Saturday, December 8, 2007

Winding Down

The new site is picking up the pace, and I'm starting a series on the major competitors to Giuliani in 2008. I'm going to be letting this site continue to die a peaceful death, so be sure and subscribe to the feed on the new Will's Perspective!

Free iPod Touch Giveaway!

I just discovered a free file service called “FileLime.” The site is currently hosting a blog contest to give away a free iPod touch. Register here.

Now, about FileLime: It’s a free and incredibly simple host that will allow you to upload a file online to link to. Its strength lies in its simplicity—there’s not even a registration processes. Just select the file and click “upload.” It’s incredibly diverse, it takes photos (keeping them in full quality), PDF files, or your Social Security Number (don’t look for mine). If it’s a file on your computer (not an application, though), chances are you can upload it. You’ll see I’ve begun to use it to link to PDF versions of some of my research papers.

On the other side of the ledger, its greatest strength may also be its greatest weakness. The sheer simplicity of it neglects to provide any instructions or help. For instance, there’s not even an “About This Service” page on the website to explain what they’re about, if I want to find a file later without saving the address, I’m not sure how I would.

Overall, it’s one of those obvious ideas you wonder why no one thought of before—and wonder how long it will last.

Sunday, December 2, 2007

Moving On Up

In light of new aspirations and desires for organization, I'm moving shop over to a new website:

I hope all of you will subscribe to the new feed on that site. I'll miss blogspot's ease of use, but the new system is a bit more flexible.

I'm currently in the process of transferring old posts from this blog to the new site, and it will take a few weeks, but hopefully we'll have a searchable database of research soon.

Thanks to all of you for reading.

Best regards,

Wednesday, November 28, 2007

Huckabee's Fiscal Restraint?

One long-standing 2008 controversy is over the nature of Huckabee's tax hikes and cuts, the context, and impact they may have had on Arkansan voters. He has managed to make enemies with two influential organizations: the libertarian CATO Institute and the venerable conservative economic lobbying group the Club for Growth (the latter of which I'm a member).

I've long had criticisms on some Huckabee positions. The remarkably articulate Governor has gone Dan Quayle a couple of times on fiscal issues ("I support Free Trade, but it must be Fair Trade"), and his baseless income inequality rhetoric is disturbing.

However, as I learned when dealing with the customer relations desk at Wal-Mart, rhetoric is secondary to the bottom line. That line is policy action. Extraordinarily admirable policy stances such as the FairTax have earned a good deal of respect for the Governor from me. Nothing in the Club's report, when conisdered in context, would keep me from voting in for him in a general election.

Dick Morris, for whom I have limited respect--but occasionally he's insightful, had some interesting refutation in this week's column:

A recent column by Bob Novak excoriated Huckabee for a “47 percent increase in state tax burden.” But during Huckabee’s years in office, total state tax burden — all 50 states combined — rose by twice as much: 98 percent, increasing from $743 billion in 1993 to $1.47 trillion in 2005.

In Arkansas, the income tax when he took office was 1 percent for the poorest taxpayers and 7 percent for the richest, exactly where it stood when he left the statehouse 11 years later. But, in the interim, he doubled the standard deduction and the child care credit, repealed capital gains taxes for home sales, lowered the capital gains rate, expanded the homestead exemption and set up tax-free savings accounts for medical care and college tuition.

Most impressively, when he had to pass an income tax surcharge amid the drop in revenues after Sept. 11, 2001, he repealed it three years later when he didn’t need it any longer.

He raised the sales tax one cent in 11 years and did that only after the courts ordered him to do so. (He also got voter approval for a one-eighth-of-one-cent hike for parks and recreation.)

He wants to repeal the income tax, abolish the IRS and institute a “fair tax” based on consumption, and opposes any tax increase for Social Security.

Saturday, November 24, 2007

Willy Wanta and the Packed Wally World: My Personal Marketing Experience

Wal-Mart, the glorious place it is, wasn't made to hold thousands of people at five in the morning. Nonetheless, I have experienced on the of the greatest marketing successes of the modern era: Black Friday. No sane person would buy as much as they do, but if ingenious markets account for variables and provide incentive, it will happen.

Black Friday shopping is a fetish rivaled only by the Saturday morning yard sale shoppers. It's an American tradition that, prior to this Thanksgiving, I had never experienced. But all that changed with a simple desire for $19.99 a pop seasons of 24 and $12 flash drives and SD cards.

You need to know Mountain View is a town of 3,000 people. Two stop lights and a Wal-Mart. And said Wal-Mart was our destination at a quarter to five yesterday morning. Dad kept telling me stuff like, "So, most people are going to be standing in line waiting for them to open the doors at five, but we're just going to sit here in the heat. It's not worth it." Yeah right, I thought, there's going to be three people there, and at five o'clock a worker's going to walk up, say "you're weird," and open the doors. We'll buy something and leave. I just knew it. Knew it.

Okay, so I was wrong.

Being the geeky soul I am, I was reminded of Charles Dickens' A Tale of Two Cities. When Dickens talks about Paris he describes a wine casket that breaks, and countless peasants flock the streets to lick up the wine and wine-soaked mud off the cobblestone streets.

This was the same scene, only instead of peasants and wine it was middle class Americans and HDTVs.

Speaking of which, half of Mountain View has one now. 42', 55', 32'... Stacks of them ten feet tall went all the way down the middle of the center aisle.

Upon arrival, as Dad said, the line stretched from the front door of Wal-Mart to the Gas Station at the back of the parking lot. As soon as the doors were opened, these people flooded in grabbing carts and heading inside. As soon as aforementioned people with carts were inside, however, they realized that that many carts wouldn't fit in Wal-Mart, thus they couldn't move around. Thus they abandond them. Thus hundreds of abandoned carts littered the aisles, thus they were still not able to move around.

When I finally reached electronics and the 24 display, I noticed that our Wal-Mart had turned into a Sams Club--complete with crates and forklifts. The flash drives weren't on a rack, they were cardboard boxes filled with said drives and stacked on top of each other.

People have no apparent need for one or two blenders, let alone six of them. Heck, for ten bucks a blender, why should that stop you. Three 50' plasmas? eBay is the only thing I can think of.

I love capitalism.

I love excess.

I love America.

(And my new seasons 3 and 4 of 24, along with 2GB SD cards and flash drives.)

Maybe next year I should try Target...

Monday, November 12, 2007

Unusual Video and Apologetic Philosophy

As I went to an apologetics conference featuring Josh McDowell and Dinesh D'Souza last weekend, I began pondering some interesting ideas. As a paradigm of cause and effect in life, is this illustration I created yesterday accurate? I'm leaning towards relationships being contingent on actions and philosophy on ethics, but I'm not sure. In traditional Western philosophical thought, our ethics are dictated by our predetermined philosophy, but I'm beginning to think our fundamental ethics (e.g. truth) result in philosophy.

Saturday, November 3, 2007

2008 Looking Differenet... and random sidenotes

Thompson is still unimpressive, Huckabee's fund raising is surging, and Giuliani and Romney are about the same. That said, how will we stand going into Iowa where Giuliani is in surprisingly bad shape and Romney's on top? Dick Morris says Huckabee could end up second in Iowa, while Romney's lead is still comfortable, and Giuliani looking rather shabby? We might actually have a shot at beating Giuliani, if a distant chance of a flank.

Now, a couple of random things. First, Miracles is now my third favorite CS Lewis book. Fantastic. If you want a "welcome to the supernatural" book, it's a great shot.

Second, House MD is the greatest show of all time. But you already knew that. Tuesday's episode was as hilarious as any (House to Cuddy: "By the way, I can tell when my Vicadin isn't really Vicadin. The question is, can you tell when your birth control pills aren't really birth control pills?"). But, more interestingly, the HDTV that has resided gracefully in the garage since we got it half off the morning after thanksgiving a couple of years ago finally got dragged into the house. Since I did the dragging, it ended up in my room. The whole "get something better, want something even better" saying is perfectly true. Analog cable looks quite screwed up on a digital TV. DirectTV HD perhaps?

"Surprisingly" Strong October Economy Numbers

Employers boosted payrolls by a surprisingly strong 166,000 in October, the most in five months, an encouraging sign that the nation's employment climate is holding up relatively well against the strains of a housing collapse and credit crunch.

The Labor Department's report, released Friday, also showed that the unemployment rate held steady at 4.7 percent for the second month in a row. It's a figure that is considered low by historical standards.

Sunday, October 14, 2007

My Feeble Attempt at a Video

Slightly cheesy, but hopefully beneficial.

Saturday, September 29, 2007

Preparing for Chinese Olympics: Fantastic

Amid the international discussion regarding the merits of a somewhat tyrannical government hosting the 2008 Olympics, TIME magazine reported the most important preparations underway:

Government officials say some 4 million Beijing residents have received English language lessons. Famous for aloofness and droll irony, the city's people have been getting training in other areas too in the hope that they will curb their spitting, erratic driving, incessant littering and inability to form an orderly line.

Saturday, September 22, 2007

Mulling Over Bush's Proposal

Bush's plan to alleviate the credit crunch (expanding FHM loans) seems mild compared to the political alternatives. The Wall Street Journal today discussed its without comparison.

