Free Markets, Free People

Paul Krugman


Irene–hurricane of hype?

What a weekend.  Hurricane Irene, the most hyped hurricane since Katrina, lived up to its billing … as a category 3 hurricane.   In other words, it did what you’d expect a cat 3 to do.  But if you listened too the press and government officials, this was a mega-storm, a storm that was the “harbinger of a change in climate” as the NY Times breathlessly claimed.

Instead it turned out to be a pretty ordinary hurricane that did indeed do some damage, but no more than a normal cat 3 (although it did make landfall twice) and it unfortunately killed some people, but mostly in freak accidents.  Finally, it blew out, downgraded to a tropical storm, before it ever reached New York City.

However the spectacle created on-shore by the approach of the hurricane was something to behold.  It had to be at least category 6.  We have a president with plummeting poll numbers taking “command” at the National Hurricane Center.  And we have the press out and about, trying to make the storm much more than it was:

For the television reporter, clad in his red cagoule emblazoned with the CNN logo, it was a dramatic on-air moment, broadcasting live from Long Island, New York during a hurricane that also threatened Manhattan.

“We are in, right, now…the right eye wall, no doubt about that…there you see the surf,” he said breathlessly. “That tells a story right there.”

Stumbling and apparently buffeted by ferocious gusts, he took shelter next to a building. “This is our protection from the wind,” he explained. “It’s been truly remarkable to watch the power of the ocean here.”

The surf may have told a story but so too did the sight behind the reporter of people chatting and ambling along the sea front and just goofing around. There was a man in a t-shirt, a woman waving her arms and then walking backwards. Then someone on a bicycle glided past.

So much for Irene the storm.  What was all the hype about?

A couple things seem apparent.   Politically the storm was seen as a, forgive the word choice, windfall.  It was something which would allow the government to prove its worth, to demonstrate the lessons it had learned since Katrina (funny that this is the first hurricane since Katrina on which this could be “demonstrated”).  It also gave the president national face time (speech), a way to demonstrate leadership (without risk) and hopefully a surge in the polls.  The compliant press was glad to go along:

The White House sent out 25 Irene emails to the press on Saturday alone.

There were photographs of President Barack Obama touring disaster centres and footage of him asking sombre, pertinent questions. With his poll ratings plummeting, Obama needed to project an aura of seriousness and command. He was all too aware that the political fortunes of his predecessor George W Bush never recovered after the Hurricane Katrina disaster of 2005.

The press mostly reported the message the White House had carefully crafted: “Obama takes charge” read the headline of one wire service story.

Instead, it all turned out, it seems, to have been a giant over-reaction.  We’ve handled numerous cat 3 (and higher) hurricanes throughout our history without all the governmental drama and dire warnings.  One can only factor sinking poll numbers into this particular event to have it make any sense.

Then there was the global warning crowd who seems bent on using any weather event as a “harbinger” of things to come because of wicked, evil humans and their carbon drenched lifestyles.  And they end up trying to use a fairly ordinary cat 3 hurricane as their example.  But, of course, the hurricane seasons of the past few years have been a bit of a disappointment to those types, hasn’t it? Fewer storms and of a lesser intensity.  You know your theory is bankrupt when you’re reduced to hyping a cat 3 as Justin Gillis did in the New York Times:

The scale of Hurricane Irene, which could cause more extensive damage along the Eastern Seaboard than any storm in decades, is reviving an old question: are hurricanes getting worse because of human-induced climate change?

The simple answer to the question seems to be – “no”.

But that doesn’t stop the alarmists from using this occasion to tar the skeptical side with ad hominem attacks instead of facts.

Paul Krugman publishes pure fiction:

In fact, if you follow climate science at all you know that the main development over the past few years has been growing concern that projections of future climate are underestimating the likely amount of warming. Warnings that we may face civilization-threatening temperature change by the end of the century, once considered outlandish, are now coming out of mainstream research groups.

And, of course Al Gore is reduced to calling skeptics the equivalent of racists.

Back to Krugman though.  As I’ve followed it, climate science seems to be saying exactly the opposite of is assertion seems to be true. A) it seems most scientists are becoming more aware of how much we don’t know about the climate (certainly not enough to be drawing the conclusions being drawn), B) the CERN study seems to put “broken” on the alarmist modeling which has driven the AGW crowd’s argument (I won’t dignify it with the word “theory”) and C) if anything, science now sees the possibility of a cooling trend, not a warming trend.

But you have to actually “follow climate science” to know that.

Meanwhile in Australia, a study is coming out that links mental illness to climate change:

RATES of mental illnesses including depression and post-traumatic stress will increase as a result of climate change, a report to be released today says.

The paper, prepared for the Climate Institute, says loss of social cohesion in the wake of severe weather events related to climate change could be linked to increased rates of anxiety, depression, post-traumatic stress and substance abuse.

As many as one in five people reported ”emotional injury, stress and despair” in the wake of these events.

Yeah, is the “emotional injury” a result of “climate change” or having your house, which shouldn’t have been built in a flood plane to begin with, washed away in a flood?  Obviously people are going to be emotionally injured when they lose their house.  But the same could be said about them if it burned down because of a grease fire.

These examples provide a look at two groups desperately casting around for favorable examples and coverage for themselves and their agendas.  Politicians who’ve now decided the new normal for weather events is to have a media event, and the AGW crowd who will use anything, absolutely anything, no matter how absurd, to try to revive their dying assertions.

