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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
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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!
Saturday, November 05, 2005
TAX CUTS FOR THE YOU-KNOW-WHO (OR IS THAT YOU-KNOW-WHOM?) There are some lessons that have to be learned over and over again. One is that "the rich" pay almost all the taxes in this country. Another is that they are never thanked for it, and any attempt to lessen their burden has shame and guilt heaped upon it. Here's Steve Conover with some excellent intellectual ammunition in the form of drop-dead facts and figures that ought to make "the rich" feel a little less guilty.Posted by Donald L. Luskin at 5:31 PM |
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THE ULTIMATE KRUGMAN TAKE-DOWN And EU Rota didn't even use a single word.
Posted by Donald L. Luskin at 12:04 PM |
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Friday, November 04, 2005
BUSH VERSUS SULZBERGER IN THE HISTORY BOOKS From "Mugger":Say...that by January, 2009, Iraq is a struggling but stable democracy, the Republicans have retained control of Congress and elected another president, the economy is strong and Iran's mad rulers are deposed, would it be surprising for Newsweek's Howard Fineman—just to pick one chameleon out of a hat—to grandly put [George W. Bush] in the same tier as Ronald Reagan?On the other hand, is there anyone in the media industry, if shielded by the anonymity that Times reporters too often grant their sources, who would deny that [Arthur] Sulzberger [Jr.]'s reign at the daily is increasingly becoming an embarrassment to his family? Blair can be excused, at least by Times partisans, as an isolated but well-intentioned excess of affirmative action, and if the self-aggrandizing Raines had to walk the plank, so much the better. After all, The Washington Post, which replaced the Times early in this decade as the liberal establishment's primary counterpunch to The Wall Street Journal, survived the Janet Cooke scandal in 1981.
Sulzberger certainly appears to be a creep. After allowing editorial-page editor Gail Collins—another disastrous hire—to print one self-righteous defense of Miller after another and then celebrating the reporter's release from jail with steak, drinks and a massage, the Jann Wenner of daily journalism has publicly withdrawn his support. Sort of like in 1972 when George McGovern—undoubtedly a nicer person than middle-aged Arthur—backed Thomas Eagleton as his vice presidential nominee 1000 percent, until he didn't.
Posted by Donald L. Luskin at 11:22 AM |
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CAPOTE CONNECTS I don't normally blog about movies. But I saw "Capote" last Saturday, and will report that it's one of the most compelling films I've seen in years. It's the story of the years Truman Capote spent in Kansas researching his breakthrough "non-fiction novel" In Cold Blood. In today's Wall Street Journal, Daniel Henninger gets at one of the many strands of fascination woven into this remarkable movie -- the portrait of the deep cultural empathy of a seemingly vain and self-absorbed New York intellectual:
This is not a Hollywood message movie like George Clooney's Edward R. Murrow film, waving warnings about McCarthyism. One can take from "Capote" what one wishes, and what I took away was how far the distance was in 1959 from New York's Upper East Side to Kansas. More than 40 years later that distance remains, defined almost every day of the week by our national politics.Recall how much was made of the gulf between Red and Blue America in the wake of the 2004 Bush-Kerry presidential election. A few days after the vote, the New York Times published a much talked-about piece reporting the flat-out stunned alienation felt by voters in Manhattan. Said one lady of people in the Midwest: "They're very 1950s. When I go back there, I feel I'm in a time warp."
Recall also how, in the 2004 election's post-mortems, it was said that the Democrats had missed the "values voters." As widely spun, this was to suggest that voters "out there" beheld life through a prism of archaic but weirdly persistent moral certitude. It was a political and personal ethos with which voters in the Blue urban centers simply could not connect.
Truman Capote connected.
Posted by Donald L. Luskin at 9:02 AM |
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BOTTOM LINE IN PARIS EU Rota on the continuing riots:
How can one riot for 8 days straight and not worry about paying for housing, food, the bills. Easy, wait for the government to send the subsidy check. Introduce accountability and responsibility into the system and watch people not have as much time on their hands to riot.Update... reader Doug Nelson points to this story from the Guardian, headlined "French youths open fire on police." It refers to a fellow with a most Orwellian job-title.
