PPI Down in September
The BLS reports that the seasonally adjusted PPI for Finished Goods declined 0.6% in September. (The non-seasonally adjusted PPI for All Commodities was also down 0.3%, according to FRED. I can’t find the one-month non-seasonally adjusted information in the BLS press releases anymore; I honestly think they removed it.)
Incidentally, if you are curious why the PPI came out later than the CPI this month (which is rare), here’s a CNBC story giving the reason.
For what it’s worth, I’m hanging on to my gold and silver coins. I definitely jumped the gun in worrying about price inflation in 2009. Even though it’s positive (despite all the talk of deflation), nonetheless it’s obviously not spiraling out of control just yet.
The reason I am holding on to my coins is that I still maintain that Bernanke has painted himself into a corner with all the excess reserves. Quite frankly, I am waiting for everyone else to realize that his “exit plans” aren’t going to work.
I’m going to lay low on the inflation issue until I have something useful to contribute. I can’t stand it when other bloggers do a “heads I was right, tails I made a good guess at the time” stance. So I was wrong about inflation in 2009, my apologies.
Goldbuggery?
MercedesRules passes along this article discussing central bank machinations to suppress not only the gold price, but the “gold basis.” I have not delved into this stuff enough to tell if this is legit or crankish, but I do know that the author–Antal Fekete–has many fans. This paragraph is striking (if true):
Reports are circulating that similar audits of certain Asian depositories have already produced “good” delivery bars (400 oz or 12.5 kg gold bricks) that have been gutted and stuffed with tungsten – a metal whose specific weight approximates that of gold, so that the famous test of Archimedes (fl. 287-212 B.C.) based on the Law of Buoyancy, designed to expose fraudulent goldsmiths, would be inapplicable. Isn’t it strange that criminal law punishes the fraudulent stuffing of gold bars, but allows the stuffing of gold assets in the balance sheet with paper gold? After all, the specific value of tungsten is much higher than that of paper!
As I say, I can’t confirm the validity of these fears, but MercedesRules (who is a huge gold bug) tells me the chatter is really up, that this isn’t just the standard “the government is screwing us, gold will zoom up, I just feel it!” talk.
On the other hand, I did find it funny that Fekete basically starts his article off by admitting he didn’t know what he was talking about 12 months ago…
SuperFreak: Are You Rooting for Hitler or Stalin?
*** Brad DeLong has the infamous Chapter 5 of the forthcoming Superfreakonomics available in PDF if you want to see what all the fuss is about. ***
This blogosphincter war is just getting absurd. In my short, illustrious career as blogger, I cannot recall ever having read so many personal emails being introduced as evidence to prove how much of a liar and a misanthrope the other guy is.
Anyway, just about the nicest treatment I have seen comes from the standup economist (HT2 DeLong). (And no, I’m not saying, “This economist is a real stand-up guy.” No, he actually bills himself as a standup comedian, who is also an economist. I cannot believe that I wasn’t the first one in that niche.) He calmly explains to Levitt why the chapter was misleading, but doesn’t condemn him to purgatory.
I noticed something about Joe Romm’s latest. He writes in his usual style, accusing his usual opponents Pielke and Morano of the worst calumny, and yet he doesn’t link to their posts. (Someone please correct me if I’m wrong on that, but I didn’t see any links.) So in addition to the stuff I already discussed, that’s just more evidence that Romm doesn’t fight fair. (Full disclosure: Rob Bradley was instrumental in hiring me at IER, and he and Joe Romm are “none too fond” to steal a quote from Rob Roy–see here and here.) I really don’t understand why Joe Romm is such a big name in those circles. Well, duh, I guess he’s the Paul Krugman of climate science, sans Nobel. (Romm is a scientist, btw, in case you thought he was some punk blogger.)
Last point: Don’t shed crocodile tears for Levitt and Dubner. Even though Romm set out to write a hatchet job, and withheld key facts from his readers, nonetheless Levitt and Dubner are being way too coy in their defenses. Of course the stuff in the beginning of their chapter makes it sound as if the scientists all thought the globe was going to freeze in the 1970s, whoops now it’s warming, hey make up your minds! OK if Levitt and Dubner want to take that angle, but then don’t write that–and even put “global cooling” in the subtitle of the book–and then get all huffy when people accuse you of challenging the “consensus.” Levitt and Dubner really are doing exactly what Krugman and friends are accusing them of: They cite factoids or quotes that are technically true, but which are designed to give a certain impression to the reader. Now that impression may or may not be defensible; I personally am a proud “skeptic” on all this (which is not the same as a “denier” mind you–it’s the difference between an agnostic who doesn’t want to go to hell, if it exists, versus an in-your-face atheist who rolls joints with Bible pages). But my point is, you can’t write the chapter they wrote, and then say, “Why does everyone think we are denying there’s a big problem here?!”
