bush is the top seller who is currently also a candidate. The story goes that which ever candidates mask sells the most wins. Here is another link to this rather unusual...predictor.

Kerry's Health Care Plan: I Don't Like It

Earlier I had indicated that it wasn't a bad plan and might even work. But upon further thought I don't think the plan will help all that much. The problem I have with Kerry's plan is one that Arnold Kling has noted earlier.

Arnold argues that health care in the United States basically comes in two formats:

• Split the Check, or
• Pass the Buck.

The problem with the Kerry plan is that it relies on pass the buck. The cost of those consumers who need medical care in excess of $50,000 would be passed along to the tax payers.

Now with pass the buck there is less incentive to avoid consuming medical resources. Since you are only paying a fraction of the costs, you will consume more medical resources than if you were paying for the costs yourself.

Further, there would be an incentive to cheat on this program just like the cheating that is currently going on with medicare.

Scully: I think the DRG system works pretty well for what it is designed to do. But we had about 300 hospitals chronically "gaming" the system for $2 billion a year for four years in a row, and we did not catch it. That is right -- $2 billion a year for four years, or $8 billion total -- and the system did not catch it (nor is it designed to catch it). That is over 2 percent of inpatient hospital spending a year "out the door and unaccounted for." We pay claims quickly and efficiently, but we have no clue what is actually going on in the system. What is the chance that Blue Cross of New Jersey or Independence Blue Cross in Pennsylvania would have missed that if their money were at risk? I can tell you: zero.

Tom Scully is was the Administrator of the Centers for Medicare and Medicaid Services the nations largest health insurer. The DRG system is the diagnosis-related group system that is for paying hospitals prospectively. Basically it is a price fixing scheme.

Think of Kerry's plan. Each time one of these high end consumers goes into the doctor's office there will be incentives to game the system. Order up un-necessary tests, procedures, and so forth. The insurance companies wont care what is done once the patient goes beyond the $50,000 mark as it will no longer be their money. The doctor will have a $1.6 million dollar house in Arcadia on which he has to make his mortgage payment. The nurse and other administrative staff just want to keep their jobs.

Further, Kerry's plan would do nothing to address the "split the check" problem that Arnold noted. People would still be signing up for the type of health care plans we have now, just in larger numbers. We'd still be splitting the check. Splitting the check means that people should not only use medical resources often, they should use the most expensive procedures, treatments, drugs, etc.

So if anything Kerry's plan will add to the upward pressure on health care costs. As health care costs rise, there will be even further incentive on the part of the politicians to do something "more". So right here we can see that Kerry's health care plan, which is supposed to "...control spiralling health care costs..." could very well result in health care costs spiralling higher at a faster rate.

Carnival of the Capitalists

Its up over at the Big Picture, so check it out.

What Nigerian Spammer Are You?

Take the quiz!

You are Farouk Bello. You are Executive Director of Commercial Bank of Africa. Your client was in a car accident along the shagamu express road. You can't find his relatives so you want to share his $25.4 million with me. You require my positive response.

I am an undecided voter

Coming down to the wire, I'll admit that I am still undecided.

Not about the presidential election -- I'm going to vote for Bush. I live in a scarlet-red state anyway, so my vote in this contest is pretty meaningless.

The one I'm still having trouble deciding on is the KS 3rd district congressional seat.

The incumbent is Dennis Moore -- oops, I mean, Dennis Moore, a (what passes for these days as a) moderate Democrat. His challenger is Republican Kris Kobach.

I have never been impressed with Congressman Moore. (He spoke at my church a couple of years ago, and we got into a bit of a verbal battle when I told him that I didn't think it was my responsibility to pay for the elderly's medication just because they reached the magic age of 65.) As I am a pretty conservative guy, in the normal course of events, I would probably vote for his opponent automatically.

However, I'm having a difficult time with Kobach. One of his biggest campaign points is his over-the-top attacks on gays. He camoflages these attacks as "supporting traditional marriage," but his TV ads make it clear that he's not just opposed to gay marriage. He frequently attack Moore as a "supporter of the radical gay agenda".

I just don't think I can stomach pulling the lever (or hitting the spot on the screen that goes ping!) for a man who is this blatantly anti-gay.

So my indecision is either vote for Moore, or no-vote.

Detangling the Spin

I know it has been awhile since the last debate, but the issue of the projected surpluses seems to be one of Kerry's favorite whipping points. Kerry's comment on this during the last debate was quite misleading.

During the debate Kerry made the following remarks,

KERRY: Let me begin by saying that my health-care plan is not what the president described. It is not a government takeover.

You have choice. Choose your doctor, choose your plan. The government has nothing to do with it.

In fact, it doesn't ask you to do anything -- if you don't want to take it, you don't have to. If you like your high premiums, you keep them. That's the way we leave it.

Now with respect to the deficit, the president was handed a $5.6 trillion surplus, ladies and gentlemen. That's where he was when he came into office.

We now have a $2.6 trillion deficit. This is the biggest turnaround in the history of the country. He's the first president in 72 years to lose jobs.

He talked about war. This is the first time the United States of America has ever had a tax cut when we're at war.

Franklin Roosevelt, Harry Truman, others, knew how to lead. They knew how to ask the American people for the right things.

One percent of America, the highest one percent of income earners in America, got $89 billion of tax cut last year. One percent of America got more than the 80 percent of America that earned from $100,000 down.

The president thinks it's more important to fight for that top 1 percent than to fight for fiscal responsibility and to fight for you.

I want to put money in your pocket. I am -- I have a proposal for a tax cut for all people earning less than the $200,000. The only people affected by my plan are the top income earners of America.--link

The question was about the proposed spending by the two candidates.

The problem starts when Kerry mentions the $5.6 trillion dollar projected surpluses. The way Kerry words it is as if these projections were cast in stone and somehow Bush is responsible for losing all of it. The problem is that projections are based on forecasts, and part of the $5.6 trillion surplus forecast was that the economy would keep expanding (a highly dubious assumption by the time Bush entered the Oval Office in February 2001). Just changing that part of the forecast alone would have reduced the the projections. This graph from the Senate Joint Economic Committer provides a rather clear picture of what happened to the surplus projections.

The largest factor for the reduction in the surplus was weakening economy. The second largest factor was the increase in spending, and finally the third factor were the tax cuts.

Further, are the tax cuts and spending "bad"? Lets try thinking of it this way. Suppose Gore had won the Presidency. The recession would have hit in March 2001, and we'd see a drop in projected surpluses as well as increases in unemployment and a decline in economic activity. What would Gore do? Stimulate the economy? How? Stimulus comes in two forms (at least on the fiscal side):

• Increase government spending,
• cut taxes.

