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Saturday, August 27, 2005

"...working fewer hours makes Europeans happier, despite the loss of potential income. ...And whatever else you may say about French economic policies, they seem extremely supportive of the family as an institution. Senator Rick Santorum, are you reading this?"
Reuters, August 27:
"French morale was at a record low less than two weeks ahead of the French prime minister's deadline to restore confidence in the population in his first 100 days in office, according to a survey on Saturday.

Less than a third of French people polled were optimistic about their and their children's future, a drop of 28 percentage points since the last poll in December 2004 and the lowest since the first Ifop survey for newspaper Dimanche Ouest-France in February 1995."

Thanks to reader Bill Schumm for the link.

Posted by Donald L. Luskin at 6:33 PM | link  

Friday, August 26, 2005

GET RICH, BUT LOSE THE FIGHT   The PayPal Wars -- a new book that documents how PayPal had to sell out its original libertarian vision. Radley Balko's review at Reason Online:
PayPalís story is a sad but instructive lesson in how this country treats its entrepreneurs. PayPal is huge and growing. With eBay branding, it now boasts 73 million users, making it by far the largest online payment service. But itís nothing like what it was intended to be: a way for people to protect the money they earn from greedy governments and protect private purchases from the prying eyes of regulators. Greedy governments and prying regulators saw to that. The company sold out to eBay not because eBay beat it in the marketplace, not because eBay offered a better product, and not to reap a financial windfall for PayPal employees. PayPal sold out because, after the beating it took from those claiming to represent the interests of consumers, selling itself was the only way to keep the company alive. Exactly how consumers benefited from that isnít clear.
Thanks to Chris Masse for the link.

Posted by Donald L. Luskin at 8:56 AM | link  

KRUGMAN OFFICIALLY CORRECTS HIS FLORIDA 2000 LIES   Notch another win for the blogosphere and the Krugman Truth Squad. In Paul Krugman's column today, he has been forced to issue what he would call a "humiliating correction" of the inaccuracies in his column last Friday about the 2000 Florida presidential election. In fact, it's a double-header.

Corrections: In my column last Friday, I cited an inaccurate number (given by the Conyers report) for turnout in Ohio's Miami County last year: 98.5 percent. I should have checked the official state site, which reports a reasonable 72.2 percent. Also, the public editor says, rightly, that I should acknowledge initially misstating the results of the 2000 Florida election study by a media consortium led by The Miami Herald. Unlike a more definitive study by a larger consortium that included The New York Times, an analysis that showed Al Gore winning all statewide manual recounts, the earlier study showed him winning two out of three.

Not so fast. I'll leave it to John Hinderaker at Power Line who has led the charge on the Ohio matter to judge whether that one's been dealt with here. But there's something fishy about the way Krugman has corrected his reporting of the Miami Herald results. The word "initially" suggests he was talking about his Friday column, in which he falsely claimed that "both" media consortiums had given the election to Gore in their recount studies -- yet in the correction, the embedded link takes you to Krugman's column of last Monday. There he makes the same point he makes in the correction, that "the earlier study showed him winning two out of three" recount methods. In other words, the reader is led to believe that Krugman's only error was in the Friday column, and it consisted of suggesting that the earlier study showed him winning under all methods, when according to Krugman now he really only won in two out of three.

But the truth is that the study Krugman is talking about involved four methods for statewide recounts, and Bush won in three of them. Here's the way USA Today tells it (emphasis added):

USA TODAY, The Miami Herald and Knight Ridder newspapers hired the national accounting firm BDO Seidman to examine undervote ballots in Florida's 67 counties. The accountants provided a report on what they found on each of the ballots.

The newspapers then applied the accounting firm's findings to four standards used in Florida and elsewhere to determine when an undervote ballot becomes a legal vote. By three of the standards, Bush holds the lead. The fourth standard gives Gore a razor-thin win.

