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Media Infiltrations: Of Interventions and Conservative Principles  National Review Online September 23, 2008 Quit Doling Out That Bad-Economy Line The Washington Post September 14, 2008
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Chronicle of the Conspiracy
Join us as we discover, document, expose and challenge the bad people, the bad institutions and the bad ideas that stand in the way of wealth creation -- and show you how to fight back!
Friday, May 06, 2005
WHY NOT DEMOCRATS? Larry Elder wonders,If employers seek to control costs, improve morale, boost the company image and reduce workplace drama [by refusing to hire smokers], why not refuse to hire ... Democrats?Thanks to James Crystal for the link.Democrats -- compared to Republicans -- on average are less affluent, more unhappy, more prone to anti-social behavior, more prone to self-destructive behavior, and more likely to have been shot at, robbed or burglarized. More of them see X-rated movies, more of them smoke, and they're less likely to be married and more likely to have separated or divorced.
George Washington University professor Lee Sigelman looked at 22 years of survey data collected by University of Chicago's National Opinion Research Center. Overall, he found Democrats less affluent, more distrustful, more sickly and more suicidal, and thus doomed to an earlier death. In short, Democrats as a class -- like smokers -- have, uh, issues. ...Republicans, more than Democrats, to be satisfied with their sex lives, more likely to wear something sexy to entice their partner and more likely to be in a committed relationship, in which they claim to be very satisfied. The survey also found that Republicans are less likely to cheat on their partner or to fake orgasms. No wonder Democrats are unhappy, unhealthy and anti-social.
Update... [5/7/2005] Dave Nadig emphatically disagrees!
Posted by Donald L. Luskin at 6:23 PM | link
YEAH, RIGHT... let's hand the entire health care industry over to government, because it does such a great job with everything else. In Maryland, the government destroys competition in order to preserve it. From the Washington Post:
A gasoline price war erupted in St. Mary's County last week after one station slashed its price for regular to $1.999 a gallon and spurred three others to follow suit, giving drivers some hope of relief at the pump...Thanks to reader Jill Olson for the link.Maryland regulators quickly stepped in and told the stations that their prices were too low. They needed to go up by 5 cents...
The sudden fluctuation in the Lexington Park area was the result of a little-noticed Maryland law that took effect in 2001. The General Assembly mandated that stations cannot charge less than what they pay for gas -- unless they're lowering prices to compete with a nearby station.
Posted by Donald L. Luskin at 3:10 PM | link
OOPS! Keith Burgess-Jackson makes a great point about today's Paul Krugman column. Krugman alleges all manner of government corruption in the way the 2003 Medicare bill was enacted. And yet, it is precisely to our corrupt government that Krugman would hand over exclusive control of America's health care industry:
Paul Krugman doesn't realize it, perhaps because he's such a dogmatic statist, but he makes a powerful case in today's New York Times op-ed column for a withdrawal of government from health care. As long as government is involved in health care, there will be corruption of the sort Krugman identifies.
Posted by Donald L. Luskin at 2:36 PM | link
SIGH The Free Market Project looks admiringly at this morning's far better than expected payroll jobs number, and takes the opportunity to chronicle the way the liberal media has systematically found a way to pooh-pooh what is now 23 straight months of job growth. This month will be no different. The Economic Policy Institute -- that reliable supplier of authoratative liberal pessimism for the media to quote -- sounds like it's almost ready to cave, and admit that happy days are here again. In a generally positive report this morning, about the most downbeat thing they could think of to say was
"This rate of growth should keep unemployment from rising, but if it persists at only this level, then it will still take many months to absorb the slack left over from the jobless recovery and to bring down long-term unemployment."But that was after they'd had a chance to study the numbers, and come to terms with just how very positive they were. Earlier this morning, moments after the numbers were released, EPI pelted the media with an email blast promoting a report declaring "Young college graduates, those age 25 to 35, are facing a tough labor market this year."
