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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, October 26, 2007

IS THIS A JOKE?   Is there something about the author's name that would make you less than comfortable following the investment advice in his book?


Posted by Donald L. Luskin at 9:35 AM | link  

KEEP THIS BLOG TAX FREE   Good news from the Senate for a change...
Internet consumers scored a victory in Washington last night, thanks to Senator John Sununu (R., N.H.), with big assists from Minority Leader Mitch McConnell (R., Ky.) and Oregon Democrat Ron Wyden. The Senate passed a seven-year extension of the Internet tax moratorium, with robust language that should stiff-arm even the most voracious state and local governments looking for loopholes to tax your email.

...If the House, as expected, passes the Senate bill early next week, President Bush can sign it into law before the current ban expires November 1.

Reader Chris Cianco notes that
[Tom] Carper [Del-D] and a handful of other senators, mostly Democrats, openly favor a temporary ban so that states can revisit the need to find new revenue sources in the face of changing technology.
.

Posted by Donald L. Luskin at 9:15 AM | link  


Thursday, October 25, 2007

SUBPRIME EXPLAINED   Just in case you didn't understand what the fuss was about.

Posted by Donald L. Luskin at 8:58 PM | link  

BIAS IN THE CHOICE OF A SINGLE WORD   From the AP, an example of how just a single word can slant the "news" coverage of political stories to fit the priors of liberal journalists:
WASHINGTON - The House's top Democratic tax writer outlined a $1 trillion plan Thursday to eliminate the alternative minimum tax and ease the tax burdens of most people by asking the rich and some companies to pay more.
Consider that single word "asking." Tax laws don't ask people to pay. There's no questioning involved, no opportunity for the taxpayer to answer when "asked." Laws require people to pay, command them, force them, coerce them, under penalty of imprisonment.

Posted by Donald L. Luskin at 4:46 PM | link  

THE GOOD NEWS BURIED ON THE BACK PAGE   Reader Liv Douglas sagely notes,
One of the BIG stories of yesterday was the completion of the TXU LBO deal. I think the TXU deal was the biggest LBO deal EVER. While the media moaned over Merrill Lynch's $8.5 billion writeoff, the TXU deal got done. In today's Wall Street Journal (page C8) -- in the Credit Markets column -- the following was written:
Big Sale of TXU Debt Is Success Despite Risks

Energy Future Holdings, formerly known as TXU Corp., made history in the debt markets yesterday.

Bankers successfully placed $7.5 billion of bonds, the largest high-yield, or junk, bond issue ever, with a portion of the deal in risky pay-in-kind toggle notes that market participants weren't expecting in this round of debt sales for the leveraged buyout.

RJR Nabisco had been the record holder close to two decades with its $6.1 billion junk-bond issue sold in 1989.

Strong demand allowed the underwriters to increase the size of the offering from an originally estimated $4.5 billion.

The junk bond market and the leveraged loan market are both recovering rapidly. Yesterday's historic event was only seen by those who follow the bond market or who read deep inside the Wall Street Journal. Most people probably only read (or heard about) the front page -- "Merrill takes $8.4 billion credit hit."

The junk bond market, which "seized up" in August, is now alive and well. It's so WELL that history was made yesterday--positive history. But to read about it, you'll have to dig deep inside the Wall Street Journal. And don't expected to hear about it on CNBC.


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


Wednesday, October 24, 2007

A NARCISSISTIC, THIN-SKINNED WHINER, PART 2   Paul Krugman bitches and moans that his sorry butt isn't welcome among his betters whom he criticizes so scatchingly.
PAUL KRUGMAN: ...Greenspan has a lot of influence. Nobody really wants to cross him. I mean, it’s -- hey, you know, I’ve been blackballed from the Fed summer conference at Jackson Hole, which I used to be a regular at, ever since I criticized him.

AMY GOODMAN: What is that?

PAUL KRUGMAN: Oh, it’s a big --

Of course if he'd invented the Internet, they would have had to invite him (or give him the Nobel Prize). Thanks to Richard Ridgeway for the link.

Update... He can't take it, but he sure can dish it out. And he wonders why his own newspaper's review of his book called it a "shrill polemic":

...when I started researching Conscience of a Liberal, I had no idea race would play such a huge role in the story. But it just jumps out of the cold, hard data. Without the white backlash against civil rights, and especially the great southern switch to the GOP, none of the right-wing triumphs of the past 30 years would have happened.

