Free Markets, Free People

Michael Wade

Podcast for 21 Feb 10

In this podcast, Bruce, Michael and Dale discuss the economy in the US and Europe, as well as gun rights.  The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Final Thoughts

Taxation clarified:

When you give your money to someone in need, simply because you want to help, that’s called CHARITY.

When someone in need holds a gun to your head and makes you give them your money, that’s called ROBBERY.

When someone holds a gun to your head, makes you give your money to him for the benefit of someone in need whom he claims to represent, that’s called SPREADING THE WEALTH.

As a corollary, when someone takes out massive loans in your name and the names of your children in order to give that money to someone else, that’s called STIMULUS.

Of course, I don’t mean that all taxation works this way. I want a strong military, competent police and a functioning judiciary to protect our society and individual interests. “All taxation is theft” is fun to ponder, but not reality. Having a civil society will always cost something. It’s when taxation goes beyond what’s necessary to perform those minimal functions that “theft” becomes an appropriate term.

Podcast for 14 Feb 09

In this podcast, Bruce, Michael  and Dale discuss the Republican desire not to be seen as the “Party of No”; China, the Euro, and the Dollar; and what seems to be a fundamental shift in the assertions of the AGW crowd.  The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Food Stamps Do Not Increase Employment

You may recall that I questioned the efficacy of Paul Rosenberg, et al.’s argument that increasing food stamp benefits would directly lead to an increase of 9 to 10 million more people being employed:

Without arguing the statistical or modeling specifics behind the chart, there is one glaring item that reveals how much magical thinking went into its creation. By far the most “stimulating” actions set forth are “Temporary Increase in Food Stamps”(calculated to create 9,803,333 jobs), “Extending Unemployment Insurance” (9,236,667 jobs), and “Increased infrastructure Spending” (9,010,000 jobs). The closest tax-cutting measure, according to this analysis, in job creation is a “Payroll Tax Holiday” which is estimated to create 7,253,333 jobs. Do you see the problem?

How, exactly, do food stamps and unemployment benefits create jobs? Arguably, spending on infrastructure could create construction jobs on a temporary basis, although that hasn’t proven to be the case with the stimulus bill that was passed. But there is simply no logic to the idea that providing government benefits to the poor and unemployed will serve to create jobs, much less 9 to 10 million of them. That’s just magical thinking.

[…]

Whatever the virtues of income support, and even if that support will be quickly spent in the economy, there is no justification for concluding that it will expand the economy. At best, it can stabilize a downturn by maintaining some level of consumer spending. But that does not expand the economy in any way, shape or form, and it certainly doesn’t create jobs [at] an unprecedented level as suggested by Rosenberg.

As it turns out, we have plenty of empirical evidence to show that, in fact, increasing food stamp aid does nothing to increase employment. Indeed, for the past decade, the US has dramatically increased the number of participants who receive food stamps to the point that 1 in every 8 Americans now partakes in the program:

The reason for the expansion, as the chart’s creators point out, is that we’ve been pushing food stamps not just on the needy, but on the working poor as well [via: James Joyner]:

States eased limits on people with cars and required fewer office visits from people with jobs. The federal government now gives bonuses to states that enroll the most eligible people.

A self-reinforcing cycle kicked in: outreach attracted more workers, and workers built support for outreach. In a given month, nearly 90 percent of food stamp recipients still have incomes below the federal poverty line, according to the Department of Agriculture. But among families with children, the share working rose to 47 percent in 2008, from 26 percent in the mid-1990s, and the share getting cash welfare fell by two-thirds.

Whether this is a good policy or not is neither here nor there. Instead, what should be glaringly evident is that there is no correlation between food stamp distribution and job creation. Over the past decade, as the number of people using food stamps rose from around 17 million to almost 35 million, the economy has both created and shed millions of jobs. For example, since December 2007, when the recession officially began, the economy lost 8.4 million jobs according to the Labor Department. Yet in that same time, according to the chart above, around 7 million more people received food stamps (rising from about 27 million to 34 million). If the “food stamps = job creation” were correct, how did we lose all of those jobs?

The inescapable conclusion is that food stamps do not create jobs, and at best only serve to keep some minimal level of economic activity going during down times.

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Podcast for 07 Feb 09

In this podcast, Bruce, Michael  and Dale discuss the unemployment numbers and Sarah Palin.  The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Obama’s Transparency

President Obama went after Washington lobbyists in a big way last night, blaming them for what ails America in a major portion of his State of the Union speech.

In his State of the Union on Wednesday, Obama once again targeted K Street: “We face a deficit of trust — deep and corrosive doubts about how Washington works that have been growing for years. To close that credibility gap, we have to take action on both ends of Pennsylvania Avenue — to end the outsized influence of lobbyists; to do our work openly; to give our people the government they deserve.”

