|Man Without Qualities|
Saturday, November 15, 2003
Democratic Lt. Gov. Kathleen Blanco became the first woman ever elected governor of Louisiana on Saturday, defeating a conservative Indian-American and scoring a rare gain for Democrats in an election season that has seen a string of Republican victories.
Consider this passage from a New York Times report on middle class people losing their health care insurance:
Ms. Pardo, a 29-year-old from Houston, said that having no insurance meant choosing between buying an inhaler for her 9-year-old asthmatic daughter or buying her a birthday present. The girl, Morgan, lost her state-subsidized insurance last month, and now her mother must pay $80 instead of $5 for the inhaler. Rent, car payments and insurance, day care and utilities cost Ms. Pardo more than $1,200 a month, leaving less than $200 for food, gas and other expenses. So even though her employer, the Harris County government, provides her with low-cost insurance, she cannot afford the $275 a month she would have to pay to add her daughter to her plan.
Isn't there something more than a little bit odd about an article that presents medical insurance as an essential, whose loss forces people into the most dreadful choices, casually explaining that the $240 cost for a child's medical insurance must come from what is left over after rent, car payments and insurance, day care and utilities?
And what is one to make of this passage:
Mr. Thornton, 41, left a stable job with good health coverage in 1998 for a higher salary at a dot-com company that went bust a few months later. Since then, he has worked on contract for various companies, including one that provided insurance until the project ended in 2000. "I failed to keep up the payments that would have been required to maintain my coverage," he said. "It was just too much money."
These people are not poor, and they are not unaware of the costs and risks connected with the decision of whether to purchase or not purchase health insurance. They are making consumption choices - and they quite clearly view health insurance as of a type with other ordinary goods. Indeed, in the case of Ms. Pardo, health insurance seems to be an ordinary good that is of less signifiance than economizing on rent, car payments and insurance, day care and utilities.
Of course, the middle class is not alone in expressing a sometimes low value assignment to medical insurance. Recent reports of state-subsidized health insurance simply going unclaimed by eligible low-income people are also striking.
Many economists treat the decision not to purchase health insurance as somehow "irrational" - or evidence that people who don't purchase such insurance are simply incapable of evaluating the risks and benefits. But the growing population of middle class people choosing to forego health insurance even though they could afford it if they chose to economize on other ordinary expenditures is strong evidence to the contrary. The inclination of economists to second-guess such decisions may have more to do with the relative risk aversion of economists compared to the population as a whole than it has to do with the ability of middle class people to evaluate these costs and risks for themselves.
Of course, if one takes this risk and actually develops a serious medical problem, one is normally perfectly well inclined to make use of whatever argument one can lay hold of to pay for the costs of one's own decision. But that doesn't mean one didn't understand the risk or make the choice.
References to this report claiming that manufacturing jobs have declined worldwide - with China, for example, losing a huge number - have popped up all over. But the article itself has not been all that easy to find on the internet.
So here it is.
I am, to say the least, skeptical of some of the details. With respect to China, for example, there are also reports that manufacturing in China often tends to substitute human labor for the technology employed in the country from which the jobs "come."
China also has some peculiar labor laws that one can imagine creating some very strong incentives for employers to report the "loss" of manufacturing jobs. For example, China is experiencing a huge migration of workers from the countryside to cities - where they take a lot of manufacturing jobs. But Chinese law requires that such migrating workers hold and comply with internal passports and visas - and those visas are good for only a few years. That means that, in principle, the workers must leave their new job and city and return to their old village at the end of their visa period.
Him? He left! Went back to his village and took some other position paying, say, 10% of what we paid him here. Sure. Big problem for us, too, we had to train him and now we have to train his replacement. That happens all the time. After all, it's the law. Gotta follow the law.
Is that the Chinese way? Is the Pope a Zoroastrian?
In the alternative, one imagines, the worker could stay and the employer deny the job exists or that the employer is employing the worker. This is just one peculiarity of Chinese employment law that might distort employment statistics.
There is also generally and worldwide a rather strong relationship between the number of employees an employer claims and the employer's tax obligations. The reader may wish to take a private moment to contemplate the traditional relationship between a Chinese business owner and the tax authorities.
I would be very skeptical of the reliability of Chinese employment statistics generally. This is a country that for decades officially denied that it suffered any unemployment at all!
Indeed, it is difficult in the extreme to suppress the sense that to accept easily the proposition that China saw a 15 percent drop in factory jobs one would have to have an intellect on the order of Robert Reich's (if Glenn Hubbard has really been saying such things about China - as distinguished from worldwide - he should know better). A Wall Street Journal article describes the Chinese situation this way:
Perhaps the most surprising result of these latest studies is the manufacturing employment trends in China. Since 2000, manufacturing payrolls in China are up about 2.5 million, even as the rest of the world has suffered. But looked at over a longer time horizon, employment in China's manufacturing sector is down sharply. From 1995 to 2002, manufacturing employment has fallen to 83 million from 98 million, a 15% drop that outpaces many of the declines elsewhere in the world.
It isn't difficult to figure out why. China remains burdened with a massive and unproductive state sector that will take years to restructure. Even as foreign direct investment pours into the country's newer plants, millions of workers at inefficient state plants have to find new work, a source of potentially destabilizing unrest in the country and massive internal migrations.
But, of course, for the "loss of jobs" argument to hold in China it is not just necessary that these millions of workers at inefficient state plants have to find new work - but that they have, in fact, not found factory work. Is the idea supposed to be that these former factory workers have gone on to rice picking or the like? Even in China the sudden creation and long-term persistence of fifteen million unemployed manufactring workers would cause more than a political ripple.
Odd that the argument just omits a little detail like that, along with any mention that those "newer plants" in China tend to use more human workers and less technology - and are often less productive per worker - than comparable plants in the developed world.
So maybe there's more to the story that just the two words cited by Mr. Reich: higher productivity.
Friday, November 14, 2003
This curious Economist item on Paul Krugman and his critics is not exactly a win for either side.
The main effect of this item is to raise the question of whether the Economist has really closely read all those Paul Krugman columns. One gets the impression that whoever wrote this unattributed Economist item dearly values her own low blood pressure more than the dissonance of intellectually honest appraisal - and it's difficult to imagine such a person spending a long period closeted in close reading with a pile of Paul Krugman's screeds. The item doesn't seem to engage the issues Herr Doktorprofessor's style raises.
For example, Herr Doktorprofessor's recurring, unsubstantiated suggestions of conspiracies - usually conspiracies involving George Bush - is entirely unmentioned. But by itself that propensity should cause one's eyebrows to be raised by the Economist's reference to Mr Krugman's perfectly respectable personal political beliefs. It is not just that Paul Krugman has a growing tendency to attribute all the world's ills to George Bush - Herr Doktorprofessor repeatedly presents Mr. Bush in a far more sinister light than that - conjuring the trappings, wheels and spokes of full blown evil enterprises with Mr. Bush at the helm. Many of Mr Krugman's personal political beliefs he expresses in his columns are anything but perfectly respectable - some of them border on the paranoid. Perhaps the author of this article needs more than what she terms a glance through his past columns to understand what Herr Doktorprofessor has been about. But even his Times colleague David Brooks has expressed his concern about Herr Doktorprofessor's often angry, even hateful, and far from "perfectly respectable," opinions. And is it "perfectly respectable" to hurl against the President of the United States coded charges of anti-Semitism - as Herr Doktorprofessor has done, even while he attempts to "explain away" the anti-Semitism in the Mahathir Mohamad speech - as the ADL correctly points out? Is that what passes for "perfectly respectable" at the Economist today?
