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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 26, 2006

PAUL KRUGMAN DECLARES   The candidate of the Angry Left -- the one who will make Hillary Clinton able to run as a moderate -- has been announced by Paul Krugman in the New York Times today. It's Al Gore, because of "...his earnestness, and his genuine interest in facts, numbers and serious analysis. ...Mr. Gore is the sort of person who ought to be running the country."

Update [5/28/2006]... Jim Glass wonders whether Krugman can tell the difference between Gore and...

Posted by Donald L. Luskin at 11:09 AM | link  


Thursday, May 25, 2006

SMELLS LIKE VICTORY   Or as reader Jon Redden put it, "Every time a tax gets repealed, an angel gets his wings." Indeed. Today the Treasury Department announced it has given up trying to enforce the illegal telephone excise tax, and intends to give all taxpayers refunds with interest. We blogged about this illegal tax several months ago, and devoted a SmartMoney.com column to -- stimulated by the visionary Jim Glass of the Scrivener.net blog.

Hey -- I told you John Snow wasn't such a bad guy. It just took him a while, that's all.

Posted by Donald L. Luskin at 12:55 PM | link  


Wednesday, May 24, 2006

AND SPEAKING OF DOMESTIC ENERGY PRODUCTION...   Iowa Senator Chuck Grassley can teach Hillary Clinton a thing or two about pandering to the ethanol lobby, as she has done with her call for energy independence based on domestic non-petroleum sources. From Hotline OnCall:
"I say to Senator Clinton, 'welcome to the club.' We'll be happy to update her on the pro-ethanol laws we've enacted without her vote. If Senator Clinton is a born-again ethanol supporter, let's hope she has the zeal of a convert as she begins promoting ethanol and other renewable fuels."

Posted by Donald L. Luskin at 10:24 AM | link  

ISN'T IT OBVIOUS?   My Washington-based lawyer/lobbyist friend (anonymous as always) is scratching his head about opposition to increasing domestic petroleum production:
So, if folks are upset at the price of gasoline, we should conserve more, produce more and not add needlessly to cost... which means we should let prices deter consumption, invite new investments in supply and not pick favorites such as corn-based, government-mandated ethanol which is protected from all competition...

Im not sure where you stand on increasing domestic petroleum production, but this quote from House Majority Leader John Boehner states his case well:

"Later this week, the House will consider ANWR legislation which will create American jobs by authorizing environmentally safe energy production on just 2,000 of ANWR's 20 million acres. Using 21st Century technology that is environmentally safe, we can create more than a million American jobs, strengthen American energy security, and increase our energy independence. Had President Clinton not vetoed ANWR in 1995, the U.S. could be getting nearly 1.5 million barrels of oil per day from the arctic - an amount equal to the daily production lost in the Gulf after Hurricanes Katrina and Rita.

"While Republicans offer solutions, the Democrats' chronic negligence on energy solutions continues to impact working Americans every day. The Democrats have shown that their energy policy runs on nothing but hot air. They are on the wrong side of the issue of American energy independence with regards to the policy AND politics. Even their supporters in the labor movement recognize that Democrats are standing in the way of increased American energy production."


Posted by Donald L. Luskin at 9:37 AM | link  


Monday, May 22, 2006

DISCOUNTING KRUGMAN   Our friend Jim Glass, who blogs at Scrivener.net, writes in with an interesting view on Paul Krugman's claim that Joe Lieberman is pushing "administration lies" about Social Security:
Regarding Krugman's latest denial of Social Security's problems we might remember back when Krugman wrote:
"The Bush tax cuts, not the retirement programs, are the main reason why our fiscal future suddenly looks so bleak .... the revenue that will be lost because of the Bush tax cuts ... would have been more than enough to 'top up' Social Security and Medicare, allowing them to operate without benefit cuts for the next 75 years."
Yes, absent the tax cuts there would have been more than enough revenue to run SS and Medicare for 75 years. This at the same time as GAO was projecting, using pre-Bush, no-Bush-tax-cuts, year 2001 numbers, that deficits would reach 20% of GDP around 2045 (and be rocketing upward) due to the cost of Medicare and SS, ending its 75-year projection then because it was implausible that government could exist beyond that point.

Thus Krugman well displayed both his attitude and his expertise regarding this subject. In my opinion this was his biggest howler ever, bar none, especially since it is right in what is supposed to be his field of expertise. Of course he printed no correction -- what's a mere multi-trillion dollar error (current value) to the Times op-ed writers? Though to see some really amusing weaseling about whether there even was an error or not, take a look at Krugmans' rationalizations for no apology: you see, when he said "Medicare" he didn't mean "Medicare," he meant only the trust fund for Part A of Medicare -- as any dummy Times reader would know!

On the other hand, Krugman was perfectly happy in that column to "discount to current value", and explain the merits of doing so, when he thought it suited his purpose.


