What, No Press Conference Post in Real Time?
READER: Hey, Angry Bear, where's your real-time commentary on Bush's press conference?
ME: Sorry, I'm out of ideas at the moment. "I wish you would have given me this written question ahead of time, so I could plan for it." But, "... something will pop into my head here in the midst of this press conference post, with all the pressure of trying to come up with an answer, but it hadn't yet. "
READER: Don't you mean "hasn't"?
ME: Hasn't what?
READER: Popped into your mind.
ME: Popcorn?
READER: Who said anything about popcorn?
ME: "Now is the time to talk about winning this war on terror." And, might I add, "one thing is for certain, though, about me -- and the world has learned this -- when I say something, I mean it."
AB
For substantive commentary, see Dave Sirota and CalPundit.
UPDATE: See Wonkette for more. While there, make sure to read this one too. And this -- She's really on a roll.
UPDATE 2: Word O' Crap has a must-read overview.
Tuesday, April 13, 2004
Consumer Confidence and Consumer Spending, Part II
Today the Commerce Department reported rapidly rising retail sales in March. Some read this as renewed evidence that the recovery is roaring ahead. The bond market is dutifully plunging in response.
Note one interesting thing: this follows closely on the heels of several reports that consumer confidence has been falling. Add another data point to my suspicion that consumer confidence has little or nothing to do with actual consumer spending.
Kash
Bush’s Approval Ratings
Perhaps surprisingly, Bush’s approval ratings have held roughly constant over the past month. The chart below shows the running average of 10 national polls from January 1 of this year to today, with 95% confidence bands. (For context, take a look at this post about Bush’s approval ratings on the American Street.)
The recent stability in Bush’s approval ratings may be surprising to some, given that over the past month people heard about Richard Clarke’s damaging book, saw further administration stonewalling and obfuscation regarding the 9/11 commission, and watched the situation in Iraq become more deadly and chaotic by the day.
So why aren’t his approval ratings suffering? There are several theories.
First, one must keep in mind that there has been some good news, too, such as improving employment statistics. Perhaps this good news has counteracted the bad news. Second, it’s possible that the particular examples of bad news that I mentioned above are seen (at least by those who were still approving of Bush a month ago) as not being Bush’s fault. Third, perhaps it those pieces of bad news were not given much importance by those who still approve of Bush. For example, maybe people who approve of Bush didn’t place much stock in Clarke’s testimony and don’t see the increased difficulty in Iraq as being surprising or particularly worrying.
Put another way, we may be at or near the lower bound of Bush’s approval ratings. It may be the case that those who still support Bush at this point are likely to do so no matter what happens. If things continue on their current trajectory in Iraq and regarding the 9/11 commission, we may well find this theory tested over the coming months.
Kash
The Daily Show
Not having sufficiently debased itself by endorsing Joe Lieberman, The New Republic has now hired a new TV critic, Lee Siegel. His (her?) first target: Jon Stewart's The Daily Show -- a show that regular readers know I regularly cite:
To be honest, I was never a huge fan of Stewart's humor, which he custom-crafts for a mostly college-age audience. "The Daily Show"'s intention of showing clips from the news in order to mock the conventional coverage of the news and get to the bottom of what's really going on in the world always seemed to me too dependent on the thing it derided--the comic equivalent of covering an old song. Stewart's deflate-the-talking-heads shtick consists too much of sarcastic jibes at the Pompous or Deceitful Public Figure, at the Underlying Reality of Self-Interest; it's more like throwing fruit than making jokes. [... commentary progressively degrades for another ten paragraphs]Now, I had a brilliant take-down of Siegel at the ready, but Digby beat me to it:
Methinks that journalist, TV critic and all around pompous ass Lee Siegel just doesn't get the joke. But that's not surprising. He is, after all, the punch line.AB
Monday, April 12, 2004
Does Bad Data Explain the Unusual Recovery?
From last week’s Economist (subscription required):
DESPITE the welcome leap in American employment in March (see article), America's job market has been surprisingly weak in the past couple of years—surprising, at least, to economists. Some have explained this by pointing to rapidly rising productivity figures. Perhaps firms have not needed more workers. But there is another explanation: America's GDP figures, which have been strong, may be inaccurate, and may be exaggerating the extent of economic growth.The picture below illustrates one piece of evidence to support this hypothesis.
...Why might official statisticians be overstating America's GDP—and productivity with it? Mr Hatzius [an economist at Goldman Sachs] suggests that they may be undercounting imports of intermediate inputs of goods and services produced abroad by American firms that have outsourced jobs to cheaper countries. Since GDP is calculated as domestic spending plus exports less imports (including imports of intermediate inputs), this would lead to an overstatement of GDP.
Typically industrial production and GDP figures match each other pretty well. But since 2001 there has been a growing discrepancy.
The article does not address the obvious question, however: if there has been a sudden decrease in the quality of data on imports of intermediate goods and services (and I haven’t seen any direct evidence to support this theory, yet), then why did this just start happening 3 years ago? And why are the errors all in one direction, so that they understate US imports (rather than overstate imports or, as we would typically expect, have errors in both directions cancel each other out)? I don't know the answers to these questions, though I think we can probably rule out one possibility right away: if it's a tax avoidance story one would expect US firms to overstate imports, to make their US profits look lower so that they owe fewer US taxes.
Regardless, if it turns out that this theory is indeed true, at least this sure would make more sense out of some unusual features of this recovery.
Kash
Bush to Discuss Iraq
The White House just announced that Bush will hold a press conference on Tuesday evening to discuss Iraq. That gives reporters 24 hours to come up with some good questions. Here’s my suggestion to get the ball rolling:
1. “Is the occupation of Iraq going about as you expected it, or has it been more difficult than you expected?”
2a. Follow-up to 1, if “about like I expected it”: “Why did you feel that there was no need to tell the American people that Iraq would still be dangerous, chaotic, and a significant drain on US taxpayer and military resources even after a full year of US occupation?”
2b. Follow-up to 1, if “more difficult”: “Why do you think we underestimated how difficult it would be to establish a stable regime in Iraq? Is it because we had poor intelligence, were over-optimistic, or because we’ve made mistakes while there? Who do you think it to blame for whatever errors were made?”
Kash
Good Analogy
Here’s what a CBSMarketwatch article about this week’s upcoming CPI release said regarding the potential danger for inflation that it may or may not show:
WASHINGTON (CBS.MW) -- Imagine coming across an apartment building where half of the residents are shouting fire and throwing their possessions from their windows and the other half are calmly sitting on the front stoop, chatting, and drinking cans of beer wrapped in paper bags.Myself, I was in the camp of those worried about deflation for much of last year. But in the last few months I’ve stopped worrying about deflation. However, this doesn’t mean that I agree with those who are already worrying about inflation. I think there’s enough slackness in the economy that it will still be several months before we see the inflation rate creep up. On Wednesday (when the March CPI figures are released) we’ll have a tiny bit more information to see who’s right.
Such a dichotomous view is what emerges when you talk to Wall Street economists about inflation. Many economists are certain that higher inflation is a foregone conclusion, while others dismiss the concern. Who is right?
Kash
Analysis of the Falluja Ceasefire
I found some interesting analysis of the ceasefire (now in its second day) that was agreed to in Falluja. The website DEBKA, an independent web-based newspaper based in Jerusalem devoted to security issues in the Middle East (and writing from the perspective of the Israeli right) argues that the US military agreed to the ceasefire under pressure by the IGC, and that it reflects the weakness of the US position there. In an article over the weekend DEBKA asserted several things that I haven't seen anywhere else in the media (which they say are supported by military intelligence sources, presumably in the Israeli military community):
- "Thursday night, April 8, US forces, diverted to regain the southern town of al Kut from Sadr's militia, rolled into the town center. They rolled out again with all speed once they saw the steady barrage directed against them could be halted only by a heavy bombardment of the streets and residential districts with resultant heavy civilian casualties."
- "Friday afternoon, intelligence reached the US command that a combined Shiite-Sunni-al Qaeda attack on Mosul was in the offing. US forces were ordered to evacuate bases in the city area and barricade themselves in camps outside. The immediate result was the breakdown of Iraqi administrative and police authority in this part of northwestern Iraq. Iraqi police and security officers began surrendering to the various militias including al Qaeda and handing over the weapons distributed by the Americans. The breakdown touched off the flight of tens of thousands from the Sunni suburbs of Mosul."
- "US forces withdrew from Baghdad's Sadr City suburb at the same time as they left Mosul. By Friday nightfall, the last US patrol had left the hostile suburb to the control of Sadr's militia in the hope of stemming further bloodshed on both sides."
- "According to DEBKAfile's military sources, a wave of desertions is sweeping the 150,000-strong command and rank-and-file levels of the Iraqi army, border guard and police. Faced with these desertions, the Iraqi Governing Council is beginning to fall apart as one minister after another abandons the government. Turning on its maker, the IGC demands that the US halt its military offensive in Iraq without delay."
I'm not exactly sure how much stock to put in this source. We haven't been hearing much about ongoing military developments in Iraq for the past few days, other than a downed helicopter yesterday and the ceasefire in Falluja. But for a weekend that was supposedly quiet, there certainly were a lot of casualties -- at least 25 US soldiers were killed in just the past 3 days -- which may suggest that there's a lot going on in Iraq that we're not hearing about. Regardless of the details, however, the dilemma faced by the US authority in Iraq is clear. I see no good options at all at this point.
What a miserable failure.
Kash
Huh?
Roger Ailes finds this statement in Clifford May's 4/8/04 column in National Review Online:
President Roosevelt waited until after World War II to put in place a commission to investigate what mistakes led to Pearl Harbor.Roger clearly documents that the Roosevelt actually issued an executive order on December 18, 1941 appointing a commission to investigate Pearl Harbor. So May flat-out made that part up. And if you'll re-read the above sentence a bit more slowly, you'll find even more convincing evidence that May was just writing down whatever sounded good to him at the time. Pathetic and ignorant.
AB
Sunday, April 11, 2004
Connect the Dots
Max Sawicky connects the dots in the August 6th, 2001 Presidential Daily Briefing. Definitely take a look.
AB
UPDATE: Viq Digby, this transcript of Bush being interviewed over the PDB. At one point Bush says
"And you might recall the hijacking that was referred to in the PDB. It was not a hijacking of an airplane to fly into a building, it was hijacking of airplanes in order to free somebody that was being held as a prisoner in the United States."That sounds oddly like a statement that it's ok to ignore threats of hijackings when the intent is to barter for prisoners: Had the PDB warned that planes would be hijacked and flown into buildings, we would have taken forceful action; since only regular hijackings were warned of, we didn't take additional preventative measures. Is that really going to be the official line on this? Ok, then. But I don't think it will work.
End Corporate Taxation!
Via the Salt Lake Tribune:
Nearly two-thirds of the companies operating in the United States reported owing no taxes from 1996 through 2000, according to a recent government study.First I support free trade, and now I'm for eliminating the corporate income tax. At this rate, I'll have to rename the blog InstaBear.
Foreign companies doing business here were more likely than American-based ones to claim they owed no taxes, according to the report filed this week by the General Accounting Office, the investigative arm of Congress.
Among American corporations, an average of 6 in 10 reported no tax liabilities on their U.S. income tax returns filed for the five years from 1996 through 2000, the study found. The percentage of American companies saying they owed nothing increased steadily but slightly in the period, to 63 percent in 2000 from 60.3 percent in 1996.
But seriously, I think eliminating the corporate income tax in a revenue-neutral fashion (i.e., raising other taxes at the same time to leave federal revenue unchanged) might make sense for a number of reasons. Here are some off the cuff thoughts:
- As the excerpt above makes clear, it's not a particularly effective tax (remember the data in the article cited above are from 1996-2000, the Clinton Boom Years, so it's unlikely that zero or negative profits are the reason companies weren't paying taxes.)
- While taxing money first as profits and then as income isn't, as Republicans allege, bad because it's "double-taxation" (just about everything in life is taxed more than once), it does complicate the tax system.
- Eliminating the tax would reduce the incentive to move corporate headquarters overseas.
- If corporate taxes were eliminated, then all dividend income should be taxed as regular income. This would go part of the way to achieving revenue-neutrality; the rest would come from progressive tax increases. Why progressive and not across the board? Because the benefits of eliminating the corporate income tax would accrue disproportionately to the upper brackets.
- Corporate taxes currently generate about 20% of the government's operating revenue, so the requisite increases in income taxes would be non-trivial.
- Very small business owners, who by definition make less money, would benefit from having the profits of their business taxed at their personal marginal rate instead of at the corporate tax rate (35%).
- The IRS would need to monitor in-kind compensation to make sure that income is not being disguised as business expenses.
- Note that I'm only talking about corporate income taxes, not FICA or Payroll taxes paid by corporations.
- Another complicating factor would be the profits of foreign-owned companies with operations and sales inside the US. One proposal is for such companies to continue paying taxes in proportion to their ownership held outside of the US. For example, if 10% of Toyota is owned by US citizens, then it would continue to pay taxes on 90% of the profits from its US operations. However, something like this would remove a lot of the simplicity from the proposed system and would likely create some odd distortions, (the Law of Unintended Consequences), so I'm unsure whether this would be worth the trouble.
- Even the Liberal Matt Yglesias recently endorsed this, though not enthusiastically: "Nevertheless, the corporate income tax concept doesn't make a great deal of sense to me ... Eliminating the corporate income tax and replacing it with higher taxes on large personal incomes and capital gains seems like it would be efficiency-enhancing, revenue neutral, and about the same from the standpoint of fairness." Matt also links to a CAP article with more details on corporations not paying taxes.
AB
UPDATE:
WASHINGTON - The Internal Revenue Service (news - web sites) audited fewer corporations, small businesses and partnerships last year but more individual taxpayers, according to a study of government data.
Syracuse University's Transactional Records Access Clearinghouse, in its analysis of IRS data, concluded that the audit rate for businesses of all sizes slid slightly last year to 2.1 audits for every 1,000 businesses, down from 2.2 audits per 1,000 businesses the previous year.
