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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 04, 2006

MORE KUDLOW REPLAYS   Here are YouTube videos of my October 17 and October 20 appearances.


Posted by Donald L. Luskin at 4:00 PM | link  

JOKE OF THE DAY  

Posted by Donald L. Luskin at 1:56 PM | link  


Friday, November 03, 2006

REPLAY OF LUSKIN ON KUDLOW   Here's a YouTube clip of my appearance on CNBC's Kudlow & Co. yesterday. Be sure to watch election-eve at 8:00 pm when I'll be live in Washington DC with Larry.


Posted by Donald L. Luskin at 7:30 PM | link  

FISHER ADMITS FED ERROR   Yes, Dallas Fed president Richard Fisher blames it on bad numbers. But it is remarkable nevertheless to hear a Fed official admit the central bank has erred in any way, ever.
In late 2002 and early 2003, for example, core PCE measurements were indicating inflation rates that were crossing below the 1 percent "lower boundary." At the time, the economy was expanding in fits and starts. Given the incidence of negative shocks during the prior two years, the Fed was worried about the economy's ability to withstand another one. Determined to get growth going in this potentially deflationary environment, the FOMC adopted an easy policy and promised to keep rates low. A couple of years later, however, after the inflation numbers had undergone a few revisions, we learned that inflation had actually been a half point higher than first thought.

In retrospect, the real fed funds rate turned out to be lower than what was deemed appropriate at the time and was held lower longer that it should have been. In this case, poor data led to a policy action that amplified speculative activity in the housing and other markets. Today, as anybody not from the former planet of Pluto knows, the housing market is undergoing a substantial correction and inflicting real costs to millions of homeowners across the country. It is complicating the task of achieving our monetary objective of creating the conditions for sustainable non-inflationary growth.

Bret Swanson has the correct response:
Referring to the CPI and PCE price indeces, which constantly disappoint, Fisher says, "The point is ... we need better data." But we've already got much better data -- right in our grasp. This data streams across our Bloomberg screens and CNBC tickers every moment of every day. In real time. The data is called the price of commodities, the value of the dollar, bond yields (somewhat less useful), and most importantly, the price of gold. It's real time market data. No sampling. No revisions. No lags.

Fisher is correct the Fed created the current inflation and that we need "better data." But he doesn't mention that the simple solution is right in front of us.


Posted by Donald L. Luskin at 10:59 AM | link  


Thursday, November 02, 2006

REPLAY OF LUSKIN ON KUDLOW   Here's a YouTube video of part of my appearance on Monday. I'm still learning to do this video-on-the-web thing. Thanks to readers Timothy Roe, Perry Eidelbus, and Gary Gagliardi for their assistance.


Posted by Donald L. Luskin at 2:51 PM | link  

KRUGMAN DECIDEDLY INDECISIVE   I guess Paul Krugman has finally come to terms with the reality that his forecasting record -- forecasting of just about anything -- sucks. At a recent presentation in Princeton he proclaimed about the coming election, "The Kerry bumper stickers are still on and passions are high ... the perfect storm is here." Ahh, but is the perfect storm perfect enough? Maybe not. He continued, "Whether it's enough? We just don't know." And how about this for indecisive?
"There's a Democrat storm surge that's heading for the Republican levee... The question is whether the surge is high enough to pass that levy."
In other words, "who knows?" And how about this?
"If I had to guess right now, I think the Democrats will take the House, but it's not going to be close... They will either fail or win by a large margin."
In other words, "who knows?" And this, concerning what would happen if the Dems win:
"There's a real question of whether they'll be able to hold on... Perhaps when people feel that the Republicans have been punished, they'll go back to voting Republican again."
Frankly, this worries me. If Krugman were crowing about a certain Dem victory know, I'd feel a lot more comfortable that a GOP upset was in store.

Reader Rick Gaber makes an excellent point:

You gotta give the Krugster credit for this one. His saying "Perhaps when people feel that the Republicans have been punished, they'll go back to voting Republican again." -- is the FIRST time I've ever seen ANYONE associated with the MSM even come close to acknowledging that the GOP's low approval ratings don't all come from people who agree with the MSM agenda (wishing the government were bigger, more powerful, more intrusive and more expensive).

