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Media Infiltrations: Deadly Rescue  National Review November 17, 2008 Krugmans Posthumous Nobel National Review Online October 14, 2008
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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 11, 2006
DELONG TRIES TO DEFEND HACKER Brad DeLong has responded in his usual bullying ad hominem way to my questions about Jacob Hacker's statistics on "income instability". Jabba the Economist sez:Luskin's confusion can be easily cleared up. Hacker calculates the average variability of individual Americans' incomes. Luskin calculates the variability of the average of individual Americans' incomes. As everybody who has taken even one semester of statistics--or even thought about it for fifteen minutes--knows: in general the variability of the average is not equal to the average of the variabilities. Why on earth should anybody think it should be?Okay as far as it goes, but merely pointing out that there is usually a difference between the variability of an average and an average of individual variabilities doesn't even begin to address the point I raised. The fact remains that Hacker's chart simply looks nothing like any of the other charts of income variability -- it's not just unequal, it's a massive outlier. DeLong is simply guessing when he says -- with his usual pompous self-assurance -- that the methodological difference he cites is the explanation for this. For all DeLong knows, Hacker has made any number of possible errors or distortions in the way he's processed his data. Even if DeLong's guess turns out to be right, that still leaves open the very real question of why -- and what it means that -- the two methodologies yield virtually opposite results. Perhaps there is some causal connection between higher individual variability and lower overall variability. But DeLong won't go there... he would certainly never open up a line of argument suggesting that individuals taking personal responsibility for their economic outcomes produces an "ownership society" that is wealthier and more stable overall. Better to just make a guess to defend a liberal icon, and call me "stupid" for not making the same guess.For Luskin to claim that there must be something wrong with Hacker's numbers because Hacker's calculations of the average variability don't line up with Luskin's calculations of the variability of the average, well...
And as along as we're doing the ad hominem thing... is it just me, or has anyone else wondered what it means that DeLong would have just redesigned his web site to feature this particular picture of himself? Of all the pictures in the world that he could have chosen, what about this one commended itself? What attributes does it have that DeLong considers especially essential to his communication of himself to the rest of the world? Is that look of bored arrogance supposed to underscore the haughty voice with which he preaches to the admiring choir at his site? Is it a deliberate celebration of morbid obesity, as though to suggest the DeLong is so brilliant that such afflictions of the flesh just don't matter? Who knows... but as long as we're making guesses, here's mine: it doesn't take a genius to look at that picture and see the sadness of a weakling who has found, in the web, a medium in which he can act the part of the bully.
Update... Perry Eidelbus contributes this defense of DeLong:
Posted by Donald L. Luskin at 11:33 PM | link
LOOK FOR THE UNION LABEL... ...stitched to the most private garments of the new Democratic Congress. From the AFL-CIO's website, here's a union's-eye view of Washington, all bought and paid for:
My DC lawyer/lobbyist friend writes,
Old Beatles line: "Her name is McGill, she calls herself Lil, but everyone knew her as Nancy."Whatever her name, the AFL-CIO believes they won 4/5 of the election. They will not be shy about their demands.
Posted by Donald L. Luskin at 11:52 AM | link
Friday, November 10, 2006
THE WRONG GUY IN LEADERSHIP So Lamar Alexander has thrown his hat in the ring for Senate minority whip...in fact he's claiming victory already, over rival Trent Lott. If the GOP is going to make a comeback by returning to its small-government, low-spending low-tax roots, this guy is the wrong guy. Remember just a couple short years ago...GOP Senator Lamar Alexander plans to offer an amendment that will authorize states and localities to tax the Internet. Alexander's plan would allow state legislators and city councils to establish a local tollbooth for accessing the information superhighway. This law would reverse the ban on Internet taxation that has existed virtually since the Internet was first invented. For his effort on behalf of the National Governors Association and other organizations, Alexander is making a real name for himself as the senator that wants to allow the Internet to be taxed.
Posted by Donald L. Luskin at 4:58 PM | link
IT WAS THE ECONOMY My SmartMoney.com column today:
What should investors do about this week's elections, in which control of Congress went to the Democratic party for the first time in a dozen years?
