Why You Should Vote for Bill White

Perry is at best unethical and at worst a crook. A summary from the Burnt Orange Report.

Throw Out the Bathwater and the Baby or Masochism as National Policy

Why does logic appear to be gone from America? Economic theory at this level is not hard. One will always equal one and one-half will equal one-half. But the people must be punished. As Pogo said, "We have met the enemy and he is us."

Survey of Health Care in the US

This is a very interesting and telling study of where the US ranks in terms of health care comared to other similar industrialized countries. I can't help but wonder whether a major reason for the US falling short of other countries on most measures is due to the disparity in health care across the population in the US. For example, we have the highest infant mortality in the group and the highest incidence of mothers dying in childbirth. I suspect the incidence in both cases is unevenly distributed across economic class--low for well-to-do and high for everyone else

People This Ignorant Shouldn't Be Allowed to Vote

Most Americans don't know what the Obama administration and the Democratic Congress has done for them.

Keith Olbermann on the Tea Party Candidates.

On MSNBC Kieth Olbermann summarizes the qualifications of some of the prominent Tea Party Candidates for national office.

When Will Evidence Matter?

Economists need to stop promoting theories that don't explain what is happening (and may be actively harming the economy) and pay attention to the evidence.

Not Quite There Yet

As I feared today was the "tough" game for Mizzou. They won't be a class one team until they can win on the road against a strong opponent. While I wasn't able to watch today's game (I'm in Chicago where it wasn't on TV and anyway I was at my grandson's football game), the score and statistics reminded me of the Texas game I saw in Austin two years ago. In that game Mizzou came out flat and got so far behind in the first quarter that they couldn't catch up, even though they outplayed Texas in the second half. One of these days, Mizzou will suck it up and play well on the road against a ranked opponent, but they are not quite there yet.

Depression Economics Explained

The spending death spiral.

More Wackiness in American Politics

The polls show voters are going to vote Republican even though they like Democrats better. And Obama polls higher than either party. Go figure.

Why Does Big Business Hate Obama?

Just to show how screwed up the leaders of the business sector and especially the Chamber of Commerce are, new data shows once again that Democratic administrations are much better for business profits than Republicans. I've never understood why business tends to vote Republican. It's as though there's a disconnect between what they think is good for their economic health and what is actually good for them. The recent data is not an anomaly. Democrats have almost always been better for the economy than Republicans. The main reason, I think, is because the Republican "me first" philosophy is not productive. Things work much better when the bulk of Americans are doing well. Our increasingly skewed income distribution and the emphasis on tax cuts for the wealthy is an environment that will lead to a less vibrant economy. We will all do less well if Republican policies prevail.

Maybe Hayek Needs a Better Publicist

Hayek Quotes of the Day.

The Time Has Come for Rational Drug Laws

Nicholas Kristof in the NYT with three good reasons to legalize marijuana.

What Would Milton Friedman Do?

Imagine my surprise! Sane economic commentary from the WSJ. David Wessel evaluates quantitative easing based on Friedman's economic advice.

Whoops! Meg Whitman Should Drop Out of the Race Immediately

From Cogitamus. If you don't know your history, you better watch what you say.

Additional Thoughts on Obama's "Failure"

Sorry, but I can't seem to leave this topic alone. Further thought suggests to me that the real issue is something that I've posted about before, but maybe not in this context. Perhaps Obama's approach to the stimulus bill was one of attempting the bipartisan cooperation he promised during the campaign. Was it a surprise that the Republicans in Congress had a different definition of bipartisanship--agree to my proposals or I'll obstruct any proposal you put forward? Maybe it shouldn't have been. Obama's mistake was not calling them out. The Republican leadership is a bunch of back-stabbing scum who will tell any lie to attack Obama. We know that now. I hope Obama takes a different tack in the future. The unfortunate part of this is that the Democrats will probably lose the House, so things are likely to be worse with the Republicans in power there.