But that was yesterday. Today his administration reached out to those same lobbyists to help pass Obama’s agenda:

A day after bashing lobbyists, President Barack Obama’s administration has invited K Street insiders to join private briefings on a range of topics addressed in Wednesday’s State of the Union.

The Treasury Department on Thursday morning invited selected individuals to “a series of conference calls with senior Obama administration officials to discuss key aspects of the State of the Union address.” …

The invitation stated, “The White House is encouraging you to participate in these calls and will have a question and answer session at the end of each call. As a reminder, these calls are not intended for press purposes.”

Like a secret mistress, K-Streeters are not exactly thrilled with Obama demonizing them in public and then requesting their expertise behind closed doors:

Some lobbyists say they are extremely frustrated with the White House for criticizing them and then seeking their feedback. Others note that Democrats on Capitol Hill constantly urge them to make political donations.

One lobbyist said, “Bash lobbyists, then reach out to us. Bash lobbyists [while] I have received four Democratic invitations for fundraisers.”

[…]

Lobbyists say the Obama White House has held many off-the-record teleconferences over the past year.

For example, lobbyists and others were invited to a teleconference with “senior Obama administration officials” on Monday to discuss the administration’s plan to improve the lives of middle-class families.

The invitation, which is addressed to “Friends,” emphasizes in bold and italics that “this call is for background information only and not intended for press purposes.” It advises callers to tell the operator “you’re joining the ‘White House Briefing Call.’ ”

Another lobbyist said these types of teleconferences occur “all the time.”

And that is why many on K Street are exasperated with Obama’s use of lobbyists as a punching bag. Some have said they understood why he used strong rhetoric on the campaign trail but are irritated the White House solicits their opinions while Obama’s friends in Congress badger them for political donations.

That politicians court special interests is nothing new, nor is their blatant prevarication and hypocrisy when it comes to claiming to “work for the people.” Yet publicly targeting specific groups for opprobrium in order to drum up public support, and then immediately running to that very same group for their help, is a whole special class of slimy. Who is it, exactly, that Obama thinks he’s backstabbing? The electorate? The lobbyists? Indeed, why should anyone trust him at all? And all of this in the name of transparency.

Judging by his actions, Obama thinks “transparency” means “clearly lying”.

Magical Thinking

The progressive base is having conniptions over the failure of President Obama to get his agenda through Congress despite having supermajorities. Now that Obama is making token gestures (however feeble [via:HA]) towards fiscal sanity, they are experiencing political apoplexy:

As noted in quick hits by BDB and rayj, [UPDATE] and by David in a diary that just caused me to push back this diary’s publication time, Obama has now gone off the deep end. After passing a stimulus that most economists (not just liberal ones) said was too small, and that was made even more inadequate by being heavily tilted toward poor-performing tax-cuts, Obama is now intentionally recreating FDR’s mistake of 1937, when he prematurely cut back spending to try to balance the budget, and sent the country into a new recession.

[…]

Specifically: He’s going to announce a spending freeze on domestic programs (but not, of course, on the military) that is “projected to save $250 billion.” The rationale is that he wants to appease folks worried about runaway deficits. Which is just what FDR was worried about in 1937.

This is Bush-style idiocy. There is no other word for it.

The cause of this consternation is magical thinking on the part of the author, Paul Rosenberg.

Here, to remind you, is the chart I put together during the stimulus debate, showing, among other things, the relative ineffectiveness of tax cuts vs. spending in generating jobs, which is the key to getting the nation out of this recession–the only way that we can rationally hope to start bringing down the deficits:

While some tax cuts are much better than the real stinkers, it’s virtually a given that once Obama starts talking about tax cuts, the GOP is going to start demanding that Bush’s tax cuts be made permanent. Not only–as you can see from the chart–are these about the least helpful tax cuts of all, they are also heavily skewed toward helping the rich and the super-rich.

If you look closely at the chart you will be unsurprised to find that government spending is calculated to provide substantially more “bang for the buck” in creating wealth and jobs. That’s unsurprising because this chart is intended to support a progressive prescription for the economy. Of course it will show government as the answer.

Without arguing the statistical or modeling specifics behind the chart, there is one glaring item that reveals how much magical thinking went into its creation. By far the most “stimulating” actions set forth are “Temporary Increase in Food Stamps”(calculated to create 9,803,333 jobs), “Extending Unemployment Insurance” (9,236,667 jobs), and “Increased infrastructure Spending” (9,010,000 jobs). The closest tax-cutting measure, according to this analysis, in job creation is a “Payroll Tax Holiday” which is estimated to create 7,253,333 jobs. Do you see the problem?