Welcome to the hurricane of hype. 

~McQ

Twitter: @McQandO


Fratricide — The left defending Obama from the left

A couple of things have popped up on the radar screen concerning discontent on the left with Obama.  It has gone from being a simmering thing discussed among the leftists to something that is becoming more commonly and openly expressed by Democrats.   Two examples serve to make the point.

One came out of New Mexico where a Obama campaign Obama for America (OFA) New Mexico State Director Ray Sandoval let loose on critics of Obama, to include Paul Krugman and progressive bloggers he calls “Firebaggers” (most likely from the name FireDogLake, an extreme left “progressive” blog).  A sample:

Paul Krugman is a political rookie. At least he is when compared to President Obama. That’s why he unleashed a screed as soon as word came about the debt ceiling compromise between President Obama and Congressional leaders – to, you know, avert an economic 9/11. Joining the ideologue spheres’ pure, fanatic, indomitable hysteria, Krugman declares the deal a disaster – both political and economic – of course providing no evidence for the latter, which I find curious for this Nobel winning economist. He rides the coattails of the simplistic argument that spending cuts – any spending cuts – are bad for a fragile economy, ignoring wholeheartedly his own revious [sic] cheerleading for cutting, say, defense spending. But that was back in the day – all the way back in April of this year. [...]

No, the loudest screeching noise you hear coming from Krugman and the ideologue Left is, of course, Medicare. Oh, no, the President is agreeing to a Medicare trigger!!! Oh noes!!! Everybody freak out right now! But let’s look at the deal again, shall we? [...]

Now let’s get to the fun part: the triggers. The more than half-a-trillion in defense and security spending cut "trigger" for the Republicans will hardly earn a mention on the Firebagger Lefty blogosphere. Hell, it’s a trigger supposedly for the Republicans, and of course, there’s always It’sNotEnough-ism to cover it.

This is an example, I think, of the level of frustration this early on that the campaign is experiencing.  Paul Krugman, other than thinking the administration should have spent much more on stimulus, has been a pretty reliable water carrier for those folks.  He can’t catch a break.  Vilified and fisked regularly by the right, he’s now being denounced by the left.   And you have to love the irony of the first sentence.  If ever there was a political rookie in way over his head, it’s Sandovol’s boss.   It’s obvious and it is the driver of much of the frustration.

However, on the other side of that, what Democratic Representative Peter Defazio (D – OR) said should be even more disconcerting to the Obamians.   He’s pretty frank in his appraisal of the man in the White House.  And his appraisal is one shared by many, at least those without political blinders on:

In his Eugene office Wednesday, Defazio accused the President of lacking the will to fight for the promises he made to get elected

“Fight? I don’t think it’s a word in his vocabulary,” said DeFazio. “ I mean come on he pledged as a candidate to make the Bush tax cuts for people making over $250,000. He repeatedly said that as president. Then the Republicans telegraphed to him they were going to use a fake crisis over the debt limit in order to muscle some major spending reductions or other things on to him. And that was in December. And what happens? Suddenly he flip flops and concedes everything to the Republicans.” DeFazio said.

Asked whether he thought the President had a shot at re-election, Defazio was skeptical.

“At this point it pretty much depends on how far out there the Republican nominee is. You know with a respectable, someone who is a little bit toward the middle of the road Republican nominee, he’s going to have a very tough time getting re-elected,” said DeFazio.

Now again, DeFazio would fall in what Sandovol calls the “It’sNotEnough” [sic] crowd.  However, the real point is the fact that regardless of where anyone is coming from in their denunciation of Obama, they almost universally agree he isn’t much of a fighter, or leader.  If you’re running for re-election, that is not something you want hung around your neck.

DeFazio also hits on a truism for the GOP – the “further out” the GOP candidate is, the more likely that Obama, warts and all, has a shot at re-election. 

But back to DeFazio’s musings:

He’s also not convinced the President will do well in Oregon.

“I believe Oregon is very much in play. I mean we are one of the harder hit states in the union, particularly my part of the state. I’ve just done six town hall meetings, have seven to go but people are shaking their head and saying ‘I don’t know if I’d vote for him again.’” Defazio said.

Asked if he was surprised, the congressman shrugged.

“Not at all. One guy asked me … give me 25 words what he’s about and what he’s done for me. I’m like … ‘it could have been worse?’” DeFazio said.

If Oregon is really in play, Obama has major problems.

I have to admit, had I been the reporter doing the interview, the next question that would have come to my mind, given his 25 words is, “Really?  How”?

~McQ

Twitter: @McQandO


Jobs? What jobs in Texas … the attacks begin

And, of course, leading the parade is none other than liberal economist and New York Times hack, Paul Krugman.  His thesis?  Well, it’s the state of McJobs, of course.  And the reason for all this misunderstanding about the “Texas miracle”.  People don’t understand the impact of population growth.  Paul Krugman stands ready to explain why Texas’ growth is just no big deal and certainly nothing we want to emulate .  Let’s let him explain:

For this much is true about Texas: It has, for many decades, had much faster population growth than the rest of America — about twice as fast since 1990. Several factors underlie this rapid population growth: a high birth rate, immigration from Mexico, and inward migration of Americans from other states, who are attracted to Texas by its warm weather and low cost of living, low housing costs in particular.

