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Friday, February 17, 2006

Stats Cannot Tell All

Are Americans saving less now than ever before? Are we a massive debtor nation as individuals? Read the NYT and other MSM economic commentaries and that is your conclusion.

Sometimes the numbers cited by economists need further analysis. That is because statistics can only measure some things and not others. There is not some all-encompassing statistic that measures economic status and certainly not economic health.

Alan Reynolds provides many examples of how the economic doomsayers are plain wrong on savings rates. One is that when someone spends considerable money on his home to add a bedroom, for a new car or college tuition, these costs go into the ledger as a reduction of savings. However, these are assets that do not make it into the savings side of the ledger while increasing outr net worth. An increase in the value of old assets does the same thing as savings. It inmcreases our net worth. And household net worth as of last year's third quarter is $51.1 trillion---up $5 trillion from a year earlier.

Read more here.

Thursday, February 16, 2006

Gore's Message- Do Not Screw With GW

Just like the Iranians realized that Reagan was crazy enough to go nuke on them regarding releasing the hostages upon his assuming the Presidency in 1981, James Taranto of the WSJ blog suggests that Saudis may have gotten the same message from the Al Gore last week. Remember he said per the Associated Press:

Gore told a mainly Saudi audience on Sunday that the U.S. government committed "terrible abuses" against Arabs after the Sept. 11, 2001, attacks, and that most Americans did not support such treatment. Gore said Arabs had been "indiscriminately rounded up" and held in "unforgivable" conditions.

Taranto suggests the message may be:

If your countrymen attack America, you will be "indiscriminately rounded up," held in "unforgivable" conditions and subjected to "terrible abuses."

And don't bother trying to appeal to American public opinion. Most Americans already oppose such treatment, but Bush is too crazy and mean to care.

We all know Gore's intent was to provide clear-eyed dissent as respects policies he disagrees, and in no way give comfort to enemy terrorists who happen to reside in the Middle East, but maybe a few Saudi's realized the better timing of a terrorist act in the US would be after Bush steps down and is replaced by a Democrat.

Little Socialists Kill

Being a socialist means never having to say you are sorry or wrong. Whether you are a Big Socialist of the Soviet, Cuba, Nazi type or just the Little Socialist in Brooklyn or Boca who reads a few MSM scare articles and thinks government should tax more and spend the revenue on this or that program, the suffering their programs create harm real people. History shows that Big Socialists always needed the Little Socialists to assume and maintain power. While the Big Socialists were given enough rope to prove that following socialism's policies always leads to tyrrany, oppression and gulags, we have seen no shame from the Little Socialists.

The Little Socialists however survive to push in many different ways the same use of government to intrude on our lives and inhibit our right to our property and thus our lives. Little Socialists never consider property rights of individuals as anything but selfishness. They see human suffering as caused by the property right proponents. But they are the modern killers. They are the ones who take opportunity away from the little people.

Cafe Hayek has an interesting post containing a graph (that I cannot reproduce here) showing the relative data on healthcare spending in a number of countries and the 5-year survival rates for colon and breast cancer. The 2 cancer-types are the most prevalent today for men and women. 5-year survival rates seem small but are a measure of the enhanced lives cancer victims lead when properly treated. Here are some of the results:

US: 12.7% Healthcare spending per GDP; 5-year cancer survival rates: Colon 60% Breast 82%
UK: 6.9% Healthcare spending per GDP; 5-year cancer survival rates: Colon 36% Breast 63%
France: 9.6% Healthcare spending per GDP; 5-year cancer survival rates: Colon 45% Breast 72%
Germany: 10.5% Healthcare spending per GDP; 5-year Cancer survival rates: Colon 48% Breast 68%

The numbers may appear relatively close but imagine falling into the differential percentage.

Little Socialists have good hearts and sleep well knowing they are helping their fellow man. They will never say they are sorry. In fact, they will pursue the programs that have failed. Without a worry.

Wednesday, February 15, 2006

Bad Lawsmakers Make Ineffective Laws

Funny post at Kling and Caplan's blog Econlog on US immigration policy. Apparently, we allow in foreign students so long as they state they will return to their home country with their increased knowledge.

Caplan writes:

As one immigration lawyer puts it: "the student must have 'nonimmigrant intent' – that is, an intention to return to their home county and not remain in the U.S." In other words, our laws try to make people go away after they finish their studies.

Conversely, Russia once admitted they would not allow their educated citizens to leave for fear of a "brain drain". Seems logical.

The positive is the intelligent foreigners find loop-holes to escape having to return to wherever. These students are smart and our rules beg gaming. Sounds like our immigration policy is in chaos generally.

Caplan quotes Von Mises:

Let us be grateful for the fact that there are still such things as those the honorable gentleman calls loopholes. Thanks to these loopholes this country is still a free country and its workers are not yet reduced to the status and the distress of their Russian colleagues.

I liked the "old saying" Caplan quotes more:

"It's a good thing we don't get as much government as we pay for."

Since so much government intervention would strangle production and the economy, maybe the saying should go:

"It is a good thing lawmakers are incompetent at enforcement."

Or maybe:

"Thank God for bribes".