I suppose the first thing is to say "Thanks" to the guys who got booted from office on Tuesday. Be grateful it's been a nice run for investors since the Democrats lost control of Congress in 1994.
The compound annual total return for the S&P 500 over those 12 years was 11.3%, compared with an average of 10.3% over previous history. Inflation only eroded your winnings at an average annual rate of 2.6% during those 12 years, compared with 3.1% over previous history.
So "Thanks." We investors got to make more money than usual, and what we made was safer from inflation.
But now voters have decided to give the other team a chance at bat. Seems odd, since today about 55% of voters are direct owners of stocks, either in brokerage accounts, IRAs or 401(k)s.
Perhaps this election wasn't about the economy at all, but rather about the war in Iraq, or about corruption. Could be, but I see some patterns in the results that tell me that voters were very much thinking about economic issues.
And not in the way you might expect for an election in which Democrats seized power. Democratic politicians and pundits have made a lot of noise this year about "income inequality" and "stagnating wages" and "economic insecurity." Their solutions are usually some form of government intervention, greater regulation, or a more extensive welfare state. But those aren't the things that people voted for this week.
If voters wanted bigger and more intrusive government, more regulation, and more welfare, they should have voted for Republicans in a landslide. It was a Republican Congress that put the regulatory nightmare of Sarbanes-Oxley in place, that outlawed online wagering, and that created the catastrophically expensive Medicare prescription drug benefit. The Republican Congress also presided over a massive increase in overall government spending.
Voters may hate the war in Iraq. They may hate corruption. But I think they also hate the way the party that historically talks about smaller government and fiscal responsibility has gone on a regulating-and-spending binge.
According to a poll conducted by Basswood Research in 15 key battleground congressional districts, 39% of voters labeled the Republicans "The Party of Big Government" only 28% gave that label to the Democrats. In those districts, Republican candidates got slaughtered on Tuesday.
But consider what happened in seven other districts, where the Club for Growth a political organization dedicated to small government, lower spending, and lower taxes financed the congressional campaigns of eight Republican newcomers dedicated to the Club's ideals. Seven out of eight of them won on Tuesday Iraq or no Iraq, corruption or no corruption.
A number of so-called "Blue Dog" Democrats were elected on Tuesday, too. Those are Democrats whose economic agenda is more like what the Republican one is supposed to be smaller government, less spending, and more fiscal sanity.
Twelve states had ballot propositions that would limit state power to seize private property under "eminent domain." Those propositions passed in 10 states, a clear message that voters want to contain the scope of government's power to interfere in the economy.
Ballot propositions that would raise the minimum wage also passed in a number of states. There, at least, voters seemed to prefer more, not less, government interference. But that's just a small extension of something already in place, which thankfully affects very few workers or businesses.
More symbolic of the voters' mood, in my judgment, was what happened to a ballot proposition in my home state of California that would have slapped a tax on oil companies for every barrel of oil they produce. The money would be used to finance a massive state program to develop alternative-energy sources. Wisely, this massive usurpation of private enterprises was soundly defeated by voters.
Here's how I read it. Voters prefer the kind of economics that Republicans used to stand for but mostly don't anymore. Republicans who still do got elected on Tuesday. Democrats who stand for that agenda got elected, too. Ballot propositions that adhered to those principles passed; those that didn't, flopped.
So investors should be comforted that, even after a Democratic sweep, it just could be that both the Republicans and the Democrats have moved a little closer to economic principles that are good for growth and good for investing.
The situation isn't without risk, though. In my judgment, the Democratic congressional leadership doesn't share the same pro-growth agenda as an increasing proportion of the rank-and-file. We're going to hear a lot from them about more regulation, new government powers and new spending programs. None of it will probably go anywhere but you never know.
With a little luck and a little wisdom, this could be a great time to be an investor.