Herr Doktorprofessor's loathing for Mr. Bush has also led him to deny - up to the very eve of the recent massive acceleration in the economic recovery - the very existence of such a recovery (performance that has led Felix Rohatyn, no Republican partisan, to exclaim: "I rejoice in the spectacular performance of our economy at this time."). His venomous, absolutist and completely wrong-headed writing has provided hilarious fodder for a contest to identify Herr Doktorprofessor's most preposterously wrongheaded prediction. My favorite is perhaps his simple but heartfelt observation There is very little evidence in the data for a strong recovery ready to break out, which Herr Doktorprofessor published at the end of July. But there are so many others to choose from. A certain air of the unreal - even the surreal - is created by the Economist's failure to even mention Herr Doktorprofessor's recent spectacular and obvious failures in seeing the acceleration coming - failures brought on by his even more spectacular and obvious loathing of the President, which clearly blinds him to much of what is most important in his own profession. A certain hallucinatory atmosphere is also left by the Economist's omission of any mention of Herr Doktorprofessor's wildly intemperate criticisms of Alan Greenspan: It's probably wishful thinking, but some people hope that the old Alan Greenspan - the man we used to respect - will make a return appearance next week. .... Mr. Greenspan must know that many people, whatever they say in public, now regard him as a partisan hack. This is the kind of thing the Economist expects from a gifted writer and economist?
There is also a certain unpleasant flavor of the self serving and self-congratulatory in this Economist item. For example, the writer (whoever she may be) opines of Herr Doktorprofessor's critics: The more reasonable ones allow that he is a gifted writer and economist, but also argue that these days his relentless partisanship is getting in the way of his argument. And, sure enough, that is exactly the approach taken by the Economist writer! Who would have thought it?
The criticism of some of Herr Doktorprofessor's more peculiar economics arguments is also on the coy side:
Even his economics is sometimes stretched. A recent piece accused conservatives of embracing the "lump of labour fallacy", the mistaken claim that there is a fixed quantity of work which governments must strive to allocate equitably. In fact, the paper he cited did not commit the lump of labour fallacy. He used game theory to argue that, by criticising North Korea but not attacking it, and then going after Iraq instead, Mr Bush is "probably" encouraging North Korea to become a more dangerous nuclear power. This probably did not convince most game theorists.
Is it too much to ask why these criticisms are valid, but not others? Herr Doktorprofessor has been almost unhinged in the intensity of his criticisms of the Bush tax cuts - to the point of stating that anyone who supports them is a "liar" - but there is no mention in this Economist item that Gary S. Becker, Edward P. Lazear and Kevin M. Murphy beg to differ - although not by name. Professor Becker is, of course, a winner of a Nobel Prize in economics, and Professor Murphy is a winner of the John Bates Clark Medal of the American Economic Association, which is also Paul Krugman's greatest credential. Has Herr Doktorprofessor confessed that In fact, the paper he cited did not commit the lump of labour fallacy? If not, why and how did this opinion of the writer become a "fact" - where the opinions of Professors Becker, Murphy and Lazear don't warrant even a mention? Perhaps the author considers those three to be among those who spend an inordinate amount of time quibbling about minor semantic points, or trivial differences in statistics? The Economist's author might claim that space was limited, but the item rambles considerably (the unsupportable speculation about a possible Nobel at the end, for example, is almost a non sequitur), so room could have been made for a bit of substance. Is it that the author didn't want to expose herself by exposing her substantive economics and game theory considerations? It is also striking that these recognized errors are trivial compared to Herr Doktorprofessor's whopping errors in predicting the current recovery and in asserting that the destructiveness of the Bush tax cuts is clear and absolute economic fact.
And where ever did the Economist get the idea that politicians don't act to advance their policies and beliefs in the period after they expect to leave power, as in this guileless passage:
After Mahathir Mohamad, the prime minister of Malaysia, recently gave an anti-Semitic speech, Mr Krugman argued that the Bush administration's ham-fisted foreign policy had forced Dr Mahathir to make the remarks in order to shore up domestic political support—most unlikely, given that he was about to step down.
Contrary to the Economist's naive suggestion, politicans frequently act to advance their agendas and policies in the period after they step down - in exactly the manner the Economist describes here as "most unlikely." Does the Economist remember the raft of legislation and appointments just perpetrated by Gray Davis after his recall? How about Bill Clinton's infamous last-minute pardons? Is the Economist aware that Presidents value their right to appoint Supreme Court Justices exactly because they often remain on the bench for decades after the President is gone from office - or dead?
There is lots wrong with Herr Doktorprofessor's treatment of Mahathir Mohamad's speech, much of it identified by those he terms his “stalkers” - who the Economist seems eager to join him in largely dismissing. But placing this kind of emphasis on the mere fact that Mahathir Mohamad was about to step down when he made that dreadful speech - while ignoring other criticisms, including Herr Doktorprofessor's own prior, undisclosed involvement with Mahathir Mohamad - is so superficial as to make the term "superficial" seem a euphemism.
Strange, it is. All of it - this Economist item. Passing strange.
UPDATE: Insults Unpunished opines: "Musil seems to be offended that Krugman is still breathing."
No, no, no, no. no!
I would never wish harm upon Paul Krugman. Paul Krugman is one of the nation's greatest naturally occurring sources of pure hilarious baloney! The man is a national treasure! He is to be cherished in the manner we have long cherished Abbot & Costello, Bob Hope, Woody Allen and others of like stripe. They are truly his intellectual brothers.
Not a drop of anger or hate is to be poured upon his gnomishly handsome visage! May he live long and prosper!
Just keep him away from economic policy, for God's sake.
Steve Antler suggests that I'm jealous of Herr Doktorprofessor. And that is so true. I have always wanted to be an accomplished comedy writer. I feel like Salieri to Herr Doktorprofessor's Mozart! How does he accomplish his uproarious, unreal set pieces so naturally ... without apparent effort? Damn him!
Bush moves ahead of Clark by three points (Bush-50% to Clark-47% - where Clark had led Bush by three points in the September Gallup Poll: Bush-46% to Clark-49%). Bush also widens his lead on all other Democratic hopefuls.
As Kentucky and Mississippi Go, So Goes Louisiana? III(0) comments (0) comments
Democrat picks up momentum from debate academics say she "lost" badly.
Isn't that often the case?
And the Democrat is said to benefit from some old-fashioned racism:
"I think some old boy state's rights anti-black types are switching over to Blanco because they don't want to see an Indian-American as governor."
Still, RealClear says the Republican takes it tomorrow,
The good news is that home values are soaring, especially in California: Riverside-San Bernardino, Calif., soared 26.5%, while the Los Angeles area climbed 25.4%.
The bad news is that housing prices in California are soaring by the same amounts - somebody, that is, everybody, has to pay those prices.
If one is a current homeowner who does not need a bigger home, then soaring home prices seem nice. But if one is a first-time home buyer - or one who needs to "trade up" - these soaring prices are a disaster.
California has seriously suppressed new residential construction. For example, throughout pricey Orange County high rise residential construction is not permitted - with very few exceptions, such as senior citizen housing. Los Angeles County - now one of the nation's fastest growing counties - has not permitted a large housing development in many years. The recently approved Newhall Ranch project would add 20,885 homes to the Santa Clarita Valley, and the Tejon Ranch Co. is planning to build 23,000 homes near the Grapevine along the Tehachapi Mountains. But those are small numbers compared to the demand. And even those projects are uncertain and have been long delayed by environmental and other challenges. Another large proposed project recently terminated in the purchase of the land as a conservancy by the state.
One effect of the housing shortage - it is really a crisis for those of modest means, but for some reason that term is not widely used - is that many marginal urban neighborhoods are being "revived" - although bizarre "historical preservation" restraints also restrict this kind of development. For example, is it really the case that almost every 1920's stucco apartment building in Hollywood is of "historical significance?"- Los Angeles says just about that.
Such "revivals" are all very nice, but those "revivals" further obscure the fact that more and more people are not able to afford the kind of housing that a market governed by rules directed at maximizing aggregate welfare (and wealth) would provide. Environmental and historical preservation regulations, especially, are being used by current homeowners to effect a kind of smash-and-grap raid on other people's properties and home ownership possibilities. Other limitations - such as height limitations - further restrict affordable development.
Not surprisingly, rents have also soared in Los Angeles, which recently became the second most expensive city for renters (after San Francisco) in California.