The minister of social cohesion, Jean-Louis Borloo, said the government had to react "firmly" but added that France must also acknowledge its failure to deal with anger simmering in poor suburbs for decades.Update 2... reader Corey Snow points to this from the New York Sun:"We cannot hide the truth: that for 30 years we have not done enough," he told France-2 television.
Back in the 1990s, the French sneered at America for the Los Angeles riots. As the Chicago Sun-Times reported in 1992: "the consensus of French pundits is that something on the scale of the Los Angeles riots could not happen here, mainly because France is a more humane, less racist place with a much stronger commitment to social welfare programs." President Mitterrand, the Washington Post reported in 1992, blamed the riots on the "conservative society" that Presidents Reagan and Bush had created and said France is different because it "is the country where the level of social protection is the highest in the world."Update 3... Reader Jill Olson chimes in. Remember Krugman's idea of "French family values"? From Sky News:
A handicapped woman was doused with petrol and set on fire by youths during another night of rioting in Paris. The 56-year-old suffered third degree burns to 20% of her body in the attack. Witnesses said a youth poured petrol over the woman and then threw a Molotov cocktail on to the bus she was travelling on in the suburb of Sevran.Update 4... Not sure why this is called an Ally McBeal moment, but this link from reader Gerald Hanner is pretty funny.
Posted by Donald L. Luskin at 8:56 AM |
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Thursday, November 03, 2005
TRUMP TRUMPS THE TIMES From The Donald's blog:The fact is The New York Times is going to hell. They published a major story about me on Sunday that they knew was wrong. On Sunday morning, right after the paper came out, my lawyer got a call from a lawyer at The New York Times asking if we wanted to correct the story. He didn't even wait until Monday, probably because he figured the lawsuits would be filed by then. The paper's editors knew the story was wrong, but they wanted to try and sell newspapers.Thanks to reader Chris Masse for the link.The New York Times was once a great newspaper, but it's not worth the paper it's printed on anymore. Changes have to be made. The New York Times is now reeling from so many huge mistakes by reporters and management that people are saying it's one of the worst newspapers in America.
There really has to be a shakeup at The Times, and I hope it happens soon. Too many people rely on it for factual information.
By the way, to the lawyer who called my lawyers on Sunday morning: Don't worry, we'll get back to you.
Posted by Donald L. Luskin at 2:17 PM |
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MORE COLUMNIST CORRECTIONS CORRUPTION Paul Krugman's correction of his "error" about the media studies of the 2000 Florida presidential election still hasn't been entered into the New York Times archives, a month after it was acknowledged in print by Gail Collins and she committed to such corrections. Now another Times columnist, Nicholas Kristof, is flouting the columnist corrections policy by "clarifying" prior errors on the web -- not in print, and not in the archives. Our friend Stephen Spruiell at NRO's Media Blog has the whole sordid story.
By the way, I continue to write Times "public editor" Barney Calame every day about Krugman's archive correction. Nothing ever happens. What a disappointment.
Posted by Donald L. Luskin at 12:50 PM |
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MORE SARBOX FALLOUT More and more companies are using the kind of financial maneuvers you'd think Sarbanes Oxley was designed to prevent in order to avoid falling into the law's clutches. The result: smaller public companies are going effectively private, and public investors will have less opportunity to invest and diversify.
Posted by Donald L. Luskin at 9:49 AM |
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NIGHTMARES A letter to the editor of the Arizona Republic, commenting on Paul Krugman's latest column syndicated there, in which Krugman said:
Let me be frank: it has been a long political nightmare. ...is the nightmare finally coming to an end? Yes, I think so.Reader Robert Flagg says,
While I suspect Krugman's nightmares will continue, I can offer him some hope in this little bit of wisdom: My nightmares stopped when I grew up.
Posted by Donald L. Luskin at 8:27 AM |
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SILLY ECON COLUMN OF THE DAY I love it when a piece of pop financial media commentary starts out in debunking mode, pointing out how the pop financial media exaggerates or over-interprets some particular event -- and then proceeds to do the very same thing. Here's a Peter Brimelow column on the hapless CBS Marketwatch that begins by critiquing all the mindless speculation in the media about what Ben Bernanke will be like as a Fed chairman. Then, hilariously, Brimelow switches gears and declares, in italics, "It does seem clear, however, that Bernanke, if confirmed, will do something." Well, uhh, yes... but what? Brimelow tells us at the end, warning of "the specter that all will ultimately spin off into an inflationary collapse." We'll be waiting for his column about that when it does.