Posted by Donald L. Luskin at 10:51 AM | link
ANOTHER KUDLOW REPLAY Here's yesterday's show, via YouTube:
Posted by Donald L. Luskin at 9:48 AM | link
KUDLOW REPLAY FROM MONDAY It's really too bad my election predictions on this show were so totally wrong. It would have been sweet to have the leftist bullies on this show eating a little crow. But it was not to be...
Posted by Donald L. Luskin at 12:42 AM | link
BEST POLITICAL AD OF THE ELECTION Except that the candidate didn't win. But other than that, this is spot-on. Thanks to Jameson Campaigne for the link.
Posted by Donald L. Luskin at 12:07 AM | link
Thursday, November 09, 2006
IT'S ABOUT TIME!! The Libertarian Party emerges as a power broker! John Fund in today's Wall Street Journal "Politcal Diary" email alert (no link available):In 2000, it was Democrats who were furious at Ralph Nader's Green Party for winning 92,000 votes in Florida and thus "costing" Al Gore the hyper-close race in that state.Now it's the turn of Republicans to be miffed at the Libertarian Party for "costing" them control of the U.S. Senate. In Montana, Libertarian Stan Jones won over 10,000 votes, far exceeding the 3,000-vote margin by which GOP Senator Conrad Burns trails his Democratic opponent. In Missouri, the contest wasn't close enough in the end to be affected, but even there, the Libertarian claimed 41,000 votes in a race that GOP incumbent Jim Talent lost by 47,000 votes.
Posted by Donald L. Luskin at 3:43 PM | link
JIM FLORA MAMBO FOR CATS SILK SCREEN PRINT
Our friend Irwin Chusid has let us know about this gorgeous artwork:
...limited-edition silk screen prints of the renowned Jim Flora 1955 Mambo for Cats RCA Victor album cover.Produced in an edition of 200 by Minneapolis print and design studio Aesthetic Apparatus the prints have been created using Flora archivist Barbara Economon's digital restoration of a vintage printer's proof. They measure 20" x 20" (much larger than the album version), and use three acrylic screen printing inks meticulously matched to Flora's original colors on archival 100-pound off-white cover stock.
Each print is numbered on the front and authenticated on the reverse with stamped seals from Jim Flora Art LLC (a Flora family enterprise) and Aesthetic Apparatus. The trademark "Flora" signature, which did not appear on the original LP cover, has been added in the lower right.
The first 100 numbered copies will be sold for $150 each, unframed. Prices for copies 101 to 200 will be increased as stock is depleted.
Jim Flora (1914-1998) designed dozens of fun--and deftly diabolic--album covers for Columbia Records and RCA Victor during the 1940s and 1950s. The 'Mambo for Cats' design is one of his best-known works; copies of the long-out-of-print LP fetch hundreds of dollars on eBay. A collection of his album covers, commercial assignments, and early letterpress work was published in 'The Mischievous Art of Jim Flora' (Fantagraphics Books, 2004), and a number of album covers are displayed at JimFlora.com. A second book, 'The Curiously Sinister Art of Jim Flora' (Fantagraphics, February 2007), features a selection of Flora's rarely seen early paintings, woodcuts, prints, sketches, and commercial assignments.
Beginning in 2007, Jim Flora Art LLC will issue a series of limited-edition fine-art prints of uncirculated Flora works from the 1940s, '50s, and '60s. These will be sold through the family website, JimFloraArt.com, and limited venues. Dealer inquiries are welcome for the silk screen and fine-art editions.
ORDERING INFO
One-click purchase on eBay. Or drop a note to: Julia@JimFloraArt.com. PayPal accepted.
Prints will be wrapped in protective paper and shipped in high-density mailing tubes via DHL Ground at a cost of $9.00, including insurance. Orders placed for Christmas gift-giving guaranteed to arrive before the holidays.
NOTE FROM AESTHETIC APPARATUS:
Great effort is made to ensure the quality and craftsmanship of each print. Given the organic nature of the screen printing process, small spots or specks are often present on some prints. However, such minute imperfections are common and do not detract or distract from the image itself.
Posted by Donald L. Luskin at 3:32 PM | link
HAS IT COME TO THIS ALREADY?