So where are those currently striking supermarket and MTA employees supposed to live? What happens to them if housing prices soar by 25% again next year? Supposedly, those strikes are both mostly occassioned by health care benefit considerations. The Los Angeles Times describes the supermarket stike this way:
The United Food and Commercial Workers union went on strike Oct. 11 after rejecting a contract presented by the management of the parent companies of Albertsons, Ralphs and Vons supermarkets. The union rejected the contract mainly because the various managements want employees to pay 50% of hospital stays, 50% of doctor's visits, 50% for prescriptions and to take a cut in vision and dental.
Those are not insubstantial issues - although one could question the spin in this passage. But I have to wonder whether medical benefit issues are being used as a surrogate for a much wider problem: California is becoming very expensive because of rent-seeking regulation. Housing prices are just one example of that price surge, although a tremendously significant example. Health benefit issues find easier resonance with the media and public than, say, demands for higher wages or a relaxation of construction regulation. So the unions - not surprisingly - are trumpeting health benefit issues. The supermarket companies talk about Walmart, but there is no Walmart at the MTA's door.
But a lot more is going on here.
And if health benefit issues are surrogate issues, it makes a lot more sense that the strikes just drag on and on. Most arguements do drag on if their real, motivating concerns are not being discussed.
An Abrogation Or Demeaning Of Democracy? II(0) comments
The reasoning of this New York Times editorial seems to justify the removal through impeachment of any federal judge who follows conscience instead of clear meaning of the law. Judges are entitled to serve only during times of "good behavior" - and the stentorian rhetoric of the Times editorial purports to make the case that Judge Moore was not meeting that standard. And not a word from the Times about the millions of votes that were required to put Judge Moore in his office - undone by only nine. Is that "democracy?"
Does this mean that the Times will be urging the removal of, say, Judge Stephen Rheinhart of the Ninth Circuit? Or Harry Pregerson, who actually confessed to the Senate that he would follow his conscience if it conflictd with his understanding of controlling law? Is the Times reference to Mr. Moore's knack for demagoguery supposed to suggest that his acts were not, in fact, true products of his conscience? If so, what evidence has been adduced that Judge Moore has less of a conscience than the often grandstanding Judges Rheinhart and Pregerson? How about Justices Brennan and Marshall - who consistently and repeatedly attempted to hold the death penalty completely unconstitutional, even after the Court had repeatedly and clearly held otherwise? Was that "good behavior?"
Somehow, I foresee no such effort by the Times on the Rheinhart and Pregerson front. Today's ad hoc rhetoric is probably already back in the drawer.
But those like the Times naively celebrating the removal of Judge Moore today should keep in mind that his removal has likely very much weakened the judiciary throughout this country.
UPDATE: And it is quite irrelevant to the damage Judge Moore's removal has caused to the judiciary that he is not a guy you want on your side.
... do not seem to be tanking despite the new signs of growth and persistently low short term rates. Jonathan Gewirtz mulls that over.
UPDATE: On the other hand, the gold market - a traditional refuge from inflation - has been heading up.
Sylvain Galineau nicely summarizes the current state of intellectual disrepair of global warming (or is it "cooling?") theories:
To summarize, global warming is causing a cooling, we can't predict much about the former and there is little proof of the latter.
But, but, but, ... Sylvain, we sure can sign up for treaties that impoverish billions of people all over the world, and demolish much of our own economy - and pretend we understand and are in control of what we are doing and observing. And it seems doing that kind of thing would make some of us feel better! Doesn't that count for something?
Thursday, November 13, 2003
This CBS story gives a remarkably negative spin to the most recent CBS poll.
Buried within the negative rhetoric is some fairly interesting material. For example, there's this:
Despite new economic data showing a lower unemployment rate and the recent stock market rebound, the economy and jobs continue to top the list of pressing concerns for the public. Although Americans? views of the state of the economy are more positive than they were a month ago, almost a quarter of Americans have had a personal experience with economic woes, and report that someone in their household has lost a job in the last year.
It is not surprising that people don't massively and all at once reverse their opinions of a president and the economy. But the inclusion of that reference to those who report that someone in their household has lost a job in the last year is interesting. Of course, the president isn't up for election now. He's up for election in just about a year. If one asks voters in November 2004 about the economy and the President's performance, many of them will likely look back about a year - to the time that 7.2% annual GDP growth rate was reported and unemployment fell to 6%. So that reference to a one-year look back doesn't bode well for the President's opponents and critics.
The story also almost obscures the facts that the number of people rating the economy's condition as "good" increased by 5% (from 45% to 50%) in just one month, while the number of people rating the economy's condition as "bad" declined 6% (from 54% to 48%) in that same month. Even more amazingly, these poll result occurred even though only about a third of Americans now view the economy as improving - even though the economy obviously is improving, generally and on the employment front. It seems highly likely that the objectively improving economy will touch the subjective understandings of more and more Americans within the next few months.
The reader is invited to peruse the most recent CBS poll results and associated stories for herself. I find them some of the more amusing recent examples of what Mickey Kaus calls "liberal cocooning."
But I'm fairly certain that any knowledgeable Democratic activist or consultant seeing these poll results is going to feel ill. Very, very ill.
I'm fairly certain of that because this and other polls show how the public is responding very well to the newer positive economic data, and that data is just beginning to flow in earnest and will almost certainly continue to flow at least until the November 2004 election. For example, the Wall Street Journal reports:
Economists are nudging higher their projections for economic growth early next year, suggesting they are becoming more confident the recovery is sustainable.
Among 53 economists who participated in The Wall Street Journal Online's November economic-forecasting survey, the average forecast for the inflation-adjusted, annualized growth rate of the nation's gross domestic product during the first quarter of 2004 was 4.1%. That was revised up from the 3.9% rate predicted when the group was last surveyed in October. .... The economists expect growth to remain steady throughout 2004. Offering second-half forecasts in the Online Journal survey for the first time, they forecast growth at a 3.9% rate for both the third and fourth quarters of 2004.
While a slowdown from the 7.2% growth rate the economy experienced during the summer, these 4% growth rates mark a notable acceleration from the pace of activity that prevailed during the first 19 months of the recovery, which started in November 2001.
Among the biggest reasons economists cited in ratcheting up forecasts was a rebound in business spending, which economists predicted would grow at a robust 10% rate for the next nine months. ... For weeks now, sustainability has been the buzzword hanging over the outlook for the economy. .... Economists noted that with business inventories low, companies now must turn to increased production to meet consumer demand. Robust productivity gains, they said, are expected to boost corporate profits and companies will need to replace aging equipment such as computers and software.
Moreover, they said the effect of tax cuts hasn't yet faded. Nearly two-thirds of economists surveyed said that the effects of the tax cuts will continue to have a significant impact on economic growth over the next 12 months, while 7.7% said tax cuts would be the primary driver of growth over that period. More than 17% said that tax cuts will have some effect, but not a meaningful one, in the next year, while only 1.9% said tax cuts would have no effect. ...
The nation's healthy pace of growth, in turn, is expected to create enough jobs to bring the unemployment rate down slightly in the months ahead. Economists nudged down their forecasts for the unemployment rate to 5.8% by next May, from previous estimates of 5.9%.
Of course, if the unemployment rate continues to decline in that way, it will be about where (maybe a bit less than) it was in October 2002 - just before the last national elections. And I'm sure the Democrats are thinking long and hard about how well they did then.
But all that economic and employment growth isn't expected to produce an interest rate crisis or draconian Fed action of the type the Times has been pining for recently. No. Instead, the Federal Reserve will likely begin tightening monetary policy sometime next year. Nearly half of those who responded said the Fed would lift interest rates by June 2004, and most pegged the increase at a quarter point, which would boost the central bank's target for the federal-funds rate, which banks charge each other for overnight loans, to 1.25%.
Yes. Ill. Very, very ill.
UPDATE: And this wouldn't make me feel any better, especially the lead GWB has already over every single Democratic hopeful.
I like much of Shelby Steele's writing, but I don't agree with his argument that Howard Dean's statement that Democrats must seek to represent "guys with Confederate flags in their pick-up trucks," was Dr. Dean playing identity politics, the new "progressive" and "inclusive" politics of our age.
I do think that Dr. Dean's foray was doomed from the start by the Democratic posturing over the Confederate flag issue.