You can also try a mixture of both cutting taxes and increasing spending. Now, if you believe the standard orthodox Keynesian theories of macroeconomics both of the above should provide a stimulus for the economy. So if Gore was going to do something it would, arguably, look alot like what we have seen. The impact of these types of stimulus would have been to reduce whatever remaining surpluses there were and quite possible...gasp...result in deficits. The alternative would have been to do nothing, and basically say, "Too bad," to those hurt by the recession.

Now maybe one can make the case that taxes could have been cut differently, or spending done differently, but the bottomline is that taxes would still have been cut, spending increased and deficits would be the most likely result.

He talked about war. This is the first time the United States of America has ever had a tax cut when we're at war.

Franklin Roosevelt, Harry Truman, others, knew how to lead. They knew how to ask the American people for the right things.

This is comical. On the one hand we have Kerry lambasting Bush over the loss of jobs and at the same time he thinks the tax cuts and increased spending were wrong. Both are typical policy responses to recessions. Both normally result in shortening the length of the recession and getting the economy on a gorwth path again. So which is it? Should we keep the tax rates high and possibly have more unemployment, or should we have lower taxes now, deficits now, and higher taxes in the future?

One percent of America, the highest one percent of income earners in America, got $89 billion of tax cut last year. One percent of America got more than the 80 percent of America that earned from $100,000 down.

This is true, in that the people at the top got the lion share of the tax breaks in terms of dollars. The problem is that Kerry doesn't tell you things like the people at the bottom of the income distribution often face negative tax rates. Further, the bulk of the tax revenue is raised by the people in the top half of the income distribution. So even if you cut everybody's tax rates it is pretty much a given that the people at the top are going to get the largest amount of money.

Now it is a fact that the Bush has submitted budgets that have run deficits. It is also true that the deficits have increased and at a pretty sizable rate. However, it is not clear that it could have been avoided simply by not cutting taxes. For one thing, not cutting taxes might have meant a longer and deeper recession which would have had an even stronger adverse impact on tax receipts. Still now that the recession is over, it would be nice to actually cut spending or at the very least hold its growth rate down to the rate of inflation. Not that I expect that to happen.

Democracy Is Democracy

President Bush, probably unwittingly, highlights the problem with pure democracy.

If free and open Iraqi elections lead to the seating of a fundamentalist Islamic government, "I will be disappointed. But democracy is democracy," Bush said. "If that's what the people choose, that's what the people choose."--link

Cox & Forkum provide us with a further example.

I think this highlights why it is important to have Democracy along with a Constitution that spells out the limits of what voters can and cannot do. Without such constraints democracy runs the very real risk of becoming mob rule.

Deficits in Perspective

In previous posts I have complained about the lack of putting the magnitude of the deficits into context by the mainstream media. I thought a nice little graph that would put the deficits in perspective would be helpful at this point.

This first graph shows the top 25 worst deficits since 1940 as a percentage of GDP.

Notice that the 2004 deficit doesn't even make it into the top ten in this chart.

Now some might object that WWII years were an exception in that we were in a large scale war. Fair enough, lets remove the war years. The following graph shows the worst 19 deficits since the end of WWII (1945).

Now the 2004 deficit is the 8th worst deficit in the post war years.

Now some might be saying, "Okay, why put it in terms of percentage of GDP." Well think of it this way. Suppose your income is $20,000 a year and you have $2,000 in debt. Now a few years down the road you look at your debt and see that it is now $4,000. Has your debt doubled? Yes, in absolute terms it has. But is it a crisis? What if your income at the later date is $40,000. Suddenly the debt doesn't seem so bad. It is still 10% of your income. The income indicates your ability to service your debt. So long as your income can cover your debt payments and leave you enough for other expenses it is not necessarily "bad". Further, debt can also be a good thing. I am in far more debt than my income. The debt levels for my household are actually larger than my income. The reason for this is because I own a home and have a mortgage. Is this bad? Most people would say, "No."

So what have we established so far. First, that the current deficit isn't necessarily the worst, at least in terms of the most meaningful measures. Second, that debt isn't necessarily bad provided one can service the debt and also depending on why ther is debt. So why is the U.S. government running a deficit again? There are three reasons (not in any particular order of importance or magnitude).

• The recession,
• increased spending,
• tax cuts.

All three contributed to the increase in the debt. Further, all of this does not mean any of the following:

• There is no deficit,
• The increase in the deficit is nothing to be concerned about,
• The deficit should be higher.

For completeness I am including a graph of the last 25 years of deficits and surpluses [Note: The deficits were initially negatives, I converted them to positive values in all three charts for consistency, this has the unfortunate result of turning surpluses negative. Also, out of laziness I used total receipts and outlays which shows a small surplus for 2001, using only on budget receipts and outlays 2001 ran a deficit].

Update: There was some strange error in the second chart that has now been fixed. Somehow the years did not line up with the right bar so 2004 ended up coming in last.

Also, in comments yportne asks the following questions:

Are these the true deficits or are there other off budget items? Is there an additional problem due to the cumulative nature of multiple deficits? For the purposes of this string should Viet Nam be treated like WWII?

Regarding the issue of on-budget vs. off budget. I am using data that is noted as being total reciepts and total outlays. There are an on-budget columns for receipts and outlays, but no columns explicitly marked as off-budget. My guess is that the total is both off and on-budget. I do know the total columns are larger in both receipts and outlays.

As for the cumulative nature of deficits that is the debt. Each years deficit adds to the national debt. Graphs could be generated showing a time series for the national debt. As for what the national debt's implcations are for growth, interest rates, and other things of economic interest that is open to considerable debate.

As for looking at other wars such as Vietnam, there is that. One could graph all years from say 1940 to present and then perhaps shade the regions during wars and provide a visual aid for looking to see if spending is positively correlated with wars. My guess is that it is. Thus, the war on terror and Iraq would be two more additionaly variable explaining why we have seen deficits grow so much in the last few years.

Update II: Victor over at Dead Parrots has a very nice post on this as well, also with a good graph that puts the unified and on-budger deficits(surpluses) side by side. Check it out.

Oh For Crying Out Loud

I sure hope this isn't the warm up for Crazy Conservatives if Kerry wins the election. Sure what Kerry did during his days as an anti-war activist are quite dubious, but I sure hope we aren't going to see Conservatives/Republicans going down the impeachment road and looking like lunatics if Kerry wins. Scratch that, I know the Conservatives/Republicans are going to go crazy if Kerry wins, I just hope they don't go down this road.

Which Dromaeosaurid Are You?

Well the answer should be obvious.

Deinonychus - Fun and playful, yet very set on pack
structure. Often an annoyance to larger
'raptors, such as Utahraptor.


