From a Quote taken from post by Bob Higgs:
The worst to be feared and the best to be expected can be simply stated.
The worst is atomic war.
The best would be this: a life of perpetual fear and tension; a burden of arms draining the wealth and the labor of all peoples; a wasting of strength that defies the American system or the Soviet system or any system to achieve true abundance and happiness for the peoples of this earth.
Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals.
It is some 50 miles of concrete highway. We pay for a single fighter with a half million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people.
This, I repeat, is the best way of life to be found on the road the world has been taking.
This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.
This is true of all Government spending whether it is under the guise of defense or “Social Justice.” The money has to come from somewhere, and that somewhere probably had a drastically different use for it.
“If we recklessly cut taxes for the wealthiest 2 percent, then Obamanomics will look an awful lot like Reaganomics,” Jackson said in a statement.
Jesse Jackson Jr. (D-Ill.) said this to appease his base. That should be obvious. So what happens when the tax extension starts to produce some growth, unsustainable but still some growth. Well he’ll just say it was because all that reckless spending of course, the good Keynesian answer.
This is the problem with economics in general. There is no controlled experiment. The Keynesian approach has been tried and failed to produce any significant results. The CBO’s most recent report says:
- They raised real (inflation-adjusted) gross domestic product by between 1.4 percent and 4.1 percent,
- Lowered the unemployment rate by between 0.8 percentage points and 2.0 percentage points,
- Increased the number of people employed by between 1.4 million and 3.6 million, and
- Increased the number of full-time-equivalent (FTE) jobs by 2.0 million to 5.2 million compared with what would have occurred otherwise. (Increases in FTE jobs include shifts from part-time to full-time work or overtime and are thus generally larger than increases in the number of employed workers)
No doubt the Keynesians will say told ya so….of course they won’t read the rest of the post that tells the limitations.
Those reports, however, do not provide a comprehensive estimate of the law’s impact on U.S. employment, which could be higher or lower than the number of FTE jobs reported, for several reasons (in addition to any issues concerning the quality of the reports’ data):
- Some of the jobs included in the reports might have existed even without the stimulus package, with employees working on the same activities or other activities.
- The reports cover employers that received ARRA funding directly and those employers’ immediate subcontractors (the so-called primary and secondary recipients of ARRA funding) but not lower-level subcontractors.
- The reports do not attempt to measure the number of jobs that were created or retained indirectly as a result of recipients’ increased income, and the increased income of their employees, which could boost demand for other products and services as they spent their paychecks.
- The recipients’ reports cover only certain ARRA appropriations, which encompass about one-fifth of the total either spent by the government or conveyed through tax reductions in ARRA; the reports do not measure the effects of other provisions of the stimulus package, such as tax cuts and transfer payments (including unemployment insurance payments) to individual people.
Consequently, estimating the law’s overall effects on employment requires a more comprehensive analysis than the recipients’ reports provide.
Hmmm I wonder if they are using the same models that failed to keep unemployment under 9% with the Stimulus. You know the reason for the Stimulus in the first place?
So now, Obama is going to cave into a non-sustainable tax extension that will produce some growth. Companies will at least know what their tax rates for the next two years and they will plan accordingly. Showing that Higgs’ Regime Uncertainty has some merit. If the economy grows it will be because of investment not consumption.
All that won’t matter to politicians like Jackson Jr. They will pick and choose what ever explanation fits better to their a priori ideals. They want the stimulus to work, it gives them a reason to spend money on things that no sane person would spend money on like Trains to Nowhere. It gives them reason to give out pork to the people who fund their campaigns. Both parties do it, Jackson Jr. and Bush both really want/wanted stimulus to work.
The reason politicians can get away with all these shenanigans is because economists will never be able to prove one theory over the other. The economy is far too complex for even the most sophisticated mathematical model. With modern economist obsession with math, which I don’t see changing anytime soon. The state of modern economics is much the same as the state of politics, they’ll all just pick and choose which explanation fits their priors better. A Liberal economist will choose the Keynesian answer, because it fits their ideology better. A Conservative will pick a supply-side or monetarist answer and hopefully Independents will pick more of an Austrian answer.