Teachers and Butchers

Two free market protectors, John Stossel and Walter Williams take on the quality of teachers today in our government schools.

Stossel discusses the Byzantine employment structure of the NYC school system where it is impossible to fire incompetent teachers and "almost impossible" to fire admitted sexual predators. Such rules are defended as necessary to protect teachers against favoritism from principals. Stossel suggests:

But if schools and principals had to compete, good teachers would be protected by competition itself: If a principal's job depends on having good people working for him, he won't sacrifice it to give a favored incompetent a job he can't do.

Williams goes further in suggesting that there are lesser caliber employees in government teaching positions because they are lesser students than in many other majors.

According to the National Center for Education Statistics (2001), students who select education as their major have the third-lowest SAT scores of 18 majors listed. When education majors graduate and take the LSAT for admission to law school, or the GRE for admittance to graduate school, they score lower than any other major.

And whether these test scores indicate competence on the job or not, we will never know as there is no firing incompetents in government schools.

When a college major often requires the use of colored magic markers, scissors and colored paper and limited or no scholarship in the subjects they teach after graduation, no wonder there is less competence in this trade than in others. If your butcher provides bad cuts of spoiled meat, you would not go back to him. All other businesses thrive or die on the profits and losses that are a direct result of consumer preferences. All but the government school system. If you were forced to only use that same butcher described above, do you think you would be buying better meats? No, you'd go veggie. But as respects government schooling, the vegetarian alternative (home-schooling) is not an economically viable one.

Trade Deficit Suggests Very Good economy

Cato's Dan Griswold explains that the trade deficit has historically grown when economic growth has sped up and unemployment has receded. When growth has slowed and unemployment has increased, the trade deficit got smaller. This tends to belie the claim that jobs migrate overseas when the trade deficit is higher.

He suggests the worriers about the trade deficit (and he never touches the idiotic worry of foreigners supposedly selling off their US government securities):

Those who seek the Holy Grail of a trade surplus should be care what they wish for. The last time America’s jobless rate reached double digits was the early 1980's, when the deficit was a measly $5 billion.

Tuesday, February 14, 2006

US Citizens Doing Very Well, Thank You

Just wondering if you knew this from the US Treasury:

The department said the U.S. government spent $209 billion last month, a record amount for January and up by 7.9 percent from January 2005, and government tax receipts also set a record high of $230 billion, up by 13.7 percent from the same month of 2005.

EURota tells us the news from France, the EU powerhouse, as reported by FT is not so rosy:

France’s economy slowed sharply in the final quarter of 2005, creating fresh doubts about the strength of the eurozone’s economic recovery. Falling industrial production and sluggish consumer spending meant French gross domestic product was just 0.2 per cent higher than the previous three months, according to official data, well below government and economists’ forecasts. In the third quarter of last year, GDP had risen 0.7 per cent.

At least everyone in France has all of that leisure time. Tim Worstall explains that the leisure time is really non-paid labor time. With their free time, they do all of the typical unpaid work that Americans pay others to do. And who is doing better?

Writes Worstall:

[M]ore paid hours are leading to more leisure hours -- seems to be explained by this paper from Harvard's Richard Freeman. Precisely because women are earning -- and then buying in those services which they used to do unpaid -- we're seeing greater specialization of labor (or if you prefer, more trade). And as we know that's the route to greater productivity. The actual paper itself is looking at American and German women and their participation in paid work. While they don't actually put it quite this way, the fact that many German women stay at home to make sauerkraut, while more American women go outside the home to do something they're good at, buying the food at the supermarket on the way home, means that the American women are both richer and have more leisure time.

The Bullies Have Found the Soft Mark---Europe

Victor Davis Hanson, in Realclearpolitics.com, asks some pointed questions to Europeans after we all witnessed the Muslim reaction to little Denmark's satiric cartoons of the Prophet Muhammad. Hanson asks:

If the most liberal and tolerant states in Europe such as Holland and Denmark have the most problems with Islamic radicals, then what does that say about the continent as a whole? Why were not the calculating jihadists singling out a more unapologetic Catholic Poland that has larger contingents in Iraq and is far prouder of its Christian roots?

Do the Europeans sense that the more open, free-wheeling and non-judgmental the culture, the more it is hated by the jihadists? If Europe as a whole is more pro-Palestinian than the United States, disapproved of Iraq, and yet is still hated as much, is magnanimity at last exposed as appeasement—earning only contempt from an emboldened enemy?

We have been saying it for a long time in this blog. The bullies of Islamic radicalism seek the weakest in order to spread their territory. American was perceived as weak by Bin Laden due to over a decade of soft responses to serious attacks. The strategy went that America would never react with might and one big blow like 9-11 would send the giant into an isolationist cocoon. That strategy worked against a large percentage of Americans. Bin Laden just misread Bush and some 55% of his fellow Americans.

However, the second part of the strategy may be working. That second facet of the global jihad is the long war of attrition that continues to bring down, not only “the summer soldier and the sunshine patriot”, but the "panickers" who showed support initially but were waiting for any negative sign in Iraq and any lessening of support at home to call for troops to return home (this was written about so eloquently by Norman Podhoretz in Commentary last month). This second phase has striking logic when one sees the ideological assistance provided by academicians, the MSM and a major wiing of the Democratic Party.