Which Dromaeosaurid Are You?
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Yet Another One

Another person who fails to think of such things as discounting for inflation and/or measuring the deficit as a percentage of GDP.

Oh well based on the number of complaints this guy has about Glenn expecting something like adjusting for inflation is just too much I guess.

Polling News

Over at RealClearPolitics.com is a round up of the latest polls. One thing to note is that Bush is basically ahead.

In the three way race Bush is ahead in seven of the nine latest polls. Further, relying on the old notion that the average of all forecasts is a better predictor than any single forecast (on average), Bush is clearly ahead in the polls right now. The polls show the following results:

• Bush: 48.7%
• Kerry: 45.3%

In looking at the head-to-head polls the picture is largely the same. Bush is leading in most polls. Also taking the average of all the polls we get the following:

• Bush: 48.3%
• Kerry: 45.4%

So it seems pretty clear that in the polls right now Bush has the advantage. Of course, national polls of this nature do not mean Bush is going to win. First, the election is still a few weeks away. Second, while Bush is ahead in a national poll it doesn't tell us much in terms of where Bush is in each state. Bush could still lose the election and looking at these numbers the election is still quite close.

In looking at the Iowa Electronic Market it looks like the slide in the price for Bush's contract has not only stopped, but has reversed itself. We also see a similar change at TradeSports.com as well.

So right now the momentum is back with Bush. Whatever benefit Kerry got from the debates has worn off.

What the...

Interesting new campaign promotion: pill boxes. Seems kind of weird, is there some sort of message to this? Vote for Kerry who'll bring drug prices under control? Or is just something for the elderly? In looking at the picture there seem to be several elderly present.

Juxtaposition

Not sure what that word means? Then read this post. And then the one that immediately follows it.

Talk about contradicting yourself. And in less than 25 minutes. Sheesh.

Is Social Security a Problem Today

Or more accurately is it a problem we need to be looking at now rather than later? Kevin Drum feels it is one we can put off for awhile. I think he is wrong.

The problem is that the Social Security surplus is currently used to lower the deficit. So while the fund is "solvent for the next 40 years", it will start running a deficit much, much sooner. In 2022, according to the Trustees Report, the trust fund's income rates become permanently negative. In 2007 the income rates will reach a (local) peak and start declining. This means that starting in 2007, holding all else constant (in real terms), budget deficits will increase.

Another problem that I have is that Social Security can be made solvent "forever".

Some very minor adjustments on either the tax or benefit side would keep it solvent forever. (For example, the Social Security Advisory Board says that even if you addressed the problem solely by tax increases, you'd only have to raise the current payroll tax from 6.2% to 7.1%. That's not exactly Armageddon, but of course you don't learn that until page 21 of this report, which on page 3 talks about Social Security's "looming financial shortfall.")

Here is the problem with this kind of thinking. First, Kevin is ignoring Medicare while the Trustees Report does not. Kevin tends to ignore Medicare based on the false belief that the two problems are unrelated. They aren't. The problem with Social Security is also part of the problem with Medicare. Social Security is head for insolvency because there are going to be a sudden and permanent upsurge in the number of elderly in this country. This absolutely has to affect Medicare expenditures as well. Now Medicare also has a problem due to the accelerating costs of health care, but to pretend that the problem with Social Security is different with the problem of Medicare is just ridiculous.¹

Second it ignores the problem inherent in activist government: rent seeking. The elderly and their vote is something that many, many politicians seek. As such the elderly have quite a bit of clout. Would anybody really object if I claimed that Bush's Medicare Drug Policy is a blatant attempt to get the elderly to vote for him? Now consider that shift in demographics in this country. They are going to far, far more elderly in the coming years. When this happens the urge to pander to the elderly will simply get stronger and stronger. There will be even more pressure to pass policies that give the elderly a "raise" in an attempt to gain the elderly vote.

Finally there is the issue of time inconsistency. Lets assume that Kevin and those who believe as he does are right. The optimal policy is to simply re-index benefits to the price level vs. the growth rate of wages. Further, that there is a minor increase in the payroll tax and a modest increase in the income cap. What does time inconsistency tell us here? It says that the government will now have an incentive to deviate from this policy if everybody believes it. By deviating they can increase the overall welfare level. But forward looking agents will realize this and not believe the government will follow the optimal plan. Thus, individuals will not act as if the plan will be followed and the optimal plan will not be achieved. What will happen? I don't know. Benefits might be cut more. The tax revenue might not materialize and taxes have to be increased even more. The supposed "forever" fix isn't forever. This last one is pretty much a given, in my opinion. Social Security was supposed to be fixed the last time they addressed the problem of insolvency. Didn't work then and based on all the above I don't see any reason why it should work now.

I hate this kind of stuff,

So why do Republicans waste time pushing private accounts? Because lots of people — especially young people — are convinced Social Security won't be around by the time they retire. But why are they afraid it won't be around? Because Republicans keep peddling scare stories about how Social Security is heading toward bankruptcy.

It's a neat circle. It's also untrue. Republicans want private accounts for purely ideological reasons, not because they actually solve a problem. If Democrats and Republicans really wanted to "fix" Social Security, they could do it in about a week of good faith effort — and then move on to other, more real, problems. Now that would be a campaign promise worth listening to.

It is a variant on the demonize the opposition. The benefit of "privatization" (and lets be honest it isn't even really privatization) is that it removes the problems rent seeking and demographics. Since it is my money going into my account there isn't the government can do to increase my future benefits save make sure the economy grows at a decent rate. Since every person is basically financing their own retirement there is no problem with changes in demographics. Notice that none of the above is addressed by Kevin or any other opponent of privatization.²
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¹I think it is also fair to say that part of the problem with the acceleration of health care costs has to do with Medicare. Lets face it the elderly's consumption of health care resources is pretty high. As you age various parts of the human body start to decline. Throw in the huge subsidy that Medicare is, and you have a recipe for ballooning consumption of resources which also forces up the prices for everybody else.
²And I'm now less convinced that privatization is the way to go, but still there is no need to impute less than honorable motives to one's opponents. I don't say that Kevin is advocating the position he is advocating because he hates the elderly, wants them to suffer. I don't claim that he hates the young and wants them to suffer. I think Kevin is wrong, but not that he is a bad man. Why he can't return the favor is beyond me.

The Star Endorses Kerry

[pssst, this is written by Dave. Not Steve. Dave.]

My local bird-cage liner, the Kansas City Star, has unsurprisingly endorsed John Kerry. I say unsurprisingly, because in 2002 the only Republican they endorsed in either KS or MO governors, congressional, or senate races was Pat Roberts, who had no Democrat opponent.