Let’s not forget just how unfair (some would go so far as to use the L-word) Levitt was to John Lott; Robert Wenzel reminds us here.
Now you can understand the title of this post. To ask, “Do you agree with Romm or Dubner on this one?” is a bit like asking, “Who were you rooting for in WW2 on the Eastern Front?”
Smoke If You Got ‘Em
For a while now I have been predicting that the feds will loosen up the marijuana restrictions in order to bring in extra revenue, just as FDR ended Prohibition when he took over. (I’ll dig up my predictions when they become more completely satisfied.) Today CNBC reports:
Feds to Issue New Medical Marijuana Policy
Federal drug agents won’t pursue pot-smoking patients or their sanctioned suppliers in states that allow medical marijuana, under new legal guidelines to be issued Monday by the Obama administration.
Two Justice Department officials described the new policy to The Associated Press, saying prosecutors will be told it is not a good use of their time to arrest people who use or provide medical marijuana in strict compliance with state law.
The guidelines to be issued by the department do, however, make it clear that agents will go after people whose marijuana distribution goes beyond what is permitted under state law or use medical marijuana as a cover for other crimes…
Just like we’re not going to get socialized medicine on Day One, they’re not going to legalize pot right off the bat. Baby steps.
Bob Higgs Doesn’t Sugarcoat It
Bob Higgs lets loose on his views of American politics (HT2 Karen De Coster):
Because I despise politics in general, and the two major parties in this country in particular, I go through life constantly bemused by all the weight that people put on partisan political loyalties and on adherence to the normative demarcations the parties promote….This marshalling of hatreds is not the whole of politics, to be sure, but it is an essential element. Thus, Democrats encourage people to hate big corporations, and Republicans encourage people to hate welfare recipients.
Of course, it’s all a fraud, designed to distract people from the overriding reality of political life, which is that the state and its principal supporters are constantly screwing the rest of us, regardless of which party happens to control the presidency and the Congress.…
…
In any event, the parties’ principles of hatred have never passed the sniff test; indeed, they reek of hypocrisy. Thus, while railing against the “corporate rich,” the Democrats rely heavily on the financial support of Hollywood moguls and multi-millionaire trial lawyers, among other fat cats. And the Republicans, while denouncing the welfare mother who makes off with a few hundred undeserved bucks a month, vociferously support the hundreds of billions of dollars in welfare channeled to Lockheed Martin, Boeing, and General Electric, among many other companies, via larcenous “defense” contracts, Export-Import Bank subsidies, and countless other forms of government support for “national security” and service to “the public interest” as Republicans conceive of these nebulous, yet rhetorically useful entities.Notice, too, that although ordinary Democrats and Republicans often harbor intense mutual hatreds, the party leaders in Congress rub shoulders quite amiably as a rule. Regardless of which party has control, the loyal opposition can always be counted on to remain ever so loyal and ready to cut a deal.…At bottom, the United States has a one-party state, cleverly designed to disguise the country’s true class division and to divert the masses from a recognition that unless you are a political insider connected with one of the major parties, you almost certainly will be ripped off on balance….
Yet, rather than hating the predatory state, the masses have been conditioned to love this blood-soaked beast and even, if called upon, to lay down their lives and the lives of their children on its behalf….I float above all of this wasted emotion, looking down on it with disgust and sadness. Moreover, as an economist, I am compelled to regret such an enormously inefficient allocation of hatred.
SuperFight Claims Naive Academic
After this post, I am not going to bother weighing in on this particular issue anymore, because at this point you need a flowchart to keep things straight. Joe Romm has started a humongous blogosphere attack on the new Superfreakonomics book, the worst charge of which is that the authors misrepresented the views of the one climate scientist they really interviewed, and didn’t even give the poor guy a chance to review the relevant material before the book went to print.
But then Dubner (one of the Freako authors) claims in this post that the scientist (Caldeira) did sign off on the material. More important (according to Dubner’s tale), the scientist Caldeira admitted this in an email to Joe Romm before Romm’s post aired, and even wrote:
“The only significant error…is the line: ‘carbon dioxide is not the right villain in this fight.’ That is just wrong and I never would have said it. On the other hand, I f&@?ed up. They sent me the draft and I approved it without reading it carefully and I just missed it. … I think everyone operated in good faith, and this was just a mistake that got by my inadequate editing.”
