Remy!

It takes a talking ass.  Jim Carrey suffers from an enlarged sense of entitlement.  Well, and a talking ass.

David Stockman wants to pee in your cornflakes

Wow. David Stockman confuses cause and effect, goes all gold-buggy, slanders Milton Friedman, and just generally comes unhinged in a massive hissy fit in today's NYT.

Let's break down a little bit of it, shall we?


Since the S&P 500 first reached its current level, in March 2000, the mad money printers at the Federal Reserve have expanded their balance sheet sixfold (to $3.2 trillion from $500 billion). Yet during that stretch, economic output has grown by an average of 1.7 percent a year (the slowest since the Civil War); real business investment has crawled forward at only 0.8 percent per year; and the payroll job count has crept up at a negligible 0.1 percent annually.

 This is a great analysis except that the timing is wrong and the causation is wrong. Here's the Fed's balance sheet since 1990:


 

As you can see, there's nothing special about 2000. There's a tiny blip, but the balance sheet stays on its path from 1900 to 2008, when it explodes.

And of course, that is/was the Fed's RESPONSE to the great recession. The terrible numbers Stockman gives for GDP growth and job growth are a direct result of the great recession. Real GDP grew strongly from 2000 to 2007, then collapsed.

A continually expanding Fed balance sheet didn't produce consistently bad economic numbers; the great recession happened and the Fed responded.

Sure, the Fed responded in an unconventional way, with asset purchases, because its policy rate was already pegged at zero. And sure, the unemployment rate hasn't fallen rapidly in response to quantitative easing. But the Fed has a dual mandate of stable prices and maximum employment, and their attempts to raise economic activity have not in the almost 4 years of unconventional policy aggravated inflation.

Here's that chart:

You can see how the Fed's unconventional policy responses have been geared to fears of deflation. Both the initial burst of asset purchases and the second rise came in response to falling inflation rates that threatened to go or stay negative.

This is probably the least shared view in America, given the Fed's many critics on both the Left and the Right, but Bernanke has actually done a very good job during this crisis and slow recovery.

Now let's consider Stockman's weird attack on Friedman:

This explosion of borrowing was the stepchild of the floating-money contraption deposited in the Nixon White House by Milton Friedman, the supposed hero of free-market economics who in fact sowed the seed for a never-ending expansion of the money supply. The Fed, which celebrates its centenary this year, fueled a roaring inflation in goods and commodities during the 1970s that was brought under control only by the iron resolve of Paul A. Volcker, its chairman from 1979 to 1987. Under his successor, the lapsed hero Alan Greenspan, the Fed dropped Friedman’s penurious rules for monetary expansion, keeping interest rates too low for too long and flooding Wall Street with freshly minted cash.

So Arthur Burns was a Friedmanite? So Paul Volcker who conquered inflation with his "iron resolve" didn't use a policy of targeting monetary aggregates a la Friedman? So the "Friedman Rule" which states that the price level should fall at the rate of time preference is fuel for the fire of "roaring inflation"?

Is Stockman trying to get a date with Naomi Klein?

I'll leave deconstructing the rest of this dreck as an exercise to the reader.

It's really been a banner week for wingnuts.

Happy Easter!

NSFW: An Honest Cable Ad

Remember, NSFW.  But a pretty good description of the most likely result of trying to "regulate" monopoly.  It's....monopoly.



Nod to Angry Alex

That's nacho cheese!

People can you imagine the pure adrenaline rush, the unmitigated joy, of cruising down the highway with 20 tons of stolen cheese in the back of your truck?

Meet Veniamin Konstantinovich Balika, who was apprehended in New Jersey with a load of hot Wisconsin Muenster.

Now, I personally believe that ALL Muenster cheese should be illegal, but that's a story for another day.

It certainly is no coincided that this malefactor of great cheese was arrested at the Vince Lombardi rest stop.

Maybe Mr. Balika should hook up with this guy.

Via Kottke.org, but the hat tip goes to loyal KPC reader Gerardo.


*****************UPDATE********************

According to NPR: this is what the arrest of Mr. Konstantinovich Balika at a New Jersey Turnpike rest stop looked like:

(clic the pic for an even less realistic-looking image)

The update hat tip goes to MK, another loyal KPC reader.

Diana Hsieh: Express Advocate?

This May, a [case] will be heard by the Colorado Supreme Court in Coalition for Secular Government v. Gessler. This case centers around a small nonprofit, run by Diana Hsieh, a doctor of philosophy, who wanted to discuss a secular understanding of the principles of life, liberty, and property. To do this, Dr. Hsieh formed a nonprofit corporation, which she named the Coalition for Secular Government (CSG). CSG commissioned a paper discussing its philosophy regarding human personhood, written by Dr. Hsieh and her friend Ari Armstrong. On behalf of CSG, Dr. Hsieh and Mr. Armstrong raised money from their friends to help pay for the costs of writing and publishing the paper. They also ran some Facebook ads and made flyers to let people know about the paper.