I can only imagine the bitter negotiations that must have been going on between Krugman, "public editor" Byron Calame, and editorial page editor Gail Collins. But this ain't over yet. There's a recount coming.

Update... Reader Dave Hemmer wonders,

Doesn't that second correction seem to you to be a not-so-thinly-veiled slap across the public editor's face? It's almost like writing: "Well I reported that it was 90% but it was really 89/100 and this whiny public editor wants me to issue a correction so I'm gonna do it but we all know I was basically right, wink wink."

Posted by Donald L. Luskin at 12:40 AM | link  

Thursday, August 25, 2005

NOW THIS IS REAL DOOM AND GLOOM   Hard to believe, but that goofy catastrophist cover story about the world running out of oil in last Sunday's New York Times Magazine has been outdone.

Posted by Donald L. Luskin at 3:27 PM | link  

I THOUGHT GROWTH WOULD RETURN IN THE SPRING   "I'll give you a forecast which might very well be wrong," Paul Krugman begins, truthfully enough, speaking of the "housing bubble" at a derivatives conference in Brazil's winter resort of Campos do Jordao. "I think it will burst in the spring of next year."

Posted by Donald L. Luskin at 3:24 PM | link  


Here are some of the best emails I've gotten from readers in response to my NRO column "It's the Truth that Counts," concerning Paul Krugman's lies about the 2000 election.

Everybody seems to be missing the most outrageous part of the "who really won Florida?" controversy. Gore's campaign sent lawyers to various naive county election supervisors to argue (wrongly) that state law applied to overseas military ballots, thus disqualifying many. It was never clear under any recount scenario, or media recount, if those ballots were reconsidered. We need to always remember who deprived our fighting men and women of the right to vote, while at the same time smearing state officials and Republicans with patently false charges of racism and civil rights violations with regard to voting. I will neither forgive nor forget this.

David Churchill Barrow

It was my impression that none of the newspaper recounts took into account any change in the standards for counting military ballots. At the time that the Supreme Court halted the process, there was a lower level federal court order that the various Florida counties did have to follow the federal law, allowing more generous standards for military ballots. This would have generated about 500 more votes for Bush, in which case none of the newspaper projections would have had Gore even narrowly winning a victory under any circumstances.

Since Bush was ahead anyways, the issue became moot and I believe there was no attempt to enforce the court decision. I could be wrong, but none of the accounts I read at the time indicated that the newspapers considered or discussed the effect of a change in counting procedures for military ballots if a further recount had been allowed. At the time, I took it as a likely bias (probably unconscious) on part of the media.

James S. Miller, Ph.D

There's a factor in the Florida recount debate that everyone seems to be overlooking. A matter of hours before the Supreme Court came down with it's ruling in Bush v. Gore, the 11th Circuit Court of Appeals, in a separate case, ruled that some 1,000 military ballots that had previously be excluded would have to be counted. It can be assumed that this would have added about 500 to Bush's margin. Even if the Supreme Court had permitted the kind of recounts advocated by Gore, such recounts would have been subject to the 11th Circuit's ruling on the limted issue of military ballots. The news organizations that did the post-facto purported recounts did not factor in those military ballots, and if they had, Bush's margin would have been safe by all recount methods.

Jon Mack

More shameful is claim that Blacks were "disenfranchised". No hard facts, lots of talk. This lack of integrity came to mind when reading a recent congressional report about "Election Fraud in Ohio" -- grandstanded by John Conyers. NPR pundits actually accused media of not paying more attention to this report because "they didn't want to lose access to Carl Rove". More likely, considering the source, even liberal pundits didn't believe they had a reliable story.

Frank Zavisca

The thing that still bothers me about that election is the microscope on Florida and a "full recount" ignores the fact that there were other states with highly questionable vote counts. Why should Florida alone decide such a monumental question of the presidency without a full recount of the other states where fraud and miscounts are an established fact? A recount in those states would have made Florida fade as a factor.

