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Personally, I believe that anyone who has more than a couple of bumper stickers of any kind on their vehicle is likely to be somewhat deranged. Experience has to date supported this view.

If Ignorance is Bliss, William Greider is Ecstatic...

...and he insists on sharing his joy with us in The Nation.

Goodbye Keynes, Hello Hoover

The first fundamental failure of Keynesian economics occurred forty years ago during the Vietnam War when the economy was overheating but the political system failed to take the corrective steps that would restrain price inflation—that is, raise taxes and reduce federal spending. The decade of economic stagnation that followed became a central factor in discrediting both liberalism and the Democratic Party.

Wrong. Despite popular mythology, Keynesian economics actually first failed during Keynes' own lifetime, back in the Great Depression. More accurately, the rather selectively-interpreted and extremely cherry-picked tactics scalpeled out of Keynes' theoretical work failed, in large part because of that selective interpretation and cherry-picking. And among the first to say so was Keynes himself, who noted that his prescription was for short-term ameliorative action, not long-term doctrine. But I digress...back to Greider:

We are now witnessing a second great failure of the doctrine John Maynard Keynes devised for managing a healthy economy. This time, Washington faces the opposite problem—a starkly underperforming economy in which 10 percent of the workforce are without jobs and income. Yet the President and Democratic Congress, spooked by the swollen federal deficits, are unwilling to do what Keynes prescribed in these circumstances—pump up federal spending enormously and run even larger budget deficits in order to force-feed a stronger recovery.

One can gain a solid grasp of Greider's own political stance simply by noting what he (along with most other liberals) leaves out of the classic Keynesian prescription for recession -- cutting taxes. Yet Greider and his ideological cohorts have no problem whatsoever remembering the "raise taxes" part of the Keynesian price inflation prescription.

Keynesian theory has many empirically demonstrable flaws and it's not my intent to begin a long dissection of them*. My point here is highlighting the willful selective ignorance of those socialist/statist ideologues who want more government and more more spending and (at root) more more MORE state control over individuals with the concomittant loss of freedom that implies, and use Keynes as their crutch. Even dedicated Keynesian Paul Krugman (who really is a brilliant economist when he's not being a complete political-media whore for "progressivism") has had some things to say about Greider's utter lack of critical-thinking skills, at least in the field of economics.

So when you hear ideologues tossing derogatory sneers at "Keynesianism" and "Monetarism" and "Libertarianism" and such, keep in mind that the overwhelming majority of them, like Greider, haven't got the intellectual foundation to know WTF they're talking about. Or even the ability to grasp that they don't have that foundation.

[*--For a much more balanced and empirical rather than ideological view of the current state of our economic situation and the failed applications of Keynesian theory thereto, N. Gregory Mankiw's recent article in National Affairs provides an excellent start for the intelligent layperson. Pay particular attention to his thoughts on the disparities between theoretical models and observed reality -- they have major applications in other areas, such as climate "science."]

How's That Stimulus Coming?

About as I predicted.

Stimulus aside, we're not seeing increase in jobs

The economy will kick into gear again when the private sector begins adding jobs. Investors were spooked Friday because it isn't doing that yet. Of the 413,000 jobs added in May, just 41,000 of them were in the private sector, barely a fifth of what economists expected, and many of those jobs were temporary ones. Speaking of which, virtually all the public-sector job increases were the result of temporary workers hired by the U.S. Census Bureau...

...The Keynesians who advocate for bigger stimulus spending to avoid a double-dip recession are beginning to bump up against the limits of their argument that deficit spending can lead the economy back to a growth cycle. The stimulus spending has to show some private-sector results. We can't keep pointing to the census workers, teachers and other public-sector jobs that have been "kept" thanks to stimulus money.

This really isn't rocket science or brain surgery. The "stimulus" bill was, as I repeatedly said, mostly aimed at shoring up government and union (and public-sector union) jobs, NOT at "stimulating" the private economy that actually generates the wealth that pays for all that government. While private-sector employment crumbled, government employment barely budged at state and local levels, and actually grew at the federal level.

Shoring up government at the expense of the private sector is not stimulus. It's an attempt to permanently expand government. And it won't boost the economy. Quite the opposite. It suppresses growth, as we're seeing. When we do begin to see positive recovery in the private sector, it won't be because of government "stimulus," but in spite of it.

Miss W? Hell, I miss Jimmy!

Well, I tried to warn you. No need to elaborate, the headlines of ongoing corruption and incompetence already tell the tale. I just wanted to say I told you so.

Since I'm too busy to post much if any for the near future, I'd urge all five of my regular readers to avail themselves of the blogroll on the left sidebar to feed their blog jones. And if you're inclined, you can visit my minimalist CafePress store for appropriate bumper stickers. T-shirts to come!