And just to be clear, there’s nothing wrong with a low cost of living. In particular, there’s a good case to be made that zoning policies in many states unnecessarily restrict the supply of housing, and that this is one area where Texas does in fact do something right.

But what does population growth have to do with job growth? Well, the high rate of population growth translates into above-average job growth through a couple of channels. Many of the people moving to Texas — retirees in search of warm winters, middle-class Mexicans in search of a safer life — bring purchasing power that leads to greater local employment. At the same time, the rapid growth in the Texas work force keeps wages low — almost 10 percent of Texan workers earn the minimum wage or less, well above the national average — and these low wages give corporations an incentive to move production to the Lone Star State.

So Texas tends, in good years and bad, to have higher job growth than the rest of America. But it needs lots of new jobs just to keep up with its rising population — and as those unemployment comparisons show, recent employment growth has fallen well short of what’s needed.

If this picture doesn’t look very much like the glowing portrait Texas boosters like to paint, there’s a reason: the glowing portrait is false.

Why is it “false”?  Here’s Krugman’s explanation:

What Texas shows is that a state offering cheap labor and, less important, weak regulation can attract jobs from other states. I believe that the appropriate response to this insight is “Well, duh.” The point is that arguing from this experience that depressing wages and dismantling regulation in America as a whole would create more jobs — which is, whatever Mr. Perry may say, what Perrynomics amounts to in practice — involves a fallacy of composition: every state can’t lure jobs away from every other state.

In fact, at a national level lower wages would almost certainly lead to fewer jobs — because they would leave working Americans even less able to cope with the overhang of debt left behind by the housing bubble, an overhang that is at the heart of our economic problem.

While I’d love to take the time to research and tackle the nonsense in Krugman’s column, I don’t have too.  Kevin Williamson at NRO has done so and done so brilliantly.  He does so by comparison … something Krugman intentionally avoids.  For instance:

What, indeed, does population growth have to do with job growth? Professor Krugman is half correct here — but intentionally only half correct: A booming population leads to growth in jobs. But there is another half to that equation: A booming economy, and the jobs that go with it, leads to population growth. Texas has added millions of people and millions of jobs in the past decade; New York, and many other struggling states, added virtually none of either. And it is not about the weather or other non-economic factors: People are not leaving California for Texas because Houston has a more pleasant climate (try it in August), or leaving New York because of the superior cultural amenities to be found in Nacogdoches and Lubbock. People are moving from the collapsing states into the expanding states because there is work to be had, and opportunity.

Think again of the Krugman statement “every state can’t lure jobs away from every other state”.   Then kick it up a level.  “Every nation can’t lure jobs away from every other nation”.  Really?   Isn’t that what we’ve been complaining about for years when the word “outsourcing” is used.  Of course “every state can lure jobs from every other state” … just look at the rust belt and try to say that again with a straight face.   People go where there is economic opportunity and jobs.  That will stabilize when and if other states treat the issue the way Texas is.  That’s why legislators from all over the country are traveling to Texas to learn how they’ve accomplished what they have, despite the unfounded caterwauling of the Krugmans of the world,

Point two from Williamson  about “McJobs”.  Again, the devil is in the details, facts in which Krugman seems to have no interest:

Krugman points out that New York and Massachusetts both have lower unemployment rates than does Texas, and he goes on to parrot the “McJobs” myth: Sure, Texas has lots of jobs, but they’re crappy jobs at low wages. (My summary.) Or, as Professor Krugman puts it, “low wages give corporations an incentive to move production to the Lone Star State.” Are wages low in Texas? There is one question one must always ask when dealing with Paul Krugman’s statements of fact, at least when he’s writing in the New York Times: Is this true? Since he cites New York and Massachusetts, let’s do some comparison shopping between relevant U.S. metros: Harris County (that’s Houston and environs to you), Kings County (Brooklyn), and Suffolk County (Boston).

Houston, like Brooklyn and Boston, is a mixed bag: wealthy enclaves, immigrant communities rich and poor, students, government workers — your usual big urban confluence. In Harris County, the median household income is $50,577. In Brooklyn, it is $42,932, and in Suffolk County (which includes Boston and some nearby communities) it was $53,751. So, Boston has a median household income about 6 percent higher than Houston’s, while Brooklyn’s is about 15 percent lower than Houston’s.

Brooklyn is not the poorest part of New York, by a long shot (the Bronx is), and, looking at those income numbers above, you may think of something Professor Krugman mentions but does not really take properly into account: New York and Boston have a significantly higher cost of living than does Houston, or the rest of Texas. Even though Houston has a higher median income than does Brooklyn, and nearly equals that of Boston, comparing money wages does not tell us anything like the whole story: $50,000 a year in Houston is a very different thing from $50,000 a year in Boston or Brooklyn.

So obviously purchasing power, not wages, is the key.  If you make less money than someone in NY but can buy twice the stuff with what you earn, who has the low paying job in terms of purchasing power?  Which would you rather have?

Case in point:

In spite of the fact that Texas did not have a housing crash like the rest of the country, housing remains quite inexpensive there. The typical owner-occupied home in Brooklyn costs well over a half-million dollars. In Suffolk County it’s nearly $400,000. In Houston? A whopping $130,100. Put another way: In Houston, the median household income is 39 percent of the cost of a typical house. In Brooklyn, the median household income is 8 percent of the cost of the median home, and in Boston it’s only 14 percent. When it comes to homeownership, $1 in earnings in Houston is worth a lot more than $1 in Brooklyn or Boston. But even that doesn’t really tell the story, because the typical house in Houston doesn’t look much like the typical house in Brooklyn: Some 64 percent of the homes in Houston are single-family units, i.e., houses. In Brooklyn, 85 percent are multi-family units, i.e. apartments and condos.