Posted by Donald L. Luskin at 10:49 AM | link
WHAT'S WRONG WITH THIS PICTURE? "I've always wondered why Republicans insist on acting like Democrats in hopes of retaining political power, while Democrats act like us in order to win." -- Dick Armey, former House majority leader.
Posted by Donald L. Luskin at 10:03 AM | link
Wednesday, November 08, 2006
BUSH AT HIS BAD-ASS BEST NPR described Bush as "groveling" at his press conference today. But this sounds like swagger, to me. Here's how he dealt with the New York Times' James Rutenberg:THE PRESIDENT: Rutenberg.Q Thank you, Mr. President. You just described the election results as a "thumping."
THE PRESIDENT: I said the cumulative -- make sure -- who do you write for?
Q The New York Times, Mr. President.
THE PRESIDENT: Oh, yes, that's right. (Laughter.) Let's make sure we get it -- the facts. I said that the elections were close; the cumulative effect --
Q Is a thumping.
THE PRESIDENT: -- thumping. (Laughter.)
Q But the results --
THE PRESIDENT: A polite way of saying -- anyway, go ahead. (Laughter.)
Posted by Donald L. Luskin at 9:04 PM | link
SIGH... There's no denying it -- the Dems did better than expected. What can I say? The GOP blew it. They did it to themselves. They had it coming. The bright note as this election was not fought in the arena of economic ideas, and doesn't constitute a referendum on pro-growth policy. It's significant that in my home state of California, proposition 87 -- which would have put a tax on domestic energy production and createda vast state bureaucracy to spend the money on alternative energy -- went down to defeat. This election was about Iraq and GOP corruption. Things are going to get interesting to be sure -- but it's hardly a lurch to the loony left.
My Washington lawyer/lobbyist friend agrees:
We've survived LBJ, we had bigger losses during Reagan's second term and we limped through hell with Carter (who just won't leave); we'll survive this. All we have to do is go back to our principles. The Democrats, though, are in for a real challenge. They united against Bush and Iraq. Can they agree on anything else?Update 2... Our friend economist John Seater adds,One name, which is not widely known even to Washington insiders, is John Tanner, the Democratic congressman from Tennessee who heads the "Blue Dog" coalition. Last night was a lot more about Blue Dogs than Pelosi. Tanner is not going to agree with us on the low-tax economic policy but he will moderate the left-wingers. He is a very decent and capable man; root for him. He's the key to keeping us a free-trade nation -- our most important economic policy.
By this time next week, the fighting will be intense among the Democrats. Its an old turn of phrase, but true: politics decides "who gets what" -- more power, fancy jobs, or the best office in the Capitol building. Wait until David Obey meets some of his Blue Dog freshman during a budget or spending bill on the floor. Fur will fly.
I think you oversimplify in the first part and are right on the money in the second part.Update 3...An anonymous reader shares this:The election was about more than Iraq and GOP corruption. It was also about the complete failure of the GOP to do most of the things it had been put in power to do. Government spending is up, not down; no federal Departments were eliminated, even though several of them are dedicated to activities that are not permitted by the US constitution (Energy, Housing and Urban Development, Education); taxes have not been reformed; tort law has not been reformed; Social Security (another unconstitutional program) has not been reformed; Medicare (yet another unconstitutional program) has not been reformed (in fact, the drug benefit law made it worse); other aspects of the mess in the health care industry have not been addressed (tax benefits for employer provided health insurance, utterly idiotic government regulation of and intervention in the drug industry, controlling medical malpractice lawsuits); excessive and overbearing federal regulation has not been reduced. I am sure I have left things off the list, but the foregoing will suffice to make the point. These bums lost because they didn't do their jobs. The corruption merely was icing on the cake that turned frustration and disappointment into outright disgust. I am skeptical that Iraq had much at all to do with the Congressional elections, but that's not a point worth bothering with. Iraq was at most a tertiary issue. The main problem was that the GOP betrayed the people who put it in power, and now the people have paid them back in exactly the right way.
