Questions and Observations

Free Markets, Free People

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.

41%!

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.

~McQ

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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.

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Dale’s Observations For 2010-07-29

World’s fairs are designed for people from homogeneous cultures who are still impressed by electricity and foreigners. http://bit.ly/axU49H #

FINALLY! Harley-Davidson provides an OEM stereo kit for their customers who don't ride huge touring bikes. http://bit.ly/9L2qoe #

Amazon unveils 3rd-generation Kindle e-book reader, now with wi-fi! http://usat.me?39468850 #

Mortgage Rates Fall Again; 30-Year Fixed At 4.54%. http://bit.ly/9fYWmO #RecoverySummer #

Jobless claims for the week at 457k, down 11k. Underlying rate is essentially unchanged. http://bit.ly/dhymwM #RecoverySummer #

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California’s fiscal crisis provides a stark look at the difference between today’s left and right

The situation in California is critical with government there facing a 19 billion dollar shortfall and the budget yet to be passed. It pits an admittedly "moderate" Republican governor against a Democratically dominated legislature and their differences on how to close that huge budgetary hole.

The lack of a budget is forcing furloughs and the possibility of the state again issuing IOUs instead of payments to vendors, etc.

Until the governor and legislature negotiate that budget, not much will change. And the fight is classic:

Schwarzenegger has proposed slashing spending to balance the state’s books, an approach rejected by Democratic lawmakers. Their leaders in the state Senate and Assembly are trying to draft a joint plan likely to include proposals for tax increases to rival the governor’s budget plan.

There it is. Where the governor sees government as having to yeild and reduce itself, the legislature views government – at the size and scope it now occupies – to be a nonnegotiable necessity and entitled to more taxpayer cash to preserve it as is.

Funny that the "conservative" position in this fight – i.e. the attempt to maintain the status quo – is that of the "progressive" party in California.

However, the cut spending/more taxes fight is, in a nutshell, the difference between the two parties right now.  I used to say there isn’t a dime’s worth of difference between the two (and on many issues that’s still true) but in terms of how to balance a budget, the “reduce government/ reduce spending” approach seems to now be solely owned by the GOP.

Whether or not they’ll actually do that should they again find themselves in the position of power to do so is obviously another question entirely. 

In the case of the Democratic party – they’re now a wholly owned subsidiary of government unions, and their pandering to these unions is both short-sighted and destructive.  The party that used to be able to claim the mantle of the working man’s party is now almost exclusively the government union worker’s party.  And of course that means keeping government large and well funded.

It’s going to be interesting to see how this fight comes out – but even with Schwarzenegger representing the GOP side of things, it is clear which side is the taxpayer’s friend.

~McQ

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DNCC still whistling past the graveyard of Nov. election

The DNCC has issued a "what, me worry?" memo saying that it is just impossible for the GOP to take the House in November. Per the DNCC, it won’t happen. And here’s why:

Republicans will need to win 39 seats to take back the House. Democrats will win at least four Republican seats (the best opportunities include: LA-02, HI-01, IL-10, DE-AL, FL-25). As a result, the real number of seats Republicans will have to pick up to win a majority is at least 43. To win 43 seats, the NRCC would need to put 70 to 80 seats in play. The NRCC have simply not put that many Republicans seats in play and do not have the resources or caliber of candidates to do so.

As Nate Silver at FiveThirtyEight asks, so if they put 69 (or 68 or 65?) seats in play, no chance of winning?

It’s nonsense on a stick, but regardless of how false their reasoning is, it’s a memo meant to bolster the moral of the troops facing a wicked election season in November. This is what many would call "whistling past the graveyard".

Point two in this ghastly bit of political miscalculation:

This cycle, there are only 20 Democratic open seats, including several that are in safe districts. If Republicans have a great election night, they would still only win 50 percent of the Democratic open seats. Conservatively, Republicans would then need to beat 35 Democratic incumbents to win the House – which is simply not possible given the Republicans resources deficit.