Tell me again whose getting the best bang for their buck?

Williamson covers much more in his fisking of the Krugman claims and it is worth reading it all.  What becomes evident in the Williamson piece is how thoroughly Paul Krugman has sold out.  The word has gone out that the Texas success story must be destroyed.  And naturally the lead attack dog responds to the bell in Pavlovian fashion in a fact free mélange of disinformation.  Williamson draws the correct conclusion from the Krugman piece:

All of this is too obvious for Paul Krugman to have overlooked it. And I expect he didn’t. I believe that he is presenting willfully incomplete and misleading information to the public, and using his academic credentials to prop up his shoddy journalism.

Or, you’re supposed to take his word for it, not fact check him. 

As insty would say: “Indeed”.

~McQ

Twitter: @McQandO


I, for one, welcome our new alien overlords

Paul Krugman was on CNN yesterday, as a guest on “Fareed Zakaria GPS”. I’m glad of it, because he provided us with this gem:

If we discovered that, you know, space aliens were planning to attack and we needed a massive buildup to counter the space alien threat and really inflation and budget deficits took secondary place to that, this slump would be over in 18 months. And then if we discovered, oops, we made a mistake, there aren’t any aliens, we’d be better–

I guess since the Nazis and Imperial Japan are no longer with us, an alien attack threat is all he’s got left. In one sense, he’s right. If aliens were coming to attack us, we’d do whatever we had to do, and damn the expense. Of course, the aliens, assuming they were really interested in killing us all off, would probably stop close to the asteroid belt and drop bolides on us until we said "uncle". Or were extinct. Which would solve our financial problems.

Here’s the thing about military spending. we consider a lot of military spending to be on durable goods.  We count it that way as part of GDP. But these goods are NOT durable goods.  They are consumables. We build them with the expectation that they will be quickly, and violently consumed in combat. And outside of combat, they generally have no useful role in society.

But let’s assume he’s right. We have a massive space armaments buildup, everyone goes back to work, and we borrow another $14 trillion to do it. Great. 18 months later, everybody is working in the armaments factories, thousands of "space fighters" and orbital x-ray lasers are buzzing around in near earth orbit, command bunkers are built deep in the earth’s crust…woo hoo! The economy is booming again.

Then we find the threat has been mistaken.  There aren’t any aliens coming to attack us. Are we really better off? I mean, we’ve been better off for a couple of years, while we were preparing for the aliens, and everybody was working. But what happens now?

Now we have a huge stockpile of useless military equipment that we have to destroy, or borrow more money to maintain. Demand for plasma cannon and shield generators disappears. The armaments factories close down, and those jobs are gone forever. We have rung up a $30 trillion debt to purchase a massive amount of goods that have no constructive purpose, and generate no wealth. And what wealth we did have is now sunk into space weaponry we can’t use for…well…anything. What we can use, we have a glut of, and have to either destroy or surplus out.

So, where do all the jobs go now? How are we better off? All the alien-fighting military and civilian jobs evaporate, our national wealth has been sunk into useless alien-fighting equipment, and we’re now carrying a debt of 200% of GDP. It seems to me that we’re now worse off than we were before the alien scare.

This is Keynesianism taken to the furthest logical extreme: We’d be better off creating a massive buildup of useless and unusable military equipment, because it would stimulate the economy. The trouble is, how do we pay for it once we’ve done it?

Frankly, if the aliens do come, I’d prefer that we do nothing. If they can cross the vastness of interstellar space, their technology is so far ahead of ours that any attempt at defense would be futile. And, of course, I presume that any society so advanced would, if nothing else, deliver us from Prof. Krugman’s brand of irrational economics once and for all.

~
Dale Franks
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Nobel Prize-winning economist endorses my economic analysis

Well, this is interesting.  Paul Krugman finally agrees with me:

[W]e already know what isn’t working: the economic policy of the past two years — and the millions of Americans who should have jobs, but don’t."

I’d just like to point out that I knew those economic policies wouldn’t work back in 2009, writing about them here. Since then, I’ve just been watching the kangaroo. So It’s nice to see Krugman joining me in declaring "fail"—though he does so with the advantage of 20/20 hindsight.

I eagerly anticipate my upcoming invitation to Sweden.

Where we diverge is in providing solutions. As always, Krugman’s solution is more spending, and more debt.  But with debt already at 100% of GDP, we’re really in uncharted waters, and I have no confidence that more debt is the answer, if the problem is the existing debt overhang.

The real question I’m concentrating on is, "At what point do the markets recognize not only that the debt path we’re on is unsustainable, but that it is going to be impossible to pay it back?"  Is that 120% of GDP? 150%?  I don’t know.  But I fear that we’re going to learn the answer.

On the bright side, I’ll be able to pay off the remaining 19 years of my mortgage for the cost of a nice hat. On the down side, a new Astros baseball cap will cost $200,000. On the bright side, again, the $100,000 from my Nobel will cover half of that, so it’s all good.

