13 Aug 2009

Dear Prudence

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Buckling to pressure from a certain critic–who was concerned more for more consistency rather than blogosphere modesty, I believe–I believe I have filtered out the absurd Evony ads. It actually is a lot easier to filter Google ads than I thought.

What clinched it for me was the realization that if I’m going to write a high school course, I don’t want some kid to be looking at my blog when his mom walks in and sees racy Google Ad photos.

So now that I am going down the censorious route, I will zap other ads that do not align with my ministry.

(Note that it may take up to 48 hours for a filter to kick in, so you may have to shield your undefiled eyes for a bit longer when you visit Free Advice.)

13 Aug 2009

Oh Wait, Maybe the Recession Isn’t Over After All

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CNBC reports with apparent surprise:

Sales at U.S. retailers unexpectedly fell in July and the number of workers filing new claims for jobless benefits rose last week, indicating the recession-hit economy faced a bumpy recovery.

A Commerce Department report Thursday showed total retail sales edged down 0.1 percent after increasing 0.8 percent in June, compared with market forecasts for a 0.7 percent gain.

Analysts had expected a boost in retail sales from the government’s “cash for clunkers” program, which gives consumers cash to swap aging gas-guzzlers for new, more fuel efficient models.

A separate report from the Labor Department showed first-time applications for state unemployment insurance benefits climbed 4,000 to a seasonally adjusted 558,000 last week.

“Retail sales were unexpectedly weaker than expected, suggesting that the money spent on the ‘Cash for Clunkers’ plan wasn’t spent on other things,” said Peter Boockvar, equity strategist at Miller Tabak & Co in New York.

There was more bad news on the home foreclosures front, where RealtyTrac reported that U.S. home loans failed at a record pace in July despite ongoing federal and state programs to avoid foreclosures.

Foreclosure activity jumped 7 percent in July from June and 32 percent from a year earlier as one in every 355 households with a loan got a foreclosure filing, RealtyTrac said.

Consumer spending fell at a 1.2 percent annual rate in the second quarter after edging up 0.6 percent in the January-March period. Despite signs the worst recession in over 60 years was winding down, companies have been reluctant to hire, though the pace of layoffs has slowed down markedly.

I think we just need to give it another month, and then Obama and Krugman will go back to explaining that the stimulus money hasn’t hit yet (and was too small anyway) to get us out of the recession.

13 Aug 2009

What Letter Will the Recovery Look Like? U-Shaped?

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Someone please make it stop. People have been arguing for months over a V-shaped versus a U-shaped recovery–as if there were some scientific propositions behind each theory. And now, CNBC runs an article talking about a W-shaped recovery and a triple-U-shaped recovery.

My guess? A lowercase z–in cursive.

13 Aug 2009

The Best Goldman Apology Yet

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LRC reprints a pretty funny Matt Taibbi article where he (with some vulgarity) responds to a Slate defense of Goldman Sachs:

So, gosh, I stand corrected, I guess. Because I thought that Goldman made a ton of money this year because it got a special waiver (fast-forwarding through the usual five-day antitrust waiting period, thanks to their buddies in the Fed) to instantly switch to bank holding company status and make itself eligible for $28 billion in FDIC-backed lending. I thought it got $13 billion in public money via the AIG bailout and hundreds millions more in extra underwriting fees through its work underwriting stock for banks repaying TARP money. I didn’t know that it made all that money because it had internal safeguards in place to rein in egos. I feel foolish now.

12 Aug 2009

Alanis Morissette Did That on (Canadian) Television

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Somehow over pitchers and wings we managed to bring up You Can’t Do That on Television the other night. (“Daaaa I heeeeard that!”) One member of our elite group remarked that if you watch clips of the show now, the Canadian accents are striking, whereas that was never something I had noticed as a kid.

In any event, here are some clips when Alanis Morissette was on the show. (You can tell it’s her, because the other actors refer to her as “Alanis.”)

12 Aug 2009

New Inflation Numbers Coming, But the Orwellians Are Working

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It’s almost crunch time! By early next week the new PPI and CPI numbers for July will be out.

I have been warning for months that actual prices are rising much more quickly than you would realize, had you simply relied on the official reports coming out of the BLS. I explained that after last month’s numbers came out (for June-over-May price increases), the grace period is over. Since the BLS has “seasonally adjusted” the actual CPI increases down every month from January through June, now they will have to bump up the actual numbers, when giving the headlines to CNBC.

Because I’m very suspicious of the government, I predicted that they will revise the prior adjustments, in effect shifting some of the price inflation back onto the earlier months of 2009, so that they don’t have to catch up so much in the 3rd and 4th quarters.

