07
Oct
2011
Facts and Other Stubborn Things, Fiscal Edition
Daniel Kuehn is frustrated with guys like me:
I’ve commented on this rhetoric of stimulus in the past. What really baffles me is that we haven’t seen any fiscal stimulus since 2009 (and that was underwhelming)… at what point do Bob and others start saying things like “for the last two years we’ve tried a spending freeze and that hasn’t worked – let’s try stimulus!”. I’m not holding my breath.
Is the following chart an adequate acquittal? I feel like Winston when O’Brien says, “You do not exist,” and Winston knows it’s pointless to argue.
I’m laying odds of 20-1 against Daniel acknowledging your point. This, the thread on Awlaki, and his comments on Ron Paul below have left me utterly confused as to why you have fixated on him so much in your blog as of late. If it weren’t for the “read at your own risk” disclaimer above the blogs you linked to, I’d lodge a complaint for damages from mental trauma suffered.
DK on RP: “What I found more funny was when he called the other Republican candidates the “status quo”. This is the guy that’s been in politics longer than ANY OTHER REPUBLICAN CANDIDATE. And yet somehow he still manages to convince otherwise intelligent people that he’s not just another politician.”
Robert, as I said on the blog it’s perfectly clear that Ron Paul is a status quo politician. He’s just like the rest of them. And he has an inflated view of himself, just like the rest of them. That’s what that post was about.
You pointed to the fact that his views are very different from other politicians.
I say something similar in the post and in the comment thread. I agree.
If you like those views, then just say you like this particular politician. That’s OK. There are politicians I like for their views too. But please don’t act like I’m being dishonest by stating the obvious fact that Ron Paul if a very good status quo politician that has honed a schtick that will get him lots of money and get him re-elected, and that that’s what he really cares about.
Are you sure you’re not smoking something? Name another politician in recent history that has advocated ending all the wars, having a completely non-interventionist foreign policy, legalizing all drugs, radically following Article 1 Section 8 for the legislation Congress can make, bring all the troops home from everywhere overseas, bringing to a close all the military bases overseas, legalizing competing currencies, making the draft illegal, reducing executive power, understanding Austrian economics, ending many “necessary” agencies in government, ending the income tax completely and not replacing it with another tax, reducing government spending (not reducing increases, but actually reducing government spending), ending all foreign aid, allowing young people to opt out of social security, slowly bringing about an end to medicare/medicaid/SS, actively calling our country an empire, advocating free trade (not through agreements but simply allowing free trade), and has not flip-flopped on a major issue other than the death penalty since he has become a politician.
Note I could have stopped with the first sentence, but I decided to prove a point.
re: “radically following Article 1 Section 8 for the legislation Congress can make”
Scrapping Art. 1 Sec. 8 doesn’t seem to me to be “radically following” it.
Explain how he doesn’t follow it.
Also, since you seem to idiotically state that a politician’s “views” cannot separate him from the status quo, note that as stated earlier, character-wise, Paul has not flip-flopped on anything except for the death penalty and has been saying the same things for the past 30 years. Lobbyists avoid his office because they know he doesn’t change his mind, and he receives small campaign donations from large numbers of people rather than large donations from small numbers of people, in comparison with your average politician. Also note he is retiring if he doesn’t win the presidential nomination, so as for being re-elected, it’s a poor point. If you are referring to being re-elected for the past 30 years in Congress, he has avoided doing what other politicians do, which is flip-flopping and funding lobbyists, and has chosen to keep doing and saying the same things, which this itself separates him from the average politician. Perhaps you are not being dishonest, but I would say you are being ignorant instead.
People don’t like politicians because they lie or the equivalent to people (voters) about what they really believe and what they really will do if elected.
That’s why honesty of intentions and consistently saying the same thing makes Ron the anti-politician as far as most people are concerned. No one gives a hoot if he has served 5 terms or 10 terms in the House.
I never mentioned his views being different. I mentioned his actions. Like his actions of refusing to take a salary. Like his action of talking about monetary policy when no-one else was and it was considered political suicide as it was considering boring and too technical for the average voter to grasp.
I’m talking about his actions that earned him the nickname of Dr. NO. I’m talking about his action of voting against a bill honoring Mother Theresa because the Constitution does not authorize it.
I’m talking about his actions that literally shifted the status quo to become one in which “End the Fed” is a popular chant.
Your comments that he is a status quo politician because he wants to get elected president is stupid. It’s just stupid. I don’t know how else to say it. It is like calling Elvis Presley just another status quo musician because he wanted to sell tickets to his shows. Or Malcolm X just another status quo public speaker because he wanted people to listen to him.