It will be interesting to see that when grow and unemployment start to pick up, as companies start to invest again, what stories differing ideological camps choose to tell.
If you guessed Republicans you’d be wrong. According to the Wall Street Journal, most of that cash is coming from Unions to Democrats.
The American Federation of State, County and Municipal Employees is now the biggest outside spender of the 2010 elections, thanks to an 11th-hour effort to boost Democrats that has vaulted the public-sector union ahead of the U.S. Chamber of Commerce, the AFL-CIO and a flock of new Republican groups in campaign spending.
You all remember the Citizens United SCOTUS ruling and you should remember Obama finger waging at the SCOTUS saying that a “Tidal Wave” of cash will threaten democracy. Well he is kinda right. The only thing that threatens democracy are Democrats who try to make decisions for the populous. Think Soda Tax, Smoking Tax, blah blah blah.
The 1.6 million-member AFSCME is spending a total of $87.5 million on the elections after tapping into a $16 million emergency account to help fortify the Democrats’ hold on Congress. Last week, AFSCME dug deeper, taking out a $2 million loan to fund its push. The group is spending money on television advertisements, phone calls, campaign mailings and other political efforts, helped by a Supreme Court decision that loosened restrictions on campaign spending.
President Barack Obama has criticized the Supreme Court decision that opened the door to more spending by corporations and unions. When asked about AFSCME’s ramped up campaign efforts following the court’s decision, the White House focused on largely anonymous campaign spending by what it termed “special interests.”
As usual the Democrats are not the honest ones here.
How else can you explain why they get all the perks?
The biggest expense uncovered in the audit was $30 million in unjustified bonuses to employees and management in 2008 and 2009 without consideration of performance.
One example was paying employees overtime for removing snow and working holidays and then giving additional “snow removal bonuses” and “holiday bonuses.”
The Comptroller’s Office audit released Tuesday says taxpayers also paid $430,000 for free E-ZPass transponders for employees to get to work and nearly $90,000 in scholarships for workers’ kids.
The audit shows turnpike authority employees got bonuses and overtime for working their birthdays and holidays.
Comptroller Matt Boxer says tolls are set for another increase in 2012.
“While tolls are going up, the Turnpike Authority is overpaying its employees, overpaying its management, overpaying for its health plan and overpaying for legal services,” Boxer said in a statement.
Public money was also used to cover costs for a toll operators event that none of the authority’s employees actually attended.
The real question is why do we still have toll booth operators? Could it be that they are part of the sacred cow, the Teamsters Union?
This article at American Thinker is wonderful. It’s like Christmas came early!
For six months, they made Krugman’s blog one of the more informative and interesting places to hear economics debated. In part, this was because they gave Krugman a serious run. Their posts were long, near the 5,000-character limit set by the New York Times. They were reasoned. They were knowledgeable. They carried citations to economic science literature that one might expect in a Ph.D. dissertation.And so their rebuttals were often decisive.For example, when Krugman a month ago drew one of his famous “trend lines” based on a single point, a blogger named rjh immediately responded, “These trend lines you are drawing all over the place. Pardon my French, they are complete garbage.” And nearly half of Krugman’s commenters joined to point out that Krugman was arguing junk. Krugman was forced to make two defensive replies; both were immediately refuted.Responding to Krugman’s praise for the high taxes in Europe and his repeated denial that tax cuts might stimulate an economy enough to make up for revenues lost, a European posting under his initials jg pointed out that the low Reagan-Clinton tax rates made “being an entrepreneur interesting again. All those internet startups like eBay, Amazon or Netscape would probably never have been created if it weren’t possible for the inventors to get rich.” This anti-progressive notion that the “evil rich” might actually create growth if they were not taxed — on his “personal” blog, no less — must have made Paul spit up his morning coffee.