At the same time, the IRS audited 14 percent more individual tax returns. The audit rate for individuals increased last year to 6.5 audits for every 1,000 taxpayers.
Saturday, April 10, 2004
More Navel Gazing
I just came across a site, BlogRunner, that archives weblogs and compiles statistics about them, statistics that, at least in my case, the proprieter is not even aware of. For example, here are the bloggers I link to, the bloggers who link to me, and the sites I link to most often:
| Top Outbound Weblogs 1. CalPundit 2. Eschaton 3. P.L.A. 4. Talking Points Memo 5. ~~~TBOGG~~~ 6. Matthew Yglesias 7. Off the Kuff 8. Hullabaloo 9. Random Thoughts 10. Roger Ailes | Top Inbound Weblogs 1. Off the Kuff 2. Pacific Views 3. The Mad Prophet Blog 4. Lean Left 5. Skeptical Notion 6. Matthew Yglesias 7. Left is Right 8. Path of the Paddle 9. TAPPED 10. Brad DeLong | Top Outbound Sites 1. www.washingtonpost.com 2. www.nytimes.com 3. www.cnn.com 4. www.salon.com 5. atrios.blogspot.com 6. calpundit.com 7. pla.blogspot.com 8. talkingpointsmemo.com 9. www.matthewyglesias.com 10. offthekuff.com 11. www.amazon.com 12. dailyhowler.com 13. rightwingnews.com 14. www.msnbc.com 15. pandagon.net |
The BlogRunner algorithm seems to have some flaws. For example, I know that I link to Orcinus far more often than I link to Random Thoughts (through no fault of Susan's), and due to Dwight Meredith moving to Wampum, I definitely haven't linked PLA in a long time. But all in all, if you want to get a feel for the ties between your favorite blog and other blogs, it's not too far off. Just go here and type the name of any blog (not the url).
AB
Friday, April 09, 2004
This post may someday be historical, but it's unlikely to be historic
During her Thursday testimony, Rice used the word "historic" once and used the word "historical" almost ten times. For example, this exchange with Chairman Kean (full transcript here), on the historical nature of information about planes-as-weapons:
KEAN: I've got a question now I'd like to ask you. It was given to me by a number of members of the families.Here's another, on the historical nature of the 8/6/01 PDB:
Did you ever see or hear from the FBI, from the CIA, from any other intelligence agency, any memos or discussions or anything else between the time you got into office and 9/11 that talked about using planes as bombs?
RICE: Let me address this question because it has been on the table ... And I said, at one point, that this was a historical memo, that it was -- it was not based on new threat information. And I said, "No one could have imagined them taking a plane, slamming it into the Pentagon" -- I'm paraphrasing now -- "into the World Trade Center, using planes as a missile."
BEN-VENISTE: I want to ask you some questions about the August 6, 2001, PDB. ... Did you tell the president, at any time prior to August 6th, of the existence of al Qaeda cells in the United States?And here's the most widely shown exchange:
[crosstalk -- my redaction]
RICE: If you'll just give me a moment, I will address fully the questions that you've asked.
First of all, yes, the August 6th PDB was in response to questions of the president -- and that since he asked that this be done. It was not a particular threat report. And there was historical information in there about various aspects of al Qaeda's operations.
BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6th PDB warned against possible attacks in this country? And I ask you whether you recall the title of that PDB?Other usages of variants of "historic" by Rice include
RICE: I believe the title was, "Bin Laden Determined to Attack Inside the United States."
Now, the...
BEN-VENISTE: Thank you.
RICE: No, Mr. Ben-Veniste...
BEN-VENISTE: I will get into the...
RICE: I would like to finish my point here.
BEN-VENISTE: I didn't know there was a point.
RICE: Given that -- you asked me whether or not it warned of attacks.
BEN-VENISTE: I asked you what the title was.
RICE: You said, did it not warn of attacks. It did not warn of attacks inside the United States. It was historical information based on old reporting. There was no new threat information. And it did not, in fact, warn of any coming attacks inside the United States.
- Commissioner, this was not a warning. This was a historic memo -- historical memo prepared by the agency because the president was asking questions about what we knew about the inside.
- The president was told this is historical information.
- It is just not the case that the August 6th memorandum did anything but put together what the CIA decided that they wanted to put together about historical knowledge about what was going on and a few things about what the FBI might be doing.
- Well, August 6th is most certainly an historical document that says, "Here's how you might think about al Qaeda."
From Thursday until this evening, everyone thought that by "historical," Rice meant old, outdated, and from the past. But now details of that August 6th PDB are leaking out and it turns out that the threat information was nearly contemporaneous with the August 6th meeting and PDB:
President Bush's August 2001 briefing on terrorism threats, described largely as a historical document, included information from three months earlier that al-Qaeda was trying to send operatives into the United States for an explosives attack, according to several people who have seen the memo.Without reflection, one might conclude that Dr. Rice was being misleading and intentionally deceptive, but one would surely be wrong. Let's turn to the dictionary:
The so-called presidential daily briefing, or PDB, delivered to Bush on August 6, 2001 -- a month before the September 11 attacks -- said there were various reports that Osama bin Laden had wanted to strike inside the United States as early as 1997 and continuing into the spring of 2001, the sources told The Associated Press.
his-tor-ic adj.Dictionary.com even includes this cautionary usage note:
1. Having importance in or influence on history.
2. Historical.
Usage Note: Historic and historical have different usages, though their senses overlap. Historic refers to what is important in history: the historic first voyage to the moon. It is also used of what is famous or interesting because of its association with persons or events in history: a historic house. Historical refers to whatever existed in the past, whether regarded as important or not: a minor historical character. Historical also refers to anything concerned with history or the study of the past: a historical novel; historical discoveries. While these distinctions are useful, these words are often used interchangeably, as in historic times or historical times.So, the explanation is clear: the one time Condi said "historic," she meant it in the sense of really, really, really, important. The remaining times when she said "historical", she meant it in the sense of "historic." She surely never meant to imply that intelligence from May of 2001 indicating that "al-Qaeda was trying to send operatives into the United States" was dated or not cause for action. To the contrary, she must have meant that its importance was
AB
UPDATE: Via Atrios, I see that the NYT has failed to correctly understand Dr. Rice's meaning:
The disclosure appears to contradict the White House's repeated assertions that the briefing the president received about the Qaeda threat was "historical" in nature and that the White House had little reason to suspect a Qaeda attack within American borders.
Pot, Meet Kettle. Call it Black.
This comes on the heels of GOP allegations that MoveOn is coordinating with the Kerry campaign.
House GOP Committee Pays Soft Money Fine
WASHINGTON — The National Republican Congressional Committee has agreed to pay a $280,000 civil fine for transferring big donations known as "soft money" to an outside group to finance ads in the 2000 election.AB
.. The U.S. Family Network sent $300,000 to another group, Americans for Economic Growth. AEG then spent about $260,000 to run radio ads in fall 1999 accusing Democrats of planning to raid the Social Security fund and use it on other programs.
Can't Say I Feel Sorry for Him
Enron's Skilling hospitalized after bar incidents
Former Enron CEO Jeffrey Skilling was taken to a hospital early Friday after several people called police saying he was pulling on their clothes and accusing them of being FBI agents, a police source told The Associated Press.
Police found Skilling at 4 a.m. at the corner of Park Avenue and East 73rd Street and determined he might be an "emotionally disturbed person," said the source, speaking to the AP on condition of anonymity.
...Skilling was at two bars in Manhattan – American Trash and The Voodoo Lounge – where he allegedly ran up to patrons and pulled open their clothes, the source said.
"He was shouting at them 'You're an FBI agent and you're following me,"' the source said.
Skilling allegedly did the same thing to people on the street, the source added. He was with his wife at the time.
AB
Not Much to Say
I want to write something, but I don't have much to say. Rice's testimony is big news, but it's been well-covered elsewhere. Ditto for the insertion of Iraq into a handbasket headed (but hopefully not unswayably so) towards Hell.
What do most people talk about when they've got nothing to say? Themselves, of course. So here's some navel-gazing.
- Traffic continues to grow nicely. It's a rare weekday that we don't get more than 1,000 unique visitors and weekend traffic hovers around 600, for an overall average of about 965/day, which is more than I ever expected. What's the secret? Mostly, persistence I think. There's a clear relationship between the age of a blog and its traffic, with Wonkette being the exception that proves the rule. However, this is not a purely causal relationship. There's selection bias: we don't observe the old blogs that failed to generate traffic and then vanished. More likely, good blogging -- or at least blogging that appeals to a certain audience -- causes both high traffic and longevity. Also, the political season that is upon us and secular growth appear to be increasing traffic across the board. Still, Angry Bear is growing relative to other blogs. If my readers could convince about 400 of their dearest friends to read the blog every day, we could break into N.Z. Bear's top 100, as measured by traffic (the currrent ranking is 135.)
Links only seem modestly proportional to traffic; based on that measure, this blog is currently rated #279 and it would take about 150 additional unique links for us to evolve from a "large mammal" to a "playful primate." Gaining a pair of opposable thumbs would take about 500 new links.
- We've raised $3,176 for John Kerry, putting us well on our way to the cumulative goal of $10,000 by the convention. Thanks!
- I've been pretty busy lately, which explains the dearth of in-depth posts about economics and policy (I made a modest attempt to rectify this in this post.) It's much easier, and often more fun, to point out that either God or nature is about to send a plague of locusts to Washington. Hopefully, things will slow down in a few weeks. Kash has similarly been busy of late, but I think he'll be back to full speed soon as well.
- I had high expectations when I invited Karsten to post from Europe on Fridays. I am very happy to see that my expectations have been exceeded.
- The RSS feed appears to be fully functional, at last.
AB
The Daily Show
Thursday night's coverage of Rice's testimony was hilarious, though somewhat depressing if you reflect on it. Comedy Central replays TDS at 10:00 a.m. and 7:00 p.m, Eastern time. Catch it if you can.
AB
Thursday, April 08, 2004
Pharaoh George Bush II?
Let's say you're a deeply religious and born-again President of The United States. Furthermore, you have ties extending deeply into the evangelical church. Then it must assuredly be a bad sign when a Plague of Locusts (billions of them!) is set to descend upon the nation's capital, Washington, D.C. (Read about Pharoah, Moses, God, and plagues here.)
Now, you might think of this as an innocent biological coincidence, something involving evolution, natural selection, 17-year life cycles, and so forth. If so, then you fail to grasp the concept of Intelligent Design: "The theory of intelligent design holds that certain features of the universe and of living things are best explained by an intelligent cause, not an undirected process such as natural selection," so there may well be some deeper purpose or message underlying this.
AB
P.S. Ok, they aren't really locusts, they're 17-year cicadas, but (1) they look like locusts to me, and (2) they are often called "17-year locusts," to the chagrin of entomologists.
Postcards from Old Europe - Special Easter edition
Note: This week's postcard comes one day early courtesy of Easter!
Easter is a time to celebrate rebirth and renewal; something many European economies could really profit from. In discussions with friends and colleagues I've often heard the question: "Well, why don't you change something? Why don't you implement reforms over there in Europe?".
The question is obviously not that easy to answer - there is no single factor which is blocking reforms. Some hindrances to reform are common to most western democracies, while others are unique to specific countries. As I am German, I feel that I am best qualified to write about the situation in this country so I'll take the next couple of paragraphs to lay down my opinion on the so-called "Reformstau" (Reform [traffic]jam).
Reforms are usually instituted to increase a countries rate of economic growth or to remove something which is considered to be unfair. A problem can arise when people think that increased growth will not benefit everyone equally. Many European countries have deep-rooted egalitarian instincts - people put a high value on the uniform distribution of wealth across the population. German basic law (i.e. the constitution) has an express provision in article 72 which obligates the government to establish "equal living conditions throughout the federal territory".
One could argue that economic reforms initially heighten inequality because they benefit some constituencies more than others. This becomes even more problematic when reforms entail reducing entitlements - people quickly assume that they have more to lose than they could ever gain because they focus on the present, not the future.
The other question is: "Why do we need reforms at all?". Most people will agree that the quality of life in Germany is very high already. Keep in mind that the growth of GDP is not the sole determinant of economic well being - most people would certainly agree that there is more to their life than GDP. Researchers at the Centre for the Study of Living Standards find that:
Per capita gross domestic product (GDP) is a poor measure of economic well-being. It measures effective consumption poorly (ignoring the value of leisure and of longer life spans) and it also ignores the value of accumulation for the benefit of future generations.Seen against this backdrop one could understand that people could be against reforms if they have the impression that one of the other contributors to their well being could potentially suffer as a result of implementing them.
[...]
We argue that a better index of economic well-being should consider: current effective per capita consumption flows; net societal accumulation of stocks of productive resources; income distribution; and economic security.
Much data shows that Germans are rather risk averse and value the status quo highly. A visible manifestation of this is the provision of high unemployment and welfare benefits in comparison with anglo-saxon countries. A good overview of this subject is provided by the OECD survey of "Benefit Systems and Work Incentives". Although the last survey is somewhat dated (1995) it does provide a more or less accurate view. It is unsurprising that the Scandinavian countries and Germany are at the top of the list with regard to the amount of transfers the unemployed or people on welfare receive. One only needs to look at the amount of debate which surrounded the latest bout of reforms to see that reforming this system of entitlements is very difficult. If you keep in mind that the German economy is anemic, you can readily imagine that convincing someone to give up some of his safety net today to help secure the future is a very difficult proposition.
Is this - understandable and specific - risk aversion a symptom of a timid culture. I think it is. Take the Global Entrepreneurship Monitor (GEM) for instance. It shows that Germans are much less likely to start their own company than the inhabitants of very many other countries. The GEM officially classifies Germany as "below average" along with countries such as Belgium, Sweden or Switzerland and finds that higher levels of social security lead to "much less start-up and firm entrepreneurship". Germany also stigmatizes failure. Someone who fails in business is usually viewed as someone who "had it coming" or "who deserved it" - no wonder that the word "Schadenfreude" is unique to the German language.