How, exactly, do food stamps and unemployment benefits create jobs? Arguably, spending on infrastructure could create construction jobs on a temporary basis, although that hasn’t proven to be the case with the stimulus bill that was passed. But there is simply no logic to the idea that providing government benefits to the poor and unemployed will serve to create jobs, much less 9 to 10 million of them. That’s just magical thinking.

Rosenberg provides this explanation for the employment fairy (from Mark Zandi of Moody’s Economy.com):

Income support

The House stimulus plan includes some $100 billion over two years in income support for those households under significant financial pressure. This includes extra benefits for workers who exhaust their regular 26 weeks of unemployment insurance benefits; expanded food stamp payments; and help meeting COBRA payments for unemployed workers trying to hold onto their health insurance.

Increased income support has been part of the federal response to most recessions, and for good reason: It is the most efficient way to prime the economy’s pump. Simulations of the Moody’s Economy.com macroeconomic model show that every dollar spent on UI benefits generates an estimated $1.63 in near-term GDP.x Boosting food stamp payments by $1 increases GDP by $1.73 (see Table 2). People who receive these benefits are hard pressed and will spend any financial aid they receive very quickly.

Another advantage is that these programs are already operating and can quickly deliver a benefit increase to recipients. The virtue of extending UI benefits goes beyond simply providing aid for the jobless to more broadly shoring up household confidence. Nothing is more psychologically debilitating, even to those still employed, than watching unemployed friends and relatives lose their sources of support.xi Increasing food stamp benefits has the added virtue of helping people ineligible for UI such as part-time workers.

Whatever the virtues of income support, and even if that support will be quickly spent in the economy, there is no justification for concluding that it will expand the economy. At best, it can stabilize a downturn by maintaining some level of consumer spending. But that does not expand the economy in any way, shape or form, and it certainly doesn’t create jobs an unprecedented level as suggested by Rosenberg.

Indeed, in order to give money to the poor and jobless, the government has to take money fr0m someplace else. Since it doesn’t create anything, the government will either (i) tax those who are working and creating wealth at higher rates, (ii) borrow money, or (iii) print money. Again, these are not wealth producing actions, but instead wealth destroying ones. It is true that, assuming such income support shortens a downturn, tax receipts will eventually outpace the costs of funding those supports. What is not true is that the government benefits will create jobs.

On the one hand, of course, I don’t want to discourage the left from turning on Obama (enemy of my enemy and all that). It just pains me to see it done based on such absurd premises.

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Podcast for 24 Jan 10

In this podcast, Bruce, Michael  and Dale discuss the special election in Massachussetts, the dangers of hyperinflation, and Haiti.  The direct link to the podcast can be found here.

Observations

The intro and outro music is Vena Cava by 50 Foot Wave, and is available for free download here.

As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2009, they can be accessed through the RSS Archive Feed.

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Dogs, Cats, Studio Apartment … Some Assembly Required

My blogging credentials (such as they are) run back to 2002, and I can remember when Charles Johnson’s Little Green Footballs site was just a blip on the blogospheric map. After Rathergate, of course, that blip turned into a giant shining beacon. As you might expect, that sort of attention led to plenty of caterwauling from the lefties, and some pretty unfair accusations. At one point, I brilliantly defended Johnson from completely unjustified attacks by none other than everyone’s favorite harlequin, GreenSox Glennwald (seriously, go read this one just for the comments where I get into it with everyone’s favorite sycophant Mona; good stuff). Johnson was the king of the anti-anti-war right at that time, and the left’s long knives were emblazoned with his name.

Since the election of Barack Obama, however, Johnson has had an … er, falling out with his former brethren. For whatever reason, he’s taken to sniping at his former comrades in arms and resorted to that favorite tactic of the left in calling everyone a racist who doesn’t agree with him.

Such is life. Coalitions rarely last for very long, and divorces are typically nasty affairs where rude epithets are common. That Charles no longer wants to associate with those whom he once treated as his band of blogo-brothers is sad, but not terribly important in the grand scheme of things. Strange bedfellows abound in times of perceived danger.

Nevertheless, there was a time (called the “Bush Presidency”) when Johnson was the posterchild for all that was deemed wrong with the political right, especially the left’s fervent fantasies about racism run amuck. To be fair, such accusations typically found their quarry ruminating around LGF’s prodigious comment sections, but that was enough for the lords of tolerance to tar all non-statists as racist, warmongering, dead-enders with no sense of compassion or grace. That is, until Johnson decided to part ways with his former comrades.

