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Media Infiltrations: Republicans and the Populist Temptation  Wall Street Journal February 9, 2010 Why Taxing Stock Trades Is a Really Bad Idea Wall Street Journal January 6, 2010
"What has been your worst blogging experience? "That's a guy who actually stalks me on the Web and once stalked me personally." "I'm saying this...guy's a jerk."
 The Happy Body Aniela and Jerzy Gregorek What I'm listening to:  Langley Schools Music Project What I'm watching:  Star Trek What I'm playing:  Speed Racer Order these from Amazon.com at Amazon's normal low prices... and a fraction of your order goes to help support this site. Thanks!
Thanks to Irwin Chusid, public editor.
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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, July 15, 2005
JOHN TIERNEY IS SO GREAT From his column this morning on Plame, Rove, and all that jazz:...it looks as if this scandal is about a spy who was not endangered, a whistle-blower who did not blow the whistle and was not smeared, and a White House official who has not been fired for a felony that he did not commit. And so far the only victim is a reporter who did not write a story about it.It would be logical to name it the Not-a-gate scandal, but I prefer a bilingual variation. It may someday make a good trivia question:
What do you call a scandal that's not scandalous?
Nadagate.
Posted by Donald L. Luskin at 11:56 PM |
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Thursday, July 14, 2005
UHH... DOES THE SEC AGREE WITH THIS? According to former New York Times "public editor" Dan Okrent, publisher Arthur Sulzberger Jr. doesn't owe any fiduciary duty to public shareholders of the Times Company. That explains why he's willing to trash the company's franchise pursuing his "progressive" agenda. Read this -- and then look at the chart, showing the free-fall the company's stock has been in (while the broad market has moved to new 3-year highs).While the Times is a publicly traded company, it is controlled by the Sulzberger family, and publisher Arthur Sulzberger Jr. did not have to consult anybody else in backing [Judith] Miller. Daniel Okrent, a former Times public editor, stresses that his old employer "has the freedom to take positions that they deem to be in the interest of journalism without fear of the reaction of public stockholders."
Posted by Donald L. Luskin at 10:17 PM |
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BLOOMBERG FALLS TO THE DARK SIDE Reader Don Noone says:
Here is a sampling of stories that made it onto the Bloomberg TOP menu today:* “Hedge Funds…Sell Republicans Short, Invest in Dems” * “Rove – Thug, Coward, and Now Smoking Gun” * A story about how Joe Wilson’s claims all hold up * A hit piece on supply-side economics by Gene Sperling called “Try a Little Quiz About Supply-Side Economics” * “Goldman Economists Are ‘Skeptical’ of Bush Budget OptimismAnd then there was yesterday’s piece on how the flood of tax receipts coming into the Treasury was due to stepped up IRS enforcement. Does Michael Bloomberg know that Al Hunt is making his news organization a laughingstock?
Posted by Donald L. Luskin at 6:43 PM |
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A close look at the tax data explains why...we're seeing a temporary uptick in revenues, not a sustained change in the trend. Taxes that are closely tied to the number of jobs and the average wage, such as payroll taxes and income taxes automatically withheld from paychecks, aren't showing any big pickup.
No "big pickup"? Here are the facts.
First, payroll tax revenues for 2005 are now expected to be $793.5 billion. That's $60.1 billion greater than 2004 -- an 8.2% increase. That increase is greater than the increase in any year during what Krugman called the "economic miracle" during Clinton years (the biggest increase then was 7.0% in 1999). You have to go all the way back to the Reagan years -- about which Krugman said there was "nothing magical" -- to find faster growth.
Second, the surge in payroll tax revenues is an unprecedented upside surprise. Coming in $19.8 billion higher than forecasted when the FY2006 budget was first released last February, it's an upside surprise of 2.6%. The average surprise for the years 1994 to 2005 has been only 0.5%.
Either way, the surge in payroll tax revenues -- which implies a surge in employment and wages -- is a "big pickup." It's one hell of a "big pickup."
Posted by Donald L. Luskin at 10:31 AM |
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Wednesday, July 13, 2005
HERE'S AN ISSUE FOR DEMOCRATS TO SEIZE ON ...if they want to score points in states where guys have confederate flag decals on their pick-up trucks. All they have to do is get involved in this lawsuit being filed against NASCAR for monopolizing "the premium stock car race market" and "the premium stock car hosting market." Thanks to our antitrust guru Skip Oliva for the link.Posted by Donald L. Luskin at 11:57 PM |
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HUH? 28%? LIKE... HOW? Here, on our letters page, is an outstanding letter from a smart reader -- looking hard at the numbers and wondering just how the hell Paul Krugman plans to execute his dream to collect 28% of GDP in federal taxes.
Posted by Donald L. Luskin at 9:59 PM |
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OFFSHORING -- LITERALLY Start-up SeaCode plans to offer services of Indian software engineers living and working in a ship three miles at sea off the California coast. Cheap labor. No immigration laws. No taxes. But only three miles away. Brilliant.
Thanks to reader John Grauel for the link.