No one wants to see borrowers lose their homes, and the good news is that private lenders are already working with late-payment borrowers to refinance the terms of these subprime loans. What's troubling about the FHA expansion plan is that the insurance guarantee places taxpayers atop the housing bubble. Uncle Sam would insure tens of billions of dollars in new mortgage liabilities, and just when default levels are cascading.
Worse, both the White House and Congress want to suspend the FHA's downpayment requirements to insure even zero-equity loans. They should read a new study by the Office of Federal Housing Enterprise Oversight (OFHEO), which reviewed 5,000 FHA loans and found that borrowers "who make no downpayment at all have the highest default rates." Sometimes these default rates were three times higher than high downpayment loans. In the latest "FHA modernization" bill, some borrowers would have no equity in their home.

Thursday, September 20, 2007

Why They Should Stay

I apologize for the delay in posting, I've been out of town. As I've said before, subscribe to my RSS reader to make up for my skirmish-ness.

Allow me to briefly delve into foreign policy. The Economist had a very well organized argument in their cover story last week.

From a slightly different perspective, but perhaps a more pertinent one, economist Thomas Sowell articulates the mistake of Iraq--and the disaster it would be to leave.

If nothing else comes out of the Iraq war, it should banish the concept of "nation-building" from our language and our minds. "The track record of nation-building and Wilsonian grandiosity ought to give anyone pause," as was said in this column before the Iraq war began...

You cannot turn a territory and its population into a functioning nation with the stroke of a pen or the drawing of lines on a map.

Real nations evolve over time out of the mutual accommodations of peoples, not by imposing the bright ideas of theorists from the top down...

This is not a plea for withdrawal. Whatever the situation when we went in, international terrorists have chosen to make this the place for a showdown battle. We can win or lose that battle but we cannot unilaterally end the war. It is the terrorists' war, regardless of where it is fought.

Saturday, September 8, 2007

A Good Point Regarding Payroll Cuts

The Labor Department's August employment report shows a gain of 24,000 private sector jobs. Job growth for June and July was revised lower, suggesting that the job market had been
under pressure even before the latest bout of financial market unrest in August.

A drop in government payrolls more than erased the private sector gain, but economists pointed out that the biggest culprit was teachers, a segment that is vulnerable to large
seasonal swings and appears likely to be revised higher next month to reflect the start of the school year.

The data was collected in the week that included August 12, the height of the financial market turbulence, but before a rash of reported financial job cuts, which will likely show up
in employment reports for September or October.

Interesting read.

Friday, September 7, 2007

No Net Job Growth in August

The AP is reporting that employers dropped 4,000 net jobs in August. Huge gains in education, retail, and healthcare where overshadowed by losses in various manual labor sectors and government jobs.

It's really quite amazing what around 1% of the mortgage industry-- and prior to that, the fed's excess money supply- can do to the rest of the economy.

Unemployment as a whole remains a healthy 4.6%, and August showed reasonable wage gains.

Wednesday, September 5, 2007

2008 Breaking News: John Edwards is a Populist

Who picks up Labor Union endorsements. Thank you, Mr. Edwards, I'll be sure to consider that when casting my vote.

“The union movement is not just important for the past, it is crucial to strengthening and growing the middle class in America, crucial to lifting millions of Americans out of poverty,” Mr. Edwards said while visiting a region of the country where the steel and manufacturing businesses have declined.

You can just see a plethora of empirical data ooze from that statement. You can, can't you? Surely someone can. I'm just inferior.

Monday, September 3, 2007

Competition Improves Efficiency - Shocking!

In the most shocking news since Criss Angel made a pocketknife disappear, look for an article in the next American Economic Review entitled "Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on US Electric Generation Efficiency." It's conclusions are so blunt it even caught US News and World Report's attention:

Over the past two decades, huge swaths of the economy have been deregulated, from banking to electricity to airlines. But has competition increased efficiency? In a paper forthcoming in the American Economic Review, a group of academics from Emory University's Goizueta School of Business, MIT, and the University of California's Haas School of Business say yes. In Do Markets Reduce Costs? Assessing the Impact of Regulatory Restructuring on U.S. Electric Generation Efficiency, the researchers examine production at fossil-fuel generating plants from 1981 to 1999, before and after deregulation. Publicly owned plants, which were largely sheltered from deregulation, experienced the smallest efficiency gains. Investor-owned plants in states with restructured markets improved the most. Even in a stodgy old industry like electricity, markets do seem to work their magic.

The paper is currently available for free on the Berkley website. The abstract explains well:

While neoclassical models assume static cost-minimization by firms, agency models
suggest that firms may not minimize costs in less-competitive or regulated
environments. We test this using a transition from cost-of-service regulation to
market-oriented environments for many U.S. electric generating plants. Our
estimates of input demand suggest that publicly-owned plants, whose owners were
largely insulated from these reforms, experienced the smallest efficiency gains,
while investor-owned plants in states that restructured their wholesale electricity
markets improved the most. The results suggest modest medium-term efficiency
benefits from replacing regulated monopoly with a market-based industry structure.

An excellent empirical work, nearly the entire article is as quotable as the abstract. The principle argument of free market advocates during electric reform was nearly dead-on.

During the second half of the 1990s, states began to shift their focus from
incentive regulation to restructuring. By 1998, every jurisdiction (50 states and the
District of Columbia) had initiated formal hearings to consider restructuring their
electricity sector, and by 2000, almost half had approved legislation introducing some
form of competition that included competitive retail access, whereby companies competed
to sell power to retail customers.10 Restructuring initiatives, in contrast to incentive
regulations, fundamentally changed the way plant owners earn revenue....Retail access programs in combination with the creation of the new
wholesale spot markets may increase the intensity of cost-cutting incentives, leading to
even greater effort to improve efficiency.

David Letterman: “Top Signs President Bush Needs A Vacation”: Staffers found him having a conversation with a coat rack; Asked CIA director to have Jason Bourne join hunt for Osama; Hasn’t stopped sobbing since he was passed over for “The Price is Right”; Has only seen the new Harry Potter movie four times; So overworked he’s pronouncing words correctly; He’s been drinking like an astronaut.

Jay Leno: Pretty busy day in Washington today. Attorney General Alberto Gonzales and Karl Rove went to U-Haul together to help each other move. ... Idaho Sen. Larry Craig, a married, conservative Republican, was arrested by a plainclothes police officer for lewd conduct in a Minneapolis airport men’s room. Today the senator’s office said it was all a big misunderstanding. The undercover police officer said the senator tried to reach under the stall to touch him, but the senator said, no, he wasn’t trying to touch him, he was only trying to pick up a piece of paper off the floor. Who picks up paper off the floor in the men’s room? I don’t even like when my shoe laces touch the floor in the men’s room. ... You know who I feel sorry for in this whole thing? The undercover cop. How’d you like to have that job? Sit in an airport bathroom all day, your pants around your ankles with a coffee and a donut waiting for guys to hit on you. ... At a political forum here in Hollywood last week, Hillary Clinton said that she does not support gay marriage. In fact, she said she’s not too crazy about straight marriage anymore, either. ... Fred Thompson said he’s still testing the waters in his bid for the presidency. He’s been testing the waters for what, like six months now? In fact, those aren’t wrinkles on his face—he’s starting to prune up from being in the water for so long.

Obama Blames All Consumer Choices on Mortgage Lenders

Unscrupulous lenders who deceptively sold subprime mortgages to millions of Americans should be fined and the proceeds used to help bail out borrowers facing a wave of foreclosures, according to Barack Obama, the Democratic senator running to be his party’s presidential candidate...

Writing in today’s Financial Times, Mr Obama blamed lobbyists working on behalf of lenders for obstructing tougher regulation of the subprime industry, adding: “Our government failed to provide the regulatory scrutiny that could have prevented this crisis.

“While predatory lenders were driving low-income families into financial ruin, 10 of the country’s largest mortgage lenders were spending more than $185m (€136m, £92m) lobbying Washington to let them get away with it,” he wrote, citing figures from the Centre for Responsive Politics.

Obama's harsh rhetoric is shallow and ill-conceived by most economic standards. Foreclosures are painful, not profitable, for lending institutions. These businesses have very little incentive to repossess on shaky subprime mortgages. As painful as it sounds to those struggling to make payments, the unwise consumer who borrowed more than he or she could afford, and poor planning on the part of the lender, are the principle financial villains in this story. Yes, some people were probably not fully informed on the ramifications of these adjustable rate mortgages. Nonetheless, "learning the lesson" of mortage marketing doesn't come easily. Bailing them out or punishing a business that is losing out does little to rectify potential future crisis: will this happen again? Certainly, no one wants perpetual problems with subprime lending. People need to learn their lesson, and a painful one at that. The Economist confesses that, "The retreat to a new level of risk was never going to be orderly or free of casualties. Neither should it be. Bankers and investors need to suffer precisely because the methods of modern finance have been found wanting. It sounds Darwinian, but the brutal demonstration that you pay for your sins is what leads the system to evolve. Markets learn from their mistakes. Only fear will spur investors to price risks better and get them to put more effort into monitoring their counterparties."

Several facts should be remembered before we take wide scale legislative action. While the economy suffer to some degree, CATO pointed out last week that new home construction is still growing, albeit much slower. The economy outside of the housing market remains strong. The loans in "crisis" represent about one in one hundred mortages in the US, the scale of these foreclosures is marginal, modest at worst. Jim Cramer and his cadre have little justification to berate Mr. Bernake's "academic" explanation and words of comfort about "Armogeddon." Scare mongerers do little to improve consumer confidence.

