JustOneMinute

The Smithwick Papers

I want to keep an eye on the paring knife suspension of Ashley Smithwick in Lee County, North Carolina.

One Day, When The Times Has An Economist As A Columnist...

Paul Krugman closes the year with misdirection and deception.  His topic is tax cuts (bad!) and Evil Republicans (what else?).  My emphasis:

How did Republican leaders reconcile their purported deep concern about budget deficits with their advocacy of large tax cuts? Was it that old voodoo economics — the belief, refuted by study after study, that tax cuts pay for themselves — making a comeback? No, it was something new and worse.

To be sure, there were renewed claims that tax cuts lead to higher revenue. But 2010 marked the emergence of a new, even more profound level of magical thinking: the belief that deficits created by tax cuts just don’t matter. For example, Senator Jon Kyl of Arizona — who had denounced President Obama for running deficits — declared that “you should never have to offset the cost of a deliberate decision to reduce tax rates on Americans.”

New and magical?  Everything old is new again!  As an alternative to Keynes, the Ricardian theory is that it is primarily the level of government spending that matters, rather than whether it is financed by taxes or borrowing. (A very accessible summary is here.)

Could it be that Krugman has Klein-itis and can't understand Ricardo because he is more than one hundred years old?  Maybe!  Or maybe we are witnessing early onset Alzheimers - Krugman seemed well aware of Ricardian models back in the late 1990's when he was writing on Japan:

In a fully Ricardian setup the multiplier on government consumption will be exactly 1: the income generated by the purchases will not lead to higher consumption, because it will be matched by the present value of future tax liabilities.

Well, that pre-dates the Florida recount and the Iraq War, so perhaps Krugman's mighty mind has been swamped with new information and the whole Ricardo/Barro rational expectations debate has gone out the back door.  Krugman may disagree with the model, or think its application is not appropriate in the current context, but there have been serious econmists on the other side of that debate for quite a while.  The idea that deficits created by tax cuts don't matter is hardly new or magical, except perhaps to Krugman and any Times readers who lean on him for economic insight.

IF YOU CAN'T TRUST FOX ON THIS:  Per Fox, the Republican message has been that we have a spending problem, not a reveune problem.  Very Ricardian, and how did Krugman miss it?

SO WHO HAS ALZHEIMERS NOW, MR. SMARTY-MOUTH?  Hmm, I see that Krugman mentioned Ricardian modeling just last July, and I blasted at him (he eventually responded, presumably to others, with a few steps in my direction.)

Greg Mankiw also lectured Krugman on the presence of a Ricardian school back in July and includes this:

I am pretty sure Paul would not find this [Ricardian] line of argument persuasive.  As far as I can tell from reading his commentary over the years, he does not believe that the distortionary effects of taxes are particularly large and so they do not figure much into his policy analysis.  But many other economists (and I suspect many stimulus-skeptics like the tea-partiers) believe that taxes have significant incentive effects and can prevent the economy from reaching its full potential.  Their argument seems logically coherent, even if it relies on a different set of parameter values for the relevant elasticities than Paul believes to be true.

Well, if Krugman's memory is as bad as mine he won't be vexing anyone much longer. I just hope he can remember where he stashed his Nobel.

Wow!

Via Drudge, "Blizzard Causes 100 Car Pil-up In North Dakota".

Wow!  They have 100 cars in North Dakota?

Ring Out The Old

Wow - the Stanford women end the UConn winning streak at 90.

I am not sure people will look back and declare it the top story of 2010, but it seems deeply portentous.

We Want Them On That Wall... But Not On College Campuses

Please don't bleed on the Ivy - the WaPo disgraces itself with this op-ed piece by Colman McCarthy (to whom we give props, in a 'spell the name right, any publicity is good publicity' sort of way).  His gist - Set aside any notion you might have that our nation's educated elite ought to have some contact with our nation's military.  In his view, US soldiers should fight, bleed and die elsewhere but not sully our college campuses with their presence:

Now that asking and telling has ceased to be problematic in military circles, ROTC has resurfaced as a national issue: Will universities such as Harvard, Yale and other Ivy League schools be opened to Reserve Officers' Training Corps since colleges can no longer can argue that the military is biased against gays and therefore not welcome?

...

It should not be forgotten that schools have legitimate and moral reasons for keeping the military at bay, regardless of the repeal of "don't ask, don't tell." They can stand with those who for reasons of conscience reject military solutions to conflicts.

They can stand with Martin Luther King Jr. and his view of America's penchant for war-making: "This madness must cease," he said from a pulpit in April 1967.

Uh huh.  I'll take a guess that Dr. King was talking about Vietnam, which, contrary to some liberal fantasies, is not the only war America ever fought.  Even Barack Obama supported some wars (back in 2002 he made the tough calls and backed the Civil War and WWII; about Korea we don't know, but he has tripled our troop presence in Afghanistan.)

To oppose ROTC, as I have since my college days in the 1960s, when my school enticed too many of my classmates into joining, is not to be anti-soldier. I admire those who join armies, whether America's or the Taliban's: for their discipline, for their loyalty to their buddies and to their principles, for their sacrifices to be away from home. In recent years, I've had several Iraq and Afghanistan combat veterans in my college classes. If only the peace movement were as populated by people of such resolve and daring.

America, Taliban, Nazi Germany - I admire anyone who leaves home to fight for a cause, however twisted.  But I am a drooling maroon.  People with less of a tendency toward moral equivalence will see things differently.

ROTC and its warrior ethic taint the intellectual purity of a school, if by purity we mean trying to rise above the foul idea that nations can kill and destroy their way to peace.

Please.  If McCarty ever is so unfortunate as to have a house on fire I hope he does not call the fire department and instead rises above the foul idea that merely pouring water on flames can halt the inevitable decay of wood back to dust.  If he is ever unfortunate enough to be mugged, I hope he can avoid calling the police and instead rise above the foul idea that incarcerating felons can halt the inevitable human tendency towards crime.  Grrr...

AND I MEAN GRRR... Moe Lane swings the big stick.

MORE:  A photo and a story.

I mean, what campus would be safe?

Hyperbole Alert

In a post about the rise of our financial services industry, Prof. DeLong delivers an aside he is far too savvy actually to believe:

Do not get us wrong: we do not hate service industries. But most service industries produce something of value in return for their profits. Health care administration simply produces denials of coverage. ...There are two ways to make money in health care: (i) by providing people with valuable treatments that they are willing to pay for, and (ii) by collecting insurance premiums and finding some excuse not to pay them out when people get sick.

Well, don't get us wrong, either - we enjoy a cocktail party quip as much as the next person.  But seriously - how many people would like to have an insurance company that never questioned a claim?  Everyone!  Until they saw the premiums, that is.  No one is imagining that there are no horror stories of abuse, but by and large insurance adjusters hold down premium costs by weeding out inappropriate claims.

As an alternative model, consider Medicare, which is generous in its coverage.  Per 60 Minutes (or MSNBC), Medicare fraud is a $60 billion per year rip-off of a $500 billion per year enterprise [but this earnest lib argues that the $60 billion is unsourced and surely high].  Maybe if the government spent a few more billion on reviewing claims a big chunk of that $60 billion could be put back in the taxpayer's pocket. 

My guess is that Congressfolk would rather hear horror stories of crime than horror stories of granny being turned down by a government bureaucrat.  And since it is their voters but not their money, here we are.

ASK A SEEMINGLY SIMPLE QUESTION:  There is a huge gray area between outright fraud and legimate billing, as explained here.  Back in 1997, the Office of the Inspector General of the GAO concluded that 14% of Medicare bills were improper; that seemed to have been halved by 2000.  And what has the OIG done for me lately?  Good question - why can't I find anything more recent?

AND ANOTHER THING... One focus of the DeLong post is to puzzle over why the financial services sector become such a large part of the US economy.  Yet I feel as if a chart is missing (I am also feeling weirdly dataphobic so I could use some help on this) - financial assets have been growing faster than GDP in the US and around the world since at least 1990, per this McKinsey study (p. 9).  So where is the chart comparing the profits of the US financial sector with total financial assets in the US?  The Federal Reserve presumably has the relevant data right here, but I saw the phrase "ZIP file" and locked up even before my laptop did.

 

Let Ben Do It

Prof. DeLong presents a clear case for quantitative easing; reading this as a clarion call for fiscal stimulus would be harder, but that is what the headline writer did:

A Time to Spend

BERKELEY – The central insight of macroeconomics is a fact that was known to John Stuart Mill in the first third of the nineteenth century: there can be a large gap between supply and demand for pretty much all currently produced goods and services and types of labor if there is an equally large excess demand for financial assets. And this fundamental fact is a source of big trouble.

...

By contrast, a gap between supply and demand when the corresponding excess demand is for financial assets is a recipe for economic meltdown. There is, after all, no easy way that unemployed workers can start producing the assets – money and bonds that not only are rated investment-grade, but really are – that financial markets are not adequately supplying. The flow of workers out of employment exceeds the flow back into employment. And, as employment and incomes drop, spending on currently produced commodities drops further, and the economy spirals down into depression.

Thus, the first principle of macroeconomic policy is that because only the government can create the investment-grade financial assets that are in short supply in a depression, it is the government’s task to do so. The government must ensure that the money supply matches the full-employment level of money demand, and that the supply of safe savings vehicles in which investors can park their wealth also meets demand.

Obviously, the process of borrow, spend and run a deficit creates new, presumably safe government debt.  But of course, having the Fed purchase sorta-kinda safe assets and deliver deposits at the Fed also creates new, safe assets.

 

At Least One Of Us Is Woefully Ignorant

Floyd Abrams writes on Wikileaks in the Wall Street Journal and delivers a bit of a headscratcher:

In 1971, Daniel Ellsberg decided to make available to the New York Times (and then to other newspapers) 43 volumes of the Pentagon Papers, the top- secret study prepared for the Department of Defense examining how and why the United States had become embroiled in the Vietnam conflict. But he made another critical decision as well. That was to keep confidential the remaining four volumes of the study describing the diplomatic efforts of the United States to resolve the war.

...

The diplomatic volumes were not published, even in part, for another dozen years. Mr. Ellsberg later explained his decision to keep them secret, according to Sanford Ungar's 1972 book "The Papers & The Papers," by saying, "I didn't want to get in the way of the diplomacy."

Julian Assange sure does. Can anyone doubt that he would have made those four volumes public on WikiLeaks regardless of their sensitivity? Or that he would have paid not even the slightest heed to the possibility that they might seriously compromise efforts to bring a speedier end to the war?

Good question, and I am hardly an authority on "What Does Julain Want?" However, there is ample room for doubt as to just what he may have ultimately published, since (unlike his file dump of the Afghanistan field reports) Assange worked closely with five newspapers to edit his trove of State Department cables.  From the AP:

PARIS (AP) — The diplomatic records exposed on the WikiLeaks website this week reveal not only secret government communications, but also an extraordinary collaboration between some of the world's most respected media outlets and the WikiLeaks organization.

Unlike earlier disclosures by WikiLeaks of tens of thousands of secret government military records, the group is releasing only a trickle of documents at a time from a trove of a quarter-million, and only after considering advice from five news organizations with which it chose to share all of the material.

"They are releasing the documents we selected," Le Monde's managing editor, Sylvie Kauffmann, said in an interview at the newspaper's Paris headquarters.

WikiLeaks turned over all of the classified U.S. State Department cables it obtained to Le Monde, El Pais in Spain, The Guardian in Britain and Der Spiegel in Germany. The Guardian shared the material with The New York Times, and the five news organizations have been working together to plan the timing of their reports.

They also have been advising WikiLeaks on which documents to release publicly and what redactions to make to those documents, Kauffmann and others involved in the arrangement said.

Obviously there are some game theory issues here - if all five newspapers had refused to publish anything, Assange could have simply looked for other, more cooperative partners, subject to the fallback option of publishing everything himself.

On the other hand, I don't know how Abrams can know that Assange would ultimately have taken that step.

Health Care In The Courts

The NY Times assesses the health care litigation with a reprise of the Commerce Clause and "necessary and proper" issues.  Randy Barnett says it is "excellent", so there you go.

All My Heroes Are Dead

And I'm not feeling so well myself...

