Category: Biz and Econ

Discussion on all things business related.

Do Conservatives Ever Tell the Truth?

Yes, but not for long.  Mark Thoma shoots down the conservative think tank site that caught the Wall Street Journal, a paper I no longer subscribe to, in a lie and immediately reversed itself for “editorial reasons.”  There is no truth in conservative ideology when intellectual dishonesty of this sort is the rule.

“The Disappearing Tax Foundation Blog Post”:

I recently noted a post from The Tax Foundation accusing the Wall Street Journal editorial page of of ‘a textbook example of how to lie with statistics.’

Bruce Bartlett points to a Tax Foundation article that accuses the WSJs editorial page of ‘a textbook example of how to lie with statistics.’: The Wall Street Journals Misleading Income Chart. When the Tax Foundation questions someones reliability, you know a line has been crossed.

Brendan Nyhan notes today that the Tax Foundation post has been taken down [cached copy]:

… At this point, youre probably wondering why this post doesnt contain any links to the Tax Foundation website. The reason is that this sort of intra-movement criticism has a short shelf life — so short that the post had already vanished by this morning. Scott Hodge, the president of the Tax Foundation, confirmed that the post had been removed: ‘we withdrew the post for editorial and content reasons.’ He did not elaborate further.

Then, later, he does elaborate further — that is, if we never got around to it qualifies as elaboration:

Update 5/16 4:51 PM [EST]: More from Hodge via email:

Like all organizations we have an editorial process. The piece was posted before I could edit it. I thought it needed revision and editing. We never got around to posting a satisfactory version. Its a moot point now.

Leaving the original post up, and then doing a follow-up post explaining the problem with the first post (which has not yet been explained other than someone thought ‘it needed revision and editing’) would have been a more honest approach.

Either the editorial process is so bad that false claims appear on the site that are later removed without explanation — not a very encouraging sign for the site — or the post was removed because it told the truth. In any case, my statement that the Tax Foundations reliability is questionable is certainly validated by this episode.

(Via Economist’s View (Mark Thoma).)

Cutting Down the Forest But Keeping the Trees

Cutting Government Spending May Be Popular But There Is Little Appetite For Cutting Specific Government Programs:

“Cutting government spending often sounds like a good idea to many people, and it is a popular rallying cry for many Republicans and Conservatives, but a new Harris Poll underlines how difficult it is. When shown a list of 20 areas of federal government spending, a majority of the public supports cutting only six of them and these do not include the big ticket items that comprise most of the federal budget. Furthermore large majorities oppose cutting Social Security or federal health care programs, which many economists believe are increasing at unsustainable rates…

These results prompt two thoughts. The first is that the big picture – cutting government spending, in general – looks very different than the more detailed picture – cutting specific programs. Many people seem to want to cut down the forest but to keep the trees. The second is that this is not 1980, when President Reagan came to power. At that time there was a much greater appetite for cutting many government programs than there is today. Furthermore it should be noted that, in spite of his rhetoric, Ronald Reagan had great difficulty cutting government spending.”

(Via Harris Interactive.)

When will we be adults about this?

It’s Not About the Deficit

It’s Not About the Deficit:

Kevin Drum:

Whos Being Serious Here?, by Kevin Drum: Paul Ryan has taken to asking if President Obama is ‘an Erskine Bowles Democrat or a Nancy Pelosi Democrat?’ Well, if this is the best that Bowles can do, I guess it makes Obamas choice a lot easier:

….Mr. Bowles had harsh words for fellow Democrats. He dismissed the idea that raising taxes alone might help erase the deficit, saying ‘raising taxes doesnt do a dern thing’ to address health care costs that are projected to be a big driver of future fiscal problems.

If theres anything that could be called a wonkish consensus on the left, its this: we should eliminate the Bush tax cuts in a couple of years when the economy has recovered, and we need to rein in the long-term growth of healthcare costs. Its true that taxes dont address healthcare costs, but its just sophistry on Bowles part to put it like that. Taxes do address the medium-term deficit, and thats important. Quite separately, PPACA makes a start on holding down healthcare costs and thus addressing the long-term deficit, and I hardly know anyone on the left who doesnt agree that more needs to be done.

…Jon Chait has more on this, including a more detailed takedown of Bowles own proposals for healthcare, which are almost laughably inadequate.

I think we make a mistake by talking about this as though the goal of Republicans is actually deficit reduction. Its not, the goal is a reduction in the size of government and once you understand that, its clear why Republicans will not support tax increases of any kind. Theyd rather cut taxes now (and argue its about jobs or long-run growth rather than ideology), and increase the deficit even more because they still believe the beast can be starved. Anything that increases the pressure to reduce spending will be embraced, anything such as a tax increase that might allow the government to grow larger will be opposed. Logic about the best way to close the deficit wont win this argument because it has little to do with the deficit itself.

(Via Economist’s View (Mark Thoma).)

Political Illusions

Political Illusions:

Tyler Cowen writes a column that is both good and bad. It is good for what it says: it debunks fiscal illusions. It is bad for what it does not say, and for what it does not say it tends to deepen our political illusions. You see, for some reason Tyler Cowen does not mention the obvious solution at the ballot box to the very real fiscal illusion problems he writes about. If we simply stopped electing Republicans–if we simply elected presidents who would choose policies designed by the technocrats of the Clinton and Obama administrations and elected senators and representatives who voted for them–we would be absolutely fine.

