Earlier I linked to an IER critique of the CBO’s scoring of Waxman-Markey. Bob Roddis sends me this Yglesias discussion of the super bargain TARP plan. You thought taxpayers were out $700 billion? Nah, don’t worry; the CBO is predicting only $159 billion in total losses on the plan, of which a mere $69 billion* is due to financial sector losses.
* It’s a nice comment on the times that I actually typed the phrase “mere $69 billion.”
Tyler Cowen approvingly quotes Matt Yglesias on the dangers of starting a carbon tariff war:
The bottom line about the international aspects of climate change is that the very idea of an effective response assumes the existence of a generally cooperative international environment. It doesn’t assume the non-existence of the odd “rogue” state here or there, but it assumes the absence of any kind of serious great power rivalries. Not just China, but also India and probably Russia, Brazil, and Indonesia as well are going to need to cooperate in a serious way with the OECD nations on this. And I just don’t see how you’re going to get where you need to get through coercion.
After quoting Yglesias, Tyler concludes:
I’ll say it again: the current version of Waxman-Markey will make things worse. Keep in mind by the time we are slapping those 2020 tariffs on China, we won’t have made much progress on emissions ourselves. How would we feel, and how would it influence our domestic politics, if the Chinese demanded we pass Waxman-Markey, while polluting at a high level themselves, or otherwise they will stop buying our Treasury securities?
Exactly, guys! How would we feel, and how would it influence our domestic politics, if Al Gore demanded we pass Waxman-Markey, while polluting at a high level himself, or otherwise armed men will throw us in jail?
Matt Yglesias is right: We don’t need coercion to deal with climate change.
In a recent post [link to be added], Robert Wenzel spelled out something that had been implicit in my views. I’ll recapitulate the argument here, and then I’ll list the BLS’ current figures so we have a convenient record later on.
For a while I’ve been warning that actual Consumer Price Index (CPI) inflation has been much higher than the official, “seasonally adjusted” numbers that the media report. For example, if actual CPI rose by 0.3 percent in May, the BLS would adjust it down to a mere 0.1 percent, and the media would dutifully say, “Prices rose 0.1 percent last month, showing deflation threat still looms.”
Now if the “seasonal adjustment” for the first six months is to push down prices below their actual rates of inflation, then by symmetry in the latter half of the year, the BLS will need to bump up the actual numbers and report higher inflation rates to the media. This is where I thought the hanky panky would come in.
In this context, Wenzel clarifies that by next year, obviously the BLS numbers for 2009 have to show the same annual rates of inflation, over the course of 2009. In other words, the “seasonal adjustments” for the year 2009 will have to cancel each other out, over the four seasons.
So in practice, when I say the BLS is going to cheat, what they will do is revise the “seasonal adjustments” from January through June 2009. For example, they will say,” Upon further review, back in May, seasonally adjusted prices actually rose by 0.2 percent. Gosh it’s too bad we told the media the lower figure of 0.1 percent at the time. Our bad.”
In this way, they can keep the upward seasonal adjustments very tame, from July through December. If the actual CPI rises, say, by 0.7 percent in August, then the BLS will report it as either a straight 0.7 (i.e. no seasonal adjusmtent) or a 0.8 percent, even though they were bumping down the numbers by bigger margins in the first half of the year. But they’re not going to want to report a 1.0 percent price hike, so they’ll contain the monthly inflation number by dumping some of it back into earlier months.
Let’s take a snapshot of the two series before the predicted hanky panky ensues:
Such a public comeuppance is only possible with the Internet. I was pretty sure Krugman was bluffing about the Arrow paper, but I don’t think I ever actually read it. Yet now anyone he cares to investigate will see Krugman was bluffing.
What’s really funny is that I’m coming to realize just how much he bluffs. Whenever he touches an area that I know–such as the economics of climate change, or the Austrian business cycle theory, or the Herbert Hoover record–it jumps out at me how unfair Krugman is to his intellectual opponents, and how (seemingly willfully) misleading his arguments are.