From Martin Wolf: A Sane and Cogent Assessment of Obama's "Failure"

In a Financial Times article, Martin Wolf makes the point that many of us have made in the past several weeks--Obama's economic policy has been more of a communications failure than a policy failure.

The key paragraphs:

Unfortunately, the Republicans have succeeded in persuading a large enough portion of the American public that if the patient had been left entirely alone, he would be in perfect health today. This is surely a fairy story. But voters naturally pay little attention to calamities averted. They focus only on how far experience falls short of what they desire. Mr Obama gains no credit for the former and much blame for the latter. His aspirational rhetoric no doubt worsened the disappointment.

The president’s willingness to ask for too little was, it turns out, a huge strategic error. It allows his opponents to argue that the Democrats had what they wanted, which then failed. If the president had failed to get what he demanded, he could argue that the outcome was not his fault. With a political stalemate expected, further action will now be blocked. A lost decade seems quite likely. That would be a calamity for the US – and the world.

In Voting, Less May Be More

Matt Yglesias makes the point that the average American votes for too many different offices. It's obvious here in Texas. On our off-year ballot, I had to make 36 choices, including 14 judges and neither of our senators were up for reelection this year. This didn't include 4 local ballot initiatives.

Tea Party Thugs, but It's OK with Rand Paul

Rand Paul has refused to censure his followers for attacking this young woman. Video. Notice the flags and other symbols of America prominently displayed by the thugs. Both saddening and sickening. This wasn't even a Rand Paul Rally--it was a debate between him and his Democratic opponent.

Update: Thug asks for apology.

Why Do We Sweat the Small Stuff?

Thomas Friedman in the NYT on "Can't Keep a Bad Idea Down, an analysis of what candidates are concentrating on:

All that’s missing is any realistic diagnosis of where we are as a country and what we need to get back to sustainable growth. Actually, such a diagnosis has been done. A nonpartisan group of America’s most distinguished engineers, scientists, educators and industrialists unveiled just such a study in the midst of this campaign.

Here is the story: In 2005 our National Academies responded to a call from a bipartisan group of senators to recommend 10 actions the federal government could take to enhance science and technology so America could successfully compete in the 21st century. Their response was published in a study, spearheaded by the industrialist Norman Augustine, titled “Rising Above the Gathering Storm: Energizing and Employing America for a Brighter Economic Future.”

Charles M. Vest, the former M.I.T. president, worked on the study and noted in a speech recently that “Gathering Storm,” together with work by the Council on Competitiveness, led to the America Competes Act of 2007, which increased funding for the basic science research that underlies our industrial economy. Other recommendations, like improving K-12 science education, were not substantively addressed.

So, on Sept. 23, the same group released a follow-up report: “Rising Above the Gathering Storm Revisited: Rapidly Approaching Category 5.” “The subtitle, ‘Rapidly Approaching Category 5,’ says it all,” noted Vest. “The committee’s conclusion is that ‘in spite of the efforts of both those in government and the private sector, the outlook for America to compete for quality jobs has further deteriorated over the past five years.’ ”

But I thought: “We’re number 1!”

“Here is a little dose of reality about where we actually rank today,” says Vest: sixth in global innovation-based competitiveness, but 40th in rate of change over the last decade; 11th among industrialized nations in the fraction of 25- to 34-year-olds who have graduated from high school; 16th in college completion rate; 22nd in broadband Internet access; 24th in life expectancy at birth; 27th among developed nations in the proportion of college students receiving degrees in science or engineering; 48th in quality of K-12 math and science education; and 29th in the number of mobile phones per 100 people.

Instead, we get "Obama is a Muslim socialist, cut taxes" and other assorted drivel. The Democrats are so busy sorting out the lies told by Republicans that they've missed the chance to stress all that has been accomplished in the past two years: health care reform, financial reform, tax cuts for 95% of Americans, consumer protection...