Posted by Donald L. Luskin at 12:17 PM | link  

FAKE BUT ACCURATE KERRY VOTER SIGHTING   From Classical Values:


Posted by Donald L. Luskin at 12:07 PM | link  


Wednesday, November 01, 2006

ONLY IN AMERICA   Or Guantanamo, at least:
A library in a drab double-wide - its stacks of books available in 16 languages, including Arabic and Chinese - is among the perks U.S. military officials promote as they seek to put a friendlier face on the controversial camp, which has been the subject of international protests over the detention and treatment of detainees.

...A military officer/librarian makes the rounds to the cells of more than 400 men who are housed in small, stark cellblocks ringed by fences topped by barbed wire.

"If we're late, they're bugging the guards," one librarian said of the detainees, whose tastes are said to favor Arabic poets and British mysteries. Harry Potter is also said to be a favorite.

Perhaps as part of the US government's avowed program of torture of detainees, they should be forced to read the New York Times.

Posted by Donald L. Luskin at 12:21 PM | link  

TECHNICAL QUESTION FOR THE BRAIN TRUST   Hey all you web-heads out there... Got a tech question for you. I want to post video clips of my Kudlow appearances on YouTube. That site requires MPEG4 files. I capture my appearances on Tivo, and from there I archive them onto DVD's via a Sony DVD recorder. Does anybody know how to make MPEG4 files from a finsihed DVD? One workaround would be to transfer the shows saved on Tivo to digital tape -- I know how to make MPEG4 files from that medium. But I want to avoid that extra step. I'm already making the DVDs, so how do I use those as my source for the MPEG4 files? Any ideas or references would be greatly appreciated. Thanks!

Update... Within minutes, reader Timothy Roe had the answer. Love the web! Love my readers!

Posted by Donald L. Luskin at 11:51 AM | link  

OKAY, SO WHAT'S YOUR ARGUMENT?   The New Republic's Jonathan Chait asks leftist economist Peter Orszag a tough question. In essence, it is: how can the Bush tax cuts be blamed for growing pre-tax income inequality? In essence, Orszag's answer is: well, uh, gee... I just feel that it does.
[Chait:] Now, how about this problem we've been seeing, this wedge between rising productivity and median wages where workers are being more and more productive and aren't getting wage gains commensurate with their productivity. That doesn't seem to be connected to tax cuts or any other public policy, does it?

PO: Three things. One, fiscal policy has exacerbated [the distribution problem]; it's diverted attention from some of the things that might likely have raised median income wages gradually over time; and the third thing is I think it's feeding into a social norm or prevailing tendency that everyone's in it by themselves and that feeds the kind of outcomes that we're seeing. There isn't a social norm of raising consciousness about this disconnect and what to do about it.

Thanks to reader Jameson Campaigne for the link.

Posted by Donald L. Luskin at 9:49 AM | link  

ANOTHER TROJAN HORSE   Democrats continue to pretend to be pro-growth in the run-up to the election. The party that made Sarbanes Oxley necessary, and has done so much to promote an environment that supports strike suits by the trial bar and depredations by states attorneys general, now wonders why the US is losing ground in global capital markets. Here Chuck Schumer (with a GOP co-author, Michael Bloomberg), write an op-ed for the Wall Street Journal:
First, what lessons can we learn from other nations' regulatory systems? Currently, there are more than 10 federal, state and industry regulatory bodies in the U.S. The British have only one such body. Industry experts estimate that the gross financial regulatory costs to U.S. companies are 15 times higher than in Britain. Beyond cost savings, the British enjoy another advantage: While our regulatory bodies are often competing to be the toughest cop on the street, the British regulatory body seems to be more collaborative and solutions-oriented.