Many businesses messed up. Politicians like Mr. Obama needing to capitalize on the situation at the expensive of the consumer and economy are daft and unethical to scream, "curse you for messing up!" As The Economist explains:

But there is a price that is only now becoming apparent. Because lenders expected to be able to sell on the risk of default to someone else, they lent too easily. After all, they would not have to pick up the pieces. In theory, that risk should have been borne by the people best able to carry it. But with everybody having sold on the risk to everyone else—and the risk often being carved up, repackaged and sold again—nobody is sure where the losses are. The fear is that some risks ended up with those who least understood what they were getting into, and fear is a potent force in this disintermediated world. In the interbank market, every counterparty was potentially vulnerable. Even small amounts of bad credit can drive out good.

In theory, ratings agencies and mathematical models help investors price the risk they are taking on, even if the securities they are buying are scarcely traded. Yet when some supposedly good-quality assets proved to be worth little, people lost faith in the models and the ratings. Across the board, investors had failed to take account of how fast and how far asset prices fall when everyone wants to sell at the same time. Hard-to-sell long-term securities had been bought with short-lived debt, which left borrowers vulnerable to a change in sentiment every time the debt fell due. It does nothing to restore confidence when the biggest model-driven hedge funds had to get in new money. The people at Goldman Sachs lost a packet when something happened that their computers told them should occur only once every 100 millennia.

Politically, something will have to happen. No "tragedy" can avoid it. We can only hope it's a mild course of action that doesn't excessively bind the individual or businesses, such as President Bush's proposal for FHM loans or, at worst, other policy prospectives such as allowing homeowners to stay in their homes and pay ordinary rent instead of payments. We can then pray radical populists like Mr. Obama have their plans shown to be, well, radical.

Jay Leno: Today Chinese officials recalled one million tons of lead because it may contain toys. ... Hillary Clinton was chastised by The Washington Post for showing too much cleavage in front of the Senate. See, that seems sexist to me. They’ve never gone after Senator Ted Kennedy for doing the exact same thing. ... Isn’t this ridiculous? Shouldn’t we be focusing on I-raq, not her rack? ... It’s amazing isn’t it? The United States is 231 years old, but apparently the media is only 13. ... Democratic presidential candidate Barack Obama said today that he would not use nuclear weapons under any circumstances. I didn’t realize his battle with Hillary had escalated to this level. I just thought there was a little friction. ... Madame Tussauds’ new wax museum in Washington, DC, is going to feature a “scandal room,” featuring wax likenesses of elected officials involved in sex, alcohol or ethics scandals. Why would you go there, when you can just walk five blocks to the Capitol building and see the real thing? ... If you haven’t seen “The Bourne Ultimatum,” it’s about a guy who works for the government but can’t remember his past. The original title was “The Alberto Gonzales Story.” ... Happy Birthday to our governor, Arnold Schwarzenegger, who is 60 years old. You can tell he’s getting up there. Remember when he used to say things like, “I’ll be back”? Now he says, “Ow, my back.”

Thursday, August 30, 2007

2008 Update: Thompson Sliding to Second, Huckabee Replacing McCain, McCain Celebrates

McCain's disastrous campaign keeps him in good humor, apparently. In an interview with Jay Leno he made several interesting remarks:

"We are doing so poorly I thought maybe I would announce on this show that I'm running for president," McCain told Jay Leno in an appearance taped for broadcast Tuesday night on "The Tonight Show." "We have obviously made mistakes," the Arizona senator said...

McCain turns 71 Wednesday - if elected he would become the oldest first-term president. Leno mentioned the birthday and McCain noted that his 95-year-old mother was refused a rental car in Paris because of her age. So she bought a car and drove around sightseeing. "I'm taking her with me wherever I go," McCain said.

The latest averages show Giuliani's lead still comfortable, with Thompson second, Romney third, McCain fourth, and Huckabee the new found distant fifth.

Romney, as anticipated, topped (bought) the Iowa Straw poll and used the resume indent to prop up fundraising, which some rumors say may be slowing down. Impressive organizational structure and handling of confrontational interviews were staples of his campaign strength.

Since his mildly surprising second place finish in Ames, media-induced popularity has gone for Huckabee like Senator Craig goes for the guy in the stall next door. Local papers, national papers, every afternoon talk show and practically network news station arranged interviews within the following weeks. While a PR miracle, and popularly called a "shocking" second place finish, it could be anticipated for several reasons.

With no other serious competition (Giuliani, McCain, and Fred Thompson were absent from the ballot) Romney was a shoo-in. The only intrigue in existence is how "also" prospects would stack up. Huckabee stole the fire from the last two Republican debates with witty one liners and eloquent charisma. Thommy Thompson looked like an insurance agent, Tom Tancredo like, well, a Congressman, and Sam Brownback more like a preacher than the Rev. Huckabee himself. While being the de facto second tier leader in the debates and media portrayal, he was near the bottom of the totem poll in fundraising, the only discrepancy in which Brownback had the upper hand. Ultimately, perceived vision and eloquence trumped cash.

Thommy Thompson's non-existant support encouraged him to finally fold his campaign, while the deeply depressed Tancredo may follow suit. Ron Paul, who has a surprising amount of cash on hand, took a Steve Forbes finish in standings. Unlike Forbes, however, Paul has a radically active group of libertarians and online activists who may keep his campaign pumping for several months.

Far more telling than the Straw Poll, however, may be the September 5th debate on Fox News. Biggest question- will Thompson be there?

Wednesday, August 29, 2007

Two Americas

But who envies who?

Some new Heritage Research is very interesting.

The following are facts about persons defined as "poor" by the Census Bureau, taken from various gov ernment reports:

Forty-three percent of all poor households actu ally own their own homes. The average home owned by persons classified as poor by the Census Bureau is a three-bedroom house with one-and-a-half baths, a garage, and a porch or patio.

Eighty percent of poor households have air conditioning. By contrast, in 1970, only 36 percent of the entire U.S. population enjoyed air conditioning.

Only 6 percent of poor households are over crowded. More than two-thirds have more than two rooms per person.

The average poor American has more living space than the average individual living in Paris, London, Vienna, Athens, and other cities throughout Europe. (These comparisons are to the average citizens in foreign countries, not to those classified as poor.)

Nearly three-quarters of poor households own a car; 31 percent own two or more cars.

Ninety-seven percent of poor households have a color television; over half own two or more color televisions.

Seventy-eight percent have a VCR or DVD player; 62 percent have cable or satellite TV reception.

Eighty-nine percent own microwave ovens, more than half have a stereo, and more than a third have an automatic dishwasher.

Sunday, August 12, 2007

Democratic Tongue-Twisters

Sorry about my hiatus from posting, some trips and a busy schedule have severely limited my time. I'd encourage you to subscribe to my RSS feed to keep up with the halfway sporadic updates.

To catch some humor from the Democratic debates, I'd recommend this article on severe flaws in logic and economics.

Monday, July 16, 2007

An Anecdote Worth a Thousand Words

As much as we can discuss earmarks and agricultural subsidy abuse, perhaps we need something more tangible.

In the past five years, Andre Agassi, Ted Turner and Scottie Pippen, have received farm subsidies.

Apperently, Agassi has a prep school with a defunct website that nailed $200,000, Pippen picks up $26,000 annually, and Turner almost $13,000 annually.

Sunday, July 8, 2007

Rebounding Economic News

As anticipated, it seems 2007 Q1 may have been the weakest point of the year. A strong economic report, keeps unemployment at 4.5%, and wages up 4%.

The economy resumed healthy growth during the spring after a winter lull, an employment report confirmed yesterday, with 132,000 jobs gained last month and a nearly 4 percent rise in wages seen over the past 12 months.

Thursday, July 5, 2007

Democratic Majority: "Improve World Image... With Protectionism"

The Wall Street Journal editorial page makes an interesting point:

Democrats are promising to improve America's image in the world if they retake the White House next year. Tell that to Peru and Colombia, which are watching Democrats in Congress renege on free-trade assurances that are barely a month old.

House Democrats pulled that fast one late last Friday, shortly before a holiday weekend when few were watching. They also announced their opposition to a free-trade pact with South Korea only a day before the deal was signed, and for good measure they announced that an extension of trade promotion authority (which expired June 30) is essentially dead as long as they run Congress. Ah, bipartisanship.

HillaryCare Letter to the Editor

Thursday, July 5th, 2007

To the editor:

Canadian Lindsay McCreith doesn’t think too highly of Canada’s “universal” health care system that many presidential candidates want to emulate. He would have had to wait for four months just to get an MRI, then months more to see a neurologist for his malignant brain tumor. He had no choice but to visit a Buffalo, N.Y. hospital for lifesaving surgery. Now he's suing for the right to opt out of Canada's government-run health care, which he considers dangerous. He’s not alone. Long delays for critical surgery are common, and in hospitals one in ten patients wait more than a dozen hours for treatment. The Wall Street Journal notes that a, “Canadian government study recently found that only about half of patients are treated in a timely manner, as defined by local medical and hospital associations.”