Did you notice the unfounded assumption? The GOP, even if everything goes perfectly for them, will only win "50 percent of the Democratic open seats". Of course that’s not at all clear at this point, but again, the specious reasoning in the memo isn’t meant to be correct, necessarily, as much as it is meant to calm fears.

And the DNC has decided that the Tea Party is the wild card on the GOP side and that actually works for them:

The Tea Party has presented three problems for Republicans. The most glaring problem is where the Tea Party candidate has defeated the moderate (and more electable) Republican candidate. Second, Republican candidates are being forced to take unpopular extreme positions to satisfy the ideological base to avoid defeat in their primaries. Third, we are seeing numerous Tea Party candidates run as third party candidates which is splitting the Republican vote…

Of those three points, only the last is valid.  And in the races where that occurs it may indeed have an effect.  As for the rest , moderate may not be the winning pick as the pendulum swings back the other way, and the positions the candidates are “forced” to take may only be seen as “extreme” and “unpopular” by Democrats, who aren’t going to vote for GOP candidates anyway.

This memo has Nancy Pelosi – who we all know is a math whiz – written all over it.  She took great exception to Robert Gibbs saying a week or so ago it was possible that the Democrats may lose the House in November.  This is her wacky reasoning to a tee.   As Nate Silver says, the memo is full of “arbitrary math”.  I’d add it is also full of false premises and conclusions.

But hey, if it calms the fears of the Democratic House members in jeopardy, I guess Pelosi, et. al. will be satisfied until Wednesday morning after the first Tuesday in November, that they’ve successfully slayed that dragon.

~McQ

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AZ immigration law – "preserving the status quo…"

A very interesting sentence in the judge’s injunction against the Arizona immigration law caught my eye yesterday. In her ruling, which voided much of the law, Judge Susan Bolton said:

“Preserving the status quo through a preliminary injunction is less harmful than allowing state laws that are likely pre-empted by federal law to be enforced,” she said.

Of course the real status quo is federal non-enforcement of immigration laws – thereby driving the state of Arizona and other states to take matters into their own hands.

That’s not the status quo Judge Bolton is talking about, but it is the reality of immigration enforcement in this country.

This obviously isn’t the end of the road for the law, but I’d guess it’s on life support as the appeals process goes forward. Bolton’s ruling is likely to reflect how the other levels of the federal judiciary will rule on the law.

I have to admit to being a bit surprised that she ruled against law enforcement checking immigration status while processing someone for a different reason and left intact the portion of the law making it a crime to stop a vehicle in traffic or block traffic to hire someone off the street. However she did block a provision that barred illegal immigrants from soliciting work in public places.

On the political side of things, AZ’s Democratic Attorney General, a possible candidate for governor, thinks he has a winner:

Terry Goddard, the Arizona attorney general who opposed the law and is a possible Democratic opponent to Ms. Brewer, was quick to condemn her for signing it. “Jan Brewer played politics with immigration, and she lost,” he said in a statement.

Brewer can only hope he keeps saying that until the election, because I’d guess – as much of a hot button as this is in AZ and because of the overwhelming support of the AZ voters – it’s really a loser for Goddard and the Democrats.

Even John McCain and Jon Kyle weighed in on the ruling:

“Instead of wasting taxpayer resources filing a lawsuit against Arizona and complaining that the law would be burdensome,” Mr. McCain said in a joint statement with Senator Jon Kyl, Republican of Arizona, “the Obama administration should have focused its efforts on working with Congress to provide the necessary resources to support the state in its efforts to act where the federal government has failed to take responsibility.”

But of course, the failure of the administration to take responsibility is the ‘status quo’, and it appears, unfortunately, that it will be “preserved”.