Ken Jones

If Gore was so good, then he could have remade himself and trounced Bush in the next round. Life is full of sore losers that just fade away.

Roy Underwood

Incredible! I can't believe that the left won't let that one go! They absolutely lost that election! The margin likely would have been a lot worse if the major networks hadn't "forgotten" that the conservative Florida panhandle was in the Central Time Zone and still voting, while they declared Gore (wrongly) the winner. The New York Times has never seemed very interested in figuring that out! Though all the investigating they did do, and it took months turned up nothing. In fact, they buried the story when they did release it, because it vindicated the Republicans. They would have needed to have printed the paper on larger sheets if Gore had really won, due to the headline size!

The part about this that really burns me is that a full election cycle after they lost they are still trying to Monday morning quarterback their way to a win. "If only we had been able to have a full recount" they lament. But no Democrat in Florida at the time demanded the full recount in accordance with Florida State Election laws. Which itself would have been hard, because they would have had to have ask for it county by county within 72 hours as I recall. Truly this is 180 degrees out of phase with their strategy at the time of only to trying to cull more votes out of the heavily Democratic parts of the state.
They didn't want to recount the Republican areas and perhaps find new Bush votes.

But who cares how might have turned out. They didn't ask for it. The United States is not some Banana Republic where we just keep counting until we get the right, or rather the "left" results. Based on all the work that was done, the whole six week mess, they never found the votes they needed. Republican lawyers had every right to end the count based on the requests submitted to the election boards and simply out-lawyered Gore to the Supreme Court. At the end of the day Bush's team simply followed the law. Krugman and the Democrats are still trying to make it up!

Tom Stockum

Posted by Donald L. Luskin at 11:01 AM | link  

GREATEST COURT JUDGMENT EVER   In a stunning and all too rare victory by a businessman over a regulator, a court has awarded financier Charles Hurwitz $72 million dollars from the Federal Deposit Insurance Corporation. At issue: the agency's harassment of Hurwitz in connection with a failed S&L, as a thinly veiled means of getting Hurwitz to capitulate in an entirely separate environmental regulatory matter. From the Associated Press:

Hurwitz has long said the case was a politically motivated effort to force him to relinquish control of ancient redwoods in the Headwaters Forest in California. The FDIC has said it was the result of a multiyear probe into United [Savings]'s failure.

In his 133-page ruling, U.S. District Judge Lynn Hughes was highly critical of the FDIC's efforts to sue Hurwitz, saying agency officials "lied about it all under oath" and they "discarded the mantle of the American Republic for the cloak of a secret society of extortionists."

Hurwitz and Maxxam "will recover their costs because the record reveals corrupt individuals within a corrupt agency with corrupt influences on it, bringing this litigation," Hughes wrote.

Thanks to Bruce Bartlett for the link.

Posted by Donald L. Luskin at 10:50 AM | link  

GREATEST MOVIE LINE EVER   How did the American Film Institute ever overlook this one when they compiled their list of the 100 greatest movie lines? Thanks to reader Martin Shimp.

Posted by Donald L. Luskin at 10:27 AM | link  

Wednesday, August 24, 2005

MORGENSON GETS HERS   After years of writing scandal-mongering anti-business columns based on nothing but accusations by plaintiffs, let's give Gretchen Morgenson a taste of her own bitter medicine. Here we have an open letter to New York Times publisher Arthur Sulzberger, Jr., from John M. Connolly, the CEO of Institutional Shareholder Services -- the firm that provides proxy voting information to institutional investors. Seems that Connolly wasn't happy with the bilious brew of lies, errors, misrepresentations and just plain meanness in Morgenson's column Sunday, accusing ISS of conflicts of interest. I won't even begin to summarize Connolly's letter -- read it for yourself. It's a gem.