You are defending your claim that he is “a very good status quo politician” by defining what a politician is. That doesn’t change the fact that he is so far from being status quo he has literally started to shift the conversation towards him. If you are a part of the status quo you cannot BY DEFINITION change the status quo. So to explain away how the Federal Reserve is now a topic of political debate solely because of the Ron Paul phenomenon as an example of him being “status quo” reveals how stupid your comment is, or to be generous, how horribly you fail to understand the words you are using.
Ron Paul’s supporters love him because he is the “anti-politician”. He speaks to you and tells you what he feels as oppose to political speak jargon. Ron Paul’s opponents criticize his extreme views and positions, and lament his refusal to compromise and play ball. Or in other words, how different Ron Paul is as a politician than all other politicians. Despite the understanding that not all politicians agree on all their views, they do mostly agree on the idea of playing the political game, being willing to compromise etc. None of which Ron Paul does and his supporters cheer him for it, his opponents attack him for it, those in between acknowledge how “out there he is”, but no one, I argue literally no one, except yourself, finds Ron Paul to be a status quo politician.
I’ve been torturing myself reading the “poorly written book, that is oftentimes contradictory and confusing” (Paul Samuelson) General Theory by Keynes and conversing with you reminds me of that. A very stupid comment dressed up in what attempts to be novel insights, based on nothing more than self-evident contradictions, misuse of terminology, or simply assuming that which you are trying to prove (Keynes has “employment as a function of demand”…because I said so! Daniel has “Ron Paul has an inflated view of himself”) is nonetheless still a stupid comment, and in this case, also totally false.
I think it is important to note before dismissing Ron Paul as a status quo politician that he receives no campaign funding from corporations, Wall Street or Unions. Where he does find financial campaign support is from the individual supporters, in fact over 100k for the 8 million he just got. Not to mention he receives more campaign donations from the armed services then any candidate combined. I’m not sure what your definition of stat quo is, but in my opinion this is the total opposite. Thank you.
But Blackdeth he still is a politician, he still wants to get elected! Don’t you see that?! The more you point out just how different he is in every conceivable fundamental way, the more I keep trying to show you guys that hey, he’s a politician and wants to get elected.
One good example of a non-status quo politician would be Elmo. Elmo never campaigns, has no interest in raising money and could care less about being elected. Sure some people may point out that Elmo is a fictional character and not a politician, but in response to these “facts” I don’t change my mind at all, I merely change the meaning of the words I’m using.
So why can’t I keep just throwing in the phrase “very status quo” in front of the term politician? Just because you guys happen to interpret words as having meaning, I like giving them my own meaning. My blog isn’t “only facts” its “facts and other stubborn things” such as using words in the exact opposite way of what they mean. Duh!
Robert, as I said on the blog it’s perfectly clear that Ron Paul is a status quo politician. He’s just like the rest of them.
DK, you’re hopelessly ignorant. It’s clear that being perfectly clear to you means to make perfectly incorrect assertions that contradict reality.
Paul is unlike any other politician in Washington. Have you even noticed his voting record? He’s gone alone on so many votes that there is a good reason he’s been nicknamed “Dr. No” in the beltway. It’s precisely because he isn’t status quo. He’s as radical as they come in Washington.
I’m writing a blog post now.
I will retract “freeze”. In the Kuehn household, we’re currently being affected by a federal pay freeze, which is why that slipped out – but of course that doesn’t affect all spending.
That concession aside, what exactly are you saying here? That after a decline in spending nominal government spending returned to trend during the biggest macroeconomic event since the 1930s????
Yes – this is my point Bob.
This is why people spend so much time arguing about someone as irrelevant as Herbert Hoover. I know you guys don’t like him. But don’t tell me that was fiscal stimulus.
I know you don’t like the trend in federal spending, Bob. I know you’d like to see the trend turn around and go the other way. But don’t tell me I’m wrong to say “we haven’t seen any fiscal stimulus since 2009 (and that was underwhelming)”. It’s EXACTLY what you show in this graph. And since we haven’t seen fiscal stimulus I have every right to be frustrated when people dismiss fiscal stimulus on the bases of the claim that we’ve tried it.
If the spike in spending in 2009 was stimulus, as you admit (tough it was underwhelming to you), and spending has only gone up since 2009, how can you logically say that there was no stimulus since 2009?
Real spending has flat lined. Nominal spending is continuing on trend. Continuing on trend in the midst of the biggest downturn since the 1930s is not fiscal stimulus, Ivan.
