“In my opinion, mortgage loan modifications are the biggest macroeconomic mistake of the Obama Administration. I could not tell you whether the stimulus bill helped or hurt. I am skeptical that the health care bill or the Dodd-Frank bill had much effect. But I am pretty sure that I was right in 2008 when I said that the housing crisis would be prolonged by efforts to modify mortgages. As you look around for places to cast blame for the depressing job statistics, do not overlook loan modifications.” — Arnold Kling, economist
Archive for the 'ModernPolitics' Category
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“I’m visiting a friend who does due diligence for his private equity fund’s investments in various U.S. companies. As a result, he talks to businessmen every week. For many months now, he has found businessmen complaining about the Obama administration’s criminalization of various failures, many of them small, to comply with detailed regulations. What Charley Hooper and I wrote about on Forbes.com recently applies, it turns out, not just to the pharmaceutical industry but also to other industries. See this recent Associated Press story for more. On top of that, the Obama administration is producing a huge volume of new regulations, many of them not finalized. Look at this graphic on Dodd-Frank, for example. And of course, there’s Obamacare: whether you’ll be under it will depend on whether you can get a waiver and who knows who can get a waiver or by what standard waivers are granted? When people fear that their investments will be for naught because they won’t be allowed to operate, that has a chilling effect on investment. I think we are in a period like that of the mid-1930s in that sense. Robert Higgs has written about the regime uncertainty under FDR because businessmen and investors weren’t quite sure about the rules. I think the same thing is happening now.” — David Henderson, economist
Paul Krugman gave an interview on book recommendations where he said this:
In my experience with these things – which I find both within economics and more broadly – is that if you ask a liberal or a saltwater economist, “What would somebody on the other side of this divide say here? What would their version of it be?” A liberal can do that. A liberal can talk coherently about what the conservative view is because people like me actually do listen. We don’t think it’s right, but we pay enough attention to see what the other person is trying to get at. The reverse is not true. You try to get someone who is fiercely anti-Keynesian to even explain what a Keynesian economic argument is, they can’t do it. They can’t get it remotely right. Or if you ask a conservative, “What do liberals want?” You get this bizarre stuff – for example, that liberals want everybody to ride trains, because it makes people more susceptible to collectivism. You just have to look at the realities of the way each side talks and what they know. One side of the picture is open-minded and sceptical. We have views that are different, but they’re arrived at through paying attention. The other side has dogmatic views.
It’s interesting because my experience is exactly the opposite: it’s the conservative economists and laymen that understand both sides, and it’s the liberals that usually don’t, especially the laymen. This is why I primarily stick to reading academic type liberals: Paul Krugman, Matthew Yglesias, Ezra Klein, Dean Baker etc….because even though I disagree with these liberals, often strongly, they tend to atleast know what us conservatives are thinking and trying to argue – they deal with the argument head on, and not some straw man (usually, not always). They also all tend to agree to the fundamental premises of economics.
Every time I venture off, and try to deal with liberal pundits, or especially leftist pundits, not trained in economics, I always find myself first explaining the fundamentals of economics – and then find myself having to debate that which is standard economics. That which the Krugman’s of the world would agree with without argument.
It seems like another economists agrees, see here. In fact, my favorite living economist of all, Bryan Caplan, is willing to put a wager on the belief that libertarian/conservative economists know more about liberal economists then the reverse, see here. Any takers?