Posted by Donald L. Luskin at 5:28 PM | link  

APPOINTMENT WITH THE DEVIL   Our antitrust guru Skip Oliva notes with regret that President Bush has appointed yet another anti-business activist to head the Antitrust Division of the Department of Justice. Skip tells me that Thomas O. Barnett was "the ringleader of the Oracle-PeopleSoft debacle":

Barnett was formerly head of civil enforcement, which includes the Networks & Technology Division, which actually prosecuted the Oracle-PeopleSoft case. Barnett was the Division official directly responsible for the case's operations. I'm a staunch advocate of holding mid-level guys responsible, since they are the ones who often make the actual decisions. Former Antitrust Division chief Hewitt Pate's role was more signing off on general strategy. And Barnett led much of the media offensive to promote the case, such as this interview to the ABA's antitrust magazine.

Posted by Donald L. Luskin at 2:07 PM | link  

APPRECIATING JOHN TIERNEY   Yeah, he may have dated Maureen Dowd once. But he was young, it was spring. John Tierney is still the biggest mistake the New York Times ever made (and that's a good thing). I can't top Perry Eidelbus's homage.

Posted by Donald L. Luskin at 7:35 AM | link  

Tuesday, August 23, 2005

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"This will be the subject of about a billion blog entries today. Did Krugman really think he could get away with this?" So wrote John Podhoretz on National Review Online's blog The Corner on Friday, stunned by an outrageous lie in Paul Krugman's New York Times column that day. America's most dangerous liberal pundit had written,

Two different news media consortiums reviewed Florida's ballots; both found that a full manual recount would have given the election to Mr. Gore.

Podhoretz was right. By the end of the day, Krugman's lie had been blasted out of the water by a flotilla of Krugman Truth Squad members in the blogosphere, including Chief Brief, Power Line, Brainster, The American Thinker, Brain Terminal, and my own blog The Conspiracy to Keep You Poor & Stupid.

Krugman's lie was especially loathsome considering that his own newspaper -- the New York Times -- was a member of one of the media consortiums to review the election results. On November 12, 2001, the Times reported:

Even under the strategy that Mr. Gore pursued at the beginning of the Florida standoff ó filing suit to force hand recounts in four predominantly Democratic counties ó Mr. Bush would have kept his lead, according to the ballot review conducted for a consortium of news organizations... The media consortium included The Times...

Of course Krugman would never publish a formal retraction. As former Times "public editor" Dan Okrent said of Krugman, "I canít come up with an adverb sufficient to encompass his general attitude toward substantive criticism." And besides, that George W. Bush stole the 2000 election is the creation-myth of the Angry Left -- it is an article of religious faith not to be questioned. And so we find Krugman, in his column Monday, digging himself even deeper into a pit of deceit as he attempts to paper over his lie.

Responding to what he called the "outraged reaction" to his Friday column, Krugman starts by rephrasing his lie in less ambitious terms:

...what would have happened if the U.S. Supreme Court hadn't intervened; the answer is that unless the judge overseeing the recount had revised his order (which is a possibility), George W. Bush would still have been declared the winner. ...what would have happened if there had been a full, statewide manual recount -- as there should have been. The probable answer is that Al Gore would have won, by a tiny margin.

Now, Krugman acknowledges that Bush would have won if the recount that had actually been ordered by the Florida Supreme Court had been allowed to proceed. Now, Krugman makes it clear that what he was talking about on Friday was something more than that -- a "full" recount beyond the scope of the one contemplated at the time, something that was not on the table, yet he personally believes "should have been." Now, Krugman discloses that even this would have made a Gore victory only a "probable answer," and even then only "by a tiny margin."

But rephrasing a lie does not make it go away. Even taking account of the critical importance of the word "full," it remains a lie to say that "Two different news media consortiums...both found that a full manual recount would have given the election to Mr. Gore." One of the two consortiums -- one led by the Miami Herald and including USA Today -- found no such thing.

This consortium recounted the votes under four standards, ranging from lenient to strict. According to USA Today on April 3, 2002, "By three of the standards, Bush holds the lead. The fourth standard gives Gore a razor-thin win."

