I had a long post about Fred Thompson’s and his pernicious love affair with “will” and its dangers to democray all written up and ready to go. It was brilliant, I assure you. But six months after I bought my laptop, my primary computer, it stopped recognizing the power supply as valid and thus refused to use it to charge the battery. Said battery is now deader than George W. Bush’s legacy. So when the cats, in their evening fisticuffs, somehow turned off the power supply, the computer died and took with it my brilliant post.

While Tgirsch does bear quite a bit of the blame for this (if he hadn’t told my wife about the kittens, we would still have one cat and there would have been no cat-style UFC shenanigans this evening), the real culprits have to be Dell. What losers make a computer that refuses to use a perfectly good power supply to charge the battery? When did electricity start coming in special Dell-only varieties?

My next computer is going to be an effin Mac.

by Kevin on June 20, 2007 02:26 AM

I’m about three weeks late with this, but Ron Paul is such a delight when it comes to keeping folks like Rudy Giuliani from getting away with dishonest fear mongering. John Nichols reminds us of the GOP debate last month and the dust up between Rudy Giuliani and Ron Paul:

Rudy Giuliani made clear in Tuesday night's Republican presidential debate that he is not ready to let the facts get in the way of his approach to foreign policy. The most heated moment in the debate, which aired live on the conservative Fox News network, came when the former New York mayor and current GOP front-runner angrily refused to entertain a serious discussion about the role that actions taken by the United States prior to the September 11, 2OO1, terrorist attacks on the World Trade Center and the Pentagon may have played in inspiring or encouraging those attacks. Giuliani led the crowd of contenders on attacking Texas Congressman Ron Paul after the anti-war Republican restated facts that are outlined in the report of the The National Commission on Terrorist Attacks Upon the United States … The mayor, who is making his response to the 9-11 attacks on New York a central feature of his presidential campaign, was joined in the assault on Paul by many of the other candidates. But congressman did not back down, and for good reason. Unlike Giuliani, the Texan has actually read the record. The 9-11 Commission report detailed how bin Laden had, in 1996, issued "his self-styled fatwa calling on Muslims to drive American soldiers out of Saudi Arabia" and identified that declaration and another in 1998 as part of "a long series" of statements objecting to U.S. military interventions in his native Saudi Arabia in particular and the Middle East in general. Statements from bin Laden and those associated with him prior to 9-11 consistently expressed anger with the U.S. military presence on the Arabian Peninsula, U.S. aggression against the Iraqi people and U.S. support of Israel.

Andy Sullivan shows that Ron Paul followed up:

Longshot Republican presidential candidate Ron Paul on Thursday gave front-runner Rudy Giuliani a list of foreign-policy books to back up his contention that attacks by Islamic militants are fueled by the U.S. presence in the Middle East. "I'm giving Mr. Giuliani a reading assignment," the nine-term Texas congressman said as he stood behind a stack of books that included the report by the commission that examined the attacks on the United States on Sept. 11, 2001.

George W. Bush and Dick Cheney have used fear mongering and lying to the American people to put their reelection strategy ahead of a rational foreign policy. I guess Rudy is a lot like them. Of course, the press can’t be bothered with this.



But I hope the press does not ignore two other matters. One is the indictment of his South Carolina campaign chief for selling cocaine. The larger problem is Rudy’s decision to skip meeting of the Iraq Study Group. As Steve Benen notes:

Sure, it was a mistake to join the group and then fail to do any work. And sure it’s not exactly encouraging to see a presidential candidate prefer cashing in to meaningful public service on the nation’s most pressing crisis. But looking beyond this, Giuliani should have stayed with the ISG so he could learn what the hell he’s talking about.

Update: Jonah Goldberg is happy to post Rudy’s reply with respect to the Iraq Study Group snub:

As someone considered a potential presidential candidate, the Mayor didn’t want the group’s work to become a political football. That, coupled with time restraints led to his decision.

I guess Jonah was too lazy to check the facts so we have to rely on Greg Sargent:

So very clearly, Rudy himself was saying that he was a "potential Presidential candidate" five months before agreeing to join the ISG. He even openly stated that he'd be actively considering a run during the same year - 2006 - that the ISG would be doing its work. So why did Rudy join it in the first place? His campaign is now saying that he backed out of his ISG commitment because the fact that he was seen as a potential candidate could politicize his work for the panel - even though that didn't stop him from signing up in the first place. This is just total bull, pure and simple. No polite way to describe it. Meanwhile, the only remaining piece of his pushback - that "time constraints" prevented his participation - actually confirms the story. So Rudy's got nothing left here.

Update II: Credit goes to Jonah Goldberg for this.

by PGL on June 19, 2007 11:52 PM

DCorps has just released "On the Offensive: First Survey of the 2008 Battleground Districts," and the findings envision an "immense opportunity" for Democratic congressional candidates to win more seats in 2008. The survey, which included a large interview sample of...

June 19, 2007 08:49 PM

This post looks at the change in proportion of children living in two parent households over time. I think most of us can agree that in most circumstances, it is better for children to live in circumstances that include both their parents, and this is certainly a big issue with the right in the US. Data on the proportion of children living with both parents is available from the Census.



Here’s a picture.







Note… according to the footnote, beginning in 1982, improved methods for collecting data began to be used. Here’s a summary… because of the structural break, Reagan’s figures only include 1982 – 1988, but I include Reagan’s entire term also at the bottom of the table.







Is the data before and after the structural break comparable? I don't know. My guess is that yes... the structural break takes the form of a one-time bump in the data, but the trends would be no different without the break in the data. Either way, it seems Carter did poorly, but the other two Dems did better than Reps (either in their half of the sample or in the whole sample).



Here’s something interesting. As we saw in an earlier post, there really wasn’t Welfare Reform may not have done anything positive (and probably did some damage) to the cause of marriage. But… there is an improvement in the percentage of children living with both parents from 1996 to 2000. So what is going on? Is the Welfare Reform Act hurting marriages and helping children? My guess… not. My guess is that once again, increases in income have a positive effect on the rate of children living in two parent households that swamped any effect in the Welfare Reform Act. (As noted in the earlier post… real median income rose much more quickly than normal (for the post WW2 era) from 1996 to 2000.) Note that whatever improvements were observed from 1996 to 2000 reversed after 2000, when real median income also began a reverse.



So… below I put in a couple of tables looking at the correlation between the rate of change of the percentage of children living in two parent homes and the rate of change in several other factors: income, real GDP per capita, and the divorce rate. I don’t expect real GDP per capita to matter … but I’ve been asked why in some recent posts I’ve been looking at real median income rather than real GDP per capita…







What do we see? Well, real median incomes matter, and a heck of a lot more than real GDP per capita when having a decision whether or not keep a family together. So my speculation earlier about the uselessness (at best) of the Welfare Reform Act in this regard may well be correct.



As to divorce, obviously, it matters a lot. Interestingly, it seems (and the data bounces around a lot so its hard to say) but divorces that happened years earlier can affect the % change in the fraction of children living with two parents. Perhaps a woman that has been divorced in the past is more likely to have a child outside of marriage in the future?



Given this post was on families staying together for the benefit of children, I’ll have a post soon on the decision to have children.

by cactus on June 19, 2007 12:12 PM

For a few reasons, I expect my my identity will become public in the next few months. I figured I’d beat the rush and maybe even take advantage of the situation.



Anyway, to begin, I’m nobody special. Regular readers may recall that I’m a consultant. I do a lot of statistical work for which the end user is the military or NASA, and some business analytics / strategy work for private companies. I’m trying to up the latter as much as possible.



The Ex-GF has been helping me put up a new website which gives a bit better description of what I do. (Pretty good domain name, eh? I guess someone let it lapse.) I usually operate solo, but I also work with some other consulting firms when I have something that’s too big for me alone.



OK. So… what do I do to get more private sector business? I find I’m pretty good at marketing, but not so good at marketing myself. I’m not even that great at getting myself in front of the right people. What do I need to do different? Comments, suggestions, contributions, donations, referrals, projects, are all welcome.

by cactus on June 19, 2007 12:04 PM

This one is by Reader Dan



--------------------------



New reports are of concern. Is this hype, cowardice, welfare cheating, the decline of the American soldier, or something about the nature of current conflicts and the military structure?



PTSD Part 2



U.S. troops returning from combat in Iraq and Afghanistan suffer "daunting and growing" psychological problems -- with nearly 40 percent of soldiers, a third of Marines and half of the National Guard members reporting symptoms -- but the military's cadre of mental-health workers is "woefully inadequate" to meet their needs, a Pentagon task force reported yesterday.



…

The task force found that 38 percent of soldiers, 31 percent of Marines, 49 percent of Army National Guard members and 43 percent of Marine reservists reported symptoms of PTSD, anxiety, depression or other problems, according to military surveys completed this year by service members 90 and 120 days after returning from deployments.



Two "signature injuries" from Iraq and Afghanistan are PTSD and traumatic brain injury, it said. Symptoms include nightmares and other sleep problems, trouble concentrating, anger, recklessness, and self-medication with drugs and alcohol.



The task force identified several barriers to care, including the stigma associated with seeking help, poor access to providers and facilities, and disruptions in care as service members move locations.



"Stigma in the military remains pervasive and often prevents service members from seeking needed care," the report said, citing anonymous surveys that show most members with symptoms of mental health problems do not seek help.



Some soldiers underreport problems because they want to stay with their units, and military officials note that many soldiers undergoing treatment for stress or other mental problems are allowed to deploy again after a screening to determine the intensity of their symptoms or depending on what medications they are taking. Those on lithium, for example, should not deploy while those on another class of medications similar to Prozac may be able to, said Army Col. Elspeth Cameron Ritchie, who assisted the task force.

…

National Guard and reserve members -- who often live far from military bases and return from deployments to rural communities -- face "particularly constrained" access to clinical care as well as to the military chaplains and family support networks that active-duty personnel can tap, the report said.



"The current complement of mental health professionals is woefully inadequate" to prevent and treat members of the military and their families, the report said. But it called the process for recruiting additional trained personnel -- both civilian and military -- "time consuming and cumbersome," stating for example that the number who could be recruited over the next six months would be "well below" the number required to meet the needs.



The shortage is deepening as active-duty mental-health professionals, also stressed by repeated deployments and other frustrations, are leaving the military in growing numbers, the report said. The Air Force has lost 20 percent of mental health workers from 2003 to 2007, while the Navy lost 15 percent between 2003 and 2006, and the Army lost 8 percent from 2003 to 2005.



Financial resources for mental health treatment in the military are also lacking, the report found. Congress provided a boost of $600 million for PTSD and traumatic brain injury in the 2007 supplemental war funding, but more will be needed, S. Ward Casscells, assistant secretary of defense for health affairs, said at the news conference.

by cactus on June 19, 2007 11:53 AM

This one is by reader sammy.



------------------------



It's a recurring theme on this blog and in public political discourse that Republicans/Conservatives are mean, greedy, don't care about the poor etc., while Democrats/Liberals are caring and compassionate. Of the Liberals and Conservatives I know personally, I cannot distinguish any difference in levels of altruism.