Considering LGF’s place amongst the pantheon of the left’s most hated sites on Earth, you can imagine my surprise upon reading a paean to Charles Johnson in, of all places, the New York Times:

Charles Johnson has been writing a blog for almost as long as the word “blog” has existed. A bearish, gentle-voiced, ponytailed man who for three decades enjoyed a successful career as a jazz guitarist accompanying the likes of Al Jarreau and Stanley Clarke, Johnson has always had a geek’s penchant for self-education, and in that spirit he cultivated a side interest, and ultimately an expertise, in writing computer code. His Web log, which he named “Little Green Footballs” (a private joke whose derivation he has always refused to divulge), was begun in February 2001 mostly as a way to share advice and information with fellow code jockeys — his approach was similar in outlook, if vastly larger in its reach, to the guiding spirit in the days of ham radio. His final post on Sept. 10, 2001, was titled “Placement of Web Page Elements.” It read, in its entirety: “Here’s a well-executed academic study of where users expect things to be on a typical Web page.” It linked to, well, exactly what it said. The post attracted one comment, which read, in its entirety, “Fantastic article.”

He’s cute! He’s cuddly! He’s just a code monkey who likes Tab and Mountain Dew! Nothing to fear here!

By virtue of his willingness to do and share research, his personal embrace of a hawkish, populist anger and his extraordinary Web savvy, Johnson quickly turned Little Green Footballs (or L.G.F., as it is commonly known) into one of the most popular personal sites on the Web, and himself — the very model of a Los Angeles bohemian — into an avatar of the American right wing. With a daily audience in the hundreds of thousands, the career sideman had moved to the center of the stage.

Now it is eight years later, and Johnson, who is 56, sits in the ashes of an epic flame war that has destroyed his relationships with nearly every one of his old right-wing allies. People who have pledged their lives to fighting Islamic extremism, when asked about Charles Johnson now, unsheathe a word they do not throw around lightly: “evil.” Glenn Beck has taken the time to denounce him on air and at length. Johnson himself (Mad King Charles is one of his most frequent, and most printable, Web nicknames) has used his technical know-how to block thousands of his former readers not just from commenting on his site but even, in many cases, from viewing its home page. He recently moved into a gated community, partly out of fear, he said, that the venom directed at him in cyberspace might jump its boundaries and lead someone to do him physical harm. He has turned forcefully against Fox News, Rush Limbaugh, Sarah Palin, nearly every conservative icon you can name. And answering the question of what, or who, got to Charles Johnson has itself become a kind of boom genre on the Internet.

“It’s just so illogical,” Geller told me heatedly not long ago. “I loved him. I respected him. But the way he went after people was like a mental illness. There’s an evil to that, a maliciousness. He’s a traitor, a turncoat, a plant. We may not know for years what actually happened. You think he changed his mind?”

Poor code monkey. So lonely and misunderstood. How awful those righties are for abandoning such a crafty, neo-hippie (who finally found his way back home to his “bohemian” roots). It really is a shame that the right is so horribly intolerant that they call Johnson bad names like “evil” and “traitor”. What’s wrong with those jerks anyway?

You can read the rest for yourself. Suffice it to say, the irony of that bastion of MSM groupthink called the New York Times writing a glowing 1,000+ word article in defense of Charles Johnson and LGF is so thick I could feed off it for weeks. Recall that LGF was one the prime agents in exposing the fraud of MSM-mainstay Dan Rather and you might just string that irony-stew out for a couple of months.

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“100,000 pesky votes in Massachusetts”

That’s what the Democrats think about the voters of Massachusett(e)s who voted for Scott Brown and against HCR. And that’s why, per their brain trust, they’re going the reconciliation route. Screw-the-proles politics at its finest (via HotAir):

Rep. Paul Ryan (R., Wis.), the ranking member of the House Budget Committee, tells National Review Online that House Democrats are planning to use of the budget-reconciliation process in order to pass Obamacare. “They’re meeting with each other this weekend to pursue it,” says Ryan. “I’ve spoken with many Democrats and the message is this: They’re not ready to give up. They’ve waited their entire adult lives for this moment and they aren’t ready to let 100,000 pesky votes in Massachusetts get in the way of fulfilling their destiny. They’ll look at every option and spend the next four or five days figuring it out.”

If the Democrats pass a health-care bill through reconciliation, it means they would need only 51 votes in the Senate for final passage. To start the process, House Speaker Nancy Pelosi (D., Calif.) would need to bring a new health-care bill to the House budget committee with reconciliation instructions, with the Senate doing the same. “They’d have to go back to the beginning of the process,” says Ryan. “They’d need to affix reconciliation instructions to a new bill.” Doing so, he says, wouldn’t be too hard. “There’s nothing we can do to stop this from a technical standpoint, since all they need is a simple majority vote and our ratio on the committee is terrible. What we can do in the budget committee is pass resolutions for the Rules committee to insist on certain changes in the bill and create a ‘vote-a-rama’ atmosphere.”

Got that? Your votes don’t matter. Your voice has not been heard. You are merely an impediment to Democrats bound for history, who have no interest in what you want. Say it with me: they only care about what they want you to want.

Just remember: this ain’t over, it’s just the beginning.

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