Posted by Donald L. Luskin at 8:20 AM |
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A TEXTBOOK CASE I thought James Surowiecki was going to talk about Paul Krugman's economics textbook in this column in the New Yorker, which begins by quoting Krugman's mentor Paul Samuelson:
"I don’t care who writes a nation’s laws—or crafts its advanced treaties—if I can write its economic textbooks."Indeed, it would have been interesting to see a dissection of how Krugman's book subtly advances the same socialist agenda that Samuelson's did (through such means as, for example, demonstrating the principle of comparative advantage with an anecdote in which the vast majority of the cooperation surplus goes to the needier of the participants, not the more capable). But instead, the column is a moderately interesting disquisition upon the everyday economics of college textbooks, to wit:
Publishers, naturally, loathe used books and have developed strategies to depress the secondhand market. They bring out new, even more expensive editions of popular textbooks every three to four years, in a classic cycle of planned obsolescence. (The “enhanced offerings” of modern textbooks have a similar function; if using the online extras requires a registration code, the resale value of a textbook goes down.) Revision cycles were once longer, but used books have been eating deeper and deeper into publishers’ profits. The G.A.O. report cites one publisher who says that revision cycles at his firm are pegged explicitly to sales revenues: falling sales means it’s time for a new edition.Thanks to reader Chris Masse for the link (Masse no doubt recalls that Surowieki is a popularizer of "prediction markets" in his book The Wisdom of Crowds).Yet even when a professor assigns an expensive textbook, students are remarkably good at gaming the cycle of revisions. For instance, the economists Austan Goolsbee and Judith Chevalier, in a study of more than a thousand colleges, found that the year before a textbook is revised new-book sales drop sharply. That’s because a textbook in its final year is significantly less valuable, since you won’t be able to resell it. In other words, before nineteen-year-olds decide to buy a textbook, they consider not just the use they’ll get from it but also its current price, the probable future demand for it, and perhaps whether they can blow off the reading entirely. Funnily enough, they’re acting in what economists would call textbook fashion. And that serves as a check on publishers, who know that if they revise too frequently they could end up losing sales.
Posted by Donald L. Luskin at 8:09 AM |
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CLEAR THINKING ABOUT CHINA AND THE YUAN An outstanding column in Forbes by our friend Steve Hanke, putting the demon of Chinese mercantilism in its place and offering up some real insights about the way the finances of the world really stay in balance. Some high points:
While economists can declare before God that the U.S. current account and capital account (adjusted for statistical discrepancies) must sum to zero, it is another matter to make pronouncements about the direction of causation between these two accounts. It can go either way. During the first half of 2005 the U.S. current account deficit was a breathtaking 6.4% of GDP. The dollar and bond bears (and most of the financial press) repeatedly cited the deficit number to support their gloomy prognostications. For them, changes in the capital account respond passively to changes in the current account.And...The bears were proved wrong, suggesting that the direction of causation was running from the capital account to the current account. This explains why we could run a huge trade deficit without any collapse in the foreign exchange value of the dollar. We could do this because foreigners were selling their currencies to buy American assets, supplying Americans with foreign exchange to buy French wine and Japanese cameras.
...it's absurd to claim that China is causing a global imbalance of trade. The U.S. current account deficit represents 1.6% of global GDP. However, the current account surplus for all the countries in emerging Asia accounts for only 0.5% of global GDP. Oil-exporting countries also account for a surplus of 0.5% of global GDP. And Japan's surplus is almost as large, 0.4% of global GDP. To balance the imbalances, if that's the game, would require much more than a revaluation of the Chinese yuan.And...