Everyone got that? Assuming Dubner isn’t fabricating this email exchange, Caldeira told Romm that he had signed off on the draft and that even though they misrepresented his views on one major point, it was his own fault for not telling them so, and they acted in good faith.
OK, so how do our friends Krugman and Romm deal with this? Krugman dismisses it as “legalistic quibbling.” Yes, I guess in the sense that if I say, “Bob Wenzel confessed over email to me that he killed JFK from the grassy knoll,” and then Wenzel forwards the DA our exchange where he actually said, “I bet somebody killed JFK from the grassy knoll, but it wasn’t me”–then that too would be legalistic quibbling.
Romm does a better job of defending his honor. In response to Dubner’s version of events, Romm writes:
I wrote Caldeira:
Are you telling me that the authors did not send you galleys for comment but you got them third hand from Nathan?
He wrote me back:
That is correct, not the entire chapter, but a section was forwarded to me by Nathan. I searched through it quickly, looking for the parts that discussed me, and did not give the whole process very much attention at the time. In general I feel no need to read, fact check, or make detailed comments on documents that arrive in my in-box. I have lots of other things to do, like trying to get my science out the door.
Soooo. Assuming nobody is actually fabricating emails here, I think what probably happened is that this poor climate scientist Caldeira was excited to be interviewed by the illustrious Levitt and Dubner. (Maybe they did some sumo moves on him.) Then he was busy with stuff and signed off on the chapter without reading it carefully. (This has happened to me once or twice, where an editor has “punched something up” a bit from my first draft, given me a chance to fix it, and I don’t catch the change. Then it goes out under my name, and I cringe because I end up sounding harsher than I intended.)
Then Joe Romm gets his hands on an advance copy, goes ape-poopy, and contacts Caldeira. Caldeira realizes he’s screwed, and tries to backpedal out of it, trying to let Romm know that he doesn’t hold the nutjob views of the Superfreaks, but at the same time he knows that they didn’t purposely distort his views. So he tries to placate Romm by saying that he only reviewed a third-hand copy.
Now think about this: You are Levitt and Dubner, and you just interviewed a whole team of people who work for a company. Are you going to send an email to every recipient? Or do you think you might just send one copy to the contact person at the firm, and expect that guy/woman to circulate it among the firm’s employees and get one batch of feedback? Keep in mind, Levitt and Dubner must have interviewed dozens, maybe hundreds, of people for the book–everyone’s talking about one guy interviewed for one chapter.
I’m not saying this is what happened, but it makes sense out of all the stipulated emails. It looks like poor Caldeira is yet another academic who is now caught in the political crossfire. These people (on both sides) are serious, Mr. Caldeira, so watch yourself in the future. Trillions of dollars are at stake, with the partisans of one side thinking they are averting widespread death, and partisans on the other side thinking they are preserving liberties from a tyrannical government.
I said from the beginning that I agreed with Krugman that the Freako guys were not fairly representing the views of economist Martin Weitzman. I only hope some progressives can publicly call out the fact that Joe Romm clearly misrepresented what Caldeira said happened to him. When someone says, “I f&@?ed up. They sent me the draft and I approved it without reading it carefully and I just missed it. … I think everyone operated in good faith, and this was just a mistake that got by my inadequate editing.” and then Romm goes ahead and writes his first post, that’s not exactly truthful.
Romm has not disavowed the alleged email, he has simply pointed to other emails where Caldeira tells a different version. For Romm to not mention Caldeira’s admission is incredibly dishonest. It doesn’t mean the Freako guys are right, or that climate change is no big deal. I would love to see some progressives come out and criticize Romm on this one. After all, Glenn Greenwald has the cajones to criticize Democrats when they use absurd tactics in their defense of Obama. What do you say, guys? You’re allowed to admit when someone from your team overreaches in his zeal to save the planet. It would be very refreshing.
Those Dirty Rotten Taxes
Oh man. When last we left our protagonists the children of Israel, King Solomon had asked for wisdom, and the Lord granted not only that (wise) request, but showered Solomon (David’s son) with peace and legendary riches.
But then things fell apart. I’m not sure if we are supposed to infer that the wealth corrupted Solomon, but I note with interest that 1 Kings 10:14 says, “The weight of gold that came to Solomon yearly was six hundred and sixty-six talents of gold…” (Cue Twilight Zone music.)