James Q. Wilson writes this forward to the book "Who Really Cares: America's Charity Divide - Who Gives, Who doesn't, and Why it Matters" by Arthur C. Brooks:

When President Bush coined the term "compassionate conservatism," many conservatives were understandably miffed. It seemed to concede to liberals that traditional conservatives are indeed a greedy, selfish bunch - unlike liberals, with their "commitment" to the poor and disadvantaged. Now comes an amazing new book that buries that old canard forever. In Who Really Cares: America's Charity Divide - Who Gives, Who Doesn't, and Why It Matters, Arthur C. Brooks uses hard data to prove that, when it comes to charitable giving, conservatives - especially religious conservatives - are far more generous than liberals, who seem to believe that "compassion" begins and ends with voting for government handouts.

Among his findings:

Conservative households in America donate 30% more money to charity each year than liberal households, even in spite of lower average incomes

Conservatives are also more generous in other ways, such as blood donations, and volunteer work. In fact, if liberals gave blood like conservatives do, the blood supply in the U.S. would jump by about 45%

People who mistrust big government give more than those who rely on the government to take care of the poor. This includes giving and volunteering even to traditionally "progressive causes" such as the arts and the environment

Conservative "red" states give away far more of their incomes than liberal "blue" states do

Thomas Sowell reviews the book here:

While both sides argue that their opponents are mistaken, those on the left have declared their opponents to be not merely in error but morally flawed as well... (w)hat is remarkable is how long it took for anyone to put that belief to the test -- and how completely it failed that test

I never understood how the Left and those in government (including the Right) feels it it is morally superior because it gives away other people's money. "POSSIBLY THE EASIEST act for any human being is to spend money which does not belong to him," wrote Robert L. Smitley in his 1933 classic, Popular Financial Delusions.



Best wishes,



sammy



----------------------



cactus here. A few comments of my own.



1. Considering I've spent the past couple of months putting up data showing that Republican Presidents do not perform better (and usually perform worse) than Democratic Presidents on things that Republicans like to campaign on (real economic growth, fiscal responsibility, abortions, marriages, etc.) turnabout is certainly fair play

2. I don't have enough information to comment on most of the assertions made above. But I do question (and have had a post on this) the one about charitable giving. Here's my quick summary (so I don't overwhelm sammy's post)... A very significant part of conservative charity is to the local church or house of worship. But in many instances, the local church is also a center of activity. Kids play basketball there after school or go to camp, the wife attends a book club, and the husband attends bible study. And that's not even counting Sunday Services. In other words... in addition to the religious activities, its the equivalent of a gym membership plus entertainment. Non-church goers also engage in these activities - but membership in the local gym, sending the kids to a secular summer camp, attending adult education classes, and the like, is not considered charity (and cannot be written off on one's taxes).

by cactus on June 19, 2007 12:39 AM

ILSM is still having problems accessing Angry Bear.



This post is his.



------------------------------



Mark Thoma had a link to June 16 Washington Post article. The article, a long one describes new contractor provided security in Iraq.



However, I did not find a discussion of the possibly applicable Anti Pinkerton Law.



The law, 5 USC 3108, states:

An individual employed by the Pinkerton Detective Agency, or similar organization, may not be employed by the Government of the United States or the government of the District of Columbia.

The issue is, is Blackwater like Pinkerton?



In the context of Iraq quite possibly. The act was made to prevent the US government from hiring Pinkerton paramilitaries and riot police from breaking up labor organization.



Now Iraqi insurgents do not have the honored tradition of US labor, but the law is the law and not conditioned on laborists verus Islamicists.



As a side light are convoy security and bodyguarding US protected officials commercial activities?



If so why not call in the Prince of Hesse?

by cactus on June 18, 2007 08:46 PM

Lawrence Kudlow loves to dress up bogus arguments in some fancy ways. He begins with:

Democrats in Congress and on the presidential trail are intensifying their high-tax war against prosperity and the so-called rich. Their latest salvo includes more tax penalties on successful investors and entrepreneurs, such as a proposed 4.3 percent surtax on high-income earners and a tax assault on the private-equity buyout industry.

His opposition to this surtax is a plea not to return to the fiscally responsible period known as the 1990’s. Kudlow is arguing like Rudy G. that a return to the 1990’s wouldn’t be prudent. After all, they would rather pretend that growth rate in the 1990’s were dismal while growth under President Bush has been fantastic. Never mind that the facts say the reverse was true.



But here’s the fancy part:

Up to now, Blackstone’s authoring statement had envisioned some kind of two-tiered tax plan, where ordinary corporate compensation would be taxed at the 35 percent corporate rate while high-risk investment-fund profits would be taxed at the 15 percent cap-gains rate. And now, senators Max Baucus (D., Mon.) and Charles Grassley (R., Iowa) want Blackstone to pay the much higher corporate tax on all its income. Normal salaries and income from straight-out financial services arguably should be taxed at the corporate rate. But the investment partnerships inside Blackstone constitute risk-taking. For example, if the risks don’t pay off with profits, there is no income to be taxed. So, should the Baucus-Grassley plan set up a new multiple tax on capital, it would have negative consequences on economic growth while diminishing the economic clout for risk-taking. And this is just the start. The next step will be to raise the overall tax on private buyout partnerships, even though there’s no intent to go public. Former Clinton Treasury secretary Robert Rubin suggests more than doubling capital-gains taxes on these partnerships, telling a Washington conference that the lower rate on capital gains hasn’t contributed one iota to the economy.

Kudlow wants his readers to believe that increasing the tax rate on capital gains would treat this form of income different from other forms of income. But wait a second – if we double the current tax rate on capital gains, which is now only 15%, then the current disparity in tax rates would be reduced. Kudlow goes onto to hammer the Democratic Presidential candidates on their tax hike agenda as if we were currently running Federal surpluses. Never mind that the facts say we are running deficits.



Update: While Max Sawicky does not comment on Kudlow, he has links to a lot of the other discussions of this issue. Another tip of my hat to Max as he continues to stay far ahead of this Left Coast Bear on D.C. tax controversies!

by PGL on June 18, 2007 07:42 PM

Mark Thoma reaches back 22 years and finds some wisdom from the late James Tobin that should be remembered today:

Congress should not touch Old Age and Survivors Insurance (O.A.S.I.), ''Social Security'' in common parlance, this year. Leaving it alone is not just interest-group politics. It is good public policy. The Greenspan-O'Neill-Reagan compromise of 1983, bipartisan statesmanship at its best, adjusted both benefits and taxes, and assured the solvency of the O.A.S.I. trust fund well into the next century. According to official median projections, surpluses of O.A.S.I. tax receipts over benefits will be helping to balance the unified budget until 2020 … Now the Administration and the Senate want to make further permanent cuts in real benefits by tampering with the COLA again. Would they dare to propose the same cuts in dollars? Even if inflation were zero? … Proposed cuts in O.A.S.I. are neither necessary nor sufficient to improve the Federal fiscal outlook. General tax increases are the answer, as any arithmetician outside the White House knows. Tom Wicker (''A Deliberate Deficit,'' column, July 19) has discovered what was perfectly clear in 1981, that the Reagan strategy was to create deficits in order to bludgeon Congress into axing Federal social spending, including ''entitlements.'' And now perhaps you will urge Congress to face squarely the true fiscal problem.

While this op-ed was published on July 20, 1985 – it still rings true today. Remember this the next time a GOP leader promises to pay for their tax “cuts” with “entitlement reform”.

by PGL on June 18, 2007 01:17 PM

I decided to head out to the gym this morning and while warming up I seemed to have seen Russert interviewing two writers for the National Review. Christy Hardin Smith confirms that I wasn’t losing it:

What pissed me off this morning is this: O’Beirne and York are clearly partisan writers, both working for the conservative National Review. I’ve met Byron a few times and I think it is safe to say that he considers himself not only conservative, but also that he has vested a lot of interest in pushing the Libby end of the case whenever possible in media appearances and in his columns. I don’t know O’Beirne, but the words “partisan hackery, whatever the cost to the facts” come to mind every time she is mentioned, for good reason.

But I decided to check out the MTP transcript to see what kind of garbage was tolerated by Timmeh on the latest embarrassment to what used to be a fine Sunday talk show (well, it was good before Russert took over).



For the Libby Lobby, O’Beirne started the spin:

MS. O’BEIRNE: It certainly would help with his conservative supporters who had, who had long objected to what they see as politicized prosecution and I think they would give President Bush credit for being a stand-up guy who stood by a loyal White House staffer.

They see as politicized prosecution? Who is they, Kate? Oh yea, your dishonest colleagues at the National Review. Poor Byron York had to wait his turn as Russert turned to E.J. Dionne for a rare bit of honest discourse from Meet the Press. All that was left for York to whine about is that the Judge decided to put Libby in jail well in advance of the November 2008 election, which gives Bush a tough choice between what Dionne has called:

“The Republican presidential candidates have two time frames to think about: their need to win conservative support in the nomination battle now and the general election imperative to break with what is looking like a discredited presidency. Taking a stand on a pardon [for]” Scooter “[Libby] forces an awkward and immediate choice between those objectives.”

I do feel bad for the Libby Lobby – not!

by PGL on June 18, 2007 01:07 PM

A great line at Pharyngula:

In the name of child safety, in order to inhibit drug peddlers, because we don't want to make things easy for terrorists, we have put up bureaucratic barriers to the purchase of laboratory glassware — while encouraging unimpaired, unchecked access to guns.



Is this a screwed-up country, or what?

The post is well worth a read.



Now, I hasten to add, I'm not in favor of banning guns. (I do think there should be limits on what people should be allowed to own. As I've stated before, I don't want my neighbor owning a surface to air missile or belt-fed machine gun, and I don't think felons should be allowed to own guns at all.) But I'd prefer to ban guns than chemistry sets.

by cactus on June 18, 2007 12:37 PM

Business Week's Catherine Arnst reports on a new Commonwealth Fund survey comparing and rating health care services in the 50 states. Her overall conclusions are less than encouraging as evidenced by her article's subtitle "A state-by-state study shows who has...

June 18, 2007 12:32 PM

This post follows another post looking at the net marriage rate by looking at the net marriage rate by Presidency, as well as how it correlates with income. All data used in this post comes from the Census Bureau.



How does the net marriage rate (i.e., marriage rate less divorce rate) look over time?







It should be noted… 1998 – 2004 excludes data for divorce rates (and population) for several states.



Before we go on to the summary… can anyone spot the effect Welfare Reform Act on the graph?



Moving right along, a summary. (And because there is always someone telling me that things in Clinton’s term changed after the Republicans took power, I have that broken out too. And the pre- and post- Welfare Reform Act is also broken out.)







And before I get accused of only considering Presidents (and the Welfare Reform Act and missing data), here’s how annual percent changes in the net marriage rate (and its components, the marriage rate and the divorce rate) correlate with annual percent changes in real median income…







Hmmmm….



Not much of a correlation between changes in income and changes in the marriage rate. People decide to get married for love. There does seem to be a negative correlation between changes in income and changes in the divorce rate, though. Not surprising… I’ve heard it said the number one cause of divorce in the US is money trouble. Given the lack of correlation between marriage and income, and the negative correlation between divorce and income, we find that a big way to get people married and keep them married is to increase their income.