I know it’s not what you guys want too, but that doesn’t make it fiscal stimulus.
Ah, the ‘ol “real” vs “nominal” spending trick. Why is it that we must make these distinctions, again?
Real spending has flat lined.
AHA! I got yo’ a**! So you admit there’s been inflation the past few years! A 12% price increase since the crisis, if you interpret the growth in nominal spending as flat in real terms.
Now my grocery shopping doesn’t have to live in a different world from Daniel_Kuehn’s and Paul Krugman’s rants!
Cool, we’re on the same page, Silas. There is really only one reason to distinguish between “real” and “nominal” spending, and that is price inflation.
Thanks, I took my point to Daniel_Kuehn’s blog on his post on the matter.
Wow, Silas. We really are “on the same page”.
Wrong again. There are two reasons, price inflation and price deflation.
Hmph! I think that I know where you are going with this, but I don’t think that you could fully elaborate upon it if you tried.
I can understand the concept of using monetary inflation to counteract a contraction of credit. By definition, in the aggregate, you have two forces working against each other. But, you cannot then say that both forces are equally present. One or the other is dominant (I usually err on the side of inflation).
But, that is far removed from the subject: spending. We have a single datum to gaze upon. If real spending is flat, but nominal spending has increased, I am quite sure that the fight between inflation and deflation has inflation in the lead.
The only possible defense that I can see you putting on the table for your last remark is either the float of the US dollar with other currencies (i.e. inflation/deflation of US vs inflation/deflation of other currencies), or a crazy historical balancing act of US inflation/deflation trends using econometrics and yield curves.
Please tell me you aren’t going to use one of these as your argument….
Of course there’s been inflation in the past few years. Have I ever said there hasn’t been?
Dude, the BLS sends me an email telling me there’s inflation every thirty days or so. How is this “getting” me?
re: “Now my grocery shopping doesn’t have to live in a different world from Daniel_Kuehn’s and Paul Krugman’s rants!”
What in God’s name are you talking about Silas? When have I or Krugman ever suggested there hasn’t been inflation in the last couple years (much less presented the idea in the form of a “rant”).
Wait, so when there is a downturn, the government is not just supposed to replace “lost spending from trend”, but the government is supposed to grow besides, and if it doesn’t grow, then there was no “stimulus”?
What a load of crap. You change your arguments more than a lady of the night changes her undergarments.
In the Kuehn household, we’re currently being affected by a federal pay freeze
Today I learned why DK is really in favor of government spending.
That concession aside, what exactly are you saying here? That after a decline in spending nominal government spending returned to trend during the biggest macroeconomic event since the 1930s????
Yes – this is my point Bob.
This is why people spend so much time arguing about someone as irrelevant as Herbert Hoover. I know you guys don’t like him. But don’t tell me that was fiscal stimulus.
I know you don’t like the trend in federal spending, Bob. I know you’d like to see the trend turn around and go the other way. But don’t tell me I’m wrong to say “we haven’t seen any fiscal stimulus since 2009 (and that was underwhelming)”. It’s EXACTLY what you show in this graph. And since we haven’t seen fiscal stimulus I have every right to be frustrated when people dismiss fiscal stimulus on the bases of the claim that we’ve tried it.
I also learned how DK can’t just say he was wrong and leave it at that, he has to make up a straw man to attack so that he goes down swinging.
Some thoughts:
http://factsandotherstubbornthings.blogspot.com/2011/10/some-recent-criticisms.html
Thanks for the graphs, I was trying to find some data like that.
So my argument stands. If there was stimulus in 2009, then you can’t logically say there was no stimulus in the following years, because spending stayed at the same level.
I’d understand if you said there was no stimulus at all, even in 2009.
If spending continued to increase at the rate it increased in 2009, we would be significantly above trend right now. Just follow the trend in the blue line at the beginning of 2009 with your mouse, if you want. The blue line looks like it would be higher than 5600. That would be a notable fiscal stimulus.
When would it end, and what would the effect be at that time?
Yancey, there is never enough. As time progresses, they just set a new baseline or change the range of the datum.
THE LINE MUST GO UP!!!!
This is the money chart from Mr. Kuehns blog that should be acknowledged if you are not going to look at the federal budget on a line by line basis. Glad someone still values facts and data in this debate.
http://4.bp.blogspot.com/-AGEnX4yh8XQ/TpA_0HG5tDI/AAAAAAAABEc/bEtp3CqY-os/s1600/2011realexpend.jpg
Interesting. This data appears to split the difference between stimulus and austerity.