On the Bernanke Mistake

Yglesias at Think Progress:

"I think people tend to overestimate the number of mistakes Barack Obama has made in his presidency. But the flipside of that is that they underestimate the severity of the mistakes that are real. Giving the most important economic policy job in the country to someone who doesn’t share his values, ideology, and partisan loyalty was a big big big mistake and it’s reflected in Bernanke’s conduct around questions like this one [fiscal policy]."

Will There Be a Second Chance?

Or will the people who got us into this mess be able to make things worse? Paul Krugman.

What Happened to Obama's Communication Skills?

Frank Rich's column on the administration's failure to go after the people who caused the financial crisis, was more interesting to me because of the long litany of things that Obama has done, but failed to communicate to the country. This is especially true regarding the tax cuts his administration has put in place. According to recent polls, only 8% of the populace is aware that he has cut taxes for 95% of Americans. If the Republicans make substantial gains in the midterm elections, it won't be because Obama hasn't done anything, it'll be because no one knows what he's done.

Foreclosure Density in the US

Brad DeLong offers this map from the Washington Post:

You Can't Stop Us!

COLUMBIA, Mo. -- A line of ordinary folks in green "Event Staff" shirts stood facing the Missouri student section late Saturday.

"You can't stop us!" the students chanted, and every time they did, one of the green shirts would glance back at the thinner line of actual law enforcement officers behind them with a look that pleaded, "You've got this, right?"

Even if his colleagues couldn't stop the outpouring of raging hormones from the stands, University of Missouri police officer Dustin Moyer had his assignment locked down tight. Moyer, a five-year veteran of the force in his first season as Missouri coach Gary Pinkel's gameday bodyguard, predicted Saturday's result two weeks earlier. Not long after the Tigers beat Colorado, Moyer began formulating a plan.

"He was real serious," Pinkel said. "He said, 'I want to know how you want to get off the field when we beat Oklahoma."

And the goal posts went to Harpo's.


Read more: http://sportsillustrated.cnn.com/2010/writers/andy_staples/10/24/oklahoma.mizzou.insider/index.html?eref=cfg#ixzz13HkBE0b9

Mizzou Has a Defense!

Great game. Mizzou out did OU in effort and conditioning. The "easy" game is over now. On to the tough game next week in Lincoln.

More Texas Music

I've posted some new songs over on the left. More Texas music from The Texas Tornados, Raul Malo and Flaco Jimenez, and Ry Cooder and Flaco Jimenez. All three are one sort of Texas music or another. You'll notice that several of the tunes I've posted were recorded at Gruene Hall, a Texas hill country music venue that has been operating forever. Everyone and anyone in Texas music has performed here.

Engines of Growth

I read an article in the NYT today about the decline in small businesses in Greece due to the government's austerity program. Consumer demand has cratered due to the recession and has been exacerbated by the forced decline in government workers and pensions. While it's unlikely to ever be as bad in the US, it's ironic that small businesses are often held out as the engine behind economic growth and it's exactly those businesses that are hardest hit by austerity programs. The Greek government's response has been to promise to funnel cheap funds to the small business sector. One has to wonder at the sheer idiocy of these programs. If businesses are failing because they can't sell their products, why do they want to borrow any money, cheap or otherwise? The thinking of policy makers who push these opposing and harmful policies is impossible to understand. There is a body of economic theory that stretches from Malthus and Mill through Keynes to the present day that provides us with the ability to understand what is going on in the economy. Our leaders ignore it at our peril.

Life in America

LZ Granderson on discrimination.

Do People Really Think This is Worth the Risk?

Kevin Drum has collected political and scientific information on climate change. Frankly this scares the hell of me. But then I'm not much of a gambler, even with events that will only affect my great grandchildren. The real irony here is that if the projections are true, the beneficiaries of our lack of action will be Russia and China. The GOP must have a discount rate approaching infinity.

QE2--What Are the Choices?