~
Dale Franks
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Krugman and the false prophets of economics

The one-trick pony that is Paul Krugman, constantly pushes massive government spending as the panacea for all recessionary ills.  It is supposed to be the way one “manages the economy” from a central government position – as collectivist a thought as one can imagine.

In fact, one of Krugman’s criticisms – despite the fact that his estimate of the amount needed to stimulate the economy was $200 billion less than what was passed in the stimulus package – is that the government hasn’t borrowed and spent enough.  And he certainly is no fan of austerity, claiming that the “pain caucus” has been in charge (what almost a year trying to address decades of borrowing and spending?), with no significant results and oh, by the way, look at the UK.

“In Europe,” he wrote last week, “the pain caucus has been in control for more than a year, insisting that sound money and balanced budgets are the answer … [But] Europe’s troubled debtor nations are … suffering further economic decline thanks to those austerity programs.”

Yes, friends, “sound money and balanced budgets” are, apparently, things to be avoided.

But curiously Krugman never says, “oh, by the way, look at Switzerland” because if he did, he’d have to explain their positive outcome based on austerity:

The Swiss have run a prudent fiscal policy throughout the economic crisis. They have had a structural surplus in each of the past five years. Their net debt is actually lower today than it was in 2005. And guess what? In 2009 their economy suffered the smallest contraction in Europe, with unemployment today below 4 percent. As for sound money, the Swiss franc is up 95 percent against the dollar since 2000.

The key point is the Swiss never let their economy get in the shape that is now plaguing the rest of Europe and the US.  It has never spent and taken on debt like the UK, much less Portugal and Greece.  It has been a program of economic austerity for years.   Consequently, the debt level is miniscule compared to other Western economies and recovery was quick with minimal intrusion (if any) from government.   We, on the other hand, were borrowing in good times and borrowing heavily to spend on things our government has no business involving itself in much less borrowing money to do so.  And it points out that even if you buy into the Krugman theory that we ought to be borrowing and spending in “bad times” ala Keynes, the other borrowing that has taken place limits those options considerably:

The real lessons for the United States are clear. Those who run up debt in good times can borrow only so much more when a recession strikes. And heavily indebted governments postpone fiscal stabilization at their peril. If you wait to reform until the bond market calls time, you are—to use a technical term from economics—screwed.

And we’re headed toward that “technical term” more quickly than we can imagine, and yet the Krugman’s of the world still counsel more spending of borrowed money leading to more accumulation of debt. 

At a certain point, the amount of debt begins to shave percentage points off the GDP as the debt is serviced.  That, at least in my opinion, is where we are now and one of the reasons we’re seeing such a slow recovery.  GDP growth, last quarter for instance, is not at all robust:

Real gross domestic product — the output of goods and services produced by labor and property located in the United States — increased at an annual rate of 1.8 percent in the first quarter of 2011…

Economically we have to understand, at the highest levels, that despite the siren songs of Keynesians like Krugman, that the bill has come due – in fact it is past due-  and must be addressed and paid.  We  can’t afford to ignore it anymore, nor pretend that spending borrowed money will do more good than harm.  We and the can are at the end of the road.  It can’t be kicked anymore without dire consequences.  Unfortunately, while it seems we’ve at least recognized that fact – for the most part – what we can’t seem to make ourselves do is that which is necessary – cut spending deeply.  We continue to hear from the false economic prophets that we can fix all this if we’ll just borrow and spend.  

~McQ

Twitter: @McQandO


Krugman finally notices Obama’s an empty suit

Funny stuff.  Paul Krugman, representing much of the left, has apparently finally noticed what an empty suit Obama is:

What have they done with President Obama? What happened to the inspirational figure his supporters thought they elected? Who is this bland, timid guy who doesn’t seem to stand for anything in particular?

I realize that with hostile Republicans controlling the House, there’s not much Mr. Obama can get done in the way of concrete policy. Arguably, all he has left is the bully pulpit. But he isn’t even using that — or, rather, he’s using it to reinforce his enemies’ narrative.

Of course Krugman is pretty much focused on economic issues and so seemingly hasn’t been watching Obama through most of his presidency, as many of us have.  He’s finally noticed the “timid guy” who doesn’t seem to stand for anything but does enjoy a good round of golf.

I guess I shouldn’t be surprised it has taken this long – the blinkers had to be firmly in place to elect him in the first place.   You had, to quote Hillary Clinton as she addressed Gen. Petraeus about the situation in Iraq some years ago, “willingly suspend disbelief” in order to vote for the guy in the first place.  What you had to suspend was the belief that experience and leadership count for something, especially when you’re talking about the highest office in the land.

This timid guy Krugman is talking about has shown the rest of us over and over he’s really unsuited for the job.  And now, even the Krugman’s of the world are beginning to take some notice.

I have to admit to laughing out loud at Krugman’s example – apparently the one that finally clued him into the problem:

His remarks after last week’s budget deal were a case in point.

Maybe that terrible deal, in which Republicans ended up getting more than their opening bid, was the best he could achieve — although it looks from here as if the president’s idea of how to bargain is to start by negotiating with himself, making pre-emptive concessions, then pursue a second round of negotiation with the G.O.P., leading to further concessions.

And bear in mind that this was just the first of several chances for Republicans to hold the budget hostage and threaten a government shutdown; by caving in so completely on the first round, Mr. Obama set a baseline for even bigger concessions over the next few months.