As politicians are the filter through which a democratic society's ideas pass before coming into effect via laws, it should be helpful to look at who is actually representing the German public in parliament. I don't intend to examine party affiliations, I just want to give you an impression of the type of people that we elect into our Bundestag. Most deputies (around a third!) are career civil servants. If you add in other people from quasi-governmental institutions you get a share of 54%. This compares to around 5% in the general public. Very representative. In my opinion civil servants have learned to trust regulation and instinctively distrust market forces. This is manifest in countless bits of legislation which assume that the man on the street is incapable of talking his own life into his hands. It is very German to try to legislate everything - from how you can save to retirement to when a shopkeeper is allowed to open his store.
The combination of high living standards, a myopic outlook on life, low risk tolerance and an overbearing government which is distrustful of markets are - at least in my opinion - the major stumbling blocks in the path of any meaningful reform. Although this entire situation might seem outlandish when seen from an anglo-saxon perspective I can assure you that it is consistent when seen against the backdrop of our value system. To paraphrase a research report by Deutsche Bank "In Germany poverty is considered to be the product of injustice, while in the US the root cause of poverty is considered to be laziness".
I wish all readers a great Easter and am looking forward to seeing you here or over at CurryBlog!
Reality in Iraq v. the Bush Administration
From today’s NYTimes:
Account of Broad Shiite Revolt Contradicts White House StandA bit of perspective is in order. A year ago when Iraqis were fighting against the US, one could argue that they didn’t understand that the US was going to help the Iraqi people, and that once they found out that the US was there for their own good, the Iraqi people would be glad. (In fact, I vaguely remember statements to that effect by Rumsfeld et al., but don’t have a specific quote to give you.) But now we’ve been there for a year. They know exactly what to expect from the Bush administration’s governance of Iraq. In economists’ parlance, they pretty much have full information at this point. That makes this revolt all the more telling.
United States forces are confronting a broad-based Shiite uprising that goes well beyond supporters of one militant Islamic cleric who has been the focus of American counterinsurgency efforts, United States intelligence officials said Wednesday. That assertion contradicts repeated statements by the Bush administration and American officials in Iraq.
... American intelligence officials now believe that hatred of the American occupation has spread rapidly among Shiites, and is now so large that Mr. Sadr and his forces represent just one element. Meanwhile... United States intelligence says that the Sunni rebellion also goes far beyond former Baathist government members. Sunni tribal leaders, particularly in Al Anbar Province, home to Ramadi, the provincial capital, and Falluja, have turned against the United States and are helping to lead the Sunni rebellion, intelligence officials say.
The result is that the United States is facing two broad-based insurgencies that are now on parallel tracks.
Why does the phrase "miserable failure" keep coming to mind?
Kash
Kerry’s Fiscal Prudence
Yesterday Kerry gave a major policy address, in which he reoriented his economic proposals around the idea of fiscal discipline. As the Washington Post describes it:
Sen. John F. Kerry outlined a broad deficit-reduction policy yesterday, scaling back several campaign promises that he now concedes the country cannot afford if his new budget goals are to be met.In addition, Kerry said that he would ask that all proposed spending and tax changes (including his own) must be offset by other changes in the budget, as was standard until a couple of years ago. He also suggested that the growth of certain discretionary programs (those not related to defense or education) should be held to the rate of inflation.
In his second major policy address of the general election campaign, the Massachusetts Democrat harked back to the fiscal and political policies of President Bill Clinton, sacrificing social spending to the goal of reducing the budget deficit by half in five years and eventually eliminating it by raising taxes on the rich and restraining government spending.
The details aren’t what’s important here, though. The significance of this address was that it signaled that Kerry has decided to adopt fiscal prudence as a core economic principle. This is a good change in emphasis for the Kerry campaign. The theme of fiscal discipline is one that sets up an easily understood contrast with Bush, is one that resonates with voters (at least in the abstract), and best of all, makes for good economics.
Kash
Echo Chamber?
Arianna Huffington on blogs, in Salon:
And because blogs are ongoing and daily, indeed sometimes hourly, bloggers will often start with a small story, or a piece of one -- a contradictory quote, an unearthed document, a detail that doesn't add up -- that the big outlets would deem too minor. But it's only minor until, well, it's not. Big media can't see the forest for the trees. Until it's assembled for them by the bloggers.AB
Wednesday, April 07, 2004
What’s Up with Import Prices?
Some people may find this morning’s release of the March import price data by the BLS a bit puzzling. It shows that, excluding oil, the price of imported goods into the US hasn’t really been rising – it has gone up by just 1.0% in the past 12 months (between March 2003 and March 2004). In fact, the rate of import price inflation has actually fallen rather than risen over the past year – despite the fact that during that time period we’ve seen a dramatic decline of the dollar against most major currencies, which one might expect should make imported goods more expensive. This data therefore throws some cold water on the expectations of people who think that a weaker dollar should, by causing imports to become more expensive, reduce US imports and thus help improve the US’s trade balance.
There are a couple of possible explanations. One is simply that the exchange rate hasn’t really changed against the US’s major trading partners. There’s some truth to that idea, since the dollar hasn’t weakened against China or Mexico. Nevertheless, it has weakened against many of the US’s largest trading partners, like Canada, the U.K., and Germany, so we would still expect to see some effect. (On a trade weighted basis, the dollar is still down by about 15% over the past year.)
A second possibility is that prices may be falling in some countries that we import a lot from. This may actually be true in some places like Germany and Japan. (Karsten, any comments?) The weaker dollar would then simply counteract import prices that would otherwise be falling. A third explanation is that firms selling imports in the US (note that these include both foreign firms like Toyota, and domestic firms like Wal-Mart) are accepting lower profit margins in order to maintain US market share. There's a long history of this happening in the US (especially in the late 1980s), so this would come as no surprise if it's true.
Regardless of the explanation, however, the result is that we should not expect to see US imports slowing down any time soon.
Kash
Interest Rates and Employment Reports
Take a look at the yield on the 10 year bond over the past 3 months (40 indicates an interest rate of 4.0%, etc.):
Something seems a bit odd to me about this picture: namely, those massive swings in bond prices (and thus yields) that have happened with each of the last 2 employment reports in early March and early April. Bond yields plummeted on March 5, when the employment report was somewhat weaker than expected. And bond yields shot up on April 2, when the employment report was stronger than expected.
Are such extreme reactions to a monthly report sensible? Some movement in bond yields in response to the employment report is only natural – surprises in the data, by definition, should be expected to change expectations about the future. But the magnitude of these movements in the interest rate seem incredibly large to me. Month-by-month statistics are notoriously volatile, easily affected by relatively small one-time events (such as the ending of the grocery workers strike in California), and thus generally only tell us a lot about the economy when a trend is sustained over multiple months. But looking at this interest rate data, it looks like with each new unemployment report, the market takes the result as an iron-clad forecast valid for many more months to come. Until the next report, that is.
I’m not trying to second-guess the market. But I do wonder if this is an example where traders may sometimes get carried away by a hyped-up emotional response to one month’s data, rather than take it for what it really is – data about just one month.
Kash
Promoting Economic Growth in Developing Countries
I found a nice paper that addresses an issue occasionally touched on here – economic growth (and the lack thereof) in the developing world. It’s an IMF working paper by Philippe Beaugrand, one of the IMF’s Africa specialists, and it nicely summarizes one school of thought about how to make poor countries grow richer. As he puts it in the introduction: “It’s entrepreneurship, stupid!”
How does one encourage productive entrepreneurship? Beaugrand provides a convenient seven step summary:
- Peace and stability: establish a credible political system that ensures legitimacy and continuity.
- Governance and the rule of law: maintain law and order; enforce property rights; avoid capricious changes in the legal and regulatory framework; set up a credible judiciary.
- Mentality: drum up support for economic and social reforms, encourage innovation, and place economic success at the forefront of the political discourse.
- Economic incentives: adopt sound economic policies including hard budget constraints, open competition, a neutral tax system, no nontariff barriers and low tariffs, basic protection for FDI, etc.
- Basic infrastructure: ensure the provision of a minimum array of public services, especially as regards the transportation network and utilities.
- Access to capital: develop efficient financial intermediation systems [i.e. a sound banking system]; mobilize external savings, but with prudent debt management.
- Education: build up human capital – raise literacy and gain access to up-to-date knowledge.
Kash
Iraq Deteriorates Further
The violent uprising has now spread to at least half a dozen cities in Iraq. Perhaps even more worrying than simply the number of cities that have turned into combat zones in the past few days, or even than rapidly climbing casualty figures (39 coalition troops killed in the past 7 days), however, is the fact that Sunni and Shiite groups are beginning to bridge the gap between them and are uniting against their common enemy – the United States occupation. It looks increasingly likely that this won’t be ended quickly or easily.
Kash
Daddy, Where Do Republicans Come From?
Seriously, I read something like this (and this) and I can reach only one conclusion: come November, if more than half the people who vote (roughly; see Florida, 2000) actually vote for George W. Bush then I'll have to simply give up. Politics, sound policy, and the common weal will all be irrelevant. The only thing remaining will be to put as many dollars in my own pocket, as fast as I can. People get the government -- and the President -- they deserve.
AB
Tuesday, April 06, 2004
More From Gary Hart
In Salon today:
The U.S. Commission on National Security/21st Century, co-chaired by former Sen. Warren Rudman and myself, reported to President George W. Bush and his new administration in January 2001 that terrorists were surely going to attack the United States and that our country was woefully unprepared. We documented the lack of intelligence coordination against this threat and the lack of preparation of up to two dozen federal agencies, as well as state and local governments, to prevent such attacks or respond to them when they did occur. Though we had no ability to forecast specific times, places and methods for such attacks, we were united in our certainty that they were bound to occur. In our first report we said: "America will become increasingly vulnerable to hostile attack on our homeland [and] Americans will likely die on American soil, possibly in large numbers." In our final report we urged the new Bush administration to create a national homeland security agency to prevent terrorist attacks.Read the rest.
AB
Indeed
John Kerry, in Cincinnati:
"There is nothing conservative about running up deficits as far as the eye can see, there is nothing conservative about piling debt on our children and building up the annual interest payments for that debt so we can't fund education, health care."AB
Hidden Cost Update
Yesterday, I asked which official, "before the war, put the cost [of Iraq] in the low single-digit billions." This is what I was vaguely recalling:
On April 23, 2003, Andrew S. Natsios, head of the U.S. Agency for International Development, laid out in a televised interview the costs to U.S. taxpayers of rebuilding Iraq. "The American part of this will be $1.7 billion," he said. "We have no plans for any further-on funding for this."Thanks to Melanie for the reminder.
AB
Monday, April 05, 2004
Bad Poll News for Bush
From the latest Pew poll, via Yahoo:
Still, a majority supports his decision to use military force in Iraq, says the poll released Monday.AB
Four in 10, or 40 percent, approve of the way Bush is handling Iraq, while 53 percent disapprove. That's down from six in 10 who approved in mid-January, according to the poll by the Pew Research Center for the People & the Press.
Bush's overall job approval is at 43 percent, a low point for his presidency, down from 56 percent in mid-January. In the new poll, 47 percent disapproved of Bush's job performance. Bush's job approval soared to 90 percent after the terrorist attacks of Sept. 11, 2001, and remained in the 70s for almost a year after that.
Operation Liberty and Justice for All
Can we fire whoever it is that comes up with names for military operations these days? Afghanistan is "Enduring Freedom," the Iraq War is codenamed "Iraqi Freedom," and now the current operations in and around Fallujah are codenamed "Vigilant Resolve." It's a codename, not an explanation, statement of principal, or bumper sticker slogan.
In the good old days, circa World War II, we gave our operations tough names like Dragoon, Cobra, Sledgehammer, Avalanche, Grenade, Torch, and best of all, Overlord. More of that, please. And no, naming operations after cheesy 1980s movies, no matter how many great deer-blood-drinking jokes they inspire, does not count.
AB
Urban Job Markets Under Reagan, Bush I, Clinton, and Bush II
In a nice bit of work, G. Scott Thomas of American City Business Journals (a non-partisan straight news entity as far as I can tell) crunched the last 25 years' job numbers; his results put last weeks's good jobs news into context:
• Nearly two-thirds of [the 100 largest urban] areas -- 63 of 100 -- had fewer jobs in 2003 than in 2000, the final year of Bill Clinton's administration. The collective loss in those 63 markets was roughly 2.1 million jobs, which was larger than the total national decline.There's a lot more in the full story, including job numbers for each of the last four presidents. There's even good news for conservatives. Well, at least for fans of Ronald Reagan; neither Bush fares well on the jobs metric:
• Seventy-nine of the top 100 metros posted slower job-growth rates during Bush's first three years than under any of his three predecessors: Clinton, George H.W. Bush or Ronald Reagan.
• Ninety-nine of the 100 largest markets had worse employment records under George W. Bush than Clinton. The sole exception was Honolulu.
Reagan emerged as the leader, with 53 of the 100 markets posting their highest job-growth rates during his administration. Thirty-eight markets enjoyed their strongest growth under Clinton, and nine reached their peak under George H.W. Bush. No markets did best under the current administration.The city-by-city data are available from American City Business Journals (html or Excel) -- be sure to take a close look at the aptly located far right column.
The flip side was dominated by George W. Bush, with 79 [of 100] markets registering their lowest job-growth rates during his tenure. Eighteen hit bottom under his father, two did worst under Reagan and one reached its nadir during Clinton's administration.
Of course, part of Reagan and Clinton's strong performances on these scores is attributable to the low baselines each inherited due to the 1980 and 1991 recessions, respectively. Notwithstanding that, there appears to more than that at work here (for example, Bush II hasn't just had slow job growth, he's had negative job growth, a feat last achieved by Herbert Hoover.) And besides, while correlation is not necessarily causation, it does make for good bumper stickers.
AB
Lies, Bribes and Hidden Costs
Eric Boehlert has a good piece in Salon analogizing the Bush administration's selling of the Prescription Drug Bill to the selling of the Iraq Invasion: hype the benefits and willfully suppress the true costs.