With the benefit of hindsight, the Sarbanes-Oxley Act of 2002, which imposed a new regulatory framework on all public companies doing business in the U.S., also needs to be re-examined. Since its passage, auditing expenses for companies doing business in the U.S. have grown far beyond anything Congress had anticipated. Of course, we must not in any way diminish our ability to detect corporate fraud and protect investors. But there appears to be a worrisome trend of corporate leaders focusing inordinate time on compliance minutiae rather than innovative strategies for growth, for fear of facing personal financial penalties from overzealous regulators.

Second, what lessons can we learn from other nations' legal environments? The total value of securities class-action lawsuits in the U.S. has skyrocketed in recent years, to $9.6 billion in 2005 from $150 million in 1997. The U.K. and other nations have laws that far more effectively discourage frivolous suits. It may be time to revisit the best way to reduce frivolous lawsuits without eliminating meritorious ones.

Reader Robert Paci wonders why the article so conspicuously fails to mention the name of Eliot Sptizer...

Posted by Donald L. Luskin at 9:19 AM | link  


Tuesday, October 31, 2006

JOKE OF THE DAY  

Posted by Donald L. Luskin at 5:33 PM | link  


Monday, October 30, 2006

WAS GEORGE SOROS A COLLABORATOR?   Read it yourself...

Posted by Donald L. Luskin at 9:10 PM | link  

GREAT LINE   The AP reports:
Without referring to her by name, Bush mocked House Democratic Leader Nancy Pelosi for saying Democrats love tax cuts. "Given her record, she must be a secret admirer," the president said to laughter, reeling off a list of tax cuts he said she opposed.
Thanks to Perry Eidelbus for the link.

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

NO ONE CAN SAY IT WASN'T FAIR!   Concerning Michigan's controversial anti-affirmative action initiative (emphasis added):
Several organizations filed lawsuits attempting to block the MCRI [Michigan Civil Rights Initiative] from getting on the ballot, arguing the groups violated the Voting Rights Act of 1965 through intentional manipulation and misrepresentation when acquiring signatures. U.S. District Court Judge Arthur Dannow agreed that the MCRI engaged in voter fraud in his statement, but declined to remove the proposal from the ballot, writing that the MCRI defrauded all voters, regardless of their ethnicity, and such, did not violate the Civil Rights Act.

Posted by Donald L. Luskin at 7:24 PM | link  

IF THIS IS "UNQUALIFIED," I'D HATE TO SEE "QUALIFIED"   From a New York Times editorial today:
Mr. Menendez has a history of ethical lapses that have been all too common for Democratic officials in New Jersey, especially for those, like him, who continue to take an active part in local party politics. ...Our unqualified endorsement goes to Robert Menendez.
Thanks to reader Robert Paci for the link.

Posted by Donald L. Luskin at 3:58 PM | link  

ACTUALLY, I WASN'T WONDERING   Krugman this morning on the purported bursting of the purported housing bubble:
In case youíre wondering, I donít blame the Bush administration for the latest bad economic numbers. If anyone is to blame for the current situation, itís Mr. Greenspan, who pooh-poohed warnings about an emerging bubble and did nothing to crack down on irresponsible lending.

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


Sunday, October 29, 2006

I NEVER HAD ENERGY INDEPENDENCE WITH THAT WOMAN!   The former president tells a big lie to support California's Proposition 87 -- designed to put a tax squeeze on oil producers. From IBD:
"Imagine if we stop being dependent on foreign oil. Brazil did it. They made a simple switch to their cars. Switched to ethanol, grown from their own crops. And it's 33% cheaper than gas," Clinton said, neglecting one key detail: cars must use three times as much ethanol as gas.

"With Proposition 87, we can switch to cleaner fuels, wind and solar power," he says in a political ad, "and free ourselves from foreign oil. If Brazil can do it, so can California."

But as a matter of fact, that's not what Brazil did.

It launched a crash program of offshore oil drilling in the late 1990s, working with a Manhattan Project-like determination to develop its own natural resources.

In 1997, Brazil opened its oil sector to foreign competition, encouraging companies like Royal Dutch Shell to explore and drill for oil in its offshore waters for the first time. It offered incentives ó like tax cuts. It also turned its inefficient state oil company, Petrobras, into a for-profit company run like a real business instead of a government cash cow, forcing it to compete on an international-standard level. In short, it got out of the way.

