Saturday, July 30, 2011

Has Government Grown?

So, I had a little fuss with my good friend, the ever reasonable and painfully earnest Dr. Brendan Nyhan, @brendannyhan

Brendan tweeted: Big government! "the number of govt. jobs has fallen 2.2 percent" since 6/09. never happened in postwar recovery before (LINK)
I responded: Um...right. The number of gov't jobs NEVER falls, always grows. Why is that inconsistent with "big gov"?

Brendan responded: People think Obama had presided over massive government expansion and it's just not true.
I responded: Check gov as % of GDP! Massive spending increase equals bigger gov, no matter how much u love it

Brendan responded: most of that is denominator shrinking due to recession plus automatic spending in recession
I responded: most but not all. Gov has grown; there may be good reasons...

So, here's the question: NOT is bigger government better, that is a matter of ideological taste. The question is: Has government grown? What measure of "government" should we pick?

Here is total government employment, from 1960 to the most recent available, June 2011, by five year increments until recently (in millions of workers):

1960 8.7 1965 10.2
1970 12.7 1975 14.8
1980 16.4 1985 16.5
1990 18.4 1995 19.4
2000 20.8 2005 21.8
2008 22.509 2009 22.505
2010 22.730 2011 22.064 (June)

(From Census and BLS data)
I should note that the apparent Obama increase 2009-2010 was at least in part due to 225,000 or more temporary census workers. But then the decline in 2010-2011 has the same cause. Thus, the number of government employees, total is basically flat since 2008. Still these are totals; what about federal government employees?

2009: Total gov workers--22.505 Fed gov workers--2.820 State gov workers--5.330
2011: Total gov workers--22.064 Fed gov workers--2.830 State gov workers--5.091

In other words, federal employees have stayed level, and the states have gotten rid of 250,000 workers. The residual, local governments, must have gotten rid of about 200,000 workers.

Growth of Government? Not really. Government employment has been essentially flat since 2005. In spite of the rhetoric about "an army of new IRS agents," and other fears, government employment grew faster under GW Bush than under Obama, at least so far.

Has government spending increased? I computed the numbers and summarized them in this table.

Wow. If there was a spending increase, it was the last year of Bush, 2008-9. On the other hand, that was supposed to be one time emergency stuff, TARP and Porkulus.

The table shows that the size of federal spending has increased, controlling for inflation, by fully 25% since 2008. And it is not going back down. The "emergency" is permanent, I guess.

Government Growth? Yes, but less than I expected, and much of it in the 2008-2009 budget year, for which only Bush can be blamed. I guess it depends what your baseline is. If spending should have gone back down, and it hasn't, we can blame Pres. Obama. But the war and the recession... Obama didn't start the fire. Not sure why he would claim credit for throwing gas on it, though.

Scope and Intrusiveness of Regulation: This is mostly perception, I suppose. Not sure that the ranting about big business and the health care rules are really worse than the Patriot Act, Gitmo, and National Security Letters.

Deficit: Fuggettaboutit. Huge increase, much of it under Obama.

So, okay Brendan. Pres. Obama is no worse than GW Bush on making government grow. But Bush was the WORST PRESIDENT in 100 years or more. Is that all you've got for a slogan?

BH Obama: He is STILL not GW Bush.

Dr. Newmark: Incentives

KPC pal Craig Newmark notes that jail, or rather the threat of it, might improve the process of budgeting and governing.

Actually, he cites two interesting sources that make that argument. But they have his endorsement.

(Yes! The inventor of "Craig's List." Not.)

Milwaukee: Famous

Spent some time with Tofe and Koopa this week, in Brew-town. (Koopa's eyes don't always stick out of his head like that. I blame the Red Bull, honestly. Of course, I'm the idiot with the blue pencil in his hand, taking the picture; nice photography).