In his anti-American care film “Sicko,” Michael Moore declares we could learn from Cuba’s universal health care system under Fidel Castro. What does Castro himself think about his miracle system? During his time of critical illness, he turned not to his own socialized doctors, but instead brought in capitalist doctors and equipment from Spain. Accordingly, Madrid’s regional president scoffed at Castro’s hypocrisy and failed socialist system.

Perhaps the most well known proposal in America is Senator Clinton’s “HillaryCare.” It depicts the current system—correctly—as being broken. A current system featuring a myriad of federal and state regulations that drive up costs, a tax code that provides few options in employer-provided coverage, and no room for individual coverage competition. However, she doesn’t advocate positive reforms such as less government regulation and more viable options for individual choice, perhaps through measures such as Health Savings Accounts (HSAs) or tax breaks to make private coverage more affordable to low-income citizens. Instead, she proposes that governmental bureaucracy handle all of it through a single-payer, taxpayer-funded format. Uninsured Americans are depicted as lost and forgotten—supposedly forty six million of them.

In fact, David Gratzer, M.D., a physician licensed both in Canada and the United States and fellow at the Manhattan Institute, paints a different picture. Dr. Gratzer explains that in a 2003 report, a third of the uninsured have family incomes of more than $50,000 a year, and for 16% of the uninsured, incomes exceed $75,000 a year. A Health Affairs study of non-poor uninsured Californians pegs their average annual health spending at $200 per person. Many people have done the math and decided not to pay for the coverage. Additionally, one third of the remaining Americans qualify for Medicare or Medicaid, and another third are without coverage for extremely brief periods, usually less than a few months. While approximately six million Americans slip through the cracks, it’s a far cry from forty six million.

Reform should be focused on providing maximum liberty, promoting the autonomy of individuals, and create more options to increase viable health care choices. The classic economist Adam Smith was correct in asserting, “Every man…is first and principally recommended to his own care; and every man is certainly, in every respect, fitter and abler to take care of himself than of any other person.”

Tuesday, June 26, 2007

Campaign Finance Sanity

One of the key improvements of the new SCOTUS dynamic is campaign finance reform, revisited. In a pivital ruling yesterday, the court decided to err on the side of free speech, and allow the public to voice their views (views that aren't even endorsing a candidate) on air.

The decision was split 5-4, with Roberts, Alito, Thomas, Scalia, and Kennedy in the majority, Alito and Roberts alined together with Roberts' majority decision; and Scalia, Thomas, and Kennedy writing an additional majority decision, objecting to the fact that Roberts and Alito didn't explicitly overrule the court's 2003 McConnell decision.

While largely viewed as a victory for "corporations," the true winner is the people--and the rule of law. Free speech may not be entirely supressed by McCain-Feingold, yet.

Wednesday, June 20, 2007

An entirely un-academic post, if I may

After the national debate tournament and several research papers, I'm afraid I'm in the mood for levity.

"Here’s the latest in the John Edwards campaign. It turns out, yes, there are two Americas and neither one of them is voting for him." - Jay Leno

Saturday, June 16, 2007

Letter to Congressmen & Letter to Editor: Tax Cuts

Dear Senator/Representative,

The profound consequence of the 2001 and 2003 tax rate cuts has been felt by Arkansans, and is consistent with historical precedent dating back to Reagan and Kennedy. Over-taxation reduces economic stimulus and the elasticity of taxable income. As a fifteen-year-old policy enthusiast, I'm deeply interested in seeing our local economy continue to benefit from economic stimulus provided by these reforms. Yet, we're faced the the likelihood of their expiration, along with the tax hike associated with that and the expansion of the Alternative Minimum Tax (AMT). I would urge you to provide support to make the tax reform permanent. We all feel the positive effects of pro-growth, pro-family tax rate cuts. Low unemployment, historically high sustained GDP growth rates, as well as increasing productivity and compensation.

Reductions in the capital gains tax and income tax stimulate economic growth, alleviate unemployment, bolster incentive for capital investment, and improve the elasticity of taxable income. This was historically demonstrated in the Kennedy and Reagan administrations, where we saw economic growth without substantial reductions in revenue. We see that freeing up the economy and allowing for the added stimulus of lower marginal rates and capital gains tax, we improve output, lower unemployment, and create a more friendly environment toward enterprise. The distortion effect of taxes is large, in fact, there is some empirical literature (e.g. Romer, Berkley 2007) to suggest that each one percent increase in exogenous tax rates reduced output by three percent.

While we bemoan the increasing federal debt, which is a policy concern, we need to remember that 87% of the accrued deficit increase since 2000 has been caused by heightened spending, with only 13% viably held accountable to tax rate cuts. Additionally, if we examine the federal debt pro rata, it is consistent with historical average federal debt held by the public as a percent of the GDP (for the past forty years that figure has been around 35%).

As we attempt to maximize revenue while providing the lowest possible marginal rates across the board, and imperative economic parameter deals with the elasticity of taxable income. A recent empirical work by Gruber and Saez in The Journal of Public Economics elucidated that the elasticity of taxable income is substantially effected by marginal tax rates of higher income brackets. What this means is that the arithmetic reduction in revenue caused by lower tax rates is offset by the alleviation of the dead-weight loss the taxes had in the first place. This economic effect allows us to cut taxes more easily, and in the long run, lose little revenue. Some estimates of skyrocketing budget deficits if we make the Bush tax cuts permanent fail to account for this offset, which the economic community acknowledges. Low-end estimates come from sources such as Mankiw and Weinzierl (Journal of Public Economics 2006) which estimated a parameter of 0.5, and higher estimates by Kimball and Shapiro (Yale 2004) have been even more favorable toward tax cuts.

The final objection to making President Bush's tax cuts permanent comes in the form of objecting to "tax cuts for the rich." This uses a grossly disproportionate methodology that overlooks a couple of things. First, while the higher-income earners were quantitatively affected more by the cuts, this is in part because we're dealing with larger sums of money, and also because the necessary capital gains tax reduction disproportionately affected them. That reduction, however, proved vital in providing for job growth and economic stimulus. More importantly, the tax cuts shifted the tax burden more to the wealthy. The rich pay a larger portion of income taxes today than they did before the cuts, and the poor pay less. Everyone's taxes were cut, and everyone benefited.

I would urge you to support these pro-growth policies, and support making the bush tax cuts permanent.

Best regards,

Will Simpson

The following letter was published in the Stone County Leader.

To the editor,

If you and your spouse are an elderly couple earning $40,000 a year, your taxes will go up from $583 to $1,489 in 2011. If you’re a woman, you could be one of the 83 million American women who could see their taxes rise by an average of $2,068. The tax cuts proposed by the Bush administration drew on a long and rich history of policy precedent, empirical literature, and proven success. They bolstered a sluggish economic prognosis into a stalwart economy with stable GDP growth, historically low unemployment, and climbing productivity and compensation. Yet, today, the democratic congressional majority’s legislative agenda explicitly declares a desire to raise American’s tax burden by allowing this reform to expire.

Two common myths exist regarding this tax reform. The first is that it exacerbates budget deficits. At least in the short term, we do see a slight loss in revenue, but the arithmetic loss from the reduced rate is offset because tax cuts alleviate some deadweight loss the taxes had in the first place. In common man terms, you won’t necessarily lose significant amounts of revenue. As a matter of fact, the Congressional Budget Office (CBO) has stated revenues for FY 2007 are exceeding last year’s by nearly $250 billion, That increase represents the second-highest growth rate (13%) in the past twenty-five years; four to five times the inflation rate. April saw one of the largest surpluses in recent decades. This is called the economic effect. Estimates for a parameter of offset by Kimball and Shapiro (Yale 2004) were favorable to tax cuts, coming close to 0.7 (meaning we recover seven tenths of the loss). In the long run, some marginal rate and capital gains reductions can even increase revenue. Many models that forecast huge revenue drops if we don’t raise taxes discount not only the basic distortion effect of taxes, but also the elasticity of taxable income (how we can enlarge the economic pie so to speak). An empirical work by Gruber and Saez (Journal of Public Economics 2002) showed that marginal tax rate cuts and capital gains reform drastically improved this elasticity. In short, the current budget deficit cannot be attributed to tax cuts, but to spending.

The second popular myth is that tax cuts are only for the rich. On the contrary, the Bush tax cuts actually shifted the tax burden more toward the wealthy! CBO numbers show that pre-tax cut, the highest 20% of income earners' tax dollars accounted for 81.2% of total federal revenues collected. Post reform, the highest 20% of income earners paid 85.3% of taxes collected. The middle twenty percent dropped from contributing 5.7% to 4.7% of revenue. The numbers are antithetical to the rhetoric of the left.

The historical precedent for tax reform is undeniable. If you look at Department of Commerce statistics before and after the Reagan Administration tax cuts, in the four years prior to the cuts real annual income tax revenue growth was at -2.8%. After the cuts it was at +2.7%. Do the same thing comparing real GDP growth and you get 0.9% compared to 4.8%. We’re seeing the same scenario unfolding today. The Bush tax reform has incubated an environment for growth. Please assure our Senators and Representative that the people of Arkansas are firmly supportive of successful tax reform, and Congress cannot allow these measures to expire.