Now a comment… The net marriage rate drops like a log from 1996 to 2000. And yet the rate of real median income increases were pretty quick… every year from 1996 to 2000 saw positive growth, well over the average (and median) for the post-WW2 era. (In fact, in 1997 and 1998, the growth rate in real median income was ludicrously high: 4.25% and 4.75%, respectively.) And the net marriage rate is positively correlated with income. So how come the marriage rate, which was unchanged from 1992 to 1996 dropped like a log despite increases in income? What changed?



Well, it seems that in the beginning of the Clinton term, some positive things started happening… a zero percent change (which occurred from 1996 to 2000) is damn good performance in this dismal looking sample. Some may have been demographic changes (an older population?), and some may have been social policies enacted by Clinton (offhand I don’t know what). But clearly it was different from the two preceding administrations. And then Welfare Reform hit. (And some other measures by the increasingly confident Republican Congress.) I suspect the Welfare Reform Act created some pretty perverse incentives for the very poor, and and rapidly rising incomes made it possible for many people in the working poor and middle class to walk away from what they considered to be bad marriages.



After Clinton’s term, the negative trend continued. The interesting thing… it wasn’t as shallow as one might expect despite the drop in real incomes… So what happened? Speculation…. Some of the negative effects of the Welfare Act die over time. After a few years on welfare, one can’t collect anything ever again regardless of how one plays the system. So some of the perverse effects may no longer matter? Perhaps someone who knows something might explain the data in comments.



Regardless... as is true of just about every data set we have looked at so far (and regular readers no doubt have lost count), the net marriage rate does better under Dem Presidents on average, than Rep Presidents. Whether this says the Dems are the Party of Marriage I don't know, but it does say the Reps definitely aren't the party that delivers in this department either.



I’ll have a post sometime soon looking at how all this affects America’s children.

by cactus on June 18, 2007 12:21 PM

We have graphed the 30-year fixed mortgage rate from 1971 to today as something about the latest from Kevin Drum didn’t seem quite right:

My first thought when I see a 30-year fixed rate of 6.74% is that it's an incredible bargain. Until about 2002, I hadn't seen a rate that low in my entire adult life.

Maybe we had not seen mortgage rates lower than 6.7% in our adult lifetimes, but surely Kevin is old enough to recall when mortgage rates dropped below 6.75% during the latter part of 1998.

by PGL on June 17, 2007 10:29 PM

Can President Bush be more fiscally dishonest?

President Bush warned Congress on Saturday that he will use his veto power to stop runaway government spending. "The American people do not want to return to the days of tax-and-spend policies," Bush said in his radio address. The House of Representatives on Friday passed a $37 billion budget for the Department of Homeland Security, but Republicans rallied enough votes to uphold a promised veto from Bush. The measure - one of several annual spending bills that Congress began to consider this week - exceeds Bush's request for the department by $2.1 billion. The administration, hoping to appease Republicans who demand fiscal restraint, has pledged to keep overall spending to the level in Bush's proposed budget in February. The president has had uneven success.

Uneven success? Who wrote this nonsense for AP? We have graphed Federal spending as a share of GDP – both in terms of Federal purchases and in terms of total Federal spending including transfer payments. What in hell does Bush mean by the “days of tax-and-spend”. The GOP candidates who wish to be Bush’s successor are suggesting we can’t return to the 1990’s. Well in the late 1990’s Federal purchases were only 6% of GDP and Federal spending was only 19% of GDP. This is compared to a 7% Federal purchase to GDP ratio and a 20.3% Federal spending to GDP ratio in 2006.



Maybe President Bush was talking about the 1980’s when a larger share of GDP went to defense spending but President Reagan adopted spend and borrow policies as the GOP wanted to pretend it was cutting taxes. The current GOP candidates for the White House are promising an even larger defense department without increasing taxes. By now – this fiscal dishonesty should be apparent to everyone. So why is George W. Bush pretending we are still this stupid? Of course, the fellow who wrote this piece for the AP is apparently as stupid as Bush assumes the rest of us are.

by PGL on June 17, 2007 09:23 PM

I just discovered the blog of Brian Zick, which brings us to something interesting from Bill Moyers. It’s 5 minutes and 41 seconds worth listening to as it notes the hypocrisy of so many members of this Administration and the political hacks that carry their water. The transcript can be found here. Moyers notes at the end that there are “contrarian voices”:

PATRICK BUCHANAN: This is an open and shut case of perjury and obstruction of justice. And the Republican party, you know, stands for the idea that high officials should not be lying to special investigators.



BILL MOYERS: And from the former Governor of Virginia, James Gilmore, a staunch conservative, comes this verdict: "If the public believes there's one law for a certain group of people in high places and another law for regular people, then you will destroy the law and destroy the system." So it may well be, as the Hartford Courant said editorially, that Mr. Libby is "a nice guy, a loyal and devoted patriot"...but none of that excuses perjury or obstruction of justice. If it did, truth wouldn't matter much."

I just wish more conservative Republicans would join Mr. Buchanan and Mr. Gilmore in condemning what Mr. Libby did.

by PGL on June 17, 2007 01:14 PM

Frederick Kagan and William Kristol do not have a clue:

Al Qaeda is counting on sapping our will, and persuading America to choose to lose a war it could win.

Really? We can win? Win What? Kristol thought we could win this thing with very little effort. But that was before that really stupid decision on March 19, 2003 – you know the one he craved for. But that was just their title. Their ignorance of history is on full display as they compare the bombing of a couple of mosques to the Tet offensive.

Last week, a group of tribal leaders in Salah-ad-Din, the mostly Sunni province due north of Baghdad, agreed to work with the Iraqi government and U.S. forces against al Qaeda. Then al Qaeda destroyed the two remaining minarets of the al-Askariya mosque in Samarra, a city in the province. Coincidence? Perhaps. But al Qaeda is clearly taking a page from the Viet Cong's book. The terrorists have been mounting a slow-motion Tet offensive of spectacular attacks on markets, bridges, and mosques, knowing that the media report each such attack as an American defeat. The fact is that al Qaeda is steadily losing its grip in Iraq, and these attacks are alienating its erstwhile Iraqi supporters. But the terrorists are counting on sapping our will as the VC did, and persuading America to choose to lose a war it could win.

The Tet offensive involved 100 towns with the fighting continuing for two months. And we did not end our involvement in the Vietnam War for another five bloody years. Yet, we never had a chance of subduing the opposition of our presence in Indochina.



Has Kagan and Kristol figured out that many Iraqis – including those who hate Al Qaeda – see as us an occupying force? If we leave, Osama bin Laden is not going to reign in Baghdad. But also long as we stay - Al Qaeda has a cause in Iraq.



Al Qaeda wanted American boots on the ground in a Muslim nation. President Bush was really stupid to listen to these two neocons and their ilk over four years ago as he gave Al Qaeda exactly what they were counting on. And if we stay as Kagan and Kristol plead that we do – we play into Al Qaeda’s hands. Kagan and Kristol have got nothing right so far. So why should they start making sense now?

by PGL on June 17, 2007 12:59 AM

Mark Thoma treats us to an exchange between Martin Wolf and Edmund Phelps that revives the savings glut argument. Martin writes:

The “savings glut” hypothesis is associated with Ben Bernanke, now chairman of the Federal Reserve. But the idea was floated earlier by others. Brian Reading, of Lombard Street Research, lays out the line of argument in a recent note*. A substantial excess of savings over investment has emerged, he says, predominantly in China and Japan and the oil exporters ... This has led to low global real interest rates and huge capital flows towards the world’s most creditworthy and willing borrowers, above all, US households. The short-term effect is an appreciation of real exchange rates and soaring current account deficits in destination countries. To sustain output in line with potential, domestic demand in those countries must also be substantially higher than gross domestic product.

About two years ago Daniel Gross criticized any attempt to excuse America’s low national savings rate:

The savings glut may be an accurate and subtle take on the world's economic imbalances. But less subtly, it minimizes the impact of the potentially destructive monetary and fiscal policies pursued by the U.S. over the last five years. It also lays the responsibility for change squarely on the backs of foreigners and makes a virtue out of what appear to be our own failings. No wonder Bernanke is so popular at the White House.

Brad DeLong added to Daniel’s discussion the following:

Daniel Gross writes about the "savings glut." But world savings are not that high: the swing of the U.S. federal budget from $200 billion annual surplus to $350 billion deficit alone - that's a decline in savings equal to 30% of China's entire current exchange rate GDP. It's not so much a global savings glut as a worldwide investment shortfall.

To suggest that we have a savings glut that would lead to a recession unless we continue fiscal expansion presumes some sort of liquidity trap where lower interest rates will not encourage more investment demand. That may have been a plausible explanation where short-term interest rates were less than one percent (see our chart). Over the past three years, however, we have seen a significant increase in short-term interest rates. In other words, monetary policy has been trying to restrain investment demand. So explain to me why a rise in national savings combined with an easier monetary policy would be a bad idea?

by PGL on June 16, 2007 01:16 PM

AB read T-bone lets us know that Fact Check actually does its job:

Republican presidential candidate Sen. John McCain has said that the major tax cuts passed in 2001 and 2003 have "increased revenues." He also said that tax cuts in general increase revenues. That’s highly misleading. In fact, the last half-dozen years have shown us that we can't have both lower taxes and fatter government coffers. The Congressional Budget Office, the Treasury Department, the Joint Committee on Taxation, the White House’s Council of Economic Advisers and a former Bush administration economist all say that tax cuts lead to revenues that are lower than they otherwise would have been – even if they spur some economic growth. And federal revenues actually declined at the beginning of this decade before rebounding. The growth in the past three years that McCain refers to brings revenues back in line with the 40-year historical average as a percentage of gross domestic product.

The author – Lori Robertson – does a nice job of documenting how certain Republican politicians are spinning. Lori also has a decent list of sources as to what economists have been saying. We could say that John “Straight Talk Express” McCain should be ashamed of such dishonesty, but then this is not the first issue where he is flat out lying to the voters. Nor is he the only Republican Presidential candidate who is telling these Laffer lies.

by PGL on June 16, 2007 12:20 AM

Stop the presses! I agree with George Will on something:

Some say he is the Republicans' Rorschach test: They all see in him what they crave. Or he might be the Republicans' dot-com bubble, the result of restless political investors seeking value that the untutored eye might not discern and that might be difficult to quantify but which the investors are sure must be there, somewhere, somehow. One does not want to be unfair to Thompson, who may have hidden depths.

Well let’s not go overboard trying to be fair to Fred Thompson. As a loyal Law and Order viewer, I can testify that Fred Thompson cannot act. And just tosses out all sorts of meaningless one-liners with no meaning. But then again – the same can be said about Mitt Romney.

by PGL on June 15, 2007 09:31 PM

Political bloggers of all stripes, and Dem oppo researchers in particular, have an interesting post to read over at The Politico. The post, "Excerpts from the NRSC Campaign Internet Guide" includes a wealth of tips for campaigns interested in leveraging...

June 15, 2007 02:37 PM

This post looks at abortions: the number of abortions, the rate of abortions per thousand women age 15 to 44, and the rate of abortions per thousand live births. Figures are broken down by Presidency. Why abortions? I think most people feel that fewer abortions is better than more abortions. Some want abortions made illegal altogether, but others think the way to go is, as Bill Clinton said, to keep abortions "safe, legal and rare."