Of course Krugman, as typified by his one-trick pony policy of more and more government spending to cure all ills is bound to be upset by any spending concessions a Democrat might make.  However, I loved his characterization of Obama’s bargaining style.  It is true  and not only does it point to someone totally out of his depth, but someone with no real principles upon which to make a stand.

Krugman turns his attention, after wondering what happened to Obama, to trying to trash everything the GOP has put forward or will put forward.  But so captured is he by his discovery of what Obama isn’t that he has to return to that subject:

You might have expected the president’s team not just to reject this proposal, but to see it as a big fat political target. But while the G.O.P. proposal has drawn fire from a number of Democrats — including a harsh condemnation from Senator Max Baucus, a centrist who has often worked with Republicans — the White House response was a statement from the press secretary expressing mild disapproval.

What’s going on here? Despite the ferocious opposition he has faced since the day he took office, Mr. Obama is clearly still clinging to his vision of himself as a figure who can transcend America’s partisan differences. And his political strategists seem to believe that he can win re-election by positioning himself as being conciliatory and reasonable, by always being willing to compromise.

But if you ask me, I’d say that the nation wants — and more important, the nation needs — a president who believes in something, and is willing to take a stand. And that’s not what we’re seeing.

Baloney.  Krugman has to have lived in a cave if he believes the rhetoric has even come close to matching the reality of the Obama presidency.  He is not a transcendent figure by any stretch.  He is, instead, a true exception to the Peter Principle and has indeed risen to a level above his incompetence. 

But to Krugman’s last point – Obama believes in one thing – Obama.  And any objective appraisal of his performance in office these past 2+ years cannot give him very high marks on “principle” or a willingness to take a stand.   There’s a reason for that.  Obama traded principle for the achievement of his ambition years ago.  He’s intelligent enough to talk the talk, but he seems absolutely incapable of walking the walk or even attempting to do so.

As Dale said on the podcast last night, you sometimes get the feeling that when he says something he truly believes it becomes reality.  In this world you actually have to take action and lead to have things happen.  Obama has no idea how to do that.

~McQ


Budget buzz–Obama’s effort seems to be unpopular on both sides of the political spectrum (update)

All sorts of coverage on the Obama budget, most of it negative.  While the White House spin machine works overtime to attempt to fashion a message saying the effort confronts the harsh fiscal reality we’re faced with and makes tough cuts and decisions, that’s not the way others are interpreting it.

Andrew Sullivan figured out Obama’s budget is a very political one:

But the core challenge of this time is not the cost of discretionary spending. Obama knows this; everyone knows this. The crisis is the cost of future entitlements and defense, about which Obama proposes nothing. Yes, there’s some blather. But Obama will not risk in any way any vulnerability on taxes to his right or entitlement spending to his left. He convened a deficit commission in order to throw it in the trash. If I were Alan Simpson or Erskine Bowles, I’d feel duped. And they were duped. All of us who took Obama’s pitch as fiscally responsible were duped.

Uh, yeah.  And it only took 3 years for Andy to figure it out. Speaking of the Simpson Bowles commission, Sullivan cites a David Brooks column where Brooks talks about a group of Senators who are taking the lead in writing up the recommendations of the commission for implementation. Says Sullivan of the effort:

They have to lead, because this president is too weak, too cautious, too beholden to politics over policy to lead. In this budget, in his refusal to do anything concrete to tackle the looming entitlement debt, in his failure to address the generational injustice, in his blithe indifference to the increasing danger of default, he has betrayed those of us who took him to be a serious president prepared to put the good of the country before his short term political interests. Like his State of the Union, this budget is good short term politics but such a massive pile of fiscal bullshit it makes it perfectly clear that Obama is kicking this vital issue down the road.

Lovely to see someone else finally realize that leadership is something this president knows nothing about, never has exercised and wouldn’t know how to do with a self-help book in front of him.  And, as Sullivan correctly surmises, this atrocity of a budget is firm proof of that (and no that doesn’t mean I endorse the Simpson Bowles commission – the point is about leadership).  Sullivan also finally ferrets out that the commission was nothing more than an artifice the president used to cover his rear and make it appear like he was focused on doing something about the fiscal shape of the UFederalSpending0471.002-thumb-440x330S government.  Instead we get exactly what those of us who’ve been on to this president’s act all along expected – pure politics.

John Hinderaker at Powerline gives graphic proof (left) that the media water carriers who are parroting the White House line about the President’s budget containing “steep” or “painful cuts” aren’t fooling anyone.  As you can see the only steep incline over the next few years is up.  There is nothing significant about any “cuts” or “savings” the Obama budget puts forward on the overall level of government spending except to keep the slope headed in a direction we can’t afford.

Instead it is more of the same simply couched in the same old obfuscating rhetoric that calls spending “investment” and taxation “savings”.  Someone needs to get the point across to Obama that the smoke and mirrors company in which he’s so heavily invested isn’t working for him anymore.

In fact, just to make the point even more evident, take a look at this chart by Doug Ross.  The yellow line you see (right) are the “steep” and “painful cuts” the president and some of the media are trying to pretend his budget is making.   Tough stuff, no?  No.  His steep and painful cuts are a veritable drop in the bucket and really do nothing structurally to actually cut spending to affordable and sustainable levels.  As Rep. Paul Ryan has said, Obama “punted” with this budget.110214-budget

Megan McArdle thinks, given this budget by the president, that it may finally be time to panic.