Will Simpson
Mountain View, AR

Tuesday, June 12, 2007

The Morality of Free Markets : Individuals vs. Collectivism

Dr. Walter E. Williams, econ professor at George Mason University, had a worthy read yesterday morning. It is one of the most comprehendable and concise explanations of the moral logic behind free and private enterprise I've seen in a while:

Dr. Thomas Sowell, a distinguished economist and longtime friend and colleague, recently wrote a series of columns under the title "A War of Words." He pointed out that liberals succeed in duping the public because they are so clever with words that they give the appearance of compassion. Liberals talk about the need for "affordable" housing and health care. They tarnish their enemies with terms such as "price-gouging" and "corporate greed." Uninformed and unthinking Americans fall easy prey to this demagoguery.

Politicians exploit public demands that government ought to do something about this or that problem by taking measures giving them greater control over our lives. For the most part, whatever politicians do, whether it's rent controls to produce "affordable" housing, or price controls to eliminate "price-gouging," the result is a calamity worse than the original problem. For example, two of the most costly housing markets are the rent-controlled cities of San Francisco and New York. If you're over 40, you'll remember the chaos produced by the gasoline price controls of the 1970s. Socialist agendas have considerable appeal, but they produce disaster, and the more socialist they are, the greater the disaster.

Liberals often denounce free markets as immoral. The reality is exactly the opposite. Free markets, characterized by peaceable, voluntary exchange, with respect for property rights and the rule of law, are more moral than any other system of resource allocation. Let's examine just one reason for the superior morality of free markets.

Say that I mow your lawn and you pay me $30, which we might think of as certificates of performance. Having mowed your lawn, I visit my grocer and demand that my fellow men serve me by giving me 3 pounds of steak and a six-pack of beer. In effect, the grocer asks, "Williams, you're demanding that your fellow man, as ranchers and brewers, serve you; what did you do to serve your fellow man?" I say, "I mowed his lawn." The grocer says, "Prove it!" That's when I hand over my certificates of performance -- the $30.

Look at the morality of a resource allocation method that requires that I serve my fellow man in order to have a claim on what he produces and contrast it with government resource allocation. The government can say, "Williams, you don't have to serve your fellow man; through our tax code, we'll take what he produces and give it to you." Of course, if I were to privately take what my fellow man produced, we'd call it theft. The only difference is when the government does it, that theft is legal but nonetheless theft -- the taking of one person's rightful property to give to another.

Liberals love to talk about this or that human right, such as a right to health care, food or housing. That's a perverse usage of the term "right." A right, such as a right to free speech, imposes no obligation on another, except that of non-interference. The so-called right to health care, food or housing, whether a person can afford it or not, is something entirely different; it does impose an obligation on another. If one person has a right to something he didn't produce, simultaneously and of necessity it means that some other person does not have right to something he did produce. That's because, since there's no Santa Claus or Tooth Fairy, in order for government to give one American a dollar, it must, through intimidation, threats and coercion, confiscate that dollar from some other American. I'd like to hear the moral argument for taking what belongs to one person to give to another person.

There are people in need of help. Charity is one of the nobler human motivations. The act of reaching into one's own pockets to help a fellow man in need is praiseworthy and laudable. Reaching into someone else's pocket is despicable and worthy of condemnation.

Saturday, June 9, 2007

May Jobs: 44nd Consecutive Month of Growth

The economy added 157,000 jobs in May, making it the 44th consecutive month of job growth.

“We had a very weak performance in the first three months of the year,” observes Richard Yamarone of Argus Research, “but now we’re in the middle of the year and economic conditions are extremely bright.”

Jared Bernstein, senior economist with the Economic Policy Institute, notes that “[t]hough job growth of this magnitude is moderate, if it persists, it is likely fast enough to provide consumers with the needed income growth to propel the economy forward in coming months.”

But we still need to raise taxes?

Thursday, June 7, 2007

2008 Update: 3rd GOP Debate - Thompson's Shadow and Romney's Performance

Wolfy Blitzer looks appeared as an annoying little boy with the men on stage.

First question:

"Knowing what you know now, would you have voted differently on the Iraq war resolution?"

Come on. Of all the repetitive questions posed today, this is as inherently beta sigma as any. Romney, who's winning the debate, essentially told Blitzer, well, that he was retarded.

(Paraphrased): "I believe that, given what we knew at the time, the bi-partisan support for the war was reasonable, and we had a successful campaign to overthrow the Hussein regime. We had poor strategy after that, we weren't realistic enough, and we've struggled. Today, we need to look forward with hope and strategy to win. We do that by asserting Iraqi control over-"

Blitzer: (paraphrased) "Mr. Governor, you refuse to answer my question, which was given what you know now, would you support the war?"

Romney: (paraphrased, but not much) ":shakes head: I did answer that question as rationally as a sane person would expect. That's a non sequitor-- a null sac, we look forward today."

Same with all the other candidates.

It's preposterous that there was another evolution question, but Gov. Huckabee gave an incredibly eloquent response to it.

Other asinine questions, or poorly worded ones:

"Is science wrong on global warming?" Um. No one says "science is wrong." It's about the interpretation and scientific belief.
"Would you pardon Scooter Libby."
"Did you read the IAGS Briefing #something before the Iraq war?" Oooh, yes, I remember that! It was paper number 234235 on my desk! I read it thoroughly. Kudos to secondary assistant director to legislative coordinator at CIA, very good.

So, at halftime: Less than 15% of the questions were remotely pertinent. The Town Hall portion was better.

Romney winning.
McCain up. his defense of McCain/Kennedy immigration was excellent, drawing on the patriotism of Hispanic soldiers. I like him more, I'd campaign for him now.
Gilmore (oddly) up.
Paul probably up (simply because so many dumb questions were just for him)
Huckabee steady. He should be killing it in the debates, but he seemed flustered a couple of times, with technical difficulties and such.
Tancredo steady.
Giuliani down.
Thompson (T.) down.
Brownback down.
Wolfy Blitzer looks like an annoying little boy with the men on stage.

First question:

"Knowing what you know now, would you have voted differently on the Iraq war resolution?"

Come on. Of all the repetitive questions posed today, this is as inherently beta sigma as any. Romney, who's winning the debate, essentially told Blitzer, well, that he was retarded.

(Paraphrased): "I believe that, given what we knew at the time, the bi-partisan support for the war was reasonable, and we had a successful campaign to overthrow the Hussein regime. We had poor strategy after that, we weren't realistic enough, and we've struggled. Today, we need to look forward with hope and strategy to win. We do that by asserting Iraqi control over-"

Blitzer: (paraphrased) "Mr. Governor, you refuse to answer my question, which was given what you know now, would you support the war?"

Romney: (paraphrased, but not much) ":shakes head: I did answer that question as rationally as a sane person would expect. That's a non sequitor-- a null sac, we look forward today."

Same with all the other candidates.

It's preposterous that there was another evolution question, but Gov. Huckabee gave an incredibly eloquent response to it.

Other asinine questions, or poorly worded ones:

"Is science wrong on global warming?" Um. No one says "science is wrong." It's about the interpretation and scientific belief.
"Would you pardon Scooter Libby."
"Did you read the IAGS Briefing #something before the Iraq war?" Oooh, yes, I remember that! It was paper number 234235 on my desk! I read it thoroughly. Kudos to secondary assistant director to legislative coordinator at CIA, very good.

So, at halftime: Less than 15% of the questions are remotely pertinent. Absolutely horrible.

Romney won.
McCain up. his defense of McCain/Kennedy immigration was excellent. I like him more, I'd campaign for him now.
Gilmore (oddly) up.

Huckabee steady. He should be killing it in the debates, but he seemed flustered a couple of times, with technical difficulties and such.
Paul probably steady (simply because so many dumb questions were just for him).
Giuliani steady. The lightening strike was incredibly good Providence for him.
Tancredo down.
Thompson (T.) down. What an irritating name confusion
Brownback down. You're rather inclined to forget about him. That's very Presidential.
Finally, Hunter down. I don't know why Mike Reagan and Ann Coulter are saying he's the conservative candidate. He's anti-free trade, has poor rhetorical engagement, and no fund raising. Anyhow, as The Politico's Roger Simon points out, he was quite rude in assaulting the front-runners at the very end of the debate.

Huckabee's answer to what the greatest moral threat today is was excellent. Paul's ranting against any form of pre-emptive strikes was depressing.

Fred Thompson won the debate. He wasn't there. But immediately after the debate he had an exclusive twenty minute interview with Sean Hannity on Hannity & Colmes. No tough questions, no competition, just a softie conversation with Hannity about the debate, politics, conservatism, life, love, and other mysteries.

Accordingly, some polls now have Thompson narrowly in second place. So much for a candidate who isn't running. He's assembled an excellent team of advisers, including (to my delight) a fabulous economist to be his economic adviser, Lawrence B. Lindsey. Lindsey understands economics, he once worked for the Council of Economic Advisers under Reagan then served on the Council for Bush 41, he's a former assistant professor at Harvard, and current Fellow at the American Enterprise Institute.

One potential high note to the candidates is the reversal in Gingrich's tone. He now says odds are 4-to-1 that he will not run. This is a complete reversal of his previous indications that he likely would. It also bolsters the prospects of other "conservative alternative" candidates, most significantly Fred Thompson, Mike Huckabee, and Mitt Romney. To digress, I am indeed a Thompson supporter, but I fear too much stock is placed in one aspect of his candidacy. He's not an amazing orator. He will perform Giuliani-caliber in the debates when it comes to delivery and engagement, expect him to come in third behind Romney and Huckabee.