I've already had posts on abortion before. For instance, recently I noted that the likelihood of abortions goes down as real income rises. I also had an older post looking at abortions by Presidency. This one is different in two regards - one is that the data goes farther back, and the other is that I've since learned to put graphs up on blogger.



So here goes...















In summary form:















What's going on? Well, once abortions became legal following Roe v. Wade, the rate skyrocketed. More doctors and clinics became providers. But it leveled off during the Reagan administration. Since then its dropped... a bit.



The data very incomplete (only 2 years of GW's term) but even if we assume Reagan's leveling off was part of some natural adjustment process in the series, the fact that neither GHW nor GW beats Clinton... its at least suggestive that Republican policies (making birth control harder to come by, focusing on abstinence only education, etc.) are not better at controlling the rate of abortion than Democratic policies.



-------------



Correction. Reader One Salient Oversight noticed that I had posted the same chart three times. I have since made the correction. Apologies.



Update. I forgot to note the data source... all data comes from the Census Bureau.

by cactus on June 15, 2007 01:49 PM

Mallory Factor sounds the alarm bells:

Unless congressional Republicans aggressively focus on extending expiring tax cuts, taxpayers will soon enough be facing the biggest tax hike in American history. Recall the history here: When President Bush’s first tax cuts were enacted in 2001, the president had to agree to a sunset clause providing that, unless extended, the tax cuts would expire at the end of 2010. This unfortunate provision nevertheless helped secure enactment of the tax bill by making the fiscal impact of the tax cuts on the budget seem smaller than it would otherwise have been counted under congressional rules.

The fiscal impact of the past six years has been rather massive in terms of the size of the General Fund deficit. Which means we never cut taxes – we only deferred them. But this is not the only thing Mr. Factor gets wrong:

But the impact of this massive tax hike on the economy would be severe, and could inevitably lead to an economic slowdown.

Right. Don’t you recall the massive recession that followed the 1993 tax increase? If you do, I don’t seem to. Mr. Factor then goes on to say certain Democrats have it all backwards:

The Democrats have it exactly backward: Tax cuts should be the impetus for entitlement reform rather than an excuse to avoid it or expand the government.

“Entitlement reform” is really a reduction in the Social Security benefits that folks have been paying for in the form of higher payroll “contributions” over the past generation. Mr. Factor is actually advocating a backdoor employment tax increase. But what else is new?

by PGL on June 15, 2007 01:28 PM

This one is by Reader Dan



Adopting best practice procedures in our healthcare system is complicated and deserves careful attention. Several problems come to mind immediately:

1. Determining what is best practice over time is problematic in general medicine, and often enough what is called best practice now later falls out of favor or is replaced by a ‘new’ procedure. Journal of Medicine Association (JAMA) is a good source for this issue, but I do not have a subscription. This blog is worth a read.

2. Best practice is established and arbitrated in a variety of ways. A policy goal might be to help develop best practice and establish baseline quality as in the UK.

3. Chronic conditions such as diabetes versus acute conditions such as heart surgery or use of stents plays an important role in how we allocate resources. Innovation is rewarded in particular ways that impact care and our health.

4. Efficiency is gained in various ways, some negative and some positive, but to date costs are huge.

5. Profit margins defines what is a medical problem and what is not in the form of research and insurance payment schedules. Maximizing % of profit margin appears to predominate as opposed to more marginal gains that might have better overall outcomes over time.

Incentives to treat soldiers are a huge issue:



Regulars know that I prefer starting with an example before I get to aggregates or huge policy issues. This one is dear to all our hearts I am sure. While this is specifically stated as a government oriented problem using Tricare insurance for military, retirees, families and others, it is not specific to government functions because private insurers are only marginally better in this arena.



EMDR is one of the most researched interventions round the world for PTSD and in particular combat PTSD. This best practice guideline recommending CBT and EMDR, published in March 2005 by the UK ’s National Institute for Clinical Excellence names it specifically as one of treatment of choice. Good general information is here.



The VA system approves its use finally at a late date in the research as one of four preferred treatments. Psychopharmacology is a resource mentioned. AMA, APA, NASW approve its use.



At EMDRIA’s (organization advocating the use of this method) request in 2005, TRICARE did a review of EMDR for the treatment of PTSD and concluded that the treatment was “unproven”. In April 2006, TRICARE agreed to do a “more in-depth review, but in an August 31, 2006 policy document TRICARE said that "EMDR is not psychotherapy". The credential as regards innovation in our health system is for another post, but thought some might want to check the issue with their own sources (so I mention it here) since military in particular will be of interest to several readers.

With credential established, I find this interesting:

Soldiers returning from war are finding it more difficult to get mental health treatment because military insurance is cutting payments to therapists, on top of already low reimbursement rates and a tangle of red tape.



Wait lists now extend for months to see a military doctor and it can takes weeks to find a private therapist willing to take on members of the military. The challenge appears great in rural areas, where many National Guard and Reserve troops and their families live. To avoid the hassles of Tricare, the military health insurance program, one frustrated therapist opted to provide an hour of therapy time a week to

Iraq and Afghanistan veterans for free. Barbara Romberg, a clinical psychologist in the Washington, D.C., area, has started a group that encourages other therapists to do the same.

Instead of quoting from an article, from personal knowledge the problem goes like this:

A psychologist or clinical social worker becomes specially trained and licensed for either treatment modality. Market rate without insurance in this area is pegged at $125-150/session. Insurance payment is a percentage of this market rate, or set at $89.50/hr./session for Blue Cross/Blue Shield of MA, and Tricare will pay a maximum of about $79 hr./session. The billing is done on face-to-face time, so the costs of billing and quality controls are included in this charge, with frequent attendant problems regarding billing procedures and changing quality control criterion. It is a significant cost factor in all insurance and more so in Tricare. Many therapists in this area do not accept this insurance, and many are not accepting any insurance as private practitioners. Remember most private practitioners pay their own health insurance costs (about $12,000/year family), rent, etc.

There are several problems involved, and I do not see either government or private health care dealing with it adequately. What are the incentives for a hospital (where conditions also are becoming much harsher in this area) or private practitioner to provide this service as a normal part of care? Is it important, and how should we respond?

by cactus on June 15, 2007 11:58 AM

This post looks at the relationship between the tax burden and economic growth. Sadly, this one has no pretty graphs and pictures... so its relatively boring. Sorry. I'm just not inspired this afternoon.



Anyway, call this post a follow up to yesterday's post on tax cutting by administration, in which we saw that Republicans are (no surprise) the party of cutting taxes, where taxes were measured as the total taxes other than social security collected plus changes in the national debt held by the public, all as a percentage of GDP. This measure of taxes takes into account the fact that a run-up on debt has to be paid off at some point.



In terms of Economic growth, the story is different. Beginning with Ike, Democratic administrations have tended to outperform their Republican counterparts when it comes to real GDP per capita growth - only the best performing Republican administration, Reagan's, performed better than Carter, the worst performer among Democratic Presidents. Regular readers know I've since then looked at real GDP per capita many different ways, the the relationship doesn't seem to disappear.



Because the government can boost real GDP per capita simply by borrowing and spending, a better measure of economic growth is real (GDP less change in the national debt burden) per person. On that series, JFK/LBJ, Clinton, and Carter all outperformed their Republican counterparts.



The fact that Reps cut taxes more than Dems, and Dems have done better on economic growth, would suggest that tax rates and economic growth are positively correlated. In other words, higher tax rates, not lower, are associated with faster growth.



And a first pass at the data seems to indicate that's true. The correlation between the % change from the previous year in our measure of taxes and % change from the previous year in real GDP per capita is 0.06699. The correlation between the % change from the previous year in our measure of taxes and % change from the previous year in real GDP less change in debt per capita is .34157, using data from 1951 to 2006. (I probably should have gone with 1952... sorry... I don't feel like redoing it for one year.)



So a first pass would indicate that the correlation between percentage changes in tax rates and percentage changes in real GDP per capita was positive, albeit weak. In other words, tax rates and real GDP per capita tended to rise and fall in (weak) tandem. The relationship between taxes and real GDP less changes in debt per capita is somewhat stronger.



Note... I'm completely skating over the whole issue of what sort or mix of taxes makes the most sense, which is definitely not a topic for today.



But... anyone except a fanatic will readily admit when tax rates are too high, they discourage economic activity, and tax cuts will benefit the economy. Conversely, when tax rates are too low, they lead to more debt or too little government, and therefore a tax hike will be helpful. But what's too high or too low? Who knows? What I do know is that taxes (not counting SS) plus the change in the national debt as a share of GDP ranged from just under 10% to just over 17% of GDP in our sample.



So let's look at how the % change in this tax rate is correlated with the % change in growth for tax rates that are low or medium or high for the observed sample... Here's a summary of the results...







How do you read this? There are seven observations for which (Tax + Change in Debt)/GDP is between 10.5% and 11.5%, and the correlation for those seven observations between the % change in (Tax + Change in Debt)/GDP and the % change in Real GDP per capita is 0.07. The graph seems to indicate that as long as (Tax + Change in Debt)/GDP is less than 13.5%, raising taxes is correlated with faster growth and cutting taxes is correlated with slower growth. Somewhere above that point (and its not entirely clear where), higher taxes are associated with slower growth. Correlation does not imply causality, but there must be some reason Dems have faster growth than Reps, and the idea of a Laffer curve with respect to growth must fit with almost everyone's intuition.



If we assume that 13.75% is the fastest growth point, based on what we saw here, the following Presidents moved tax rates throughout their term in the direction most likely to lead to faster growth in real GDP per capita: Ike, JFK/LBJ, Carter and Clinton. The following Presidents favored policies that moved the country away from this faster growth point: Nixon/Ford, Reagan, GHW, GW.



Interestingly enough, the same graph for real gdp less change in debt per capita has a positive correlation at every point but one... and the correlations tend to be stronger for most points (by far) than those on the graph above. I guess what that means... much of our growth rate has been funded by debt... but we knew that.

by cactus on June 15, 2007 01:00 AM

Via Steve Benen, this story...

Given the recent rhetoric in Republican circles about immigration policy, I found this story spectacularly amusing.

The California Republican Party has decided no American is qualified to take one of its most crucial positions — state deputy political director — and has hired a Canadian for the job through a coveted H-1B visa, a program favored by Silicon Valley tech firms that is under fire for displacing skilled American workers.



Christopher Matthews, 35, a Canadian citizen, has worked for the state GOP as a campaign consultant since 2004. But he recently was hired as full-time deputy political director, with responsibility for handling campaign operations and information technology for the country’s largest state Republican Party operation, California Republican Party Chairman Ron Nehring confirmed in a telephone interview this week.



In the nation’s most populous state — which has produced a roster of nationally known veteran political consultants — “it’s insulting but also embarrassing … to bring people from the outside who don’t know the difference between Lodi and Lancaster … and who can’t even vote,” said Karen Hanretty, a political commentator and former state GOP party spokeswoman.