In Iraq, the benefits were hyped primarily by promoting the WMD claims (thus creating the bogus benefit of removing WMD from Iraq) and, to some extent, by expressing too much faith in Iraq's rapid transformation into a shining beacon of democracy.
The distortions on the cost side were equally egregious. Larry Lindsey, Bush's then Economic Advisor was roundly chastised by the administration and the Right more generally for saying in September 2002 that the Iraq invasion might cost between $100 billion and $200 billion. White House OMB Director Mitch Daniels was similarly dressed down in January 2003 for proffering a $50-$60 billion cost estimate.(*) Of course, Daniels was too optimistic and Lindsey's number was in the ballpark: costs to date are about $150 billion and the administration is still not including the future costs of the occupation in its budget forecasts. Clearly, officials at the time knews that the invasion would be very costly, but they were pushed to the side.
Similarly, Gen. Shinseki was widely criticized in February 2003 by the administration -- most vocally, Paul Wolfowitz -- for saying that "several hundred thousand" troops would be required to stabilize Iraq after the invasion (Shinseki retired last August.) Now, it is unfortunately becoming increasingly clear that the roughly 130,000 troops now deployed are not enough. Worse, I cannot recall a single pre-war mention that the cost in American lives would top 600. There was a clear and concerted effort to minimize the costs -- whether measured by troops, dollars, or lives -- of the invasion. Those who disagreed were disgregarded and marginalized.
Focusing on the actual costs and benefits of the invasion is important because of a sleight of hand tactic employed by war supporters. Often, in response to criticism of the invasion, supporters will ask questions such as
- Don't you think it's good that Saddam is out of power? (e.g., here)
- Don't you want the Iraqi people to be free? (e.g., here)
Are the benefits of removing Saddam from power greater than the costs, in lives and dollars, of removing him?By hyping the benefits and downplaying the costs, Bush and his supporters lead the public to believe that the answer to this last question was yes. Increasingly, the public's answer appears to be no. Thus, the ex-post justification perforce devolves into a claim that the benefits are positive, not that the benefits exceed the costs.
It is in this context of comparing benefits and costs that the Medicare Drug Benefit and the Iraq War are properly juxtaposed. Could anyone answer no to this question?
Would it be a good thing for all the nation's elderly to have access to life-saving and life-improving drugs?Surely not. What about this question?
Is it worth $400 billion for the nation's elderly to have access to life-saving and life-improving drugs?As it turns out, the answer in the Congress was, narrowly, yes. But that answer was only achieved by hyping the benefits (upon reflection, seniors are not particularly pleased with the plan) and understating the costs by $140 billion, or 35%. While the answer to the previous two questions is apparently yes, had the question been honestly posed as
Is it worth $540 billion to give seniors a modest drug plan under which most will pay 60% or more of their total drug costs out of pocket?then the answer would almost surely have been no. Only by concealing costs and exaggerating benefits is this administration able to get its major initiatives enacted.
Certainly, all politicians cast their proposals in the best possible light. But the Bush administration consistently pushes this to new heights. The old process of starting with analysis, selecting proposals based on that analysis, and then advocating for those proposals is now turned on its head. Policy is first and foremost derived from political exigencies; then the costs and benefits are transmogrified as needed to justify the policy. In 2002, John DiIulio made this painfully clear:
"There is no precedent in any modern White House for what is going on in this one: a complete lack of a policy apparatus ... What you've got is everything -- and I mean everything -- being run by the political arm. It's the reign of the Mayberry Machiavellis."Sadly, bad policy is the predictable result when decisions are made politically and justified by distorted cost and benefit projections. This is true in the context of Iraq, true in the context of Medicare, and true in the context of tax cuts (hyping the job-creating effects while understating the resulting revenue shortfalls). More simply, it's true.
AB
(*) I can't recall which official, before the war, put the cost in the low single-digit billions; hopefully a commenter can help me out.
Sunday, April 04, 2004
Tempest in a Blogspot
For those who are curious, Angry Bear has no plans to start accepting ads. I do however, plan to keep the contribute to Kerry link up ($2175 raised so far!) until either the convention or I think Kerry has enough money, at which point I'll probably switch it to fund-raising buttons for individual Senate campaigns and/or the Democratic Senatorial Campaign Committee.
For those who are easily confused, this means that I am endorsing them, not the other way around. In other words, the opinions expressed here are the respective author's and not necessarily those of anyone who links to this blog (though they probably should be.)
If you have no idea why I'm making this disclaimer, but would like to know, then see Matt Stoller, Digby, Atrios, Kevin Drum, Mark Kleiman, Matt Y. (from whom I got the title of this post), and of course Kos.
Finally, note that while I don't run ads, I see absolutely nothing wrong with other bloggers doing so.
AB
More Evidence Supporting Clarke
This from a lengthy NYT piece:
... The warnings during the summer [of 2001] were more dire and more specific than generally recognized. Descriptions of the threat were communicated repeatedly to the highest levels within the White House. In more than 40 briefings, Mr. Bush was told by George J. Tenet, the director of central intelligence, of threats involving Al Qaeda.The story does detail a number of anti-terrorism measures that the Administration initiated -- or talked about initiating -- before 9/11, but there was little follow-through. For example, this:
The review suggests that the government never collected in one place all the information that was flowing into Washington about Al Qaeda and its interest in using commercial aircraft to carry out attacks, and about extremist groups' interest in pilot training. A Congressional inquiry into intelligence activities before Sept. 11 found 12 reports over a seven-year period suggesting that terrorists might use airplanes as weapons.
Mr. Bush proposed a 7 percent increase in overall spending on counterterrorism programs, a larger increase than was proposed for any cabinet department or agency other than education.AB
... The report also called for a $6.6 million program to improve intelligence collection at ports of entry; an additional $10 million, for a total of $76.7 million, to help state and local authorities learn to detect biological warfare agents; and a $17.3 million increase for a program to help purchase special equipment for fire departments, emergency medical services and law enforcement agencies, bringing the cost to $126.7 million.
But on Capitol Hill, the administration put relatively little political capital behind its proposals, choosing instead to emphasize its plan for a missile defense system.
When Senator Carl Levin, a Michigan Democrat who was then chairman of the Armed Services Committee, sought to transfer money to counterterrorism from the missile defense program, Defense Secretary Donald H. Rumsfeld sent a letter on Sept. 6 2001, saying he would urge Mr. Bush to veto the measure. Mr. Levin nonetheless pushed the measure through the next day on a party-line vote.
Time For Senator Frist to Apologize on The Senate Floor
In the Sunday Washington Post:
The most sweeping challenge to Clarke's account has come from two Bush allies, Senate Majority Leader Bill Frist (R-Tenn.) and Fred F. Fielding, a member of investigative panel. They have suggested that sworn testimony Clarke gave in 2002 to a joint congressional committee that probed intelligence failures was at odds with his sworn testimony last month. Frist said Clarke may have "lied under oath to the United States Congress."Sen. Frist, as you may recall, stood on the floor of the Senate and said (full statement here), among other things, that
But the broad outline of Clarke's criticism has been corroborated by a number of other former officials, congressional and commission investigators, and by Bush's admission in the 2003 Bob Woodward book "Bush at War" that he "didn't feel that sense of urgency" about Osama bin Laden before the attacks occurred.
In addition, a review of dozens of declassified citations from Clarke's 2002 testimony provides no evidence of contradiction, and White House officials familiar with the testimony agree that any differences are matters of emphasis, not fact. Indeed, the declassified 838-page report of the 2002 congressional inquiry includes many passages that appear to bolster the arguments Clarke has made.
I am troubled by these charges. I am equally troubled that someone would sell a book, trading on their former service as a government insider with access to our nation's most valuable intelligence, in order to profit from the suffering that this nation endured on September 11, 2001. I am troubled that Senators on the other side are so quick to accept such claims. I am troubled that Mr. Clarke has a hard time keeping his own story straight.At the time, I wrote that "I'm not sure how or why I have this feeling, but I suspect [the] statement by Senate Majority Leader Bill 'Cat Killer' Frist is going to backfire." Thankfully, it looks like I may have been right for once.
AB
UPDATE: Atrios says, "Censure Frist," which I think is as appropriate as it is unlikely (not that an apology is any likelier.)
Which NY Times Op-Ed Columnist Are You?
I am Tiger Woods Paul Krugman:
You are Paul Krugman! You're a brilliant economist with a knack for both making sense of the current economic situation and exposing the Bush administration's lies about it. You somehow came out as the best anti-war writer on the Op-Ed staff. Other economists hate your guts for selling out to the liberals. To hell with 'em.Via Roger Ailes (the non-evil one), whose essense I don't really think most closely matches Maureen Dowd's.
Which New York Times Op-Ed Columnist Are You?
brought to you by Quizilla
AB
Saturday, April 03, 2004
At Last
On Wednesday, responding to the news that Bush would need to be accompanied by a guardian/vice-president in order to testify before the 9/11 commission. At the time I remarked that "[It] seems like some enterprising young Photoshopper could get some mileage from a few pictures of ventriloquists, their dummies, Bush, and Cheney." The General has delivered the goods.
AB
The Wizard of Oz
Via TBogg, this from Eleanor Clift on the subject of Bush's agreement to testify before the full 9/11 Commission, but only if Uncle Dick is at his side:
A top Republican strategist dubbed the legal document striking the unusual deal “the Wizard of Oz letter” because it strips away the myth that Bush is in charge. Until now, it’s been all speculation about Vice President Cheney’s influence. With the revelation of the tandem testimony, nobody with a straight face can deny Cheney is a co-president or worse, the puppeteer who pulls Bush’s strings.AB
... Try thinking about it this way: can anyone imagine Bush’s father in a similar situation bringing his vice president?
Friday, April 02, 2004
Gary Hart
In Salon today, an interview of Gary Hart who, in 2000, co-chaired the little-publicized U.S. Commission on National Security:
Hart was co-chair (with former Sen. Warren Rudman, R-N.H.) of the U.S. Commission on National Security, a bipartisan panel that conducted the most thorough investigation of U.S. security challenges since World War II. After completing the report, which warned that a devastating terrorist attack on America was imminent and called for the immediate creation of a Cabinet-level national security agency, and delivering it to President Bush on January 31, 2001, Hart and Rudman personally briefed Rice, Rumsfeld and Secretary of State Colin Powell. But, according to Hart, the Bush administration never followed up on the commission's urgent recommendations, even after he repeated them in a private White House meeting with Rice just days before 9/11.The whole interview is facscinating; here's a telling exchange:
HART: ... And then as Congress started to move on this, and the heat was turned up, George Bush -- and this is often overlooked -- held a press conference or made a public statement on May 5, 2001, calling on Congress not to act and saying he was turning over the whole matter to Dick Cheney.AB
So this wasn't just neglect, it was an active position by the administration. He said, "I don't want Congress to do anything until the vice president advises me." We now know from Dick Clarke that Cheney never held a meeting on terrorism, there was never any kind of discussion on the department of homeland security that we had proposed. There was no vice presidential action on this matter.
In other words, a bipartisan commission of seven Democrats and seven Republicans who had spent two and a half years studying the problem, a group of Americans with a cumulative 300 years in national security affairs, recommended to the president of the United States on a reasonably urgent basis the creation of a Cabinet-level agency to protect our country -- and the president did nothing!
By the way, when our final report came out in 2001, it did not receive word one in the New York Times. Zero. The Washington Post put it on Page 3 or 4, below the fold.
So there was absolutely no follow-up on your commission's recommendations once Bush referred the matter to Cheney?
Right.
Labor Market Turnaround?
You’ve probably already seen the news, but if not: The BLS’s labor market report for March is out, and it includes a blowout job creation number of 308,000. This is well past economists’ average expectations. The unemployment rate rose from 5.6% to 5.7%, which somewhat paradoxically may also be a signal of a stronger labor market – apparently lots of people are reentering the labor force after sitting it out for a while.
This is a big, big report, and it is almost completely good. One month doesn’t make a trend... but could it be the start of one?
Kash
Postcards from Old Europe - The rocket that didn't launch
Trying to divine central bank's policies by interpreting the public statements made by their representatives always reminds me of the arcane art of Kremlinology. Practitioners of Centralbankology must have been working overtime the past couple of weeks to make sense of the many little tidbits emanating from the bank's ivory towers. One thing that was evident is that the US and European monetary policy seem to be moving towards each other - the Fed's comments are getting a little more hawkish, while the ECB's governors are signaling a possible cut in rates.
Although the ECB has refrained from hiking rates at their meeting on the 1st of April a whole raft of comments before and after the meeting give the impression that an interest rate cut might be in the offing. I don't want to beat my own drum, but I do have to mention that this was my opinion all along. The simple fact of the matter is that the Eurozone's recovery is half dead already.
Optimists keep citing the an imminent "export led recovery" as the catalyst for higher growth rates in the Eurozone. This is understandable as the major European countries have usually exported or devalued and the exported their way out of economic weakness. As the devaluation route is now mostly closed, they now have to rely on exports to dig themselves out of their hole. In an interview with the German daily Handelsblatt ECB president Trichet said:
In the normal course of economic activity, recovery most often starts with net exports, then passes over to investment and then, as the third stage of the rocket, so to speak, arrives at consumption.The only problem is the fact that this doesn't seem to be working. A look at the ECB's March report showed that the volume of exports to countries not in the Eurozone actually fell in the last quarter of 2003! This is not something we should be happy to see as it implies that Europe is not able to profit from the rapid pace of US consumption. The rocket is fizzling on the launchpad. While the Asian economies are reaping the benefits of the credit-fueled and consumption driven boom in the US economy the Eurozone has been left standing on the sidelines and has been trying to convince itself that a strong euro doesn't really matter.
The euro-strength has been helping the consumer by making imports cheaper. The purchasing public responded by increasing the amount of imported goods in their shopping carts all through last year. As it usually takes a while for the effects of a rising currency to fully trickle through into import prices we can probably look forward to European consumers continuing to increase the amount of foreign goods on their shopping list. The only problem with this is that it doesn't help Eurozone companies one bit.