Went to the ballpark, and I had a man-salad in the Stadium Club (major props to Koopa, there). Yes, that is spinach, beets, green beans, a half pound of cheese, and a half pound of spicy sausage. MAN salad, my friends.
Got to sit in the dugout, before the game, and walk aroung on the field.

Later, stopped in at Hayek's Drug for some homage.
And, the Brew Crew stomped the stinkin' Cubbies three games, sweeping them back to the next games they will lose, down at Busch Stadium. I have the score cards and beer receipts to prove it! (Sure, yes, as a Cards fan I should root against the Brew Crew. But they are so cute and furry; we saw Braun hit a homer, and Fielder hit an opposite field, 450 foot shot to the upper deck!!! I bet HE eats man salads, though I guess he is now a vegetarian, right?)

Thanks to Tofe and Koopa. Major good time.

Friday, July 29, 2011

What? WHAT?

We are through the looking glass.

Fears of a default have caused the prices of US Treasury bills to skyrocket.

No, wait, you are not paying attention, look at that again: P*R*I*C*E*S*. Not yields. If prices go way up, yields go way down (though not below zero, really).

So, the market is still predicting zero chance of a default on t-bonds. All the market is predicting is that there will be a shortage of new t-bonds after we hit the debt ceiling. The anticipated shortage is driving prices up.

If we expected a default, or inflation there would be a sharply rising term structure in t-bonds. But if anything the terms structure is falling and getting flatter.

Check this out:

What kind of world do we live in? Nobody in the financial world is worried that the US will not pay its t-bonds. They are only worried that, if we hit the debt ceiling, there won't be enough new debt manufactured by our government to meet demand. Debt is our chief export, the only thing that balances our trade balance with China.

Professional wrestling, by comparison, has some elements of realism. NO ONE BELIEVES DEFAULT IS POSSIBLE.

(nod to @tylercowen , who tweeted the link)

Grand Game, Judge Judy Edition

This is actually pretty disturbing...

Is it racist? Should the guy really get the money for "being me"? On the other hand, if he qualifies, why is he doing anything wrong? He didn't make the rules...

Got My Hands on Everything, Like Dominique Strauss-Kahn

Pretty funny, some good lines.

There is even a Congressional hearing....hey, didn't Russ patent that?

Hey, yo, we straight out of twenties!

A big nod to my PiKA brother, John Donato!

Show me your O face!

Clic the pic for a more glorious image or go here for individual photos.

Thursday, July 28, 2011

Dang those danglers!

Florida has had problems with those bull ball danglers, which we described here at KPC three years ago.

A new incident: The Five Oh in SC is actually writing tickets!

(Nod to the Blonde, who being pure and innocent is easily shocked)

The Takeaway

Got to be on The Takeaway this morning.

Are new jobs numbers good news? Not so fast, there, Dusty!

Will Wilkinson: Democracy in America

Will Wilkinson from his blog at The Economist. He substantially improves the argument about indulgences that I made a few days ago. (Link to my op ed)

What we need to recognize is that prosperity needs stability, predictability, and optimism. But political success requires chaos, confusion, and fear.

Right now, the Republicans seem to be winning parts of the "You should be afraid! Very, very afraid!" race.

But BOTH sides win from telling you, "We can save you! Send money!"

Bricks in St Loo Taken By the Truckload

Nod to the Blonde

"Outlandishly Subsidized" Is Not the Same as Cheap

There is an old claim that cookie crumbs have no calories. Furthermore, dessert bites a woman takes off her date's/husband's plate are not fattening. That's why so often women say, "I don't want any dessert," and then will eat more than half of yours. (Plus, I *pity* the fool man who doesn't order dessert. Your woman does not want to be the sort of woman who orders dessert, so you have to do it. Just STFU and order...)

Okay, that's funny and all. But the Germans think of solar power the same way. They have these enormous, utterly irrational subsidies for solar everything, and houses all over that dark, cloudy country have hugely expensive solar panels. (Interesting, and surprisingly harsh, story in Spiegel).