The foregoing makes clear why I think you are right on the money with your second point. The repudiation of the GOP was not in any way an embrace of Democratic policies. It was a rejection of GOP failures.
The Democrats ran in this election on a platform of not being Republicans, not by presenting any specific alternative. I am quite sure the Democrats would not have done nearly so well if they had actually discussed their proposed alternatives to GOP policies.
For the country, the election probably turned out just about as well as it could have. We probably will have a deadlocked government for two years, which means no more harm for a while. The GOP now may figure out that it messed up and needs to return to the principles that got it elected over a decade ago. The Democrats will think they won because the voters liked their non-existent ideas, so they will act as nutty as ever, continue their degeneration into a party of morose crackpots, and remind the voters why the country needs to return true conservatives to power in 2008.
"Mr. Ward, what is it that the foulest bastards on earth denounce us for, among other things? Oh yes, for our motto of 'Business as usual.' Well -- business as usual, Mr. Ward!"Update 4... And now, equal time for the oppostion:--Ayn Rand Atlas Shrugged
I'm a "liberal" who reads your blog pretty regularly.I'm really tired of the spin/lie that Democrats have no agenda and only ran [and won] based on criticism of the Iraq War.
First, there's the Six for '06. The Democrats' proposals on National Security were released in March '06. There's their domestic platform. And this will come as no surprise but the Republicans blocked several legislation attempts by Democrats to help the Middle Class. And you are well aware that the Democratic Party will probably be friendlier towards legislation aimed at protecting the environment and curbing climate change.
Go ahead and pick apart the Democratic agenda. But please don't patronize your readers with the oft-repeated lie that Democrats have no agenda or ideas.
Hugh Haggerty
Posted by Donald L. Luskin at 6:58 AM | link
Monday, November 06, 2006
QUESTION OF THE DAY Q: What's the difference between Saddam Hussein and John Kerry?A: Kerry hangs himself.
Posted by Donald L. Luskin at 10:54 PM | link
CROSSFIRE A LA KUDLOW I did Kudlow & Company on CNBC tonight, and was surprised by the ad hominem personal attack unleashed against me by economist Jared Bernstein. Other than as an occasional guest on Kudlow, I'd never heard of Bernstein. So, I googled him. Turns out he's a labor economist at the union-funded liberal thinktank, the Economic Policy Institute. Looking through a few of his recent writings there, I was surprised to find these two items:
In this climate, the only way for workers to get ahead is to work more hours... Today's report adds another data point to the emerging trend of slower job growth..."November 3, 2006:
...the job market remains relatively strong, with unemployment low and wage gains that are likely to beat inflation.Oh well, you know what they say. Inconsistency is the hobgoblin of inconsistent minds. Or is it just that the relentless economic gains from the 2003 tax cuts on dividends and capital gains are now undeniable, even to liberal labor economists on the eve of an election?
Posted by Donald L. Luskin at 10:46 PM | link
HACKING HACKER
Liberal Yale economist Jacob Hacker has been getting a lot of play in the mainstream media with his new book The Great Risk Shift -- a kind of Bush-bashing self-help book. Dig the subtitle: "The Assault on American Jobs, Families, Health Care, and Retirement And How You Can Fight Back". Hacker's thesis, in a nutshell, is that even though the economy seems wonderful, it really isn't. That's because people don't feel "economic security." His seemingly scientific proof statement is a chart of what he calls "income instability." Here it is:
In the book he never really defines what this means or how it is calculated, but it gives an academic gloss to his otherwise sheerly anecdotal thesis. Actually, to my eye, it looks like -- whatever it is -- this "income instability" exploded during the Clinton years... but let's overlook that detail. More important is that I can't find any other data series that even remotely gives me this result. Take a look at these three that I calculated below from publicly available data from the Bureau of Economic Analysis, the Census Bureau, and the Bureau of Labor Statistics. All three are different measures of the volatility of income -- and none of them look the slightest like Hacker's. In fact, if anything, they lead one to the opposite conclusion -- that incomes have become less unstable through time.