And Now For Something Completely Different

As campaign season starts to really gear up, we are once again entering the fact-free zone where the only factor most people pay attention to is how appealingly snarky their own side can manufacture sound-bite insults to lob at the other, or how emotionally appealing their own policies can be framed, regardless of how abysmal said policies perform in any truly objective context -- especially that of the history of such policies. Once again, I am hearing the old, tired refrain I used to (and still do) hear endlessly from Markists: "The only reason our policies don't work very well is that the right people haven't applied them yet!" Yep, Utopian policies often fail when they depend on human beings to act as hive insects pursuing only the good of The All. Oddly enough, the Utopians themselves seem subject to this constraint.

Since I'm busy and tired of arguing with the endlessly ignorant vox populi who have mistaken freedom of speech and the egalitarianism of opinion as providing them with, you know, actual knowledge or expertise of certain fields (namely, almost all of them) and therefore think that their ill-informed and uninformed opinions are the equivalent of objective reality if only they click their heels often enough and worship the shiny promised Utopia, I offer a reality check that comes complete with automatic scorekeeping.

Namely, poker. Poker is a game of skill that combines statistics, probability, and psychology. Any fool can luck their way through one game and come out ahead, but to consistently come out ahead requires not just a knowledge of the mechanics of the particular game being played, but a clear basic understanding of the three areas mentioned above.

There's a new variant being played (well, new to most of us Westerners) that is wide open for the quick study. It's called Badugi, and it's a four-card-hand variation of lowball draw. Mind you, *I* don't understand it well enough yet to play it for actual money, but I find it presents interesting possibilities and many traps for tradtional poker players, lowball and otherwise. A quick video intro can be found at "How to Play Badugi".

If you see me at the play money badugi tables making a botch of it, try not to laugh too hard. And don't mistake my ineptitude at it as extending to other real-money poker games. Or do -- being underestimated is always good for enhancing profits.

For those who want to work up their skills in a broader variety of poker games, there are mixed-game tournaments. One of my favorites is the 8-game mix, which consists of alternating rounds of Limit 2-7 Triple Draw, Limit Hold’em, Limit Omaha Eight or Better (Hi/Lo), Razz, Limit Seven Card Stud, Limit Stud Eight or Better (Hi/Lo), No Limit Hold’em, and Pot Limit Omaha. A similarly brief intro video about 8 can be found Game Mix can be found at (surprise!) "How to Play 8 Game Mix".

If nothing else, playing in freeroll 8-Game tourneys can give you a feel for the varying strategies required for different games, especially for games that on the surface appear similar but require different strategies to play well, such as Limit Holdem versus No-Limit Holdem. It also encourages verstaility in thinking and strategy, which is always a good thing.

Poor Carpentry

Peter Beinart of The Daily Beast indulges in some Lakoffian framing to "explain" how the Tea Party movement isn't "populist." All he has to do to get there is redefine populism and by implication recast the federal government under the current administration as being the little guy. Seriously! Here, let's watch him stack the deck...

In American history, populism has a specific meaning: It’s our non-Marxist way of talking about class. Being a populist means standing up for the little guy against ruling elites.

Such vague claptrap is what Beinart deploys as a definition of populism for exclusionary purposes. And it fails on the face of it. In modern poli-sci terms populism is best defined as "an ideology which pits a virtuous and homogeneous people against a set of elites and dangerous ‘others’ who are together depicted as depriving (or attempting to deprive) the sovereign people of their rights, values, prosperity, identity and voice." [1]

This is a clear definition of populism that fits well the assorted populist movements in American history, including the current Tea Party movement. Beinart doesn't want to employ it because it specifically negates the rhetorical pretzel logic he has conspicuously constructed to steer the definition back into the fallacious trap of using "populism" as a mere sneering pejorative when describing any popular non-leftist movement. In Beinart's world, ONLY leftist movements employing identity politics can truly be "populist."

Beinart has substituted "little guy" into the equation to exclude anyone falling outside the heroic leftist totem of "the oppressed" from being capable of being "populist." In Beinart's world, only "the oppressed" can be "populists," and in leftist terms that automatically excludes anyone not favored by, well, leftists. It's simply a new polish on the old "victimhood" routine, one intended to deny victim status to anyone not of Beinart's tribe. One is either a victim or an oppressor, and by defining populism in terms of class struggle (while claiming he's being "non-Marxist" in doing so) Beinart seeks to automatically and categorically label the Tea Party people as elitist oppresssors. Thus anyone they are opposed to must categorically be the oppressed.

Now let's watch the second part of the framing attempt, in which Beinart casts the Obama administration in the role of the oppressed, since those opposed to the oppressed by Beinart's definition cannot be populists:

The Tea Partiers aren’t standing up for the little guy; they’re standing up to the little guy. We’ve long known that their leaders, like Sarah Palin, opposed against real regulation of Wall Street. Now we learn that what the Tea Partiers dislike about Barack Obama’s economic policies is that they don’t do enough for the rich. According to the Times, Tea Partiers are more likely than other Americans to think Barack Obama’s policies favor the poor, and they’re mad as heck about it.

