Saturday, July 16, 2011

"They call you PIGS but they don't understand"







Tea Party Hero: Bill Clinton

My good friend Bill Chafe (yes, one of the 88; deal with it) wrote a piece for the N&O this morn. And he's basically right. So I sent him this note:

Dear Bill:

I enjoyed your article in the N&O this morning.

Thought I would share a table I made up for an article I just wrote for CRITICAL REVIEW. This is total government spending per capita, in real (2010 constant) dollars, by decade:

Table: U.S. Nominal and Real (2010$) Federal Spending Per Capita
Year...NomG/Cap...RealG/Cap
1970...$1,000.... $5,500
1980...$2,600.... $6,800
1990.. $5,100.... $8,300
2000.. $6,500.... $8,300
2010.. $12,300... $12,300

(Sources: Budgetof the US Government: Historical Tables 3.2 and 7.1, and StatisticalAbstract of the United States)

So ignoring the fact that Republicans are hopeless hypocrites about tax cuts, it is pretty clear that Republicans presidents are also the cause of spending increases! That's mostly, but not exclusively, because of idiotic military spending, but that hardly matters.

The usual story about how Clinton balanced the budget was that he had huge tax increases to cover his big spending growth. Well, thanks for playing, but no.

Constant dollar Gov't spending per person was $8,300 in 1900, and was still $8,300 in 2000 when "conservative" GWB took over.

We have had exactly one president who embodied the "keep spending low, balance the budget" conservative principles of the Tea Party since 1970, and his name was... Clinton.

So, goodONya, sir. Hope to see you sometime.

Mike

What if....

What if they had an election and nobody ran?

Let's hope this movement spreads....

Friday, July 15, 2011

The culture that is Scotland

"I've been a police officer in Greenock for 20 years and so I've seen a lot of wedding parties turn nasty, but this was something else".


And that's putting it mildly. Story is here.


Lounge Chairs = Lebensraum?

This video is tremendous.

I like the tiny German swim briefs. That is what KPC pal Martin wears, though he prefers brighter colors. I still have nightmares about it.

(Nod to Tommy the Brit, who looks pretty good in German swim briefs)

Cut cut cut, cut cut defense

I don't see how anyone could look at this chart and not see an easy $2 trillion in budget cuts over the next 10 years ($200 billion per year for 10 years).



To paraphrase / update some long dead white dude: "$500 billion for defense and $200 billion back in our pockets!!"

PS: OMG, Shrub was such a bad bad bad president. And to follow him, the GOP wanted us to go with this guy:





Thursday, July 14, 2011

Wednesday, July 13, 2011

Lavish links

1. The wonder that is Ron Artest (this is a must read).

2. Edwin Edwards wants a reality show.

3. Barry Eichengreen jumps the shark. He wants the "Marshall plan for Greece" to finance (and I quote) "building new solar and wind power-generating facilities, in order to turn Greece into a major energy exporter."

Hat tips to Tyler C, Keith G, and ironically, Barry E's own Twitter feed.


Should we allow insider trading?

"Insider Trading" sounds like something that should obviously be illegal.

The problem is that outlawing IT and enforcing the law rigorously ensures that share prices (or whatever the asset is) do NOT...repeat NOT...reflect all the information available about their future profitability. This argument is quite persuasive to me. Our man Don Boudreaux podcastrates the ideas pretty well.

Besides, the law now is unenforceable.

LeBron is not so sure.

Now, this study. Interesting.

Bubbles and Information: An Experiment

Matthias Sutter, Jürgen Huber & Michael Kirchler
Management Science, forthcoming

Abstract: Asymmetric distribution of information, although omnipresent in real
markets, is rarely considered in experimental economics. We study whether information about imminent future dividends can abate bubbles in experimental asset markets. We find that markets with asymmetrically informed traders have significantly smaller bubbles than markets with symmetrically informed or uninformed traders. Hence, fundamental values are better reflected in market prices — implying higher market efficiency — when some traders know more than others about future dividends. This suggests that bubbles are abated when traders know that a subset of them have an edge (in information) over others.


Sounds to me like an argument for allowing at least limited insider trading. Of course, fraud and deception (rumors and lies) would still be just as illegal, and common, as before.

(Nod to Kevin Lewis, who has been an insider for years)

Debt ceiling blues

Ok people, we are now, what, like 2 weeks away from Armageddon? Pretty impressive.

I thought I'd offer some thoughts.