A rising share of imported goods is doubly negative as consumer confidence is still very low in the Eurozone. The consequence of this double whammy is that the recovery rocket's third stage is also in danger of malfunctioning. This is in sharp contrast to the US where the third stage of the rocket has firing all through the recession and hasn't stopped burning yet. The US rocket is burning on fuel supercharged by easy credit and rising asset prices. Some members of the Fed's mission control team think that this sustained buying spree is harmful and are trying to dampen the perceived speculative excesses by ways of hawkish talk.
A quick glance at the media could support this view, some prices (Gas!) are rising right through the roof! Surely there must be inflation right around the corner? Some people are even suggesting that core CPI is a sham. I don't think that this is the case. A look at the medium term shows that core CPI and CPI are almost identical. I am assuming that people are looking at price hikes in frequently purchased goods (think gas) and concluding that all prices are rising. This is simply not true. Many goods are falling quite sharply in price - the only problem is that we tend to remember price increases and forget the bargains. Core CPI (and CPI) are low by any standard so I don't see a rate hike just around the corner.
Back across the Atlantic inflation is low (1.6%) as well which could give the ECB some leeway to cut rates. The only problem that I see, is the fact that a rate cut will not address the root cause of sluggish growth. The relative inflexibility of the major European economies is the major reason why the Eurozone is not able to grow GDP in a meaningful way. Yesterday's ECB meeting threw cold water on expectations of a quick cut in rates. Could it be possible that the ECB intends to keep monetary policy tight with the aim of "encouraging" Europe's larger economies to finally speed up their pace of reforms?
Thanks for reading and don't forget to check out CurryBlog!
Thursday, April 01, 2004
Can You Blame The Kid?
Here's the now famous bored-kid, instigator of the CNN-White House-David Letterman flap (via Atrios), looking at his watch:
But who was his role model? For that we have to turn to the Elder Bush in (roughly) the year of the bored kid's birth, when George Bush Sr. found that he even bored himself:
AB
Saddam's WMD
Note: This is *not* a 4/1 joke.
Based on a story today, Saddam Hussein possessed half the components required to build a nuclear landmine based on 1950's era British technology:
LONDON - A claim that Britain considered using live chickens in a nuclear weapon aroused skepticism Thursday, but officials insisted it was not an April Fool's hoax.Here's the half of the 50's era British WMD system (found in the "area around Tikrit and Baghdad and east, west, south and north somewhat") that Saddam had in his possession:
"It's a genuine story," said Robert Smith, head of press and publicity at The National Archives.
The archives released a secret 1957 Ministry of Defense report showing that scientists contemplated putting chickens in the casing of a plutonium land mine.
The chickens' body heat was considered a possible means of preventing the mine's mechanism from freezing.
His scientists, however, were still having trouble with these parts:
 |  |
AB
P.S. Be careful when Googling for images of "little boy" without adding "+Nagasaki" or "+atomic." The results are, sadly, not pretty. Who knows what watchlists I'm on now?
Flippity-Floppity
Yesterday, I quoted an AP story on some of Bush's reversals. The Center for American Progress has a more complete, though I'm sure not comprehensive, list.
AB
The Headline Says it All
Page 1, Washington Post. Top Focus Before 9/11 Wasn't on Terrorism: Rice Speech Cited Missile Defense.
On Sept. 11, 2001, national security adviser Condoleezza Rice was scheduled to outline a Bush administration policy that would address "the threats and problems of today and the day after, not the world of yesterday" -- but the focus was largely on missile defense, not terrorism from Islamic radicals.AB
The speech provides telling insight into the administration's thinking on the very day that the United States suffered the most devastating attack since the 1941 bombing of Pearl Harbor. The address was designed to promote missile defense as the cornerstone of a new national security strategy, and contained no mention of al Qaeda, Osama bin Laden or Islamic extremist groups, according to former U.S. officials who have seen the text.
An Inside Look at Rumsfeld's Talking Points
This is an interesting tidbit. Apparently someone walked into a Starbucks over the weekend and found some notes that were obviously written by someone prepping Rumsfeld for his Sunday morning interviews on the news shows. That individual then gave them to the Center for American Progress, the Democrats' think tank. The notes are quite entertaining, and both the CAP and the Washington Post are having some fun with them.
You can view .pdf files of the actual notes here.
Kash
Tomorrow’s Big Economic News
I’m referring to the release of the March employment report, which will be released by the BLS at 8:30am tomorrow (EST). This is what CNN/Money has to say about it:
Since at least November, there have been signs of a long-hoped-for jump in jobs, leading economists to make fairly rosy forecasts. And since November, those forecasts have been wrong, and job growth has disappointed.Tune in tomorrow to find out if we’ve received a pleasant surprise, or been disappointed yet again by the US’s job market.
Will March's jobs data, due on Friday, finally be the moment when the loop is broken? Maybe not -- though things could look a sight better than in February, when just 21,000 new jobs were added to a labor market of more than 130 million.
On Friday, the Labor Department prints the biggest economic report of the month, its measure of March's unemployment rate and growth in non-farm payrolls. Economists, on average, expect unemployment to hold steady at 5.6 percent and non-farm payrolls to grow by about 123,000 new jobs, according to Briefing.com.
Kash
Wow!
Great news today, on almost every front!
- Latest report: 600,000 jobs added in March; Bush now on pace to meet jobs projection in the Economic Report of the President.
- Budget will be in balance in 2006, due to rapid economic growth caused by Bush tax cuts. Trade deficit plummets as current accounts deficit turns into surplus.
- Citing the shining beacon of democracy in the adjacent country, Iran announced today that it will abandon its WMD program and hold democratic elections next October.
- Outing himself, Richard Clarke admitted this evening that his only objective was to maximize book sales; retracts allegations that fighting terrorism was not the Bush administration's top priority from day one.
- Ken Lay was indicted this morning; arrest is imminent.
- President's Mars plan unveiled. Scientists concur that man will land on the Red Planet in 2007.
- Mathematical error discovered: President's Medicare plan will cost $400 billion as promised, not $540 billion!
- Actual WMD found in Iraq. Hidden bunker containing 1.5 tons of VX gas, 8,000 liters of anthrax, 7,000 liters of botulinum toxin and nearly 1,000 liters of aflatoxin found in the "area around Tikrit and Baghdad and east, west, south and north somewhat."
- Income inequality lessened over the last year. While all income brackets saw gains, the poorest households gained the most.
AB
Wednesday, March 31, 2004
Angry Bear, Now With WorkingTM RSS (I think)
I thought I had it working before, but based on a number of emails, the feed quit updating many moons ago. I think I've got it working now, and it gives the full post instead of just the first part. Here's the link:
http://angrybear.blogspot.com/atom.xmlThe link in the sidebar should work as well. If this doesn't work, let me know in comments.
AB
Your Tax Dollars at Work
Generating talking points for the Bush Campaign, via the WSJ (subscription required):
WASHINGTON -- The Treasury tapped civil servants to calculate the cost of Sen. John Kerry's tax plan and then posted the analysis on the Treasury Web site. A federal law bars career government officials from working on political campaigns.AB
The Treasury analysis doesn't mention Mr. Kerry by name. Rather it sketches out the potential cost of a tax plan that rolls back tax reductions for taxpayers with incomes above $200,000 -- the nub of the Democratic presidential candidate's plan. The result, the Treasury said in the analysis posted March 22, would be a tax increase of as much as $477 billion over 10 years on "hardworking individuals and married couples." The same day, the Republican National Committee issued a press release in which it unveiled what it called its "John Kerry $pendometer," and cited the same $477 billion figure as the cost of "raising taxes on the top income bracket."
Yet More Outsourcing Fuel
Here's one more recent piece of data and analysis about offshore outsourcing, to add to the analysis discussed in the post below.
Jason Kirkegaard of the Institute for International Economics (a nonpartisan think tank devoted to careful research on current issues in international economics) made an extremely detailed examination of the BLS’s labor statistics by industry, occupation, and state to try to identify an impact of offshore outsourcing on those occupations said to be most vulnerable. One could spend hours poring over the detailed cross-tabulations showing exactly which types of jobs have been lost in recent years. In general, the report does not turn up any evidence the offshore outsourcing is responsible for significant job losses in any particular industry or occupation.
Some of the most interesting results can be summarized as follows:
- “The vast majority of the jobs lost in the post-bubble US economy from 2000 to 2002 in occupational categories threatened by offshore outsourcing has occurred in the manufacturing sector. This indicates that discussions of white-collar job losses cannot be separated from economic problems in the manufacturing sector.” In other words, the problems of the manufacturing sector affect not just blue collar workers in those firms, but white collar workers as well.
- “Most jobs lost have been in high-paying management positions, a different occupational category from the projections most frequently cited.” Since there seems to be little evidence that management jobs are being moved offshore, the cause of these job losses is likely something other than offshore outsourcing.
- “Jobs have been lost non-uniformly across different states, with some gaining and others losing jobs, suggesting that no singular nationwide trend other than the regular business cycle is occurring.” For example, in administrative support occupations New York has lost more than 30,000 jobs while California has gained over 30,000 jobs. Thus there seems to be significant relocation and movement of jobs even within the US.
- “The US economy every quarter generates many more jobs than are projected to be lost to offshore outsourcing over the next decades.”
- “The majority of US jobs projected... to be lost in occupational categories threatened by offshore outsourcing pay less than the US average, suggesting that many of these jobs may face medium-term elimination through technological change, regardless of whether they are outsourced to offshore locations or not.”
- “Some IT occupations have declined, but the declines are concentrated in low-skilled IT occupations, and in occupations where economy-wide trends dominate (managers and manufacturing).”
- “More than 70,000 computer programmers have lost their jobs since 1999. But more than 115,000 higher paid computer software engineers have gotten jobs since 1999.”
Put another way, even if we imposed a moratorium on offshore outsourcing, the job market would still remain weak because of the weak economy. We won't stop losing jobs, or gain new ones, until demand picks up in the economy, no matter how much or how little international trade the US engages in. So if you’re worried about the job market (which I am), then focus your attention on the pitiful economic management that the Bush administration has shown, and the weak economy that has persisted as a result.
Kash
Adding Fuel to the Outsourcing Fire
The Information Technology Association Of America has just released the results of a study they commissioned from an economic consulting firm called Global Insights. The punch line of the analysis:
This major study conclusively demonstrat[es] that worldwide sourcing of computer software and services increases the number of U.S. jobs, improves real wages for American workers, and by pushing the U.S. economy to perform at a higher level, has many other economic benefits.Of course, keep in mind that this was the result that the ITAA had hoped for when they commissioned the study, so one must look very carefully at the assumptions made and models used by Global Insight to arrive at their estimates. Unfortunately, it's a little hard for me to form an opinion about them without having the full report to read, which costs $350. (Though if someone wants to send me a copy, I'd be happy to take a whack at it!) However, from the executive summary it seems that their results are driven by pretty standard and uncontroversial economic effects -- namely, higher productivity and lower prices in the US that are the result of offshore outsourcing.
My initial conclusion? This report by no means provides us with a final or definitive answer -- but it does provide some ammunition for those who point out that there are benefits as well as costs to offshore outsourcing, and that, on an economy-wide basis, those benefits may even outweigh the costs.
Kash
UPDATE: Last sentence modified slightly in response to a reader's comments. Thanks for the input.
Yen/Dollar Update
FYI:
TOKYO (CBS.MW) - The dollar fell to the lowest level in almost four years in Asia Wednesday as market participants tested Japan's resolve for its dollar-buying intervention policy ahead of Japan's "tankan" business sentiment survey to be released Thursday.For a bit of context, see this post.
The dollar traded at 104.29 yen after briefly falling to 103.98. The dollar traded at 105.91 yen late Tuesday in New York. It fell below 104 yen for the first time since June 2000.
Kash
UPDATE: Karsten reports on the just-released data describing Japan's interventions in the currency markets over the past month. Japan was apparently still buying lots and lots of dollars in March...
Via the AP
Headline: A look at Bush's reversals
(AP) -- President Bush's decision Tuesday to allow his national security adviser, Condoleezza Rice, to testify publicly before the commission investigating the September 11, 2001, terrorist attacks reversed earlier White House insistence that she would only appear privately.And speaking of Bush reversals, he's apparently going to testify before the full 9/11 Commission, but only if Dick Cheney is with him. Seems like some enterprising young Photoshopper could get some mileage from a few pictures of ventriloquists, their dummies, Bush, and Cheney.
Some previous Bush reversals in the face of criticism:
# He argued a federal Department of Homeland Security wasn't needed, then devised a plan to create one.
# He resisted a commission to investigate Iraq intelligence failures, but then relented.
# He also initially opposed the creation of the independent commission to examine if the 2001 attacks could have been prevented, before getting behind the idea under pressure from victims' families.
# He opposed, and then supported, a two-month extension of the commission's work, after the panel said protracted disputes over access to White House documents left too little time.
# He at first said any access to the president by the commission would be limited to just one hour but relaxed the limit earlier this month.
AB
UPDATE: TBogg found this CNN story before I did, and he also has the better take:
His supporters will say he is just "evolving". Or, in his case, "creationing".....
EasterSlap
We need a name for things like this; I propose EasterSlap.
AB
Tuesday, March 30, 2004
Child Care Support for Welfare Recipients
From the NYTimes:
In a direct rebuff to the White House, the Senate voted today to increase the amount of money available to provide child care to welfare recipients, who would be subject to stricter work requirements under sweeping welfare legislation favored by President Bush and Congressional leaders.Why does the Bush administration go out of its way to make life more difficult for the most disadvantaged in this country? The cost of providing extra child care support is minimal – just over $1bn per year – and the benefit can be enormous to individuals on welfare, who are told to return to work even if their child care bills exceed the potential income they would earn from working. It may even be the case that increased support for child care will largely pay for itself by moving more people from the welfare rolls and onto private payrolls. So in addition to being mean-spirited, the White House position on this issue makes no economic sense.