It's less of an endorsement of Kerry than a laundry list of President Bush's errors. The editorial board must not have heard Bush at the last debate -- "A litany of complaints is not a plan". What little space they did devote to praising Kerry is laughable:

With Kerry, the nation could expect leadership that would result in dramatic improvements in homeland security and a strengthened military force. Americans also would see more effective strategies in Iraq and Afghanistan...

Must be one of Kerry's secret plans that we don't have any details about.

...and the welcome rebuilding of our tattered international alliances.

You mean by calling current allies the "coalition of the coerced and bribed"? Or do you mean by having his sister actively (and ineffectively) campaign for the defeat of John Howard? Or maybe you mean France and Germany will around, even though they've both said "no way, no how".

I get the impression that the Star would have endorsed a cardboard cutout of Gomer Pile.

Social Security Privatization

Tyler Cowen at Marginal Revolution has a couple of interesting posts on Social Security privatization. His first post is in response to a pro-privatization post by Brad DeLong. Tyler's second post is also in response to a post by Brad DeLong that takes a negative veiw of personal accounts.

The thing that got my attention on all of this is Cowen's mentioning of time inconsistency. Here is the problem in a nutshell. For example, if the new debt (issued to cover current obligations) is issued without any problems then the government will have an incentive to accept further unfunded liabilities for the future. Hence a forward looking bond market is unlikely to view the issuing of debt as a one time deal.

All in all, this simply re-enforces my problem with activist government. As the government meddles in the economy/people's lives there is always going to be this specter of time inconsistency. This is inescapable, IMO, because politicians have to go through periodic elections. Hence there will always be incentives for the politician to change a policy to increase voter welfare. Time inconsistency is a problem that impacts just about any activist policy. It impacts taxes, regulatory issues, government spending, etc. To some extent the problem can be circumvented by reputation effects. This is what we have seen with Greenspan. Greenspan and the Federal Reserve engage in discretionary policy. The reason they can do this and not have a problem with time inconsistency is because Greenspan has a reputation for being an inflation hawk. But Greenspan wont live forever. So what do you do when the current person with the reputation is no longer available for office?

Prescott and Kydland suggested rules rather than discretion. They noted that while the rules wont allow one to achieve the optimal policy they could improve on the outcome. Further, these rules don't have to be simple rules (although they can be simple). The thing that these rules must be is difficult to change. We can see an example of these rules in the Constitution. The freedom of speech and the right to bear arms are both rules in a sense (and simply ones at that). Imagine what would happen if those rules were not there? What would happen to the right to own a firearm in this country was subject to a mere majority vote? Would our freedom of speech be as free as it is today if it could be restricted based simply on a majority vote?

So I have to reconsider my position on privatizing Social Security and Medicare. I think there is a quite a bit of truth to Prof. Cowen's fear about raising taxes and/or issuing debt. For example, suppose we raised taxes today to pay for the transition cost, removed the payroll tax, and at the same time promised to cut taxes in the future. Would it happen? I don't know. One thing is that once the politicians have a stream of money coming in they are loathe to get rid of it. If the truly optimal policy is to cut taxes in 20 years then it is time inconsistent and it wont happen.

So perhaps Prof. Cowen is right about Social Security. Lets stop calling it a retirement program and call it what it really is: welfare for the elderly. Samething for Medicare. If you are a retired person recieving Social Security and Medicare then you are a welfare recipient. You live (either in part or entirely) off of other people's work effort. Lets institute means testing and throw the wealthy off the program. Reduce this welfare program as much as possible (maybe even institute some sort of work requirement) and look at creating incentives for people to save for their retirement so they don't need these hand outs.

Of course for this to work it would require people of different political orientations to agree to this move. The temptation to use it for short term political advantage is quite strong and part of the problem (scroll back up to the part about time inconsistency and getting elected). Frankly, I have little hope for this as well. Personally I think Franklin Delano Roosevelt should be a reviled historical figure.

Teresa's Taxes

Well, interestingly enough it looks like Teresa is pretty good at hiding her money from the tax man.

Carnival of the Capitalists

This weeks carnival is up over at Jay's site. So head over and check it out.

Some entries that I found interesting:

• Tex the Pontificator's post on energy prices.
• EconLog--Free Market Health Care.
• Professor Bainbridge is of course always worth the read.

I'm sure you're wondering...

...what my opinion is of Kerry's using Mary Cheney in last debate. In order:

1. Kerry's remark: It really didn't bother me too much. I thought it was pretty crass to use his opponent's child like that, but crassness seems to be par for the course in this election.

2. Lynn Cheney's response: pretty good.

3. Elizabeth Edwards' retort: Revolting.

"She's overreacted to this and treated it as if it's shameful to have this discussion. I think that's a very sad state of affairs… I think that it indicates a certain degree of shame with respect to her daughter's sexual preferences… It makes me really sad that that's Lynne's response."

Hey, I wish my parents were as accepting as Mary Cheney's folks.

The Last Debate

Well I watched the last debate and I thought it was pretty much a tie. I listened to most of it on the radio so I missed most of the visual aspects of the debate which I personall think is a good thing. It means I wont be distracted by the visual aspects which, to me, are largely irrelevant.

I will agree that Bush is misrepresenting Kerry's health care plan. It is not going to be a situation where the government takes over the health care industry as with Hillary Care back in 1993. Kerry's plan is basically a federal insurance program for health care insurance companies. It will only cover those cases where expenses go over $50,000.

However, I also think the way Kerry and Edwards are spinning the plan is misleading too. As noted the plan will have the government pick up the tab for those cases where the costs of treatment go over $50,000. This is not magic money; that money will have to come from someplace and there are only two places it can come from:

• higher taxes,
• higher deficits, or
• a combination of higher taxes and higher deficits.

There is no way around this. If the money for this comes from higher taxes then it is a clear case of "passing the buck". That is those who pay taxes and don't get sick will be subsidizing the medical care of those who don't pay taxes and do get sick. Or more simply these costs are going to be borne by those Americans who pay taxes. This is undeniable. This is what Hillary Clinton meant when she said things (i.e., money) are going to be taken from those with money for those without for the common good. This is a prime example of that mind set. Taxes are going to go up for some class of citizens to pay for this "common good" policy. Even if debt is issued initially that is simply future taxes. So again the bottomline is that taxes for some group of people are going to go up. They will either go up today or they will go up in the future.

Further, it is not clear to me that this will do much for health care costs. While it will probably have the effect of lowering insurance premiums it will not lower total expenditures and will if anything increase them. With the government picking up the tab for those cases where the costs go over $50,000 there will be less incentive to try to avoid unnecessary costs. Now medical care service providers will have an incentive to "pad the bill". Insurance companies aren't going to squawk because after $50,000 it isn't their money anymore. Patients wont complain because they probably wont be aware of it and it isn't their money either. Tax payers wont complain about this specifically because they wont be getting an itemized bill.¹

If you look at the following graph you will see something astonishing.