...what about China's growing coffer of foreign reserves? At the end of September they were $769 billion, with $58 billion added in the third quarter. What will be surprising to the anti-China politicians is that in 2004, the reserve accumulation was due only in part to trade. The bigger contribution came from capital transactions: Investors in other countries poured money into China to build factories, accounting for 29% of the foreign reserve growth.Currency speculators accounted for 37%. These are people betting that the yuan will be revalued upward to please the folks in Washington, D.C. The speculators send dollars and euros and yen off to China, getting yuan chits in return and contributing to the pileup of dollar, euro and yen assets in Beijing. Think of the delicious irony here. The very meddling in currency matters from Capitol Hill is driving an increase in foreign exchange holdings by China.
Posted by Donald L. Luskin at 1:24 AM |
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Wednesday, November 02, 2005
THE ANSWER IS "NO" You had to ask? Thanks to Chris Masse for the link.Posted by Donald L. Luskin at 1:50 PM |
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JOKE OF THE DAY
Posted by Donald L. Luskin at 12:28 PM |
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TAX REFORM: WHAT IT TAKES Glenn Hubbard gets it exactly right in the conclusion to his discussion in today's Wall Street Journal about the proposals of the President's Advisory Panel on Federal Tax Reform.
...the next step is to go to the Final Jeopardy round.Sadly, "convincing explanations" are what this administration is always poorest at, preferring to see tax policy change in terms of legislative initiatives to be managed rather then popular movements to be fomented.Answer: A convincing explanation of the centrality of tax reform in domestic policy and continued presidential leadership. Question: What will it take to bring into focus the Tax Reform Panel's options and advance legislative action on tax reform?
Posted by Donald L. Luskin at 11:45 AM |
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AND WHILE WE'RE AT IT You can never have too much France-bashing. It turns out their neighbors don't like them much, either (I guess those riots make too much noise).
Eighty-six percent of people in Britain aged 18 to 30 think the French deserve "a popular negative stereotype"... That compares to 27 percent of like-aged people in France who felt the British held a negative stereotype of their nation, according to the survey.So they're deluded, too. Thanks to reader Jill Olson for the link.
Posted by Donald L. Luskin at 11:34 AM |
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AHA! It really was "all about oil" after all! The Bush administration cooked intelligence to justify invading Iraq so that there would be a world oil crisis, and -- yes! -- Sam Alito would make a couple bucks on his vast holdings of Exxon Mobil stock! And it turns out he inherited it from "a friend"... hmmm... no doubt a "friend" who was "accidentally" killed by a hired assassin in the pay of the Bushonian Cabal. Thanks to reader Jill Olson for the true story.
Posted by Donald L. Luskin at 12:17 AM |
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THE KRUGMAN COLUMN THAT KEEPS ON GIVING Can you beat "French Family Values," published on July 29? Every time there's news from the Continent, it just looks stupider and stupider. Krugman wrote,
French schools are good across the country, the French family doesn't have to worry as much about getting its children into a good school district...And whatever else you may say about French economic policies, they seem extremely supportive of the family as an institution.So that must be why there has now been six nights of rioting in Paris:
Youths set two rooms of a primary school in Sevran on fire Monday along with several cars, Mayor Stephane Gatignon said in a statement.Now that's family values. Thanks to several readers who pointed this out.Unrest was triggered by the deaths of two teenagers electrocuted in a power substation where they hid to escape police. A third was injured. Officials have said police were not pursuing the boys, aged 15 and 17.
Prime Minister Dominique de Villepin met Tuesday with the parents of the three families, promising a full investigation of the deaths and insisting on "the need to restore calm," the prime minister's office said.
Posted by Donald L. Luskin at 12:04 AM |
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Tuesday, November 01, 2005
JOKE OF THE YEARPosted by Donald L. Luskin at 10:27 PM |
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ALITO ON ANTITRUST Our antitrust guru Skip Oliva writes,
I take no position on Supreme Court nominations. I would just say, however, that Judge Alito's limited record on antitrust cases is an encouraging sign, particularly his dissent in a 2002 decision that affirmed a $68 million antitrust judgment against 3M. A competitor sued 3M for offering "illegal" bundled rebates on office products. The Third Circuit majority--it was a 7-3 en banc decision--invented a new rule of antitrust liability to affirm this verdict. (Alito had been on a 2-1 panel that initially overturned the verdict.) Some pro-antitrust groups will inevitably label Alito as "opposed to antitrust enforcement" on the basis of this decision.Incidentally, 3M was denied review in the Supreme Court after the Bush administration filed a brief asking the justices not to take the case. One of the grounds cited by the Solicitor General was the need for "academics" to study the Third Circuit's new theory. I previously posted a summary of the 3M case at this link.