ACTUALLY:  I feel great!  I am always refreshed to recall the classic Bush-Dukakis debate of 1988.  That was most famous for the Duke's answer on capital punishment in the scenario where someone had raped and killed his wife; the Duke promised to smother the offender in oatmeal and social science statistics.  But a less well remembered clunker was his answer to "Name your heroes".  Just the intro:

COMPTON: Governor, today they may call them role models, but they used to be called heroes, the kind of public figure who could inspire a whole generation, someone who was larger than life. My question is not, who your heroes were. My question instead is, who are the heroes who are there in American life today? Who are the ones who you would point out to young Americans as figures who should inspire this country?

DUKAKIS: Well, I think when I think of heroes, I think back, not presently, Ann.

Which I paraphrase in my memory.

Chris Matthews Joins The Birthers?

This may send a tingle up your leg - Chris Matthews is having trouble with the faith-based initiative surrouding Obama's birth documentaton, asks ""Why has the president himself not demanded they put out the original documents?"

Good question.  His panelists are Clarence Page of the ChiTrib (who explains that Obama's oponents are too stupid and rigid to understand the truth, so why bother?), and David Corn, who reprises the 'birth announcement' chestnut: his gist is that the presence of two contemporaneous birth anouncements answers all the questons, since no one could have faked his US citizenship agaisnt the day when he would need the bona fides to be eligible for President.

Please - send better rebuttals.  An obvious response, that would have occurred to every lefty if it were Bush promoting this line, is that there are many advantages to establishing American citizenship which would have been obvious to Barack's mother and maternal grandparents at the time of his birth.  One particular advantage - if Baby Barack's citizenship was established as American, that might be critical if one day the shotgun marriage failed and a black father tried to estabish custody of his black son in a Kenyan court.

I am not saying that is what happened; I am just worried that there must be lead in the Kool-Aid the lefties are drinking, becasue they are getting pretty brain-damaged if they can't even conceive of this possibility as an alternative to the "Ha, ha! They were conspiring to preserve his eligibility for the White House!" theory.  [Does anyone remember our friends on the left being so trusting when we were told that all of Bush's National Guard records had been released?]

I should also take a moment to deplore the apparent ignorance of Matthews and his guests, who closed the segment wondering whether the State of Hawaii could even "find" the eleusive documentation.  Please - the location of Obama's birth file is not a mystery.  State privacy laws control its release.

Folks who have been paying attention will even remember this press release from the State of Hawaii:

There have been numerous requests for Sen. Barack Hussein Obama's official birth certificate. State law (Hawaii Revised Statutes §338-18) prohibits the release of a certified birth certificate to persons who do not have a tangible interest in the vital record.

"Therefore, I as Director of Health for the State of Hawai'i, along with the Registrar of Vital Statistics who has statutory authority to oversee and maintain these type of vital records, have personally seen and verified that the Hawaii State Department of Health has Sen. Obama's original birth certificate on record in accordance with state policies and procedures.

The outgoing Governor then mis-spoke and broke state law in a subsequent radio interview:

"It's been an odd situation," Lingle said, referring to the continuing controversy over the disputed natural-born citizenship of Obama. "This issue kept coming up so much in the campaign, and again I think it's one of those issues that is simply a distraction from the more critical issues that are facing the country.

"So I had my health director, who is a physician by background, go personally view the birth certificate in the birth records of the Department of Health, and we issued a news release at that time saying that the president was, in fact, born at Kapi'olani Hospital in Honolulu, Hawaii. And that's just a fact and yet people continue to call up and e-mail and want to make it an issue and I think it's again a horrible distraction for the country by those people who continue this."

That was not what the official statement said, and her extrapolation was a violation of Obama's privacy rights.

Kaus On Immigration And Income Inequality

Micky Kaus grapples with income inequality and immigration reform.

After ignoring the topic for several years, Krugman finally threw a bucket of reality into the faces of his left-leaning admirers in 2006.  From the supporting notes he posted on-line:

Like all research results, the conclusions of these papers may have to be revised in the light of future research. But I’m afraid that the three negative conclusions I stressed in the column are fairly robust.

First, the benefits of immigration to the population already here are small. The reason is that immigrant workers are, at least roughly speaking, paid their “marginal product”: an immigrant worker is paid roughly the value of the additional goods and services he or she enables the U.S. economy to produce. That means that there isn’t anything left over to increase the income of the people already here.

Krugman notes that most of the benefit accrues to the immigrant himself, whose income has almost surely risen.  That is an important point which shuld not be minimized.

My second negative point is that immigration reduces the wages of domestic workers who compete with immigrants. That’s just supply and demand: we’re talking about large increases in the number of low-skill workers relative to other inputs into production, so it’s inevitable that this means a fall in wages.

My guess is that the Democratic coalition finesses this with the promise that one day all these immigrants will join unions and vote for greater benefits for all.

Finally, the fiscal burden of low-wage immigrants is also pretty clear. Mr. Hanson uses some estimates from the National Research Council to get a specific number, around 0.25 percent of G.D.P. Again, I think that you’d be hard pressed to find any set of assumptions under which Mexican immigrants are a net fiscal plus, but equally hard pressed to make the burden more than a fraction of a percent of G.D.P.

In a different blog post Krugman expands on this with a bit of liberal Conventional Wisdom we find puzzling (my emphasis):

Paul Krugman: My reading of the research on this is that the legality of immigrants isn’t as big an issue as you might think for tax purposes; even illegals pay taxes, for the most part. The point instead is that a low-skill, low-wage worker, wherever that worker was born, will on average receive more benefits than he or she pays in taxes. There’s nothing wrong with that – on the contrary, it’s the way a just society should work – but it means that low-skill immigrants place some burden on our system.

A "just society" should just shower benefits on the poor?  Does it matter why they are poor, or where they came from?  Someone here illegally should be subsidized?  Someone who never troubled to graduate from high school deserves a check?  Where is the tough love?

Moving on, a year back Ross Douthat explained why Democrats were going to rail about income inequality but accomplish little - in short, they weren't going to reform our schools or control our borders, and taxing the rich won't reverse the tide.

 

Cats And Dogs Slimming Together

The Wall Street Journal sides with Michelle Obama after Sarah Palin mocks her anti-obesity campaign.  As did I, I should note.

The Hill joins in, reprising every righty who ever took a shot at Sarah.

Traditional Post-Blizzard Open Thread

My current theory is that shoveling snow won't really induce a heart attack... unless you're lucky.

Grandma Got Run Over By A Reindeer... And Obama

Health reform has become stealth reform: Obama is back to finish the job and kill off granny, but this time he will be operating on the QT:

WASHINGTON — When a proposal to encourage end-of-life planning touched off a political storm over “death panels,” Democrats dropped it from legislation to overhaul the health care system. But the Obama administration will achieve the same goal by regulation, starting Jan. 1.

The Times goes off message (on the day after Christmas with minimal audience) to report on the stealth plan:

Congressional supporters of the new policy, though pleased, have kept quiet. They fear provoking another furor like the one in 2009 when Republicans seized on the idea of end-of-life counseling to argue that the Democrats’ bill would allow the government to cut off care for the critically ill.

...

After learning of the administration’s decision, Mr. Blumenauer’s office celebrated “a quiet victory,” but urged supporters not to crow about it.

“While we are very happy with the result, we won’t be shouting it from the rooftops because we aren’t out of the woods yet,” Mr. Blumenauer’s office said in an e-mail in early November to people working with him on the issue. “This regulation could be modified or reversed, especially if Republican leaders try to use this small provision to perpetuate the ‘death panel’ myth.”

Moreover, the e-mail said: “We would ask that you not broadcast this accomplishment out to any of your lists, even if they are ‘supporters’ — e-mails can too easily be forwarded.”

The e-mail continued: “Thus far, it seems that no press or blogs have discovered it, but we will be keeping a close watch and may be calling on you if we need a rapid, targeted response. The longer this goes unnoticed, the better our chances of keeping it.”

In the interview, Mr. Blumenauer said, “Lies can go viral if people use them for political purposes.”

The decision was made in "early November" and goes into effect on Jan 1?  And we are hearing about it the day after Christmas?  Very slick.  How much more health care reform by way of stealth regulation should we expect from the most transparent Administration in history?

THE COMEDY NEVER ENDS:  The Times needs to pretend that end-of-life counseling was the only reason anyone ever mentioned 'death panels', because if they re-open the subject they will have to avoid (yet again) the fact that Obama talked about government panels recommending end-of-life treatments with one eye on efficacy and the other on expense.  Of course, later Obama pretended he never said any such thing and the Times played along, but Obama's approval rating was higher then, the deadline for closing Gitmo had not passed, and life was sunnier.

Interestingly the reporter for today's story, Robert Pear, also got this headline in the glorious Death Panel summer of 2009:

A Basis Is Seen for Some Health Plan Fears Among the Elderly

I kid you not.

DEPLORING THE PROCESS:  Bill Jacobson at Legal Insurrection is in rebellion over the stealth process.

When Humbugs Collide - Krugman, Wrong Even When He's Right

Krugman fights deceit with deception in denouncing the Republican "Humbug Express":

If you listen to the recent speeches of Republican presidential hopefuls, you’ll find several of them talking at length about the harm done by unionized government workers, who have, they say, multiplied under the Obama administration. A recent example was an op-ed article [link] by the outgoing Minnesota governor Tim Pawlenty, who declared that “thanks to President Obama,” government is the only booming sector in our economy: “Since January 2008” — silly me, I thought Mr. Obama wasn’t inaugurated until 2009 — “the private sector has lost nearly eight million jobs, while local, state and federal governments added 590,000.”

Horrors! Except that according to the Bureau of Labor Statistics, government employment has fallen, not risen, since January 2008. And since January 2009, when Mr. Obama actually did take office, government employment has fallen by more than 300,000 as hard-pressed state and local governments have been forced to lay off teachers, police officers, firefighters and other workers.

Politfact was all over Pawlenty, who was relying on this problematic post by Veronique de Rugy at Big Government.  And obviously, Jan 2008 is roughly the start of the recession.

But rather than quit while ahead, Krugman bashes on:

So how did the notion of a surge in government payrolls under Mr. Obama take hold?

It turns out that last spring there was, in fact, a bulge in government employment. And both politicians and researchers at humbug factories — I mean, conservative think tanks — quickly seized on this bulge as evidence of an exploding public sector. Over the summer, articles and speeches began to appear highlighting the rise in government employment and issuing dire warnings about what it portended for America’s future.

But anyone paying attention knew why public employment had risen — and it had nothing to do with Big Government. It was, instead, the fact that the federal government had to hire a lot of temporary workers to carry out the 2010 Census — workers who have almost all left the payroll now that the Census is done.

Is it really possible that the authors of those articles and speeches about soaring public employment didn’t know what was going on? Well, I guess we should never assume malice when ignorance remains a possibility.

...

Still, why does it matter what some politicians and think tanks say? The answer is that there’s a well-developed right-wing media infrastructure in place to catapult the propaganda, as former President George W. Bush put it, to rapidly disseminate bogus analysis to a wide audience where it becomes part of what “everyone knows.” (There’s nothing comparable on the left, which has fallen far behind in the humbug race.)

And it’s a very effective process. When discussing the alleged huge expansion of government under Mr. Obama, I’ve repeatedly found that people just won’t believe me when I try to point out that it never happened. They assume that I’m lying, or somehow cherry-picking the data. After all, they’ve heard over and over again about that surge in government spending and employment, and they don’t realize that everything they’ve heard was a special delivery from the Humbug Express.

Hmm - even a careful reader of Krugman will probably not come away with an obvious alternative explanation: the Federal payroll has in fact risen under Obama.  That seed of truth has been overgrown with weeds of confusion, yet it endures.

 

Traditional Merry Christmas Open Thread

Blessing of the day to you and yours.  Merry Christmas.

How Dare These People Ask For Evidence And Documentation

As we celebrate the birth of Christ, the Times comments on the birth of a lesser man:

Hawaii’s Governor Takes On ‘Birthers’
By SHERYL GAY STOLBERG

HONOLULU — Gov. Neil Abercrombie of Hawaii, who befriended President Obama’s parents when they were university students here, has been in office for less than three weeks. But he is so incensed over “birthers” — the conspiracy theorists who assert that Mr. Obama was born in Kenya and was thus not eligible to become president — that he is seeking ways to change state policy to allow him to release additional proof that the president was born in Honolulu in 1961.

