27 September 2010

There's Enough Blame To Go Around

Preach it brother!
"The Tea Party movement is an expression of what I think is a mainstream widespread sentiment in America that Washington is broken, that both parties are to blame, and that people want to elect folks that are going to go to Washington, DC, number one and do what they say they’re going to do primarily stand up for the agenda that’s coming from there and offer some clear alternatives that embrace the things that make America exceptional."

For more than a year now, voters have indeed been telling both parties to 'drop dead.' As of February of this year, more than 70% of Americans agreed with the statement, 'Washington is broken.'  This is the truth that establishment Washington fears more than winning or losing an election - that Americans are rejecting it outright.

21 September 2010

Breaking .. Natural Evolution

CNN is reporting that Larry Summers is leaving the President's economic team, as part of a 'natural evolution,' in the composition of that team.  That leaves only Geithner from the President's original economic team, and he's been receiving quite a few mixed signals.

Maybe Boehner had an effect after all.

As If There Weren't Enough Reasons To Dump Reid

Via Politico:
'Senate Majority Leader Harry Reid had an unusual form of praise for New York's junior senator, Kirsten Gillibrand, this morning at the fundraiser Mayor Bloomberg hosted for him at his townhouse - referring to her as "the hottest member" as she sat just a few feet away, according to three sources. ... First Bloomberg spoke, then Sen. Chuck Schumer, and then Reid, according to the sources. Reid praised Schumer at length, discussing how he could have run for governor - and won - in 2006, but didn't, and instead accepted the Nevada senator's entreaties to run the DSCC. Then he turned his attention to Gillibrand, saying something about how "many senators are known for many things," according to a source. He added, "We in the Senate refer to Sen. Gillibrand as the hottest member."'
 The Washington Post has this comment from the Reid campaign:
'Reid spokesman Jim Manley told Politico, "What can I say, she made The Hilll's 'Most Beautiful' list. Of course he also went on to praise her skill and tenacity and described her as an effective member of the New York delegation as well."'
Well that just makes it all better doesn't it?  Don't you just love Reid (he of the 'light-skinned negro' sans 'negro dialect' comments)?  He's a peach.  Apparently, Gillibrand will have to do without a public apology, because she's beautiful, and sexism just isn't as bad to Reid.  Of course, Hispanics haven't received an apology from him either.

Reid's campaign against Angle is rated as a toss-up right now - hopefully, he'll be tossed out in the process.

11 September 2010

Patriot Day 2010

We Remember Them 
To Mae and David
Donald McCullough
Text: Author unknown
Published by Hinshaw Music, Inc.

'In the rising of the sun and in its going down, we remember them.
In the blowing of the wind and in the chill of winter, we remember them.
In the opening of buds and in the rebirth of spring, we remember them.
In the blueness of the sky and in the warmth of summer, we remember them.
In the rustling of the leaves and in the beauty of autumn, we remember them.
In the beginning of the year and when it ends, we remember them.
When we are weary and in need of strength, we remember them.
When we are lost and sick at heart, we remember them.
When we have joys we yearn to share, we remember them.
So as long as we live they too shall live,
For they are now a part of us as we remember them.'

Last Year's Post:
11 September 2009

Call to Remembrance

We remember so many people today whose lives were set on a new course eight years ago. My friend, Todd Beamer, who was a year behind me at Wheaton College is first among them for me. He reminded us all that even in death, one can change lives and live out faith. We also remember the many who died at the Pentagon that day and subsequently, and in New York City. I remember these men and women, the members of the IL-ARNG 1544th Transportation Company, and all who have sacrificed over the last eight years.

Some suggested actions: sponsor a Gold Star Family, donate to TAPS, or sponsor a memorial site, or participate in a memorial.