Things then got still worse. When Krugman repeated his claim that Bush’s tax cuts had “caused” the deficit and damaged the economy, commenters first taught Krugman how to count. They then cited two papers by the Romers showing that tax cuts help economies. Christina Romer is, of course, the chief economic advisor to President Obama.When Krugman repeated one of his “debt is good” posts, posters linked to the economic science from Reinhardt and Rogoff showing that high debt is inimical to economic recovery.Occasionally, Krugman attempted a reply. For example, he dissembled that Reinhardt and Rogoff had “highlighted” a single postwar American experience, which he dismissed as “spurious.” The commenters did not let him get away with it. Within 24 hours, Sean had pointed out that Reinhardt and Rogoff had found similar effects of debt in six countries on three continents over four decades, including Canada, Japan, Greece, and Belgium. Krugman then struggled to find something “spurious” about each of these. Sean‘s rebuttal showed that Krugman was refusing to meet any burden of proof. Still worse, Samuel showed that Krugman’s reasoning, if applied generally, would forever insulate Krugman’s ideology from any refutation of any kind.…Which is perhaps what Paul Krugman wants, but it is not economic science.
Krugman’s blog commenters were especially relentless in pointing out his inconsistencies. In one post, Krugman admitted that “politicians will always find ways to shield the powerful.” Posters piled on, pointing out that Krugman’s universal policy prescription gave politicians more power under the assumption that they would defend “the proletariat.” Krugman replied that he was “sure that there’s a large literature” on government cronyism and corruption. Secure in his big-government ideology, he admitted that he had never read that literature. But like the ideologue that he is, Krugman then expressed his faith (the only word appropriate) that “bureaucracy will do a heckuva job” if it is not “downgraded and devalued.” Bloggers responded by citing the latest economic science showing the impossibility of Krugman’s “utopian dictatorship-by-bureaucracy.”
By July, Krugman had lost his “Battle of the Blog.” On July 23, Latrina commented, “Who is this Sean from Florida? He takes everything that [the] Professor [says] and shreds it, piece by piece. He shouldn’t be allowed to post his comments on this blog since he seems to be winning all the debates. We progressives need to stick together and embellish our talking points without someone from the outside pointing out fallacies in our ideology.”Krugman had also had enough. On July 23, Krugman showed that he was clearly no longer “in love” with his commenters. Now he called them “ranters” and “trolls.” On July 28, Krugman changed his comment moderation policy. Claiming that “ranters … say the same thing every time,” Krugman announced that he was going to throw away posts longer than “three inches.” His thinking must have been thus: Three inches are sufficient to write “Krugman is brilliant,” but not sufficient to present a documented and persuasive rebuttal to whichever of Krugman’s standard arguments he was peddling that day.
Do you really need anymore proof that Liberals don’t do economics? Facts hurt their worldview to much.
It’s more of a complaining piece than anything else. Yet, Krugman’s column should give Obama some pause.
But progressive disillusionment isn’t just a matter of sky-high expectations meeting prosaic reality. Threatened filibusters didn’t force Mr. Obama to waffle on torture; to escalate in Afghanistan; to choose, with exquisitely bad timing, to loosen the rules on offshore drilling early this year.
Then there are the appointments. Yes, the administration needed experienced hands. But did all the senior members of the economics team have to be protégés of Robert Rubin, the apostle of financial deregulation? Was it necessary to install Ken Salazar at the Interior Department over the objections of environmentalists who feared, rightly, that his ties to extractive industries would make him slow to clean up a corrupt agency?
This has to be the first piece I’ve read from Krugman that didn’t explicit blame Bush for all that’s wrong with the Obama administration. Krugman has tried that for almost 2 years now, and only highly partisan Democrats, like himself, actually bite at that anymore. Everyone knows that Obama didn’t have any business being in the White House. The Democrats were blinded by rhetoric and a candy coated surface. Just goes to show how “smart” they really are.
O.K., I don’t really know what’s going on. But I worry that Mr. Obama is still wrapped up in his dream of transcending partisanship, while his aides dislike the idea of having to deal with strong, independent voices. And the end result of this game-playing is an administration that seems determined to alienate its friends.
Imagine that, politicians not liking independent thought. Imagine a populace that doesn’t drink the Kool Aid, that probably frightens Krugman and the rest of the Democratic party leadership more than any Republicans gains this November.