Health care expenditures have risen as out-of-pocket expenses have declined for consumers. Is this simply a coincidence...a statistical anomaly? I doubt it. The way health care works in this country now many people do not pay for their health care directly. If I run up a sizeable bill for medical care it is borne by my fellow co-workers in part via higher premiums. If I can't pay for medical care, the costs are covered via higher prices for those with insurance and through other means such as taxes and so forth. So I see Kerry's plan as having precisely the opposite effect on health care expenditures. It will, in my view, increase health care expenditures and may even increase the rate at which health care expenditures are growing.

Even trying to prevent such "padding of the bill" will result in higher costs. There will have to be a new bureaucracy created to oversee such cases. They will have to evaluate what is "reasonable". And part of Bush's objection, that government bureaucrats will be making medical decisions, will in part be true.

If you aren't convinced by the above let me offer another way of thinking about it. Lets suppose Kerry's program is put into place what would be one thing we'd expect to see? How about more cases where the costs go over $50,000? Seems reasonable to me.

So while Bush's portrayal of Kerry's plan is misleading, the conclusion that it will be costly is, in my view, accurate.
_____
¹They might complain about taxes being too high, but that is unlikely to have any impact on this possible problem.

Sullivan Misses the Boat...Completely

I found this via John Cole, Andrew Sullivan is apparently upset with Sinclair Broadcasting Groups decision to air the anti-Kerry move Stolen Honor.

There is surely a distinction between a movie shown in theaters and a movie shown over the publicly regulated broadcast airwaves. Owners of TV stations do have some public obligations in the way that movie theater owners and distributors do not - especially in an election campaign.

I disagree with the distinction one tries to draw between movies and television. Neither are free for viewing. To watch a movie I have to purchase a ticket for a fairly low cost (say on average $8). With regards to television I have to purchase a television. Both have monetary costs involved. Further, there is the opportunity costs as well. When seeing a particulalr movie the opportunity cost are all other activities I could engage for the time of the movie. Similalry for television programs. Frankly I see little difference between the two. Further, I am not obligated to watch either a movie in a theater or a program on television. Contrary to the hysterical ravings of the knotted undies brigade on this one, we are not punished for failing to watch television.

Similarly I disagree with Michael Copps, an FCC Commissioner, statement that Sullivan quotes approvingly,

"This is an abuse of the public trust. And it is proof positive of media consolidation run amok when one owner can use the public airwaves to blanket the country with its political ideology -- whether liberal or conservative. Some will undoubtedly question if this is appropriate stewardship of the public airwaves. This is the same corporation that refused to air Nightline’s reading of our war dead in Iraq. It is the same corporation that short-shrifts local communities and local jobs by distance-casting news and weather from hundreds of miles away. It is a sad fact that the explicit public interest protections we once had to ensure balance continue to be weakened by the Federal Communications Commission while it allows media conglomerates to get even bigger. Sinclair, and the FCC, are taking us down a dangerous road."

Of course, Copps is going to say this. What else is going to say? Something like this?

Well, I personally don't see a big deal here. I don't see a big distinction between television and movies. Further, I am a commissioner for a dinosaur of a bureaucracy that is wasting tax payer money by worrying about such things. Frankly, the voters should elect politicians that will totally revamp this dinosaur of a bureauracy and perhaps even get rid of it altogether.

No, that would simply be too honest.

Sullivan than proceeds to get himself all tied up in a philosophical knot that he cannot untie.

As I've said, it's a free country, and my instincts are against any attempt to regulate this kind of thing. But the blatantly partisan nature of this move - and its dissemination of rank smears into millions of homes - is still troubling. If CBS announced they were pulling regular programming to air "Fahrenheit 9/11" a week before the election, do you think no conservatives would protest?

Sure, many conservatives would be unhappy. I'm sure many libertarian leaning people such as myself would be unhappy with such a move. However, I wouldn't demand that the FCC, Congress or anybody else intervene. Would I object to boycotts, people calling the various stations, and so forth? Nope, that is precisely the response. Respond with your dollars and viewership. This will get the attention of the Sinclari Broadcasting Group faster than whining to politicians who may or may not do anything about the problem.

I've been told that Andrew Sullivan was once a great promoter of conservative ideals. Really? I don't see it now. I think that what we have wittnessed is the transformation of Andrew Sullivan into a liberal. Which is fine, I just wish he'd realize it.

This Is Just Hilarious

O'Reilly and his phonesex fetish. Naturally he is claiming it is extortion...although the interesting thing is, it doesn't looke like he is denying it.

Junk Statistics--A Follow Up

A few days ago I noted some possible junk statistics in a paper that puports to find a link between terror alerts and Bush's popularity levels as measured by polls. I finally decided to e-mail the editor with my issues with the article. Below is my e-mail,

Ms. Troyer,

I must say the statistics in that paper are really disappointing and I am dismayed that a paper like that would be published without considerable additional work. Some of the problems are:

1. The use of linear regression model when the dependent variable can take on values in the interval [0,1]. There is nothing constraining the model, so concievably the mode could predict approval ratings that are greater than 1 (i.e., greater than 100%) or negative. Both are impossible.

2. Why wasn't a test for autocorrelation done on the data? Most canned statistical packages offer such tests. Autocorrelation can lead to inefficient estimators, and autocorrelation with lagged dependent variables can lead to inefficient, biased, and inconsistent estimators. Further, there are remidial measures for both autocorrelation both with and without lagged dependent variables. When no lagged dependent variables are present the Cochrane-Orcutt method is quite efficacious and again most canned packages offer this. When lagged dependent variables are present the method of intrumental variables has proven quite helpful. At the very least I'd expect these tests to be performed and their results reported even if the results are in the negative, so that the reader will have that possibility of doubt removed.

A note of caution: When testing for autocorrelation with a lagged dependent variable the Durbin-Watson test is no longer valid (it is likely to reject the hypothesis of autocorrelation erroneously). Instead a lagrange multiplier test should be used.

3. Why isn't the data made available in a text file format for others to download and check.

4. Why were other polls not incorporated into the analysis? The data at Rasmussen Reports is much more regular and would have given the analysis a more authoritative tone, IMO.

5. Lack of graphs of the data. Graphs are very good at letting the reader see relationships, they aren't perfect, but I find them extremely useful as a starting point.

And I actually got a reply which is give below.