“It’s an insult to his mother and to his father, and I knew his mother and father; they were my friends, and I have an emotional interest in that,” Governor Abercrombie said in a telephone interview late Thursday. “It’s an emotional insult. It is disrespectful to the president; it is disrespectful to the office.”

Yeah, what kind of country are we living in when people won't trust some state bureaucrat?  Well, the governor is going to show them all right, by showing them just what they want!

“He’s a big boy; he can take sticks and stones. But there’s no reason on earth to have the memory of his parents insulted by people whose motivation is solely political,” Mr. Abercrombie said. “Let’s put this particular canard to rest.”

Naturally we deplore the racist use of the phrase "boy".  As to the seemingly obvious question - why doesn't Obama simply request and release these records? - well, the Times continues its own Don't Ask, Don't Tell policy.

They close with a rhetorical question from the governor:

"My thought is, rather than get into some kind of argument or play into that mentality, why not just simply try to authenticate this and let the facts speak for themselves?”

Why not indeed?  Darn those birthers for thinking Obama is hiding something just because he is hiding his records.

JUST SO YOU KNOW:

To recap my Official Editorial Position on the birther thing:

The state of Hawaii has a more extensive file documenting the circumstances of Obama's birth;

That file contains documentation sufficient to prompt the state to deliver a birth certificate, so presumably they are satisifed he was born in Hawaii;

State privacy laws prohibit the state from sharing that file with the public, but they would release it to Obama or any relative/trustee with a legitimate interest in his history;

Obama has not requested and released his file, a process I estimate would take a day (I assume the President would be accorded special treatment).

So, why is the most transparent administration in history so opaque on this minor point?  My official editorial position is that "Obama" is the most tightly controlled brand since Mickey Mouse (and is becoming synonomous with just that), so he is just saving this material (and his law firm billing records, and his college transcripts, and everything else) for his eventual eight-figure book deal.

My back-up guess is that the file includes something embarassing, such as a legal name change from "Barry" to "Barack" while a teenager.  The omission of that detail (if true) from "Dreams From My Father" might trigger some clucking.

And the long-shot back up to the back up is that the "proof" being accepted by the state of Hawaii is simply affidavits from his mother and maternal grandparents asserting he was born in Hawaii.  The obvious motivation would have been to document Barack (Barry?) as an American so that if the shotgun marriage didn't last a custody fight would play out in American courts.

Of course, in that long-shot scenario, those affidavits might be accurate, and the affiants have all passed away.  But I suspect such a revelation would prompt even the authors of this study to question the clarity and foundation of their faith in the circumstances of Obama's birth. 

 

 

Get Ready For A Happy New Year

The Obama tax relief has the Times talking up the economy.

Traditional Christmas Eve Open Thread

You'll be finished shopping any day now.

TMI And Not Enough Thought

NPR is wringing their hands about whether Too Much Information about a President causes us to lose respect for the man and the office.  Ann Althouse notes that NPR did not engage in similar fretting in the dark Bush days.

If the cheerleading for Obama 2012 has begun, let's just hope the quality improves - any voter dumb enough to be impressed by this will have a hard time finding his way to the polls.  Let's just pick out a howler or two:

More and more delicate details were revealed about sitting presidents — and less and less homage paid to the office — by tabloid newspapers and cable television. And then in the mid-1990s, the Internet, with its unruliness and rudeness, let the cat completely out of the bag. Bill Clinton and the two George Bushes lived in constantly scrutinized — and widely reported on — fishbowls.

We seemed to know everything — and more — about Clinton. His health, his skivvies, his sax, his sex, his Socks. The fact that Clinton had a 66 percent approval rating when he left office is an anomaly.

An anomaly compared to whom, or what?  The first Bush left office in January 1993, pre-dating the internet (their assertion notwithstanding). 

The second Bush, on the other hand, fell from 90 percent approval rating in September 2001 — at the time of the attacks on the World Trade Center and Pentagon — to just 34 percent when he left office in 2009.

Uh huh - some combination of a botched war in Iraq, a financial meltdown, and too much information about Bush's personal life probably explains that.  The anomalous Bill Clinton delivered his most sordid revelations during his second term.

President Obama's numbers, so far, have the same downward trajectory. At the start of his administration, the Gallup Poll found Obama's job approval rating at 68 percent. The latest figures from Gallup give him an average approval rating of 46 percent for the week — which is pretty much where his numbers have been since September.

...Of the seven two-term presidents in the past 60 years, only Reagan and Clinton had higher average approval ratings during their second terms. For the most part, the longer we had the chance to know our presidents, the less we approved of the job they were doing.

Here are the numbers.  Let's first note that every President gets a 'honeymoon', so the first year is likely to be higher than subsequent ones.

Regan had a miserable economy which rebounded by his second term; Clinton had a weak recovery which blossomed in his second term.

Truman and Johnson are being scored as a two-termers despite only being elected to the Presidency once.  Each man was booed off the stage and declined to seek re-election because of a difficult war.

Nixon had that little Watergate thing, which coupled with this beach photograph torpedoed him.

Bush choked on pretzels, not to mention Iraq and Goldman Sachs, so his approval rating swooned.

Eisenhower had a little second-term scandal with Sherman Adams but his lowest approval rating was about 52%, so it is not as if the public stopped liking Ike.

All in all, the theory that "the longer we had the chance to know our presidents, the less we approved of the job they were doing" doesn't have much going for it.

One Of These Is Not Like The Others

A quick news quiz: pick the word that does not belong with the other three:

(a) Gitmo (B) Obama (c) shambles (d) strategy

Hint at the link.

Bong Hits For Jesus

Pat Robertson favors a dramatic downsizing of our marijuana laws as our nation casts about for an exit strategy in the war on drugs. AllahPundit has lots, including this:

Exit question: Does this create some political space for “true conservatives” to be more adventurous in opposing marijuana laws? Palin showed a little flair on that point a few months ago but it’s disappeared among the field since then (except, of course, for libertarian Gary Johnson). If she brings it back, it could spark interest among independents, and now that she has Robertson as cover on her right flank, the damage among social cons should be minimal.

Yes, and I would pay extra to see Sarah take the lead on marijuana decriminalization just to see the reaction from the Usual Suspects in the media (hmm, how many would think they were having an acid flashback?  Andrea Mitchell for sure...). 

Unfortunately, I don't know how much of a national debate we can have - if Obama opens his mouth everyone will be throwing his pot-smoking youth in his face and positions will re-freeze.  As with the war in Afghanistan, Obama needs to continue the war on drugs to display his toughness.  Nixon was able to go to China; Obama won't be able to go anywhere on this.  Which is a shame.

THEN AGAIN:  OK, maybe Obama could tiptoe into the debate by hding behind Sarah.  As I said, I would pay extra...

Food Fight! Sarah Or Michelle?

Sarah Palin throws down against Michelle Obama:

Sarah Palin mocks Michelle Obama's anti-obesity campaign on reality show with jab about dessert

She's all for cutting flabby government, but Sarah Palin wants Michelle Obama to butt out of keeping kids from getting fat.

The moose-munching Tea Party darling is picking a fight with the First Lady - over dessert.

"Where are the s'mores ingredients?" the sharp-elbowed hockey mom growled in Sunday's episode of her outdoorsy TLC show "Sarah Palin's Alaska."

"This is in honor of Michelle Obama, who said the other day we should not have dessert," Palin said mockingly as she rummaged through her kitchen cupboards for graham crackers, marshmallows and chocolate.

Hmm.  I would have said it will be a cold day before I side with Michelle over Sarah, but having checked the thermometer...

I don't mind a little role-modeling from the First Family; nor do I mind a government effort to inform.  I would also note that, Ms. Palin's commitment to individual choice and responsibility notwithstanding, our national obesity and overweight statistics suggest that some aspect of the consumer decision making process has gone awry.

Until the government uses its expansive powers under the Commerce Clause to end my inactivity in the broccolli market I am going to side with Michelle on this one.  I have doubts about whether she will have much impact, but at least Ms. Obama is pushing in the right direction.

In any case, the real scuffle here is between Sarah Palin and Mike Huckabee, famous former fatty.  [And I see Mike has joined in on Michelle's side!]

BONUS MOCKERY:  OK, she is First Lady, not a Presidential candidate.  Still, since role modeling is the topic, here we go, from a chat last February between Mike Huckabee and Michelle Obama:

MIKE HUCKABEE, FOX NEWS HOST: The obvious question I have to ask you: do you ever watch Fox News?

FIRST LADY MICHELLE OBAMA: I — you know what? I don't watch news that much.

HUCKABEE: But you will watch it this weekend?

M. OBAMA: I will, I will. I will absolutely watch it. You've got it.

HUCKABEE: All right.

M. OBAMA: I try to stay away from, you know, news because I want to formulate my opinions based on experiences that I have. So, you know I'll read clips, you know. I get headlines, but I tend — and I try to keep home kind of a news-free zone.

OK, I can see not wanting to be pestered by her kids wondering what that mean man meant about daddy and approval ratings and "in the tank", but still.

STILL MORE:  Ben Smith catches Sarah Palin in a nanny outfit, which could be OK...

Not All Global Warming Skeptics Are Crackpots?!?

The NY Times has a long feature appraising the science, economics, and politics of carbon dioxide and climate change.  The most surprising bit is this:

Climate-change contrarians do not accept these numbers.

The Internet has given rise to a vocal cadre of challengers who question every aspect of the science — even the physics, worked out in the 19th century, that shows that carbon dioxide traps heat. That is a point so elementary and well-established that demonstrations of it are routinely carried out by high school students.

However, the contrarians who have most influenced Congress are a handful of men trained in atmospheric physics. They generally accept the rising carbon dioxide numbers, they recognize that the increase is caused by human activity, and they acknowledge that the earth is warming in response.

But they doubt that it will warm nearly as much as mainstream scientists say, arguing that the increase is likely to be less than two degrees Fahrenheit, a change they characterize as manageable.

Among the most prominent of these contrarians is Richard Lindzen of the Massachusetts Institute of Technology, who contends that as the earth initially warms, cloud patterns will shift in a way that should help to limit the heat buildup. Most climate scientists contend that little evidence supports this view, but Dr. Lindzen is regularly consulted on Capitol Hill.

“I am quite willing to state,” Dr. Lindzen said in a speech this year, “that unprecedented climate catastrophes are not on the horizon, though in several thousand years we may return to an ice age.”

That is a more thoughtful discussion than I ever would have expected.  They also include unexpected balancers such as this:

But these modest efforts [to reduce energy consumption] are being swamped by rising energy use in developing countries like China, India and Brazil. In those lands, economic growth is not simply desirable — it is a moral imperative, to lift more than a third of the human race out of poverty. A recent scientific paper referred to China’s surge as “the biggest transformation of human well-being the earth has ever seen.”

Growth is good!

The Education Of Eric Holder

Attorney General Eric Holder has a long interview with ABC News in which he reveals his recent rendevous with reality (my emphasis):

What was uppermost on his mind, however, is the alarming rise in the number of Americans who are more than willing to attack and kill their fellow citizens.

"It is one of the things that keeps me up at night," Holder said. "You didn't worry about this even two years ago -- about individuals, about Americans, to the extent that we now do. And -- that is of -- of great concern."

"The threat has changed from simply worrying about foreigners coming here, to worrying about people in the United States, American citizens -- raised here, born here, and who for whatever reason, have decided that they are going to become radicalized and take up arms against the nation in which they were born," he said.

In the last 24 months, Holder said, 126 people have been indicted on terrorist-related charges, Fifty of those people are American citizens.

"I think that what is most alarming to me is the totality of what we see, the attorney general said. "Whether it is an attempt to bomb the New York City subway system, an attempt to bring down an airplane over Detroit, an attempt to set off a bomb in Times Square ... I think that gives us a sense of the breadth of the challenges that we face, and the kinds of things that our enemy is trying to do."

Holder says many of these converts to al Qaeda have something in common: a link to radical cleric Anwar Al Awlaki, an American citizen himself.

No, two years ago the only thing we knew about Reid, Padilla, the Lackawanna Six et al was that Bush was shreddding the Constitution and Gitmo needed to be closed.  Two years ago the DHS was fretting about right-wing haters.