“This week, Bloomberg BusinessWeek put the financial woes of the U.S. Postal Service on its cover with a story titled “The End of Mail.” The dire plight of the USPS isn’t exactly news — it’s been losing money since 2006, including nearly $20 billion since 2007. But the cliff the agency has been driving toward is fast approaching. The agency is now almost $15 billion in debt. Unless the government steps in, it will default on $5.5 billion of retiree health-care costs in September. By October it will reach its legal debt limit, and by the end of the year, the USPS will be out of cash — insolvent and unable to operate.” — Freakonomics Blog
“Given the austerity mood in the press, the administration is emphasizing the monetary savings involved in this, but that’s actually just a small piece of the potential gains. At the end of the day, by far the biggest problem with having the federal government own a warehouse it’s not using is simply that the warehouse isn’t getting used. An old warehouse could be converted into condos or a police station or a rock club, but those aren’t the kind of things the federal government runs. A private individual might just lease the property out, but again the federal government’s not a commercial real estate manager. Selling the land and the structures is the best way to get the real resources back in circulation. And as always, real resources matter a lot more than budget line items. The government can conjure up more money any time it wants. The real resources available to the country are what’s in limited supply, and the real policy upside is in putting them to better use not obtaining more dollars.” — Matthew Yglesias, on Obama’s plan to sell off government property
Readers of my blog, especially those who comment frequently, know my good friend Jon. He’s a recent convert to the left and believes in it passionately. A common theme of his world view, and those on the left in general, is the tug of war between the rich and the poor. The powerful and the non-powerful. The politically connected and the those with no political power. Basically the heart of leftist’s worldview revolves around this paradigm.
Every political fight, every economic decision and every current event is filtered through this prism. Since I consider Jon a smart, honest and sincere person, I have been trying to understand how he could be so enthralled by such a political philosophy. I try to read, watch and listen to everything he asks me to. And a big part of that is Chomsky and his writings. So I go over to Chomsky’s site and this is the latest article of his, on the Winsconsin union political fight:
As working people won basic rights in the 1930s, business leaders warned of “the hazard facing industrialists in the rising political power of the masses,” and called for urgent measures to beat back the threat, according to scholar Alex Carey in “Taking the Risk Out of Democracy.” They understood as well as Mubarak did that unions are a leading force in advancing rights and democracy. In the U.S., unions are the primary counterforce to corporate tyranny.
By now, U.S. private-sector unions have been severely weakened. Public-sector unions have recently come under sharp attack from right-wing opponents who cynically exploit the economic crisis caused primarily by the finance industry and its associates in government.
Popular anger must be diverted from the agents of the financial crisis, who are profiting from it; for example, Goldman Sachs, “on track to pay out $17.5 billion in compensation for last year,” the business press reports, with CEO Lloyd Blankfein receiving a $12.6 million bonus while his base salary more than triples to $2 million.
Instead, propaganda must blame teachers and other public-sector workers with their fat salaries and exorbitant pensions — all a fabrication, on a model that is all too familiar. To Wisconsin’s Gov. Scott Walker, to other Republicans and many Democrats, the slogan is that austerity must be shared — with some notable exceptions.
The propaganda has been fairly effective. Walker can count on at least a large minority to support his brazen effort to destroy the unions. Invoking the deficit as an excuse is pure farce.
In different ways, the fate of democracy is at stake in Madison, Wis., no less than it is in Tahrir Square.
Lost on Chomsky, and which bears no mention in this article or other writings, is an investigation into whether or not the claims of opponents of teachers unions are actually true. This is typical Chomsky. He doesn’t care about declared motives. There has to be other reasons, and those reasons have to fit into a powerful vs nonpower paradigm. Anything else is not even worth investigating.
Ignored by Chomsky then is the long trail of writings and arguments that opponents of teachers unions have been making. Opponents of teachers unions make the claim (among others) that the teachers union stifles reform and entrenches a low quality public education system. One that ultimately harms the poor most, especially minorities.
The proof of this is so one sided that even traditional supporters of unions have a hard time making a compelling case in their defense and instead resort to distortions and misleading claims (see here for an example). But where is Chomsky on this issue? Nowhere. He is so blinded by his worldview, that anything contrary to union power is ipso facto a power grab against the ‘poor and powerless’ in favor of the ‘rich and powerful’.
I bet you can read all of Chomsky’s material, all of his writings, videos and historical accounts and you will not find anything on say, the unions role in entrenching racism (pdf), or vast corruption throughout history, or more currently, the teachers unions negative affect on public education – his is a simple storyline, unions and ‘workers’ are good, rich people are evil.
