Murphy on Fox News
On Friday, June 26, 2009 I had a brief appearance on Stuart Varney’s show. (Here is the clip from June 26, 2008 when I was also on his show.) In case you’re wondering, I wasn’t being thoughtful in between questions; there is a slight delay.
What’s Wrong With This WSJ Snapshot?
Von Pepe sends along the following screen shot. Notice anything ironic about the two circled stories?
Austrians: Our Victory Is Complete, Part II
In an earlier post, I quoted Scott Sumner who (jokingly) said that ABCT had captured the hearts and minds of the intelligentsia. Today I impulsively followed a Google Ad (from my inbox, not from this blog, which would violate all sorts of contractual provisions) to this in-your-face site, which declares:
At the end of the day, we are not dependent on the wealthy. We are not dependent on the lawmakers, the banks, or the government to turn the tide. We are dependent on ourselves. We are the only ones who are going to save us from this “recession.”
So already you can see the Austrian influence. Notice that they contrast “lawmakers” with “the government,” showing that they are aware of Hayek’s distinction between law and legislation.
Perhaps you are not convinced? Okay, check out this money quote: “Compared to the Great Depression of the 1920’s, sometimes, it seems that little has changed.”
Beautiful! They realize with the Austrians that it was the unsustainable credit expansion of the 1920s that was the true disaster. Other observers try to figure out what went wrong, starting with the 1929 crash, and then focusing on the 1930s. Not these guys. Bravo!
Avoid Hardee’s of Valdosta #6
This is mostly a note to myself, but some of you who are in the Florida / Georgia area and who also patronize fast food restaurants may benefit as well:
On a recent road trip, I picked the wrong Hardee’s. The floors were dirty, the shake machine was out of commission, the soda was flat, and they screwed up my order. (I had ordered my burger first, then I ordered my son’s and asked them to hold the onions and pickles. They held the toppings on my burger as well.)
But to top it all off, after we got our food I wanted some ketchup. I went up to the condiments area, and the dispenser was empty. So I asked at the counter, and the lady said, “Sure thing, one moment.”
She went in the back, and I thought she forgot about me, because how long could it take to grab a few ketchup packets? But a minute or two later, she came back with a little plastic bowl filled with ketchup. “We’re still waiting to get our packets in,” she explained.
Inasmuch as there are 10 Hardee’s per square mile in this region of the country, in the future I will tough it out and drive past the Valdosta #6 Hardee’s location.
More Rosy Forecasts From the CBO
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.”
Cowen and Yglesias (!) Making Sense on Climate Change
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.
For the Record: The BLS’ NSA CPI circa June 2009
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:
MONTH….NSA CPI….SA CPI
Jan 09…..211.143……212.174
Feb 09…..212.193……213.007
Mar 09…..212.709……212.714
Apr 09…..213.240……212.671
May 09…..213.856……212.876
More Bluffing From Krugman
This is great; sometimes I really just love the Internet. Paul Krugman shoots his mouth off about an Arrow article, and Bryan Caplan and then David R. Henderson spank him. Naughty Nobelist!
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”).
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