But as I read others in their areas of expertise, I realize Krugman bluffs there, too. Please tell me he was at least really awesome in trade (where he got his “Nobel”).
I am so glad that Glenn Greenwald has been consistent in his treatment of Bush and Obama. I loved his scathing critiques of the Constitution-chuckin’ cowboy in the White House, but I was bracing for GG to come up with excuses for Obama (as so many have done). But not Glenn:
Ever since Obama reversed himself on the question of whether to suppress the torture photos, I’ve been searching for an Obama supporter who (a) defends his decision to suppress those photos but also (b) criticized him when, two weeks earlier, he announced that he would release those photos. I haven’t found such a person yet, but I’m still looking.
When Obama originally announced he would release the photos, he was attacked on seemingly every television news show by people like Lindsey Graham, Liz Cheney and Joe Lieberman for endangering the Troops, but I don’t know of a single Democrats who joined in with those criticisms on the ground that the photos shouldn’t be released. But as soon as Obama changed his mind and embraced the Graham/Cheney/Lieberman position, up rose hordes of Obama supporters suddely insisting that those photos must be suppressed because to release them would be to endanger the Troops. I’m still searching for any pro-photo-suppression Democrats who criticized Obama when he triggered controversy by orginally announcing he would release them.
That is one of the most beautiful arguments I have ever seen in the political arena. He totally busted about 10 million people in this country. And I bet there are some of them who, if they read GG’s post, would realize that was true of them, and yet they hadn’t sensed any problem at the time. It all seemed so natural, and with Obama being picked on by that meanie Rush Limbaugh, one’s inclination would be to defend him no matter what.
Time is slipping away (busy busy busy), so let me put my finger on the single biggest mistake I think I made regarding my January 23rd call for gold to break $1000 by the summer.
First, let me give myself a break. At the time of the call, gold was about $878 (I’m just eyeballing the charts from Kitco, so I might be off a bit). Right now, gold is trading at about $942, using the same metric (London Fix).
So that means I was calling for an increase of (122/878)= about 14% over five months, which (normally) is a fairly aggressive call, especially when most “experts” were worrying about massive, 1930s-style deflation in January.
Instead of getting the 14% in five months, instead gold only went up about half that, i.e. a little more than 7%. So that was still a strong move, especially in the context of plenty of people warning of terrible deflation.
Nonetheless, I foolishly said that if gold didn’t break $1,000 by summer, then I didn’t know what I was talking about. What happened is that I really thought gold would be much higher than $1,000 by now, and so I (thought) I was building in a big cushion by only saying $1,000.
Looking back, I can reconstruct what I believe was my downfall: At the time, there were analysts and even some Congresspeople who were criticizing the banks for sitting on all of the TARP money and Fed-related bailouts. The idea was, “Why are we giving you hundreds of billions, if you’re not going to start making new loans?”
So I was confident that those excess reserves would soon be flowing into the hands of the public, and that broader monetary aggregates like M1 and M2 would be growing rapidly through the first half of 2009.
I was (of course) wrong. For some reason, I actually took the politicians seriously when they said they were going to do something to “fix” the economy (i.e. pressure banks to lend out reserves).
The other day my four-year-old was choking on some orange slices for about 2 seconds, but those were a terrifying 2 seconds. So I decided to banish my fears through knowledge, and refreshed my memory on CPR for little guys. The below video is about 8 minutes, but it’s really good. (You also have to sit through a short commercial in the beginning.) Even if you’ve read up on how to do these techniques, it’s good to see this guy do them on the mannequins, to get an idea of how hard you’re supposed to smack their back, or thrust upward in a Heimlich, etc.
A flurry of Richard Feynman YouTubes has been hitting the blogosphere, so I’m guessing someone recently uploaded his interview(s). Seriously, if you’ve never read anything by this guy, you should definitely check out his work; I review the pop stuff here.
Robert Wenzel posted this 6-minute clip that nicely captures what Feynman is all about. (The last 30 seconds is a great finale to the whole clip.) If you like the below, you’ll love the rest of his (pop) stuff.