Oh, well - I don't know why Holder wants to credit Obama and say that Muslims only became radicalized in the last two years, but there it is.

THEY'RE ON IT 22/7!  Janet Napolitano: We’re working “364 days a year” to fight terror.  Have a Merry Christmas!  (And be doubly nervous in 2012.)

Now All Racists Are Violent?

Oh, brother - Matt Yglesias takes it upon himself to teach a bit of Mississipi history to Gov. Haley Barbour, whose family has been in Mississipi for a mere five generations.

In a Weekly Standard profile Gov. Barbour credited the local Citizens Council with keeping things cool when the Yazoo City schools were finally desegregated in 1970:

Both Mr. Mott and Mr. Kelly had told me that Yazoo City was perhaps the only municipality in Mississippi that managed to integrate the schools without violence. I asked Haley Barbour why he thought that was so.

“Because the business community wouldn’t stand for it,” he said. “You heard of the Citizens Councils? Up north they think it was like the KKK. Where I come from it was an organization of town leaders. In Yazoo City they passed a resolution that said anybody who started a chapter of the Klan would get their ass run out of town. If you had a job, you’d lose it. If you had a store, they’d see nobody shopped there. We didn’t have a problem with the Klan in Yazoo City.”

Matt documents that the Citizens Councils were white supremacists, asserts that Barbour is "dangerously igorant" of his own state's history, and closes with following logical and rhetorical leap:

Haley Barbour gives these people credit for keeping things calm!

Hmm - are all racists violent?  I am not up to speed with what they are teaching at Harvard these days about the Deep South.

Let's turn to a much younger David Halberstam writing in 1956 for Commentary:

The Council movement has been compared frequently to two earlier organizations that originated in the South, the Ku Klux Klan of Reconstruction times, and the new Klan that appeared on the scene after World War I. And indeed there are, at least for the moment, certain parallels between the Klans—especially the original one—and the Council movement. The differences are nonetheless crucial. The Councils have an almost self-conscious desire for respectability. They struggle to achieve a constitutionally illegal purpose by “all legal means.” They shun both the Klans’ reputation for violence, and their haberdashery; their members are respectable citizens of the community, the quintessence of the civic luncheon club. At their meetings there is emphasis on speakers from the ministry and the universities.

The original Klan grew out of the turbulence of the post-Civil War South. Southern whites, then politically powerless, donned hood and regalia to move against the “carpetbag” Negro Union and Loyal Leagues. The membership of the Klan included the backbone of the local community: former Confederate officers, lawyers, and bankers, and it relied primarily on threats—of a “whupping,” a midnight scare session, or a tar-and-feathering—to impose its own notion of peace and order on the semi-anarchy of Reconstruction. But by 1871 the conditions in the South that gave rise to the Klan had largely disappeared and it was disbanded.

...

The second Klan battened on postwar frustration and distrust of foreigners. First and foremost, it was fanatically anti-Catholic, though it was also anti-Negro and anti-Semitic. It set itself up as a guardian of local morality as well as patriotism, and would don the white hood and go after a man who wasn’t supporting his family properly, or who had been drinking too much. Violence was frequent, tar-and-featherings abounded, and there were even lynchings. The movement finally collapsed because of its over-extended membership, its lack of real purpose, and its inability to withstand strong criticism of it from both North and South.

The White Citizens Council movement today has had to throw off the Klan’s stigma and repudiate its legacy. Partly this is so because of the WCC’s feeling that not even desegregation justifies violence. But more important is the fact that the economy of the South is fast industrializing: every little town has its industrial development group seeking outside (usually Northern) support, and this is the single most telling factor in the community’s attitude toward the future.

Show them the money.

Or let's cut to "The Citizens' Council" by Neil McMillen, describing the same period:

Economic pressure but not violence in 1955.  And by 1970 I guess the Council was ready to move on.

I don't think Barbour claimed the Councils were led by integrationist progressives on the right side of history; I think he claimed they helped keep the peace.  Two sources say they did, against which we have to weigh Matt's shock and awe.

THE NIGHT THEY DROVE OLD DIXIE DOWN:  I am sure I am not smart enough to grasp the current liberal vision - do they read "To Kill A Mockingbird" and come away with the notion that Atticus Finch represented the mainstream white view in the South?  Do they suppose that a regressive and racist minority of whites suppressed both blacks and the white majority?

My guess is that the Citizens' Councils provided a non-violent means of expression (and repression) for the majority white view.  ItIs unfortunate they were on the wrong side of history, but they were preferable to the violent alternative.  The Other McCain has lots, including this:

I have on my shelves a 1960 book by William D. Workman Jr. entitled The Case for the South. Workman makes clear that it was foolish to speak of “moderates” in the Deep South of that era if, by “moderate,” you meant white people who were in favor of integration. The overwhelming majority of white Southerners were in favor of maintaining the status quo of Jim Crow, which was all they’d ever known.

When it became obvious that the federal government intended to impose desegregation at all hazards, one might say that those leaders who counseled peaceful cooperation for the good of the community were “moderates,” but this doesn’t mean they were actually in favor of desegregation. Neither does it mean that officials like Jimmy Carter — who campaigned and governed as a segregationists so long as that was the means to political success — were any more “racist” than anyone else.

To which I would add:  It is politically convenient for high-minded Dems to pretend they lost the South on the issue of race.  However, the South is also tougher on defense, stronger on guns, weaker on unions, and more religious than the country as a whole. High-minded Dems would prefer not to talk about their limited appeal as the party that lost both Vietnam and God.

I'VE FORGOTTEN MY MILTON... Wasn't Lucifer cast down after trying to organize the cherubim and seraphim?  Or was he trying to ban handgun sales?  It gets hazy at Christmastime...

A SAFE BET, BUT: Ben Smith suspects that the media will ask Barbour about a tasteless quip he made in 1982.  And I bet they will! Of course, these are the same media heroes who uncritically recycled every evasion and misstatement made by the Obama campaign about the Ayers/Obama relationship, but still.

A DAY LATER:  Barbour delivers the obvious defense - his original statement was accurate and responsive but incomplete.

Jim Geraghty is cogent and sensible.

Holiday Week Open Thread

The traditional "I'm sure glad I am only a fair-weather Giants fan ('cause baby, it's cold outside)" open thread.

And a bonus thought of interest mainly to my cardiologist - the NY Jets had an excellent chance to lose their game on the final play with no time on the clock, a weird confluence which would have turned sports talk radio in New York city into one huge exercise in suicide prevention.

But we live!

DADT Ends

The Senate repeals Don't Ask, Don't Tell.  John McCain is fuming but Barry Goldwater would have applauded:

At 85, after a life in politics spanning five decades (he retired from the Senate in 1987), Mr. Conservative [aka barry Goldwater] has found himself an unlikely new career: as a gay rights activist. While that's not his sole pursuit – he returned to Capitol Hill yesterday to testify in favor of scenic overflights of the Grand Canyon – in recent years he's championed homosexuals serving in the military and has worked locally to stop businesses in Phoenix from hiring on the basis of sexual orientation. This month he signed on as honorary co-chairman of a drive to pass a federal law preventing job discrimination against homosexuals. The effort, dubbed Americans Against Discrimination, is being spearheaded by the Human Rights Campaign Fund, the influential gay lobbying organization.

"The big thing is to make this country, along with every other country in the world with a few exceptions, quit discriminating against people just because they're gay," Goldwater asserts. "You don't have to agree with it, but they have a constitutional right to be gay. And that's what brings me into it."

Do keep in mind, Goldwater was a libertarian at heart, which put him in an odd place in the Republican Party:

Gay rights aside, Goldwater is doing lots more to drive would-be disciples nuts. In 1992 he backed a Democrat for Congress over a Christian conservative Republican (his candidate, Karan English, won), and has been applying the full force of his cantankerous personality to frequent denunciations of the religious right and occasional defenses of Bill Clinton – calling a press conference recently to urge Republican critics of Whitewater to "get off his back and let him be president."

And back to gay rights:

So how did this super-patriot, former fighter pilot and retired Air Force general get involved in gay rights?

"The first time this came up was with the question, should there be gays in the military?" Goldwater says. "Having spent 37 years of my life in the military as a reservist, and never having met a gay in all of that time, and never having even talked about it in all those years, I just thought, why the hell shouldn't they serve? They're American citizens. As long as they're not doing things that are harmful to anyone else. ... So I came out for it."

He says he's mystified by the origins of homosexuality. "You try to find out where it started, even going back to old Egyptology – and you knew damn well the Egyptians had to have those people – but you can't find any writings," he says. "I have one grandson who's gay. And my brother {Bob Goldwater} has a granddaughter who is gay. We're sort of at a loss to know what the hell it's all about."

Goldwater says that having openly gay relatives doesn't influence his beliefs, which are animated by libertarian principles that government should stay out of people's private lives.

If Goldwater (and AllahPundit!) are with me, who will stand against me?

AND DO KEEP IN MIND:  As AllahP notes, far better that this die in the Congress than in the courts:

I support the move, but if you don’t, look at it this way: As Gates has often said, if it didn’t happen here it probably would have happened in the courts. Civilian control of the military is one thing, judicial control is something else, so the fact that repeal now wears a democratic halo will hopefully make it more tolerable to skeptics inside the branches.

 

 

The DREAM Dies

The Senate kills the DREAM Act.

Under Development - My OEP On Fannie Mae And The Financial Collapse

So what is my Official Editorial Position on the role played by Fannie Mae in fueling the housing bubble and the resulting financial collapse?  Good question - I really ought to have one, and I am having a hard time swallowing the straight Republican line put out by the Republicans on the panel investigating this.

I am confident that the largest players in the US mortgage market played a role in distorting that market.  However, the numbers don't tell that story very convincingly - the conservator's report on Fannie and Freddie from 2010 showed them losing market share during the housing boom. Left unmentioned by even astute observers - Fannie Mae was hamstrung by an accounting scandal and was battling the Bush Administration.  However, per CNN the market had passed them by:

Another question that has been lost in the political wrangling is whether Fannie's business has changed permanently for the worse. Over the past 18 months the growth in Fannie Mae's portfolio has slowed sharply because of competition from banks and hedge funds, which are financing their mortgage purchases with cheap, short-term debt (a technique known as the carry trade). Back in 2002 the spread between the yield of Fannie's mortgage portfolio and its long-term liabilities was 63 basis points. In the second quarter of 2004 it had fallen to two basis points. To keep profits up, it looks like Fannie, which has disparaged the carry trade as too risky, may now be using the strategy itself, which would make it more vulnerable to rising interest rates. 

Gary Gorton of Yale has the must-read on how that repo trade worked out [another version here].

And the Republican arguments can become hazy here.  For examples, buyers may have proceeded with confidence in 2005, firm in the belief that Fannie would be back to bail them out in 2006. Even more importantly, not every bubble ends in a financial panic - for example, the tech collapse of 2000/2001 did not threaten to take down the banking system.  So even if Fannie helped inflate the housing bubble, should they be blamed for the panic?

Well.  This is a weekend for Christmas shopping.  Joe Nocera of the Times tackles the Republican report and vexes me with this:

The Republican document issued earlier this week did little more than regurgitate this theory of the case. “Subsidizing mortgages through the G.S.E.’s was a particularly expedient way to increase the homeownership rate,” they write at one point. At the same time, they tread lightly over the culpability of other nongovernmental culprits like the credit ratings agencies and Wall Street itself.

The only problem with Mr. Wallison’s theory is that it’s not, as they say, reality-based. Anyone who has looked at the role of Fannie and Freddie will discover they spent most of the housing bubble avoiding subprime loans, because those loans didn’t meet their underwriting standards. (Indeed, for most of their existence, Fannie and Freddie didn’t so much meet their affordable housing goals as gamed them.)

Well, Fannie and Freddie couldn't underwrite subprime loans, so they bught them for their own investment accounts from others, and scored that as providing affordable housing.  The WaPo has a chart from HUD (I think...) showing Fannie and Freddie buying 49% of the securities backed by subprime mortgages in 2003, 44% in 2004, 33% in 200, and 20% in 2006.  (In 2006 the dollar amount was $90 billion).  Even with declining market share, they were huge players.

