Free Markets, Free People

E.J. Dionne

Stupidity is what stupidity writes

E. J. Dionne Jr has an op-ed out entitled, “In American politics, stupidty is the name of the game.”

After reading the piece, I am pretty convinced it should be re-titled “In American punditry, stupidity is the name of the game.”  Dionne spends his 700 words demonstrating how true that title would be.

His premise is framed in a question: “Can a nation remain a superpower if its internal politics are incorrigibly stupid?”

Probably not – but it isn’t just anyone’s internal politics which he’s questioning – it is an attack on the fiscally conservative.  And, of course he deals with the left’s favorite subject when comes to government, budgets and spending:

Start with taxes. In every other serious democracy, conservative political parties feel at least some obligation to match their tax policies with their spending plans. David Cameron, the new Conservative prime minister in Britain, is a leading example.

He recently offered a rather brutal budget that includes severe cutbacks. I have doubts about some of them, but at least Cameron cared enough about reducing his country’s deficit that alongside the cuts he also proposed an increase in the value-added tax, from 17.5 percent to 20 percent. Imagine: a fiscal conservative who really is a fiscal conservative.

So now, fiscal conservancy is defined as “cutting spending and raising taxes”?  SInce when?  If, for instance, you have a government which is huge, out of control and intruding areas that it shouldn’t be and costing us a bundle while it’s doing so, why is “raising taxes” a remedy?

Why couldn’t a conservative proffer a solution which would cut spending and the size of government alone?  Why isn’t that ever an answer?

Well simply because the left doesn’t believe in smaller or less intrusive government and it has this class hatred thing going on for “the rich”.  

It is their job – through government of course – to take what the rich have and redistribute it.  Ask any of them.  That’s because their basic ideological premise is that the money we all have really doesn’t belong to us – it’s a benefit we accrue for living in this fine land shaped and governed by enlightened leftists who know much better than those who have “earned” their money where and how it should be spent. 

And, of course, that leads us to absolutely stupendous intellectual arguments like this:

The simple truth is that the wealthy in the United States — the people who have made almost all the income gains in recent years — are undertaxed compared with everyone else.

So there you go – the fact that “everyone else” is suffering under heavier taxation than those here doesn’t have the leftist shouting “ain’t freedom great".  Instead he shouts “make ‘em pay more” because  – and mother’s everywhere are wincing – the other guys make ‘em pay more.

Yeah, and the other guys live in countries which most here wouldn’t trade for this place.  The fact that someone accusing a certain political element of “stupidity” has to resort to the “but others pay more” argument in an attempt to sell the premise is just freakin’ laughable. 

The problem, sir, isn’t that the rich don’t pay enough.  The problem is the government here (and elsewhere, if truth be told) spends more than it has – consistently, increasingly and without an end in sight.

What in the hell is wrong with Dionne that he attempts to run this class warfare swill at us?  Does he honestly believe we’re that dumb?  Is the stupidity he’s banking on that of his readers?

His is a preposterous premise followed by an absurdly simplistic ideological argument which seems to be designed to distract the reader from the real problem – runaway government spending.

Take next year’s budget for example as just announced by the Obama Administration – $1.4 trillion dollars, of which 41% is borrowed.


That’s not the fault of the rich, Mr. Dionne.  And no matter how much you tax them it never will be.

The rich aren’t the freakin’ problem and hopefully even someone as dull witted as Dionne might eventually figure that out.  But I doubt it.

I mean, read his op-ed and you quickly realize there’s little or no hope of that ever happening.


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People who live in glass houses…

When you accuse someone of stupidity, it’s probably wise to avoid saying something stupid yourself while doing so.  Sadly, E.J. Dionne fails to avoid that trap.

Our discussion of the economic stimulus is another symptom of political irrationality. It’s entirely true that the $787 billion recovery package passed last year was not big enough to keep unemployment from rising to over 9 percent.

But this is not actually an argument against the stimulus. On the contrary, studies showing that the stimulus created or saved up to 3 million jobs are very hard to refute. It’s much easier to pretend that all this money was wasted, although the evidence is overwhelming that we should have stimulated more.

Very hard to refute?  That’s nonsense on stilts.  Mr. Dionne may be so smart that rays of light emanate from his brow, but the paragraph above is an extraordinarily foolish position.