It is not hard for an open minded person to ascertain that many Southerners favor personal or official use of the Confederate flag who do not subjectively view that flag as a racist symbol. The strongest argument against official use, in my view, is that - notwithstanding the way that flag may be viewed subjectively by many, even a majority, of people - there are enough people who do view the Confederate flag as a racist symbol that it should not be used to represent a state or locality. In that limited sense, the fights over that flag are battles of subjective versus objective meaning. As a matter of policy, one can accept or reject the argument. But on the question of personal use of the flag (as on a pick-up truck) - as distinguished from official use of the flag (as on a state flag) - the objective policy argument against using the flag is much weaker.
But Democratic posturing has gone much further. It has not been enough for many Democrats to argue that everyone should see what these Democrats see as the racist content of the flag - these Democrats instead argue that everyone does see that content. Worse, such Democrats have made the argument that the Confederate flag vibrates with so much racist resonance that anyone who uses it personally - or favors using it officially - must be and actually is subjectively intending to make a racist statement. In my opinion, that argument is clearly false - judging by my experience with Southerners who use it personally (on their pick-up trucks or otherwise) or favor using it officially. The imputation by Democrats of subjective racist intent to those advocating any use of the Confederate flag has been an important device for them in impugning the political credentials of such advocates.
That's all come back to haunt Dr. Dean. Dr. Dean should be able to argue that he wants to represent the "guys with Confederate flags in their pick-up trucks" who do not view that flag as a racist symbol.
But Democratic posturing in the flag battles means that few Democrats can admit that such people exist.
UPDATE: Paul Krugman's strained effort to recast Dr. Dean's comment is absurd. It is not correct that What [Dean] meant by his flag remark was that Democrats must make the case to working Americans of all colors that the right's elitist agenda isn't in their interest.
Whatever else he may have meant, Dr. Dean meant to convey something about the Democrat's need to appeal to the interests of "guys with Confederate flags in their pick-up trucks" specifically - that is, interests in some way distinct from the interests of working Americans of all colors generally. The problem is, recent Democratic posturing makes it all but impossible for Democrats to acknowledge that "guys with Confederate flags in their pick-up trucks" can have good-faith, non-racists interests and beliefs that merit representation. Appealing to such interests is no more engaging in "identity politics" than appealing to the interests of, say, homeowners, is "identity politics." It's just "politics." But Herr Doktorprofessor's attempt to dissolve the interests of "guys with Confederate flags in their pick-up trucks" in some general "working Americans" soup is just dishonest.
When Bill Clinton was impeached, some people argued that although he had done some things wrong, even criminally wrong, those things did not amount to an "impeachable offense."
When Gray Davis was recalled, some people argued that although he had done some things wrong, those things did not amount to an "impeachable offense" - and that removing an elected official from office was an abrogation of democracy if the official had not committed an "impeachable offense."
So, why don't we hear from such people that the removal of Alabama Chief Justice Roy Moore from office for his refusing to obey a federal court order to move his Ten Commandments monument from the rotunda of the state courthouse is an "abrogation" or "demeaning" of democracy.
Sure, what the Judge did was wrong - even a violation of the law. That was also true of some of the things Bill Clinton did - even some of the things he admits he did. But none of those things Mr. Clinton did amounted to an "impeachable offense" in the minds - or at least under the pens - of those former defenders of democracy. Surely refusing to move a silly monument is not "impeachable offense" if lying under oath, for example, is not. And Judge Moore has been removed by the votes of nine people - not the votes of the many millions it took to oust Governor Davis, votes that such defenders of democracy told us only weeks ago were still inadequate.
Why does it fall to people such as Greg Sealy, head of the Sitting at His Feet Fellowship in Montgomery, an inner-city mission to cry that it was the "darkest day" he has seen in America since he moved to the United States from Barbados 23 years ago? Only folks like Mr. Sealy seem to be pleading "They stole my vote. The judiciary stole my vote. I voted for Roy Moore."
Where are those clarion calls from the defenders of democracy who stood so bravely behind Gray Davis and Bill Clinton? Stood on principle! Where is the outrage of the New York Times? and the Los Angeles Times? And so many others!
UPDATE: Glenn Reynolds defends the removal, which is fine and does not exhibit an inconsistency in his positions. But Glenn's word of justification for the removal leaves a lot to be desired: If judges don't obey court orders, who will?
Professor Reynolds seems to have the constitutional priorities exactly backwards. The point of a judicial order is to make something, the ordered thing, happen. But it is members of the executive branch who are supposed to execute - that is, to make things happen. The refusal of a member of the executive branch to comply with a court order therefore seems to strike more at the heart of the constitutional government by laws than the willfullness of a judge.
For example, is it more significant that a state judge defied a federal judge's order to move a block of stone than it was for the federal president to defy a federal court's discovery order and lie in a federal court proceeding? I don't think so. [I especially don't think so where the order to remove the block is substantively dubious as a matter of Constitutional law.]
In addition, perhaps Professor Reynolds - or somebody else - can explain to me why it is so important that judges obey orders from other courts but not precedent, even controlling precedent of those courts or statutes of the legislature. The Ninth Circuit, for example, routinely disregards Supreme Court precedent and has even so willfully defied the Supreme Court's rulings that in one case the Supreme Court became so frustrated with the Ninth Circuit's repeated interference with the execution of a murderer in California in defiance of Supreme Court rulings that the Supreme Court found it necessary to issue an order providing: "The stay of the Ninth Circuit Court of Appeals is vacated. No lower federal court is empowered to issue a stay of execution without this [Supreme Court's] authority." Should Ninth Circuit judges who defy clear precedent or statutes be impeached?
Judge Moore is charged with following his conscience instead of a court order. In that regard, it is worth keeping this little interchange from the confirmation hearings of Ninth Circuit Judge Harry Pregerson on October 3, 1979, the day of his confirmation hearing when he, then sitting Federal District Judge Pregerson, was questioned by then Senator Alan Simpson. Here is the exchange:
Simpson: If a decision in a particular case was required by case law or statute, as interpreted according to the intent that you would perceive as legislative intent, and yet that offended your own conscience, what might you do in that situation?
Pregerson: Well, of course it's a hypothetical question and life does not present situations that are clear cut, but I think all of us, judges and lawyers, would be very pleased if congressional intent was clearly discernible. I have to be honest with you. If I was faced with a situation like that and it ran against my conscience, I would follow my conscience.
Simpson: I didn't hear, sir.
Pregerson: I said, if I were faced with a situation like that, that ran against my conscience, disturbed my conscience, I would try and find a way to follow my conscience and do what I perceived to be right and just. Not that, I would hope not, it would mean I would act arbitrarily. I was born and raised in this country, and I am steeped in its traditions, its mores, its beliefs, and its philosophies; and if I felt strongly in a situation like that, I feel it would be the product of my very being and upbringing. I would follow my conscience.
Perhaps Professor Reynolds - or someone else - can provide some reason why it's "fair" for nine panelists to remove Judge Moore - who received the votes of millions - for doing exactly the kind of thing Judge Pregerson told the Senate he would do the very day of his confirmation?
And to complete an exquisite irony, Judge Harry Pregerson eventually became a member of the three-judge panel that attempted to void the recent recall of Gray Davis. That decision was, of course, completely defiant, wrong and willfull - and was subsequently reversed without dissent by a Ninth Circuit en banc panel.
Wednesday, November 12, 2003
Such Setbacks II(0) comments
Jim Taranto offers a characteristically insightful post showing that while Senate Democrats have a clear tactical advantage in their current filibuster of the President's judicial nominees, the Republicans have the strategic advantage.
The OpinionJournal item overlooks one person who will likely be especially damaged by all this grandstanding: Tom Daschle. Senator Daschle is, after all, the Senate minority leader (the capo da tutti Democratti) leading his fellow Democrats as they go to the mattresses in their high profile filibuster against the Republicans and all those conservative nominees - especially the nominees who do not support the abortion rights so sacred to the most liberal Democrats. But Senator Daschle is also in the process of trying to present himself to his rather conservative South Dakota constituency for re-election next year - a constituency 36% of whom disfavor him in recent polls - as "just Tom" who is "just like" them. As I noted previously, Senator Daschle is sufficiently conscious of his vulnerability to have voted for the recent partial birth abortion bill which is now being attacked by exactly the kind of federal judge he is demanding that the President appoint.