Yeah, right. This is merely an attempt by Beinart to cast anyone opposed to the actions of the administration as being part of a privileged racist/elitist mob. Beinart is asserting here that being opposed to the massive growth of federal government and economy-crushing spending by same somehow automatically makes Tea Party people privileged elitists oppressing the "little guy." The "little guy" in this case being the federal government as personified by Barack Obama! (Try oppressing the IRS next time you're summoned for an audit. You'll quickly find out who the "little guy" really is.)

Pretty disingenuous stuff coming from a left-wing elitist Ivy League product of exclusive private schools, Yale, and Oxford. Perhaps Mr. Beinart has mistaken his own wealth of elitist privilege as being an acceptable substitute for intelligence, when even the most cursory examination of his premises makes clear that his ham-handed rhetorical framing is pretty poor carpentry indeed.

As George Orwell once famously remarked, "One has to belong to the intelligentsia to believe things like that; no ordinary man could be such a fool."

UPDATE: Right on cue, here comes reliable tool and left-wing elitist Ivy League product of exclusive private schools, Harvard, and Oxford E.J.Dionne promoting the narrative. Why, you'd almost think it was a coordinated effort on the part of left-wing elitist Ivy League products of exclusive private schools, Harvard/Yale, and Oxford to shape the narrative. Is having had a Rhodes scholarship one of the required credentials for this club? Elsewhere, Glenn Reynolds notes his own powers of prognostication.

UPDATE AGAIN: James Taranto at WSJ's Best of the Web takes notice with "Populism of the Privileged." Heh. Remember that we were there first.

[1] Albertazzi, Daniele and Duncan McDonnell, 2008, Twenty-First Century Populism: The Spectre of Western European Democracy, New York and London: Palgrave Macmillan, p.3

Econ 301: Data and Doubt

If like me you have a solid background in advanced real-world empirical economics, you're probably getting rather annoyed by now with the creatively optimistic interpretations of every stat release that comes out. This is generally a manifestation of confirmation bias, the tendency on the part of somewhat naive ideologues to see everything as evidence of their own wishes manifesting rather than as data points for objective assessment in a coherent empirical framework. Pointing out to same that they don't really know what they're talking about is somewhat futile -- ideologues follow pre-dispositions, not evidence and objective analysis, and the attempt will probably just get you called names. Especially as they tend to be certain they ARE being objective, despite the contrary evidence and their own lack of expertise in the field.

For those more interested in what's actually going on than in simply cheerleading their own fantasy scenarios, David Rosenberg of Gluskin-Sheff has a handy and concise list of some of the most mis-represented stats currently being used to cheerlead (and claim admin credit for) a "recovery" that at best looks to be somewhat slow and anemic at this point. A sample:

The ISM index came out before the payroll numbers did and injected a big round of enthusiasm into the pro-cyclical camp. The index did shoot up in March, to 59.6 from 56.5, and while many of the components were up, the prime reason for the increase was the eight-point surge in the inventory component, to 55.3. Moreover, the orders-to-inventories ratio slid to a level suggesting that we could be in for a big pullback in the next few months. Meanwhile, very little attention has been made to the construction spending data, which sagged 1.3% MoM in February with broad-based declines across sectors — and January’s 0.6% drop was revised to -1.4% (the fourth slippage in a row).

Go read the whole thing at the link. It's a good quick-and-dirty capsule check on why the institutional investors are not nearly as sanguine about the current condition of the national economy as the administration mouthpieces and partisan cheerleaders are.

UPDATE: Some related thoughts on the unemployment figures.

Why We Don't Trust Congress

Georgia's 4th Congressional District must be so proud of him! I admire the admiral's forbearance. The really scary thing is that Johnson is a major improvement over the previous member to hold that seat. Even scarier, while he's not the sharpest knife in the drawer, the odds are excellent that he's not the dullest either.

"Unforeseen" Consequences

The Law of Unintended Consequences never sleeps, but to call the following real-world consequences "unintended" or "unforeseen" when those of us who live in the REAL WORLD have spent the best part of a decade pointing them out as inevitable results of certain actions ... well, there's good reason those words are in quotation marks. I TOLD YOU SO. Repeatedly.

Let's start off with what happens when you impose new overhead costs on industry ...

The ObamaCare Writedowns
The corporate damage rolls in, and Democrats are shocked!

Turning over every couch cushion to make their new entitlement look affordable under Beltway accounting rules, Democrats decided to raise taxes on companies that do the public service of offering prescription drug benefits to their retirees instead of dumping them into Medicare. We and others warned this would lead to AT&T-like results, but like so many other ObamaCare objections Democrats waved them off as self-serving or "political."