On the other hand, the conservator reports don't show them with huge losses from their investment activity, despite holding a $700 billion portfolio of mortgages (all qualities, presumably).  I presume I am missing something.

LOVE THESE TYPOS: An earlier version (and possibly this one, too) had discussion of the baking system and the hosing bubble.  And I got no help from Spellchek, that uncertain ally.

IN BRIEF:  My current leaning is that Fannie and Freddie contributed to the general moral hazard promoted by the Fed - a never heard of 'em hedge fund (Long Term Capital) was too big to fail back in 1998, Bear Stearns was too big to fail in early 2008, and surely the housing market was too big to fail and would be propped up by Fannie, Freddie and the Fed.  Also important were the Basel capital requirements which gave banks around the world a special break on mortgage backed securities.

Easy money leaving investors scratching for yield, a regulatory structure encouraging banks to hold housing securities, huge government sponsored entities promising to buy anything in sight to keep the housing market humming - what could go wrong?

Yet Another Study Showing How Dumb I Am

The NY Times summarizes yet another study showing how dumb I am, being in the Fox News demographic; Aaron Worthing at Patterico's Blog responds.

The study's authors admit that "truth" can be slippery, but they lose their humility at the starting gate - their first "truth" is that “most economists who have studied it estimate” that the stimulus bill "saved or created several million jobs".  

The first speed bump is that a mere 8% of their survey respondents actually endorse this wisdom.  Talk about the Great Unwashed!  But their evidence also merits a laugh track:

“[The] CBO concluded that for the third quarter of 2010, ARRA had “increased the number of full time-equivalent jobs by 2.0 to 5.2 million compared to what those amounts would have been otherwise.”

Hmm, so now the CBO represents "most economists"?  Who knew?!?  And how impressed should we be that the government gave itself a passing grade?  Surely they can do better than that.

Actually, they don't, and stop calling them Shirley; here is their other bit of support: 

“Since 2003, the Wall Street Journal has maintained a panel of 55-60 economists which it questions regularly, in an effort to move beyond anecdotal reporting of expert opinion… In March 2010 the panel was asked more broadly about the effect of the ARRA on growth. Seventy-five percent said it was a net positive.”

Please.  The authors provide a link to the WSJ article in question, and it is hardly bereft of clues as to their direction:

Economists Credit Fed For Alleviating Crisis

Economists say stimulus helped but point to central bank's key role

And skipping a bit:

Thirty-eight of the 54 surveyed economists, not all of whom answered every question, said the American Recovery and Reinvestment Act boosted growth and mitigated job losses, while six said the legislation had a net negative effect.

On average, economists estimated that the stimulus added one percentage point to growth in 2009; they forecast gross domestic product would expand 3% this year, compared with 2.2% in the absence of stimulus. They estimated that the February unemployment rate, reported at 9.7% last week, would have been 10.4% without the stimulus.

That is a reduction in unemployment of 0.7% on a workforce of roughly 150 million, or about 1 million jobs, which falls short of "several million".  The positive thinkers will want to credit some additional employment to the extra 0.8% of GDP growth forecast for 2010; a reasonable estimate seems to be another 0.4% reduction in unemployment, or 600,000 jobs.

Color me dumb but I doubt that a majority of economists believe that 1.6 million equals "several million".  If the study authors are aware of more compelling evidence that "several million" jobs were created by the stimulus, they really should have used this opportunity to present it.  The WSJ link they provide only gets them into field goal range.

The study continues with further illustrations of my stupidity (I am wrong to disbelieve the CBO machinations which tell me ObamaCare will reduce the deficit), but time does not permit a full cataloging of my ignorance.

CHUGGING ALONG:  Their second issue on which the public is woefully ignorant is ObamaCare: apparently a mere 13% of survey respondents embrace the CBO and believe that a huge, complicated new entitlement program will defy history and come in under the politically gamed budget.  Go figure.

Issue three is the status of the recovery.  44% correctly believe the economy is starting to recover; 55% are so foolish as to think that things are getting worse, little appreciating that "The US Bureau of Economic Analysis concluded in September 2010 that the recession had ended in June 2009".

Well, put me in the 44%, and the stock market is on my side.  On the other hand, over at the BLS I learn that total employment reached 140 million in June 2009; it then dipped to 138 million by December 2009 and is now at 139 million.  The unemployment rate was 9.5% in June 2009, reached 10.0% that December, and is now 9.8%.  And as of September 2010 (prior to the new tax bill and stimulus) 22% of the WSJ economists surveyed were forecasting a double dip recession.  Put it together and I wouldn't pound the table saying the skeptics were wrong.

Issue four:

The National Academy of  Sciences has concluded unambiguously that climate change is occurring.  However, a substantial 45% of voters thought that most scientists think climate change is not occurring (12%) or scientists are evenly divided (33%).  Fiftyfour percent recognized that most scientists think that climate change is occurring.

Not only do I want to go with the crowd on this one, but I am not sure how one might defend either minority view as to what "most scientists" believe.  But I bet I'll find out!

Issue five:

Large numbers of voters had misinformation about which President initiated the Troubled Assets Relief Program (TARP).  Asked which President had started the program, 40% believed incorrectly that TARP was started under President Obama, not under President George W. Bush.  Fifty-five percent were correct that the program began under Bush.  

Facts are stubborn things.  However, the authors get Orwellian here:

TARP was passed in Congress with considerable bipartisan support.  Majorities of Democrats in both houses favored it.  Republicans were divided overall: a large majority of Republicans favored it in the Senate, and while House Republicans leaned negative, this was by a narrow margin.  A majority of voters were correct about Democratic support  for TARP, but views were mixed on how the Republicans voted.   

How soon they forget - TARP was shot down on its first pass through the House.  From the Sept 30 2008 WaPo:

A bipartisan rebellion in the House killed a $700 billion rescue plan for the nation's financial system yesterday, sending global stock prices plunging, prompting fierce recriminations on the presidential campaign trail and dealing President Bush his worst legislative defeat.

...On the 228 to 205 congressional vote, 140 Democrats voted yes and 95 voted no; 133 Republicans opposed the measure, while 65 approved.

That relates to this attempt to test people's memories:

Respondents were asked: “When Congress voted on the bailout for banks and financial institutions in 2008, please select how you think the Democrats and Republicans voted: [each] mostly favored it, mostly opposed it, or were divided.”   Sixty percent of voters were aware that Democrats had mostly favored TARP (opposed it, 9%; were divided, 26%).  Regarding Republican congressional support, 31% thought correctly that Republicans were divided; 31% thought they mostly favored it; and 33% thought they mostly opposed it.

Divided does look like the most descriptive answer.

Issue Six:

Respondents were asked: “Is it your impression that the bailout program for Chrysler and General Motors occurred under President George W. Bush, President Barack Obama, or both presidents?”  Fifty-three percent believed the GM-Chrysler bailout occurred under President Obama only.  Another 16% thought it occurred under President Bush only.   Just 28% were correct that the GMChrysler bailout occurred under both presidents. 

GM and Chrysler got $17 billion at Christmastime from Bush and $63 billion under Obama, who orchestrated the union bailout and got all the headlines.

Issue Seven was a Dem attack:

In October an article on the website ThinkProgress.org launched the claim that the U.S. Chamber of Commerce was using large amounts of money raised from foreign sources to support Republican candidates.  Most voters—60%--were aware that this charge about the Chamber of Commerce was not proven to be true.  However, a substantial 31% did believe the claim that “the US Chamber of Commerce was spending large amounts of money it had raised from foreign sources to support Republican candidates and attack Democratic candidates” was proven to be true.  

Issue eight was on the original stimulus:

Although the stimulus legislation included about $288 billion in tax cuts, this was not the understanding of a majority of voters.  Instead, a modest majority of 54% of voters believed there were no tax cuts in the stimulus legislation, while 43% knew it did include tax cuts. 

The study links to a Politfact article explaining that $70 billion of that $288 billion came from the AMT fix, so it was a "cut" only in the sense that the AMT fix which had always been adopted before was adopted yet again (but might not have been!).  These authors would give a better impression if they showed evidence of reading their own sources.

Issue nine is a bit frightening:

Although President Obama has more than doubled the number of troops in Afghanistan, four in ten voters had a different perception.   

Respondents were asked, “What is your impression of what the Obama administration has done in regard to the number of US troops in Afghanistan—increased them, decreased them, or kept them the same?”  Forty-three percent mistakenly believed that the Obama administration had either kept troop levels the same (20%) or actually decreased them (23%).   A 55% majority was aware that the Obama administration increased the number of US troops in Afghanistan. 

The silver lining for Obama - with this kind of pubic awareness he won't have trouble with an anti-war movement.

Issue ten is meant to tweak the birthers, rally the faithful, and raise my blood pressure:

As you may know, some people have suggested that President Obama was not born in the United States.  Do you think that Obama was not born in the US, Obama was born in the US, or it is not clear whether Obama was born in the US or not?”

They accept the Hawaii summary certificate as conclusive.

For my money, it is clear that:

The state of Hawaii has a more extensive file documenting the circumstances of Obama's birth;

That file contains documentation sufficient to prompt the state to deliver a birth certificate, so presumably they are satisifed he was born in Hawaii;

State privacy laws prohibit the state from sharing that file with the public, but they would release it to Obama or any relative/trustee with a legitimate interest in his history;

Obama has not requested and released his file, a process I estimate would take a day (I assume the President would be accorded special treatment).

So, why is the most transparent administration in history so opaque on this minor point?  My official editorial position is that "Obama" is the most tightly controlled brand since Mickey Mouse (and is becoming synonomous with just that), so he is just saving this material (and his law firm billing records, and his college transcripts, and everything else) for his eight-figure book deal.

My back-up guess is that the file includes something embarassing, such as a legal name change from "Barry" to "Barack" while a teenager.  The omission of that detail (if true) from "Dreams From My Father" might trigger some clucking.

And the long-shot back up to the back up is that the "proof" being accepted by the state of Hawaii is simply affidavits from his mother and maternal grandparents asserting he was born in Hawaii.  The obvious motivation would have been to document Barack (Barry?) as an American so that if the shotgun marriage didn't last a custody fight would play out in American courts.

Of course, in that long-shot scenario, those affidavits might be accurate, and the affiants have all passed away.  But I suspect such a revelation would prompt even the authors of this study to question the clarity and foundation of their faith in the circumstances of Obama's birth.  

Daredevil

Fascinating news from neurology - the woman without fear:

Spiders, snakes? Brain-damaged woman knows no fear

NEW YORK – Meet SM, a 44-year-old woman who literally knows no fear.

She's not afraid to handle snakes. She's not afraid of the "The Blair Witch Project," "The Shining," or "Arachnophobia." When she visited a haunted house, it was a monster who was afraid of her.

SM isn't some cold-blooded psychopath or a hero with a tight rein on her emotions. She's an ordinary mother of three with a specific psychological impairment, the result of a very rare genetic disease that damaged a brain structure called the amygdala (uh-MIG'-duh-luh).

Her case shows that the amygdala plays a key role in making people feel afraid in threatening situations, researchers say.

Her life history also shows that living without fear can be dangerous, they said.

Well, sort of - here we go:

She apparently hasn't felt fear as an adult, not even 15 years ago in an incident described by the researchers. A man jumped up from a park bench, pressed a knife to her throat and hissed, "I'm going to cut you."

SM, who heard a church choir practicing in the distance, looked coolly at him and replied, "If you're going to kill me, you're going to have to go through my God's angels first."

The man suddenly let her go. She didn't run home. She walked.

"Her lack of fear may have freaked the guy out," Feinstein said.

But it also got her into that situation in the first place, he noted. SM had willingly approached the man when he asked her to, even though it was late at night and she was alone, and even though she thought he looked "drugged out."

SM has also walked into other dangerous situations because of her lack of fear, and all in all, it's remarkable she's still alive, Feinstein said.

I am hazy as to just what they mean by "fear", as contrasted with judgment and experience.  For example, I don't quake in terror at the prospect of crossing a busy street - it is obviously dangerous, but my years of experience in simultaneously walking and chewing gum have equipped me to deal with it.  Similarly, when I was a young man linving in the Greatest City in the World, I knew certain areas and certain behaviors were high-risk; I didn't tremble in terror at the thought of entering Central Park at midnight, but I rarely entered it, either.