Ed Dolan has a very good post today where he succinctly lays out the two major alternatives open to the Fed if they do engage in additional quantitative easing. As he points out, the principal issue with the most aggressive strategy is whether the Fed has the ability to dial it back once further easing has had its desired effects. For my part, I'd go for the more aggressive approach, otherwise we risk the same response we had with the fiscal stimulus: "it doesn't work." Then we'd be living in a world where our only recourse would be austerity--the economic equivalent of the 18th century medical practice of bleeding.

Too Big to Fail, Again

Simon Johnson makes the point that it may be time for another stress test for the largest banks. The last one was largely a farce--for the reasons another one may be necessary now. Several of the big banks (Bank of America, in particular) may have outstanding exposures to the mortgage market that were not recognized in the first stress test. Some of these banks (Bank of America, in particular) are already in a precarious capital position. It's likely that few people anticipated that we would be faced with a looming "too big to fail" crisis this soon after the last one. The likelihood that major banks will have to buy back a significant portion of the mortgages they originated (thereby increasing their capital requirements) is high enough that hedge funds have begun to buy up depreciated mortgage paper. They expect that they will be able to put much of it back to the originating banks at par. In the financial reform bill, the Republicans shot down a proposal that would have created a fund financed by the banking system that could have been used if the worst occurred. They falsely labeled it as a bail out of too big to fail banks. Now we may looking at the prospect of the largest bank in the country facing insufficient capital with few options remaining for the government.

Robert Skidelsky and the Economics of Austerity

A very lucid description of how the current economic problems are world wide in scope and why current proposals in the developed countries are going to hurt rather than help. More on the economics of austerity by Robert Skidelsky.

Keynes and Friedman--Fellow Travelers

I recently mentioned to a correspondent friend that I thought in light of the idiocy that passes for a lot of macroeconomics these days, I saw more in common between Keynes and Friedman than either of them has with the New Macro. Here's a good example from Brad DeLong who still reads what our predecessors had to say about economic theory.

Read DeLong's post here.

The Effect of Changes in Tax Rates.

Gregory Mankiw, professor at Harvard and former chair of Bush's Council of Economic Advisors:

Economic View - Higher Taxes Mean I’ll Work Less - NYTimes.com

(He should have known better than to make such a flimsy argument. It's just one more example of the lack of any real world substance behind much of what passes for economic theory today). See Barry Ritholz's response:

Questions for Mankiw - NYTimes.com

What Were They Thinking?

There seems to be a lot of discussion on the left regarding whether liberals are doing Obama a disservice by pointing out the areas where he has fallen short and ignoring the areas where he has been successful. It's clear that he has had a number of successes--Affordable Care being the most important. However, for all the heavyweights on his economic team, with respect to economic policy, his administration went with what they thought they could get rather than what was needed. Did they really believe that what they were asking for would solve the problem? Time has shown this to be a dumb strategy. There were plenty of people within and without his administration who argued for more stimulus. One could have expected the Fed to have its head in the sand, so fiscal policy was pretty much on its own. The net result has been far too little, leading opponents to be able to say: "See, fiscal policy doesn't work." The worst possible result--for the economy and for the Democrats in the midterm elections. It's surprising that Democrats couldn't remember that "It's the economy, stupid."

Epitaph For An Administration - Paul Krugman

Stimulus Critics Beg for "Wasted" Money

Virtually all the senators and congressmen who voted against the Obama stimulus package went hat in hand to the Federal Government begging for funds for their districts. Some of them contradicting their own positions when they voted. The big names begging for funds included Sen. Scott Brown (R-Mass.), Rep. Michele Bachmann (R-Minn.), Rep. Ron Paul (R-Tex.) and Sen. John McCain (R-Ariz.).

See "Republicans, Democrats Who Criticized Stimulus Wrote Letters Seeking Funds."

For example, Rep. Pete Sessions (R, Tex.) argued that the funds would help create jobs in his district, something he denied when the bill was in Congress. Do only the ethically challenged make it to Congress?