The paper is 32 pages long, with 176 endnotes. It makes philosophical arguments concerning the complex public policy debate surrounding the definition of personhood. The paper used a proposed Colorado ballot measure as a backdrop for its discussion on the issue. The paper concludes with a single sentence of express advocacy: “If you believe that ‘human life has value,’ the only moral choice is to vote against Amendment 62.”

This one sentence of express advocacy meant that CSG may be forced to register as a issue committee with the state of Colorado.  

Amendment 62, for non-Coloradans.

To summarize:  A philosopher argues, in an academic-style paper, for why calling a week old "fetus" a full legal person a bad idea.  Then she draws the conclusion that if you accept this argument then Amendment 62 should be voted down.  And for that she is forced to register, report all her donors and support, and pay significant regulatory costs.

Before "Citizens United," this case would have been a slam dunk for the nannies.  Now...interesting.  Thank goodness the Supreme Court decided Citizens United correctly!  Blog post.   

Phone call for Alex Rosenberg...

It's Hard....It's a Hard...It's a Hard Rain, That's Gonna Fall

Like our benighted Prez, France's Hollande honestly believed that all you had to do to "solve" the unemployment crisis was to have everyone work for the government.

But if everyone works for the government, or otherwise gets more money from the government than they pay to the government in taxes....well, SOMEBODY has to pay.  There is no way to add up a bunch of expenditures and call it "revenue."

I don't blame Obama, or Hollande, for believing that nonsense.  I blame voters for believing Obama and Hollande.  They ain't never lied:  They SAID they were going to do what in fact they are doing.

Ooooh!  Wait!  Hollande DOES have a plan, after all.  You just have to put a 75% tax on the few people who DO have jobs.  Of course, they will all leave the country.  And then you blame THEM for being greedy.  And Germany bails you out.  France is occupying its impregnable "ImaginIknow" line.

"Right" out of their minds

People, this morning I have to write about right wingers who have totally lost their minds.

Let's start with the trivially mean and stupid. Yes, Rep. King, I'm talking about you. Complaining publicly that the Obama girls shouldn't be going on vacation while the country is struggling. Nice job nimrod.

Now to the New York Post, and the inimitable Thomas Sowell, who stumbles his way to the innuendo that quantitative easing in the US is the same as Cyprus' haircut on bank depositors. There's only one problem with his argument: THERE IS NO INFLATION TOM!!!!  When when when will these inflationistas learn how to read a chart:

Finally to the dumbest of the dumb for the day at least. Art Laffer and Stephen Moore in the WSJ on "The Red State Path to Prosperity". Hey guys, repeat after me: THE RED STATES ARE THE POOR STATES! Please please please, learn how to read a chart before you make fools of yourselves.

Here are the 10 richest states: Maryland, New Jersey, Connecticut, Alaska, Hawaii, Massachusetts, New Hampshire, Virginia, California, Delaware.

Here are the rankings for the no income tax Southern states Laffer & Moore are so proud of: Texas (25th), Florida (38th), Tennessee (44). They also brag on Louisiana (41), North Carolina (39), Oklahoma (45th) and Kansas (28th).

Illiterate and angry is no way to go through life, guys.

Jerry Littlemars Deals With It; Can YOU?

A very nice video.  Mr. Littlemars says you'd best RECOGNIZE.



Here is the video Mr. Littlemars is referring to...




"HE JUST EXPLAINED IT!"  Yes, indeed. 

Krugman Finally Jumps the Shark

I have for some time offered a defense of P-kroog. 

A tepid defense, to be sure.  But the defense has been that he had not sacrificed his intellect to his ideology in the area of international trade.  Sure, he sold out and lied about domestic macro policy, but okay:  he was still sensible on his open economy macro claims.  In fact, really impressive.  (For an example, read this.   That's great stuff.  P-kroog vintage 1993).  P-kroog, on trade, still had some sense of being required to use actual logic and evidence.

Until....now.  P-kroog has decided that the reason that investors are trying to get their money out of Greece, Cyprus, and etc. is that (wait for it) the INVESTORS are bad people, and need to be controlled.  Here it is.

There is a reason why capital mobility is one of the Mundell-Fleming "unholy trinity," along with a currency peg and an independent monetary policy.  That reason is simple:  if a country wants to impose capital controls, it can only be because they want to do something appallingly stupid to their exchange rate or their monetary policy.  Some commentary from FEE.

(I should note that the "Krugman thinks he is Pharaoh" comparison makes sense.  He won't let the capital go, he thinks he is a living god, and he lives in a city near denial, or the Nile, or something like that)

Online course on the Mexican economy

LeBron von Strauss has already announced this, but Mrs. Angus has done a course of around 50 short videos on Mexico for Marginal Revolution University.

Of course you know this is self-recommending, right?

Here's the first one:





The rest are available here.