Posted by Donald L. Luskin at 12:28 PM | link
SHOVEN AND BOSKIN GANG UP ON ORSZAG Wednesday evening I attended a meeting at the Stanford Institute for Economic Policy Research, and heard a debate on Social Security reform between Stanford's John Shoven and Brookings' Peter Orszag. Of course Shoven promoted personal accounts and benefit growth reduction, and Orszag -- looking like a giant Q-tip dipped in Shinola and dressed for Sunday School -- was all about tax hikes, opposing personal accounts with the lie that they are a "margin loan" from the governmnent. The audience was generally friendly to Shoven, and Orszag had to take some tough questions (you can watch the whole thing on video here). At the end of the Q-and-A, economist Michael Boskin reduced Orszag to stunned incoherency with a question suggested in his recent policy brief for SIEPR: In light of the need to prepare for the coming crisis in Medicare funding, "why would we want to raise taxes on well-off workers to fund higher benefits to well-off retirees?"
Posted by Donald L. Luskin at 11:57 AM | link
Thursday, May 05, 2005
THE GLENGARRY LEADS Now you too can get rich by speculating in worthless Iraqi currency! Who said the Middle East would never be free?Thanks to reader Jameson Campaigne for the link.
Posted by Donald L. Luskin at 9:30 PM | link
THAT NOTED RIGHT WING TAX ECONOMIST HACK So my friend Kevin Hassett of the American Enterprise Institute is now respectfully referred to as a "noted tax economist" in a New York Times column this morning by UC Berkeley economics professor Hal Varian. That's great -- but how come the Times' reporters don't call Varian when they're writing a story about Hassett? Instead they call Varian's Berkeley colleague Brad DeLong, the screaming liberal. When the subject was a recent paper by Hassett on media bias (oh, the irony!), the Times quoted DeLong calling Hassett a "right wing hack."
Posted by Donald L. Luskin at 7:04 PM | link
AMBIVALENT, BUT HAPPY We libertarians don't like to think of the government taking even more of our money, yet it seems like good news when we hear that tax collections are running way ahead of estimates, and that therefore federal budget deficit projections are going to get trimmed way down. Oh, and of course we take some perverse delight in imagining Jonathan Weisman's chagrin in having to report this in the Washington Post this morning. He didn't come right out and admit that maybe some of the Bush administration's economic policies are working better than he expected -- but it's the inescapable conclusion of his story.
Thanks to readers Jill Olson and Daniel Miller for the link.
Update... Noel Sheppard says it's not enough!
Posted by Donald L. Luskin at 1:30 PM | link
OKRENT CONFESSES Former New York Times public fig-leaf Daniel Okrent now admits what it was all about. It was never about being the "reader's representative" -- it was about "doing service" for the paper, and protecting it from "enemies." From WNYC's "On The Media":
BROOKE GLADSTONE: What in your opinion was your most important column?
DANIEL OKRENT: Mmm. That's really tough. I guess I would have to say it was the one where I confronted the issue - the headline was: Is the New York Times a Liberal Newspaper? And I probably did not do the paper as much service as I would have liked to with that column, because by the very headline, and the first line, which was: Of course it is, [LAUGHTER] I handed the paper's enemies something that could be taken radically out of context. I made it too quotable.
Thanks to reader Jameson Campaigne for the link.
Posted by Donald L. Luskin at 12:38 AM | link
Wednesday, May 04, 2005
BOGUS BUREAUCRATIC BEFUDDLEMENT Reader Bryan Pick asked me to respond to the claims by Francis X. Cavanaugh, the former executive director of the federal Thrift Savings Plan, that implementing personal accounts in Social Security is administratively unfeasible. On first blush Cavanaugh's claims seem to carry a lot of weight, because of his experience at TSP -- often cited as a model for Social Security personal accounts. But upon close examination, his critiques are mostly red herrings that give off the unmistakable odor of a career bureaucrat whose pride has been injured because he wasn't consulted by the Bush administration on this. I had the opportunity to work with Cavanaugh and his staff very closely during the years when TSP was first being put together (my former firm, Wells Fargo Investment Advisors -- now Barclays Global Investors -- has always been the exclusive provider of investment management services to TSP, and I managed the relationship during Cavanaugh's tenure). Suffice it to say that I know whereof I speak when I hint as to Cavanaugh's motives here -- and that I know a thing or two about these administrative matters myself.Cavanaugh's main critique (there are other trivial ones that I won't address) is that personal accounts would lodge untenable costs and burdens upon millions of employers, many of whom have only a handful of employees. Cavanaugh argues that employers would have to provide much more detailed and timely information about employee contributions than are currently required by Social Security, and that employers would be responsible for educating employees about their investment options. But neither of these things is true. Information about employee contributions only has to be extremely timely if workers are to be permitted to make changes to their investment decisions with great frequency. That is the current standard among corporate 401(k) plans -- indeed, the standard is to permit daily changes (and there are plenty of critics who think that encourages pointless, expensive and risky account activity). But surely there is no reason that it must be the same in Social Security. And surely there is no reason whatsoever why an employer need be responsible for investment counseling, any more than he is responsible today for explaining Social Security benefits.