Wait, it gets funnier. Matthews was hired by Michael Kamburowski, the state GOP’s chief operations officer, who is … wait for it … an Australian citizen.

by cactus on June 15, 2007 12:28 AM

John Edwards proposes what will surely be a controversial idea:

Edwards' plan would remove long-term patents for companies that develop breakthrough drugs and then reap large profits because of the monopolies those patents provide, according to a statement by Edwards obtained Wednesday evening.

This article discusses other aspects of the Edwards health care proposals. But something tells me that the economist blogs will focus on this aspect. Ending monopolies may sound good but we will surely that fans of the patent system asking about the incentives to do research on new drugs.

by PGL on June 14, 2007 08:03 PM

Jeffrey McCracken begins his piece entitled Detroit Pursues Sweeping Cuts In Union Talks with:

Detroit's Big Three, facing their worst crisis in decades, are seeking unprecedented concessions from the United Auto Workers union in a bid to narrow what they say is a $30-an-hour labor-cost disadvantage against Asian rivals like Toyota Motor Corp. and Honda Motor Co., auto executives say.

$30 an hour labor cost disadvantage sounds serious but then Dean Baker does some fact checking:

It's contract time for the United Auto Workers and the Wall Street Journal is working hard to build the case for big pay cuts. The paper tells us that compensation for UAW members is in the range of $70-$75 an hour. Well that's serious money. At that rate, with overtime, an autoworker can earn as much in a year as an incompetent CEO gets in a day. Clearly things are out of line. Seriously, $70-$75 an hour is pretty good pay, but it is also not really what UAW members earn. The base pay for these workers is around $25 an hour. To get to $75 an hour, you would have to believe that autoworkers get $100,000 a year in benefits. Is that plausible? Assume that they get $15k for their pension and $25k for their health insurance, that gets you to $40k. Where is the rest of the $100k? Well, what the auto industry does to get this figure is they average in their health care and pension costs for their retirees. These are real expenses for the industry, but they have nothing to do with the compensation received by current workers. News reporting on the UAW contracts should clearly distinguish between the compensation received by current workers and the legacy costs from retired workers. UAW members are well-paid, but averaging in the legacy costs hugely exaggerates their earnings in the mind of readers.

So if McCracken comes up with a $30 per hour differential by inflating UAW compensation by $30 an hour, doesn’t it sound like we have very similar wages to those Japanese auto workers? If so, the woes of GM and Ford lie elsewhere.

by PGL on June 14, 2007 07:28 PM

Are conservatives or progressives a majority in America? You won't find a stronger case for the progressive majority, on the internet at least , than Media Matters' footnote and link rich "The Progressive Majority: Why a Conservative America is a...

June 14, 2007 06:23 PM

Every time I post something stating that the surge is not working, someone disputes it. Apparently I'm not the only one who has doubts:

Three months into the new U.S. military strategy that has sent tens of thousands of additional troops into Iraq, overall levels of violence in the country have not decreased, as attacks have shifted away from Baghdad and Anbar, where American forces are concentrated, only to rise in most other provinces, according to a Pentagon report released yesterday.



The report -- the first comprehensive statistical overview of the new U.S. military strategy in Iraq -- coincided with renewed fears of sectarian violence after the bombing yesterday of the same Shiite shrine north of Baghdad that was attacked in February 2006, unleashing a spiral of retaliatory bloodshed. Iraq's government imposed an immediate curfew in Baghdad yesterday to prevent an outbreak of revenge killings.

...

Iraq's government, for its part, has proven "uneven" in delivering on its commitments under the strategy, the report said, stating that public pledges by Prime Minister Nouri al-Maliki have in many cases produced no concrete results.



Iraqi leaders have made "little progress" on the overarching political goals that the stepped-up security operations are intended to help advance, the report said, calling reconciliation between Shiite, Kurdish and Sunni factions "a serious unfulfilled objective." Indeed, "some analysts see a growing fragmentation of Iraq," it said, noting that 36 percent of Iraqis believe "the Iraqi people would be better off if the country were divided into three or more separate countries."



The 46-page report, mandated quarterly by Congress, tempers the early optimism about the new strategy voiced by senior U.S. officials. Defense Secretary Robert M. Gates, for instance, in March described progress in Iraq as "so far, so good." Instead, it depicts limited gains and setbacks and states that it is too soon to judge whether the new approach is working.

So... the best they can tell us is... "so far, so good." How good?

Violence fell in Baghdad and Anbar province, where the bulk of the 28,700 more U.S. troops are located, but escalated elsewhere as insurgents and militias regroup in eastern and northern Iraq. In Anbar, attacks dropped by about a third, compared with the previous three months, as Sunni tribes have organized against entrenched fighters from al-Qaeda in Iraq, the report said.



Overall, however, violence "has increased in most provinces, particularly in the outlying areas of Baghdad province and Diyala and Ninewa provinces," the report said. In Diyala's restive capital of Baqubah, U.S. and Iraq forces "have been unable to diminish rising sectarian violence contributing to the volatile security situation," it said.

But its limited, right?

It cited "significant evidence" of attacks on Sunni Arabs by the predominantly Shiite government security forces, which have contributed to the displacement of an estimated 2 million Iraqis from their homes.

And on the Shia front...

Shiite militias, which have engaged in the widespread killing and sectarian removal of Sunni residents in Baghdad, now enjoy wide support in the capital, the report said. "In Baghdad, a majority of residents report that militias act in the best interests of the Iraqi people," it said, while only 20 percent of respondents polled nationwide shared that view. Maliki's promises to disarm militias have not produced a concrete plan, the report said.

And since we're an econ blog...

Iraq's economic progress is also mixed, with some success in controlling inflation, while oil production remains stagnant and demand for electricity outstrips lagging supply.

My guess... like everything else the Pentagon has given us since this mess started, it probably plays up the positives and downplays the negatives. In other words, my guess is that this is the best possible spin. And the best possible is still awful.



I used to say that if things were going as well as the cheerleaders told us, you'd see some of them taking their families to Iraq for vacation. Now things have deteriorated to the point where even that isn't true. Since they won't listen to anyone else, its time to send all the cheerleaders and architects - the GWs and the Rummies and Freddie Kagans and Bill Kristols over to Iraq, and not let them leave until they solve the problem they created. Maybe if they had some skin in the game...

by cactus on June 14, 2007 03:02 PM

Here's a poll of right wing bloggers. I found question 7 - who is going to win the Republican nomination, most interesting.



53% of them think its Fred Thompson. Rudy Giuliani comes in second (29%) and Mitt Romney comes in third (14%), McCain in fourth (4%) and everyone else is at 0.



Now, I'll admit, I'm not following either the Dem or the Rep race as closely as these people, but I just don't see it at all. I don't see Thompson winning it. I don't see Rudy or McCain. My bet... Romney gets it.



Your thoughts?

by cactus on June 14, 2007 12:28 PM

By way of Avedon Carol I arrive at blah3 which in turn leads me to this from ABC News:

A terrorist watch list compiled by the FBI has apparently swelled to include more than half a million names.



Privacy and civil liberties advocates say the list is growing uncontrollably, threatening its usefulness in the war on terror.



The bureau says the number of names on its terrorist watch list is classified.



A portion of the FBI's unclassified 2008 budget request posted to the Department of Justice Web site, however, refers to "the entire watch list of 509,000 names," which is utilized by its Foreign Terrorist Tracking Task Force.



A spokesman for the interagency National Counterterrorism Center (NCTC), which maintains the government's list of all suspected terrorists with links to international organizations, said they had 465,000 names covering 350,000 individuals. Many names are different versions of the same identity -- "Usama bin Laden" and "Osama bin Laden" for the al Qaeda chief, for example.

by cactus on June 14, 2007 12:13 PM

This post looks at tax cuts by Presidential administration. Cutting taxes is one of the key stated platforms of the Republican Party, along with smaller government, faster economic growth, fiscal responsibility, and some social issues such as reducing the number of abortions, cutting the rate of unwed motherhood, maintaining a healthy dislike of homosexuals, and as of late, apparently teaching, um, "the controversy" over the Theory of Evolution.



Of course, words and deeds don't always go hand in hand. Here at Angry Bear, we've shown that the Republicans do not produce smaller government (by most measures even St. Ronald can't best Bill Clinton), they produced slower economic growth by any number of measures regardless of how one massages the data, they certainly have not been the party of lower debt, or fewer abortions, or less unwed motherhood.



I guess I can make a snide remark at this point about hoping that when I eventually find some data, I can at least show the Republicans are sincere about homophobia and ignorance, but I just don't have it in me. I will state, even before we start, that cutting taxes is indeed something at which Republican administrations excel.



The approach I took was as follows. I looked at the sum of individual and corporate income taxes, plus excise taxes and other taxes; basically, everything except social security taxes from OMB Table 2.1. Following Milton Friedman's admonition that any debt must eventually be repaid, I then subtracted added the change in the national debt from the previous year - that data came from OMB Table 7.1.



I then looked at this data... all non-social security taxes plus the change in national obligation two ways. In one case, I looked at it as a share of GDP. In the second case, I adjusted it for inflation (using the CPI, and divided through by the population, obtained from the BEA's NIPA Table 7.1. When selecting CPI and population, I took into account the fact that the end of the fiscal year changed from the second quarter of the calendar year to the third quarter of the calendar year in 1976.



OK. I think that's enough blah blah blah. Here's a picture of non-SS taxes plus changes in debt obligation as a percentage of GDP.







Here's a summary of taxes plus changes in debt as a percentage of GDP.







Here's a pic of real non-SS taxes plus changes in the national debt per capita.







Here's a summary of real taxes plus changes in debt per capita.







A few comments/observations. No doubt you'll have some of your own.

1. Dems are at the bottom of each table. Even JFK/LBJ. But for them, growth in the first series was negative, and in the second it was positive... in other words... they did cut taxes, and it raised a lot more money afterwards.... basically, the Laffer curve and a situation where the taxes were too high to start with.

2. Following up the Laffer curve... check out the pattern after JFK/LBJ, especially beginning with Reagan. It seems pretty clear that cutting the tax rate (as a percentage of income) leads to less real taxes being collected, and raising tax rates leads to more real taxes being collected... after JFK/LBJ had their tax cuts, we've been on the left side of the Laffer curve. Gee... where have I read that before? Oh yeah... both PGL and I have had posts about that right here at Angry Bear.

3. Yes, GHW raised some tax rates, but he cut others. And there are many ways to cut taxes... cut enforcement for one thing.

4. Gingrich's Republican revolution seems to have allowed Clinton to up tax rates...

5. St. Ronald the Reagan was not the big tax cutter that Republicans believe he was. As a percentage of GDP, he came in third, after GW and Nixon/Ford. In terms of revenues collected, he came in 5th, and GHW came in third. My guess... St. Ronnie's spending habits... Why hasn't GW, who has similar spending habits suffered as much? I think it may have something to do with interest on the debt... St. Ronnie had to borrow at a much higher rate of interest. Alan Greenspan literally bent over backward for GW.



For grins, and I do mean grins, I did a means test on the two series. (I only looked at it by administration.) For the test, H0: mean of growth rate in taxes for Dems = mean of growth rate in taxes for Reps



Table 1a for the first series...







Table 2a for the second series...