...On top of AT&T's $1 billion, the writedown wave so far includes Deere & Co., $150 million; Caterpillar, $100 million; AK Steel, $31 million; 3M, $90 million; and Valero Energy, up to $20 million. Verizon has also warned its employees about its new higher health-care costs, and there will be many more in the coming days and weeks.

This is just the beginning of the damage done to American businesses by the massive cost mandates imposed by Obamacare. The sad thing is that we could have accomplished a LOT more in the way of real reform by simply extending full health insurance deductibility to individuals and reporting premiums paid by their employers as income to be netted against said deductions, while IMPROVING corporate viability. Naturally, Obamacare minions in Congress are doing their best to blame business for doing exactly what Congress has just ordered them to do:

Meanwhile, Henry Waxman and House Democrats announced yesterday that they will haul these companies in for an April 21 hearing because their judgment "appears to conflict with independent analyses, which show that the new law will expand coverage and bring down costs."

In other words, shoot the messenger. Black-letter financial accounting rules require that corporations immediately restate their earnings to reflect the present value of their long-term health liabilities, including a higher tax burden. Should these companies have played chicken with the Securities and Exchange Commission to avoid this politically inconvenient reality? Democrats don't like what their bill is doing in the real world, so they now want to intimidate CEOs into keeping quiet.

Even if they succeed in further demonizing and silencing corporate America, it won't stop the economic damage in the slightest. Reality 1, Fairy Dust 0.

Then, of course, there's the obvious real-world response to legislation doomed to explode government deficit spending at a time when our finances are already strained:

Sell-off in US Treasuries raises sovereign debt fears

The yield on 10-year Treasuries – the benchmark price of global capital – surged 30 basis points in just two days last week to over 3.9pc, the highest level since the Lehman crisis. Alan Greenspan, ex-head of the US Federal Reserve, said the abrupt move may be "the canary in the coal mine", a warning to Washington that it can no longer borrow with impunity. He said there is a "huge overhang of federal debt, which we have never seen before".

This is a considerable worsening of Treasury-sale prospects since the already-alarming December report. Gee, I wonder what happened between now and then to boost fears of unmanageable US sovereign debt? Oh yeah. Reality 2, Magic Wand 0.

Lastly, some further inevitability that I have pointed out over and over and over again over the last several years:

Health overhaul likely to strain doctor shortage

Primary care physicians already are in short supply in parts of the country, and the landmark health overhaul that will bring them millions more newly insured patients in the next few years promises extra strain.

The new law goes beyond offering coverage to the uninsured, with steps to improve the quality of care for the average person and help keep us well instead of today's seek-care-after-you're-sick culture. To benefit, you'll need a regular health provider.

Yet recently published reports predict a shortfall of roughly 40,000 primary care doctors over the next decade, a field losing out to the better pay, better hours and higher profile of many other specialties.

Well, DUH! Ya think? When you start out with a shortage, one largely caused by major structural disincentives such as doctors leaving medical school with six-figure student loan debt and having to choose between low-paying primary-care and high-paying specialties, it's gonna take more to fix than a few tossed scraps and boiled-out bones. But that's all that's offered as primary-care inducements, a few scraps, such as a 10% boost to PCP's in Medicare reimbursements. Reimbursement rates that are already largely "non-profit." We've seen this show before, in Massachussets:

Massachusetts offers a snapshot of how giving more people insurance naturally drives demand. The Massachusetts Medical Society last fall reported just over half of internists and 40 percent of family and general practitioners weren't accepting new patients, an increase in recent years as the state implemented nearly universal coverage.

That's for new patients period. Acceptance rates for Medicare/Medicaid patients are far lower. Reality 3, Flying Unicorn Sparkly Rainbow Farts 0.

Watching this predictable and predicted train wreck of authoritarian central planning is like watching someone on the short stack in the SCOOP poker tournament play increasingly lousy hands in a desparate attempt to Win the Big One. A miracle salvation is possible, but the odds are so long against that "miracle salvation" is the precisely appropriate phrase. Far more likely is a bust-out, and sooner rather than later, long before the final table.

This is just Week One of Obamacare. Hang on, it's gonna be a long ride.

An Honest Politician?

It is said that an honest politician is one who keeps his promises, and who stays bought.

After health care vote, Stupak 11 request billions in earmarks

A day after Rep. Bart Stupak, D-Mich., and ten other House members compromised on their pro-life position to deliver the necessary yes-votes to pass health care reform, the "Stupak 11" released their fiscal year 2011 earmark requests, which total more than $4.7 billion--an average of $429 million worth of earmark requests for each lawmaker.

Sounds like someone made some promises, and bought on credit.