And once you start to look at modern American political economy with that in mind, the picture you see is nothing like the happy legends. I spend a lot of time in COAL on the real Ronald Reagan; he wasn’t an avuncular old fellow who advocated true conservatism — for most of his career, he was primarily a clever, insinuating race baiter, who found ways to appeal to racist sentiments — welfare queens driving Cadillacs, etc.. — without actually using the n-word.

Thanks to reader Bill Maron for the link.

Posted by Donald L. Luskin at 7:08 PM | link  

TO EACH HIS OWN   Crazy Republicans try to pick up cops in airport men's rooms, and crazy Democrats see flying saucers. At least cops really exist.
Democratic presidential candidate Dennis Kucinich has claimed to have seen a UFO, according to Shirley MacLaine in her new book, "Sage-Ing While Age-Ing." Kucinich "had a close sighting over my home in Graham, Washington, when I lived there," the actress, a close Kucinich friend, wrote. "Dennis found his encounter extremely moving. The smell of roses drew him out to my balcony where, when he looked up, he saw a gigantic triangular craft, silent, and observing him. "It hovered, soundless, for 10 minutes or so, and sped away with a speed he couldn't comprehend. He said he felt a connection in his heart and heard directions in his mind."
Thanks to DC-insider pal "Mick Danger" for the link.

Posted by Donald L. Luskin at 12:33 PM | link  

VANISHING MIDDLE CLASS? HARDLY!   Centrist liberal economist Stephen Rose:
...incomes and employment have grown by substantial amounts in every state (even in the so-called Rust Belt) since the passage of the North American Free Trade Agreement in 1993.

In fact, there is no convincing, data-driven proof that trade has led to any overall job loss during the last 30 years. To the contrary, the economy has grown at a slow but steady rate (a few brief recessions notwithstanding) with trade and employment rising in tandem.

For example...
As recently as 1979, 61% of female workers were in jobs that paid less than $25,000, and only 3% earned more than $50,000 a year. By contrast, more than 36% of new jobs that opened since 1979 for women pay more than $50,000 [all figures adjusted for inflation] and only 17% pay less than $25,000.

...There has been a tremendous growth in the number of men in high-paying jobs: In 1979, just 10% of male workers earned above $75,000, while fully 34% of new jobs since 1979 have paid this amount or more.

...For three-quarters of the workforce (women and the top half of male earners), economic growth translated into earnings gains. But for male workers in the bottom half of the earnings distribution, the decline of unionized manufacturing employment has led to the drying up of some middle-class jobs for those with no post-secondary education.

For the clear majority of the workforce, then, the job market has become more welcoming, not less so.


Posted by Donald L. Luskin at 8:13 AM | link  


Tuesday, October 23, 2007

WHAT A GIVEAWAY!  

Warner Brothers (wait -- or is it Sony? -- now I'm confused) has been kind enough not to sue us for our adaptation of the Ghostbusters logo as the symbol of the Krugman Truth Squad. Hopefeully they won't be as generous with this ridiculous abuse of intellectual property -- the "Terrorist Busters" logo that's actually in use by the CIA. Doesn't a logo kind of defeat the whole purpose of undercover work, anyway? Thanks to a dear old friend in Los Angeles for the link.

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

KUDLOW REPLAY   In which Jeremy Siegel and I teach Michael Metz a little something about index investing and its alternatives.


Posted by Donald L. Luskin at 3:30 PM | link  

PRICE DISCOVERY   Federal Reserve Board governor Randy Kroszner says there's no "price discovery" in the market for credit derivatives. What a load of bull! Just go to this handy-dandy website, input a few simple parameters about your collateralized debt obligation and in less than a second you'll have exactly what your CDO is worth. Try it -- you'll see!

Posted by Donald L. Luskin at 3:11 PM | link  

THE CLINTON MACHINE SHAKES DOWN POOR IMMIGRANTS   Or are poor immigrants just being used as a smokescreen to conceal the true campaign donors?
Haven't we seen this kind of thing before from the Clintons?Hillary is on the defensive about taking money from Chinese immigrant benefactors. This time, it looks even more awkward. ...the candidate’s fund-raising swing through the Chinese community of New York resulted in $500 to $2,300 donations from people identified as “dishwashers, waiters and street stall hawkers.” Of the 150 donors on paper, 50 couldn’t be located, and at least one openly says he hasn’t contributed to the campaign. An April fund-raiser in a poor neighborhood fetched $380,000.