Net result, lots more oil for Brazil ó enough to enable the once-oil-dependent country to actually export some, all from fewer energy reserves than the U.S.

Brazil's new P-50 rig has boosted output to an average 1.9 million barrels of oil a day, a bit more than the 1.85 million Brazil consumes.

By contrast, ethanol output in Brazil, the world's biggest producer, is only a small share of its energy consumption.

Last year, the country squeezed out just 282,000 barrels a day mostly using sugar, a more efficient and clean-burning energy source than the corn-based stuff produced in the U.S. But sugar-based ethanol still isn't as efficient as gasoline.

Thanks again to reader "Zoogler."

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

BIG BRO' LIVES   And the Brits seem to be able to do all this without even having a Patriot Act:
Families who live in desirable areas face massive increases in their council tax bills under plans being drawn up by Labour, it was revealed...

Ministers have purchased sophisticated 'Big Brother' computer systems which calculate the desirability of an area based on the quality of local services and the types of people who live there.

The software, which will be used in the forthcoming revaluation of all 21 million homes in England, contains astonishingly detailed data on the number of households, even those who have pets, wear contact lenses or are vegetarian.

...bills could rise by as much as four times in areas which are deemed 'desirable' - sending some bills spiralling from £1,000 to £4,000.

The Acorn computer system uses marketing information obtained from companies, such as credit card and stores, to create a detailed analysis of individuals and their neighbourhoods based on 287 'lifestyle variables'.

Thanks to mysterious reader "Zoogler" for the link.

Posted by Donald L. Luskin at 8:41 PM | link  

A VERY DIFFERENT WAY OF THINKING ABOUT THE "SCIENTIFIC CONSENSUS" ON GLOBAL WARMING  

Check out this lecture by visionary physicist David Deutsch, presented on the TedTalks site. The heart of it is a fascinating inquiry into the uniqueness of human life and human knowledge, but it includes -- almost incidentally -- with some real wisdom on the global warming debate. As I was listening, and I could hear the subject turn to global warming, I rolled my eyes -- okay, I thought, here comes the politically correct part. But I was most pleasantly surprised. Here's a really unique pro-growth and pro-freedom angle on it:

The rational thing for a layman to do is take seriously the prevailing scientific theory. And according to that theory, it's already too late to avoid a disaster, because if it's true that our best option at the moment is to prevent CO2 emissions, then that is already a disaster by any reasonable measure. So it's already too late to avoid it, and it probably has been too late ever since before anyone realized the danger.

Now the lesson of that seems clear to me, and I don't know why it isn't informing public debate. It is that we can't always know. When we know of an impending disaster, and now to solve it at a cost less than the cost of the disaster itself, then there's not going to be much argument really. But no precautions, and no precautionary principle, can avoid problems that we do not yet foresee. Hence we need a stance of problem fixing, not just problem avoidance.

It's true that an ounce of prevention equals a pound of cure, but that's only if we know what to prevent. If you've been punched on the nose, then the science of medicine does not consist of teaching you how to avoid punches. I medical science stopped seeking cures and focused on prevention only, then it would achieve very little of either.

The world is buzzing at the moment with plans to force reductions in gas emissions at all costs. It ought to be buzzing with plans to reduce temperature, and with plans to live at the higher temperature -- and not at all costs, but efficiently and cheaply. Some such plans exist, such as swarms of mirrors in space to deflect the sunlight away, and encouraging aquatic organisms to eat more carbon dioxide. At the moment, these things are fringe research. They are not central to the human effort to face this problem or problems in general.

And with problems that we are not aware of yet, the ability to put right -- the the sheer good luck of avoiding indefinitely -- is our only hope of not just solving problems, but of survival. So take two stone tablets and carve on them. On one of them, carve "Problems Are Soluable." And on the other one, carve "Problems Are Inevitable."


Posted by Donald L. Luskin at 2:24 PM | link