Based on the false assumption that small employers would have to bear all the burdens of administering a 401(k) plan in order to deal with Social Security personal accounts, Cavanaugh goes on to cite the inevitable "studies" leading to the conclusion that small businesses will be taxed billions of dollars in order to comply. But there's really nothing more for employers to do than they already do to deal with Social Security. So where's the extra cost?
Employers aside, it will not be free for the federal government to implement personal accounts in Social Security. It's not free for TSP, either. It's typical cost is about 7 basis points per year of assets under management. Estimates for Social Security personal accounts are typically 30 basis points -- more than four times greater. If anything, economies of scale suggest that running a plan for 150 million participants -- as Social Security would do -- ought to be cheaper per unit than running one for only 3.3 million -- as TSP does today.
Posted by Donald L. Luskin at 11:03 PM | link
STOMACHS ON THE LEFT BEGIN TO TURN Paul Krugman's relentless and dishonest opposition to Social Security reform is even beginning to disgust fellow liberals. Here's liberal Washington Post columnist Steven Pearlstein in an online q-and-a:
Fairfax, VA: Do you agree with Paul Krugman's assertion that the President's recent plan to cut social security benefits actually falls mostly on the middle class and not the wealthiest?
Steven Pearlstein: No, it was very intellectually dishonest. All he was really saying is that, for rich people, Social Security benefits are a small part of their post retirement income. In truth, any cut in benefit will fall mostly on the middle class because the middle class gets most of the benefits. Its sophistry, really. And like the Dems, Krugman assumes in his analysis that the money will be there to pay 100 percent of future benefits, which cannot be assumed. That's why we're having this conversation in the first place. I have in front of me an analsys which suggests that the decline in the replacement rate for a typical American household under "progressive" indexation will be about the same as the decline in replacement rate if nothing is done to Social Security and benefits increases are "cut" simply to reflect the amount of money available.
And it's not just Krugman. Here's a Pearlstein column telling the Democrats that they'd better come up with something better to say on Social Security than "no."
Social Security is a case in point. By staying unified, Democrats have pushed back an attempt to partially privatize a government social program that, more than any other, defines what they are about. They also got the president to agree to increase the amount of income subject to the payroll tax as well as a progressive scheme for slowing the growth in future benefits.
You might think, therefore, that this would be the ideal time for a minority party to take the lead with its own plan to ensure solvency of this popular program, based on those and other progressive principles. Guess again. The Washington Democrats have decided, instead, to press their advantage by demanding that the president agree to trade all consideration of private accounts, as well as his income tax cuts, plus one Supreme Court justice to be named later, before they will even pull up to the negotiating table. Apparently, they'd rather have an issue to demagogue than actually rescue a vital program.
Thanks to Bruce Bartlett for the links.
Posted by Donald L. Luskin at 5:44 PM | link
THANKS! Sometimes you wonder if anyone's watching. Then other times...
Ron Insana on CNBC was asking a couple of big shot guests what is causing the abnormal low yield on the 10-year Treasury bond. Donald Luskin, of Trend Macro, said global liquidity, as there are so damn many dollars in the world, and that they have to go somewhere. And the 10-year Treasury market is one of the few things that can absorb all that money. He is exactly right.