Clinton’s current reasoning — “There were more than 250 people at the event” — doesn’t quite compute, because that makes the average donation an awfully high $1,520 (the absolute maximum allowed per person is $2,300). In other words, it certainly looks like some entity is using New York’s Chinese immigrant community to funnel funds into the Hillary campaign.


Posted by Donald L. Luskin at 10:35 AM | link  

WHY DO RICH CORPORATIONS GIVE MONEY TO POPULIST DEMOCRATS?   Is it some kind of death-wish? Hardly. It's called payola. And the "culture of corruption" surrounding it would make Tom DeLay blush:
Perhaps you've heard that this is the Congress for "the little guy," the "forgotten" middle class, the working stiff. If that was the plan, it isn't working. On present trends, the 110th Congress will go down as one of the biggest blowouts in corporate welfare history.

That's saying something, considering that the last GOP Congress gave big business some $92 billion a year in subsidies... ...if all the pending spending bills pass, corporate welfare will exceed $100 billion in direct outlays in 2008.

The handouts for the rich that have a good chance of passing include the most expensive farm bill ever; a rise in the mortgage limits on loans that can be securitized by Fannie Mae and Freddie Mac (see related article); some $2 billion in loan guarantees to ethanol producers; and expansions in flood and terrorism insurance to benefit home builders, mortgage banks, and real estate developers.

Many of the 40 largest existing corporate welfare are set to get a raise, including the Commerce Department's $116 million manufacturing extension program, the $100 million Advanced Technology Program (which funds R&D for the likes of IBM, General Electric and Xerox), and the $200 million Agriculture Market Access Program, which underwrites foreign advertising for the likes of Pillsbury and Dole. We'd call all of this the "K Street" project, but even Tom DeLay never thought this big...

If you want to know how good liberals can tolerate such largesse for the rich, keep in mind that in Washington quids often come with a quo. The latest FEC fundraising reports indicate that industry lobbyists have shifted their allegiance from Republicans and are now funneling cash to Democrats they expect to hold their majority. Roll Call newspaper, which covers Congress, reports that in the first half of 2007 business lobbyists gave "all or most of their cash to Democratic candidates and party committees."

They're getting their money's worth.


Posted by Donald L. Luskin at 10:26 AM | link  


Sunday, October 21, 2007

WE'RE FROM THE ECONOMICS DEPARTMENT, AND WE'RE HERE TO HELP YOU   American academics are dispatched to solve the hyper-inflation crisis in Zimbabwe:
The rate of inflation recently hit its highest level ever, 7,000 percent per year, causing international bodies to seek help from leading academics around the world to stabilize the situation before the country descended into chaos. A group of inflation fighters from the economics department at the University of Chicago has stepped into the breach, offering hope that the country may be able to reverse its current course with an infusion of market discipline.

"We were hoping for Bono," says Nkende Masvingo, referring to the rock singer who has made sub-Saharan poverty his personal crusade, "but they sent us Gary Becker because U2 was on tour."

Becker, the winner of the 1992 Nobel Prize in Economics, will lead a "dream team" including Steven Levitt, co-author of the best-selling pop economics book "Freakonomics", that will set up camp in this city, the nation's capital. "First, we need to understand the situation," said Becker. "Then, we'll bloviate on what people should do about it."

Thanks to our monetary affairs correpsondent "Irrational Exuberance" for the link.

Update [10/22/07]... reader Ethan Glading notes,

There is a serious flaw in this joke. It would never cross an academic economist's mind to actually travel to a region in order to "understand the situation."

Posted by Donald L. Luskin at 1:52 PM | link  

JOKE OF THE DAY  

Posted by Donald L. Luskin at 10:12 AM | link  

A NARCISSISTIC, THIN-SKINNED WHINER   Paul Krugman, on his blog at the New York Times, whines about the less than fawning review of his new book in the Sunday Times Book Review. Could he show a little class and just take it like a man, like every other author does? This kind of childish thing is the mark of a deep inferiority complex -- and in this case, a well-deserved one.

Update... "PGL," the anonymous coward at the Angry Bear blog, is just as upset with the review as his puppet-master Krugman is. He even manages to turn his distaste for the review as an attack on me personally (though I am not mentioned in the review). If this is PGL's way of acknowledging the success of my campaign to reveal Krugman for the vicious fraud that he is, then I thank him for making what must be a painful admission.

Posted by Donald L. Luskin at 12:27 AM | link