I was a laconic hawk when the deficits shot up in 2008, 2009, 2010.  A few years of deficits in an unprecedented crisis weren’t going to kill us; we had time to get them under control.

But I’m starting to think that it’s time to panic.  This deficit is $700 billion higher than the CBO projected in August 2009, of which $500 billion is lower tax revenues, and $200 billion is new spending.  It’s also $500 billion less revenue and $100 billion more spending than the CBO was expecting as late as August of last year, thanks to the extension of the Bush tax cuts.  For all that I keep hearing about deficit reduction and PAYGO rules, somehow those "fiscally responsible" Democrats have given us the largest peacetime deficit in history, one that keeps growing beyond all expectations–and for all their alleged worries about the budget deficit, so the Republican role in all of this has been to goad Democrats into cutting taxes even further, so that the wealthiest earners could enjoy their fair share of our collective fiscal insanity.

I know the arguments for stimulus, but at this point, I don’t think we can afford the luxury of a more stimulating economy.  Our politicians can’t be trusted to do the right thing later; we need to make them do it now.

I can’t emphasize that last sentence more.  If ever there was a time to do what is necessary to take a knife to the bloated government budget, it is now.   The public is as much on board as it will ever be and while it may whine and even scream and holler about some thing’s, most of the voters in this country know something pretty drastic must be done and done soon.

Even “Johnny one-note” Paul Krugman isn’t happy – for the usual reasons:

Andrew Leonard is right: the Obama budget isn’t going to happen, so in a sense it’s irrelevant. But it still has symbolic meaning. What is Obama saying here?

The important thing, I think, is that he has effectively given up on the idea that the government can do anything to create jobs in a depressed economy. In effect, although without saying so explicitly, the Obama administration has accepted the Republican claim that stimulus failed, and should never be tried again.

My favorite line in the Krugman piece was this:

What’s extraordinary about all this is that stimulus can’t have failed, because it never happened. Once you take state and local cutbacks into account, there was no surge of government spending.

Remember, what was spent was about $300 billion more than Krugman recommended.  But if it never happened I assume Krugman will now quit attempting to say that the trillion dollars which was thrown out there to stop the fall and stimulate growth did it’s job, right?  That was his previous stance and all that was needed was more spending to have an even greater effect.  Correct?   Now he’s in the middle of rewriting history:

Yes, I know, it’s argued that Obama couldn’t have gotten anything more. I don’t really want to revisit all of that; my point here is simply that everyone is drawing the wrong lesson. Fiscal policy didn’t fail; it wasn’t tried.

MIA – a trillion dollars.  Yeah, it “wasn’t tried”, was it?  About the nicest thing Krugman can muster to say about the Obama budget (in another article) is it isn’t the Republican budget:

It’s much less awful than the Republican proposal, but it moves in the same direction: listening to the administration, you’d think that discretionary spending, not health care, is at the heart of our long-run deficit problems — and you’d also think that the job of rescuing the economy was done, with unemployment still at 9 percent.

It could be worse — the GOP proposal is — but it’s hardly something to cheer about.

Well, we’ll see how much either is to cheer about when we take a look at the Republican budget.

Finally, to inject a little humor into a basically humorless debate – even if the humor is unintentional – read Jonathan Chait’s piece in The New Republic.  You get the idea he was on his third or fourth scotch and up late when he wrote it.  It is the journalistic equivalent of trying to turn a sow’s ear into a silk purse and coming up with an ugly fuzzy pouch that smells like bacon.  Even his title points to a very tentative approval, something he had to talk himself into in order to make the attempt:  “Why Obama’s Budget Is OK”.   And while some of his points are valid (the president’s budget is a political document) how he got from some of his observations to some of his conclusions can only be explained by booze and sleep depravation.

UPDATE: Steve Eggleston has a good post up full of charts that makes the point with the government’s own numbers that Paul Ryan was right yesterday – “doing nothing would be better than passing [Obama’s] budget”.

~McQ


Krugman–food shortage caused by weather caused by global warming, of course

Paul Krugman has suddenly discovered the food shortage in the world.   And, he’s come to the conclusion that it has mostly been caused by all the bad weather we’ve been having.  Of course that bad weather only be caused by man-made global warming (although there are other scientists claiming otherwise).

While several factors have contributed to soaring food prices, what really stands out is the extent to which severe weather events have disrupted agricultural production. And these severe weather events are exactly the kind of thing we’d expect to see as rising concentrations of greenhouse gases change our climate — which means that the current food price surge may be just the beginning.

Well he’s right about one thing – “these severe weather events” are certainly blamed on man-made global warming, although a body of evidence is developing saying that’s simply not true.  But being able to now tie it all to food shortages is a new venue for using scare tactics in an effort to enable government to control and tax something that is absolutely natural.

Krugman knows he’s on shaky ground as can be seen here – but he forges ahead anyway:

It’s true that growth in emerging nations like China leads to rising meat consumption, and hence rising demand for animal feed. It’s also true that agricultural raw materials, especially cotton, compete for land and other resources with food crops — as does the subsidized production of ethanol, which consumes a lot of corn. So both economic growth and bad energy policy have played some role in the food price surge.

Still, food prices lagged behind the prices of other commodities until last summer. Then the weather struck.