First, any statement of any jobs “created or saved” requires that we perform the impossible task of modeling how the economy would have performed in an alternate universe where a different policy mix was applied. We literally have no idea–nor any way to construct a testable hypothesis–that models how the economy would have reacted in the absence of the stimulus.  Even the Congressional Budget Office, while rather supinely delivering a report that ostensibly supported the administrations claims about job creation, was careful to note:

…it is impossible to determine how many of the reported jobs would have existed in the absence of the stimulus package.

Second, the methodology was extremely suspect.  In making its predictions of post-stimulus recovery, the administration simply plugged in an assumption about the multiplier effect of government spending.  They assumed that X amount in spending would result in Y% increase in aggregate demand, resulting in Z jobs.  What the CBO did in checking up on that prediction, was to plug essentially the same assumptions into their model, which, unsurprisingly, “confirmed” the predictions. Even the CBO seemed a bit embarrassed about that.

But the CBO, to its credit, has been fairly forthcoming about its methods and their limitations. In response to a question at a speech earlier this month, CBO director Doug Elmendorf laid out the CBO’s methodology pretty clearly, describing the his office’s frequent, legally-required stimulus reports as “repeating the same exercises we [aleady] did rather than an independent check on it.” CBO tweaks its models on the input side, he says—adjusting, for example, how much money the government has spent. But the results the CBO reports—like the job creation figures—are simply a function of the inputs it records, not real-world counts.

Following up, the questioner asks for clarification: “If the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis, right?” Elmendorf’s response? “That’s right. That’s right.”

In other words, the CBO’s regular, legally-mandated reports, are estimates based on an economic model that doesn’t actually take inputs from the real world. They simply take the same estimates the administration used to create their predictions, then apply them to the monthly spending report, coming up with a number of jobs “created or saved” that is, unspurprisingly, exactly what the administration predicted.

Please note: this has no actual relationship to the number of real-world jobs that exist.  The only thing the CBO reports prove–by its own admission–is that it is possible to replicate the administration’s predictions by  duplicating the assumptions.

So, not only is it untrue, as Mr Dionne asserts, that “studies showing that the stimulus created or saved up to 3 million jobs are very hard to refute,” the CBO director explicitly refutes that notion by agreeing that “[i]f the stimulus bill did not do what it was originally forecast to do, then that would not have been detected by the subsequent analysis.”

But, let us say, arguendo, that Mr. Dionne is right, and the $787 billion did, in fact, create 3 million new jobs.  The price tag then, comes to $262,333.33 for each job created. That seems like a relatively steep price.

Happily, we know more or less precisely how many people are employed in the country, and how the size of the labor force has changed. We know this, because the Bureau of Labor Statistics releases those figures on a monthly basis, and they are publicly available at the BLS web site.  If we assume March 2009 to be the first month of the stimulus, we see that there were a total of 140,854,000 Americans over the age of 16 employed, including farm employment.  As of Jun, 2010, there were 139,119,000 Americans working. That tells me that there are 1,735,000 fewer Americans working today, than there were when the stimulus was passed.  If we exclude agriculture, and look at only non-farm payrolls, we see that there were 132,070,000 people employed in March, 2009, vice 130,470,00 in June, 2010.  Again, that’s a net loss of 1,600,000 payroll jobs.

I’m not seeing any net job creation there.

In at least one sense, though, Mr. Dionne is quite right.  Since the administration’s claims of 3 million jobs “created or saved” is empirically disprovable, they can tout them as much as they’d like, even in the face of 1.6 million jobs actually disappearing under the stimulus.  After all, they can always say, “There would have been 3 million fewer jobs if we hadn’t acted.  And if you don’t believe me, prove me wrong!”  It is, after all, so comforting to be able to take refuge in an unfalsifiable hypothesis.

Government Is The Answer To Economic Prosperity?

E.J. Dionne has apparently mistaken Joe Biden’s passion for intelligent thought.  In an interview with Biden, Dionne quotes him as saying:

“We will continue to be the most significant and dominant influence in the world as long as our economy is strong, growing and responsive to 21st-century needs. And they relate to education, they relate to energy, and they relate to health care.”

On he went: “Give me a break. So many people have bet on our demise that it absolutely drives me crazy. . . . There’s sort of an attitude that is both politically directed by our Republican friends but also believed by a fair number of people that we just can’t make this transition in the 21st century.

“I want to tell you something, because if we cede the ground to those who suggest that — I don’t mean foreigners, I mean domestic critics — that somehow, we are destined to fulfill [historian Paul] Kennedy’s prophecy that we are going to be a great nation that has failed because we lost control of our economy and overextended, then we might as well throw it in now, for God’s sake. I mean it’s ridiculous.”

