Include Me Out? So, only 98% now?

Loyal reader AB sends the following email:

Was it something I said (or wrote)?  Think you'd enjoy...  After being "invited" by MoveOn to protest at Romney appearance here, I responded I would attend IN SUPPORT of Romney.

Withing minutes I received the following.....

---------- Forwarded message ----------
From: 
Date: Fri, Aug 10, 2012 at 4:56 PM
Subject: You've been removed from "We Are the 99%!" event
To: ******@gmail.com

The host of "We Are the 99%!" -- a We are the 99% -- has removed you from the list of attendees for this event.
--The MoveOn.org Political Action Team

She swallowed the spider to catch the fly

and by "she" I mean Hugo Chavez.

People, gasoline in the oil-rich Bolivarian Republic of Venezuela sells for $0.11 cents per gallon. In neighboring Colombia, it costs over $4.00.

So it's no wonder that those Bolivarian citizens often undertake a fair amount of illegal cross-border arbitrage.

But, nowadays, Venezuela actually has to import a fair amount of gasoline (they can't refine enough for the local market) at market prices.

In other words, they are at the margin, taking a big loss on imported gas that their citizens then "export" to Colombia! The Chavez government is leaking a lot of money to subsidize (a) domestic criminals and (b) Colombian motorists.

Anyway, Chavez has gotten tired of this mess and imposed quantity rationing on people in two states that border Colombia and lean toward the opposition.

Not surprisingly, the locals are extremely upset about this violation of their inalienable right to rip off their government, even though the allowed quantity of gas is 11 gallons, PER DAY (40 for busses).

Wouldn't it just be simpler, fairer, and more environmentally sound to just end or drastically reduce the massive subsidy for gasoline?

How does giving away gasoline make any real sense ( I know people like free gas, but you could just give them cash and drastically reduce the negative environmental externality)?

"It isn’t easy to understand how the world works"*

And it doesn't help that we get bombarded with BS on a minute by minute basis:

"Tax rates were higher under Clinton than under Bush/Obama and things were better, so raising taxes now won't hurt economic performance."


"We tried stimulus and the economy was worse than the governments' "no stimulus" baseline, so fiscal stimulus doesn't work."


"We spend more on health care than some other nation does and get worse results, so if we adopted the system used by the other country we'd get better results with less cost."


These are examples of the common mistake of not taking other relevant factors into account. Using one bilateral comparison to determine causality is rarely going to be correct.

Consider the third example above. For the claim to have any shred of validity, we'd need to find a nation that had roughly the same population, income distribution, ethnic diversity, rates of obesity and exercise, diet, and probably a few other things as well. That ain't Sweden, or Singapore, or France.

But yet we hear it every day repeated as a killer argument for some alternative health care delivery system.

Then there are the claims that conflate average with marginal:

"Wages are higher in manufacturing than services, so we should subsidize increases in manufacturing jobs"


"Higher top tax brackets won't deter economic expansion because they only apply to the last money earned. The overall average tax rate won't go up very much." 

Averages just aren't relevant for economic decisions. To determine what kind of job is better, we need to study what are current hires in manufacturing earning compared to services. When deciding to expand production businesses compare the marginal costs and benefits of doing so.

Take heart, at the least the BS shot at you by econo-pundits is not as grossly ridiculous as that delivered by medico-pundits.

Take this recent gem: "If you sit a lot, you will have a shorter life expectancy" which is being widely interpreted as meaning "sitting will shorten your life!"

Did it never occur to these geniuses that sick people probably sit a lot more than healthy people??

And no, state of health was NOT a control in the meta-analysis that is cited in the articles. Only age and gender were used as controls. In other words, the statement is meaningless.


*title quote is from Larry Summers as discussed here by one of his former students, Miles Kimball.

Penguin hunt

La Penguina has started the process of nationalizing YPF, a Spanish owned energy company operating in Argentina and Spain is pissed! Its Industry Minister says there will be "consequences"!

People, you just know that Argentina will lowball the Spaniards on the price like they were some kind of foreign bond holders.

Perhaps after his surgery, they can send old Juan Carlos over there with his blunderbuss.

Maybe JC and Maggie Thatcher's ghost can tag-team to take down Kirchnerismo.

Das boot

is exactly what Germany wants to give to what's left of the Greek government. Apparently installing an unelected "technocratic" government hasn't moved Greece very close to where Germany wants them to be so now they want to appoint a "budget commissioner" with veto power over Greek fiscal decisions. And they want Greece to pass a law saying that "first and foremost" all state revenues will go to debt reduction.

Read all about it here.

To me, this is Germany saying, "don't let the door hit you in the butt on the way out" to their southern vassals.

In my opinion Greece should take them up on the offer and generously offer investors including the ECB, German & French banks, and the IMF a 100% haircut on their holdings of Greek debt.

Greece has more leverage in this situation than Germany seems to want to believe or at least admit.

Paul Krugman: meet a libertarian

One thing that amazed me in Mungo's Krugmanectomy below is Paul saying, "Spend money on some useful goal, like the promotion of new energy sources, and people start screaming, 'Solyndra! Waste!' Spend money on a weapons system we don’t need, and those voices are silent, because nobody expects F-22s to be a good business proposition."

Let's ignore the loaded phrases like "useful goal" and "we don't need" as those are purely statement of preferences (i.e. unproven and unprovable), and concentrate on the claim that people who object to the Solyndra Subsidy are silent on big Pentagon programs.

Paul, meet me and my ilk. We are libertarians.

We are against out of control military spending and bogus business subsidies. Not just to "green" firms like Solyndra but to big corporations and big agriculture. We rail against Solyndra, perpetual wars, ethanol subsidies, $700 billion dollar defense budgets and all manner of policies that distort incentives and cause people to act in sub-optimal ways.

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)

Facial expressions entirely appropriate for these troubled times

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