Conclusion of the tests... we should reject the hypothesis that Dems and Reps have similar policies on taxes with a probability of just under 95% and a probability of just under 98%, respectively. (I don't expect most of the folks who objected to slightly stronger results showing that Dems and Reps produce different real economic growth rates to object to the results of this test.)



Conclusion of the post... after much searching, we finally stumble on a series where Republican Presidents perform as advertised. They cut taxes. I wonder if that's enough, in the minds of most Republicans. I imagine for some it is. But ask yourself... if you could get lower taxes at the cost of lower growth rates in real GDP per capita and median income and the like, would you do it? What does your answer, yes or no, say about you?

by cactus on June 14, 2007 01:50 AM

Rudy pledges the following:

1. I will keep America on offense in the Terrorists’ War on Us.

2. I will end illegal immigration, secure our borders, and identify every non-citizen in our nation.

3. I will restore fiscal discipline and cut wasteful Washington spending.

4. I will cut taxes and reform the tax code.

5. I will impose accountability on Washington.

6. I will lead America towards energy independence.

7. I will give Americans more control over, and access to, healthcare with affordable and portable free-market solutions.

8. I will increase adoptions, decrease abortions, and protect the quality of life for our children.

9. I will reform the legal system and appoint strict constructionist judges.

10. I will ensure that every community in America is prepared for terrorist attacks and natural disasters.

11. I will provide access to a quality education to every child in America by giving real school choice to parents.

12. I will expand America’s involvement in the global economy and strengthen our reputation around the world.

Conservative James Joyner has his doubts over each one – especially #12:

How could we be more involved in the global economy? And how are you going to do this while shutting down our borders, chasing illegal aliens, and stopping the import of energy from abroad.

To explain, let’s go back to #2:

No, you won’t. And, frankly, I wouldn’t want to give you (or anyone else) enough power to “identify every non-citizen in our nation.” There are over 300 million people living here, stretched across a continental landmass. How on earth would you do that?

Excellent! I heard Rudy talking about #1 where he claimed we Democrats were for reducing our commitment to fighting the war on terrorism. Way to go Rudy – just flat out lie to the American people!



Update: I want to be fair and balanced so I should say something nice about Mitt Romney as well. Eric Kleefeld notes Barney Franks has done this for me:

The real Romney is clearly an extraordinarily ambitious man with no perceivable political principle whatsover. He is the most intellectually dishonest human being in the history of politics.

Update II: Greg Sargent has some details on Rudy’s dishonest Dem bashing.



Update III: AB reader Divorced one like Bush reminds us of the Contract On America. Compare Rudy’s commitments #3 and #4 to “the fiscal responsibility act”. When a Republican says he can balance the budget and cut taxes simply by reducing “waste Washington spending”, that Republican has told a big flat lie. Way to go Rudy!

by PGL on June 13, 2007 08:53 PM

The surge in Iraq has sputtered. (Regular readers may recall I predicted it would do so before it began.) Things seem to have hit the fan over there and nobody is pretending otherwise any more. Of course, its still the fault of the naysayers - somehow, if we only clapped harder, things would be alright. Ah well.



So I decided to revisit GW's National Strategy for Victory in Iraq from back in November of 2005 to see where we should be at this point...



First, a note... the document is chock full of quotes by GW. Apparently he was viewed as some sort of seer or something. For instance, there's this from June 2003:

Our mission in Iraq is clear. We're hunting down the terrorists. We're helping Iraqis build a free nation that is an ally in the war on terror. We're advancing freedom in the broader Middle East. We are removing a source of violence and instability, and laying the foundation of peace for our children and grandchildren.

And here's the key part... how success is defined...

As the central front in the global war on terror, success in Iraq is an essential element in the long war against the ideology that breeds international terrorism. Unlike past wars, however, victory in Iraq will not come in the form of an enemy's surrender, or be signaled by a single particular event -- there will be no Battleship Missouri, no Appomattox. The ultimate victory will be achieved in stages

It then goes on to give some short, medium, and long term signs of progress. Here's the short term list:

An Iraq that is making steady progress in fighting terrorists and neutralizing the insurgency, meeting political milestones; building democratic institutions; standing up robust security forces to gather intelligence, destroy terrorist networks, and maintain security; and tackling key economic reforms to lay the foundation for a sound economy.

I guess the only question one can ask is - what the heck comes before the short term?



Among the consequences of failure is this:

A failed state and source of instability for the entire Middle East, with all the attendant risks and incalculable costs for American security and prosperity.

Can anyone say that hasn't happened already?



The report does state:

Iraq is likely to struggle with some level of violence for many years to come.

I wonder if this is the "some level" they had in mind when they wrote this nonsense.

by cactus on June 13, 2007 08:51 PM

Someone expain the Princess Di phenomenon to me, please. Salon has an interview with Tina Brown, occasioned by her new biography of the late Princess and it brought back all the memories of the time right after her death. I never understood the outpouring of emotion on her demise, particulalrly form non-UK citizens. Yes, Dianna did good work with AIDS charities. But she was a member of the Royal family. She lived a gilded lifestyle paid for by the Kingdom. She literally had no material need and very few material desires that could not be satified almost immediately. She didn’t sacrafice a thing to her charity work — her financial situation ensured that any financial contribution was not even a small hardship, and she had no real job so her charity work did not take up free time or time away from her family. And it wasn’t as if it could be argued that she had earned her position; she was new Gates or Bono or Clooney or Scaife. Unlike those people, she had done nothing other than marry well.

I don’t hold any ill will toward the woman, and I am not trying to minimize the good work she did. And, of course, it is a terrible tragedy when someone dies that young. But considering that her position was based on the notion that some people are inherently superior to others, and considering that her lavish lifestyle was maintained at public expense, her charity work was quite literally the least she could do.

So why has she been diefied in her death? Someone please explain, because I just don’t understand.

by Kevin on June 13, 2007 06:08 PM

John Scalzi has agreed to go to the Creation Museum and give a report:

I will go to the Creation Museum and file a full, detailed and delightfully snarklicious report of the trip IF AND ONLY IF I receive at least $250 in donations via PayPal by 11:59pm NEXT FRIDAY, June 15, 2007. ALL the proceeds (minus PayPal’s processing bite) will then be donated to Americans United for Separation of Church and State, an organization which for sixty years has striven to keep the chunky peanut butter of religion out of the dusky chocolate of good government.

Bear in mind that $250 is the absolute minimum that I will accept to drag my heathen ass to that place for you people; I’d much rather all y’all donate more. A lot more. Because, damn. In fact, I’ll sweeten the deal by saying that if I get $1,000 in donations, everyone who donates will get two special extras from me: an appropriately-themed short fiction piece and something else that I’ll think up of later but which will probably be ridiculous and stupid and hopefully a little funny. So there you have it — a reason (two, actually) to donate beyond making me haul my carcass out to this travesty of science.

Now to the questions:

How do I donate?

My Paypal address is “detrius@scalzi.com.” Go to PayPal and send me money in the usual fashion there. Please put “MUSEUM DONATION” in the comment box when you send the money, so I can keep track of who is sending me donation money. Also include your regular e-mail address if you want the extras, should the donations crack $1k.

So give. Not only is it for a good cause — religious freedom — but Scalzi does sarcasm well. And few things on this planet are more worthy of sarcasm than the Creation Museum ….

by Kevin on June 13, 2007 12:47 PM

CoRev posted this at his blog and asked if it could be posted here too. I'll do it, but only because I have some comments at the end.



---------------------------





In the military there are shaped charges to maximize damage. In the

Main Stream Media there are shaped articles to create the same results.

Here's the lede:

Army Sees First Big Slip In Recruiting in

2 Years

Big Slip?



Inside the article we find this:

The Army fell short of its

recruiting goal for May, its first significant slip in two

years.

Not only the first ?significant? slip in two years

we find that the other services met or exceeded their goal for the

month, (and the past two years?). And what was that HUGE deficit?

The Army signed up 5,101 recruits. That was short of its goal of

5,500,...

for those math challenged among us that is 399

less than projected. 399 is "Big" or "significant"?



I think not when we find this in the very same article.

"May

is historically a difficult month to recruit," said Maj. Anne Edgecomb,

an Army spokeswoman, citing high school graduation and other spring

events that tend to make it harder to attract recruits....



The Marine Corps had a banner month in May, signing up 2,225 recruits,

many more than its goal of 1,665. The Navy hit exactly its target of

2,709, and the Air Force met its goal of 2,451.

I think the Guard Units are still having some trouble recruiting. the

article provided this piece of information that confirms that thought.

The Army National Guard met 88 percent of its goal and the

Air National Guard met 77 percent of its goal.

All of

this from the WaPo here.



--------------------



The problem with CoRev's post is that he's looking only at this year. Standards have already dropped. I don't have time to go look at a .mil site right now, but I think CoRev is ignoring a few details about military recruiting, namely that the military is ignoring a few details about a number of its recruits these days.

by cactus on June 13, 2007 12:28 PM

Charles at Political Arithmetik shows how poll reporting can distort political reality in his post on the latest LA Times/Bloomberg poll on approval/disapproval of congress. He explains that the LA Times headline "Approval of Congress Lowest in a Decade" overstates...

June 13, 2007 11:29 AM

Ramesh Ponnuru takes on the - for him - gutsy role of criticizing others for their combination of vanity and flawed logical analysis. Irony, then, is not dead.

His ire is roused by Steve Landsburg’s calculation of the relative economic value of illegal immigration and its justification as a ban on immigration. Landsburg first notes, correctly, that the “stealing our jobs” argument is somewhat hampered to begin with by the fact that every study of the economic impact of illegal immigration reveals that it is a major economic benefit to America (the taxes paid by illegal workers vastly outweigh the benefits they receive, no matter how loudly racists yawp to the contrary). Even restricting the analysis only to the question of depressed wages for low-skilled American workers - presumably the strongest argument against immigration - works against the anti-immigration position over the long run. But Landsburg finally puts the issue in the most favorable terms possible to his opponents and asks, if you ignore all secondary and other effects and calculate only the short-term marginal utility of wage increases for immigrant workers (from moving into a higher-wage market) vs. wage decreases for local workers (facing competition from low-paid immigrants), what is the relative gain or loss to each? He comes up with a rough answer that the immigrants gain about 5 times as much as the locals lose, in relative terms - which means, of course, that from the perspective of those who offer the “stealing our jobs” argument for restricted immigration, the loss in wages to one local worker is 5 times more important than a similar gain by one immigrant. He goes on to note that the Constitution’s assignment of 3/5 value to blacks, compared to whites, for census purposes was regarded as offensively racist, and asks whether this is relevant to the nativists’ assignment of 1/5 value to Mexicans, compared mostly to whites, for wage-tallying purposes.

Ponnuru is not amused at being asked to explain himself, and offers this response (in its entirety):

Steven Landsburg proves, to his own satisfaction, that immigration restrictionists must value the life of an immigrant at one-fifth the value of a native-born American. “[T]here was a time when the U.S. Constitution counted a black slave as three-fifths of a full-fledged citizen. Alabama Gov. Bob Riley has recently apologized for the ravages of slavery. How long till politicians apologize for the ravages of our restrictive immigration policies?” There is, however, an alternative to the hypothesis that restrictionists place a low value of immigrants’ lives, which is that we don’t think about the issue in the narrow terms Landsburg wants to confine us to, and which seem contrived to puff up his moral vanity.

