You Get What You Pay For?
Someone help me out here. Krugman discusses a CBO report on government job creation efforts. If you look at the chart he reproduces, you see that the single most effective program of job creation–where the unit of measurement is “Years of Full-Time Equivalent Employment per Million Dollars of Total Budgetary Cost”–is “Increasing Aid to the Unemployed.”
Now what in the world does that even mean? On the one hand, it seems like the very worst thing you could do to create jobs would be to pay people for not having a job. Note, that consideration alone doesn’t mean unemployment checks are a bad thing, but they certainly don’t “create jobs.”
So I am thinking what that ranking really means, is that if you spend $1 million on expanding unemployment relief programs, then the recipients get more take-home money for their “job” of being unemployed, than if you spend $1 million on green jobs and then count how many more people have jobs making solar panels.
I’m not being sarcastic, I really think that’s what this CBO report means. Can anyone confirm or deny?
Big Brother Running EconLog?
I don’t know if it’s because I just upgraded to the new version of Firefox or what, but I just noticed that the browser tabs for EconLog feature a spooky all-seeing eye. Is that like Total Economics Awareness or something?
PPI "Flat"–Producer Prices Only Rose 4.4% in 2009
Naturally the headlines all say that the latest reading from the Labor Department on producer prices was flat, by which they mean that if you strip out food and energy prices, the other ones didn’t rise from November to December.
Overall, the Producer Price Index rose 4.4% during 2009. So at what point will the Fed have to start raising interest rates because of the inflation threat?
Quick Thoughts on the Scott Brown Win
* I am trying not to get too excited about this, because I remember only too well how relieved I was back in 2000 when George Bush beat Al Gore in the nailbiter. (Note that I did NOT vote for Bush, I’m just saying as an observer I was hoping he would win.) What was my reasoning? Was it because I cared about Republican “family values” and such? No, I was very afraid that if Al Gore won, he would implement his Big Government Socialist Green Agenda and seriously increase the role of the federal government in the economy. Phew, dodged a bullet on that one!
* For an example of how this could backfire, at the very least now when this turns into the Great Depression II in everyone’s book, we will endlessly hear that things were going great until the Brown upset caused the Democrats to chicken out on “reform,” and that’s why the country didn’t “bend the curve” on health care costs, green energy, etc. So it will be Massachusetts’ voters’ fault when the misery index breaks 20 in a couple of years.
* I was driving back from a friend’s house at 1 am last night–it was a pure coincidence that this was when we could get together, it’s not like we have Special Election parties–and there was some guest on a radio show who kept saying that these results were impossible, the election had to be rigged, because this was “the seat of Ted Kenn-e-DY.” The host said, “Yes, we know how to pronounce the name, you don’t have to keep saying it like that.” They took a call from a woman who said she was independent who had voted for Kennedy but switched to Brown, and the guest refused to believe her. He thought she was a Republican who was lying. Another guy called and said he was an independent who voted for Brown because Coakely ran an awful campaign. The guest said, “What kind of reason is that to vote for someone, just because the other person is a d**chebag?” This cracked me up–isn’t that the foundation of our political process?
* On NPR today they had a historian (or is it AN historian?) who was saying Obama fans had nothing to fear, that both Abraham Lincoln and FDR had bad first years in office too. He didn’t say this, but the lesson for Obama is clear: Make sure you get at least 20,000 US soldiers killed, and you will be revered by future Americans.
* I had previously thought that this would disqualify me from higher office, but Brown’s win has shown that the American voters can focus on the issues rather than youthful indiscretions, right?
The People Have Spoken
OK that was a short-lived experiment… I am dropping the comment moderation feature except for posts that are more than 14 days old. What you people weren’t realizing is that my older posts are getting spammed too, so that if someone stumbled upon a “classic” Free Advice post in which I predicted the Dow Jones 3 years in advance, it would be inundated with ugg boots ads.
So this new compromise should work. I can prevent older posts from being filled with spam, but you guys can explain to each other how stupid you are in the comments in real time. As I drop in on new posts, I’ll try to zap the spam.
I think I should be congratulated for my willingness to admit my mistake and change policies so quickly. Can you imagine if Michael Chertoff were running this blog?