CRISP uses a blind, peer-review process, which involves some of the most accomplished and respected social and behavioral scientists in social psychology. Some of the limitations you note were raised in the review. As with any research, there are limitations and flaws. The reviewers deemed that in the balance, the work merited publication. Graphs tend to be resource intensive (taking substantial space on precious server resources that we have and lengthening download time, particularly for readers who do not enjoy reliable, broad-band access). We will not publish image data unless it contributes new information that is not already discernible from the analyses. The data can be obtained from the author. For all CRISP papers, we require authors either release data or provide correlation matrices and descriptives adequate to replicate analyses. CRISP does not have the resources to maintain data archives. We receive no funding from any source. All work is voluntary. For more information on CRISP, please see our Web site:

http://www.uiowa.edu/~grpproc/crisp/crisp.html

Sincerely,

Lisa Troyer, PhD
Editor, Current Research in Social Psychology
Associate Professor of Sociology
University of Iowa

The bottomline here is rather disappointing. While some of the statistical problems were noted with this research the decision to publish the work without addressing these concerns is troubling. It is troubling because doing these kinds of tests are relatively easy with most canned statistical packages these days. Also, if the tobit model is the appropriate model to be used that is usually found in most canned statistical packages.

I'm not even sure I buy the explanation about graphs being bandwidth intensive as I list a number of graphs on my website and have no problem with bandwidth (well unless I get a really good link from InstaPundit). Same for making a repository for data from various papers. This would not suck up lots of resources, IMO.

Overall a very disappointing response, and it does little to dismiss my worries that this paper was published for political reasons.

Kerry's Discharge Mystery

I found this story via InstaPundit. The story is about the oddity of Kerry's discharge in 1978 when he enlisted for six years in 1966. Also, the officer review board, which according to the story, is unnecessary for an honorable discharge. The story is full of all kinds of speculation, but who knows what is true. Well that isn't entirely accurate, the one thing we do know for sure is that Kerry hasn't signed Standard Form 180 which would allow for the complete release of his military files.

The Grand Master Plan

While watching the second debate one thing struck both me and my wife about Kerry: he alwasy referred to his plan (Iraq, the economy, etc.), but provided no specifics or information. My wife thought it sounded vague and empty. Not only that, but when you went looking for the details for these plans usually one finds nothing. I know I've looked for John Kerry's plan on Iraq (link, link). I have also looked for Kerry's plan for Medicare (link--note: Ironically the page I linked to at Kerry's site has vanished into the ether...now that is irony!). I have looked at Kerry's plan of Social Security (link). In all cases the plans simply aren't there (and in some cases literally).

During the debates Kerry laid out a bit more of his "plan" for Iraq. In the end the only thing I could think was that Kerry's plan is basically a crap shoot. He wants to beg our allies for more support and have a summit. I'm sure lots of good things have been done at summits. Like....uhhhh....well...errrr...aahhhh...uhhhmmm...oh well I'm sure lots of things. You know, a summit must really scare the insurgents. I can just see it now, "No, not a summit, by Allah we will be in trouble then!"

Personally I think John Kerry should just meld all these disparate plans into one Grand Master Plan. It would go something like this:

John Kerry's Grand Master Plan for America

• Make things better.

It is simple and concise and most importantly is that this plan literally takes no actual posistion. For a flip-flopper like Kerry it is perfect. It will allow him to continue to be everything to everybody. Who can argue with making things better? What is the alternative...making things worse?

Prescott and Kydland Win the Nobel Prize in Economics

This isn't a huge surprise given Prescott and Kydland's work, especially their work on time inconsistency. I have actually read both of their papers on time inconsistency ("Rules Rather Than Discretion", 1997, Journal of Political Economy, and "Dynamic Optimal Taxation, Rational Expectations, and Optimal Control", 1980, Journal of Economic Dynamics and Control).

In other news, Prescott has called for even deeper tax cuts.

Oil Prices and Recession

Are the recent increases in oil prices sufficient to triggger a recession? Anirvan Banerji of the Economic Research Cycle Institute says no.

In looking at their weekly leading index I tend to agree with this view. While the rising oil prices have resulted in a slowing of the economy I don't think it will be sufficient to tip it into recession. Of course, if oil prices continue to rise that is another matter entirely.

As for the "record" oil prices, we are not even close yet. Remember you should adjust for inflation when doing a comparision. You want to compare purchasing power in a given time period. For example, $1 in 1980 (when the last actual peak in oil prices occured) would be have as much purchasing power today as $2.30 (yes, you'd multiply the peak price in 1980 by 2.3 to obtain what would be necessary to break that peak today).

A Dose of Reality for Kevin Drum

Kevin Drum on the showing of Stolen Honor: Wounds that Never Heal by the Sinclair Broadcasting Group prior to the election,

They aren't just going to make this anti-Kerry film available for airing. They aren't going to recommend their affiliates show it. And they aren't going to put it on late at night.

They're going to preempt prime time network programming on 62 stations that reach 25% of the country's viewers. You're going to watch this Kerry-bashing agitprop whether you want to or not.

Uhhh no Kevin. I am not going to be watching it despite what the Sinclair Broadcasting Group wants. I wont be watching it for one simple reason, I very, very rarely watch television. About once a month or so the television will come on for one reason or another, but that is about it.

Oh and Kevin, nobody else "has to watch this agitprop" because they can change the channel, turn off the television, or put in a DVD. This move by Sinclair does nothing, let me repeat, n-o-t-h-i-n-g to the choices people can make. The ability to choose not to watch is still there.

So unknot your underwear Kevin, and relax before you burst a vessel or something. Sheesh.

Update: Yglesias also has his undies knotted up too. Funny thing is that Yglesias has hit on the very solution, don't watch it. Really I don't know why it is so bad that a private company does something like this.

Waveflux is also part of the knotted underwear brigade. As is Srinivas Ayyagari of Three Guys.

Update II: I wonder if this would upset the knotted underwear brigade.

I have to admit showing Fahrenheit 9/11 in a classroom is a bit different, in my view. The audience is to a large extent captured. Now perhaps if the teacher offered the option of going to a nearby classroom and working on homework for those students who didn't want to watch the two issues would be more similar. Also, if showing the movie was followed up by a discussion that didn't shut down conservative/alternative view points it would be less disagreeable.

Thanks to Timothy for the link.

Carnival of the Capitalist

The latest Carnival of the Capitalists is up over at Business Pundit. Check out all the posts on economics, business, and so forth.

Terrorism, Gambling and Prostitution

Well, this was big news over the weekend, but I was taking a break from blogging. In an article in New York Times Magazine John Kerry mentioned what it would take to make Americans feel safe.