The Senate can bring the mattresses and cots onto the floor, but somehow I don't think Senator Daschle is going to get any sleep during this debate.
UPDATE: Senator Daschle's understanding of how currents pulling the national Democratic party leftward can backwash into South Dakota to his disadvantage is evident in passages from his new book, Like No Other Times, which describes the Paul Wellstone memorial that demolished the Democrats' chances of holding his Minnesota Senate seat. In the many words of Senator Daschle that urgently attempt to position him as a reasonable, centrist kind of just-a-guy South-Dakotans can like and vote for:
Not only did Walter Mondale slip overnight from eight points up to ten points down. . . . In South Dakota, where [incumbent Democratic senator] Tim Johnson's people were going door-to-door all over the state, reports were coming back that more than a few South Dakotans were saying, "I am so outraged at what happened in Minnesota that I was going to vote for Tim, but now I'm going to vote Republican."
Republicans brought the Charles Pickering matter to a vote on the eve of the Mississippi election, to their apparent distinct advantage. A repeat performance of this judicial filibuster close to next year's election therefore seems likely. It's not too hard to suspect that after seeing Senator Daschle lead the now-ongoing judicial nominee filibuster (live, this year, and as repeated campaign television spots next year, together with more coverage of next year's judicial filibuster - or equivalent spotlighting tactic), those same more than a few South Dakotans will be saying, "I am so outraged at what happened in the Senate judicial filibuster that I was going to vote for Tom, but now I'm going to vote Republican."
So far there's no word from South Dakota that Senator Daschle's poll negatives are moving one bit, despite all the money he's pouring into the effort. But a year is a very long time in politics.
FURTHER UPDATE: Looks like the overnight tracking polls must be registering positive for the Republicans.
As Kentucky and Mississippi Go, So Goes Louisiana? II
Going, going ...
RealClear has the skinny on Saturday's election.
UPDATE: Seemingly worse for the Democrat after the debate. But no call, yet.
Tuesday, November 11, 2003
Japan. Again, Japan. II(0) comments
As has turned out to be the case repeatedly in Japan, even the limited but over-publicized "reforms" have much less to them than meets the eye. As noted previously, the biggest banking "reforms" supposedly relate to recognition and treatment of bad loans. But then there's this:
Japan's largest banks have granted some of the country's most troubled companies debt forgiveness packages worth over ¥4,000bn ($37bn) since the beginning of 2002, calling into question their public pledges to get tough with struggling borrowers.
Debt forgiveness has allowed the banks to make sizeable reductions in non-performing loans, which dropped 27 per cent in fiscal 2002, in response to orders from the Financial Services Agency, the regulator, to reduce bad loans by half by March 2005.
But critics say the packages have slowed structural reform by subsidising weak companies at the expense of stronger competitors and are a sign that relationship banking continues to thrive in Japan.
Most of the debt forgiveness has centred on the least efficient sectors of the economy, which include companies such as Daikyo and Fujita in real estate and construction, Seibu Department Stores in retailing and Orient Corp in consumer finance.
"Clearly, debt forgiveness has become easy and politically palatable. Traditional banking relationships have weakened, but even though they have weakened they are still very strong," said Jason Rogers, a director at Barclays.
The ¥4,000bn debt forgiveness - calculated from public announcements, media reports and from the banks themselves - is approximately double the ¥2,000bn in new capital raised by the banks over the past year to shore up their balance sheets. "The new capital has not been used for positive purposes but to write off bad loans or for debt forgiveness," said Naoko Nemoto, financial institutions analyst for Standard & Poor's, the credit rating agency. ....
[S]preads on speculative grade credit [have] shrunk, indicating that the market believed big corporate issuers would be bailed out via the banking system. "It amounts to the quasi-socialisation of credit risk." ...
The ¥4,000bn figure is likely to be much larger after considering loans to small and medium enterprises - which make up the bulk of bank lending.
What a mess.
No, no, no, Mr. Thomas!
The moon dominates "Salome," not "Tristan und Isolde!"
And it comes out at the beginning of the opera, not after the curtain comes down!
Maybe Mr. Fastow can get the names of the people on this Texas jury so he can invite them all back for an encore!
With the economy not providing much in the way of likely campaign issues for the Democrats next year, what about the War on Terrorism?
For example, former Vice President Al Gore accused President Bush on Sunday of failing to make the country safer after the Sept. 11 attacks and using the war against terrorism as a pretext to consolidate power. Is any of that sticking? Well, there's a new poll out:
conducted by Princeton Survey Research Associates.
Nov. 6-7, 2003. N=1,002 adults nationwide.
MoE ± 3.
". . . do you approve or disapprove of the way Bush is handling policies to prevent and minimize terrorism at home?"
Today is Veterans Day. I sometimes wonder if those of us who did not serve in the Armed Forces can ever understand what that involves - still less what is involved in combat.
We may not all be able to understand those things except in a disappointingly remote sense. But I believe that we all have an obligation to make the attempt - and to remember the people who have served and fought.
There has been a flurry of expression concerning why men seem to be deserting television - led by Kim du Toit's very interesting post. Jane Galt and Craig Henry and Glenn Reynolds have more to report. Some of these commenters have suggested that television's dominant manner of presenting the roles and characteristics of men and women may be involved. That may be part of the issue.
But there seems to be another force at work: American television increasingly presents a tolerant view of homosexuality, and increasingly presents images of gay interaction itself. I am not interested in condemning or condoning that development here. But it is simply a fact that the development has happened and is continuing to happen.
In my opinion, while tolerance of gay lifestyles may (or may not) be increasing in the United States, it is also a fact that the great majority of American men do not feel comfortable being directly or indirectly involved in or witnessing or having their attention drawn to any aspect of gay interaction. It is not just that straight men - and, especially, straight young men - do not want to be propositioned or sexually approached. The great majority of straight men do not want to see or be seen by gay men, or see or be reminded in any way or at any time of gay interactions.
Nor do the great majority of straight men care to be confrontational on this issue at any time. For the most part, straight men simply prefer to avoid locales where gay activities are present, or where one is reminded that gay activities are present or condoned, or where one might be reminded that gay activities are present or condoned. And straight men also prefer to avoid locales which are associated in the minds of other people, such as friends and relations and business associates, as locales where one might be presented with gay images or reminded that gay activities are presented or condoned. In short: One might ask whether some straight men do not want to hang around a television that may produce a gay image. Again, I take no position here as to whether any of the above patterns are right or wrong - but I do believe they exist as described.
Television is not the only locale to be abandoned recently by males where such issues may be involved. Highschool and college locker rooms - and especially locker room showers - are more and more unused. To some extent that is probably attributable to the ever-increasing risk that someone using a miniature electronic device is watching - and recording. But anecdotal evidence suggests that many (not all) men are increasingly uncomfortable in such locales - and increasingly avoid them - simply because there is more tolerance of gay activities. For example, for a lot of reasons, very few men want to be involved in a mess where one man shouts at another "Why are you looking at me!" - especially in an environment in which that looking is no longer much condemned. Deeming something "rude" is not the same as deeming it "sick" or "perverted."
I definitely do not affirmatively believe that the departure of men from television is partially caused by television becoming a more "gay" medium. But I do believe that avoidance of all things gay is a very strong feature of heterosexual male American culture, that it does not take much to activate this avoidance behavior pattern (a pattern which may be what is making the growth of tolerance of gay activities possible, anyway), and that it is worth looking into this feature in determining why the men are leaving.
George Soros has found his calling! "[Defeating President Bush] is the central focus of my life," Soros said ... The 2004 presidential race, he said in an interview, is "a matter of life and death." .... "When I hear Bush say, 'You're either with us or against us,' it reminds me of the Germans." It conjures up memories, he said, of Nazi slogans on the walls, Der Feind Hort mit ("The enemy is listening"). "My experiences under Nazi and Soviet rule have sensitized me" ...
