Category Archives: Economics

Business, Economics, Media Criticism, Political Commentary

What Do You Think?

26 Comments

OK, so we have a bill that has passed both the House and the Senate, both of which are controlled by the Democrats. In both houses, they were rushed through with little debate, and in the House, it was almost entirely crafted by the Democratic leadership, without even significant input from the Blue Dogs, let alone the Republicans. It is hundreds of pages, and totals close to a trillion dollars (a mind-numbing number that may necessitate updating the old Dirksen quote) in new spending, paid for with money that the nation doesn’t have. It has many items in it that are not obviously aimed at stimulating the economy, but rather in advancing various social and political goals, but it’s hard to be sure because few have had the opportunity to even read, let alone comprehend the whole thing.

Now which is the more likely scenario?

A. It is the output of a sober, long-debated process that was totally focused on improving the American economy, carefully considering the potential unintended consequences of every item in the bill, with associated committee hearings and qualified witnesses, or

B. It is an overnight cut’n’paste concatenation of every item on pent-up Democrats’ wish lists going back to 1994, when they lost control of the Congress, because everyone wants to get a ride on the late-Christmas tree that is sure to go through via fearmongering by a popular new president.

Come on, folks. William of Ockham had just the tool for this conundrum.

I know where my money is.

Economics, Media Criticism, Political Commentary

Straw Men

61 Comments

I’m listening to the president, and on the verge of throwing something at the flat screen. I’m very tired of hearing him make the vague “argument” that we can’t get out of this situation with the “same failed policies of the past eight years.” This is apparently an argument against tax cuts in the “stimulus” bill, though it’s hard to know, because it’s vague. Why won’t some reporter ask him what in the hell he’s talking about? To actually put forth his supposed theory of how we got here, and what “failed policies” caused it? Because if he’s arguing that we’re in trouble because of tax rate cuts, that’s a ludicrous proposition. He seems desperate, and has fallen back on the only thing he seems to know how to do — campaign with vague and misleading rhetoric.

Charles Johnson has further commentary on these Obama strawmen.

[Update a few minutes later]

Some questions that the president should, but probably won’t be asked tonight.

[Update a few minutes later]

More thoughts from Victor Davis Hanson:

…things are upside down: The conservatives are mad that Bush over-spent, and suddenly when out of power want to restore fiscal sanity, while Obama says that the Bush borrowing brought on this mess and must be addressed by more borrowing. What is what? Conservatives suddenly are once again fiscal purists when out of power? Liberals blame Bush for reckless Keynesian spending and want to cure it by more of the same?

Few tell the truth: The conservatives should say ‘Mea culpa—our deficit spending and borrowing helped to get us into this mess, so we’ve seen the error of our ways, and want you liberals not to repeat our mistakes.’ And the liberals should say, ‘Bush on the budget was one of us in borrowing and spending and priming, so we can’t really trash the last eight years since we’re now advocating more of the same.’

Yes, few tell the truth. Including, foremost, the president.

[Update late morning]

“The worst bill since the 1930s.” An interview with economist Robert Barro.

[Evening update]

He’s doing the press conference now, and repeating the stupid, false history that we’ve done nothing in the past eight years except tax cuts. I want to throw a shoe at him.

[Bumped from this morning]

[Update a few minutes later]

He claims that he’s been “civil” and “respectable.” I don’t think that it’s either civil or respectable to set up strawman arguments based on a false history, and kick them down. And now he’s claiming that there are no earmarks in this package? Please.

Business, Economics, Media Criticism, Political Commentary

This Is Stimulus?

7 Comments

One of the (no doubt many) economic time bombs in the bill could force employers to extend COBRA for decades. What’s the problem?

The HR departments for large employers are looking at this provision with great alarm, as indicated in this policy brief. PricewaterhouseCoopers produced an analysis which pegs the ten-year cost of this provision at $39 billion to $65 billion just for those current COBRA-eligible workers age 55 to 64. The estimated costs would be even higher if the analysis assumed, as is reasonable, that many more workers would elect early retirement if they were assured of access to group-rated insurance.

What would employers do if faced with the costs of implementing this provision? It’s fairly predictable. They would hire fewer workers, and pay their current employees less. Not exactly “stimulus.”