But they say "it's cheap!" because the cost is subsidized by a fictional entity called, "The State." It doesn't actually exist, and the cost is being picked up taxpayers, which of course are the very people touching themselves and squealing with joy at how "cheap" the subsidized solar panels are.

Germans: if you want dessert, just order it. Don't pick off taxpayers' plates.

(nod to the Blonde)

Wednesday, July 27, 2011

Church! Congress Must Stop Selling Indulgences

We need a Reformation....or perhaps a different church?

My column in today's Durham Herald Sun

Fire 'Em!

Usefulness of Dismissing and Changing the Coach in Professional Soccer

Andreas Heuer et al.

PLoS ONE, March 2011, e17664

Abstract: Whether a coach dismissal during the mid-season has an impact on the
subsequent team performance has long been a subject of controversial scientific discussion. Here we find a clear-cut answer to this question by using a recently developed statistical framework for the team fitness and by analyzing the first two moments of the effect of a coach dismissal. We can show with an unprecedented small statistical error for the German soccer league that dismissing the coach within the season has basically no effect on the subsequent performance of a team. Changing the coach between two seasons has no effect either. Furthermore, an upper bound for the actual influence of the coach on the team fitness can be estimated. Beyond the immediate relevance of this result, this study may lead the way to analogous studies for exploring the effect of managerial changes, e.g., in economic terms.

Wow. I'm not sure I have ever seen quite so many endogeneity problems in one study. If changing the coach mattered, teams would do it, and keep doing it, until it doesn't matter.

(Nod to Kevin Lewis)

The (tea) party's over

The head tea-partier in charge, Mark Meckler, is a scary dude. Check out this snippet from a Q&A with him:

Is there any scenario where you think it would be OK to raise the debt ceiling?


What do you think is the ideal solution to this impasse right now?

"The ideal solution is to cut spending so that we stop spending beyond our means. The ideal solution is what you would have to do if you were in the same situation personally that the country is in. The ideal solution is what each of us as citizens have to do when we get in financial trouble personally or what companies have to do, or what states have to do or what cities have to do. Frankly, the only entity in our nation that continues to defy reality is the federal government. It’s just time to pay the piper".

So, Mr. Meckler is advocating a 1.6 trillion dollar cut in spending THIS YEAR out of a 3.8 trillion dollar budget? In other words around a 40% reduction in Federal spending this year?

That's really his solution to the issue?

Nowhere in the interview does Meckler say what he would cut to hit this kind of target. Those pesky details are left as an exercise for the reader I guess.

What a freakin' moron.

People, I am a big fan of small government and low taxes. I would welcome Federal spending being capped at say, no more than 20% of GDP (perhaps as an average over each presidential term). But you can't get from where we are to where I'd like us to be in one year. No way, no how.

This Meckler guy is a clown.

Hot Dogs: As Dangerous As Cigarettes?

Here we are told that hot dogs are as dangerous as cigarettes.

Well, maybe, if you have a two pack a day hot dog habit...

Here's my question: There are two different information campaigns going on here. One is the campaign to put pictures and warning labels on cigarettes....and now hot dogs.

And there is a campaign to ensure women who are going to have abortions have to see the ultrasound of their fetus. Other people are trying to display photos of aborted fetuses.

The question: why is that all the bed wetters who want to force us to see cigarette- damaged lungs fiercely oppose the idea of displaying abortion-damaged fetuses?

I'm a libertarian; I think people can get their own info. But you lefties, who think everyone (except you) is an idiot....why no on the fetus thing? Why aren't you consistent?

(nod to the Blonde)

Educated Leaders, More Growth?

Do Educated Leaders Matter?

Timothy Besley, Jose Montalvo & Marta Reynal-Querol
Economic Journal, August 2011, Pages F205–227

Abstract: This article uses data on more than 1,000 political leaders between 1875 and
2004 to investigate whether having a more educated leader affects the rate of economic growth. We use an expanded set of random leadership transitions because of natural death or terminal illness to show, following an earlier paper by Jones and Olken (2005), that leaders matter for growth. We then provide evidence supporting the view that heterogeneity among leaders’ educational attainment is important with growth being higher by having leaders who are more highly educated.