Soros's contributions are filling a gap in Democratic Party finances .... Asked whether he would trade his $7 billion fortune to unseat Bush, Soros opened his mouth. Then he closed it. The proposal hung in the air: Would he become poor to beat Bush?
He said, "If someone guaranteed it."
But defeating George Bush is not the only new goal that might lead Mr. Soros to extremes. There seem to be other political demons that have possessed his mind during its current sleep of reason. Just how far would the new George Soros go to serve these creatures? How about this:
"There is a resurgence of anti-Semitism in Europe. The policies of the Bush administration and the Sharon administration contribute to that," Soros said. ... "If we change that direction, then anti-Semitism also will diminish," he said. "I can't see how one could confront it directly."
That is a point made by Israel's most vociferous critics, whom some Jewish activists charge with using anti-Zionism as a guise for anti-Semitism. ... The billionaire financier said he, too, bears some responsibility for the new anti-Semitism, citing last month's speech by Malaysia's outgoing prime minister, Mahathir Mohammad, who said, "Jews rule the world by proxy."
"I'm also very concerned about my own role because the new anti-Semitism holds that the Jews rule the world," said Soros ... "As an unintended consequence of my actions," he said, "I also contribute to that image." ....
Abraham Foxman, national director of the Anti-Defamation League, called Soros' comments "absolutely obscene."
"He buys into the stereotype," Foxman said. "It's a simplistic, counterproductive, biased and bigoted perception of what's out there. It's blaming the victim for all of Israel's and the Jewish people's ills."
Furthermore, Foxman said, "If he sees that his position of being who he is may contribute to the perception of anti-Semitism, what's his solution to himself -- that he give up his money? That he close his mouth?"
Perhaps Mr. Soros doesn't have time or resources for any of those things suggested by Mr. Foxman, since they might distract him from the central focus of his life ... and from building his relationship with his new soulmate, Herr Doktorprofessor Paul Von Krugman!
Associates said Soros' appearance Nov. 5 was the first they could ever recall in which the billionaire, a Hungarian-born U.S. Jew who escaped the Holocaust by fleeing to London as a child, had spoken in front of a Jewish group or attended a Jewish function.
And his remarks show that there's a good reason for that.
The determination of what aspect of Mr. Soros' remarks is the most obscene is a bit refined. But it is worth mentioning that he seems especially drawn to ascribing significance to features that suggest the he is important ... even central. When he hears George Bush speak about the need to spread and protect democracy, Mr. Soros hears Hitler - but when he hears Mahathir Mohammad spit anti-Semitic garbage, Mr. Soros hears a cry for all of us in the West - even a big and important man such as himself - to look inward for our own flaws, for what we have done to create this terrible cry of pain from Mahathir Mohammad.
Yes, yes, Mr. Soros, we all recognize that you are such an important man, a big man, a colossus on the international stage ... a maker of kings and nations ... A VERITABLE GOD!
Now, will you just sit down, shut the heck up and stop embarrassing yourself?
UPDATE: An astute reader e-mails:
Hasn't Mr. Soros set himself up in a sort of catch-22 predicament? I mean, if he is successful at helping to "depose" President George W. Bush, wouldn't he be lending creedence to the Dr. Mahathir's idea that Jews really run the world?
Personally, I find Mr. Soros' funding of MoveOn.org to be sad and reprehensible. Buying more knitting needles for the Angry Left to blind themselves with is not helpful.
Yes, exactly. Soros loves the idea that he is powerful and important. Dr. Mahathir's idea that Jews (really, in Soros' mind, Soros) really run the world seems to very much appeal to Soros.
Monday, November 10, 2003
Senator John Kerry of Massachusetts has fired his campaign manager .... Jim Jordan ... He replaced Mr. Jordan with Mary Beth Cahill, a former chief of staff to Mr. Kerry's fellow senator in Massachusetts, Edward M. Kennedy. Ms. Cahill also worked with Emily's List, a political action committee that raises money on behalf of female candidates who support abortion rights. ... The move by Mr. Kerry marks the second upheaval in a campaign that just six months ago was viewed by many Democrats as a well-organized organization that was rolling toward the nomination. A week after Mr. Kerry announced, Chris Lehane, a senior adviser who had worked for Al Gore, quit, and later joined the campaign of Wesley K. Clark, the retired general.
Does this mean that Senator Kerry ever actually thought he could get the nomination?
UPDATE: Hope under the Capitol Dome springs eternal - and usually ill-advised. An astute reader forwards this TNR article explaining that Senators run for president because, among other fatuous considerations, running for president allows a person to spend the year pretending he or she actually is president. It' sad, really.
The US Senate is a particularly strange place. I have noted previously that at any given time the Senate contains about 100 people who each think they would be a better president than the then-current resident of 1600 Pennsylvannia Avenue, but it's a place that also imposes a cautious "get-along-go-along" approach on those same 100 people that is completely at odds with the leadership and executive talents required of a good president.
To my eye, all of the Senators now running for president - other than Edwards - seem to conceive of a presidential election as some kind of gigantic cloakroom deal to be cut. In Edwards case, it's a gigantic jury argument to win. Who cares - he seems to say - what the jury thinks a week after they vote?
God help us all if any of it happens.
Dole, Mondale, Humphrey, Gore. The list of creatures of the Senate that the voters have recently rejected is long. And if Hillary Clinton hangs around the Senate until 2008, she's probably finished as a possible president because of the likely effects on her mind. But she thinks she is maintaining her prospects by serving in that body. The poor benighted fool.
An ex-governor, even one from a very small state, has a better chance (Carter, Clinton, Dean - not to mention large-state governors Reagan and GWB). Kennedy - 43 years ago - was the last person elected to the presidency out of the Senate. But he wasn't even a true creature of the Senate. He was placed there by his dad and clearly did not depend on making it work for him. His resources came from elsewhere.
Johnson was a quintessential creature of the Senate - and the course of his presidency (in my view) shows it - and not to his advantage. The course of the Vietnam War under Johnson suggests a Congressional policy amputation. He used his Senate leverage to get much ill-considered legislation passed without complete Congressional checks and balances. Some good things - like the Civil Rights Act - were passed with his pressure. But he probably could have done that if he had stayed in the Senate, and the Senate probably could have produced a better bill.
FURTHER UPDATE: More out the Kerry door.
What is it that causes reporters in - or reporting on - Japan to ignore or fail to understand the significance of what anywhere else in the world would be considered basic, bedrock economic and business principles - over and over and over and over and over and over, again?
The Wall Street Journal is again suggesting that Japan's recovery may "stick:"
The country's $4 trillion economy grew at an annualized 3.9% in the April-June quarter. Industrial production is surging, as exports boom and manufacturers invest in new equipment. Gross domestic product has expanded for six straight quarters and is expected to continue upward through 2004. The stock market has risen 40% in the past six months.
False dawns have briefly lit Japan twice before in the decade since the world's second-largest economy entered a prolonged downturn. Public spending and exports fueled short expansions and stock-market rallies in 1996, when the economy grew 3.3%, and in 2000, when it expanded 3.2%. Both times, a combination of ineffectual government and feeble corporate-restructuring efforts snuffed out growth, which has averaged just 1.1% annually in the past 11 years.
This time, many economists say the chances of a sustained recovery are the best they have seen. The severe problems Japan has faced -- a banking debacle, price deflation, stodgy corporate leadership and incompetent government policy-making -- all show signs of easing.
The change follows a widening realization that Japan must adapt its economic system or face the prospect of a long national decline.
Japan's problems are firmly rooted in the weakness of its financial markets and corporate management incentives. The Japanese bond market hardly exists, at least relative to the needs of "the country's $4 trillion economy" [We are also helpfully told: A healthier Japan would have huge implications for the rest of the world, restoring a vital engine to the global economy. Why is there so often that inserted reminder in such stories that, yes, Japan is big and important - and by implication the reporters assigned to report on Japan are big and important too? They're not working in some back alley, see. Not at all. This is big and important! Front desk stuff that YOU SHOULD KNOW ABOUT, BUT DON'T! When was last time the Journal ran an article reminding its readers that A healthier United States would have huge implications for the rest of the world, restoring a vital engine to the global economy? But I digress.]
