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Chronicle of the Conspiracy Friday, July 09, 2004 JOKE OF THE DAYPosted by Donald L. Luskin at 8:19 AM |
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RELIGIOUS RIGHT SHOOTS SELF IN FOOT Religious-right moralizers who insist on imposing their views on everyone -- and at the same time clamor for smaller government -- should consider what's happened in the wake of their outrage following Janet Jackson Nipplegate scandal. Since Janet Jackson exposed her nipple jewelry on national television, radio stations have been clamoring for technology that delays broadcast feeds for up to 40 seconds, giving hosts and producers a chance to bleep out naughty words...But the technology isn't cheap for small stations, which also face a risk of hefty fines just like their huge commercial counterparts in metropolises like New York City and Los Angeles.Radio has long been a stronghold for the kinds of values the religious right treasures -- looks like they've shot themselves in the foot. Update...Reader Michael Pollard writes, You criticize "Religious-right moralizers who insist on imposing their views on everyone ..." as though this were per se an offensive practice. But all laws involve the lawmaker's (or, by extension, voters') imposition of his views on everyone. That is what laws do. Btw, I'm a libertarian-leaning agnostic.Michael, as libertarians, our first task is to understand the limits of the state, and that means drawing the distinction between laws that secure our liberty (e.g. laws against force and fraud) as opposed to laws that enforce arbitrary preferences of one citizen upon another (e.g. laws against so-called "obscenity"). In the libertarian universe, then, laws cannot "impose views" -- the protect you against that very thing. Posted by Donald L. Luskin at 8:08 AM |
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THE DEMOCRATS' MORAL IMPERATIVE Reader Robb Tarr reacts to Paul Krugman's column today, calling for the rollback of Bush's tax cuts and the spending of the new revenues on health care: One thing I don't understand, is that all those Democrats who call for higher taxes can immediately put their money where their mouths are. They should simply take whatever higher tax rate they advocate, calculate their own taxes as if that rate were in effect, and request from their employer that this higher amount be withheld from their pay. Come next April, when the IRS tries to refund them the difference, they can simply make a donation to the Federal Government.Update 7/10/2004... Reader Robert Lawrence adds: I always confront people who tell me we would roll back the tax cut. I reply that , as a CPA, I have the tax software going back over a decade and would be happy to do their return by based on any pre-tax cut year they want. No one ever takes me up. In 23 years of doing returns I have NEVER had someone tell me they wanted to pay more taxes! Just as there all no atheists in foxholes I can assure you there are no Liberals on April 15th. Posted by Donald L. Luskin at 8:05 AM |
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Thursday, July 08, 2004 HERE'S HOPING We're quoted in a piece by Amey Stone in BusinessWeek Online today:"...with four months until Election Day, Bush has plenty of time to rally. In a July 7 commentary, Donald Luskin of research boutique Trend Macrolytics ventured, 'If we had to guess, it would be that Bush will be reelected and that his tax policies would survive to at least 2008," which "would bode well for a significant rally in the fourth quarter.'"Posted by Donald L. Luskin at 9:31 PM |
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TIMES HYPOCRISY ON WELFARE REFORM (REMEMBER THE NEEDIEST!) Stuart Buck at the Buck Stops Here blog has a devastating then-and-now comparison of the New York Times' editorial position on welfare reform. Stuart points out that in an editorial yesterday, the Times said: Much of the partisan angst and philosophical conflict that marked the original passage dissipated as the law sharply shrank welfare rolls by 60 percent and guided millions of recipients from the dole to low-income employment and career opportunities. In keeping with the law's emphasis, states and localities began exercising creative authority to tailor federal block grants to the particular child care, transportation and education needs of welfare recipients and the working poor. Renewal, with some moderate tinkering, seemed a no-brainer.But Stuart notes, Renewal of welfare reform is a no-brainer, huh?Read the whole sorry thing. It's stunning. Thanks to reader David Bakin for the link. Posted by Donald L. Luskin at 12:45 PM |
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JOKE OF THE DAY Posted by Donald L. Luskin at 11:38 AM |
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Wednesday, July 07, 2004
Posted by Donald L. Luskin at 8:50 AM |
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JOKE OF THE DAY Posted by Donald L. Luskin at 12:34 AM |
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WELFARE REFORM AS STRUCTURAL CHANGE Tim Worstall explains slow low-end wage growth as something other than a conspiracy by Halliburton: For several decades it was a given that by the time we got down to 5.6 % unemployment we would expect to be seeing wage inflation. That's where we are now and as is rightly pointed out we don't have that inflation. So what happened, has there been some structural change in the economy since the last recession, something that would change the relationship between unemployment rates and income gains? Well, yes, there has been: welfare reform. Posted by Donald L. Luskin at 12:27 AM |
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Tuesday, July 06, 2004
Thanks to globe-traveling reader James Bennett for the link. Posted by Donald L. Luskin at 8:35 AM |
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JOKE OF THE DAY Sick, sick, sick! Posted by Donald L. Luskin at 12:26 AM |
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"What about overall growth? ...In the first quarter of 2004, growth was down to 3.9 percent, only slightly above the Clinton-era average. Scattered signs of weakness — rising new claims for unemployment insurance, sales warnings at Target and Wal-Mart, falling numbers for new durable goods orders — have led many analysts to suspect that growth slowed further in the second quarter."Paul Krugman three weeks ago: "Over the last few months, the recovery has finally started to look like the real thing." Posted by Donald L. Luskin at 12:12 AM |
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Monday, July 05, 2004