I could be surprised, though.

I hope I am.

I'm now a Frederalist. If you think that has anything to do with James Madison or John Jay, go read that statement again.

Monday, June 4, 2007

Income Inequality

I stand surprised.

The two major economic reports of the past few weeks are the exact opposite of what I expected. My anticipation was for strong general economic growth and a poor report on income equality, albeit I still oppose government action to rectify the latter. GDP growth was existent, but lower than expected, with a strong unemployment report. Most economists forecast a stronger second quarter.

The most startling report over the past few weeks comes from the CBO regarding income inequality. We previously discussed the CBO's conclusions regarding income volatility, but an even more impressive aspect of the report involves the Krugman Democratic "income inequality" slogan. The left of center Brookings Institution concedes the following:

“According to a Congressional Budget Office (CBO) study released this month, the bottom fifth of families with children, whose average income in 2005 was $16,800, enjoyed a larger percentage increase in income from 1991 to 2005 than all other groups except the top fifth... Even more impressive, the CBO found that households in the bottom fifth increased their incomes so much because they worked longer and earned more money in 2005 than in 1991—not because they received higher welfare payments... Low-income families with children increased their work effort, many of them in response to the 1996 welfare reform law that was designed to produce exactly this effect. These families not only increased their earnings but also slashed their dependency on cash welfare. Earnings up, welfare down—that’s the definition of reducing welfare dependency in America.” —Brookings Institution Senior Fellow Ron Haskins

Friday, June 1, 2007

Rocket Scientist Shuns Doomesday Global Warming Alarmists

No, seriously. NASA has engaged a PR blitz since Thursday afternoon to explain its Administrator's comment that, well, Al Gore-style hypothetical scenarios and causations are absurd.

"I have no doubt that global — that a trend of global warming exists, I am not sure that it is fair to say that it is a problem we must wrestle with... First of all, I don't think it's within the power of human beings to assure that the climate does not change, as millions of years of history have shown. And second of all, I guess I would ask which human beings — where and when — are to be accorded the privilege of deciding that this particular climate that we have right here today, right now is the best climate for all other human beings. I think that's a rather arrogant position for people to take...Nowhere in NASA's authorization, which of course governs what we do, is there anything at all telling us that we should take actions to affect climate change in either one way or another. We study global climate change — that is in our authorization. We think we do it rather well. I'm proud of that, but NASA is not an agency chartered to, quote, battle climate change." - NASA Administrator Michael D. Griffin, in an interview with NPR, hence striking a firestorm of controversy.

Thursday, May 31, 2007

2008 Update: Thompson Moving

Fred Thompson has reportedly dropped NBC's Law and Order next season, and MSNBC is reporting he will formally file initial FEC papers on June the fourth.

This poses problems for all GOP horses, most severely Romney, Gingrich, McCain, and the second tier.

Gingrich is the other "non candidate," and as he continues to tarry his coming until September, it opens the door for anxious and agitated donors to support Thompson. McCain is still desperately trying to best his pitiful first quarter fund raising, which Thompson could put a dent in. Most polls that include Thompson demonstrate that a good deal of his support coming from the Romney camp, likely due to the feeling that Romney is the most conservative of the "big three." The appeal of the "second tier," most notably Huckabee, Brownback, and Tancredo, is largely contingent on frustration with more popular candidates. Thompson may hamper that feeling.

RCP averages, taken before the Law and Order announcement:

RCP Average 05/10 to 05/23
Guiliani: 26.0%
McCain 18.2%
Thompson 10.0%
Romney 10.0%
Spread: Giuliani +7.8%

Wednesday, May 30, 2007

Powerful Economies Screw Up the Environment... Don't They?

A couple of Heritage Foundation trade analysts had a dumbfounding brilliant and obvious idea. They looked at Yale's Environmental Sustainability Index (ESI) and the Wall Street Journal/Heritage Index of Economic Freedom, and observed how they correlated. When meshing the two together, they produced this graph, which doesn't require any explanation.

Oh, and a parting golden nugget of wisdom:

I sued Taco Bell
'Cause I ate half a million Chalupas
And I got fat!
I sued Panasonic
They never said I shouldn't use their microwave
To dry off my cat
Huh, I sued Earthlink
'Cause I called them up
N' they had the nerve to put me on hold
I sued Starbucks
'Cause I spilled a Frappucino in my lap
And brrr, it was cold!

-- Weird Al, "I'll Sue Ya"

Monday, May 28, 2007

Gas Prices: Evil Big Oil Executives (Dick Cheney and Halliburton) in Mitch McConnell's Attic

Gas prices are, obviously, rising at the onset of the summer driving season. Accordingly, politicians are again crying for effectual price controls to combat the illusory "price gouging" on the part of the ever-amorphous and scheming "big oil."

A golden nugget of wisdom we should add to the likes of "fire cannot melt steel," and "Al Qaeda isn't in Iraq," should be "gas prices are set by Hallibuton and Republican donors to pay pension plans."

I can't help but remember, the indispensable Tom Sowell said, "Asking a liberal where prices and wages come from is like asking a six-year-old where babies come from."

As usual, the current gasoline prices are directly correlated to an increasing demand without an increase in supply that would be necessary to maintain the same price. No congressman's bill entitled, "The 2007 Act to Repeal Economic Equilibrium and to Henceforth Draw Demand Curves Upside Down" will change that.

The Wall Street Journal explained it well this morning:

Under the anti-gouging law, service station owners could face up to 10 years in prison if they dare to raise their prices too much when supplies are low. Representative Bart Stupak, the Michigan Democrat who sponsored this scheme, said the vote would determine whether Members "side with Big Oil" or "side with consumers who are being ripped off at the gas pump." Who elects these guys?

The inconvenient fact is that there's no evidence of price rigging by Big Oil or the tens of thousands of independent service station owners across America. The causes of higher gas prices include $65-a-barrel oil caused by rising global demand and geopolitical tensions, a record high U.S. gasoline consumption of 380 million gallons a day, and refined gasoline shortages caused by Congressional rules and mandates. Far from withholding production to raise prices, U.S. gasoline production of 8.8 million barrels a day is higher than any time in history and refineries are getting more gas per barrel of oil than ever before.

It's worth noting what the Federal Trade Commission (FTC) report on oil prices released last year, "Investigation of Gasoline Price Manipulation and Post-Katrina Gasoline Price Increases," had to say regarding prices.

"In light of the amount of crude oil production and refining capacity knocked out by Katrina and Rita, the sizes of the post-hurricane price increases were approximately what would be predicted by the standard supply and demand paradigm that presumes a market is performing competitively... olding prices too low for too long in the face of temporary supply problems risks distorting the price signal that ultimately will ameliorate the problem."

Instead of price controls, which consistently backfire, there are a couple of options. We can work with the elasticity of oil supply and demand by increasing supply or reducing demand. Nearly all measures to reduce demand have severe economic consequences, so we work to increase petroleum supply and refining capabilities. Kenneth Green from the American Enterprise Institute (AEI) gives some very practical suggestions.

-Open ANWR (sixteen billion barrels of oil)
-Open OCS (billions more barrels)
-Offshore Drilling (same story)
-Repeal regulations on oil refining

I might add, "quit demonizing oil companies." Am I now a suck up?

Saturday, May 26, 2007

The "Scary Weapons" Ban

An issue that rests at the emotional core of social policy, politically charged, and well funded, has emerged in recent months in one particular bill, HR 1022. A new "assault weapons" ban. This bill reflects international pressure that's growing at an alarming late, and this policy is the manifestation of moot and flawed arguments contrary to the preponderance of empirical literature in criminology research; not to mention foundational policy ethics. There are four principle reasons to reject the proposal of the new assault weapons ban.

First, the bill's definition of "assault weapon" is arbitrary at best, asinine at worst, relying on standards that, at times, don't even significantly deal with the functionality of weapons (e.g. the type of clip). The general reasoning for such bans is that no one needs an "assault weapon." There are certainly legitimate uses for these weapons; standard semi-automatic rifles can have multiple functions ranging from hunting to sports. Regardless, legislative fiat to the idea that a person doesn't "need" something is a response not founded in any ethical system of governmental power. I might not need many luxuries in life, but if I should avoid infringing on the equivalent rights of others with my tools or property, the sustained principle is that we err on the side of liberty. Such naive policy subverts the core purpose of such legislation.

Second, this measure, like most gun control measures, it is an ineffective reaction to emotion and emotionally charged anecdotes that aren't grounded in empirical precedent. Unfortunate situations such as the tragic massacre at Virginia Tech underscore the fact that there is evil in this world, and there are desperate criminals who will stop at nothing to harm those who have done no harm. Yet, such an event took place in a "gun free zone," in which the criminal (who didn't observe the gun free state ordinance) preyed on the disarmed law-abiding citizens. Great Britain, which passed a complete gun ban, has been lauded by many as a great step forwarded in the progress of Western Society. Yet, it has been ineffectual, and undermines the spirit of liberty. As the venerable British newspaper The Observer noted in 2000, since the enactment of the gun ban the quantitative number of firearms in England has increased, not decreased, and the black market flourishes. Those who wish to commit crimes with firearms are still able to do so, it is the law-abiding who are left defenseless. Advocates of more stringent regulations frequently cite the fact that Britain has lower homicides with firearms per 100,000 citizens than the United States, yet that overlooks the fact that Britain has lower crimes with or without firearms due to cultural, sociological, and demographic differences. Former visiting criminologist professor Dr. John R. Lott aptly noted that 96% of the time the citizen only must brandish a weapon to deter attack. The deterrent factor of an armed citizenry is an inherent right that must be preserved. The precedent of banning some "scary looking" semi-automatic weapons cannot be established.
Third, fundamental principles of human liberty object to the notion that a citizen can have his rights suspended when he has harmed no one. The natural Lockean right to self-defense has been recognized throughout the history of mankind, and involves the necessary tools to carry out such a right. Err on the side of liberty, not license.