What does Krugman say about that? More lies. Krugman wrote on Monday, "Two out of three hypothetical statewide counts would have given the election to Mr. Gore." Reality: there were not three counts, there were four. And three out of four went for Bush, not Gore.

Those four counts, however, were not the "full" recounts that Krugman thinks "should have been." Nevertheless, he lied about them. And even this consortium's "full" counts -- those that dealt with "overvotes" in addition to "undervotes" -- don't support Krugman's claims. According to USA Today on May 10, 2001, again there were four standards (not three). The winner was "Bush, under the 2 most widely used standards; Gore, under the 2 least used."

So "full" recount or not, it was an outright lie for Krugman to claim that "both" consortiums named Gore the winner. But what about that second consortium, the one that included the New York Times?

According to the Times itself, on November 12, 2001, the most that can be said is that "Mr. Gore might have won if the courts had ordered a full statewide recount of all the rejected ballots... The findings indicate that Mr. Gore might have eked out a victory..."

So with all that, let's see what remains of Krugman's lie. Under the recount process ordered by the Florida Supreme Court, both consortiums agree that Bush would have won. Under the "full" recount process that Krugman thinks "should have been," one consortium gives the election to Bush under the more likely standards, and the other consortium only finds that Gore "might" have "eked out" a victory.

Those are the facts. But will the Times run a correction, at least concerning Krugman's blatant factual misrepresentations about the Miami Herald/USA Today consortium's results? As of this writing, I've heard nothing in response to my query about it to "public editor" Byron Calame. I'm not holding my breath. There's no way the New York Times is going to interrupt its most effective evangelist when he's in the middle of a fire-and-brimstone sermon about the Angry Left's cherished creation-myth.

Posted by Donald L. Luskin at 12:01 PM | link  

Monday, August 22, 2005

CALLING THE TOP IN OIL   Investor Carl Futia continues to use the New York Times as a contrary indicator. I agree with him whole-heartedly on this one.
My favorite newspaper, The New York Times, is telling its readers that the world is running out of oil! Above this post you will see the cover of yesterday's The New York Times Magazine. It depicts a fuel gauge on "empty". The cover article by Peter Maass is entitled "The Beginning of the End of Oil". Among other things the article discusses the increasingly popular theory of "peak oil" which predicts a top in world-wide oil production in 2006. This NYTM cover is solid evidence of overwhelmingly bullish sentiment in the oil market. I think it is telling us that the next big move in crude oil will be downward from here and that the bull market [in] crude that started from $11 in 1998 is over.

Posted by Donald L. Luskin at 9:58 AM | link  

KRUGMAN CORRECTS HIS ERROR ON ELECTION 2000   Paul Krugman's column today is devoted to an elaborate defense against the "outraged reaction" to his claim in Friday's about Al Gore being the true winner in the 2000 presidential election. Say what you will about the actual merits of what he claims the facts are in today's column. The real issue is that he wouldn't even be writing today's defensive column if his claims about the election in Friday's column hadn't been exaggerated.

Here's what he wrote Friday:

Two different news media consortiums reviewed Florida's ballots; both found that a full manual recount would have given the election to Mr. Gore.

Open and shut. No gray areas, no subtlety, no room for doubt. Fact. But here's how he made the same point today:

...what would have happened if the U.S. Supreme Court hadn't intervened; the answer is that unless the judge overseeing the recount had revised his order (which is a possibility), George W. Bush would still have been declared the winner.

...what would have happened if there had been a full, statewide manual recount - as there should have been. The probable answer is that Al Gore would have won, by a tiny margin.

Doesn't have the same punch when he has to describe the narrow hypothetical he's really talking about, and has to admit that it's only "probable."

As far as I'm concerned, this is another Krugman correction -- in his typical cowardly style, it's disguised as an amplification and used as another opportunity to take a swipe at George Bush.