The vote, 78 to 20, expressed broad bipartisan support for a proposal to add a total of $6 billion to child care programs over the next five years, beyond the additional $1 billion already included in the bill. The federal government now earmarks $4.8 billion a year for such child care assistance.
The vote came one day after the Bush administration expressed its objections to increasing the child care grant, saying in a written statement that it was not needed.
Kash
Consumer Confidence
Here is the headline from today’s edition of CNN/Money:
Confidence hits 5-month low : Job worries push closely watched measure of sentiment lower in March, though it is above forecasts.We’ve seen indicators that consumer confidence was low for over a month now, so this is completely unsurprising. But given how low consumer confidence has been for the past year or so, I’ve started wondering about whether consumer confidence readings actually tell us anything useful about where the economy is headed.
NEW YORK (CNN/Money) - Worries about the job market pushed consumer confidence to its lowest level in five months in March, a research group said Tuesday -- although its index came in above Wall Street forecasts.
The Conference Board’s consumer confidence index comes from tallying the results of a survey of 5,000 randomly selected individuals. A description from their web site follows.
The questions asked to compute the indexes have remained constant throughout the history of the series. The Index is based on responses to 5 questions:Do these questions actually do a good job of predicting consumer spending? The graph below shows the plot of consumer spending (the orange line, measured in percent shown on the right axis) superimposed on the graph of the consumer confidence rating (the blue line, measured as an index shown on the left axis).For each of the 5 questions, there are three response options: POSITIVE, NEGATIVE and NEUTRAL.
- Respondents appraisal of current business conditions.
- Respondents expectations regarding business conditions six months hence.
- Respondents appraisal of the current employment conditions.
- Respondents expectations regarding employment conditions six months hence.
- Respondents expectations regarding their total family income six months hence.
Other than both series being unusually high in the late 1990s, it’s hard to see much of a relationship between the two. Formal econometrics may tease out more of a relationship than casual observation suggests (something that I will leave as an exercise for the reader), but it’s not obvious to me that consumer confidence really does a good job at predicting consumer spending.
Kash
That Liberal Media
Next time your conservative friends whine about the liberal media, tell them they're right, and try to make them listen:
Rumor has it that Atrios will be on Janeane Garofalo and Sam Seder's show
AB
Rice to Testify
She'll probably get points now just for testifying, regardless of what she actually says. In an odd twist, the administration is trying to borrow a page from Bush v. Gore:
In a letter to the commission, White House counsel Alberto Gonzales said the commission must agree in writing that Rice's appearance would not set a precedent for testimony by White House staff.In Bush v. Gore, the majority knew they were writing a bad ruling, and so decided to simply declare that the case would not serve as a precedent for future cases:
Our consideration is limited to the present circumstances, for the problem of equal protection in election processes generally presents many complexities.Of course, things become precedents by virtue of happening, not by virtue of beind declared a precedent. On the other hand, I supposed Gonzales is technically correct that Rice's appearance won't be a precedent since previous National Security Advisors Zbigniew Brzezinski and Sandy Berger have testified before Congress. So what Gonzales must mean is that Rice's testimony could not serve as a precedent for National Security Advisors testifying before "independent, bipartisan commission created by congressional legislation and the signature [of the President]."
I now present to you, without further ado, Rice's upcoming testimony:
- Saddam Hussein was a dangerous man in the world's most dangerous region.
- No one could have predicted that terrorist would use planes as weapons. But had we known that terrorists were going to attack with planes on September 11th, 2001, in the a.m., we would have done everything in our power to prevent it.
- When we went to Camp David to plan our response to the al Qaeda attack, it was a map of Afghanistan that was rolled out on the table.
Economic Advice for the Next President
C. Fred Bergsten, of the Institute for International Economics, has a piece in the current issue of Foreign Affairs in which he outlines his suggested advice for the next president. It’s a lengthy essay, full of sensible thoughts about needed changes to US international economic policy. Highlights:
A reelected President Bush or his successor will have to design and implement new initiatives to address global economic challenges of the highest national and international priority:Take a look at the essay if you have a chance.He will have to do all of this in a new global economic context, in which a unified Europe, a rising China, and a new Asian bloc are shattering the final vestiges of U.S. economic hegemony.
- forging a new domestic consensus in support of globalization;
- restoring and maintaining a sustainable external financial position;
- reviving trade liberalization;
- and freeing the world economy from the manipulation of energy markets by leading producers.
Kash
Robert Novak: Douchebag for Liberty
You must watch The Daily Show. On Monday's show, Jon Stewart lead off with some great commentary on the recent talk show circuiting by Rumsfeld, Powell, Cheney, and Clarke.
Addressing Rice’s 60 Minutes appearance in which she said, "Nothing would be better, from my point of view, than to be able to testify":
[Stewart qua Rice] You see, here with you, I can lie. But those people [the 9/11 Commission] want you to put your hand on a Bible and swear to all kinds of crazy stuff. And that, that is not going to help us fight al Qaeda.On Clarke suggesting, in response to charges that his recent testimony contradicts his 2002 testimony, that the administration not only declassify his October 2002 testimony, but also his 1/2001 memo, the eventual 9/2001 plan, all his emails and memos, and Dr. Rice’s testimony:
[Stewart qua Clarke] I see your declassified memo, and I raise you my hard drive.Then things got really funny when Stewart turned to Bob Novak, who recently asked Congressman Rahm Emanuel whether he, "believe[s] watching these hearings that Dick Clarke has a problem with this African-American woman Condoleezza Rice?"
NOVAK: Congressman, do you believe – and you’re a sophisticated guy – watching these hearings that Dick Clarke has a problem with this African-American woman Condoleezza Rice?”Indeed.
EMANUEL: [looks stunned, grabs earpiece] Say that again.
STEWART: [interrupting the video] Yes, Robert Novak. Please! Say that again.
NOVAK: Do you believe that Dick Clarke has a problem with this African-American woman Condoleezza Rice?
EMANUEL: [mixture of non-plussed and bewildered expression] No. Bob, give me a break, no.
STEWART: Wow. Who even knew this deck had a race card? Don't you get it people? Civil rights activist Robert Novak is implying Richard Clarke was never interested in fighting terrorism -- he just hates black people.
That’s the thing about Robert Novak. He’s all about fighting injustice. Whenever he sees a white man attacking a black woman, he’s gotta say something. Or when he hears about a CIA agent still working undercover, he has to reveal that person. That’s Robert Novak. A douchebag for liberty.
AB
P.S. Clarke wasn't on The Daily Show last night, but apparently he'll be on Tuesday night, followed by Karen Hughes on Wednesday.
UPDATE: Via Digby:
. But during the Democratic primaries, an unexpected foe stole the ratings crown from all three. The Daily Show With Jon Stewart, a mock news program airing on Viacom's (VIA) Comedy Central, attracted more viewers at 11 p.m. than any of the cable news channels in the last two weeks of January, outdoing Fox by 20 percent even as the news network was running live campaign coverage.
Monday, March 29, 2004
Rice to Testify?
Perhaps, but there's still the hang-up of whether or not she'll swear to tell the truth:
The White House looked for a deal on Monday with the Sept. 11, 2001, commission under which national security adviser Condoleezza Rice would appear in private before the panel, but it refused to budge in the face of demands she testify in public and under oath.I'll repeat my earlier point: Dr. Rice can refuse to answer questions (e.g., if the answers would compromise national security or violate executive priviledge), so I can only divine one reason why she would refused to testify under oath, which I'll politely leave unsaid.
AB
The End of Japan's Buying Spree?
From Bloomberg:
Japan to End Yen Sales, London Times SaysSuch rumors have been floating around for over a week now, but the fact that they persist and seem to be gaining credibility may be significant. The telltale sign will be if they allow the yen to fall below about 105 yen/dollar, since that seems to have been where they've dug their heels in up to now:
March 29 (Bloomberg) -- U.S. 10-year Treasury notes fell, pushing yields to their highest in more than three weeks, after the London-based Times said the Bank of Japan may end yen sales, fueling speculation it will buy less U.S. government debt.
Accelerating economic growth means Japan no longer needs a weaker currency to boost exports, the Times said, citing unidentified officials at Japan's central bank, which buys and sells yen on behalf of the Ministry of Finance. The BOJ typically buys U.S. debt with the proceeds of dollar purchases. A ministry official said Japan's currency policy hasn't changed.
The drop in the yen/dollar exchange rate below 105 would have a minimal impact on the US economy, at least this year. However, given that Treasury data shows that Japan has recently been buying a net of $20-25bn in US government bonds per month, if Japan were to stop buying US treasuries there could be an effect on long-term interest rates. Exactly how much long-term rates will rise is the $64,000 question.
Kash
Compare and Contrast
President Bush, November 19, 2003, London:
I've noticed that the tradition of free speech -- exercised with enthusiasm -- (laughter) -- is alive and well here in London. We have that at home, too. They now have that right in Baghdad, as well.The New York Times, March 29, 2004, Baghdad:
American soldiers shut down a popular Baghdad newspaper on Sunday and tightened chains across the doors after the occupation authorities accused it of printing lies that incited violence.The US continues to competently win over hearts and minds in Iraq…
Thousands of outraged Iraqis protested the closing as an act of American hypocrisy, laying bare the hostility many feel toward the United States a year after the invasion that toppled Saddam Hussein.
…[T]he letter outlining the reasons for taking action against Al Hawza did not cite any material that directly advocated violence. Several Iraqi journalists said that meant there was no basis to shut Al Hawza down. "That paper might have been anti-American, but it should be free to express its opinion," said Kamal Abdul Karim, night editor of the daily Azzaman.
Omar Jassem, a freelance reporter, said he thought that democracy meant many viewpoints and many newspapers. "I guess this is the Bush edition of democracy," he said.
Kash
Sunday, March 28, 2004
Condi on 60 Minutes
First, Clarke: once again, very clear and compelling (I particularly liked this statement.) I also thought Russert was pretty easygoing throughout and let Clarke give detailed answers.
This evening, Dr. Rice was on 60 Minutes to attempt to rebut Clarke's charges. It was the same spin that you've heard before: no plan, we were focused on terrorism and al Qaeda from day one, and so on. But at one point, Dr. Rice did say something interesting:
When we went to Camp David to plan our response to the al Qaeda attack, it was a map of Afghanistan that was rolled out on the table. It was Afghanistan that became the focus of the American response. And Iraq was put aside."And Iraq was put aside"? Put aside from what? I thought the administration said Paul O'Neill was lying or mistaken when he said the administration had plans for Iraq from day one? Or did Rice mean that Iraq was in fact the focus during the period from 9/11 to the Camp David meeting and only then were the Iraq plans put aside (which is basically what Clarke charged)? Seriously, I'd like to know what she meant by this.
AB
UPDATE: In a post titled Clarke Revelations Take Their Toll, Ruy T. reports a slew of bad numbers for Bush, including this:
A just-released Newsweek poll has Bush's approval rating on handling terrorism and homeland security down to 57 percent, a sharp decline from 70 percent two months ago. It is also significant that this rating is down in the 50's--Bush's ratings on terrorism, homeland security and related issues have been steadily in the 60's or above in this and other public polls for a very long time.
Saturday, March 27, 2004
Richard Clarke on Meet the Press
Sunday. Set your Tivo's. Also, unless Jon Stewart was kidding, Clarke will be on The Daily Show Monday night.
AB
UPDATE: Dr. Rice on 60 Minutes, too.
Bush Takes Credit for Home Ownership
Once again, Bush is going out of his way to take credit for some good news, despite a complete lack of evidence to show that he had anything to do with it. This is, of course, simply the counterpart to his “It wasn’t me” mantra that he recites whenever anything bad happens.
This time, the good news has to do with home ownership in the US. (I’ll go with Bush’s assumption, which is not obviously true, that higher rates of home ownership are automatically good.) In his weekly radio address this morning, President Bush claimed credit for the nation’s rising rate of home ownership:
In our growing economy, more Americans can afford a new home. Incomes are rising. The unemployment rate is falling. Mortgage rates are low. And because of tax relief, Americans have more to save, spend and invest -- and that means millions of American families have moved into their first homes.Let’s take a moment to think about this claim that “because of tax relief… millions of American families have moved into their first homes.” The median home price in the United States in 2003 was $170,000. (Source: National Association of Realtors.) Suppose that this median home is typically purchased by a family at roughly the 60th percentile of income, which means that they would have had an annual income of about $50,000. (Source: Census Bureau.) The effect of Bush’s two tax cuts combined is estimated to be a total of $834 for a family earning $50,000 per year. (Source: Tax Policy Center.)
Does it seem likely that an extra $834 would make that typical family choose to buy a house instead of renting? The annual payments (mortgage, insurance and taxes) on the median house would be about $14,000, and a typical ten percent down payment would be $17,000. Compared to these figures, it seems a bit of a stretch to argue that an extra $834 was enough to cause “millions of American families” to decide to buy a house for the first time. (Imagine: “We have $16,170 this year to put down on a house, but just can’t quite make it to $17,000… so I guess we’ll just have to keep renting.”)
For more on just how ludicrous it is for Bush to take credit for increasing home ownership in the US, take a look at the chart below. It gives some historical context on the statistic that Bush is trumpeting so loudly.
(Source: Census Bureau.)
He is quite correct that the rate of home ownership in the US is “the highest ever.” But that reflects an ongoing trend, not something newly created by tax cuts. In fact, Bill Clinton could have made the same claim nearly every year of his presidency, despite the fact that taxes were increased in late 1993. Can you see a correlation between tax cuts and rising home ownership rates? I can’t.
But of course, I guess we already knew that having facts to support his assertions is not particularly important to President Bush. Especially if he can dodge responsibility for something bad that happened, or take credit for something good.