One has to wonder just how Hacker tortured his data to get it to confess that incomes are more unstable today than they've been in the past. Wonder no more: here's how he did it, according to his own web site:
The transitory variance (or "instability") of family income is the difference between the total variance and permanent variance (or "inequality") of log family income (with "permanent variance" equal to the covariance of log income between the endpoints of a five-year interval -- a pair of years sufficiently far apart such that the transitory errors are uncorrelated) The model uses the log of income, so the measure of transitory variance is independent of the mean level of income. The intuition is simple: Transitory variance captures the fluctuation of income around its overall growth path. Income that stays flat or rises or falls smoothly has no transitory variance. Income that swings up and down wildly has high transitory variance.Whew! Call me anti-intellectual, but I'm not buying it. Anyone who has to work that hard to come up with an interpretation of the data that simply appears nowhere else is, in a word, lying.
Update... A reader at the Federal Reserve Bank of St. Louis notes that Jacob Hacker is a politial scientist, not an economist. Amen.
Posted by Donald L. Luskin at 12:47 AM | link
GLOBAL WARMING COUNTERPOINT This is the best. Read. Savor. Memorize. Harangue your friends. Thanks to reader "Zoogler" for the link.
Posted by Donald L. Luskin at 12:47 AM | link
HUH? ISN'T THAT THE OTHER GUYS? Wait a second. I thought "progressives" were against the lopsided distribution of wealth! Liberal economist Robert Kuttner on the upcoming election:
"We are about to get something all too rare in Democratic politics lately -- some progressive leadership . . . With a little gumption on the Democratic side, the lopsided distribution of wealth, security, and opportunity in America could come roaring back."Thanks to reader Chris Ciancio for the link, via Newsbusters.
Posted by Donald L. Luskin at 12:32 AM | link
TRIUMPH OF OPTIMISM FOR GOP ON ELECTION DAY Look how the veep plans on spending his day! Will he invite future speaker Nancy Pelosi? Thanks to reader Anthony Bullard for the link.
Posted by Donald L. Luskin at 12:29 AM | link
Sunday, November 05, 2006
THE CONTRARY POLITICAL INVESTOR The Tradesports futures contracts on GOP House control are down to 20% with the election a little more than a week away. Considering that most bottom-up analysis shows the Democrats only taking, say, 22 seats -- which would give them a razor-thin majority of 7 -- it hardly seems right to think that the Dems are now 4 times more likely to win than the GOP. Consider this, from blogger Robert Musil:I think there is a very good chance that undecided voters will break disproportionately towards the GOP in this race - especially in Congressional races. By common admission, the putative appeal of the Democrats is limited to essentially one issue: Discontent with progress in Iraq. It is worth noting that that discontent has not been enough to beach Senator Lieberman in his deep blue state, but such is supposedly the Democratic advantage.Hmmm... at 20%, thos contracts might be worth a flyer.But problems in Iraq have been absolutely pounded by the media for a long time now. The information is all out, and has been force-fed for weeks to virtually every voter. Anyone who is going to make a decision to vote one way or the other on the basis of that issue has almost certainly done so already. The rest of the major issues favor the GOP: nearly historic low unemployment, historic stock market highs, stabilized low interest rates, historic high home ownership rates, declining gas prices. Then, of course, there is Karl Rove's famous "get-out-the-vote" machine, for which the Democrats have no real counterpart...The first signs of such a GOP slide may already be evident, as in this article from the Washington Post that purports to sound a death knell for the GOP's election prospects, but contains this overlooked pearl:
A new Washington Post-ABC News poll shows some narrowing in the Democratic advantage in House races. The survey gives the Democrats a six-percentage-point lead nationally among likely voters asked which party they prefer for Congress. It was 14 points two weeks ago, but this remains a larger advantage than they have had in recent midterm elections.Omitted from the WP "analysis" is the historical fact that when the GOP trails in the generic ballot by 5% or less, the GOP tends to gain seats in the House. So can 6% easilly correspond to a likely Democratic sweep?
Posted by Donald L. Luskin at 8:16 PM | link