09 September 2010

Dreams of Anticolonialism

Dinesh D'Souza, president of King's College in New York and an Indian ex-pat, has published a fascinating little thesis on the roots of Obama's decision-making and philosophy at Forbes.com.  D'Souza hypothesizes that the president's search (recounted in Dreams From My Father) for identity and purpose in his father's history, profoundly influenced Obama's current political thinking.  More particularly, the senior Obama's anticolonial socialism and African economic nationalism, are at the root of Obama's rejection of American exceptionalism and his extended 'apology tour' to the rest of the world.  I would add, that if D'Souza is correct, at least in part, this interpretation would explain the Obama Administration's strange rejection of many of our traditional allies, while embracing nations which, if not actively our enemies, are not our friends.  D'Souza draws on his own extensive experience with the anticolonial movement that roiled India (and most 3d world countries) in the 1950s and 1960s.  The whole article is worth a careful read, but some extracts are below.
'What then is Obama's dream? We don't have to speculate because the President tells us himself in his autobiography, Dreams from My Father. According to Obama, his dream is his father's dream. Notice that his title is not Dreams of My Father but rather Dreams from My Father. Obama isn't writing about his father's dreams; he is writing about the dreams he received from his father. So who was Barack Obama Sr.? He was a Luo tribesman who grew up in Kenya and studied at Harvard. He was a polygamist who had, over the course of his lifetime, four wives and eight children. One of his sons, Mark Obama, has accused him of abuse and wife-beating. He was also a regular drunk driver who got into numerous accidents, killing a man in one and causing his own legs to be amputated due to injury in another. In 1982 he got drunk at a bar in Nairobi and drove into a tree, killing himself. An odd choice, certainly, as an inspirational hero. But to his son, the elder Obama represented a great and noble cause, the cause of anticolonialism. Obama Sr. grew up during Africa's struggle to be free of European rule, and he was one of the early generation of Africans chosen to study in America and then to shape his country's future. ...
Obama Sr. was an economist, and in 1965 he published an important article in the East Africa Journal called "Problems Facing Our Socialism." Obama Sr. wasn't a doctrinaire socialist; rather, he saw state appropriation of wealth as a necessary means to achieve the anticolonial objective of taking resources away from the foreign looters and restoring them to the people of Africa. For Obama Sr. this was an issue of national autonomy. "Is it the African who owns this country? If he does, then why should he not control the economic means of growth in this country?"As he put it, "We need to eliminate power structures that have been built through excessive accumulation so that not only a few individuals shall control a vast magnitude of resources as is the case now." The senior Obama proposed that the state confiscate private land and raise taxes with no upper limit. In fact, he insisted that "theoretically there is nothing that can stop the government from taxing 100% of income so long as the people get benefits from the government commensurate with their income which is taxed." ...
It may seem incredible to suggest that the anticolonial ideology of Barack Obama Sr. is espoused by his son, the President of the United States. That is what I am saying. From a very young age and through his formative years, Obama learned to see America as a force for global domination and destruction. He came to view America's military as an instrument of neocolonial occupation. He adopted his father's position that capitalism and free markets are code words for economic plunder. Obama grew to perceive the rich as an oppressive class, a kind of neocolonial power within America. In his worldview, profits are a measure of how effectively you have ripped off the rest of society, and America's power in the world is a measure of how selfishly it consumes the globe's resources and how ruthlessly it bullies and dominates the rest of the planet. For Obama, the solutions are simple. He must work to wring the neocolonialism out of America and the West. And here is where our anticolonial understanding of Obama really takes off, because it provides a vital key to explaining not only his major policy actions but also the little details that no other theory can adequately account for.'

07 September 2010

Who's Paranoid Now?

From the increasingly rare file of excellent NY Times Op-Eds, we have this fascinating look at the political uses of charging the other guy as paranoid.
'Conservatives and libertarians dubbed Lee a “liberal eco-terrorist” inspired by a “green climate of hate.” They pointed out that he traced his political “awakening” to Al Gore’s apocalyptic rhetoric. They cited an F.B.I. statement calling eco-vigilantes America’s “No. 1 domestic terrorism threat.” This was all a little ridiculous. But of course it was really an attempt to turn the tables on liberals, who have spent the last two years linking conservative rhetoric to hate crimes and antigovernment maniacs. (It’s a hard habit to break: the liberal site ThinkProgress.org quickly suggested that James Lee was actually a right-wing extremist, because his hostility to “parasitic human infants” extended to the children of illegal immigrants.). ... There’s the 32 percent of Democrats who blame “the Jews” for the financial crisis. There’s the 25 percent of African-Americans who believe the AIDS virus was created in a government lab. There’s support for state secession, which may have been higher among liberals in the Bush era than among Republicans in the age of Obama. And there’s the theory that the Bush White House knew about 9/11 in advance, which a third of Democrats endorsed as recently as 2007....But obsessing about the paranoia of the masses is often a way for American elites to gloss over their own, entirely nonsymbolic failures. In the Bush era attacking the conspiracy theories of the “angry left” made it easier for conservatives to avert their eyes from the disaster the Iraq war had become. Today, establishment liberals would much rather fret about the insanity of the Republican base than reckon with the unpopularity of Barack Obama’s domestic program.'
Remember, just because you're paranoid, doesn't mean they're not out to get you.  Just ask Margaret Thatcher.

Closing thought: I wonder how many people will take this one seriously.

05 September 2010

Stealing From The Future

Early in 2009 the Initiative On Global Markets website published updates of then current research projects including the following description by two economists from the University of Chicago Booth School of Business.