Posted by Donald L. Luskin at 10:44 PM | link  

McGOVERN DEFENDS WAL-MART   George McGovern (yes, George McGovern), speaks common sense in today's Los Angeles Times (yes, the Los Angeles Times).
Many of my friends will consider this view heretical. But it is based on stark reality...

It can be galling to hear companies argue that they have to cut wages and benefits for hourly workers even as they reward top executives with millions of dollars in stock options. The chief executive of Wal-Mart earns $27 million a year, while the company's average worker takes home only about $10 an hour. But let's assume that the chief executive got 27 cents instead of $27 million, and that Wal-Mart distributed the savings to its hourly workers. They would each receive a bonus of less than $20. It's not executive pay that has created this new world.

I understand the attraction of asking business the perceived "deep pockets" to shoulder more of the responsibility for social welfare. But there are plenty of businesses that don't have deep pockets. And many large corporations operate with razor-thin profit margins as competitors, both foreign and domestic, strive to attract consumers by offering lower prices.

The current frenzy over Wal-Mart is instructive. Its size is unprecedented. Yet for all its billions in profit, it still amounts to less than four cents on the dollar. Raise the cost of employing people, and the company will eliminate jobs. Its business model only works on low prices, which require low labor costs. Whether that is fair or not is a debate for another time. It is instructive, however, that consumers continue to enjoy these low prices and that thousands of applicants continue to apply for those jobs.

Thanks to reader Dave Duval for the link.

Posted by Donald L. Luskin at 1:13 PM | link  

SULZBERGER'S ADVICE TO GRADUATES: "READ NEWSPAPERS"   And don't forget to patronize our loyal advertisers, either. Arthur Sulzberger, Jr., inheritor of the title "publisher" of the New York Times, according to the Daily Freeman of the State University of New York at New Paltz (where?), told the graduating class "to engage themselves, read newspapers, know the world, neighborhoods, and stand up for America's democracy."

But that sales message was just the closer. The thrust of Sulzberger's speech was a steaming bucket of White Guilt -- a plea for institutional legitimacy by abasing one's self for the sins of one's race and class:

"I will start with an apology," Sulzberger told the graduates, who wore black gowns and hats with yellow tassels. "When I graduated in 1974, my fellow students and I ended the Vietnam War and ousted President Nixon. OK. OK. That's not quite true. Maybe there were larger forces at play.

"Either way, we entered the real world committed to making it a better, safer, cleaner, more equal place," Sulzberger added. "We were determined not to repeat the mistakes of our predecessors. We had seen the horror and futility of war and smelled the stench of government corruption. Our children, we vowed, would never know that. So, well, I am sorry."

..."It wasn't supposed to be this way," Sulzberger said. "You weren't supposed to be graduating in an America fighting a misbegotten war in a foreign land. You weren't supposed to be graduating into a world where we are still fighting for fundamental human rights, be it the rights of immigrants to start a new life, the right of gays to marry or the rights of women to choose."

Sulzberger added the graduates weren't supposed to be let into a world "where oil still drives policy and environmentalists have to relentlessly fight for every gain.

"You weren't. But you are and I am sorry for that," Sulzberger said.

Yep. This is the lunatic whose views infuse the spirit of the world's leading newspaper.

Thanks to TimesWatch for the link.

Posted by Donald L. Luskin at 11:20 AM | link  


Sunday, May 21, 2006

KRUGMAN BLASTS LIEBERMAN FOR TELLING THE TRUTH   Paul Krugman's column today attacks Joe Lieberman for, among other things, repeating an "administration lie."

A letter sent by Hillary Clinton to Connecticut Democrats credited Mr. Lieberman with defending Social Security "tooth and nail." Well, I watched last year's Social Security debate pretty closely, and that's not what happened.

In fact, Mr. Lieberman repeatedly supported the administration's scare tactics. "Every year we wait to come up with a solution to the Social Security problem," he declared in March 2005, "costs our children and grandchildren and great-grandchildren $600 billion more."

This claim echoed a Bush administration talking point, and President Bush wasted little time citing Mr. Lieberman's statement as vindication. But the talking point was simply false, so Mr. Lieberman was providing cover for an administration lie.

According to the Social Security Trustees' Annual Report, 2006, Table IV.B5: the system's unfunded obligation stands now at $4.934 trillion. According to the same table from the previous year's report, it was $4.318 trillion. Thus the growth from year to year was $616 billion. Krugman may dispute the meaning or accuracy of this figure on technical grounds, but there is simply no way he can look at the numbers and characterize Lieberman's statement as an "administration lie." If anything, it was an "administration understatement."

Update... Greg Mankiw agrees.

Update 2... Foolwise has a different angle.

Posted by Donald L. Luskin at 11:34 PM | link  

THE LANGUAGE OF SUCCESS   Harry Reid says it's "racist" to make English our nation's official language. Okay. Then it must be racist to want to get rich, too.

Posted by Donald L. Luskin at 1:16 PM | link