Update... In today's column Krugman says,

So why do so many people believe the Bush win was rock solid? One answer is that many editorials and op-ed articles have claimed that no possible recount would have changed the outcome.
Reader Josh Hendrickson comments,
He blames op-ed pieces for Bush's victory. Apparently he thinks that other op-eds are as unreliable as his.
Update 2... Richard Baehr at The American Thinker has an excellent take on Krugman's election column today (following up on his equally excellent take on Krugman's Friday column).

Update 3... Reader Jon Chambreau chimes in:

You've missed the most delicious part of Krugman's defense, that it is based on "six hypothetical manual recounts" referencing the University of Chicago's National Opinion Research Center. A search of that site brings this gem, "the project does not identify 'winners'. Its goal is to assess the reliability of the voting systems themselves, using the highest standards of scientific accuracy and reliability."

Posted by Donald L. Luskin at 8:48 AM | link  

THE WAY OUT OF THE VIOXX MADNESS   A masterful answer from Richard Epstein, who seems to be the only sane legal mind left in the world:

Merck should not apologize for pushing hard to win quick market acceptance; before Vioxx was withdrawn, countless people with chronic pain were able to get on with their lives. Now these folks are left far worse off because of a double whammy: a Food and Drug Administration that yanks too many drugs off the market because it has no idea how to evaluate risk, and individual jurors who think it is their solemn duty to "send a message" to the drug companies on whose products we so desperately depend.

So, in return, I would like to send my message to [plantiff's attorney] Mr. Lanier and those indignant jurors. It's not from an irate tort professor, but from a scared citizen who is steamed that those "good people" have imperiled his own health and that of his family and friends. None of you have ever done a single blessed thing to help relieve anybody's pain and suffering. Just do the math to grasp the harm that you've done.

Right now there are over 4,000 law suits against Merck for Vioxx. If each clocks in at $25 million, then your verdict is that the social harm from Vioxx exceeds $100 billion, before thousands more join in the treasure hunt. Pfizer's Celebrex and Bextra could easily be next. Understand that no future drug will be free of adverse side effects, nor reach market, without the tough calls that Merck had to make with Vioxx. Your implicit verdict is to shut down the entire quest for new medical therapies...

Ah, you will say, but we're only after Vioxx, and not those good drugs...Clever lawyers like Mr. Lanier will be able to ambush enough large corporations in small, dusty towns where they will stand the same chance of survival that Custer had at Little Big Horn. Investors can multiply: They won't bet hundreds of millions of dollars in new therapies on the off-chance of being proved wrong. They know they'll go broke if they win 90% of the time.

Your appalling carnage cries out for prompt action. Much as I disapprove of how the FDA does business, we must enact this hard-edged no-nonsense legal rule: no drug that makes it through the FDA gauntlet can be attacked for bad warnings or deficient design.

Posted by Donald L. Luskin at 8:31 AM | link  

POLICY WANTS TO BE FREE   Kevin Hassett mentions us kindly in his latest Bloomberg column, but that's not why you should read it. It's a devastating critique of the vast wasteland that is the world of deliberately manufactured policy ideas designed to benefit Democrats.
With Democrats faltering in the marketplace of ideas and reeling from electoral losses, a group of financiers has initiated a visible and collective movement to recover -- a vast left-wing conspiracy, you might call it. The Washington Post reported on Aug. 7 that at least 80 liberals have pledged to contribute $1 million apiece to fund a new network of think tanks through an organization known as the Democracy Alliance. Their intent is to revive the intellectual left. Their endeavor is doomed from the outset.

It's folly to construct a network of research organizations with a clear aim of supporting specific political ends, in this case those of the Democratic Party. Good research provides no political advantage because it convinces everyone. You shouldn't care who accepts your research. While Republicans in the U.S. may have adopted more ideas emanating from a small set of think tanks, Democrats could have done so as well. What are these new think tanks going to do, keep their research secret from Republicans?

Posted by Donald L. Luskin at 8:07 AM | link