Credit in Japan for the most part still comes from banks. But doesn't the article say that the banks have reformed? Indeed it does - but only in recognizing bad loans. The article simply omits to mention any reforms in bank policy as to new lending. And it's new lending that determines where real, productive assets go - which, in turn, largely determines whether an economy is going to work.
Big article on Japanese reforms - no mention of new bank lending policy reforms or whether a bond market is developing to break the hold of the banks. Nice.
In the bad old days of the 1980's and before, the Japanese government set much economic policy - the same policy that has created the current more-than-a-decade-morass. The government largely determined which economic entities would get hold of the real, productive assets. And the government accomplished that largely through the banks. Have those Japanese government officials sworn off invasive economic planning and manipulating banks' new lending policies? Who knows? - the Journal just tells us that incompetent government policy-making ... show[s] signs of easing. But we are also told that Japan's economic planners watched with envy the U.S.'s technology-driven boom of the 1990s. So are those eager-beaver, envious Japanese economic planners now determined to keep their mits off the economy and let the market decide where the real productive assets should go? We aren't told. It must not be important.
Of course, in the bad old days the Japanese government encouraged far too much investment in the export sector and capital goods. Has that changed? We aren't told - but the Journal does cheerfully report that signs that things are looking up include: Industrial production is surging, as exports boom and manufacturers invest in new equipment. Are those all parts of the problem or the supposed solution?
Big article on Japanese reforms - no mention of whether the Japanese government is getting out of the bank manipulation and industrial policy businesses. Nice.
How about unresponsive, aged corporate management - management almost completely unresponsive to shareholder needs and largely based on cronyism? Has the huge problem of what the Journal weirdly terms stodgy corporate leadership been addressed? Has there been a broad move towards correcting management incentives and moving away from a seniority/crony system? Who knows? - there's no mention of that, either.
Big article on Japanese reforms - no mention of whether Japanese corporations are taking steps to secure and reward the best managers or avoid cronyism. Nice.
Another huge problem with Japan's allocation of assets was the lack of equity market transparancy and frequent market manipulation - often with the involvement of the government. Are we supposed to believe that Japan fully prosper without a free, unmanipulated stock market? Has there been progress in fixing this problem in Japan? One won't know from reading this Journal article.
Big article on Japanese reforms - no mention of whether Japanese equities markets are less manipulated or more transparent. Nice.
So what the heck is the evidence of a widening realization that Japan must adapt its economic system or face the prospect of a long national decline? Well, it seems that there has been progress in admitting what a bad bank loan is, deflation is "easing," and in the real property market - the management of which all evidence indicates had previously been left entirely to the inmates of institutions housing the hopelessly insane - commercial land has dropped 86% in value in Japan's six biggest urban areas and "For the first time, people now think the value of land depends on the money it can make through rental and development," says Katsunori Yamamoto, a Mitsubishi Estate manager. One is so pleased to see that real estate specialists in Japan have discovered that relationship - especially since the old way of doing things created real property values that needed to be deflated by 86%. But have there been any changes in how, say, a Mitsubishi Estate manager might be chosen or paid? Don't ask - don't tell.
And, of course, we are told: Signs of previously unthinkable strategies are cropping up all over the corporate world. It certainly is nice to read that lots of new things are being done in Japan - lots of new strategies are being adopted. But Japan never lacked for gross activity - the problem came in choosing the correct activities. It's that same old "deployment of real, productive assets" issue that keeps popping up and getting ignored. We are apparently supposed to be charmed that companies across the economy are striving to get their overhead under control: A recent Nikkei newspaper survey of more than 1,000 listed companies showed that because of cost cutting, they could break even with lower revenue than at any time since 1991. But even formal Japanese audit practices don't reveal very much - and reliance on an unidentified "newspaper survey" to determine what companies are "breaking even" must be some kind of joke.
The Journal also tells us with singing optimism:
Also bolstering the recovery: Stock prices had fallen to earth after their wild speculative rise of the 1980s, making many shares look like bargains and bringing buyers back to the market. Land prices, subject to the same speculative fever, also eventually bottomed out, and the government has helped fuel new development with policy changes. Many economists say they expect consumer prices also to start rising again soon.
Yes, yes, it's especially interesting that we're all supposed to be happy and optimistic that economists say they expect consumer prices also to start rising again soon in Japan. Can the reader explain why that particular factoid doesn't make the reader feel all that much more certain that the Japanese economy is really poised to take off?
The fact of the matter is that a Journal reporter who wrote an article even remotely like this one on the United States economy would at least never write another article for the Journal again. But because this article concerns Japan it just fits right in.
Sunday, November 09, 2003
Just before the recent 7.2% estimate for third-quarter GDP growth was released, I made a prediction:
If the third-quarter numbers come in north of 6.5%, the official Man Without Qualities advance estimate of fourth-quarter HDP (Herr Doktorprofessor) trends is a distinct falling off in the number of HDP columns arguing that unemployment and a "jobless recovery" will be the big problems for the President's re-election, and a growing dominance of HDP clarion calls that the "collapse of the bond markets" will do him in - notwithstanding the employment growth previously considered all-important by a handful of economists.
That hasn't happened yet. But the Times itself is already leading the way with today's editorial:
Alan Greenspan may be in for a rough election. ... The quandary facing the Federal Reserve will not be how much or how fast to cut, but how much and how fast to raise, its crucial overnight interest rate, now at a 45-year low of 1 percent. Just two weeks ago, the Federal Reserve opted to leave that rate unchanged, and it issued a statement suggesting it would not act for a "considerable period."
But the ongoing flurry of positive economic data should force Mr. Greenspan to shorten his time horizon. Since the Fed spoke, we have learned that the economy grew at a blistering 7.2 percent annual rate in the third quarter. Manufacturing, construction, corporate profit, consumer spending and productivity numbers have all been impressive.
Most significant, the economy is finally adding jobs after being battered by the overhang of the popped Internet bubble, terrorism, corporate scandals and the war with Iraq. More than a quarter-million jobs were created in the last two months, according to figures released Friday, and plummeting new claims for unemployment benefits suggest the labor market will only get stronger. ... Nobody is yet suggesting that these are the best of times. The country will be hard pressed to regain anytime soon the 2.5 million jobs lost during the Bush presidency.
And so it has come to pass that the that New York Times can now describe the late Clintonian era as a "popped Internet bubble" with an "overhang" that has "battered" the economy since George Bush took office - but only a sentence later hold the current President to account for "the 2.5 million jobs lost during the Bush presidency."
This leaves the Times apparently suggesting that the Bush Administration should be faulted for not creating its own "bubble" - or at least an aggressive expansion - whose risks are worth it as the only way to restore "the 2.5 million jobs lost during the Bush presidency."
But appearances here are deceiving. This Times editorial is all in a dither over exactly the opposite of the appearance noted above. Here, the Times fears that the Fed will not raise interest rates fast enough to stop a "bubble" from forming - there is no mention of jobs.
There is also no mention of the complete lack of reported price pressure throughout the economy. Nor does the Times tarry even a moment here over that interesting and gigantic nonfarm business productivity surge at a seasonally adjusted annual rate of 8.1% from July through September - a pace that was the fastest since the first quarter of 2002 and an acceleration from an already-robust 7% clip in the second quarter of this year. Most educated people would wonder whether such a historically huge jump in productivity - one that extends well into the services sector once thought to be all but immune to such things - might have some effect on the Fed's need and inclination to raise short term rates. But not the Times. Not here. It is interesting that the Times editorial rejects most qualifications as to the positive significance of the economy's recent and likely future performance. Is that at least a faint glimmer of intellectual honesty?
It is perfectly possible to be legitimately alarmed at recent Fed policy from an inflationary standpoint. The Fed chooses to concentrate on certain factors in gauging inflationary risks. Some highly talented observers think the Fed chooses the wrong factors. But the Times identifies no such argument here. Instead, we are presented with a broad-brush, crude implicit Phillips curve argument.