Consider the case of wheat, whose price has almost doubled since the summer. The immediate cause of the wheat price spike is obvious: world production is down sharply. The bulk of that production decline, according to U.S. Department of Agriculture data, reflects a sharp plunge in the former Soviet Union. And we know what that’s about: a record heat wave and drought, which pushed Moscow temperatures above 100 degrees for the first time ever.

Yes, it is true that emerging nations are demanding more meat and that means more crops go to feed.  Then there’s the ethanol scam using 40% of the corn crop.  I guess, in an oblique way, you can blame ethanol on “global warming” too.  

Naturally an unusual heat wave is a result of man-made global warming (AGW).   So, apparently are monster blizzards (just ask Al Gore).    But don’t believe him, let Paul Krugman, global warming expert fill you in:

To some extent we’re seeing the results of a natural phenomenon, La Niña — a periodic event in which water in the equatorial Pacific becomes cooler than normal. And La Niña events have historically been associated with global food crises, including the crisis of 2007-8.

But that’s not the whole story. Don’t let the snow fool you: globally, 2010 was tied with 2005 for warmest year on record, even though we were at a solar minimum and La Niña was a cooling factor in the second half of the year. Temperature records were set not just in Russia but in no fewer than 19 countries, covering a fifth of the world’s land area. And both droughts and floods are natural consequences of a warming world: droughts because it’s hotter, floods because warm oceans release more water vapor.

Yeah, uh, they’re also “natural consequences” of a cooling world, or a world in which the magnetic poles are going to flip, or a world that is experiencing the effects of sun spots, or as mentioned, regional weather patterns.

As always, you can’t attribute any one weather event to greenhouse gases. But the pattern we’re seeing, with extreme highs and extreme weather in general becoming much more common, is just what you’d expect from climate change.

Really – you can’t?  But that’s precisely what happens daily, Mr. Krugman.  Here’s your crowd on the Moscow heat wave:

According to environmentalists, the heat wave in Russia has been caused by man-made global warming.

Al Gore – after telling us the warmer weather meant less snow in our future is now explaining this winter of humongous snow falls, some of which fell in 49 of the 50 states, as a result of … global warming.

Most folks realize that when you explain something one way, you can’t have it the other way, no matter how convenient it might be to your argument.  And yes, that’s an “inconvenient truth”.  That also brings us to Krugman’s attempt to wave off critics:

The usual suspects will, of course, go wild over suggestions that global warming has something to do with the food crisis; those who insist that Ben Bernanke has blood on his hands tend to be more or less the same people who insist that the scientific consensus on climate reflects a vast leftist conspiracy.

See, when you use “scientific consensus” you loose all credibility, Mr. Krugman  – science isn’t about “consensus”, it’s about skepticism. 

And all of this has little to do with believing in a “vast leftist conspiracy” – that’s your strawman.  It has to do with bad science and the hacks who push it.

That would include you, sir.

~McQ


Year 3 of Obamanomic brings us $1.5 trillion more of debt

Or so sayeth the CBO.  Good thing they waited until today to announce it.  Otherwise we might have heard snickering and outright laughter during the SOTU when our deficit-hawk President talked about how serious he was about reducing the deficit and the debt.

The budget deficit is now estimated to have widened this year to $1.5 trillion, the CBO said. That compares to a budget deficit of $1.3 trillion for the fiscal year that ended Sept. 30.

The increase in the deficit would bring it to 9.8 percent of gross domestic product, the CBO said, following deficits of 10 percent and 8.9 percent during the previous two years.

Do you remember how he promised to half the debt by the end of his first term in office?  Yeah?  Well that means he could run a deficit of $750 billion and keep his word.  Funny how that works out, huh?

The CBO’s projections assume that current laws remain unchanged. If the nation continues on its current path, the CBO said, the total national debt will rise from 40 percent of GDP in 2008 to 70 percent by the end of 2011, reaching 77 percent of GDP by 2021.

But hey, this is all the other guy’s fault, remember?  Oh, and one more point, those of you on the left having fun with Rep. Paul Ryan’s factual response?  Make sure you go find someone who can explain the ramifications of this to you, ‘kay?  And have them point out who it is that the CBO agrees with in principle as well:

“To prevent debt from becoming unsupportable, the Congress will have to substantially restrain the growth of spending, raise revenues significantly above their historical share of GDP, or pursue some combination of the those two approaches,” CBO Director Douglas Elmendorf wrote in a blog post announcing the report.

While you’re at it, have them explain the appetite for tax increases. Wait, I’ll save you the question – there is none.  See December’s extension of the current income tax rates.  Now, given that – try to focus.  What does that leave?  Yes, they’re left with “substantially restrain[ing] the growth of spending”.  As in “no more new spending” and “cut back existing spending”.  Precisely what Ryan has been saying, isn’t it?

So when Rep. Ryan makes the point that:

Under the terms of a House resolution passed Tuesday, Ryan is to set ceilings at 2008 levels or less.

He has a good reason, one backed by the facts of the situation and not some meandering mewling from Paul Krugman.  This is the medicine for the addiction.  America has said and is saying again that the voters are not willing to give you a single nickel more until government proves it can significantly cut it’s spending habit.  No cuts, no increased taxes.  In fact, if the cuts are indeed significant enough, the perhaps no new taxes are needed at all.

Yeah, I know, living within your means like all the rest of us have to do – what a concept.

~McQ

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