Posted by Donald L. Luskin at 3:38 PM |
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A CAREER-LIMITING MOVE Neal Phenes thinks that the New York Times' Edmund Andrews has set himself up to be fired for reporting today that there's good federal budget news out there, and just maybe it had something to do with the Bush administration's policies!
Posted by Donald L. Luskin at 12:46 PM |
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MOLLY IVINS (YES, MOLLY IVINS) POINTS THE WAY Attention Barney Calame, Dan Okrent, Gail Collins, Paul Krugman and the rest of you cowards at the New York Times: this is how to run a columnist correction, courtesy of a surprisingly honorable Molly Ivins:
CROW EATEN HERE: This is a horror. In a column written June 28, I asserted that more Iraqis (civilians) had now been killed in this war than had been killed by Saddam Hussein over his 24-year rule. WRONG. Really, really wrong.The only problem is figuring out by how large a factor I was wrong. I had been keeping an eye on civilian deaths in Iraq for a couple of months, waiting for the most conservative estimates to creep over 20,000, which I had fixed in my mind as the number of Iraqi civilians Saddam had killed.
The high-end estimate of Iraqi civilian deaths in this war is 100,000, according to a Johns Hopkins University study published in the British medical journal The Lancet last October, but I was sticking to the low-end, most conservative estimates because I didn't want to be accused of exaggeration.
Ha! I could hardly have been more wrong, no matter how you count Saddam's killing of civilians. According to Human Rights Watch, Hussein killed several hundred thousand of his fellow citizens. The massacre of the Kurdish Barzani tribe in 1983 killed at least 8,000; the infamous gas attack on the Kurdish village of Halabja killed 5,000 in 1988; and seized documents from Iraqi security organizations show 182,000 were murdered during the Anfal ethnic cleansing campaign against Kurds, also in 1988.
In 1991, following the first Gulf War, both the Kurds and the Shiites rebelled. The allied forces did not intervene, and Saddam brutally suppressed both uprisings and drained the southern marshes that had been home to a local population for more than 5,000 years.
Saddam's regime left 271 mass graves, with more still being discovered. That figure alone was the source for my original mistaken estimate of 20,000. Saddam's widespread use of systematic torture, including rape, has been verified by the U.N. Committee on Human Rights and other human rights groups over the years.
There are wildly varying estimates of the number of civilians, especially babies and young children, who died as a result of the sanctions that followed the Gulf War. While it is true that the ill-advised sanctions were put in place by the United Nations, I do not see that that lessens Hussein's moral culpability, whatever blame attaches to the sanctions themselves -- particularly since Saddam promptly corrupted the Oil for Food Program put in place to mitigate the effects of the sanctions, and used the proceeds to build more palaces, etc.
There have been estimates as high as 1 million civilians killed by Saddam, though most agree on the 300,000 to 400,000 range, making my comparison to 20,000 civilian dead in this war pathetically wrong.
I was certainly under no illusions regarding Saddam Hussein, whom I have opposed through human rights work for decades. My sincere apologies. It is unforgivable of me not have checked. I am so sorry.
Posted by Donald L. Luskin at 12:22 PM |
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INCOMING! I can easily imagine the email harassment campaign that must now have been unleashed against the editor of the Cleveland Plain Dealer, Doug Clifton. He dared to write to New York Times "public editor" Byron Calame complaining about a story Monday by David Cay Johnston -- a story which has since had its egregiously misleading headline corrected on the Times' website. Whenever I've written critically of Johnston's inaccurate, distorted and partisan stories on tax policy, I've been subjected to a barrage of hate-mail about me sent both to me, my colleagues, and third party publications. Here's Clifton, as captured on Romenesko:
"Most Editors Say They'd Publish Articles Based on Leaks" That was the headline on David Cay Johnston's story on C3 today. The story itself quotes three editors who speak directly to the point and one whose opinion isn't clear. No matter. Let's say four editors hold the sentiments of the headline. How does that become "most?"
...My conversation with David Cay Johnston lead me to believe he would produce a nuanced story. Sadly, I was wrong. It pains me, after 35 years in the business to see the inadequacy of daily journalism to deal with subtle shadings of fact. As to the headline, one expects more from The Times.
Thanks to reader Jameson Campaigne for the link.
Posted by Donald L. Luskin at 8:01 AM |
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Tuesday, July 12, 2005
FAT CHANCE Jim Glass at Scrivener.net does it again! Glass reminds us of Paul Krugman's ranting about why government should take up arms to control America's obesity crisis:Above all, we need to put aside our anti-government prejudices and realize that the history of government interventions on behalf of public health ... is one of consistent, life-enhancing success.Life-enhancing success? Glass reminds Krugman about the Canadian public health system which has just been found by that country's Supreme Court to be "an unconstitutional danger to the citizenry's health." And Glass reminds Krugman of a New York Times Magazine story from 2002 -- "What If It's All Been a Big Fat Lie?" -- in which it turns out that government has been intervening against fat already, for over 20 years, and screwing it up royally. And George McGovern's fingerprints are all over it. Check it out!