Posted by Donald L. Luskin at 2:58 PM |
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IT'S ABOUT TIME Reader Carl Futia uses the excesses of the mainstream media to predict financial markets. Today he notes the cover of Time magazine:
The Time cover screams about " The Great Retirement Ripoff ". It explains how nasty corporations and their partners in crime, the US congress, are picking people's pockets and denying them their promised retirement benefits.I think it is worth remembering the last Time cover story that screamed about disappearing retirement savings. Here it is. Note the date: July 29, 2002. Just a few days earier the S&P 500 had hit 771. Draw your own conclusions.
Posted by Donald L. Luskin at 11:07 AM |
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ALITO TRADES Bush's nomination of Alito seems to be just the kind of in-your-face move the GOP base needed. Yes, he has a strong anti-choice background. But now GOP thought leaders are talking about the "nuclear option" again, and Tradesports has Alito's chances of confirmation at 78%. The online "prediction market" has chances of greater-than-50 Senate votes at 94%. Put the two together, and you can infer a "withdrawal contract," priced to suggest only a 24% chance that the nomination will be withdrawn before a vote.
Posted by Donald L. Luskin at 9:05 AM |
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Monday, October 31, 2005
OOPS! This is just one of a thousand examples of how seemingly "objective" and "factual" and "authoratative" economic statistics are as imperfect as anything else in this imperfect world.A Commerce Department spokesman said on Monday that a "computational error" was made in calculating the core personal consumption expenditures price index in the August U.S. personal income report.Thanks to our informant "Irrational Exuberance" for the link.The report, issued last Friday, said prices measured by personal consumption expenditures minus food and energy costs -- known as 'core PCE' -- showed costs rose about 0.2 percent in August. But an error was made on calculating truck costs.
"Due to the error, the decline in real expenditures for trucks was overstated by about $3 billion (chained 2000 dollars), or less than 0.05 percent of PCE," the department said on its Web site on Monday.
An official said that if the error was accounted for, the rise in core PCE was a slightly smaller 0.14 percent.
Posted by Donald L. Luskin at 10:26 AM |
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OKAY, WE CAN STOP TALKING ABOUT PLAME/LIBBY NOW Ted Olson has said all that needs to be said:
Mr. Fitzgerald justified his subpoenas on the ground that the journalists were "eyewitnesses to the crime." But he was unable to establish, and he certainly hasn't charged, that there was a crime in the first place. If special prosecutors can be empowered to investigate allegations of conduct that isn't first established to be criminal, and to interrogate witnesses -- especially reporters -- about memories of distant conversations with sources regarding conduct that isn't plainly criminal, there is no politically motivated allegation that can't be turned into a criminal cover-up.Update... Reader Sylvain Galineau adds:
I don't know if Ted noticed, but this situation is actually a marked improvement over the Martha Stewart case, since she was indicted and convicted for lying about something that is not a crime. At least Libby is indicted for lying about something that is a crime.Update 2... economist John Seater adds:
Sylvain Galineau is wrong. Martha Stewart wasn't indicted because she lied about anything; that was merely the excuse. Martha Stewart was indicted for what has become a serious crime in the United States, even without any legislature passing a law criminalizing it: she was successful in business.
Posted by Donald L. Luskin at 9:20 AM |
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Sunday, October 30, 2005
WHO SAID BUSH ISN'T A UNITER? See? He has brought together Christians and dope-smokers in opposition to budget cuts in federal entitlement programs:Faith-based organizations and heads have stood firmly in opposition to the budget cuts that would add to a net total of $50 billion over a period of five years.Which of them wrote that lede? Hard to tell.
Update... Bush fails again. A reader comments,
As both a Christian and a dope smoker, I would like to say that I do not support the government's entitlement programs and I disagree with any religious leader that advocates a government war on poverty. If the churches want charity, let them provide it.
Posted by Donald L. Luskin at 12:02 PM |
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