A Good Football Day

Mizzou dominated Texas A&M 30-9 and the game wasn't that close. Mizzou's wide receivers are impressive. But it was surprising that the Missouri coaching staff left Blaine Gabbert in for most of the game, particularly given that their offensive plan was ineffectual in the 4th quarter. I'm just hoping that Mizzou's defense is as real as it looks. The next two weeks will be key: Oklahoma at home and then Nebraska in Lincoln.

Living in Texas, it's amazing how the sportswriters are such a bunch of homers until they get down on someone. Every single writer for the Austin Statesman picked A&M to win. What a bunch of losers.

Speaking of getting down on someone, not many people around here gave Texas much of a chance against Nebraska. I had a feeling that Texas's defense had something to prove and that Texas would beat Nebraska. Everyone I told thought I was crazy. Muschamp's defense shut down the run, Nebraska had to pass and it turns out that Nebraska's wide receivers would be better suited as defensive backs--they can't catch a football. Expect stickum sales to be up in Lincoln for the rest of the season.

Mack Brown showed once again that he's the nicest guy/lousiest coach in BCS football. That pooch kick halfway through the 4th quarter was a real gem of a call.

More Mortgage Shenanigans

Key features of the mortgage crisis.

1. Many homeowners took out mortgages that they had no reasonable probability of paying.

2. Many of those same homeowners were induced by unscrupulous bankers and mortgage brokers into taking out those loans in the first place.

3. The banks and financial house who packaged those loans into derivative securities didn't care (even when they knew) that a significant number of those loans would eventually default.

4. When this happened, everyone pointed at everyone else as the cause of the problem.

As Ralph Cioffi, the former Bear Stearns hedge fund manager and fraud defendant, said in a recent Observer profile about anger at banks and bankers. "People don't want to take responsibility for their own actions." Of course, he was talking about borrowers, not bankers.

For more Wall Street "color," read the article in the New York Observer.

The Foreclosure Fiasco and Wall Street’s Shrug

Where We Should Put Our Education Dollars

Policy recommendations from a Rand Corporation study.

http://www.rand.org/pubs/research_briefs/RB9427/

Too Scary for Halloween

This is a good description of how messed up the mortgage crisis really is. If you think it's over, you're very, very wrong. Check this out:

http://rortybomb.wordpress.com/

And here:

Foreclosure-Gate's Doomsday Scenario

Rick Perry Is a Liar

More Perry Crookedness

From the Burnt Orange Report: by: Phillip Martin Wed Oct 13, 2010 at 11:46 AM CDT

It doesn't get any clearer than this. From the Dallas Morning News, "Gov. Rick Perry approved $4.5 million for donor's start-up firm without regional board's OK": Gov. Rick Perry approved a $4.5 million award from the state's technology fund to a company founded by a major campaign donor despite the company's failure to win the endorsement of a regional screening board, The Dallas Morning News has learned. The money was awarded in August to Convergen Lifesciences Inc., founded by Perry contributor David G. Nance. Convergen was allowed to bypass a key part of the Texas Emerging Technology Fund's extensive process for vetting applications, and to proceed for approval to a statewide advisory board appointed by Perry. A spokeswoman for Perry said Tuesday that the money was properly awarded to Convergen because the law establishing the tech fund allows applicants to appeal decisions by regional reviewers. However, the law makes no mention of such appeals. The chairman of the regional board in Houston, one of the state's largest, told The News he had never heard of an appeals process. Walter Ulrich, also a former member of the tech fund's statewide advisory committee, said approval by regional boards is mandatory. "It cannot go to the state without our board's approval," he said. "I've never seen that happen." Walt Trybula, a nanotechnology expert at Texas State University who reviews tech fund applications for the Austin regional board, said the ability to appeal would undermine the process. "If you've got a way to go around a review committee," he said, "why do you have a review committee?" And the chairman of the state House committee that oversees the tech fund said the "extraordinary" process that awarded the money to Nance's firm shows that reforms are needed. "This is the most troubling case that I've seen come through" on the fund, said Rep. Mark Strama, D-Austin.