“We will continue to be the most significant and dominant influence in the world as long as our economy is strong, growing and responsive to 21st-century needs. And they relate to education, they relate to energy, and they relate to health care.”

Read the highlighted paragraph carefully. What is Joe Biden equating a strong economy with? “Education, energy and health care”.

What is he really saying?

That increasing government intervention is the answer to a strong economy.  That the answer lies in education (reform), energy (cap-and-trade) and health care (reform).  IOW, unlike in any previous era, Joe Biden is claiming government is the key to building wealth and economic prosperity.  Not one mention in his clueless tirade about markets, economic freedom, entrepreneurship or business.  None.  In Joe Biden’s world, economic strength seems to depend solely on government.  The fact that the 18th, 19th and 20th centuries of United States history show him up for the windbag he is, apparently doesn’t phase him.  Or Dionne either, for that matter.  It is pure liberal economic cluelessness crossed with Joe Biden’s usual verbal flatulence.  Dionne apparently buys into it.

In fact Dionne goes on to say:

Beneath the predictable back-and-forth between Obama and his Republican adversaries over government spending lies a substantively important difference over how the United States can maintain its global leadership.


For Republicans, American power is rooted largely in military might and showing a tough and resolute face to the world. They would rely on tax cuts as the one and only spur to economic growth.

Obama, Biden and the Democrats, on the other hand, believe that American power depends ultimately on the American economy, and that government has an essential role to play in fostering the next generation of growth.

Republicans believe that “American power is rooted largely in military might?”


So all those charges of “friends to big business” and “the party of business” were  just so much hot air – that it’s always been about “military power” and nothing else? How purposefully tendentious does one have to be to live in Washington, cover politics for a living and write something like that? 

And then to claim that the GOP’s “one and only spur to economic growth” is the tax cut is absolutely stunning.  You have to wonder if alcohol or weed (or both) were present and in use when this was being written (and I’d have to wonder about those 3 layers of editors as well).  If they can’t use that as an excuse I’m at a loss to explain the sheer cluelessness of such a statement.

Jennifer Rubin at Commentary jumped on this as well:

Republicans don’t care about economic growth? Just military might? Hard to see where he gets that, considering that the post-Reagan conservative movement and the Republican party have been devoted to market capitalism. Indeed, the slur on Republicans has been that all they cared about was wealth creation. Oh, but they are just interested in “tax cuts.” Well, that and free trade, modest regulation, legal reform, and other conditions that spur economic growth, investment, and wealth creation.

If Dionne really believes what he wrote he has no business writing political opinion columns for anyone, much less the Washington Post.  That’s the most ill informed sentence I’ve seen in some time.  And his sentence touting Obama, Biden and the Democrat’s belief that the economy is what America’s power depends on is refuted by Biden’s own words.  Biden is saying the economy depends on government.  Therefore “America’s power” depends on government’s management of the economy – not the economy itself.  When he claims it all depends on “education, energy and health care”, he’s parroting the Democrats agenda for more government intervention, regulation and intrusion.  If you don’t believe that, Rubin provides the proof:

Dionne considers this all trivial or dim because he and liberals are convinced that government creates wealth, that public spending creates jobs, and that expansion of the public sector is the way to a brighter future. In fact, he congratulates the president for cheering on the competition in statism with other powers. In the State of the Union, Dionne recalls, the president vowed that no nation would get the jump on us when it comes to government programs. (”Meanwhile, China is not waiting to revamp its economy. Germany is not waiting. India is not waiting. These nations aren’t standing still. These nations aren’t playing for second place. They’re putting more emphasis on math and science. They’re rebuilding their infrastructure. They’re making serious investments in clean energy because they want those jobs.”)

That’s right, in the SOTU, Obama stressed precisely what Biden is saying and Dionne is parroting.  China – of all places – was first on Obama’s list of nations to apparently emulate.  And not in the sense you’d like to believe.  He didn’t say China’s entrepreneurs are turning that economy around.  He’s talking about government.  The government of  China, the government of Germany, the government of India – they are the purported engines of economic recovery and wealth creation.

Is it any surprise then to find that he, Biden and liberals like Dionne are of the opinion that more government and more government spending is the path to economic success?  A former community organizer, a professional politician and professional pundit all claiming that the laws of economics are null and void and that the path to proseperity is through bigger and more expensive government?  All we need now is Hugo Chavez to add some real intellectual economic heft to that group [/sarcasm].

All the more reason to be thankful the supermajority in the Senate will be history at 5pm today.  The “party of no” has its work cut out for it.