Note that, true to form, Ponnuru offers no alternative analysis to demonstrate what the relative value of wage gains by immigrant workers would come out to be, to his satisfaction. He merely offers the standard right-wing response to inconvenient science: denunciation devoid of technical detail of any kind. But the rest of his response, oddly, is even worse. He does not seem to realize that he has essentially conceded that nativists are dismissive of Mexicans’ lives by way of his insistence that they are not so on economic grounds.

Landsburg’s argument is this (take notes, Ramesh): by every calculation of the impact of illegal immigration, the average immigrant benefits at least 5 times as much as the average local worker is harmed, even granting that immigrant labor depresses wages. (The reason: Mexican wages are so low to begin with that a few dollars per hour’s gain, for such a worker, is worth more to them than a few dollars per hour’s loss to the US-based worker; this is the economic concept of “marginal utility” - the less money you have, the more even a small gain is worth to you. This gap only widens when you take into account the fact that the wage depression is ameliorated by other factors, which Landsburg does not include.) The standard economic argument against immigration is that it does depress wages - but, as we’ve seen, only by about 1/5 as much as it increases wages for the immigrants. So, on a one-to-one basis, keeping Mexicans out in order to protect wages for US-based workers means valuing those Mexican workers’ gains at less than 1/5 those of locals - because treating immigrants’s benefits as equally as important as locals’s harms would redound overwhelmingly in favor of immigration.

Ponnuru responds that this isn’t the only reason they’re against immigration. So, apparently, they have other arguments that show immigration to be a bad thing. Very well, then: immigration is a bad thing - taking these (also conveniently unnamed) other arguments and the relative economic impact into account. But the economic impact favors immigrants by 5:1. So the (secret) other reasons must disfavor immigration by what amounts to a greater-than-5:1 ratio, commensurated to the economic impact (or, in simpler terms, by “a lot”). What could these be? The only other arguments generally offered are the racist ones (”diluting our culture” “a majority-minority country!” “¡bilingual education!”) and the rather convenient “rule of law” argument (we must make sure they stay illegal because they’re illegal; if we made them legal, they wouldn’t be illegal, but we can’t because of the rule of law). Which is to say that conservatives are willing to keep Mexicans in poverty either because it just galls them so much that they have fake Social Security Numbers (jeez, what would they do if they caught a Mexican with an expired yacht club membership card?), or because they’re racist, and in either case even in spite of the tremendous benefit that can be done for poor workers by allowing them to immigrate.

How Ponnuru thinks this is a response to the accusation that he values Mexicans’ lives lowly, I can’t imagine. His response is, literally, that he does not value their economic interests at 1/5 those of natives, but rather he values their economic interests fully and everything else about them at a level so low it outweighs the economic one! He actually says, quite openly, that his “non-narrow terms” of analysis come out against immigration even though the economic analysis is so heavily weighted in favor of it. What can those terms be other than “culture” and being a stickler for paperwork? And what can his argument mean but that he thinks those things are important enough to sweep away the vast and disproportionate benefits immigrants derive on economic grounds?

The supposed virtue of the economic argument against immigration was that it was simply cold, factual analysis - not driven by racism or mere animosity. Its weakness, of course, is that it is false. So Ponnuru calmly (though implicitly) invokes racism and animosity as factors even stronger than economics, as his proof that he doesn’t devalue economics. Nice going, Ramesh. You’re not good for much, but you can be counted on to say what you think without embarrassment. It’s helpful.

by KTK on June 13, 2007 01:39 AM

This post looks at spending by the federal government, subtracting off Social Security and the defense spending. And it does it two ways. One is as a percentage of GDP. The other is in real dollars per person.



Before I begin, a few comments. Regular readers know in the past few days I've been looking at federal spending, here in terms of number of Federal employees, and here in terms of number of Federal spending less social security as a percentage of GDP.



Now, as a liberal who is fiscally conservative, I really don't care about the size of government. The question is - are we being made better off? At times, smaller government is the way to do that. At times, larger government is the way to do that. (As noted on numerous other posts, the fastest annualized growth rates in the economy (whether one accounts for changes in debt or not) in the post WW2 era occured under JFK/LBJ and Clinton administrations. One increased the size of government a lot, one decreased it by more than any other President by the two measures I've looked at so far.



But small government is an article of faith to our conservative and libertarian friends, not to mention our troll who has on occasion been acting almost like one of our friends as of late. And the fact that Clinton outperforms all the Reps, including St. Ronald the Most High Reagan, doesn't fit with that faith. Fortunately, all is not lost... our friends feel the test is unfair. Spending should not include defense spending. Frankly, I'm not sure I agree.... it seems to me, for instance, that this is an argument that we should count GW's spending on Afghanistan, as that is spending that was thrust upon him. The corrolary, of course, is that this means counting the spending on Iraq, which was not thrust upon him and is being run poorly, and that had Afghanistan been managed well, that war might well be over as well. Also, some spending gets spent no matter what... and could go into military or civilian pots. Example might include shoring up levees (had it been done) in New Orleans, or various types of satellites. But we aim to please here at Angry Bear, so I'll do it.



The second problem our friends have identified ... dividing by GDP makes Presidents that produced better growth look better (in their eyes) when it comes to cutting spending as a percentage of GDP. Since our friends don't seem to accept the idea that that Democratic administrations growing faster in general was anything but a whimsical game of the gods, it is necessary to penalize those administrations that grew faster. Well, OK, as I noted, we aim to please... I'll also take a look at things dividing through by population rather than GDP.



A final note before we begin... data on government outlays comes from OMB Table 3.1, data on GDP comes from OMB Table 1.2, and CPI for computing inflation comes from this table at the BLS. Additionally, to adjust for population, I used 2nd quarter population data for years until 1976, and 3rd quarter thereafter, to match the fiscal year ends. Data on population came from the BEA's NIPA Table 7.1. But, as always, if you want my spreadsheet, drop me a line.



Anyway, assuming I didn't screw up the data, here goes... First up, a graph of Federal Outlays less SS less Defense, all as a percentage of GDP...







And now a summary...







Clinton still beats Reagan. Even with a Democratic Congress. And what's this? Carter coming in third? That can't be right. But it's OK. We still have another measure up our sleeves that will make Reagan kick some Clinton ass and put Carter in his rightful place - at the bottom. And here it is.... ladies and germans, the measure of what really matters to Republicans and Conservatives and Libertarians alike... (drumrolll).... real (2000 dollars) federal spending not counting social security or defense expenditures, per capita.







And a summary...





Wait. No. Not possible. Every single President increased spending on non-Social Security and non-defense items per capita? And Clinton did it by the least? And he was actually cutting spending per capita before the Republican Congress took over? And Reagan increased this type of spending by more than three times Clinton? More than three times Clinton? And Carter came in third, increasing spending per person at half, repeat, half the rate that GW did?



So we have two options. One is that I made a serious mistake somewhere. Regular readers know its happened before, and will probably happen again. This isn't my job, so perhaps I'm not as careful as I would be if there was a paycheck attached to the work. You're welcome to check my spreadsheets if you want, or to simply grab the data and do it yourself. I'm confident if I made a mistake, someone will spot it. I'll have egg on my face, and try not to make another one for a long time.



The other option is that I didn't make a mistake. And if that's the case, what's the lesson here? I don't know, but it seems to me that even on the one thing that is supposed to really matter to Republicans, that is unaffected (for the most part) by outside events, when looked at in ways that are intended to make Republicans look good, and when ignoring those parts and pieces that would make Republicans look bad... even on that carefully constructed measure, Republican Presidents don't seem to perform better than Democratic Presidents for whom this isn't a goal. I don't know how to interpret this in any way except that Republican Presidents tend to either not be competent, Republican, or both. But then, I don't vote for them.

by cactus on June 12, 2007 10:47 PM

Reader Dan finds this interview of Michael Perlman.



Michael Perlman offers another view on free market not staying free because of the nature of markets and maximization of profit. He describes a glitch that needs addressing.

…Fixed costs are also related to but not the same thing as long-lived capital. Economists rarely pay much attention to long-lived capital, except to applaud the concept of capital accumulation. The reason for their inattention is that capital goods require considerations of time, which complicates the simple economic models with which they are enamored. Once a company has invested in such capital goods, it is stuck with them because it will not get much for its investment on secondhand markets. Companies become desperate to utilize these capital goods as efficiently as possible.



A large passenger airplane carrying only a couple people would be a disaster for the airline. They would have to do something to fill up their seats.



If all the airlines were in a similar situation, they would have no choice but to engage in the price war. This sort of competition occurred in the 19th century railroads. Bankruptcy became commonplace until J.P. Morgan began to organize them into large cartels to prevent competition.

...

Modern economics assumes away this tendency even though common sense shows that no really competitive industry today is very profitable. Profits are highest in industries protected by intellectual property or by the influence necessary to garner government contracts. But now, such debates have subsided. Instead, economists exude confidence that the market operates as a giant computer or even a super-brain, which allows it to ensure that business performs in the most efficient manner possible. So great is the divorce from reality that such theories persist even in the post-Enron era.

...

Competition affects finance in two different ways. As in the rest of the economy, competitive forces drive financial institutions to increase efficiency (in the narrow sense of improving things like the cost of handling transactions). As in the non-financial sector, the outcome tends to be consolidation, which strengthens finance.



At the same time, competition in the non-financial sector tends to lower the rate of profit. Investors, seeking substantial profits, lose interest in the non-financial sector and turn to purely financial operations. This particular consequence of competition helps to explain the rise of hedge funds and the relative absence of investment in productive sectors of the economy.

Reader Dan asks...

Do markets have a developmental pattern inherent in the modern form? If you are always looking for 15% return or more, does this distort the free part of the market to a particular kind of market if the excess capital simply sloshes around in financial instruments?

by cactus on June 12, 2007 08:21 PM

Greenberg Quinlan Rosner's e-alert brings this good news about Dem inroads into one of the GOP's more supportive constituencies: Rural voters deliver a narrow plurality to a generic Democratic candidate for President: 46 - 43 percent. In contrast, President Bush...

June 12, 2007 06:10 PM

Some weeks ago I posted on the upcoming water crisis in the southwest US. It seems to have already arrived.



For those of you who want to pump water from the Great Lakes, the GL are on a down cycle that may last 50 years or so. Not a good idea.



And southern CA is know for heavy air pollution, which Governor Terminator is addressing with some major proposals.



Questions:



Is it rational to continuing moving people into southern California?



Would it be more rational to create policies causing people to move out of southern CA?



Who would do this and how would it work?



Should we wait until conditions are so bad people depopulate on their own?



If southern CA starts to depopulate and housing prices drop, will people then begin moving back?



Mark Thoma has a post up today on “smart growth” and sprawl, forcing the depopulation of southern CA could be the ultimate smart growth move – or would it be too fascist?



Your thoughts?

by save_the_rustbelt on June 12, 2007 03:19 PM

Righties have been making much of Bush’s enthusiastic reception in Albania this week. Echidne of the Snakes has this hilarious outtake from Albanian TV news, showing Bush posing for pictures at a public event, then walking a rope line hugging and touching hands with people in the crowd. Within ten seconds, somebody steals his wristwatch. (I think you can actually see the hand that does it.)