Glory Days

45th High School Class Reunion

Pictures of classmates:






























And what we used to look like:

About the Congress of Morons

In an interview with Ezra Klein, car czar Steve Rattner tells us what he thinks about America's lawmakers:

EK: Tell me about dealing with the Congress.

SR: When you actually deal with them to try and get something done? It's impossible. It is so divisive, so parochial and so petty. If you look at the auto rescue, the only time Congress really got involved was over the dealers. Here we are, laying off thousands of workers and restructuring these companies, and the only thing that animated Congress was the dealers. In terms of the body as a whole, they were just obstructionists.

I think that if we didn't have TARP, the whole economy could have imploded before Congress figured out what to do. They hated TARP because it gave the Treasury a $700 billion check, but it wouldn't have worked any other way. I think every president gets tagged negatively by the American public for things that really, they should be tagging Congress for. Everyone talks on the morning talk shows about the president's approval rating, it's 45 or 44 or 46, and Congress is 22. People should be focused on Congress. It's really important. It's not on top of the Hill by coincidence. It's not Article I of the Constitution by coincidence.

I recommend we replace them all with a randomly selected bunch of sixth graders. They might not get any more done, but at least they'd be better behaved.

If You are Interested in What Diamond, Et Al. Did to Win the Nobel Prize

Here's a nice summary of some of the work (and why it's important today) by Paul Krugman:

The Beveridge Curve.

Here's more detail on the history of this research area from Edward Glaeser.

The Work Behind the Nobel Prize.

Wouldn't it be nice to have someone in a policy-making position who understood how markets really work? Instead we get Senator "Know-Nothing" Shelby.

How to Regulate the Financial System--Are Big Banks the Problem?

From Project Syndicate: Why Target Big Banks?

A Note about Music

Something happened to my musical tastes when I crossed the Red River. Before that, I'd never been much into country music, even though my girls have liked it since high school. But in Texas, country music is different. It's not the slick over-produced Nashville sound that is played in Kansas City and Chicago (although not all of that is bad). Down here, country music is closer to rock and sometimes nearly indistinguishable. My favorite XM station is Outlaw Country and you are as likely to hear Bob Dylan as you are to hear Willie Nelson; the Rolling Stones as Asleep at the Wheel. I love it!

Winners of the Economics Nobel

From the New York Times:

2010 winners of the Nobel Memorial Prize in Economic Science.

Dale Mortensen was one of my professors at Northwestern.

Why are Texans so dense?

From the Burnt Orange Report:

"In any other state, in any other year, you'd think it would be a sure bet that a politician like Rick Perry would be headed for defeat - he's the perfect example of the type of incumbent that should. Consider the following -

1. Rick Perry had serious primary challengers from the right and left who spent millions attacking him and forced him to drain his entire bank account.


2. Rick Perry has a serious Democratic opponent - the former Mayor of America's 4th largest city, who's done the impossible in matching the GOP's typical money advantage.


3. Rick Perry is the epitome of incumbent - having been in one office or another for a quarter century and having been Governor for a whole decade. This weekend he refused to rule out a bid for a fourth term should be be re-elected.


4. Rick Perry doesn't have just one legitimate scandal, but multiple ones - shades of bribery, payola, land deals, hidden schedules, and countless cases of using his public office for personal or political desires. It's not like there is a debate on the question of whether Rick Perry has skeletons in the closet - we're just unsure of how many and what size.


5. Rick Perry goes full steam ahead, opponents be damned. That includes casting the media as opponents - refusing to meet with editorial boards, answering reporters' questions, or engaging in any debate with anyone."

What Spending?

Has government spending risen under Obama?

Punk Rock at the ACL

What better way to restart my blog than pictures of a grandchild?





Maya acquired the look at this year's Austin City Limits music festival, which she attended with her father.