When I asked Kerry what it would take for Americans to feel safe again, he displayed a much less apocalyptic worldview. "We have to get back to the place we were, where terrorists are not the focus of our lives, but they're a nuisance," Kerry said. "As a former law-enforcement person, I know we're never going to end prostitution. We're never going to end illegal gambling. But we're going to reduce it, organized crime, to a level where it isn't on the rise. It isn't threatening people's lives every day, and fundamentally, it's something that you continue to fight, but it's not threatening the fabric of your life."

Like Professor Volokh I can see the point here. Defeating terrorism would seem impossible as it is a strategy not simply and ideology. Terrorism will alwasy be an alternative to those who cannot wage war on a large scale.

And also like Prof. Volokh I am astonished at Kerry's criminal analogies. As somebody with a strong libertarian bent I actually advocate making prostitution and gambling legal. The way I see it, prostitution or gambling is a voluntary exchange between two (or more) people. Terrorism on the other hand is like murder which entails the involuntary taking of another person's life.

Further, in many places prostitution is not rigorously prosecuted. If you grab a copy of various publications here in L.A. you can find listings for escorts, massage services, etc. There are also numerous massage (accupressure) parlors in and around Los Angeles which have a reputation for providing additional services. Occassionaly some of them will be shut down, but for the most part they are left alone.

Is this what John Kerry means by reducing terrorism to the level of prostitution and gambling? If so, I'm not sure I want any part of it. I don't want the law enforcement agencies, let alone the U.S. military and intelligence community, to be ignoring terrorism. This strikes me as exactly what Kerry's critics are saying is the real danger of electing John Kerry and the return to the pre-9/11 mindset. I can understand wanting to get back to that type of life, but it is wrong to put it into policy.

Why is it wrong? Well what do you think of people who talk about the "good old days" when this or that was the main viewpoint? Usually you think of them as being out of touch, old, or sticks in the mud. In this case, it is tantamount to saying that what happened on September 11th, 2001 wasn't an event that changed the world.

John Kerry's view here strikes me as one where he wants to get back to the time when people didn't worry about terrorism. We can relax about it and tolerate a certain amount of it. Unitl it comes up and bites you again, like it did on September 11, 2001. Although who knows, the next time might be worse...maybe even involving weapons of mass distruction.

The article is right on one thing. While Bush has tried to sound more optimisitic his world view is the more grim of the two. 9/11 represented a shift in outlook. We can no longer just ignore terrorism. We can no longer think of it like we do other illegal, but voluntary transactions between people. Terrorism is something we will have to remain ever cognizant of and we cannot relax about it anymore. Even without weapons of mass destruction terrorists can do a great deal of damage. September 11, 2001 demonstrated this. Factor in weapons of mass destruction and terrorism is something we are going to have to guard against from now on. Indefinitely, as far as I can tell.

This is one of the big reasons why I think John Kerry is the wrong man, at the wrong time, in the wrong place to President. His outlook on this matter while understandable would not make good policy. Perhaps President Bush is going about it wrong, or not as thoroughly as he should, but John Kerry's view strikes me as being even more inappropriate.

Update: Corrected the "him" [John Kerry] to "Americans" in the first paragraph.

Unilateral

I propose that the word unilateral be stripped from all languages on Earth and anybody using it should be put to death.

In a letter released in Brussels on Friday, the European Commission said it rejected a unilateral U.S. move to terminate the pact since it was not backed by proper reasons and the EU considered the agreement to be in force.

U.S. trade officials said they terminated the agreement because European governments had also provided billions of dollars in production subsidies for the A380, which were not allowed under the 12-year-old accord.

The United States also argues that nothing in the 1992 agreement, even if it remained in force, would bar it from challenging the A380 launch aid program at the WTO.

Mills rejected the EU's charge that the United States was acting unilaterally.

"It's difficult to understand to see how enlisting a multilateral organization like the WTO to help resolve a bilateral dispute is considered unilateral. Going to the WTO is the very example of multilateralism," Mills said.--Link

The word no longer has any meaning whatsoever.

September Employment/Unemployement

Well the Bureau of Labor Statistics has released its Employment Situation Report today and the news is so-so, in my view.

The additions to payroll employment were 96,000. While this is an improvement over the July report, it is still low by about half and below the number of jobs added in August. Also throwing some cold water on things is the downward revision to the August payroll employment numbers. Initially payroll employment growth was reported at 144,000, but the September release adjusts that number down to 128,000.

The unemployment rate was unchanged at 5.4%. Also according to the household survey the big reason that there was no change was that the decrease in the labor force was offset by an increase in the number of people not in the labor force. All in all, fairly weak labor market news and even a bit on the bad side.

Keep Your Eye on the Ball

The last few days I have been hearing both Kerry and Edwards making the statement that the Bush Administration "took their eyes of the ball", with the idea being that Bush lost focus on the true target in the war on terror. This is usually followed up by a comment about failing to catch Osama bin Laden. The thing is, is Osama bin Laden the real enemy?

To me the real enemy are the terrorist and the network that they have formed. Getting bin Laden would be nice but, in my view, would be largely symbolic. Would capturing/killing bin Laden mean the threat from terrorists would be over? I don't see how it could be taken that way. Even with the capture/death of bin Laden the network he helped build would still be in existence. The ideology it is founded on would still exist and attract followers.

The idea that this problem would go away once bin Laden is captured or killed is ridiculous and just underscores how I can't bring myself to trust Kerry in terms of taking the fight to the terrorists. It is too bad the Democratic party let themselves be hijacked by the anti-war movement. If they had nominated somebody like Lieberman I think many who support Bush, but dislike many of his other policies would be thinking hard about who to vote for. Instead we have the limp noodle Kerry who has been pretty much a dove ever since the late 1960s. Not that there is anything wrong with being a dove/anti-war. The problem with Kerry is that he has tried to portray himself as this tough guy (the faux tan during a game of flag-football, all the gun totting events, his war record, his lucky C.I.A. hat, etc.).

Virtually everybody on the Left try to argue against Kerry as the flip-flopper, but the entire Democratic Convention and Kerry's entire campaign is one giant flip-flop. The attempt to portray Kerry as a hawk, a candidate who as President would not hesitate to use U.S. military forces whenever and wherever necessary. Despite all the problems I have with Bush's policies on the domestic front, I just can't bring myself to support Kerry. I don't have a clue what I am going to do on November 2nd.

Update: This cartoon from Cox & Forkum pretty much sums it up.

Smog Check

I wanted to blog on this a few days ago when I saw this post over at Roger Simon's blog (but work ratcheted up and I didn't get the time). The story is that Gov. Schwarzenegger has supported rule changes that will enforce the toughest smog rules to date.