This is typical of Chomsky and leftist in general. Their simplistic paradigm is so ingrained in them that they often cannot see the forest for the trees, and miss the fact that it is the students and poor minorities in particular, who are the powerless in need of defending, and it is the teachers unions and their political allies that are the powerful.
“8. Bin Laden was assassinated. He was not. First of all, he was the leader of a para-statal organization that had declared war on the United States. If the US could have stormed Hitler’s bunker and taken him out, it would not have been an assassination, any more than being able to take out an enemy general on the battlefield would be. Second, the SEALs fired only when he made a threatening move, which is a form of self-defense. There is every reason to believe that the US would have preferred to take Bin Laden alive, since they could have then interrogated him about ongoing terrorism plans.” – Juan Cole, on whether Osama Bin Laden was “assassinated”
“Now we learn that on an income of $1.7 million, the Obamas paid $450,773 in taxes, taking full advantage of the Bush tax cuts. I think it is fair to ask: If the President believes that people like him ought to be paying more, then why didn’t he pay more? There is absolutely no rule against sending in more money than you owe.” – Steven Landsburg, professor of economics on Obama and Taxes
Update: For readers interested, more on this discussion here.
“Here we see the fundamental differences between the parties: One believes in spending more and allocating that spending via central planning. The other believes in spending less and harnessing individual choice and competition to ensure that the money is spent wisely.” — Greg Mankiw, professor of economics at Harvard on the difference between the Ryan plan and ObamaCare
“Kristof has his historical facts precisely backwards. From 1929 to 1932 federal spending increased by 50% in nominal terms, doubled in real terms, tripled relative to national income. Judged by that measure, Herbert Hoover makes Barack Obama look like a fiscal conservative.” — David Friedman, rebutting NYT journalist Kristof’s claim that Herbert Hoover was a president of austerity
“Leaving the specific details aside, Ryan’s and Obama’s health care initiatives are complementary, not competitive with each other. Without a functioning individual insurance market, you can’t voucherize Medicare. And without pushing most individuals into the individual insurance market, that individual market won’t really be the giant risk pool you need to drive the health care system in a more efficient direction. Obama’s plan nudged beneficiaries of private, employer-sponsored insurance into the national pool. Ryan’s proposal shoves the beneficiaries of government-provided insurance into that same pool.” — Noah Millman, writing at The American Scene Blog
“Last year, I blogged about some research that Michael Heaney and I were doing on the anti-Iraq War movement. I found that the antiwar movement quickly collapsed after Obama’s election. Smaller crowds, less attention. The big finding is that Democrats stopped showing up after Obama’s inauguration…In other words, once a Democrat gained power, Democrats stopped showing up to antiwar protests.” — Fabio Rojas, Associate Professor of Sociology at Indiana University
This is why I’m a big fan of Rand Paul.
“Not only is Smith not endorsing a progressive income tax, he isn’t endorsing any sort of income tax. Reading further into the passage, he successively rejects taxes on income from capital, taxes on wages, and taxes on the income of professionals. The only income he approves of taxing is the income of government officials. What he is arguing for is a system of taxation whose effect is proportional to income, not a tax on income.” — David Friedman, rebutting the claim that Adam Smith endorsed a progressive income tax
“The point is that there’s something a bit head in the sand about proclaiming this a simple “humanitarian” undertaking. Showing up with bags of rice in a famine zone is a humanitarian undertaking. Sending in some Marines to help guard the trucks full of bags of rice is a plausible military element of a humanitarian undertaking. What we’re doing is providing tactical air support to one faction in a civil war in order to help them prevail against a rival faction that has much more heavy military equipment. This may or may not produce some net humanitarian benefits in the end, but it’s hard for me to know how you’d make an accurate forecast about that one way or another.” — Matthew Yglesias