And, finally, there is no legal reason to contextually the Second Amendment to exclude these weapons. While this is not currently the Rule of Law in the United States, since the Supreme Court never heard a case regarding the original assault weapons ban, if one should maintain the interpretation that the Second Amendment applies to all arms, then one cannot escape the conclusion that the individual's right to bear arms shall not be infringed. The founders intended the Second Amendment to apply to muskets no more than they intended the First Amendment to apply to quill pens and newspaper presses.

In short, I ask Americans to not allow emotionally charged rhetoric to override empirical literature and foundational rights.

Monday, May 21, 2007

Second Debates - Schumer's Surprise

"Intuitively, you would think volatility is increasing. But it isn't, which I guess shows that the American economy has always been very flexible."

"Oops," says Senator Chuck Schumer (D-NY). After teaming up with his colleague in liberalism Sen. Jim Webb (D-VA) to direct the Congressional Budget Office (CBO) to conduct a study on economic volatility, they were taken aback that the figure wasn't historically high. What the CBO classifies as economic volatility, the percentage of workers to see their income drastically change annually, rose slightly after 2000 with the recession, but it still well within historic norms. Once again, the US economy remains flexible and consistent.

The ten declared candidates seeking the GOP nod for President met again last week at South Carolina with Fox News' Brit Hume and Chris Wallace. Far superior to the style and management of Chris Matthews and MSNBC*, several factors were similar to the first debate, and others entirely indigenous.

The winners of the debate were the same as last time: Romney and Huckabee. Giuliani did better, helped by Ron Paul's outrageous 9/11 comments; after which he luckily had the floor. McCain had a poorer performance.

Tancredo did better. His appeal is the girl-next-do--I mean, the Republican-next-door, not an intellectual and strong Presidential appeal, was evident. His problem persists, however. Every horse needs water, and when your only horse is immigration, the Rio Grande dries up rather quickly. His comment that he'd "be looking for Jack Bauer" in the terrorist crisis was memorable and drew him a bit of attention.

All I could think of when Gov. Jon Gilmore spoke was that his ears made him look like an elf, and he loves to bloviate about his governorship. He should stick to writing emails for the party. Rumor does have it, however, that there is a photoshop file with his campaign logo somewhere. On a computer setting in some office. Too bad he doesn't have the money or staff to print it.

Tommy Thompson is just cruel for causing name confusion with our favorite, Fred Thompson. And his face looks like a catcher's mitt. This debate was his second strike, he can head to the dugout and save some embarrassment.

Ron Paul's 9/11 comment was poorly worded and shocking. Interestingly enough, he led the Hannity & Colmes "txt in" poll for a good portion of the show. Both of his supporters are quite active

Sam Brownback was dry. Like Tancredo, Brownback only has one horse: social issues. Abortion is important. But there must be another reason to vote for a candidate. Surely?

Romney was vivacious, as usual. I was disappointed to find a second issue that I disagree with him on, No Child Left Behind. That means we now have one major issue (gun control), and one moderate (NCLB) in disagreement, which keeps me from, by default, throwing support behind Romney if Fred doesn't run. Fortunately, he won't have any power with gun control, and NCLB is something I can live with. He also has Greg Mankiw as an economic adviser, to which I give props.

Fmr. Gov. Mike Huckabee was fantastic. The debates are his time to shine. He's charismatic, a fabulous orator; he's memorable, his phonetics always rhyme, his metaphors and analogies are delightful. He has an uncanny ability to strike cords with the values voter part of the GOP block in a pickup trucks, the soccer moms worried about terrorism, and the Wall Street Journal Republicans. If I lived in Iowa and not Arkansas, I would think he was a God-send. One might feel a little more confident about him if I thought he had a Karl Rove type behind him. President Huckabee still doesn't sound too bad. $500,000 does. Well, he can always start a Subway with that much and be his own Jared.

One thing that does have me concerned is the Michael Bloomberg/Chuck Hagel situation. Bloomberg is taking a third party run quite seriously, and is rumored to have discussed strategy with Ross Perot's campaign. A third party run with Bloomberg and Hagel would likely be disastrous for Republicans, a 2008 Ross Perot. However, one possible token of fortune would be Bloomberg and Clinton splitting New York, leaving an unprecedented thirty-one electoral votes from New York going to the GOP candidate (presuming it isn't Giuliani).

Parting thoughts:

“That people on the political Left have a certain set of opinions, just as people do in other parts of the ideological spectrum, is not surprising. What is surprising, however, is how often the opinions of those on the Left are accompanied by hostility and even hatred. Particular issues can arouse passions here and there for anyone with any political views. But, for many on the Left, indignation is not a sometime thing. It is a way of life. How often have you seen conservatives or libertarians take to the streets, shouting angry slogans? How often have conservative students on campus shouted down a visiting speaker or rioted to prevent the visitor from speaking at all? The source of the anger of liberals, ‘progressives,’ or radicals is by no means readily apparent. The targets of their anger have included people who are non-confrontational or even genial, such as Ronald Reagan and George W. Bush. It is hard to think of a time when Karl Rove or Dick Cheney has even raised his voice, but they are hated like the devil incarnate. There doesn’t even have to be any identifiable individual to arouse the ire of the Left... If it is hard to find a principle behind what angers the Left, it is not equally hard to find an attitude. Their greatest anger seems to be directed at people and things that thwart or undermine the social vision of the Left, the political melodrama starring the Left as saviors of the poor, the environment, and other busybody tasks that they have taken on. It seems to be the threat to their egos that they hate. And nothing is more of a threat to their desire to run other people’s lives than the free market and its defenders.” —Thomas Sowell

Tuesday, May 15, 2007

Thompson vs. Moore - Obama on Social Security

The great battle of the wits is at hand.

Michael Moore, as many of you know, is currently in Cuba filming his new documentary, "Sickos," which chronologies how Cuba's health care system is allegedly superior to the United States'. We've previously covered the inaccuracy of such statements. He's received a good deal of criticism (shockingly), and is under investigation by the Treasury Department for a possible infringement of our embargo on Cuba.

In the midst of this, Moore lashed out at former Tennessee Senator and potential Presidential candidate Fred Thompson, who, as many of you know, is my pick for President.

Moore accused Thompson of supporting Cuba as well by purchasing Cuban cigars. He then challenged Thompson to a public debate on health care. Thompson then posted a video response on the internet that has been circulated since.

Watch the video. You won't regret it.

Senator and Presidential candidate Barack Obama appeared on ABC's program "This Week With George Stephanopoulos" last weekend. He had a little chit chat regarding social security reform, and apparently he's very open minded to being closed minded.

Stephanopoulos: You've also said that with Social Security, everything should be on the table.

Obama: Yes.

Stephanopoulos: Raising the retirement age?

Obama: Everything should be on the table.

Stephanopoulos: Raising payroll taxes?

Obama: Everything should be on the table. I think we should approach it the same way Tip O'Neill and Ronald Reagan did back in 1983. They came together. I don't want to lay out my preferences beforehand, but what I know is that Social Security is solvable. It is not as difficult a problem as we're going to have with Medicaid and Medicare.

Stephanopoulos: Partial privatization?

Obama: Privatization is not something that I would consider . . .

Good show, Mr. Obama.

Monday, May 14, 2007

Free Market Education Solutions - Literally

US News & World Report showed us an interesting perspective on education reform in their April 29th edition.

For Trinity Gardens, a poor neighborhood in Mobile County, Ala., that sends children to Brazier Elementary, the neglect wasn't a huge surprise. In 1965, a nearby Air Force base closed-taking away 10,000 jobs-and a series of paper mills shut down in the 1990s, stealing at least 3,000 more. Most of the Gardens' residents live below the poverty line, holding two jobs to get by. Who had time to care how many fifth graders passed a state writing test? (In 2003, only 7 percent.)

But in 2004, Brazier Elementary suddenly began to change. In just one year, workers cleaned up the halls, new teachers poured in, and test scores shot up. Noting the change, parents like Patrick sent their kids back to Brazier. Patrick thanks Brazier's new principal, Merrier Jackson, for the turnaround, calling her "a godsend." But it was actually a less heavenly group that sent Jackson to Trinity Gardens: CEOs.

Four times a year, Everage Thomas, a supervisor at the nearby Budweiser Busch Distributing Co., squeezes into the school's miniature plastic chairs for a meeting with Principal Jackson on student performance. Budweiser has invested capital in her school, and it wants to see results. So Jackson, a former businesswoman, brings PowerPoint presentations, graphs, and charts to prove her students are learning. She calls Budweiser a "stakeholder." That terminology fits a district-ordered reorganization three years ago intended to use a business mind-set (and accountability) to improve Mobile's worst-performing schools. The overhaul followed a reform campaign bankrolled in part by local business groups and the Chamber of Commerce.