Indeed, this is exactly the kind of complex provision which should be considered by Congress only after careful study and a hearing or two to avoid unintended consequences. Certainly it has no business on a bill purportedly aimed at promoting short-term job growth. Unfortunately, logic and reason may not be enough to prevail in the current mad-dash rush to “pass something.”

I suspect that most of the bill is like that. This is madness. The Founders would be appalled at what has happened to the Republic.

Economics, Political Commentary

So Why Is It We Needed A Stimulus Again?

4 Comments

The CBO says that the recession will end this year without one. You can see why the Dems are so panicked to get this bill passed quickly. They’re afraid that they might, in Rahm’s words, “waste the crisis.”

[Evening update]

I have to give kudos to Doug Elmendorf. If he authorized the release of that report, he’s a brave man. He has a blog, though it doesn’t (yet) seem to mention the subject of this particular post.

Let’s just hope that he doesn’t learn the hard way about the “Chicago Way.”

Economics, Political Commentary

Undoing Welfare Reform?

Mickey Kaus thinks that the Republicans are missing a huge political opportunity in the “Stimulus” debate:

The essence of the 1996 reform was ending the individual legal entitlement to AFDC (cash aid to single mothers, basically) and replacing it with state-run programs that, in theory, require recipients to enter the work force. The stimulus bill doesn’t rip up that basic deal, as I understand it. But it is part of a larger liberal campaign** to use the recession to weaken work requirements and let millions of non-working single mothers back on the welfare rolls. Specifically, it would apparently reward states that expand their welfare caseloads–even if the increase is only the product of loosened work requirements rather than a worsening local economy.

Gee, it’s almost as thought they want people dependent on the state. I’m sure that it’s just an unintended consequence…

Business, Economics, Space

“NASA Problems”

15 Comments

Yesterday, over at Space Politics, I saw a very peculiar comment:

…NASA failed to achieve the goal of low cost shuttle operations when they failed to pursue the privatization of the shuttle transportation system. Regrettably this failure may cost the lives of another shuttle crew as one of the cost saving features of the privatized shuttle would have been crew escape pods…a fatal flaw.

To which I responded: “Huh?”

Then, today, over at the Orlando Sentinel space blog, I saw something seemingly similar, from the same person:

Sen. Bill Nelson is backing a dead horse. If his staff had done their homework they know Ares I Orion shuttle replacement is not feasible. Too expensive to develop and to operate. Sen. Nelson is driving nails in NASA’s coffin…and maybe a shuttle crew by not supporting the shuttle crew escape pods…see: wwwnasaproblems.com [sic]

Posted by: Don Nelson | February 06, 2009 at 10:33 AM

So I corrected the URL by putting a dot between the “www” and “nasaproblems,” and wandered over there to see what was going on.

What a mess. Ignoring the site design, very little of this makes any sense, either from a business or technical standpoint.

I don’t have the time or the energy to delve into all the problems, but just to respond to the blog comments, I don’t know what “opportunity” NASA ever had to privatize the Shuttle. I actually supported a privatization study by USA back in the nineties, and it was very difficult to come up with a scenario that would make any kind of business sense for Shuttle privatization, given its intrinsically high costs, with little demand for it outside of government. And that’s ignoring all of the intrinsic institutional resistance that NASA and particularly JSC had to handing over the keys to anyone else.

But even if it could have been privatized, the notion that adding “crew escape pods” (even assuming that it is even really technically feasible) to the existing design would somehow “reduce costs” is absolutely loopy. What is the basis of this claim? Similarly, why would a private entity do this?

Putting a crew escape system into the orbiter as designed makes zero economic sense. As I’ve noted many times, crew are replaceable, while orbiters are not. If the Shuttle isn’t safe enough to fly crew, it’s not reliable enough to fly at all, as we’ve learned with the Challenger and Columbia losses, because we’re now down to a fleet of three vehicles, and it would cost billions to replace them, even if it made economic sense to operate them privately. That, in fact, is why we’re retiring it. The notion of privatizing Shuttle at this late date is utterly ludicrous.

This is obviously the work of an engineer, and not a program analyst.