Kash
p.s.: While he's at it, perhaps we can suggest some other good things that Bush can take credit for. Infant mortality has fallen in China since he took office; thank the tax cuts! Two advanced rovers have successfully landed on Mars since he took office, and they've even found evidence of water; thank the tax cuts! The price of high definition televisions has fallen a lot since Bush took office; thank the tax cuts! Wow, who knew that tax cuts could do so much...
Friday, March 26, 2004
Umm, About That, ...
When we said that no one expected terrorists to use planes as missiles, and when we said Bush never pressed Clarke to link Hussein to 9/11, we were, you know, just kidding. We're big kidders, you see. Now where are those Gosh darn WMDS?
WASHINGTON - (KRT) - A member of the 9/11 commission said Friday that national security adviser Condoleezza Rice indicated in a private session she was wrong to have once stated no one expected terrorists to use planes as missiles.Maybe they should just stop talking until they can get their stories straight.
The White House reportedly also backpedaled Friday on whether President Bush pressed counterterror czar Richard Clarke the day after the attacks to find evidence that Iraqi dictator Saddam Hussein was involved.
Clarke claimed the meeting occurred in the White House Situation Room and presidential aides said earlier this week the meeting never happened.
But CBS News reported last night that White House aides now concede the meeting "probably" occurred.
AB
Bill Frist Just Blew a Gasket
I'm not sure how or why I have this feeling, but I suspect this statement by Senate Majority Leader Bill 'Cat Killer' Frist' is going to backfire:
I am troubled by these charges. I am equally troubled that someone would sell a book, trading on their former service as a government insider with access to our nation s most valuable intelligence, in order to profit from the suffering that this nation endured on September 11, 2001. I am troubled that Senators on the other side are so quick to accept such claims. I am troubled that Mr. Clarke has a hard time keeping his own story straight.Frist's statement then lurches further into pathos and outrage before winding down with
In his appearance before the 9-11 Commission, Mr. Clarke's theatrical apology on behalf of the nation was not his right, his privilege or his responsibility. In my view it was not an act of humility, but an act of supreme arrogance and manipulation. Mr. Clarke can and will answer for his own conduct but that is all.Now, I take it most of you have seen Clarke's apology, so judge for yourself.
These attacks take me back to DiIulio's sudden retreat, despite the fact that his charges were on paper in a letter to Ron Suskind, from his statments about the lack of any substantive policy-making apparatus in the White House (DiIulio coined the term "Mayberry Machiavellis"). Paul O'Neill also did a similar, though lesser, backtrack. Contemporaneous to both, I remember a lot of speculation about why they were retreating on their stated positions. Some were humorous (Rove must have pictures of DiIulio naked with a goat, and the like.) Some were more serious (speculation that the full right wing media and establishment would come against them if they failed to amend their positions.)
Then, all the reminiscing over DiIulio and O'Neill brought to mind Ron Suskind's account of the time he visited Karl Rove:
Eventually, I met with Rove. I arrived at his office a few minutes early, just in time to witness the Rove Treatment, which, like LBJ's famous browbeating style, is becoming legend but is seldom reported. Rove's assistant, Susan Ralston, said he'd be just a minute. She's very nice, witty and polite. Over her shoulder was a small back room where a few young men were toiling away. I squeezed into a chair near the open door to Rove's modest chamber, my back against his doorframe.For those unsure of what Rove could possibly have meant by that last bit, keep your eyes on Richard Clarke.
Inside, Rove was talking to an aide about some political stratagem in some state that had gone awry and a political operative who had displeased him. I paid it no mind and reviewed a jotted list of questions I hoped to ask. But after a moment, it was like ignoring a tornado flinging parked cars. "We will fuck him. Do you hear me? We will fuck him. We will ruin him. Like no one has ever fucked him!"
AB
Damn You, John Kerry
I say that, because this is surely somehow his fault:
(AP) -- Soldiers headed for Iraq are still buying their own body armor -- and in many cases, their families are buying it for them -- despite assurances from the military that the gear will be in hand before they're in harm's way.For background on the body armor issue, see this post.
Body armor distributors have received steady inquiries from soldiers and families about purchasing the gear, which can cost several thousand dollars. Though the military has advised them not to rely on third-party suppliers, many soldiers say they want it before they deploy.
AB
A Thought on Declassification
If a document or testimony can be declassfied to cover a party's political hide (or an attempt to do so), then why was it classified in the first place?
AB
P.S. My guess on how this works out: the testimony doesn't get declassified and Republicans go on CNN, FOX, Op/Eds, and the like saying how, if only they could show you what was in that classified testimony, you'd know what a bounder and a scoundrel that Richarde Clarke is. (Alert readers may recognize this ploy from the Republicans' secret room full of secret evidence strategy used against Clinton during the impeachment.)
UPDATE: Marshall has more, based on speculation that Republicans will seek perjury charges against Clarke.
When The Going Gets Tough ...
... the tough just plain get weird.
Via Josh Marshall, here's Bob 'Champion of Women and Minorities' Novak on Crossfire last night:
ROBERT NOVAK: Congressman, do you believe, you're a sophisticated guy, do you believe watching these hearings that Dick Clarke has a problem with this African-American woman Condoleezza Rice?Josh reports that Ann Coulter is also indignant over race-based mistreatment of Rice:
The chair-warmer describes Bush as a cowboy and Rumsfeld as his gunslinger -- but the black chick is a dummy. Maybe even as dumb as Clarence Thomas.Meanwhile, Republicans are now accusing Daily Kos of being a "secret site" that funnels money to Democrats, in this instance, South Dakota Congressional candidate Stephanie Herseth (I think I've seen Herseth ads over at that other super-secret site, atrios.blogspot.com.)
Meanwhile, Rice wants to go before the 9/11 Commission to rebut Clarke's charges, but not under oath. Since, even under oath, she can decline to answer questions that compromise national security or tread upon executive priviledge, I can only discern one motive for not wanting to be under oath.
And speaking of "secret sites" like Atrios funneling money to Democrats, as of yesterday Atrios has raised over $100,000 for Kerry (which means that, at $1,500 I'm lagging somewhat behind on my goal of raising 1/50th as much as Atrios.) Were Atrios raising money for Bush, I believe he'd now be entitled to one environmental regulation rollback of his choice.
AB
Kerry's Tax Proposals
Kerry is giving a speech today in which he will propose some significant changes to corporate taxes. The NYTimes describes the main features of his proposal:
The essence of the Kerry plan boils down to two main elements. The first would be eliminating the ability of American multinational companies to defer taxes on their foreign profits as long as those profits stay outside the United States. That would raise about $12 billion a year in extra tax revenue, which Mr. Kerry would use to reduce the overall corporate tax rate to 33.25 percent from 35 percent. Analysts on Wall Street have estimated that American companies have accumulated more than $400 billion in overseas profits.I gather from this description that the plan is intended to be revenue-neutral, which means that it is designed to keep the total taxes paid by corporations roughly constant. Given that, Kerry's plan makes some sense, though I think that he is probably overdoing the rhetoric a bit if he suggests that these changes to the tax code will reduce the movement of US firms overseas. In fact, I doubt that his changes would have any measurable impact on US corporate decisions about setting up operations overseas. The most important factors that cause a US firm to produce in another country are usually wages, fixed costs, and transportation costs, not tax considerations.
... Mr. Kerry also borrowed an idea supported by many Republicans. In addition to reducing the corporate tax rate, the plan would give American multinational companies a one-year "tax holiday" under which they could bring their accumulated foreign profits back to the United States at a tax rate of only 10 percent.
Economic advisers to Mr. Kerry said the tax holiday would actually lead to a short-term windfall in tax revenues, because companies would have a special incentive to bring back hundreds of billions of dollars that have been sitting untaxed overseas. Under the plan, the government would use that windfall to pay for a two-year tax credit to companies that create new jobs.
On the plus side, though, by eliminating this odd distortion in the corporate tax code, there may be some efficiency gains as capital is no longer held in overseas bank accounts simply for tax purposes. Most interesting to me, however, is the suggestion that the windfall in tax collections could be used for some direct job-creating tax stimulus. That's an excellent idea, I think. Like AB's proposed reduction in the payroll tax, these are the sorts of ideas that could actually generate real job creation.
Kash
More on Getting Your Story Straight
I’m back from a few days out of town, and have been catching up on my reading – especially AB’s excellent commentaries on the Clarke affair and Karsten’s thoughtful post about population decline in Europe.
I will confess that I’m petty enough that I’ve been enjoying the discomfiture of the Bush administration this week over the Clarke testimony. Somewhat gratifyingly, the press seems to have finally caught on to the fact that the Bush administration’s panicky response to Clarke has been rife with self-contradictions. In today’s Washington Post, Walter Pincus and Dana Milbank enumerate some of the many inconsistencies in the flurry of statements that Bush operatives have made this week, most of which have been well-documented this week by blogs, for instance here on Angry Bear and also on Brad DeLong's blog. My favorite part of the WaPost piece is this description of how the White House answers such charges of inconsistencies:
Asked about this apparent discrepancy [in statements regarding Clarke's role in White House policy-making], McCormack pointed a reporter to a Clarke background briefing in 2002 in which the then-White House aide was defending the president's efforts in fighting terrorism.No, you’re not missing something if you think that McCormack’s answer had nothing to do with the question. Pincus and Milbank are pointing out (in a subtle way that avoids directly making the statement) that the Bush administration can’t answer questions about inconsistencies, and when confronted simply tries to change the subject instead.
The fact that this piece didn’t appear until today makes me wonder, though, if the press would have ever written such a story without the blog world doing all of the leg work for them all week long…
Kash
Ranks of The DisgruntledTM Update
The list as of yesterday: Jon DiIulio, Rand Beers, Paul O'Neill, Joe Wilson, Richard Foster (the Medicare guy) and Richard Clarke.
Now, via CalPundit, former chief US Weapons Inspector David Kay may soon make the list:
"We are in grave danger of having destroyed our credibility internationally and domestically with regard to warning about future events," he [Kay] said. "The answer is to admit you were wrong, and what I find most disturbing around Washington . . . is the belief . . . you can never admit you're wrong."And via Orcinus, Reagan's -- and briefly Bush's -- chairman of the Joint Chiefs of Staff (1985 to 1989), Admiral William Crowe, appears a bit disgruntled as well, over the fictitious missile defense being rolled out for the next election:
"As you have said, Mr. President, our highest priority is to prevent terrorists from acquiring and employing weapons of mass destruction," said the letter made available to Reuters.48 other retired generals and admirals signed the letter as well. Each and every one of them is surely disgruntled -- after all, were they gruntled, why would they have retired? (Crowe, displeased with Bush I, endorsed Clinton in 1992.)
As the "militarily responsible course of action," the signers urged funds earmarked for missile defense go instead to bolster nuclear weapons depots and protect U.S. ports and borders against terrorists.
While her gruntle-status remains unclear, via Josh Marshall I see this startling phrase in an NYT story today:
As she prepares to leave her job at the end of the year, Ms. Rice, the president's national security adviser, now finds herself at the center of a political storm, furiously defending both the White House and her own reputation.Here's a scorecard to date:
| DisgruntledTM | Possibly DisgruntledTM |
|
|
AB
Postcards from Old Europe - Next Stop Oblivion?
Thank you very much for your positive reaction to last week's post. I was especially pleased by your extensive use of the commenting system. You can rest assured that you have given me much input to fill my future postcards. I was originally planning on writing about Europe/US trade but my thoughts were hijacked by the comment thread about the impending extinction which supposedly awaits most of Old Europe.
Many of you have written comments on this subject but I hope that you'll bear with me as I give you my 0.02 USD. A declining population is an economic negative because less people implies a declining supply of (potential) workers. The supply of warm bodies (labor) is one of the determinants of potential output growth - the others are the supply of capital and technological innovation (i.e. the growth of productivity). A country which is faced with a declining population therefore runs a real risk of entering economic stagnation and - ultimately - decline.
The German central bank, the Bundesbank, estimates potential output growth to be around 1.5%. This very low rate does not provide a large cushion to rest on. To put things in context: US output growth is estimated to be around 2.75 - 3.25% depending on who you ask. It stands to reason that any reduction in the labor force could quickly lead to a negative growth trend in Germany and other European countries who share the same demographic challenges.
Should we expect the land of beer and bratwurst to spiral into destitution in the next couple of years? Well, no. Let's take a look at the relevant data: a German woman can expect to bear 1.4 children - this is below the replacement rate (2.1). Population Growth is provided by immigration which provides us with around 200,000 new residents per year. We now add in some increases in average life expectancy and arrive at 75 million Germans in 2050 (from 82 million today). This decrease in the labor pool would force potential output growth down to around 1%.
What can be done to prevent trend output growth from falling? The obvious answer is: "Have more children!". The only problem is that you can't legislate fertility and even if you could, you face a time-lag until the children enter the labor force. The alternative could be to let more immigrants into the country. This policy depends on being able to attract immigrants that are as well educated as the people they are replacing - otherwise you get a drop in labor productivity which is not helpful at all. Just letting people in is not the answer. The onus here is clearly on our politicians to implement an immigration policy which takes qualification into account and not just ethnic affiliation.
Other ways to increase trend output would force changes on today's workers. You could try to persuade people to work longer hours or try to prevent people from taking early retirement. The "official" retirement age in this country is 65 - the only problem is that nobody actually works that long. The average retirement age is around 60. Only around 40% of people aged 55 - 64 still work (60% in the US, 70% in Sweden); the result of a perverse incentive system which led companies to shift older workers from their payroll to the government's. A longer work week could increase the supply of available labor which could compensate for the decline in the labor force but is a political hot button just as later retirement is [Update: sentence changed - see comments].
I won't go into the possibility of substituting capital for labor (won't work efficiently) to enhance trend growth prospects here and I will not assume that technological innovation will grow by incredible leaps and bounds and thus enhance total factor productivity. A declining labor force is a problem which can only be solved by more people - not by building fully automated factories or by having robots greet each other at your local Carrefour. Changes in work habits (longer hours, ...) can help in the short term, but won't turn a declining and aging labor force into a young and sprightly reservoir of talent.