~McQ

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Dale’s Observations For 2010-07-28

The Fed's Beige Book report on economic activity disappoints investors, economists. http://bit.ly/a3he8L #RecoverySummer #

And yes, I said VAT. A national sales tax like the Fair Tax is a non-starter. No high rate sales tax has ever worked, anywhere in the world. #

The Chicago boys and Bruce Bartlett-finally!-have accepted my long-held position of scrapping the income tax for a VAT. http://bit.ly/bcFfIx #

Panasonic Launching 'World's First' Consumer 3D Camcorder, which can shoot in 3D or HD. http://bit.ly/be08Gu #

Durable-goods orders fell by 1.0% in June to a seasonally adjusted $190.5 billion. http://bit.ly/cHAZ8h #RecoverySummer #

What Would Happen if the Bush Tax Cuts Expire? http://bit.ly/bxe76e #

U.S. cities and counties will have to cut hundreds of thousands of jobs. http://bit.ly/9jU2ZE | They say that like its a bad thing. #

Once again, Massachusetts does its bit to ignore the bits of the Constitution liberals don't like. http://bit.ly/bwRN3a #

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Why "science" has a problem

It’s a fairly obvious reason that Kenneth P. Green and Hiwa Alaghebandian, writing in the Journal of the American Enterprise Institute, point to as the problem – in some areas, science and scientists have gone from being neutral observers of facts and purveyors of information developed through the scientific method to attempting to assume an authoritarian and activist role in our lives. Not all of science, obviously, but certainly a visible and loud minority. And that causes problems for all of science:

In the past, scientists were generally neutral on questions of what to do. Instead, they just told people what they found, such as “we have discovered that smoking vastly increases your risk of lung cancer” or “we have discovered that some people will have adverse health effects from consuming high levels of salt.” Or “we have found that obesity increases your risk of coronary heart disease.” Those were simply neutral observations that people could find empowering, useful, interesting, etc., but did not place demands on them. In fact, this kind of objectivity was the entire basis for trusting scientific claims.

But along the way, an assortment of publicity-seeking, and often socially activist, scientists stopped saying, “Here are our findings. Read it and believe.” Instead, activist scientists such as NASA’s James Hansen, heads of quasi-scientific governmental organizations such as the UN Intergovernmental Panel on Climate Change, editors of major scientific journals, and heads of the various national scientific academies are more inclined to say, “Here are our findings, and those findings say that you must change your life in this way, that way, or the other way.”

The two authors took a look at phrases scientists have been quoted as using over the years in statements they’ve released or how the media has interpreted them.  And make no mistake – in many cases the media aided and abetted these activist scientists.

So here’s what they found:

[A]round the end of the 1980s, science (at least science reporting) took on a distinctly authoritarian tone. Whether because of funding availability or a desire by some senior academics for greater relevance, or just the spread of activism through the university, scientists stopped speaking objectively and started telling people what to do. And people don’t take well to that, particularly when they’re unable to evaluate the information that supposedly requires them to give up their SUV, their celebratory cigar, or their chicken nuggets.

In essence we had the confluence of “save the world” journalism meeting activist “save the world” scientists and the result was more agenda driven partisanship (and partnership) than objectivity.  Some scientists felt compelled to save us from ourselves and many journalists shared that desire.  The most obvious result of that has been the sham science of “global warming”.

The authors conclude by pointing out how science has, in some cases, become the “regulatory state’s” lap dog and what it has to do to redeem itself:

If science wants to redeem itself and regain its place with the public’s affection, scientists need to come out every time some politician says, “The science says we must…” and reply, “Science only tells us what is. It does not, and can never tell us what we should or must do.” If they say that often enough, and loudly enough, they might be able to reclaim the mantle of objectivity that they’ve given up over the last 40 years by letting themselves become the regulatory state’s ultimate appeal to authority.

They’re absolutely right – and, every time we see an activist scientist getting into the “what we must or should do” nonsense, we need to call him or her on it.  And we need to continue to be highly skeptical of the state’s appeal to science as the final authority when doing so is decidedly in the state’s favor.