Continue reading “Political Illusions”

When You’re Last Year’s News

You’re the Boss: A System That Encourages Small Businesses Not to Hire Older Workers:

“I have good reason to suspect that my costs and the costs of all of my employees are going to go up if I hire an older worker…

Our current system hides these costs, and I’m sure that this is a large part of the difficulty that older workers have in getting hired. Some of you will probably object that my system would result in lower wages for older workers. In some cases it might, but that beats no wages at all. As I said in my last post, it may be illegal to discriminate on the basis of age, but there’s always a way to rationalize hiring any given worker over any other one. If we can put a price on the insurance costs, then the skills and experience that older workers bring to the table can be properly accounted for.

Postscript: Yes, I know that a single payer system would solve this problem. But it ain’t gonna happen, so I’m not waiting for it.”

(Via Business and Financial News – The New York Times.)

Markets don’t make moral decisions.  They make economic ones.

Pain without Purpose

Pain without Purpose:

“And here we reach the limits of my mental horizons as a neoliberal, as a technocrat, and as a mainstream neoclassical economist. Right now, the global economy is suffering a grand mal seizure of slack demand and high unemployment. We know the cures. Yet we seem determined to inflict further suffering on the patient.”

(Via Grasping Reality with Both Hands.)

Political ideology trumps technocratic know-how.  In other words, non-professionals think they know more than the pros.  And we know where that leads.

Family budgets aren’t economies.  The government is not our parent nor does it fund the workings of the economy.  Yet we keep repeating that damn fool “tighten our belts” meme.  The price of ignorance, sophomoric ignorance at that is high.

I Thought Tax Cuts were Supposed to Create Jobs

GOP spending plan would cost 700,000 jobs, new report says:

“A Republican plan to sharply cut federal spending this year would destroy 700,000 jobs through 2012, according to an independent economic analysis set for release Monday…

[This] report comes on the heels of a similar analysis last week by the investment bank Goldman Sachs, which predicted that the Republican spending cuts would cause even greater damage to the economy, slowing growth by as much as 2 percentage points in the second and third quarters of this year.”

(Via Grasping Reality with a Sharp Beak.)

Predictably, the GOP goes after the messenger when it can’t rebut the message.  It’s a surefire way to determine who’s lying or incompetent and who’s not, who’s got a grip on reality and who’s in denial.  And sure enough as I kept reading:

Republican leaders frequently claim that cutting government spending will create jobs by removing the fear of higher taxes from the minds of the nation’s business owners and entrepreneurs…

So far, the Republicans have been unable to marshal an independent analysis that reflects that view. [emphasis mine]

In other words, they are pulling this economic “theory” clean out of their ideological butts.

Yes, You Have to Pay for Tax Cuts

Democrats should not rise to the bait of “fiscal conservatives” | Jeff Frankels Weblog | Views on the Economy and the World:

“The problem is that a heavy majority of the supposed fiscally conservative congressmen, although passionate about cutting government spending in the abstract, are in truth no better able to find specific dollars of budget cuts that they can support or defend to their constituents than are the Democrats.   Factoring in their immutable desire to cut taxes, I believe that if the Republicans were in full control, we would have larger budget deficits in the coming years than if the Obama crowd retained power.  This is what happened in a big way when Presidents Reagan and GW Bush took office promising to cut the debt while also cutting taxes.   Spending, deficits, and debt soared during their terms, relative to their respective Democratic predecessors.  There is no reason to think anything has changed…

Rep. Paul Ryan’s supposedly tough long-term plan to cut spending doesn’t balance the budget until 50 years from now and runs up another $62 trillion in national debt in the meantime…” [emphasis mine]

(Via Grasping Reality with Both Hands.)

Democratic “investment” = GOP “tax cuts” = increased government spending.

Does The U.S. Really Have A Fiscal Crisis?

Does The U.S. Really Have A Fiscal Crisis?:

“But the problem here is bipartisan – as it was with the tax cut last year.  None of the leadership on either side is willing to talk openly about how our biggest banks caused great fiscal damage.  No one is willing to explain why our healthcare costs continue to rise.  And no top politicians currently champion real tax reform.

The Republicans have seized a moment.  To them, this is not really about fiscal responsibility; this is about an opportunity to shrink the size of government.

But the Democrats have played perfectly into their hands.  The heart of their mistake was the president’s refusal to explain clearly how the financial system produced a recession that has pushed up our national debt. “

(Via The Baseline Scenario.)

Axis of Depression

Axis of Depression – NYTimes.com:

“So what’s really motivating the G.O.P. attack on the Fed? Mr. Bernanke and his colleagues were clearly caught by surprise, but the budget expert Stan Collender predicted it all. Back in August, he warned Mr. Bernanke that ‘with Republican policy makers seeing economic hardship as the path to election glory,’ they would be ‘opposed to any actions taken by the Federal Reserve that would make the economy better.’ In short, their real fear is not that Fed actions will be harmful, it is that they might succeed.

Hence the axis of depression. No doubt some of Mr. Bernanke’s critics are motivated by sincere intellectual conviction, but the core reason for the attack on the Fed is self-interest, pure and simple. China and Germany want America to stay uncompetitive; Republicans want the economy to stay weak as long as there’s a Democrat in the White House.”

(Via Grasping Reality with Both Hands.)

I long suspected this when I saw the GOP opposing its own policies when they came from a Democrat in the White House.  They know that opposition to Obama is more about high unemployment than support for the GOP.  It’s party before country which is all pretty disgusting until I realized that the real blame lies with us, the fools.  We are the ones who should laugh in Mike Pence’s face when he suggests that The Fed should focus only on stabilizing prices against the law that created it amidst the worst unemployment we’ve seen in decades.  To quote the Federal Reserve Act, the purpose of The Fed “to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.”   Nope.  Instead, all too many of us cheer and then blame the Obama Administration for high unemployment!

You get the government you deserve.  Always.