The bizarre thing is, neither Bush nor the Secret Service appear to notice this.

by KTK on June 12, 2007 01:21 PM

This post looks at the size of the federal government by way of Federal Outlays less Social Security, all as a percentage of GDP, by administration beginning with Ike. Its a follow-up of yesterday's post looking at the number of Federal Employees.



Before we begin, I would hasten to add... unlike some of the other series I have looked at like growth and fiscal responsibility, on which Democrats tend to better, this is a measure of importance only to Republicans, but not to Democrats. Democrats, presumably, want the government to be of some "optimal" size - which presumably means they would make it bigger when they deem it too small to provide what they deem to be essential services, or they would make it smaller when they deem it too big and therefore too wasteful. In general, however, Republicans just want it smaller.



Let's begin with a warning. Yesterday I warned our more sensitive readers to avert their eyes, for the data was not kind to the Holiest St. Ronald the Reagan, and in fact showed the Devil himself to be the President who went the furthest toward reducing the size of the Federal workforce. For those who were too careless to heed my admonition yesterday, I beseech you today. Avert your eyes or you imperil your soul.



Surgeon General's requirements taken care of, we can begin. Several readers pointed out in comments yesterday that Clinton may have reduced the size of the Federal workforce through the use of contractors. One could remove employees from the payroll simply by privatizing them and hiring them as contractors. Thus, it would only be fair to look at spending. Which spending? Well, all of it, less items that the President cannot control. The big one over which the President has no control is Social Security. Its a transfer payment, its easy to break out, and it operates independently from the rest of the budget. (Data on Federal Outlays and SS spending comes from OMB Table 3.1 and data on GDP comes from OMB Table 1.2.)



So let's see the numbers. Here's the picture...







Here's a summary...







Before anything else, I should note... it never fails, someone comes around erroneously arguing that its due to the Republican revolution and I have to go back and put the numbers into comments. So let me cut that off at the knees...



The annualized shrinkage from 1992 to 1994 was 3.26%. From 1994 to 2000 it was 2.37%. For those who can't subtract, that's almost a percent a year. As I keep pointing out, if Gingrich hadn't interfered, its likely that Clinton's performance would have been much better.



Which raises a question, again. Why don't Republicans love Clinton? He had the second best economic growth in the sample (after JFK/LBJ), he was fiscally responsible, he reduced the size of government. Aren't all these things that Republicans claim they love?



How can a Republican justify having voted for GW given a) Gore's role in making the government smaller during Clinton's term and b) GW's rapid expansion of government - at a faster pace than even JFK/LBJ, beating out every other President. And its not like he's done well at anything else either.



For extra credit, what happened after 1984 Congressional elections?



Anyway, gotta run. Have at it.

by cactus on June 12, 2007 12:46 PM

I'm always reluctant to use a partisan source for information, even more when its just providing a translation from another source I simply cannot evaluate and which may be from (horror of horrors) France. But this one has some interesting info, and I don't have any reason to think they're wrong.



Reader Dan sends a link to this article (which in turn was translated from this article):

The most interesting thing about the statistics the American administration provides on coca production in Colombia every year is the way they are presented. Or not. When the figures are down, as was more or less the case up until 2005, the American drug czar - all smiles and armed with supporting tables (see below) - convokes the cameras to explain that the five billion dollars spent by taxpayers to finance Plan Colombia (military aid to Bogota to fight against cocaine) since 1999 are bearing fruit. But when production climbs, move along reporters, there's nothing there to see. That is the case this year.



"Statistically, there has been no change in the amount of coca under cultivation between 2005 and 2006," did we thus learn on Monday, June 4 in a press release discreetly posted online by the offices of John Walters, the aforementioned czar. Yet, when one looks a few lines down, the data seems to tell a wholly different story: The area under coca cultivation grew nine percent to reach 157,200 hectares. Fear and trembling. How can this difference be explained? "The acreage evaluated in 2006 is 19 percent more than that evaluated in 2005, and almost all the observed increase in production was in this newly-evaluated area." Thus, there was not more coca, but they simply did a better job of looking for it. For five billion dollars, it's only fair....



Yet, two details are striking. First of all, the Office of National Drug Control Policy's (ONDCP) press release does not venture to compare the figures for equal acreages, although that had been done the year before to explain how, then too, in spite of the increase in figures, production was, in fact, continuing to decline. Which would therefore mean - another detail that stings - that the previous year's figures were bogus. Yet, in 2004, Walters gloated even in his blog as he presented this same data, then supposed to explain, all by itself, the genius of American policy in Colombia. At that time, they omitted any mention that the acreage evaluated did not represent even half the country's total acreage. This year, John Walters does not seem to have even deemed it useful to open the debate with Internet users.

Does anyone not believe the administration is fudging the numbers?

by cactus on June 12, 2007 11:56 AM

Kevin and I always like to talk about what we would do if we were Emperor of the NHL. Since the season is now over, I thought I’d make a list, in no particular order (below the fold):

• Scrap the points system. Align with the other three major North American team sports, and have wins and losses be what matters. If you care so much about overtime losses, use them as a tiebreaker only when wins and head-to-head record aren’t enough to break a tie.
• Contract the league back down to 28 teams. I nominate Florida and Phoenix as the teams to contract.
• Move teams back to Canada and the Northeast:
  • The Carolina Hurricanes go back to being the Hartford Whalers.
  • Quebec gets the Nordiques back, but since Colorado has proven a worthy NHL city, they get to keep the Avalanche. Instead, give Quebec the Ducks. Anaheim doesn’t care about them, and that way Quebec city gets back a team of roughly the same caliber as the one it lost years ago.
  • The Jets can go back to Winnipeg, too, but they deserve better than the lowly Coyotes (whom I’ve already contracted) — give ‘em the Thrashers (Atlanta barely even cares about the Braves any more, much less a hockey team…).
  • Tampa Bay is on notice: fan support there seems to be quite good, but if it slips, you’re off to Portland or Fredericton or Halifax or somewhere…
• Modify the schedule to ensure home-and-home with every team in the league every year. Now that I’ve contracted down to 28 teams in the league, that accounts for 54 games. Add an additional home-and-home against every other conference opponent, and that puts you up at 80 games. If you want to keep an 82-game schedule, you could have the last pair be home-and-home against a rotating opponent; otherwise, you could just leave the regular-season schedule at 80 games.
• Downsize the goalie equipment. Guys like Giguerre and Nabokov are freakin’ ridiculous these days. You mean to tell me that in the modern age of polymers and kevlar and solid, lightweight protection, you have to dress up in one of those inflatable sumo wrestler costumes before you climb in net? C’mon, man, Sawchuk didn’t even wear a mask! I’m not saying every goalie should look like this, but they sure as hell shouldn’t look like this. This seems like a happy medium, although I’d like the sweater to be a bit more snug. Institute a mandatory three-game suspension for oversized goalie equipment.
• Call a delay-of-game penalty when a team makes an illegal substitution after an icing call. I’ve seen too many teams try to sneak out a new player after icing has been whistled, and use the ensuing confusion as a free time out. Bullshit. Two minutes for delay of the game, to be served by one of the fresh-legged players who was improperly on the ice.
• Fix the schedule so that you don’t have points in the season where some teams have played as many as five more games than some others. Also, install baseball-like travel rules: No night game the day before a travel day (day game or no game).
• Install high-speed cameras in net. I don’t know how many times I’ve seen a video goal review where in one frame, the puck is halfway across the line, with 2/3 of the puck visible, and the next frame, it’s invisible. The pucks move fast, so have a camera that can keep up. While you’re at it, install a second overhead camera above each goal, so that you have one from slightly in front of the goal line and one from slightly behind the goal line.
• Scrap the trapezoid. If a goalie wants to wander way out into never-neverland and risk leaving a wide-open net on a bad turnover, let him.
• Ban fighting. Every other major team sport can live without it. Why not hockey? I’ve heard all the bullshit reasons about how the aggression would manifest itself in other ways, but that simply hasn’t been the case in, say, the NFL, and wouldn’t happen if you continued to be serious about calling roughing, boarding, and high-sticking penalties. Get serious about it, and get rid of it. An automatic one-game suspension without pay per punch thrown ought to get their attention.
• Keep calling penalties. Look, I’m all in favor of good, physical, defensive hockey, but that shouldn’t mean hooking, holding, tripping, and chipping. You can play good defense with good positioning and with solid, clean hits. “Let them play” shouldn’t mean “let them cheat.”
• Scoring on a delayed minor penalty no longer nullifies the penalty. If you score in a delayed penalty situation, you get the goal and the full two-minute power play.
• Return to named divisions. No more of this generic “Atlantic” or “Southeast” bullshit. Go back to Norris / Adams / Patrick / Smythe. Hockey, like baseball, reveres its history. Turning its back from that is a mistake.
• Return to a divisional playoff format. You still have sixteen teams making the playoffs, four from each division. Seed the top four teams from each division 1-4, and play until you have a winner from each. Then you have a Norris-Smythe playoff and a Patrick-Adams playoff to determine who makes the cup finals. You want deep divisional rivalries? This is how you get them.

by tgirsch on June 12, 2007 03:52 AM

Okay, that was awful. I don’t want to hear anything about “not wrapping things in a bow” or “ambiguity” because that wasn’t what happened last night. And, yes, spoilers follow, so read down if you aren’t interested.

Chase did not end the series with any kind of ambiguity, or at least, with any kind of ambiguity that matters. No, you don’t know precisely what happens to Tony at the end, but Chase left enough hints around to let anyone put any bow they wanted on the end of the show. If you think Tony should die, well, the ending, combined with Bobby’s comments about just fading to black — which were emphasized in the penultimate episode — let you think he died. If you think he was going to jail, the final scene’s tension combined with the news of Carlos’ grand jury testimony let you think that he was about to be picked up. If you want to believe that Tony continues to muddle along while slowly corrupting and destroying the things around him, A.J.’s sudden conversion to materialism and Meadow’s slow drift into Mob lawyer-land and the plight of Bobby’s poor kids let you believe that as well. That’s not ambiguity — that is pandering.

Chase and his staff created a rich show with fascinating characters and events. Those characters and those events have different importance and meaning depending upon which ending you imagine for the show. Instead of trusting his viewers to think, to re-examine the show in the light of an ending, Chase did the worst kind of pandering. He gave enough evidence to support any conclusion anyone wants to believe and in doing so stole from the audience the pleasure of having to think about what they have just seen. Since you can choose your own ending, you can — and probably will — choose the ending that best fits your desires, pre-conceived notions, and biases. Chase did wrap the show up in a nice, net little package — he just let you choose the wrapping paper.

And that’s a shame. Chase indulged in the kind of pretentious self-indulgence that gets first year film students Fs. He could have trusted his audience, trusted in his story and the structure and characters that he and his writers and actors had created over the last several years. He could have given us something like Rashamon; instead he gave us something like a “choose your adventure” book. The Sopranos could have been truly great. Chase settled for just truly pretentious.

by Kevin on June 11, 2007 03:05 PM