“Austerity” I suppose, is a slippier word. It seems to me just doing business as usual in a depression probably ought to count as “austerity”, since even pre-Keynesian thinkers figured “lean against the wind” was sensible enough.
If that’s “austerity”, then this seems like austerity to me. You’re being austere in your approach to fiscal policy – you’re not budging.
If “austerity” is actually cutting, then I guess this is splitting the difference.
Mr. Murphy – are you (again) relying on the aggregates you hate so much? Mike Norman takes 5 minutes to actually analyze the data so you don’t have too.
http://mikenormaneconomics.blogspot.com/2011/10/major-budget-items-seeing-sharp-decline.html
Sorry Mr. Murphy, an increase in SS and Medicare does nothing to prove your point. Real budget cuts are occuring.
This looks like another example of data mining.
AP Lerner, I’m not interested in someone showing me why a $300 billion increase over two years is a “freeze” in spending, or better yet how they are budget cuts. “Data mining”? I’m showing total federal and total government spending are at the highest points in history. You guys can multiply it by -1 and then claim Newt Gingrich took over, I don’t care, you are still making up stuff.
By your logic, I can put up a chart showing taxes as a % of GDP are 15%. And I can show the history of that data point, and declare ‘Barrick Obama has done more to cut taxes and shrink government than any president in 50 years’.
Of course, I would be wrong.
And by declaring ‘ total federal and total government spending are at the highest points in history’ is ‘stimulus’, you are data mining. Details matter. Data matters. Just because the population is larger and older, and SS and Medicare spending is at all time highs, does not mean the spending is stimuls. And note, i’m not defending nor criticizing the spending. I’m criticizing your biased view of the spending and decision to rely on an aggregate when it fits your fairy tale.
Still data mining, no matter how you want to put the Muphy Twin Spin on it.
You seem to think that it’s only stimulus if the President labels it as such. Technically we’ve had several stimuli under Obama, but he’s only bequethed the official title to his first package back in 2009. But I would say that the tax cut/unemployment extensions from last fall qualify as well. And now he’s pushing for another stimulus but hyping it as a “jobs plan.” I’m guessing that he thinks it has a better chance of passing as long as he avoids the word ‘stimulus.’
I guess what I’m saying is: focus on the economic activity, not the political jargon. What does it really matter if the recipients of the deficit spending are medicare/SS beneficiaries or construction contractors? It’s still “injecting money into the economy,” right?
I guess what I’m saying is: focus on the economic activity, not the political jargon. What does it really matter if the recipients of the deficit spending are medicare/SS beneficiaries or construction contractors? It’s still “injecting money into the economy,” right?
Bingo. The irony is that it is precisely AP Lerner who is distorting the data to fit his fairy tale. He refuses to consider the massive stimulus spending that has been taking place to in fact be “stimulus,” because A. We aren’t hearing the WORD “stimulus” so much any more, and B. Because the economy is still in the dumps.
Oh dear, if you Austrians call this stimulus you might be the most boring quasi-humans to have sex with.
That’s a relief.
I don’t know of any Austrian looking to get screwed by an MMTr.
Even if was stranded on a desert island with an MMTer, I’d STILL choose the coconuts.
I always find it a little odd to see Austrians saying things along the lines of “look , we’ve tried fiscal stimulus and it didn’t work – you Keynesian are idiots”
The reason I find it odd is because Keynsians would quite rightly argue (as I think there are here) is that the stimulus is way smaller than they have been calling for. Further, if Krugman’s plans were implemented we would undoubtedly see a significant reduction in unemployment.
Would this validate Keynesian and prove it is the free-market thinkers who are the idiots after all ? Of course not. Government fiscal polices and direct government spending (because it is not guided by the market) may create “jobs” but will likely not create “utility” . It will lead to a further mis-allocation of resources , a failure to address the supply-side issues that caused the recession in the first place, and (as much political as economic) a rolling forward of the state that will probably never roll-back again.
I think it dangerous to suggest that Keynesian policies will not work in terms of aggregates like unemployment and GDP. They will “work” and that will be a bad thing.
Well, they always say it needed to be larger when it doesn’t work.
The reason I find it odd is because Keynsians would quite rightly argue (as I think there are here) is that the stimulus is way smaller than they have been calling for.
I don’t at all find it odd that the Keynesian response to the failed stimulus is that the stimulus wasn’t big enough. Even if stimulus harms economies, even if more stimulus makes the economy worse, Keynesians would still spew the fairy tale that they were right all along, and that the stimulus was not big enough.