Posted by Donald L. Luskin at 5:28 PM |
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SCORE! ESPN gets its first ombudsman, George Solomon -- and he seems like quite a live wire. Hopefully the New York Times' Barney Calame will emulate Solomon's roll-up-your-sleeves-and-get-involved style, and not the passive cowardice of his predecessor Dan Okrent. Thanks to reader Sam Michael for the link.
Posted by Donald L. Luskin at 5:23 PM |
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WHY THE BUSH TAX CUTS WORKED It's really so simple. From today's Wall Street Journal edit page:
One lesson in all of this is that not all tax cuts are created equal. Tax rebates and other temporary measures aimed at stimulating consumer demand don't work. Consumers aren't irrelevant, but prosperity is created on the supply side of the economy with the incentives to produce goods or services that people want to consume. So tax cuts in marginal rates that boost incentives to work and invest provide a much bigger bang for the buck.
Posted by Donald L. Luskin at 8:10 AM |
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PERRY EIDELBUS GOES TO TOWN on Paul Krugman's budget predictions over the years.
Update... and here's a great letter on an obesity connection that Krugman missed!
Posted by Donald L. Luskin at 8:07 AM |
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Monday, July 11, 2005
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Now, consider reality. Take a look at the chart, below. It's total federal tax receipts in trillions of dollars, year by year (source: Office of Management and Budget). Revenues peaked in 2000 with the last gasp of the 1990's boom. They were in free-fall in 2001, 2002 and 2003. But you can't blame the tax cuts for very much of that. It wasn't until 2003 that any but a tiny fraction of Bush's tax cuts were put into effect. After the cuts, revenues have soared -- and they are forecasted to make new all-time highs in a few short years.
Krugman snarls,
The usual suspects on the right are already declaring victory over the deficit, and proclaiming vindication for the Laffer Curve -- the claim that tax cuts pay for themselves, because they have such a miraculous effect on the economy that revenue actually goes up.
Count me -- and anyone else who's seen that chart -- as among those "usual suspects." And as long as we're making witty cinematic allusions, let me add that I love the smell of tax revenues in the morning. Smells like victory.
The best Krugman can do is forecast that the explosion of revenues in the wake of the 2003 tax cuts won't last. Why, for one thing, Krugman claims "the economy as a whole is, if anything, doing worse than one would expect at this stage of an economic recovery."
Again, consider reality. Since the recession bottom in the fourth quarter of 2001, real GDP has grown 12.0%. That beats the 11.0% growth over the comparable period in the previous economic recovery -- the one that began on Bill Clinton's watch, which Krugman once called an "economic miracle."
And Krugman frets that the revenues flowing into the US Treasury are the wrong kind. Not enough growth, he says, is coming from taxes "tied to the number of jobs and the average wage, such as payroll taxes and income taxes."
Consider reality: personal withheld tax revenues are up 7.3% compared to last year, and social insurance and retirement receipts are up 6.4% (source: US Treasury). Yes, there's been ever greater growth in corporate tax revenues. But so what? Why are those revenues the wrong kind? Another cinematic allusion -- when it comes to higher revenues driven by lower tax rates, I feel the same way that Woody Allen feels about orgasms: "I've never had the wrong kind, ever. My worst one was right on the money."
So what would be good enough for Krugman and the Democrats? Don't kid yourself that they'd be satisfied even if George W. Bush left office, had his tax cuts repealed, and all deficits magically vanished. They won't be satisfied until tax rates are raised to the point where government is seizing an unprecedented fraction of personal wealth. Krugman recently told an Asian newspaper,
"We should be running surpluses...We should be getting 28% of GDP [gross domestic product] in revenue. We are only collecting 17%."
Consider reality -- and if you're not used to thinking about tax revenues as a fraction of GDP, this reality will come as quite a shock. As the chart below shows, the federal government has never collected more than about 21% of GDP in taxes. Krugman wants it to collect 28% -- even more than was collected at the very height of World War II.
What would government do with the money (assuming, fantastically, that the attempt to collect that much wouldn't utterly destroy the economy)? Krugman has at least one idea. Both his Times columns last week (here and here) were a plea to "put aside our anti-government prejudices" and "do something" about obesity -- "America's fastest-growing health problem."
Something tells me Krugman hasn't checked with Michael Moore or Teddy Kennedy about that particular idea for spending the money. But they'll work that out among themselves later.
The first step is to seize it. And every time they talk about repealing the Bush tax cuts, that's what they're trying to do.
Posted by Donald L. Luskin at 2:25 PM |
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JOKE OF THE DAY
Posted by Donald L. Luskin at 2:01 PM |
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Sunday, July 10, 2005
HE EVEN GOT MY NAME RIGHT David Nason in The Australian:...last year Don Luskin, writing in Capitalist Magazine, said: "Don't be afraid to hold stocks just because you know there will be another attack - a lot of the risk is already priced in. And when there is another attack, buy the market."Luskin's theory was based partly on opinion polls showing many investors in denial about the possibility of another attack.
When an attack does come, he argued, those people will get a rude awakening and markets initially will trade lower to accommodate their panic.
As the market reaction to Thursday's attacks showed...Luskin [was]... right on the money.
Posted by Donald L. Luskin at 11:01 PM |
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