It’s not the same thing, but here Jeff Hummel describes a massive revision that the BEA just undertook to the GDP figures going back to 1929. Here’s an excerpt from Hummel:

Using new input-output analysis, the BEA has just completed a comprehensive revision of all the numbers in the National Income and Product Accounts going way back to 1929. Consider the slight difference this can make in the story of the current recession, which the National Bureau of Economic Research (NBER) dates as beginning in December 2007. The old estimates reported that real GDP fell by 0.2 percent in the fourth quarter of 2007, whereas the new estimates report that it rose by 2.1 percent. For the first quarter of 2008, the old estimate is a 0.9 percent rise; the new estimate is 0.7 percent fall.

And to show just how ridiculous these revisions can be, Hummel goes on to explain:

Richard K. Vedder and Lowell E. Gallaway caught probably the most egregious instance in their neglected Out of Work: Unemployment and Government in Twentieth-Century America (1993). The 1960 estimates of real Gross National Product (this was when the preferred aggregate was still GNP rather than GDP), using a 1929 base year, reported that output rose by 30 percent during World War II (1941-1944) and then fell by a modest 5 percent to 1948. In contrast, the 1990 estimates, using 1982 as a base year, had output rising by 50 percent during World War II and then falling by a massive 30 percent from 1944 to 1948.

In other words, the 1990 estimates discovered a massive post-World War II recession in the U.S. that absolutely nobody was aware of at the time and that failed to show up at all in the unemployment numbers. Yet most macro texts over the last decade have graphs that mindlessly depict this imaginary depression by statistical artifact. [Bold in original]

I can’t believe I am actually anxious for a BLS report to come out. And yet here we are.

12 Aug 2009

The Forthcoming Lessons for the Young Economist, a High School Economics Course

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I am pleased to announce that the Mises Institute has officially given me the green light to start working on an economics course geared for the high school level. The main audience will be for homeschoolers, but the course materials will be “official” enough that any high school teacher with a friendly administration could adopt the course.

This will not be centered on Austrian economics per se, but rather economics in general. I will be guided by the notion that many of the students will get their one course in economics from this material. So I’m certainly not spending time on Average Total Cost curves. (The teacher’s edition will have advanced topics and also sections on mainstream textbook analysis, for the students who plan to take econ in college.)

I will give more updates as the project matures. We are very excited about the whole thing. I have been in consultation with a fellow grad from Hillsdale College, who now teaches history to junior high students. We will work together to ensure that Lessons for the Young Economist is appropriate for the target age.

12 Aug 2009

Fifth Third Bank Manager Taking Sales Tips From Obama?

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I’m sure most of you heard President Obama’s ill-advised attempt to defuse critics of the health “reform” plans. Obama was trying to make the point that a public (government) health insurance plan wouldn’t put private insurers out of business, and so he noted that FedEx and UPS were doing fine, whereas the Post Office was the one always in trouble. You can’t see it in the clip above, but on the audio clips I’ve heard it seems that even the very friendly crowd was a bit nonplussed by this line of argument.

Anyway, I had a similar thing happen when I deposited a check at my local bank. I opened the account when I was a professor in Michigan, and now I live in Tennessee. Every once in a while the person at the desk urges me to open a checking account with them, so that everything will be in-state.

I have resisted doing so for two main reasons. First, we have most of our bills on autopay through the account, and I would have to switch everything over. Second, quite frankly the Fifth Third employees in Hillsdale, Michigan (where we opened the account) seem a lot more competent than the ones I’ve dealt with in Nashville, TN. (I’ll just leave it at that. Not saying one group of people is good or bad in an absolute sense, but one group has to be relatively better, and I put my money–literally–on the Michigan people.)

Now here’s what’s funny: I know full well that there must be some sort of drive to get people to sign up with new checking Fifth Third checking accounts; they even have promotional gimmicks like you get an extra $25 in your account (with an initial minimum deposit). So today the branch manager comes up to me and urges me to switch, for the same reason they always give. But this time he added a little drama to it, saying something like, “We’d like to be able to say that nothing could go wrong, with your account being based out of Michigan, but in truth the Fifth Third computer network doesn’t always work the way we wish it did. So just to spare you heartache down the road, you should really think about setting up an account here in Tennessee. You can at least just open one, and then over time move your activities over to it.”

I didn’t say this, but my internal reaction was, “Well, if you’re telling me to open up a new checking account in Nashville because the Fifth Third system is unreliable, I would do it with another bank. What kind of sales pitch is that?”