Potpourri
* Tom Singleton sends along this troubling article about the way the feds might came after 401(k) assets. Incidentally, this is one of the “real world”-type reasons that made me more receptive to Nelson Nash’s Infinite Banking Concept. Nash argues that it’s silly to take the returns in your 401(k) at face value, because even setting aside the volatility, it will be much easier for the feds to tap into a tax-created asset class when the budget hole becomes unbearable. In contrast, the government would obviously remove the tax exemption from whole life insurance policies at some point, but it would be a lot harder politically for them to simply seize the accumulated assets.
* Joe Sobran explains his path from government-loving patriot to Rothbardian anarchist. For those of you (e.g. my relatives) who check in here occasionally for financial advice but not for “Bob’s nutjob political views,” I highly recommend this article. It’s not in this particular piece, but I’m pretty sure it was Sobran one time who wrote something like, “At a certain point in my life I realized that I was a Big Government conservative. The liberal Democrats cared about getting more money for social programs, whereas I always looked favorably upon bigger budgets for the military, without really concerning myself with whether the money was well spent.”
* Sorry I can’t remember who sent this to me, but someone said that here the Fed explains that the Fed didn’t cause the housing bubble. Phew!
* From LRC, a Justin Raimondo article on the “weird factor” surrounding the underwear bomber incident. I had never heard some of these details. For example, did you know that there was apparently a passenger on board the plane who videotaped the incident? You could say that the government confiscated the tape for security purposes, but why hasn’t anybody been talking about it?! (By the way, I’m not referring to it as the “underwear bomber incident” to make light of it, it’s just that I’m too lazy to go copy and paste the guy’s name. When Joe Smith lights his underwear on fire, I’ll refer to it as, “Joe Smith’s attempted attack.”)
* I might ask my wife to buy me Glenn Greenwald for my birthday. We all know he’s great on civil liberties, but here he does a good job explaining the distinction between capitalism and what’s been happening on Wall Street.
* Tributes to Rothbard in The Freeman.
* Dick Clark the Younger has some thoughts on “Obama the People’s War President,” and his acquaintance who was in the military and became a conscientious objector.
An Analogy for My Views on the Significance of the Monetary Base
I’m not going to name names, but there are some people out there whose views on the monetary base and inflation at first seem quite opposed to my own, but in reality we are focusing on different levels of causality.
Specifically, it is true that the monetary base per se doesn’t make the price of milk go up at the grocery store. (Well, even that’s not technically true once you take account expectations and the effects of bankruptcies among investment banks, but bear with me.) However, those of us who are very worried about the unprecedented excess reserves are saying that the only plausible outcome of all this is a rapid rise in the money stock held by the public, commonly measured by the aggregates M1 and M2.
For an analogy–which of course is unfair but it gets my point across–imagine that you’re trapped in a bank with some robbers, and you’ve been moved into a back room with a big burly guy who’s guarding you. He pulls out a pistol and you say, “Uh oh, that’s not good. I don’t like him having that pistol.”
But then you notice that it’s not loaded. “Well, even though I’d prefer that he didn’t have that thing at all, right now we’re not in any immediate danger,” you reassure the others.
Then the burly guy pulls out some bullets and begins loading it. With each new bullet you say, “Oh boy, this isn’t good. He can really do some damage now. Maybe we should cause a distraction and then try to overwhelm him with paper cuts from these deposit slips.”
At this point a contrarian in the group says, “Would you idiots stop listening to this fearmonger? There’s nothing at all dangerous about a loaded gun. Look, he’s got six bullets loaded now, more than he’s had in the entire time we’ve been his captives. Are you in physical pain? Are you bleeding? I rest my case. You guys are clueless if you’re getting worked up over something irrelevant like the number of bullets in the gun.”
Then the guy starts firing, and people start dropping. You say, “I told you we were in trouble!”
The contrarian starts laughing. “Um, you dolt, haven’t you noticed that the number of bullets in the gun is dropping?! And you have a PhD in firearms?!”
The Fight Against Anarchy
OK kids some of you have complained about all the spam in the comments lately, which has annoyed me too. (The spam, not your complaints.) So I am selflessly taking on the responsibility of moderating all the comments. We’ll try this for a while and see how it goes.
On the negative side, it will make it harder for you guys to argue with each other.
On the positive side, it will make it harder for you guys to argue with each other.
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