Posted by Donald L. Luskin at 3:18 PM | link
Tuesday, May 03, 2005
THE FINAL LAP OF THE KRUGMAN 500 Lying in Ponds -- the site that quantitatively tracks partisanship in opinion columns -- notes the 500th anniversary of Paul Krugman's New York Times column. And something very, very special about those columns:I doubted that it was possible, but Paul Krugman, with yesterday's well-timed perfectly partisan effort, has now written 500 New York Times columns, and not a single one of them qualifies as a "crossover column" -- one which consists mostly of criticism of one's own party, or praise of the other. Remember that his column began in January 2000, so the unwillingness to cross party lines extends back to the entire final year of the Clinton administration.
Posted by Donald L. Luskin at 8:09 AM | link
POZEN DEFENDS "PROGRESSIVE INDEXING" Robert Pozen -- the father of the "progressive price indexing" strategy for reining in runaway Social Security benefit growth -- has a great op-ed in the Wall Street Journal this morning, defending his vision against the inevitable lies from the Left that it means "middle class benefit cuts." Most interesting though, is the last paragraph -- a recommended way forward that knits together all the loose threads of the debate: a delicate combination of progressive indexing, small tax increases, and larger personal accounts. Of course I don't like the tax increase part, but if that's inevitably part of a viable political solution, perhaps this isn't the worst way to do it. Worth a read.
If Congress is attracted by a package of Social Security reforms combining a milder form of progressive indexing with a 2.9% surtax on earnings above $90,000, it must provide high earners with retirement benefits attractive to them. One possibility would be to devote 1.45% of the surtax to Social Security solvency, and to allow the other 1.45% to be allocated to a personal account invested in market securities. Since such an account would not divert existing taxes away from Social Security, it would not involve any increase in government borrowing. In short, the combined approach would let both parties win--Democrats would get a mix of higher taxes and progressive benefit changes, while Republicans would get personal investment accounts and constraints on benefit growth. And the solvency of Social Security would be restored for all American workers.
Posted by Donald L. Luskin at 7:59 AM | link
THE SINCEREST FORM OF COPYING The opinion section of the Los Angeles Times continues to sparkle under the leadership of Michael Kinsley. Here, for example, is a blatant shameless (and unfunny) rip-off the Guardian's satire of the Arianna Huffington celebrity blog. Thanks to reader James Neel for the link.
Posted by Donald L. Luskin at 7:47 AM | link
Monday, May 02, 2005
THE LIES LIE UPON LIES Paul Krugman's New York Times column today terribly distorts the already terribly distorted meaning of a quotation from Jason Furman, liberal economist at the liberal think tank The Center on Budget Policies and Priorities. Krugman tries to give the impression that "progressive price indexing" of Social Security benefits -- which President Bush proposed in his press conference last week -- would severely reduce benefits for the middle class. He quotes Furman thus:"For millions of workers," Mr. Furman writes, "the amount of the monthly Social Security check would be at or near zero."
What Furman actually wrote, however, was quite different. Furman's statement depended on not just considering progressive price indexing of benefits, but also the fact that workers would (1) voluntarily reduce their standard benefits in exchange for likely greater benefits from personal accounts; and (2) pay their Medicare premiums by deduction from their Social Security checks. Here is what Furman wrote:
For many middle-income workers, Medicare premiums would consume most or all of the very small monthly Social Security benefit that would remain under the combination of progressive price indexing and “carve-out” private accounts. Social Security checks for millions of ordinary American workers thus would be close to or at zero.
Krugman took Furman's quote wildly out of context to make it seem as though progressive indexing alone would reduce the Social Security check. But Furman's original quote is deceptive in its own way. First, it may nominally reduce the amount of a check to have a payment for Medicare (or anything else) deducted from it, but that doesn't reduce its value. And second, Furman is falsely setting the post-retirement benefits resulting from personal account values at zero; in fact, those would be paid out each month too, no doubt as part of the Social Security check.
Posted by Donald L. Luskin at 7:53 AM | link