I would think that anyone with an intellectual (as opposed to visceral) appreciation of the downside in approaching a drugged-out strager and having one's throat slashed would modify their behavior appropriately, fear or not.  But I'm afraid I am not an expert on this.

I do like this study:

In another experiment, published in 1995, she was blasted with a loud horn every time she saw a blue-colored square appear on a screen. Despite the repeated blasting horn, she never developed the fear an ordinary person would feel when seeing the blue square.

Well - if the horn bothered her, one might expect she pretty quickly developed an "Oh, bother, here we go again" response, which would relate to her ability to detect patterns and evaluate potential hazards and annoyances (such as loud horns or knife-wielding druggies).  But I would guess that "Oh, brother" does not need to show up as fear.

 

The Health Care Mandate - Waiting For The Shoe To Drop In Florida

The Times braces its readership for the next blow to ObamaCare and the controversial mandate:

Judge Hints He May Rule Against Health Law
By KEVIN SACK

PENSACOLA, Fla. — A federal judge asserted on Thursday that it would be “a giant leap” for the Supreme Court to accept the Obama administration’s defense of a central provision of the new health care law, suggesting he may become the second judge to strike it down as unconstitutional.

In a three-hour hearing, the judge, Roger Vinson of Federal District Court, said the law’s requirement that most Americans obtain insurance, a provision that takes effect in 2014, would constitute “a giant expansion” of the court’s traditional application of the Commerce Clause of the Constitution.

“People have always exercised the freedom to choose whether to buy or not buy a commercial product,” the judge said, noting that he had been uninsured and paid out of pocket when his first son was born.

They duly note that Judge Vinson is a Reagan appointee.

I do like this compelling government argument:

Ian H. Gershengorn, a deputy assistant attorney general who is defending the law, told Judge Vinson that the health care market was unique because getting sick was both unpredictable and potentially bankrupting. The economic consequences of not having insurance — including cost-shifting to others — justify its regulation by Congress, he said.

Uh huh.  Which is why we have a Federal mandate obliging the purchase of fire insurance, since losing one's home can be financially devastating and result in cost-shifting.  Oh, wait - you mean we don't?  Whatever.  Maybe I misunderstood the word "unique". 

But let's soldier on - having a heart atack can be unpredictable, financially devastating (not to mention fatal), and can result in cost shifting.  Hence the Federal mandate for eating vegetabes and exercising regularly.  Similarly, getting AIDS by way of unprotected sex can be unpredictable and devastating, which explains the Federal mandate for condoms.  OK, I can quit anytime...

Well.  Since lightning already struck in Virginia, thereby shifting the range of the comprehensible and respectable, I will be surprised if this judge does not stike down the mandate.  Here is what seems to be up for grabs:

Judge Vinson, a senior judge appointed by President Ronald Reagan, has seemed somewhat more receptive than Judge Hudson to the states’ argument that the entire health care law should fall if the insurance mandate is unconstitutional. He said the act was analogous to a watch with interlocking and interdependent wheels.

“It’s also been compared to a Rube Goldberg invention,” he remarked.

Judge Vinson said he would rule “as quickly as possible.”

In kinda sorta doesn't matter what this judge decides, since eventually the Supreme Court will take this up.  However, the wider the boundaries drawn by the various appeals court the greater the maneuvering room for the Supremes.

Kids These Days

Kids these days - here are stories about two Philly-area college footballers players who have saved lives on the side and a coach who deserves some credit.

First at wide receiver and in the outfield, Matt Szczur:

Villanova’s Matt Szczur has had so much to do this year — play football and baseball, provide bone marrow to a toddler with juvenile leukemia, keep up with his schoolwork — that he sometimes wishes he had a duplicate Matt Szczur to give him a hand.

Szczur, a wide receiver, likes to do it all, but he will have to make a hard choice after he plays in the Senior Bowl next month. Szczur is also a baseball player who was drafted in the fifth round last year by the Chicago Cubs. If he commits to play only baseball by Feb. 10, in time for spring training, he will receive a $500,000 bonus. That means he would miss the N.F.L.’s scouting combine, which begins Feb. 23.

“I’d rather see him play baseball,” his father, Marc, said this week, “but I just want him to be happy.”

Let's cut to the kid:

Szczur, a senior from Erma, N.J., gained attention late in the 2009 season after the National Marrow Donor Program determined that his bone marrow was a match for a 13-month-old girl with juvenile leukemia.

Wildcats players have been tested since 1992 at the urging of Coach Andy Talley.

For years Coach Talley has been talking up bone marrow donation to anyone who will listen; he is not credited, but I suspect he had an influence on this next story:

Last week, Warren Sallach, a road maintenance worker from Brenham, Tex., called Matt Hoffman, a senior defensive end at Rowan University in Glassboro, N.J. They had never met, and Sallach froze when Hoffman answered.

“You don’t know what to say the first time you talk to somebody that saved your life,” Sallach said. “Just a thank you is nowhere near enough.”

In November 2009, Sallach received a blood stem cell transplant to treat non-Hodgkin’s lymphoma in San Antonio. He has since learned that the anonymous donor was Hoffman, who gave up the final football game of his junior season to undergo the donation procedure in Philadelphia.

To protect the confidentiality of recipients and donors, the National Marrow Donor Program requires them to remain anonymous to one another for at least a year after a transplant. They can make contact only if both parties consent.

Last week, Sallach, 59, and Hoffman, 21, spoke by phone for an hour, and on Thursday, they will meet for the first time in Salem, Va., at the presentation of the Gagliardi Trophy, Division III’s equivalent to the Heisman. Hoffman is one of the four finalists.

The two families are anticipating hugs and tears and smiles.

“Even though we didn’t know each other, it’s an intimate situation to donate your cells to someone who needs them,” Hoffman said. “It’s going to be special to meet him and his family.”

The Rowan football team led an on-campus drive in the spring of 2009 to enroll students in the Be the Match registry for the donor program, and Hoffman was one of the 371 people who signed up.

After he was identified as a match for Sallach, Hoffman received shots for five consecutive days before the transplant to raise his blood stem cell count. The medication enlarged his spleen, which put him at risk of a rupture if he returned to football too quickly. So he sat out of Rowan’s final game.

“I knew that years from now I wouldn’t really care about maybe missing out on a couple of sacks,” Hoffman said.

And back in Texas:

Sallach had another round of chemotherapy before the transplant. He lost 50 pounds over the six months after the treatment and was tired and weak. But he slowly regained weight, the blood stem cells began to create new marrow, and the lymphoma went into remission once again.

Sallach, who said his most recent tests showed no sign of lymphoma, was well enough to go hunting recently with his 9-year-old son, Travis, who shot an 11-point buck. On New Year’s Day, Sallach and his wife, Becky, will celebrate their 10th wedding anniversary.

“It’s the little things that you realize we wouldn’t have been able to experience had Matt not come along,” Becky Sallach said. “How do you put into words the sacrifice that he made to save a complete stranger’s life?”

ERRATA:  I want to see Matt Szczur and Auburn receiver Philip Lutzenkirchen in the same game just to listen to the announcers scuffle with the program notes.

Unhappy Is The Land That Needs A Hero

The NY Times tells us about a heroic Sunni policeman in Iraq:

In Seconds Before Blast, the Making of a Hero
By JACK HEALY

BALAD RUZ, Iraq — As the suicide bomber clutched the detonator to his explosive belt, preparing to spray fire and shrapnel into a religious procession here, an Iraqi police officer named Bilal Ali Muhammad faced a choice between his own life and something larger.

If he ran and took cover, Mr. Muhammad, 31, had a chance to save himself, to continue supporting his widowed mother, to help put his younger brother through college and to watch his three young daughters grow up.

Instead, the officer — a Sunni Muslim — threw himself onto the bomber, blunting the explosion’s impact on the Shiite worshipers.

“He gave his soul to the country,” said his mother, Alaahin Hassan, holding two of his daughters in her lap as dozens of black-veiled women filled her living room this week with ritualized wails of grief. “He believed in God. That made him great.”

In a country fractured by sect and ethnicity, from villages like this all the way to the government that is finally forming in Baghdad, Mr. Muhammad’s last act was a burst of heroism and humanity set against the viciousness that still stalks Iraq.

This was the situation:

On Monday afternoon, Mr. Muhammad was guarding the edge of an annual religious celebration of Ashura as Shiites waved green and black banners and beat drums to commemorate the killing of one of their sect’s foundational members in A.D. 680. The ceremonies have been ripe targets for Sunni insurgents, and Iraq’s leaders have deployed swarms of security forces this year to guard against attacks.

At 2:30 p.m., according to witnesses and police officials, Mr. Muhammad spotted a suspicious man approaching the crowd, his hand wedged into his pocket.

Mr. Muhammad, a police officer for five years, stopped the man and asked him, What do you have in your pocket? The man replied, It’s none of your business.

Pulling open the man’s jacket, Mr. Muhammad found an explosive belt strapped to his chest. Whether from instinct or training, or sheer lack of any other options, he acted in that instant.

Shouting warnings to the crowd, he wrapped his arms around the bomber. As both men tumbled to the dirt, the explosion ripped through their bodies and raked the street, scarring the white walls of a schoolyard.

A woman and her granddaughter sitting nearby were killed and a dozen others were wounded. But the police said the death toll would have been drastically higher had Mr. Muhammad not thrown himself onto the bomber.

“He’s a hero,” said Mr. Muhammad’s uncle, Hamza Hassan, who spent the day welcoming well-wishers to a funeral tent outside Mr. Muhammad’s family home here in this farming town near the Iranian border. “The only choice was to become a martyr.”

The man is a hero, but the government is on a bit of a tricky line - glorifying martyrdom risks glorifying, or at least legitimizing, the suicide bombers who also are prepared to die for their cause.

And a glimpse of the possible aftermath:

In nearby Baquba, inside a neat house by the trash-strewn banks of a languid stream, the family of Naseem Sabah Ismail is well acquainted with the accolades of heroics. In January 2008, Mr. Ismail, 23, threw himself onto an old man trying to set off a suicide vest at an Ashura procession. “He knew he was going to die,” said his father, Sabah Ismail. “He went to him anyway. He held onto him.”

The government provided a pension to the officer’s family and a few thousand dollars for burial in the Shiite cemetery in Najaf. But nearly three years later, the family said their sacrifice had largely been forgotten.

After his death, local officials made effusive speeches and private pledges vowing to promote Mr. Ismail to first lieutenant and build a statue in his honor. The statue was never built, and the promotion never came.

“The government only gave us promises,” said his mother, Sabriya Abed. “But it was all lies.”

 

Out With The Old, In With The Older

The omnibus spending bill dies, the dreaded Bush tax cuts live.

Not a bad starting point for the new Congress.

Blazing Presidents

Life imitates art as Obama finds his inner Cleavon Little:

Dem rep: Obama told us if the tax deal doesn’t pass, it’s the end of his presidency

Promises, promises.

 

Let's Do The Time Warp Again

Obama is having a flashback to his college days in the 80's when the nuclear freeze was the topic du jour.  His 80's flashback has induced a 60's flashback in Glenn Reynolds, who is having more fun than should be legal.

News You Really Won't Want To Use

Per the Times, if you exercise vigorously before breakfast you will train your body to hoover up excess fat cells rather than going for the easy carbs that are circulating in the bloodstream after a meal.

Elsewhere I have read that early morning exercise is a great way to induce a heart attack, so if this holiday diet plan results in an Epic Fail, make plans to have your estate sue the Times.

(Note to Republicans - drop by Dec 31 and avoid the estate tax, not to mention those tedious New Year's Eve parties; we know that earnest Dems will want to pay their fair share regardless of the current deplorable Bush-era law.)

ERRATA:  Hmm:

And though it has been suggested that morning exercise may put some people at higher risk for heart attack, further research indicates that there is simply a generalized increased risk of heart attacks in the morning. If your schedule favors an early workout, emphasize stretching and a good warm-up to insure that your body is ready for action.

There's one way to find out!  And we all owe God a death.

The Financial Crisis

The four Republicans on the panel investigating the financial collapse of 2008 are issuing their own interim "primer" prior to the final report in January.  Keith Hennessey, one of the four dissidents, is hosting the primer at his blog.