Fiscal Stimulus and Macroeconomic Fluctuations: Evidence from Cash for Clunkers

Atif Mian, Associate Professor of Finance
Amir Sufi, Associate Professor of Finance

Summary: We seek to estimate the economic consequences of short‐term boost in consumer spending on cars driven by the Obama Administration’s “Cash For Clunkers” program. We exploit cross-sectional variation (across counties) in the fraction of automobiles that qualify as “clunkers” to isolate the impact of boost in auto-sales on outcomes such as unemployment, housing market, consumer defaults, and household expenditure. Our research hopes to shed light on one of the most important questions facing policy makers at a time of recession: Do Keynesian policies of government stimulus work?
On September 1, the results of their innovative study were released.  The study sought to test the Keynesian model inherent to the program by examining short and longer term impacts on consumer behavior.  In short, they wanted to understand if a consumer stimulus of this kind would actually stimulate the economy, or if it would merely shift buying patterns.  The Cash for Clunkers program provided the rare opportunity to test out a yet long-beloved, economic model.  By comparing consumer behavior in large states with little response to the program, against consumer behavior in all states where they followed every sale made under the program, Sufi and Mian were able to run the study in real-time, as well as examine the resultant behavior in the months after Cash for Clunkers ended.

A look at the history behind the proposal provides an interesting perspective on Mian and Sufi's final results.  During the first Clinton term, Alan Blinder, an economics professor at Princeton University, proposed that the government could boost its efforts to control carbon emissions by influencing car purchases through a trade-in stimulus.  His proposal at the time died a quiet death.  Flash-forward to 2008, when the economy was starting its long dive, and Prof. Blinder saw his chance to ressurect his 'modest proposal,' this time emphasizing the potential economic benefits to unemployed auto workers and sales reps.  In a Talk of the Nation interview one year ago, Blinder explained why he thought the program as enacted was failing:
'Well, certainly not. Things that come through Congress never come out the way you expect them to. I mean, my proposal focused much more on, for example, emissions than on miles per gallon, although they're related, but they're not the same. And also, importantly to me, one of its objectives was to assist poor people who tend to own the clunkers. The way the law was written, you could only get the cash for the clunker if you bought a new car. And a lot of poor people can't afford to buy a new car.'
Apparently Blinder thought (and presumably still does) that the car stimulus was not stimulus enough.  Indeed, this is evidenced by his statement a moment later in the same interview.
'Well, I think the stimulus part has worked swimmingly. And I should have mentioned, when I wrote that piece in July '08, I mentioned four objectives. We already talked about three: stimulus, anti-poverty and pro-environment. Right at the end, I said, And by the way, it would be good for the automobile industry. Well, that's been the objective, of course, that's been the guiding light of this legislation, this national legislation. I think it's been quite effective. I mean it's been a big stimulus to sales.'
Blinder has been arguing for some time that all of the stimulus and bailout programs have been outright successes, albeit with very little evidence to back up his claims.  In July of this year, he and Mark Zandi released another modest dud, "How The Great Recession Was Brought To An End."  In it, the authors assert the now familiar mantra that the government's stimulus programs averted a far worse crisis, based on (you guessed it) economic modeling, and cite as evidence the rise in GDP of 3.4%.  The paper was published one month before the government drastically revised its estimated growth down to 1.6%, and released the August unemployment rate, which ticked up to 9.6%.  Arguably, Blinder is falling into the classic trap of failing to 'test' a model under actual conditions in order to prove its robustness and usefulness as a predictive tool.

Unlike Blinder, Mian and Sufi tested the proposal against actual sales and found that the program merely 'stole' future sales by simply advancing sales by a couple of months.  Within less than a year, as the Planet Money interview with Sufi so eloquently put it, the program was a total wash.  The abstract neatly sums up the paper's conclusions: 'We also find no evidence of an effect on employment, house prices, or household default rates in cities with higher exposure to the program.'  In the interview, Sufi summarized the problem with assuming that government can induce behavior:
'We don't take a stand on whether that's a useful thing. It's hard to answer that question. You could argue that if you're in the depths of a really bad recession, maybe shifting purchases of automobiles by even a couple months, maybe that's a useful thing to do. But I think it's incredibly important for policymakers to understand whenever you induce the purchase of any good, whether it be homes, whether it be a washing machine, you are in some sense stealing those purchases from the very near future. And I think that's the key result of our paper that ends up mattering.'
All of which is to say that while government may have a role in both boosting the economy, and in encouraging behavior, it can not do either by trying to force consumer behavior down a particular path.  Doing so merely steals from the future.

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