~McQ

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Promises, promises, promises …

Randall Hoven, over at American Thinker, provides us with one of the most succinct and powerful posts I’ve seen is quite a while.

Remember this quote?

“If we do nothing to slow these skyrocketing costs, we will eventually be spending more on Medicare and Medicaid than every other government program combined.  Put simply, our health care problem is our deficit problem.President Obama, September 2009.

That was the “promise” that Obama made – pass health care reform and pass deficit reduction.  Except, as usual with this man, it appears the opposite is actually true.  And that is to be found in a CBO graph.

So the projection shown in the graph is that if we were to spend on those programs at the March 2010 baseline (as the law reads now) from now till 2020 we’d spend about 400 billion, but with the new and improved ObamaCare, that goes to over 600 billion?  Yup, real “deficit reduction” in that package, huh?

We’re also seeing the stirrings of a move from the left to dramatically and drastically cut military spending.  Already the war in Afghanistan has gone from the “good and necessary war” per Democrats to one they don’t want to fund anymore.  Apparently the military is the area of choice within which the Democrats want to “cut spending”.    Again, Hoven, looking at CBO numbers, provides some context to the debate:

Hoven’s Index for July 26, 2010

Medicare and Medicaid spending as percent of GDP:

1970:  0.7%

2007:  4.0%

2020:  5.9%

Defense spending as percent of GDP:

1970:  8.1%

2007:  3.9%

2020:  3.6%

Source:  CBO.

The bottom line is, of course, that ObamaCare is the biggest “deficit reduction” hoax foisted upon the citzenry of the US since the debate about income tax which claimed it would never rise above 2%. And, in fact, it is the rise of entitlement spending – not military spending – where our problem lies.

And for those of you who bought into the monstrosity of ObamaCare under the “deficit reduction” premise – shame on you. Why is it you demonstrate common sense when email scammers from Nigeria try to get your bank account number, but you fall right into the largest legislative scam in recent history based on vague and nonsensical promises that most 5th graders could see through?

Of course you’re most likely among the same people who bought into the hype surrounding this empty suit we now have as a president, so I shouldn’t be that suprised I suppose.

~McQ

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DISCLOSE act defeated … for now

But Chuck Schumer is promising a “flurry of votes” on the bill until it finally passes.  Republicans held solid on this attempt to get around the Supreme Court ruling that found the former campaign finance bill unconstitutional on 1st Amendment grounds.

Senate Democrats were only able to muster their 59 votes, which, of course has Ezra Klein and others calling for an end to the 60 vote Senate rule for cloture.

I say the act is defeated for now for a reason.  And that reason, as usual, is Olympia Snow (R-ME):

Olympia Snowe (Maine), whose vote was closely watched on the issue, said the bill wasn’t in a position yet where she could support it.

Key word is “yet”.  The promise in that word is Democrats can do something that will put her in a position to support it.

But back to Schumer.   He, of course, claims the “health” of our democracy rests on its passage.  Actually the health of our democracy rests on removing Senators like him from office, but here’s his statement:

"It’s the amount of money, not who you are, that is affected. And so we’ve seen a campaign of desperation, of full muscle, to try to do everything they can to stop this bill because they realize, as already in some campaigns we have seen, how this will fundamentally change the balance of American politics," he said. "It will make the average citizen feel more and more remote from his or her government. It will hurt the fabric of our democracy."

I would posit that the average citizen couldn’t feel more remote from the government than they do now, and this bill’s passage or non-passage has absolutely zero to do with that. 

In fact, the average citizen finds the more and more it hears from Senators like Chuck Schumer and sees them in action, the more that citizen realizes that they have little use for the Constitution – except to wrap themselves in it when it is politically expedient to do so – and will take every opportunity to attempt to insert government control where that document promised government wouldn’t be allowed.

It isn’t refusing to limit the 1st Amendment that’s damaging to the “fabric of our democracy”, it’s Senators and other lawmakers who attempt to do it that are the threat.

~McQ

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