Heidi Moore of the NY Times Deal Book tries to summarize the controversy and the report:

Here’s the problem: The Democrats on the commission blame Wall Street risk-taking for causing the crisis. A cadre of Republicans on the panel — the vice chairman, Bill Thomas, and three commissioners, Keith Hennessey, Douglas Holtz-Eakin and Peter J. Wallison – don’t want to blame Wall Street for packaging subprime mortgages, as the Democrats on the commission do. In a 13-page document to be released on Wednesday, the Republicans want to lay the fault at the feet of Fannie Mae and Freddie Mac, the Democratic darlings that underwrote subprime mortgages.

...

Of course, there’s a middle path where both parties are right – and both parties are wrong.

It’s true that lenders with loose standards – including Fannie Mae and Freddie Mac – underwrote millions of bad mortgages with little documentation and less regard for risk.

But what really propelled the crisis to bailout proportions was not the housing crisis alone or the government-sponsored enterprises alone. As the authors point out, it was a group effort.

Ms. Moore eventually lapses into incoherence:

The government-sponsored enterprises fueled bad lending but it was the investment banks’ packaging of the same bad mortgages over and over again into toxic collateralized debt obligation bundles that created billions of dollars in losses. If every mortgage could only be securitized once, the losses would have been bad but not horrible. But because fancy Wall Street chicanery reproduced those mortgages and mirrored them in bundles of increasing size, the investment banks took far bigger losses than they would have otherwise. As those losses grew, the banks struggled to find enough cash to stay well capitalized. Investors grew scared that the banks would not be able to, and the government had to step in to bolster the banks’ capital with the Troubled Asset Relief Program and other bailout programs.

Huh?  If she means that there were, for example, derivatives equal to twice times a home's value tied to the value of a specific home, then she needs to account for the winners as well as the losers.  When the house falls in value by, for example, $100,000 the mortgage holder and two derivative holders each lose $100,000, for total losses of $300,000.  But two other derivative holders (on the other side of the trades) make $100,000 each, for gains of $200,000.  The net effect of the side-bet derivatives is zero (other than never-to-be-overlooked fees and bid/offer margins).  The net loss to all participants is $100,000, which is the value lost in the real asset, the house.

Now I'll grant that if the market moves were sufficiently large and surprising then some losing market players could be driven into bankruptcy while the winners would be ruling the world.  But I don't have the impression that there was some group of out-sized winners.  I think the direct losses on the underlying mortgages were large enough to explain the financial debacle.  As I have noted before, AIG lost almost as much in direct investments in mortgage-backed securities through its boring securities lending activity as it did through its exotic use of derivatives.  Yes, people lost money the old-fashioned way, too.

ALL THAT SAID:  The Fed's easy money policy does not get belabored, or even mentioned, in this report.  Nor is the spectre of a global savings glut driving down yields given any shrift.

BACK IN THE DAY: I blamed Greenspan's easy money and the moral hazard reinforced by the 1998 rescue of Long Term Capital for the eventual debacle:

By demonstrating that a "never heard of 'em" hedge fund was too big to fail, Greenspan strongly reinforced the notion that banks and investment banks could count on a Fed lifeline.  Lightly regulated and heavily supported - where was that going to lead?

Yeah, I'm an ex post savant.

INVINCIBLE IRRELEVANCE:  Paul Krugman doesn't need to read the report to know its stupid, but I especially like this:

Yep. It was all Fannie and Freddie, which somehow managed to cause housing bubbles in Ireland, Iceland, Latvia, and Spain as well as the United States; and the repo market had nothing to do with it.

Update: Barry Ritholtz has a chart of the global housing bubble.

I am not the best guy to take the other side since I think Fed easy money played an obvious role.  I also happen to think that a workable definition of "bank" would be "a financial intermediary designed to take deposits and over-lend to real estate speculators and developers."  I mean, we had the REIT debacle of the 70's, the S&L debacle of the 80's, and - imagine! - the housing debacle of the 00's.  (We caught a break in the 90's due to the tech bubble - go figure.) 

So now Krugman thinks that Henessey et al are nowhere unless they can explain the housing boom in Ireland and Latvia.  For heaven's sake - without looking it up, I will say that relative to the US market, the Irish housing market is somewhere between tiny and miniscule, and the Latvian market is smaller.  And having looked it up, I see that the Irish housing stock is estimated to be worth about 412 billion Euros.  By way of contrast, the Fed values the US housing stock at $16 trillion, backing $10 trillion in mortgage debt.  I will score that ratio of roughly 30-1 as "tiny", which suggests Latvia is miniscule.

However, an explanation of the Irish boom is here, and it seems to overlook both FNMA and the Fed:

The summary is this: the country is in the aftermath of its greatest economic boom since the first hollowed out log arrived in-country about 12 millennia ago. House prices rose accordingly. An annual immigration of up to 70,000 mostly affluent immigrants to Ireland boosted prices, as did two income families. Dublin sprawled outward and anyplace within an hour's drive experienced significant inflation. The rest of nation followed the upward path.

Since 1995, house prices trebled or even quintupled. In Dublin, many rose by even greater multiples.

I would guess the adoption of the Euro and migration from Eastern Europe were more important that FNMA in tiny Ireland.  So what?  Fannie and Freddie were the dominant players in far and away the largest mortgage market in the world and almost certainly distorted that market.

Could we have had a housing bubble in the US if Fannie and Freddie had run amuck but the Fed had raised interest rates and been more diligent about loan standards?  Probably not.  Or, could we have avoided a bubble if the Fed had done what they did bit Fannie and Freddie were not running amuck?  Well, probably.

A fire requires oxygen, fuel and heat.  Assigning responsibility to just one of those three misses the point.  As noted, Hennessey at al don't highlight the Fed's role in the housing debacle, but that doesn't mean that Fannie and Freddie played no role at all.

ON THE TOPIC OF HOUSING AND KRUGMAN'S CREDIBILITY:  In several of his columns on the housing market Krugman put forth a conceptual error that would not be tolerated in a freshman economics course.

His gist: we are a big country and in some places, a surge in demand for housing simply calls forth new supply.  Fair enough.  His howler is this:

In the rest of the country — what I once dubbed Flatland — permissive zoning and abundant land make it easy to increase the housing supply, a situation that prevented big price increases and therefore prevented a serious bubble.

Since Krugman's model recognized price bubbles but not supply bubbles, he was left grasping for explanations as to the problem in Atlanta (where a lot of building had occurred in the good times and now prices had collapsed in the bad times). 

In a simpler view, the supply curve for hosuing is always kinked; a surge in demand will call forth new supply, but a reduction in demand does not prompt people to bulldoze homes.  Consequently, a "bubble" in an area where building is easy will show lots of construction during the good times without much increase in prices.  When the boom ends and demand unexpectedly recedes, unsold homes will cause words like "glut" to be employed to explan the crash in prices.

Simple and obvious, but too complicated for a sometime-economist, full-time polemicist.

SNARK ASIDE FOR A MOMENT:  Normally Krugman apologists are like streetcars - there will be another one along in a minute.  But can anyone actally defend his "Flatland/Zoned Zone" argument and his complete blindness to supply bubbles followed by price collapses?

Glimmer Man

There is a glimmer of hope for Obama in the latest WaPo poll.

After the Democratic washout of 2010 his approval rating is still at 49%. More intriguingly, Question 4 is "Who do you trust to do a better job coping with the nation's problems over the next few years?".  Obama still leads "The Republicans" by 43% to 38%.

By way of contrast, after the Dem washout of 1994, Clinton trailed "The Republicans" by 34% to 49%.

And after the Republican wahout in 2006 Bush (who was not eligible for re-election) trailed "The Democrats" by 31% to 57%.

Obama may have an unshakeable base, or he may really be viewed as separate from the Pelosi-Reid regime.  But these poll numbers give him a better starting point for 2012 than folks might have expected after the recent Dem drubbing.

 

Income Inequality And Volatility

Tyler Cowen is fascinating on income inequality and the benefits of betting against the Washington Capitals.

I have a stray thought which thies nicely to his major premise, summarized here:

Another root cause of growing inequality is that the modern world, by so limiting our downside risk, makes extreme risk-taking all too comfortable and easy.

He focuses on financial institutions that are too big to fail, but my notion is that New York City probably has more non-starving actors and actresses then ever; their family and friends can keep them aflot while they bus tables and wait for that one big break, whereas in a poorer time they would have been exhorted to get real jobs.

Well - I can't imagine finding the dat to verify that, and it is not as if starving artists are new to this era.

Ross Douthat and Arnold Kling have thoughts.

Just Hire The Genius Regulators... Ooops!

The NY Times reviews two books on the early Obama years.  One covers the financial crash; I am sure the actual analysis is much more nuanced, but this head-bangingly over-simplified description of efficient market theory is refuted within the Times own story:

In fact, the main reason the financial crisis of 2008 occurred, the journalist Michael Hirsh argues in his provocative new book, “Capital Offense,” is that “the people in charge of our economy, otherwise intelligent and capable men like Greenspan, Rubin and Summers — and later Hank Paulson and Tim Geithner — permitted themselves to believe, in the face of a rising tide of contrary evidence, that markets are for the most part efficient and work well on their own.”

...

In these pages Mr. Hirsh looks at how the ideas of John Maynard Keynes — predicated upon the belief that markets do not automatically self-correct, and that government intervention is sometimes necessary — were embraced in Washington in the wake of the Great Depression. He chronicles how the opposing ideas of Milton Friedman — who believed that free markets functioned efficiently without bureaucratic interference — gained ascendancy with the election of Ronald Reagan and the abrupt collapse of the Soviet Union. And he charts how the deregulation movement accelerated during the administrations of Bill Clinton and George W. Bush, arguing that it created an “indomitable zeitgeist” that would set the stage for disaster.

Regarding the differences between advocates of government intervention and those who contend that free markets operate better on their own, Mr. Hirsh says that such arguments, boiled down, are “largely about the issue of human rationality versus irrationality. One side holds that markets are basically rational and efficient on their own — that they are an optimal way for societies to allocate resources — and governments only interfere. The other side holds that markets and the people who make them up often behave irrationally, inefficiently and unjustly, and therefore the best course is to keep government involved at all times.”

Right - we should keep government involved because unlike humans, our Martian overlords are not subject to emotion, folly, political manipulation, regulatory capture, or any of the other problems vexing human institutions (that's why we found so many WMDs in Saddam's Iraq and Afghanistan is going swimmingly).

Or, if we have to settle for mere humans as regulators, at least we can hire the best and brightest.  Oh, wait!  Back to the Times lead:

A now infamous 1999 Time magazine cover featured Alan Greenspan (then chairman of the Federal Reserve), Robert E. Rubin (then Treasury Secretary) and Lawrence H. Summers (then deputy Treasury secretary) as “The Committee to Save the World.” The three men, the magazine declared, had steered America through the perilous shoals of highly volatile world markets. The United States economy remained “astonishingly robust” and, by protecting American growth, the three had made “investors deliriously, perhaps delusionally, happy in the process.”

A decade later, in the wake of America’s 2008 fiscal meltdown, the thinking of Time’s “Three Marketeers” and their colleagues in Washington and on Wall Street would be cited as a major cause of that crisis. Mr. Greenspan has been chastised for keeping interest rates too low for too long, for failing to see the danger of subprime mortgages and falling house prices, and for neglecting to use the Fed’s regulatory clout to restrain the excesses in the market. Mr. Rubin has been taken to task for promoting the repeal of the Glass-Steagall Act, which was passed during the Great Depression and prohibited commercial banks from engaging in the investment business. And Mr. Summers has been criticized for failing to foresee the risks derivatives posed and for his reluctance to regulate these exotic financial instruments.

So let's see - we had the geniuses in charge and it all went south anyway?  So therefore the answer is to engage better geniuses?  Hmm.

A far more fruitful approach would be to examine flaws and distrotions in the market.  Pollution is famously modeled as a failure of property rights and a 'tragedy of the commons' - for the longest time, no one had or exerted ownership rights over air or rivers, so pollution was 'free" to individual pollutants.