The argument advanced by the Times does not even make sense from the standpoint of basic timing. The 2004 election is one year away. Even if every one of the Times concerns is correct, the Fed will not be under serious pressure to raise rates for several months - that is, nine months before the election. (The Times admits: You can expect the Fed to prepare markets for the turnabout when it next considers rates in December, and then to take action in the spring.) Even at that point, it is highly unlikely that the Fed will be under pressure to effect dramatic rate increases. And modest rate increases are generally believed to take twelve months to have their effects, anyway. Is the Times suggesting that a modest interest rate rise put through by the Fed in, say, May 2004. is going to have some effect on employment in October? It won't.
In sum: The great bulk of whatever effect Fed policy is going to have on the November 2004 election is already in place. Unless the Fed effected a truly dramatic increase in rates in the next month or so - which is highly unlikely - any rate increase the Fed does decide upon will not work its way through the economy until after November 2004.
So what the heck is the Times thinking about?
On a more personal side, how could Alan Greenspan realistically be made to feel serious pressure? The man was reappointed to a full 14-year term beginning 1992 and was born in 1926. Does the Times think Dr. Greenspan is angling to be reappointed to another 14-year term in 2006 - when he will be 80 years old?
The Gray Lady seems increasingly frantic in her efforts to find some reason - increasingly, any reason - why the Democratic crack-up likely coming in November 2004 just won't happen ... just can't happen .... and please, dear God, don't let it happen .... except they don't much believe in God at the Times.
Well, maybe they'll start believing more soon. There's an old saying about atheists in fox holes.
UPDATE: As is so often the case, Steve Antler and Don Luskin and Bruce Bartlett and Maguire all make a lot more sense than the Times.
Bruce Bartlett identifies the Times probable agenda here:
I do not believe that the Times is particularly concerned about inflation. ... The goal is to prepare the ground for Democrats to adopt a Ross Perot-like obsession with fiscal responsibility that could undercut President Bush's support among swing voters. It will also serve to soften the left-wing image of Howard Dean, the likely Democratic presidential nominee, by giving him a conservative issue to run on.
Mr. Bartlett provides some good reasons why the Times-Democratic strategy is a likely loser. And Holman Jenkins writing in the Wall Street Journal does a very good job of explaining why this new Democrat-Times attempt to to relive 1992 is probably just so much empty liberal nostalgia:
Let's talk about the new Democratic Party economics, which we might call Krugmanomics: a combination of deficit dread and demands for higher taxes on the rich.
Politically, voters care about budget deficits only when they feel insecure about their own jobs. The deficit then becomes an emblem of economic mismanagement (never mind the Keynesian wisdom that a growing deficit is desirable when the economy is slack, providing countercyclical demand).
Likewise, voters never crave tax hikes but are most receptive to tax hikes aimed at the undeserving rich when their own economic anxiety is high.
This is extremely unpromising fodder for a party that wants to get elected to majority status more than once every 40 years or so. By now you can already see the problem with Krugmanomics: It appeals only on the downside of an economic cycle.
In 1992, the Democrats got lucky with the business cycle--no small feat, because getting lucky is becoming harder for the party out of power to do. Growth periods have been getting longer; recessions have been shorter, shallower and further between. You really have to nail it to have an election coincide with the gloomy times when Democratic appeals work best.
It's interesting that Paul Krugman's name keep coming up - even though he has not yet piped up. There may be a good reason for that, a possibility that I want to explore in a future post.
Here it is:
Tom Friedman, Anti-Semite
No, of course not, but if this paragraph were judged by the "Krugman standard" he would be called one.
What is the supposed Krugman-Friedman similarity? Mr. Friedman writes:
Mahathir Mohamad['s] ... speech was a brutally frank look into the causes of the Muslim world's decline. Though it was also laced with shameful anti-Jewish slurs, it was still revealing.
The reader is invited to read the Friedman column and make her own judgment. But in the opinion of the Man Without Qualities, not one word in Mr. Friedman's column attempts to "explain away" the anti-Semitism in the Mahathir Mohamad speech - as the ADL correctly points out Paul Krugman did.
Further, Atrios' suggestion that Paul Krugman was denounced as himself being an anti-Semite by Herr Doktorprofessor's most pointed and prominent critics is willfully inaccurate. Others might justifiably choose stronger language.
So it comes to this:
The Friedman and Krugman items are not similar. Krugman was not denounced as personally being an "anti-Semite" by any of his most prominent critics. [A "useful, overeducated, seduced, willfully blind idiot" is closer to it.] And Mr. Friedman's column cannot be condemned by the same standards correctly used to castigate Herr Doktorprofessor.
It was only a short, flabby Eschaton post. Is Atrios going for some kind of record in the serious-conceptual-errors-per-pixel measure?
Mickey Kaus has been especially good at pointing out the long running Democratic delusion that the growing Hispanic population of the United States will tilt its politics towards Democrats. [This post is just an example. Mickey's been calling the Democrats and their media sycophants out on this particular delusion with enough regularity to make a claim to "owning" the topic.]
Some obvious reality checks one can garner anecdotally from just walking and driving around Los Angeles, and talking to people with whom one does business and otherwise has contact:
Hispanics are heavily small business owners and home owners. They seem generally socially conservative. It is hard to detect a intense sense of alienation from the mainstream. Hispanics clearly don't vote as a bloc. Many obvioulsy view class and national distinctions as counting for much more than the media gives credit (Mexico is not Guatemala is not Salvador is not Chile is not Peru - is not Spain!) Indeed, even the concept of "Hispanic" seems increasingly preposterous.
But such Democratic analysts insist on seeing Hispanics as somehow analogous to African Americans. (And this even as the distinctions within that group become more apparent. "The Islands" as distinguished from "The South," for example.]
And Hispanic constituencies do not move in a vacuum. In California, for example, the spectacle that a too-long Democratic legislature has made of the budget seems to have changed a lot of minds - including a lot of minds west of La Brea here in Los Angeles. Those effects can be at least as strong as any long term population shift towards supposedly Democratic-leaning Hispanics, especially since Hispanics become statistically less Democratic-leaning the longer they are in this country.
Some new polling data provides some more objective support for the anecdotal impressions. For example:
Hispanics and Latinos have also been an important constituency for the Democrats in many parts of the country. But there has been a somewhat larger partisan shift away from the Democratic party among Hispanics than among the public at large.
During the late 1990s, Democrats outnumbered Republicans among Hispanics by a margin of more than two-to-one (41% to 19%). In the aftermath of 9/11, Democrats still lead, but by a smaller margin (36% to 22%). Republican gains have been greatest among Protestant Hispanics - especially those who consider themselves evangelical Christians.
With respect to California, there is this:
[T]he GOP has made some inroads, including a slight but statistically significant change in California. A 41% to 31% Democratic party identification advantage has narrowed to a mere 38% to 33% advantage since 9/11. This was based predominantly on surveys conducted before the gubernatorial recall process was underway.
Florida is another state in which Hispanics are an increasingly important constituency. Of course, many Florida Hispanics are Cuban Americans - a group that makes any concept of a "generic Hispanic voter" seem especially ridiculous. Democrats looking to Florida as a serious battleground state next year may want to consider this:
[I]n several key battleground states in other regions - notably Florida - Republicans have made gains. With its conservative Cuban-American population, the Sunshine State's Hispanic population is among the more politically diverse in the country, though Democrats outnumbered Republicans by 12 points during the late 1990s. Today, Republicans have a slight advantage over Democrats, 32% to 30%.
NEXT UP: Is anyone doing serious work on Asian Americans and other supposedly "solidly" Democratic groups and states? Like all those people of (often highly mixed) Japanese and Chinese descent in Hawaii - a state now sporting, I believe, it's first Jewish female Republican Governor?
The real story is out:
Andras Simonyi, Hungary's ambassador to the United States, spent an hour Saturday night discussing the impact of Western songs on Eastern European politics before an invitation-only audience of 250 at the Rock and Roll Hall of Fame.....
"By keeping in touch with the music scene in the West, it kind of kept me sane and with the feeling I was part of the free world," said Simonyi, an economist by training.
The ambassador was introduced by defense and anti-terrorism consultant Jeff Baxter, who once played guitar with The Doobie Brothers and Steely Dan.
The battle was nip and tuck for a long time, since the Communists had artillery like this and this on their side!