Now I am not familiar with the gory details of these rules but my guess is they will do shit to reduce smog and air pollution in general. I hear periodically that 5% of the cars are responsible for some large percentage of the pollution. The idea being we need to get rid of these super-polluter cars. The only problem with this is that I have yet to see one of these super-polluter cars.

Now granted, my not seeing one of these super-polluters doesn't mean they don't exist. But after living in California for the past seven years and spending no small amount of time on Southern Cali's freeways you'd think I'd see a few. Then it dawned on me. Maybe they aren't cars. I noticed that the biggest billowers of foul black stuff were tractor-trailers and buses. Maybe that 5% weren't cars at all, but were large vehicles. And we all know that the smog rules for these vehicles are much, much less stringent. Oh...you didn't know that. Well now you do.

The point is that eventually you wont be able to squeeze much more pollution reduction out of people driving regular cars. They are already quite low in terms of emissions. Now there is alot of potential for semi trucks, buses, cement trucks, and construction vehicles. However, these guys have strong lobbies (compared to the regular schmuck sitting in his Hyundai) on the freeway.

These new rules are bad. They raise the costs for drivers who are already bearing the lion share of the "emission reduction burden". They force up transportation costs (especially for the poor--nice and regressive there isn't it?). It is also a sign that special interest politics still rule in California politics despite all the rhetoric. Don't get me wrong, I want clean air, but these rules are not going to do Jack fucking shit.

Junk Statistics Alert

Kevin Drum is posting on this new paper that shows a link between Bush's approval ratings and Terror Alert warnings. When I clicked on Kevin's link to the paper I was taken to a...press release.

I personally consider the press release a strong indicator of junk science/statistics. It is not a perfect predictor, but when something is so "hot" as to warrant a press release, there is often somebody pushing the research for political reasons.

In looking at the paper it looks like the paper was a rush job.¹

• Submitted: September 4, 2004
• First Revision: September 28, 2004
• Second Revision: September 29, 2004
• Accepted: September 30, 2004
• Published: September 30, 2004

Another funny thing here. Isn't it the Gallup poll that many Democrats were crying about as having to large of a Republican sample? Here is a question, why wasn't this study done using more than one poll? Wouldn't it have been an even stronger case to see this effect in several polls?

Another cause for concern is the use of regression models. Are standard linear regression models used? If so, I'm not sure that is the right model to be using. Bush's approval rating is a number between 0 and 1 (1 corresponding to 100% approval). Suppose Bush's approval rating is 47% and the terror warnings boost Bush's approval rating by 65%. Are we to really believe that Bush's new approval rating is 112%? A plain old vanilla linear regression model might be methodologically incorrect here.

Another problem is that this is time series data, and one of the problems with time series data is autocorrelation². There are tests for autocorrelation and remedial measures for solving the problem of autocorrelation when present. Good standard research, IMO, would be to conduct these tests to see if autocorrelation is present. As far as I can tell this was not done.

So what is the big deal with autocorrelation of the error terms? Well normally nothing big in that it the ordinary least squares estimators are still unbiased, consistent, asymptotically normal, but are inefficient (i.e., you'll be more to fail to reject the null hypothesis). It isn't horrible, especially if you have a fairly large sample. However, when you have lags of the dependent variable, as some of the models in this research have. In this case then the ordinary least squares estimators are no longer consistent or unbiased. In this case all you have is asymptotically normal with is fairly useless in terms of parameter estimation.

So why weren't these basic tests done? This looks to me like a rush job. The results were politically pleasing to the people at the journal and they wanted to get it out. I could be wrong, but I'm a bit suspicious right now.

Update: One of Kevin's commenters provides a link to a graph of Bush's poll approval numbers and terror alerts (here).

In looking at the graph, at least three of the orange alerts in 2003 came when Bush's poll numbers were on the upswing. The orange alert in 2002 coincides with a nearly simultaneous increase in Bush's approval ratings. One spike in Bush's approval rating actuall occures prior to the terror alert in 2003. Further, there are notable spikes in Bush's approval ratings when there were no terror alerts, so I am very skeptical of this paper. It is looking more and more like junk.

Another thing that makes me suspicious is the lack of data being available on the journal's website. Can't they pop a simple text flat file up there for others to download and look at the data?
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¹In looking at other papers accepted by the journal this appears to be the norm. A fews days turn around from when the referee comments are sent back to acceptance to publication. This paper is notable in that it there was just one day between recieving comments, revising and resubmitting, then another day for publication. Comparing this to some of the papers in NAJ Economics, another online journal, we see a rather stark difference. The first article on the page linked above was first presented at a seminar in 2001. The second paper started in February of 2002.
²Autocorrelation is when the error terms in the regression equation are correlated over time.

No Recession & No Re-Acceleration

Economic Cycle Research Institutes Weekly Leading Index has been flat for the last two months. This indicates a sluggish economy for the foreseeable future.

Bush In Trouble?

I'd say Bush is indeed in trouble based on the data from TradeSports.com and the Iowa Markets. Here is the graph of Bush's contract at Trade Sports,

As we can see Bush's price has been in free-fall since the debates. Over at the Iowa Market we see pretty much the same thing.

On top of all of this we have Newsweek reporting that Bush's lead in the polls is now gone. The picture is also a hoot, Bush looks so prissy. It completely reminds me of Gore during the first debate in 2000.

If there was any doubt about who won the debate this should settle it.

35 to 40 Countries?

From the September 30 debate: (transcript)

KERRY: Thirty-five to forty countries in the world had a greater capability of making weapons at the moment the president invaded than Saddam Hussein.

Presumably he is referring to WMD's since every country in the world can make weapons out of sharpened sticks. So who are these 35-40 countries?

There are the declared nuclear powers: USA, Britain, France, Russia, PRC, India, Pakistan.

Second there are the obviously bad guys: Iran, North Korea, Syria, Libya (though they appear to have given up)

Third, the potential ne'er-do-wells who might already have the bomb: South Africa, Taiwan, Israel, Japan.

That's 15. I suppose I should include any country with a decent medical research lab or industrial pesticide manufacturing facilities, which would encompass most of Europe, Canada, and parts of South America.

Anyway, his point (whether true ot not) that dozens of countries were more capable of producing weapons than Iraq is moot, since most of those countries have no motive for producing and using WMDs.

It reeks of moral equivalency. Sure, Sweden could probably churn out a few tons of nerve gas without too much trouble, but how likely are they to lob a battery of missiles into Finland?

Saddaam had already shown the capacity for producing chemical weapons, and the willingness to use them. He gassed Iranians and Kurds. He fired SCUD missiles at Israel. US and foreign intelligence services all agreed that he still had weapons. Anyone who thinks he was less of a threat than Denmark (or even Taiwan) just because Denmark (or Taiwan) has a greater capacity for making WMD's is delusional.