First off, there shouldn't be a debt ceiling. Looking at US debt experience in WWI and WWII should be enough to convince one of that. Maybe some kind of conditional ceiling, like 70% of GDP with a suspension for declared wars and a provision to get back to 70% within 5 years of the cessation of hostilities.

Second, I am actually with the Republicans here on the no taxes part of the negotiations. Look, we already have substantial tax increases baked into the next few years. Expiration of the Bush tax cuts and a host of new taxes and fees to finance Obamacare. Absent a Republican sweep in 2012, taxes are already going up a lot in the near future. If anything, I would cut taxes now.

Third, I believe that we need to cut spending soon. I am not a fan of Federal spending being at 25% of GDP and rising, but there are better places to start than social security. How about starting with the ridiculous subsidies we give farmers and big business that distort and cause harm around the world. Stop the Ethanol madness, the sugar subsidies, the cotton subsidies, the "green jobs" subsidies. Then turn to the Pentagon. People, defense is a public good. My consumption of it does not reduce the quantity available for your consumption. Thus, there is no reason for defense spending to rise continually with population/GDP. Get the hell out of Iraq and Afghanistan. Get out of Germany and Japan. WWII ended more that 50 years ago. Oh, and get out of Greece too (yes we have soldiers in Greece!). Cut defense spending by 25% at a minimum. Oh and let's eliminate NASA too while we are at it.

Fourth, I really admire Obama's spin job on the negotiations. First he wants a "clean" raising of the debt ceiling, then he demands that taxes have to rise in order to raise the debt ceiling, and he is getting a lot of buying that it's the Republicans who are recklessly killing the debt ceiling increase

This can't be right....

This can't be right, can it?

Of course, if it were right, it might be useful. You wouldn't need to take
specific things along, you could just fabricate what you need when you get there.

The LMM is wondering if it can replicate a husband that picks up wet towels. I said no, it only makes actual copies. So the LMM is now wondering if it can make George Clooney.

Tuesday, July 12, 2011

The WMOE Talks About Price Controls

The Whitest Man on Earth dishes on price controls, in Forbes.

Pretty cool.

Takeaway

Unemployment benefits expiring? Please.

Wake me up when three things happen:

1. Social security/medicare/entitlement reform. Raise ages, means test, raise maximum payroll before taxes go to zero.

2. Cut DOD and other defense related spending by at least 15%. More is better, but no less.

3. Reform taxes along lines suggested by Bowles-Simpson budget commission proposal.

Everything else is bullshit. And I got to say so on the Takeaway this morn. (7 am is early for a radio show...ugh)

Monday, July 11, 2011

Self Serve Line

Masturbation may be adaptive.

Plus, there's a video of an elephant doing it. Not safe for work, or for avoiding nightmares.

The Tripod: It Lives

Hadn't been to the tripod for quite a while. Top of mountain above Park City, Utah. Pretty darned high, as Jayme is thinking in this photo... Anna the Intrepid snapped these pix, and I am reproducing them here, with all proper respect to her. (Thanks, Anna!) This was taken April 23. But still deep snow on the snowcat trail, where it got packed down all winter. That's the famed David Schmidtz wearing the long pants, with me and the Bishop guarding the rear flank in case of a follow ambush.
Once we got up, the Bishop and I conferred on strategy. (it's 3k meters. "Can you breathe yet?" "Nope, you?" "Nope.")
The obligatory triumph at the tripod shot. That's Anna the photographer (except this shot, obviously) in the pink standing to my left.

Five seconds after this shot was taken, mocking my timid old man descent in three feet of snow, Anna fell flat on her boom-boom. Bicycle shorts and snow...yeehah!

The tripod is one of my very favorite places in the world. For those who got to share it this year...thanks!

Eye Troubles

Damn, damn, thrice damn.

Trouble seeing, left eye hurting. Dr. Gupta says "macular edema," which just means its swollen. Scar tissue on retina, though it's the clear kind of scar tissue not the thick PVR kind, which is some good news.

I get two prescriptions. One is for Nevanac. 3 ml: $350. At 20 drops/ml, that almost $6 per drop. Now, we have excellent insurance, so it much less than that to me. But $6/drop? Wow.

Worrisome. If this doesn't take down the swelling, I go back under the knife for surgery to remove the scar tissue. Firetruck.

Bhide - Phelps on IMF

KPC pal Amar Bhide has a nice piece in Newsweek (with Edmund Phelps) about the IMF. Clear and useful.