It's the same quintessential principle behind school choice: incentive. The government has little accountability and incentive contained with it's quasi autonomous functions. The infamy of bureaucratic blunders lies, at least partially, in the government's inability to innovate and conquer. Businesses, on the other hand, have a direct stake in their performance. All income is contingent on performance. That same risk assesment in decisions can be applied to many realms. The private sector, or at least, government programs that offer private contracts, or private entities supported by government, consistently outperform pure-governmental functioning. The Department of Housing and Urban Development is noted for low-quality and rapidly deteriorating housing that can't compete with private offerings to low-income families needing shelter (e.g. Habitat for Humanity).

Objections in the article come from sources like John Dewey, who lamented:

Education would then become an instrument of perpetuating unchanged the existing industrial order of society... Who, then, shall conduct education so that humanity may improve?"

Because the industrious spirit of private enterprise considers only the short term, and perpetuates its own ignorance, while state glorifies mankind and innovates beyond the individual citizen's wildest expectations? The precedent itself cries out in agony.

Why can't private innovation be applied to education? Why, after every hour of Milton Friedman's explanations, do only a handful of states offer realistic school choice? Why do the John Deweys of the world still see government as the panacea? Perhaps Brazier Elementary will pose these questions yet again.

Tuesday, May 8, 2007

A Restored Ally?

Last week may have put an end to French jokes for a while. America-friendly, pro-free market, center-right candidate Nicholas Sarkozy edged out Socialist candidate Ségolène Royal 53% to 47%. Sarkozy's platform included desperately overdue economic reform, lift trade barriers, reduce taxes, and roll back regulations. Royal advocates, as Steve Forbes put it, "to boost France's job-killing minimum wage, meddle even more in its nationalized electric industry and increase state control over the financial and media sectors." She also continues to express support for France's strict 35 hour work week cap and mandatory vacation.

The increasing socialist influence in France has inhibited growth for several years. As the venerable British magazine The Economist said in 2002:

At the time of its introduction, most economists pronounced the law's motivation--that if each employee works fewer hours, there will be more hours to share around--to be nonsensical. The idea that a fixed quantity of work exists, to be parcelled out among workers, is the so-called lump-of-labour fallacy. France's own Frederic Bastiat had pointed out two centuries ago that there is no limit to the work that needs doing.

But, unemployment did go down after the enactment of the 35 hour work week, and some productivity figures remained the same. At least, so it appeared.

In sum, the productivity figures may be misleading. Restrictions on hours mean that output per hour is bound to rise, as firms shed lower-value, yet still profitable, tasks. France's output per worker, however, has remained flat. What is more, the government bought big employers' agreement to the law by offering tax breaks. These tax cuts would have helped to bring down unemployment even had there been no 35-hour law.

The original problems on a more fundamental level weren't be alleviated by perpetuating the same state-dependent mindset. The French voters desperately wanted a change, an innovative reform-style candidate. Sarkozy represented the majority party in France, and by all accounts, the socialist to left candidates should have had the upper hand. But Sarkozy projected himself as a new, fresh, reformist candidate, and took the popular vote. Perhaps in a lesson of strategy to the GOP in 2008.

His platform included some no-brainer solutions that we've known for years, as The Economist said back as far as 1997:

Why not seek instead to reform France's rigid, high-cost labour market, for instance, by encouraging more part-time work (which occupies 16% of French workers, against 24% in Britain and 38% in the Netherlands); by lowering the minimum wage (of FFr6,643, or $1,127, a month); by making it easier (and less expensive) to sack workers; by reducing France's generous unemployment and welfare benefits, and so on? Not, apparently, on Mr Jospin's mind

As music to the ears of a Bush White House, Sarkozy also promised to restore relations with America and the Bush Administration (that have been less than cordial under Jacques Chirac). Of course, Mr. Sarkozy retains his fair share of flaws, but a fundamentally feasible philosophy under riding the French President, along with some basic economic understanding, could do wonders for the cornerstone EU state. Not to mention, France could remain a dedicated ally and friend to their freedom-loving comrade across the Atlantic.

Tuesday, May 1, 2007

2008 Update: Searching for Reagan and... Thompson?

The Reaganite impact has been seen in the establishment of an ultimate idiom for national leadership. A man who can unite the party's vast internal ideological differences. Individualist lovers of liberty that make up the quasi-libertarian branch of conservatism (the "New Right"), the traditionalists of neoconservatism who long for the men who will opine to their cries for society bound by a transcendent order, and those "anti-communist" members of the party (whom today would be "anti-terrorism") who stand firm in the hawkish zeal to defend the homeland against those totalitarian forces of aggression who wish to see us dead. The battle for a balance between order and liberty drove wedges in the party for much of the 20th Century, yet Reagan was able to unite them under their common goals. Their Jeffersonian libertarian ideals that the "government which governs best governs least," and their neoconservative ideas that a strong military and national defense must be maintained to save the Western World and the Shining City on a Hill. This fusion of ideas, produced Reagan. The economic zeal of Milton Friedman, F.A. Hayek and George Stigler drawing from frustrated calls for return to sanity in The Road to Serfdom and Free to Choose. The staunch defense of the free world, aggressive, definitive, and imperative; laden with Churchillian and Lincoln poetic rhetoric. A defense inspired by the terrorizing tales of defected Soviet spy Whittaker Chambers in Witness. These factions of the party united to defend the natural and necessitated rights of men esteemed by Locke and Hobbes, the Burkean ordered liberty of society, the Hayekian and Chicago School ideas of free markets and monetarism, the fundamental values of Kirk and Milton, while preserving the individual autonomy of Bastiat-style classical liberals.

But is it even comprehensible that a GOP candidate in 2008 could unite the tory notions, drive away the gathering storm of neo-liberalism, and land a seat in the Oval Office?

The Reagan legacy has impacted many great leaders of our day. Names ring in the minds of his students: Quayle, Williams, Gingrich, Sowell, Meese, Kirkpatrick, Weinberger, Noonan, Bennett... McCain? Giuliani? The vacuum is opened.

Of the present field of candidates, for balance of ideology and electability I draw nearer to supporting Mitt Romney than anyone else. Charismatic, well-grounded, deep fund raising pockets, and understands liberty. He's lurched to the right in the past few years, but it seems more sincere than others, and could be in the same style that Reagan lurched right before running for President. His economic record in Massachusetts is impeccable, and his advocacy on other issues impressive. Yet, his lackluster support in comparison to Giuliani, and the prejudice from some of the Religious Right over Mormonism (however preposterous a gripe) still leaves a spot in the candidates. Sure, Brownback, Gilmore, and Huckabee are noble chaps. But $1.5 million or half a million in fund raising is going to get you no where.

A new factor is actor and former senator Fred Thompson. A relative latecomer, his window of opportunity for announcing may be short, yet as Bob Novak puts it, "many conservatives may embrace Thompson with a sigh of relief." The popular senator from Tennessee has had a strong limited-government record on virtually all major issues, and has sustained some of the limelight while starring on NBC's "Law and Order" and maintaining his PAC. A current fellow at the American Enterprise Institute, he's garnered a good deal of support from GOP base publications ranging from Human Events to Patriot Post to the Wall Street Journal.

His support is not universal, however. Pulitzer Prize winning conservative columnist George F. Will scoffs at the notion of a Reaganite Thompson. Mr. Will cites his age, lack of experience in a tightly contested campaign, and hypothetical lackluster energy. He also details, to my hearty agreement, discontent with Thompson's support of the reprehensible McCain/Feingold Campaign Finance Reform legislation. As of a March interview with Fox News Sunday's Chris Wallace, Thompson maintained his support of the freedom-suppressing measure. An additional area of concern is his 1995 vote against Health Savings Accounts (HSAs).

All other aspects of his prospective campaign may prove strong. A recent LA Times poll, according to Dick Morris, has Thompson at second place behind Giuliani, trumping McCain, Romney, Huckabee, and the undeclared Newt.







If Gingrich feels Thompson represents the cause fully, there's a good chance he won't declare in September (his deciding point). Thompson would be a likely choice for many Gingrich supporters, while Huckabee will likely be forced out due to lack of competitive fund raising. Leaving the vote of those like me to be split between Romney and Thompson, either of whom I would be happy with. A true blue lover of liberty at the helm of the GOP ticket may be the only thing that can prevent a second Clinton White House. Thompson/Romney '08?

Sunday, April 15, 2007

Happy Income Redistribution Day

It's the most wonderful time of the year.

I'm quite convinced that if elections were held in April instead of September, Steve Forbes would have nabbed the nomination in either '96 or '00.

In following up the last post, the more carping there is about low-skill households and low-income families being left behind in the tax debate, some new Heritage research is interesting.

if the costs of direct and means-tested benefits, education, and population-based services alone were counted, the average low-skill household had a fis­cal deficit of $22,449 (expenditures of $32,138 minus $9,689 in taxes). The net fiscal deficit of the average low-skill household actually exceeded the household's earnings. If interest and other financial obligations relating to past government activities were added as well, the average deficit per household rose to $27,301.