But for all that, Krugman knows whereof he speaks on this topic: he is an expert on nepotism. With all the economists in the world to choose from, whom to you think he selected to co-author his upcoming college textbook on principles of economics? It's his own wife, of course -- Robin Wells. She's on the research staff in the economics department at Princeton, but if she's ever written any other books before there's no mention of them by the publisher of the upcoming one with her hubby. All we know of her from Krugman's writings in the Times is that she has the unique psychic power to reveal to Krugman what all African-Americans think on given topics. Considering what Wells has to go through to get her second billing on Krugman's book, maybe going to Iraq isn't such a bad deal after all. Posted by Donald L. Luskin at 9:23 PM |
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But since "Bobby" will no doubt consider even this new embarrassment to Krugman another "wonderful piece of economic history," he will surely treasure another vintage bit of Krugman I've managed to liberate from deep cover: a page from a January, 1983 memo Krugman prepared for CEA chair Martin Feldstein, perhaps part of a draft for the Economic Report of the President. In the September 1982 "harrowing reminder" memo with Summers, Krugman had written:
Yet just four months later, in the new memo I've discovered, he completely contradicted himself, writing:
Suddenly not so harrowing, eh? That's a "rowback," friends! Yes, as early as 1983 -- subsidized by tax dollars, yet -- Krugman was at work perfecting the art that would serve him so well at the New York Times: correcting a previous error by replacing it with a new version in a subsequent writing, without mentioning that there had ever been an error in the first place. It's just as Krugman has written of his brief tenure at CEA: he "discover[ed] a new talent: that of writing serious economics in seemingly plain English." So this, then, was the birth of his career as America's most dangerous liberal pundit -- the master of "seemingly plain English." That expression, by the way, is seemingly plain English for "lying." Posted by Donald L. Luskin at 7:14 PM |
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WHAT'S IN A NAME? A lot, if you are James Crystal. Check it out. Posted by Donald L. Luskin at 7:12 PM |
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I'll get to the substance of DeLong's attack in a moment, but first I must congratulate him for his courage in writing anything at all on this subject. You see, I thought DeLong wouldn't want to draw any attention to his own history as a co-author with Lawrence Summers -- it's even more embarrassing than Krugman's. DeLong and Summers co-authored "Equipment Spending and Economic Growth" in the Quarterly Journal of Economics in 1991, and "Equipment Spending and Economic Growth: How Strong is the Nexus?" in the Brookings Papers on Economic Activity in 1992. The papers were presentations of an empirical study showing higher social returns to capital equipment investment than would be predicted by the classic Solow growth model. But only a year later, "Reassessing the Social Returns to Equipment Investment," an NBER Working Paper by Alan J. Auerbach, Kevin A. Hassett, and Stephen D. Oliner, revealed that DeLong and Summers were just flat-out wrong, and for the most embarrassing of reasons: their results fell apart with the removal of Botswana from their data set:
After this embarrassing debacle, Teflon-coated Summers managed to go on with his career, eventually becoming Treasury secretary under Bill Clinton, and then president of Harvard. But has Professor DeLong ever written another paper accepted by a refereed scholarly economics journal? He'll have to tell me if he has. I'd check his online CV, but it has not always proven to be entirely accurate. Now, let me briefly address DeLong's nitpicking of my critique of the Krugman/Summer's inflation forecast. DeLong claims that I used the wrong data definition to fact-check Krugman and Summers' forecast that "As real interest rates decline and the economy recovers, we can expect the real exchange rate...to return to approximately their historical levels." Krugman and Summers defined "historical levels" by stating "The real exchange rate is now...23.7 percent above its average level during the period 1973:1981." DeLong defines the "real exchange rate" as "to divide a nominal exchange rate series by...the ratio of the home to the foreign price level." The problem is that when you use that definition, then Krugman and Summers' 23.7% "historical level" is wrong. Using the Federal Reserve's Price-adjusted Broad Dollar Index series constructed DeLong's way (endorsed as the correct series by no less an economic authority than "Bobby" -- the keeper of the online Krugman shrine -- in the process of crowing about DeLong's defense), we see that at the time Krugman and Summers' forecast was written, the real exchange rate was in fact only 18.2% above its "historical level." The series I used, which (in DeLong's words) was "to divide a nominal exchange rate series by the home country's price level," and to see it from the perspective of the foreign currency rather than the dollar -- came a little closer to Krugman and Summers' number, at 28.5%. Obviously I had no idea what series Krugman and Summers really meant, or from what perspective they intended it to be viewed -- and either does DeLong. So I picked the series and the perspective that made more sense in relation to Krugman and Summers' own numbers. Did I guess wrong? Did DeLong? Who knows. All I know is that DeLong counts my guessing differently from him as among my "sins." I thought economics was a science, not a religion -- but then perhaps this explains why DeLong always refers to Krugman as "Brother Paul." Does using DeLong's series make Krugman and Summers right? Here's a revised version of the chart I first presented, using the Federal Reserve series. Krugman and Summers prediction about the real exchange rate (defined this way) proved right -- finally -- by the last year of the Reagan presidency. Before that, however, it spent three years moving strongly the opposite direction.
But none of this trivia has the slightest bit to do with Krugman and Summers' astronomically wrong inflation forecast. It's a side-show, a footnote (unlike the matter of allowing one's entire hypothesis to be blown out of the water by the elimination of Botswana from one's data-set). If anything, this makes Krugman and Summers' inflation forecast even more absurd -- if their exchange rate forecast was (finally, sort of) right, then how could their inflation forecast be so spectacularly wrong? I guess we must count among the "sins" of Krugman and Summers that they have no idea what causes inflation. Posted by Donald L. Luskin at 6:26 PM |
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JOKE OF THE DAY Posted by Donald L. Luskin at 6:25 PM |
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