Borrowing from Podhoretz a quote from Thomas Paine:

’Tis surprising to see how rapidly a panic will sometimes run through a country. . . . Yet panics, in some cases, have their uses . . . . [T]heir peculiar advantage is, that they are the touchstones of sincerity and hypocrisy, and bring things and men to light, which might otherwise have lain for ever undiscovered.

Back to Europe, such attrition looks to be more successful as the Islamists see a people with little stomach (and a minimalist military) to defend itself. Hanson sees Europeans as further cowering at the thought that US troops will be pulled from their NATO perches. Now, the anti-Americanism has toned down by the governing elites. But, will they have the will and ability to defend themselves?

Or have the bullies found a weak enough target for success?

Monday, February 13, 2006

Bush Harbors Attempted Murder Suspect VP

I watched the press conference with Scott McClellan on the Cheney hunting accident. The questioning was all about the timing of their notice about the accident. There was a lot of "what did he know and when did he know it" stuff that I could not understand had any bearing on anything.

WaPo beat reporter Peter Baker said,""I'm not sure there is a standard protocol when the vice president shoots someone, but it's fair to say reporters prefer that news be disclosed in a timely fashion."

We all want the press to get instant access to every detail involving the government big and small. Like with the public school teachers, we are all here to serve them.

Expect Dean or Teddy to seek Bush's impeachment for keeping on as VP an "attempted murder suspect". It is as coherent as any other charge they have been making whenever the opportunity presents itself. Shouldn't the press be asking leading Democrats about when they knew of the latest shooting by the Democrat leaders---shooting themselves in the foot.

Al Gore's View

Can we thank God again that Al Gore was not elected President? Here is a report on his latest comments:

Former Vice President Al Gore told a mainly Saudi audience on Sunday that the U.S. government committed "terrible abuses" against Arabs after the Sept. 11, 2001, attacks, and that most Americans did not support such treatment.

Gore said Arabs had been "indiscriminately rounded up" and held in "unforgivable" conditions. The former vice president said the Bush administration was playing into al-Qaida's hands by routinely blocking Saudi visa applications.

Would he have appeased terrorists if he were President? You forget what an improvement Kerry is over Gore.

The Necessity of Deterrence

If there is ever a chance for a free lecture on Ancient history's Peloponnesian War from Victor Davis Hanson, one must take advantage of it. Here is one.

In this long excerpt Hanson provides the enduring lesson of the Peloponnesian War:

Why do wars start? Osama bin Laden told us in his infamous 1998 fatwa that he was declaring open season for two reasons: the UN embargo we supported against Iraqi children and the stationing of U.S. troops in the holy sites of Mecca and Medina. Well, the troops are not there anymore, and there’s no UN embargo; it’s been replaced by $87 billion dollars pledged to build Iraq – yet there’s still a war with bin Laden. What happened?

The answer is a word that Thucydides created that had not been in the Greek language before him: profasis. It means “perceived grievance,” or maybe loosely translated, “pretext.” Sparta said that they had to attack Athens because Athens had had a siege at Potidea. Athens had hurt the Megarians. Athens had been on the wrong side – these were all perceptions, pretext, perceived grievance....


Is the war in the West Bank really about 93 percent of demands? No. What is it about? It’s about a prosperous, competent Western society plopped right down alongside the PA. We can’t help it, but we’re reminding you every day. And that creates this Thucydidean anger, desires, contradictions, paradoxes.

That’s how most wars start. Thucydides teaches us that. These appetites drive them. The Spartans didn’t need the Athenian empire, but they realized everybody went there to see Sophocles, Euripides, Socrates, Pheidias, and the Parthenon. You didn’t go to Sparta to do anything. It was a loser society.

Thucydides also tells us there’s such a thing called “deterrence.” If I were Thucydides in 1998, I would say bin Laden is going to do something terrible to the United States.

We had quite a run-up in the Islamic war against the West: the 1979 Iranian hostage, the Beirut embassies, the Beirut annex, the murder of the 241 Marines, the first World Trade Center, the Khobar Towers, the East African embassies, the USS Cole. We lost the sense of deterrence, like a sleeping dog who shoos away a fly, and made it open season on American soldiers and diplomats. Bin Laden said after Mogadishu that Americans will not or cannot do anything about it.

The Athenians didn’t realize it, because, when you lose deterrence, you always have the logic of appeasement to suggest you haven’t lost. But the fact of the matter was, once they adopted a policy, they would go into their walls and write it out. Nobody told Pericles, “You have no mechanism to punish the Spartans if they set foot one inch into your land. And when they do it, even though they can’t cut down all of your olive trees, they can send a message to your allies that you cannot or will not stop enemies being right outside your walls.” They lost the deterrence, and the war started.


If as the Leftists say "War Is Never the Answer", then why do they skimp on deterrence? President Reagan realized that deterrence could win a war before it ever started. And that is why there is no more Soviet Union.

Hanson again: It’s very dangerous during peace not to give a message that, if anybody starts a war, they’ll pay a terrible price.

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