Excerpt:

The Greek debacle and the North African drama raise existential questions about the IMF. Responsible governments have no business borrowing vast sums from abroad, rather than from domestic sources. That’s what tinpot regimes do. And lending even more to borrowers who can’t pay what they already owe? That’s what loan sharks and mafiosi do.

The IMF’s business model sabotages properly functioning capitalism, victimizing ordinary people while benefiting the elites. Do we need international agencies to enable irresponsible—verging on immoral—borrowing and lending? Instead of dreaming up too-clever-by-half schemes to stumble through crises after they happen, why not just stop imprudent banks from accommodating foreign borrowing by feckless governments?

Dance band on the Titanic

Oh my. Yet another story about economists behaving badly. This time it's Bruno and the Frey-ettes. Multiple self-plagiarism plus possible more traditional plagiarism or at the least incredibly sloppy literature checking.


The cliff notes version is that Frey et. al basically published the same paper 4 times in different journals without any of the 4 referencing or making note of the existence of the others.

Further, there are multiple previous papers that use the same data, similar techniques and draw similar conclusions. None of them are cited in any of the Frey et. al papers.

The econ job rumors site has a huge thread on the Frey affair as well.


Not the Onion

The mind boggles.

The housing crisis/sub-prime debacle was caused by government complicity in enabling fake mortgage originators to write loans and then turn around and sell them immediately to dupes (i.e., da Fanny and da Fred). The Dems voted down an amendment that would have required a 5% down payment to meet the "qualifying restriction." So, yes, the Chris Dodd quote, "this is biased! it would restrict home ownership only to those who can afford it!" is fake (this is the satirical source of that fake quote). But the Dems acted as if that was exactly what they believed, and voted down even a 5% down payment as being racist and biased. Seriously, they did that. Really.

Okay, but surely we learned something, right?

No, to the contrary. The Justice Department is trying to hunt down banks that resist making loans to people who have zero chance of paying them back. It doesn't seem possible, but it's true.

So now we know why the Dems voted down the Corker Amendment. They actually want to force banks to make zero down payment loans to people whose only income is public assistance. We are NOT DOING ANY FAVORS to poor people if we saddle them with loans they cannot pay back. Holder and his thugs at Justice are taking another step and blaming the banks for enforcing any down payment rule (the norm used to be 20%! But now 5% is too high! Yikes! YIKES!)

The Obama administration seems genuinely surprised at employment declines and the lack of growth. If you constantly abuse financial instituions, they are not going to loan that money. And if you try to force them to loan it, the money will disappear. The Roosevelt administration tried several of the same tactics in 1935-6, and the result was a second dip, with employment crashing.

As we say a lot here at KPC: Business needs certainty. But politicians like uncertainty, and fear, creating dependency. Okay, but if you make that play, Mr. Obama, Mr. Dodd, and Mr. Holder, you can't seriously expect to see economic growth. If you pursue Peronista policies, you will get Peronista results. Go ahead and cry for us. The U.S. is becoming Argentina.

I wish this were the Onion, but it's real.

(Nod to the Blonde)

Sunday, July 10, 2011

I [heart] the Orlando Five Oh

this guy loves the Orlando police department. Or, maybe he doesn't.
I think he doesn't. Or maybe he does. What do YOU think?

A dark day for economics

As if our failure to predict the financial tsunami, and our constant bickering and dithering about appropriate economic policies weren't enough, now comes Paul Ryan's Vino-gate to cast further unflattering light on us economists.

First consider the "whistle-blower" Dr. Feinberg. She seems to think you need a PhD in economics to be able to do basic arithmetic:

"I was an economist so I started doing the envelope calculations and quickly figured out that those two bottles of wine was more than two-income working family making minimum wage earned in a week."

Man I guess she has STATA on her smartphone or something 'cause that's a real brain teaser:

700-(7.25X40X2) >O

I am going to go out on a limb and say that set of calculations owed more to her being a liberal who hates Ryan and others of his ilk than being an economist.

Then consider Ryan's two dinner companions, who also turn out to be economists and to be the ones who ordered the two bottles of wine (according to Ryan). They are not exactly covered in glory either.

First, as Ryan himself points out while throwing his pals under the bus, it's a douchebag move to order the most expensive bottle on the wine list and then to double down on it shortly thereafter.

Second, getting up and throwing F-bombs at a woman, even if she's being obnoxious (or "crazy" and "possibly drunk" as Ryan put it) just ain't cool.

People, I'd like to assure you that economists are not really like this at all, but what reason would you have to believe me?

Here's another take on the situation from our friends at Popehat.