But upon Solomon’s death, there is a power struggle and Solomon’s majestic empire is split. Here’s what happened when Rehoboam, Solomon’s son, took the throne:
1 And Rehoboam went to Shechem, for all Israel had gone to Shechem to make him king. 2 So it happened, when Jeroboam the son of Nebat heard it (he was still in Egypt, for he had fled from the presence of King Solomon and had been dwelling in Egypt), 3 that they sent and called him. Then Jeroboam and the whole assembly of Israel came and spoke to Rehoboam, saying, 4 “Your father made our yoke heavy; now therefore, lighten the burdensome service of your father, and his heavy yoke which he put on us, and we will serve you.”
5 So he said to them, “Depart for three days, then come back to me.” And the people departed.
6 Then King Rehoboam consulted the elders who stood before his father Solomon while he still lived, and he said, “How do you advise me to answer these people?”
7 And they spoke to him, saying, “If you will be a servant to these people today, and serve them, and answer them, and speak good words to them, then they will be your servants forever.”
8 But he rejected the advice which the elders had given him, and consulted the young men who had grown up with him, who stood before him. 9 And he said to them, “What advice do you give? How should we answer this people who have spoken to me, saying, ‘Lighten the yoke which your father put on us’?”
10 Then the young men who had grown up with him spoke to him, saying, “Thus you should speak to this people who have spoken to you, saying, ‘Your father made our yoke heavy, but you make it lighter on us’—thus you shall say to them: ‘My little finger shall be thicker than my father’s waist! 11 And now, whereas my father put a heavy yoke on you, I will add to your yoke; my father chastised you with whips, but I will chastise you with scourges!’”
12 So Jeroboam and all the people came to Rehoboam the third day, as the king had directed, saying, “Come back to me the third day.” 13 Then the king answered the people roughly, and rejected the advice which the elders had given him; 14 and he spoke to them according to the advice of the young men, saying, “My father made your yoke heavy, but I will add to your yoke; my father chastised you with whips, but I will chastise you with scourges!” 15 So the king did not listen to the people; for the turn of events was from the LORD, that He might fulfill His word, which the LORD had spoken by Ahijah the Shilonite to Jeroboam the son of Nebat.
16 Now when all Israel saw that the king did not listen to them, the people answered the king, saying:
“What share have we in David?
We have no inheritance in the son of Jesse.
To your tents, O Israel!
Now, see to your own house, O David!”
So Israel departed to their tents. 17 But Rehoboam reigned over the children of Israel who dwelt in the cities of Judah.
18 Then King Rehoboam sent Adoram, who was in charge of the revenue; but all Israel stoned him with stones, and he died. Therefore King Rehoboam mounted his chariot in haste to flee to Jerusalem. 19 So Israel has been in rebellion against the house of David to this day.
20 Now it came to pass when all Israel heard that Jeroboam had come back, they sent for him and called him to the congregation, and made him king over all Israel. There was none who followed the house of David, but the tribe of Judah only.
(1 Kings 12:1-20, New King James Version)
Potpourri
* Brian Domitrovic was one of the speakers at the recent ISI conference I attended. He is a history professor but (like Tom Woods) he has the gumption to cross disciplinary lines and do very good economic analysis. Domitrovic is an avowed supply-sider, but if you think “oh so he thinks you cut taxes, receipts go up, end of story” then I encourage you to read more about it. I haven’t spent too much time at his blog yet, but I think this post is a good summary of what Domitrovic (following Robert Mundell) calls “the policy mix”–namely “tight money and tax cuts.” Domitrovic’s ISI speech walked through the 1920s, ’30s, ’70s, and ’80s, and showed the lessons that a supply-sider would draw.
* Man I can’t believe all those whiny leftists who actually think the US government is capable of “torture”! (Yes, they actually use the t-word.) You keep a detainee from falling asleep, or you pour some water over his face, and the ACLU’s all on your case. Next thing you know, you got the British high court mad because you use a scalpel to slice open the genitals of a guy who’s NOT EVEN A BRITISH CITIZEN, for crying out loud. Oh my gosh, what a bunch of sissies, and then everyone’s all huffy about the CIA threatening to not tell British intelligence about impending terror attacks on the UK, if they publicized details of the genital slicing. Are there no real men left in the West? No wonder Al Qaeda is winning.
* Steve Levitt defends himself from the Romm/Krugman tag team. I don’t even care about the rest of his post; Levitt ended with “Nothing could be further from the truth.” Seriously, is the truth really far away? I ask because there are hundreds of new things every week that are each apparently tied for being the furthest possible thing from it.
* Cage Match: Gene Callahan & Bob Murphy vs. Roger Koppl & St. Paul. No matter who wins, we lose.
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