Or, if the housing market is at issue, one might ask whether government-sponsored FNMA crushed the market for conventional mortgages by hoovering up every conforming mortgage in sight, thereby pushing lenders into riskier markets such as sub-prime.  Since FNMA was a very well-bankrolled market participant with incentives that went beyond mere profit-maximizing, their behavior could have easily distorted the market.

And of course the whole "too big to fail" investment strategy only made sense because there was a government entity prepared to prevent failure.

Cliff Lee To The Phillies

Yike. I can take a break from worrying about the Jets and take a moment to worry about the Yankees:

The Philadelphia Phillies agreed to terms late Monday night with Lee, the prized left-hander who pitched for them in the 2009 World Series, according to a baseball official told of the deal.

...In returning to Philadelphia, Lee will join a staggering rotation that could rival some of the greatest in history. Lee, a former Cy Young Award winner, will join the two-time winner Roy Halladay, along with Roy Oswalt and Cole Hamels.

Halladay Osawalt and Hamels were supposed to stifle the Giants and couldn't, but still.

This immediately takes any pressure off the Mets to even pretend to compete in the National League East this year.  And obviously, the Yankees have to get to the Series before the Fab Four becomes an issue.  Still, the Best Team Money Can Buy was meant to leave Cliff Lee under my Christmas tree, so I am off to pout.

The Hits Keep Coming - ObamaCare Mandate Loses In Virginia Court

Folks who thought last week was Obama's worst yet better keep their scorecards handy:

Health Care Law Ruled Unconstitutional
By KEVIN SACK

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

In a 42-page opinion issued in Richmond, Va., Judge Hudson wrote that the law’s central requirement that most Americans obtain health insurance exceeds the regulatory authority granted to Congress under the Commerce Clause of the Constitution. The insurance mandate is central to the law’s mission of covering more than 30 million uninsured because insurers argue that only by requiring healthy people to have policies can they afford to treat those with expensive chronic conditions.

The funniest reaction I have noticed is from Josh Marshall:

A year ago, no one took seriously the idea that a federal health care mandate was unconstitutional.

No one?  It's not exactly one year to the day, but on Dec 9, 2009 the Heritage Foundation hosted an event with just that topic:

Today, The Heritage Foundation will host an event with Sen. Orrin Hatch (R-UT) discussing the constitutionality of the personal mandate to buy heath insurance. Also, Heritage will be releasing a paper authored by Randy Barnett, Nathan Stewart and Todd Gaziano arguing that this mandate is both unprecedented and unconstitutional. No where in the constitution is Congress granted the authority to mandate that individuals enter into a contract with a private party.

I am guessing they took that argument seriously, since they reprised it the following March and apparently persuaded many states Attorneys General, and now a Federal judge. Oh, well - I am sure no one Josh Marshall knows likes Sarah Palin, either, but I wouldn't take that as the final word on her political appeal.

However, the Times swims in the same water:

But the ruling was nonetheless striking given that only nine months ago, prominent law professors were dismissing the constitutional claims as just north of frivolous.

Oddly, the actual Times debate from nine months ago included experts on both sides of the question, including the aforementioned Randty Barnett.

The next sentence from Dr. Marshall contains an obvious brain-o:

And the idea that buying health care coverage does not amount to "economic activity" seems preposterous on its face.

Well, yes, but so what?  Buying health insurance surely is an economic activity (although it is customarily regulated by the states.)  The question at hand was whether not buying health insurance was an economic activity subject to Congressional oversight.

OK, enough wth the cheap shots.  ObamaCare's defenders needed to sweep the board; the Republicans only needed one victory.  From the WaPo:

It is one of 25 legal challenges to the federal law wending their way through the federal courts across the country. In two other lawsuits, judges sitting in Michigan and Lynchburg, Va., have found that the same provision of the law passed legal muster. A third judge in Florida is also weighing constitutionality of the individual mandate in a suit jointly filed by 20 states.

The statute's constitutionality will ultimately be determined by the U.S. Supreme Court.

The opinion is available at How Appealing.  Via Glenn, we also have a round-up at How Appealing and thoughts from Heritage.

WORDS TO LIVE BY FROM THE OPINION:

"Salutory goals and creative drafting have never been sufficient to offset an absence of enumerated powers".

 

Obama's Problem - He's Trying To Lead A Bunch Of Racist Whites

The NY Times hands space to Ishmael Reed, who recycles an argument from 2008 - Obama can't afford to show anger:

Progressives have been urging the president to “man up” in the face of the Republicans. Some want him to be like John Wayne. On horseback. Slapping people left and right.

One progressive commentator played an excerpt from a Harry Truman speech during which Truman screamed about the Republican Party to great applause. He recommended this style to Mr. Obama. If President Obama behaved that way, he’d be dismissed as an angry black militant with a deep hatred of white people. His grade would go from a B- to a D.

Groan.  The Big Tent Dem pounds this from the left, and Donald Douglas joins in from the right.

I have three stray thoughts:

1.  People loved "No Drama Obama" and his calm Presidetial temperment back in 2008.  Now its a problem?

2.  Is Mr. Reed prepared to argue that black politicians just shouldn't be elected to high office until we have deported or re-educated all the whites?  I don't think so.

3.  Dum de dum dum - I know they aren't high on the lefty Watch List, but check out a few of the Clint Eastwood classics and see whether a man can be tough and forceful without a lot of shouting.  Or check out Bill Clinton's press conference on Friday to see the difference between Presidential and peevish.  I didn't hear Clinton shouting, but he seemed pretty persuasive.

Or, touring the world leaders, I have seen video and photos of Vladimir Putin doing all sorts of things, but not shouting.  Anyone care to question his toughness?  (Chuck Norris questioned Putin's toughness and now Norris is talking Russian out of his... never mind).

In Our Ongoing Pursuit Of Silver Linings...

Dana Milbank merits a nod for the Silver Lining du Jour - from his vantage point on the left he has found the bright side to what he thinks is Obama recent spine implant:

For the first time in my adult lifetime, I am really proud of President Obama.

I'm not particularly proud of the tax-cut deal he and the Republicans negotiated. But I'm proud that he has finally stood firm against the likes of Peter DeFazio [described as "a backbencher from Oregon and one of the hard-core liberals in the House].

And this is great news for libs because...

Liberals, if they can see beyond their pique, should realize that the emergence of Obama's forceful leadership could be good for them. This time, he stood against his Democratic colleagues, but there's reason to hope that he'll show his newly discovered spine to the Republicans the next time.

One White House official told me that Obama will build a "shifting set of coalitions, issue by issue" over the next two years. If so, and if Obama will no longer allow those in the Capitol to run his presidency, he'll have a strong couple of years.

Well, OK.

FWIW, David Brooks, covert White House press flack, told us that Obama would be a "network" liberal with shifting alliances.  None dare call it triangulation!

IN MY CRYSTAL BALL:  Will Obama have "a strong couple of years"?  I don't see Obama having a strong couple of anything except maybe a cup of coffee.  My guess - the Republican House will be happy to pass center-right legislation.  The Democratic Senate will then spare Obama the embarrassment of a veto by filibustering it, with vulnerable Senate Dems crossing the aisle and squeaking in support of the bill.

Of course, Obama will have to get something passed, or the implicit message to voters will be "Help!  I need more Republican Senators!"  But Republicans shouldn't lose ground if Dems switch to becoming the Party of No.

Running On Empty

I like the original Times headline on Chinese Liu Xiabo's Nobel ceremony:

Liu Nobel Is Awarded to Empty Chair 

That is in keeping with last year's decision to award the Peace Prize to an empty suit.

ERRATA:  The title has since been changed in the text but survives in the HTML code and the Times search function.  Or see McClatchy.

WORDS FROM THE WISE:

Guests at the ceremony in Oslo’s City Hall listened instead to a recitation of his defiant yet gentle statement to a Chinese court before his incarceration last year. “I have no enemies and no hatred,” Mr. Liu said in “I Have No Enemies: My Final Statement to the Court,” read aloud by the Norwegian actress Liv Ullmann. “Hatred can rot away at a person’s intelligence and conscience.”

 

Meet Joe Biden

They told Glenn that if he voted for McCain we'd have a Vice President with outsized influence...

The Times tells us abut the growing role of Joe Biden:

As the Ground Shifts, Biden Plays a Bigger Role

As previously reported, Biden took the lead for the White House and negotiating and selling the tax cut compromise.

Now, at the halfway point of a first term in which Mr. Obama has mostly relied on the counsel of a tightly closed inner circle, Mr. Biden is taking a more prominent and influential role. With the departure of Rahm Emanuel as chief of staff and Mr. Obama’s need to negotiate with Congressional Republicans if he is to advance his agenda, the president is increasingly using Mr. Biden as a multipurpose emissary while continuing to seek his counsel behind the scenes.

Mr. Biden not only played an important role in negotiating the tax deal with Republicans and trying to sell it to Democrats, but also was one of the people in the West Wing who urged Mr. Obama to try to find a compromise on the issue in the first place, aides said.

...Or, as Mr. Weiner put it in an interview, “Biden brings everything that Rahm Emanuel brings, but the major difference is everyone likes Joe Biden.”

Last February David Brooks told us that Joe had been given the lead on Iraq, and on overseeing shovel-ready stimulus spending (aka "union ready projects".  Biden took the lead on the minimalist approach to Afghanistan, which is mentioned today.  Also mentioned among his foreign policy endeavors:

Mr. Biden took the lead in nudging Iraq’s leaders into forming a new coalition government. He has been given the task of navigating growing tensions in Lebanon. And while Mr. Obama rejected Mr. Biden’s recommendation of a narrowly focused counterterrorism strategy for Afghanistan in favor of a more expansive counterinsurgency approach, the halting pace of progress in Afghanistan has left some administration officials wondering if the president might not eventually come around to Mr. Biden’s way of thinking.

There are still times when Mr. Biden has been left out of Mr. Obama’s decision-making, most notably in March, after his fence-mending trip was ruined by an Israeli announcement of new housing units for Jews in East Jerusalem. Mr. Biden condemned the move as undermining the peace process.

But while Air Force Two was flying back to Washington, Secretary of State Hillary Rodham Clinton, after a talk with Mr. Obama, called Prime Minister Benjamin Netanyahu of Israel and went much further than Mr. Biden had, leaving the appearance that Mr. Obama did not think the vice president had been forceful enough.

Those housing freeze negotiations have now collapsed, so maybe Biden really is a genius (or at least, smarter than the geniuses in the White House.)

More on fo-po - Biden has the ball (or at least, is offensive coordinator) on New START ratification:

...Mr. Biden used the opportunity to defend of the New Start treaty, enumerating the reasons he believed Republicans should vote for it in the lame-duck session.

He was executing his latest assignment from his boss. On Nov. 18, Mr. Biden convened a meeting to enlist support for the treaty from foreign policy luminaries in the Roosevelt Room of the White House. Mr. Obama stopped by, and James A. Baker III, the former secretary of state, gestured toward him.

“Wait a minute, Mr. President,” Mr. Baker said, according to a White House aide who was in the room. “We need to know who our point of contact is on this. Who do we call?”

Mr. Obama looked at Mr. Baker. And then he pointed to Mr. Biden.

I think that leaves Obama in charge of hoops and office parties.

NEVER MOVE ON:  Times coverage takes us back nearly twenty years to appraise Biden's value as an Ambassador to DC:

While Mr. Biden has credibility with the Democratic left, his long record in the Senate has enough moments in which he proved willing to work with or give ground to Republicans that they view him as less dogmatic than many other administration officials.

Mr. Biden alienated some of the left when he led the Senate Judiciary Committee’s hearings for Clarence Thomas’s nomination to the Supreme Court in 1991. While he voted against confirmation, Mr. Biden made decisions during the hearings, including not allowing testimony about pornography rentals, that many critics believed helped Justice Thomas weather the confirmation process.

The Chinese Nobel Laureate had some relevant thoughts:

Guests at the ceremony in Oslo’s City Hall listened instead to a recitation of his defiant yet gentle statement to a Chinese court before his incarceration last year. “I have no enemies and no hatred,” Mr. Liu said in “I Have No Enemies: My Final Statement to the Court,” read aloud by the Norwegian actress Liv Ullmann. “Hatred can rot away at a person’s intelligence and conscience.”

Does he have internet access?  It's interesting that he reached that concluson without even reading the Daily Kos or the HuffPo.