To sum it up: Germany - or Europe for that matter - is not going to fall off the face of the earth any time soon. Please keep in mind that every free society collectively decides its own course of action. If Europeans decide that they want to sacrifice 1.75% of trend growth for 30 days of paid vacation, free schools and universities, comprehensive health care, high job security and whatever else, then we should respect their choices. If we look at a study by the Centre for the Study of Living Standards, we see many countries in Old Europe compare favorably with the US in terms of quality of life. But if we are honest we know that we are comparing apples with oranges - Europe and the US appeal to different people in different ways. We should be happy that we have the possibility to sample the delights of both worlds and then wearily exclaim "a great place to visit, but I wouldn't want to live there".
Thanks for reading, I'm looking forward to seeing you next week. If you want to read more of my stuff, just go here!
Thursday, March 25, 2004
Get Your Story Straight
That was my father's sarcastic advice when he would catch me, as a young boy, stretching the truth. Good advice back then, good advice today. (Even better advice: tell the truth.)
From today's NYT:
"He [Clarke] was in every meeting that was held on terrorism," Ms. Rice said. "All the deputies' meetings, the principals' meeting that was held and so forth, the early meetings after Sept. 11."From CBSnews.com yesterday:
... McClellan suggests that Rice's staff meetings were essential. "Dr. Rice, early on in the administration," McClellan said yesterday, "started holding daily briefings with the senior directors of the National Security Council, of which he was one. But he [Clarke] refused to attend those meetings, and he was later asked to attend those meetings and he continued to refuse to attend those meetings."My father's point was that a constantly shifting story is prima fasciae evidence of lying. He was right then and he's right now. Shifting story via Atrios.
AB
UPDATE: Speaking of Dr. Rice, you really should read this post by Josh Marshall.
The AP on Clarke
Morat catches some funny business with quotes in an AP summary of Clarke's testimony.
AB
The Good News: It's Better than February
Via CNN:
The Labor Department said 339,000 people filed new claims for state unemployment benefits in the week ended March 20, compared with a revised 338,000 the prior week. But both figures were lower than those over the past few weeks. The March 13th week's report was the lowest number of new claims since the week of Jan. 13, 2001, when the number of new claims was only 316,000.Here's the score card in recent months:
Note that it takes 150,000 or so new jobs per month just to keep up with populatio growth.
Now, the White House since backed off of those predictions, but you may recall that the 2004 Economic Report of the President (Table 3-1, p. 98) predicted that the economy would average 132.7 million jobs in 2004 (not end with, but average); 2003 averaged 130.1 million jobs. For this to actually happen, the economy would have needed to add about 320,000 jobs every month in 2004 -- as you can see, we're 520,000 jobs behind.
There is at least some good news, in the latest Manpower Survey:
The quarterly survey notes that 28 percent of employers expect to hire more workers from April to June.Only six percent plan to reduce hiring in the next quarter and the rest expect no change in hiring levels.
That's the highest level since the first quarter of 2001 and it's the third consecutive quarter in which U.S. employers have increased hiring.
AB
P.S. See this post for a nice chart showing monthly job growth from 1994 to December 2003.
Yet Another Disgruntled Fellow
At this rate, soon it will be hard to find anyone in Washington who is gruntled. So far the list of the disgruntled includes Jon DiIulio, Rand Beers, Paul O'Neill, Joe Wilson, and Richard Clarke.
While he's not yet an ex-emloyee, I expect Richard Foster to soon join this list:
The Medicare program's chief actuary told lawmakers Wednesday that he gave analyses last June to the White House and the president's budget office that were not shared with Congress, predicting that prescription drug benefits being drafted on Capitol Hill would cost about $150 billion more than President Bush said he wanted to spend.AB
Richard Foster made the disclosure during his first appearance before a House committee since he confirmed two weeks ago that administration officials threatened to fire him if he directly provided lawmakers with his cost estimates on the changes to Medicare.
The Must-Read Interview of The Year
Actually, it's not really the must-read inteview of the year but rather an interview of me. Also, it's not so much an interview as an overview based on an instant-message interview by Stirling Newberry of bopNews.com last week. Click here to read the whole thing. Overall, I think it's a very positive (and therefore accurate) take on me, Kash, and this blog.
AB
Scientists for Science
If you read CalPundit or Crooked Timber, you've probably already seen this, but it's worth re-plugging. About a dozen scientists have created the latest group blog, The Panda's Thumb, a blog "dedicated to defending the integrity of science against all attempts to weaken it, distort it, or destroy it." Much of the focus is on efforts by Creationists Intelligent Design-ists to take evolution out of public school curricula, or to at least teach Creationism alongside evolution.
Needless to say, the scientists oppose this:
The battle-cry of the IDists, "teach the controversy!" strongly presupposes that there is a controversy worthy of teaching. It is true that there is a controversy in evolutionary biology, in the political sense. But this is not what such legal scholars as DeWolf (et al.) mean when they use the term. They would like to convince the majority of citizens (or the minority that sit on school boards) that this is an issue of fairness. According to the truism there are two sides to every coin. Why not "teach the controversy" and let the students make reasoned opinions for themselves? Why not use "the controversy" to teach about the process of science?Don't expect to these guys to be on any of Bush's scientific advisory panels.
The best reason not to teach the "origins controversy" is that it simply is nowhere to be found. Genuine scientific controversies -- the important and useful ones -- take up a huge volume of space in the scientific literature. Even the controversies sparked by wrong ideas can be tracked as they generate discussion among the members of the scientific community. If no-one is talking about it, it's not controversial.
AB
Wednesday, March 24, 2004
You Gotta Like Clarke's Style
Dana Milbank, describing Clarke under questioning by Republican commissioner John F. Lehman, in Thursday's Washington Post:
The gallery drew quiet when Lehman questioned Clarke. "I have genuinely been a fan of yours," he began, and then he said how he had hoped Clarke would be "the Rosetta Stone" for the commission. "But now we have the book," Lehman said, suggesting it was a partisan tract.AB
Clarke was ready for that challenge. "Let me talk about partisanship here, since you raised it," he said, noting that he registered as a Republican in 2000 and served President Ronald Reagan. "The White House has said that my book is an audition for a high-level position in the Kerry campaign," Clarke said. "So let me say here, as I am under oath, that I will not accept any position in the Kerry administration, should there be one."
When Clarke finished his answer, there was a long pause, and the gallery was silent. Lehman smiled slightly and nodded. He had no further questions.
Who do we have to invade?
... to get some cheap gas around here?
AB
The DOD Inspector General
The Inspector General at the Departmnet of Defense must be disgruntled:
According to the report on the inspector general's Web site, procurement rules were not followed in 22 of 24 deals awarded by the military on behalf of the U.S.-led Coalition Provisional Authority in Baghdad and its now-defunct Office of Reconstruction and Humanitarian Assistance (ORHA).AB
Many of these contracts, the biggest of which was to create an Iraqi media network, were not competitively bid.
In one example, a contractor was paid even though he was on vacation. In another, vehicles were airlifted into Iraq at a cost of hundreds of thousands of dollars without proper approval. And in a third, a media contractor was used to organize garbage removal.
Free Trade
In a thorough and convincing (to me, but I was already convinced) article in Foreign Affairs, Dan Drezner makes a good point that I hadn't heard before:
Offshore outsourcing is similarly counterbalanced by job creation in the high-end service sector. An Institute for International Economics analysis of Bureau of Labor Statistics employment data revealed that the number of jobs in service sectors where outsourcing is likely actually increased, even though total employment decreased by 1.7 percent. According to the Bureau of Labor Statistics Occupation Outlook Handbook, the number of it-related jobs is expected to grow 43 percent by 2010. The case of IBM reinforces this lesson: although critics highlight the offshore outsourcing of 3,000 it jobs, they fail to mention the company's plans to add 4,500 positions to its U.S. payroll. Large software companies such as Microsoft and Oracle have simultaneously increased outsourcing and domestic payrolls.AB
How can these figures fit with the widespread perception that it jobs have left the United States? Too often, comparisons are made to 2000, an unusual year for the technology sector because y2k fears and the height of the dot-com bubble had pushed employment figures to an artificially high level. When 1999 is used as the starting point, it becomes clear that offshore outsourcing has not caused a collapse in it hiring. Between 1999 and 2003, the number of jobs in business and financial operations increased by 14 percent. Employment in computer and mathematical positions increased by 6 percent.
In the Loop
Richard Clarke, in an interview with Salon, seems none to happy with Cheney:
QUESTION: Vice President Cheney told Rush Limbaugh that you were not "in the loop," and that you're angry because you were passed over by Condi Rice for greater authority. And in fact you were dropped from Cabinet-level position to something less than that. How do you respond to what the Vice President said?There's a lot more in the full interview.
ANSWER: The vice president is becoming an attack dog, on a personal level, which should be beneath him but evidently is not.
I was in the same meetings that Dick Cheney was in, during the days after 9/11. Condi Rice and Dick Cheney appointed me as co-chairman of the interagency committee called the "Campaign Committee" -- the "campaign" being the war on terrorism. So I was co-chairing the interagency process to fight the war on terrorism after 9/11. I don't think I was "out of the loop."
QUESTION: The vice president commented that there was "no great success in dealing with terrorists" during the 1990s, when you were serving under President Clinton. He asked, "What were they doing?"
ANSWER: It's possible that the vice president has spent so little time studying the terrorist phenomenon that he doesn't know about the successes in the 1990s. There were many. The Clinton administration stopped Iraqi terrorism against the United States, through military intervention. It stopped Iranian terrorism against the United States, through covert action. It stopped the al-Qaida attempt to have a dominant influence in Bosnia. It stopped the terrorist attacks at the millennium. It stopped many other terrorist attacks, including on the U.S. embassy in Albania. And it began a lethal covert action program against al-Qaida; it also launched military strikes against al-Qaida. Maybe the vice president was so busy running Halliburton at the time that he didn't notice.
AB
Fundraising Update
I haven't mentioned donating to Kerry in a while because we were doing so well:
Total Donations: 15That includes $350 from Kash and I. So Angry Bear readers have ponied up $800 so far to help spread Kerry's message and fight Bush's attacks! Remember that after the Democratic Convention, Kerry (Bush as well, I believe) will be using public funds so contributions are needed between now and August. In any case, given the numbers to date, I think a reasonable cumulative goal for this blog is $10,000. You know what to do.
Total Dollars: $1141.78
Average Donation: $76.12
AB
Too Funny
Usually I prefer not to post an entire piece of someone else's work, but it's hard to excerpt a cartoon and this one from Tom Toles is too funny:
AB
Tuesday, March 23, 2004
More McClellan
We've already established, using the White House's own press release, that on and before 9/11 Clarke was in fact a top member of the anti-terorrism team, not the cyber-security team. In fact, on 9/11, he was apparently second only to Dr. Rice in the anti-terrorism hierarchy. Next question: did Clarke meet with Bush on 9/12?
Let's roll the transcript, from Ari Fleischer's September 12, 2001, 4:05 p.m. press briefing:
Q Can you give us a little more detail on the President's day after, or following the meeting with congressional leaders? Was anyone else at this lunch with Cheney? What happened between -- after the lunch with Cheney and right now?Now all that remains is to determine whether that meeting took place in the Situation Room. Even if it didn't, is it really plausible that the President was in fact in the White House (he had lunch in "the private dining room right off the Oval Office") but never went into the Situation Room? And even if that's true, is McClellan certain that's the story he wants to run with?
MR. FLEISCHER: The President and Vice President Cheney had lunch in the private dining room right off the Oval Office. The President then made additional phone calls to foreign leaders, and began a meeting just a little while ago with his national security team.
AB
Then Where Was He And What Was He Doing?
Skippy catches a puzzling statement from Press Secretary McClellan:
Q Scott, this morning, you said the President didn't recall the conversation in the Situation Room on September 12th that Mr. Clarke said he had, where the President asked Dick Clarke three times to pursue links between 9/11 and Iraq. And you said he doesn't -- I had two questions. So did the President tell you or somebody in the White House over the weekend, he doesn't recall?In case you're wondering, McClelland is talking about Septermber 12, 2001, the day after 9/11. So the President's counter to Clarke's charge that on 9/12 the President told Clarke to pursue links between 9/11 and Iraq is this: It Wasn't Me (special I wasn't there remix).
MR. McCLELLAN: Yes, I talked to him. He doesn't recall that conversation or meeting.
Q And that was -- he said it this morning, or this weekend? When did he say that?
MR. McCLELLAN: Well, this weekend and this morning, yes.
Q Okay. And secondly, Clarke now says that he has three eyewitnesses, and he repeated it again this morning, and he named them -- to the conversation.
MR. McCLELLAN: Let's just step backwards -- regardless, regardless, put that aside. There's no record of the President being in the Situation Room on that day that it was alleged to have happened, on the day of September the 12th. When the President is in the Situation Room, we keep track of that.
Ok, that's par for the course, but if that's really the line the administration wants to stick with, then I have a follow-up question: Where was the president if not in the situation (at any time that day) and what was he doing?
AB
Swing State Summary
This table summarizes the results of my analyses to date of the jobs situation in Swing States; details and a discussion are at The American Street.
AB
UPDATE: Table corrected so that the column 3 heading reads "Right/Left Vote" and the ordering in that column is made consistent: Bush's % first, then Gore's.
Monday, March 22, 2004
Jobs in Pennsylvania
In the process of composing my post for The American Street tomorrow, I realized that I skipped over a very important swing state, Pennsylvania. While Pennsylvania voted for Gore in 2000, Bush nevertheless enacted steel tariffs in an effort to court voters in this swing state. I suspect that Pennsylvania residents are not impressed: their state has lost 146,400 jobs since Bush took office, a 2.56% decline:
Gore carried this state 51%-47% in 2000; based on the jobs picture, Kerry should have no problem bettering that margin in 2004.
AB
P.S. Anyone notice how I managed to mention the steel tariffs without quipping that they didn't appear to do much for the jobs picture in Pennsylvania?
Clarke and Cheney Update
Josh Marshall has some key information on