(Nod to Kevin Lewis)

Tuesday, July 26, 2011

Clouded Memory

Google Effects on Memory: Cognitive Consequences of Having Information at
Our Fingertips

Betsy Sparrow, Jenny Liu & Daniel Wegner
Science, forthcoming

Abstract: The advent of the Internet, with sophisticated algorithmic search engines,
has made accessing information as easy as lifting a finger. No longer do we have to make costly efforts to find the things we want. We can "Google" the old classmate, find articles online, or look up the actor who was on the tip of our tongue. The results of four studies suggest that when faced with difficult questions, people are primed to think about computers and that when people expect to have future access to information, they have lower rates of recall of the information itself and enhanced recall instead for where to access it. The Internet has become a primary form of external or transactive memory, where information is stored collectively outside ourselves.

(Nod to Kevin Lewis)

Linkulus Maximus

Some links:

1. Organic food is okay, but it's not that great.

2. Boogity, boogity, Amen.

3. We are just not that into him. And yet we are still getting screwed.

4. Sell, baby, sell!

5. Will the Greens be on the ballot in NC? If the NC Senate, controlled by the Repubs, has any sense they will. If this passes, I will personally be out on the street corner, hawking signatures to get our Green bros and sisters onto their rightful place.

(Nod to the Blonde)

Monday, July 25, 2011

Who killed Col. Mustard?

It was Laureate Stiglitz, in the park, with a microphone

(clic the pic for a more glorious image)

The spending cuts in the budget deal are a pitiful joke

A trillion dollars sounds like a lot of money, doesn't it? Well when it's (A) over 10 years and (B) from a spending level that is around 3.8 trillion for the current year, it's ez to see that a trillion dollars of cuts is a joke. Pro-rated, that's $100,000,000,000 cut each year from a level of $4,800,000,000,000. Which is 2% and change. Which is pitiful.

Plus, the cuts aren't cuts. Here's Ezra Klein on Harry Reid's cuts:

Reid’s plan includes $100 billion in savings from so-called “mandatory spending” like Fannie Mae and agricultural subsidies, $1 trillion in savings from winding down the wars, and $400 billion in reduced interest payments from cutting more than $200 billion in spending.

So a mere $10,000,000 per year of actual spending cuts while the rest comes from "winding down the wars" and reduced interest payments from winding down the wars.

Sweet baby Jeebus!

Ain't that just like a boss to totally fudge the numbers and con the shareholders?

Mungowitz is right. This is pro wrestling.

Markets in Everything: Snacks for Zombies Edition

(clic the pic for a more glorious image)

And here's a bonus MIE: Personal Hygiene Edition:

Sunday, July 24, 2011

Maybe This Time

Usually, when I think something is a turning point, it turns out to be a high water mark. Sort of like how Woodstock was not a fundamental step forward in hippie culture, but its never-to-be-repeated apotheosis, after which a lot of boomers starting to go bald (even the women) and get jobs as I-bankers and stockbrokers.

So, with that caveat, let me offer this piece by KPC pal Dave Weigel as a turning point, something we may look back and remember as a start, not an end.

This rant was the start
, in some ways, of the organized Tea Party movement. This article by Weigel was basically the end of my campaign, though that wasn't Dave's fault. Beginnings or ends... who can tell, at the time?

Thus it is with the #FuckYouWashington hashtag, and American Elect. The question is whether the idea for a "real" third party (LP is apparently chopped liver?) will catch on. Dave is absolutely right, of course, that electing a President would do very little. Except that it would do a lot. Veto points only work if MCs have the juevos to block stuff. And pretty much none of the MCs have juevos.

(Nod to Brendan Nyhan, or rather @brendannyhan, for the link)