Archive

  • If Only Business Columnists Were Required to Know What U.S. Government Bonds Are

    We keep hearing about the failings of the U.S. education system. Economic columnists give us endless examples of such failings. Alan Sloan, a columnist for Newsweek, the Washington Post and MarketPlace radio gives us a beauty in a column that appeared in some form in all three venues (here's the Newsweek version.) Sloan notes that Social Security is projected to need to draw on its trust fund in about a decade. He says that at this point "we'll fix Social Security by again increasing payroll taxes and trimming the benefit formula." Now, if Mr. Sloan understood how government bonds worked, he would know that they have value, that's why people all over the world hold them and in fact are willing to hold them at a very low rate of interest. When Social Security starts drawing on the trust fund it will simply redeem its bonds at the U.S. Treasury, just as tens of millions of people, corporations, and banks have done over the years. Of course, the Treasury will need the money to repay...
  • THE PROBLEM WITH...

    THE PROBLEM WITH PICKING A SIDE. Laura Rozen has reported that there's chatter in military circles about picking a side in the burgeoning civil war in Iraq. I have also heard this option described as the "pick a winner" strategy, with the idea being that the U.S. could forge an alliance with whoever appears to be likely to win the conflict and then help them crush the opposition in a short and decisive war, thereby creating a state with enough of a monopoly on the use of force to have internal stability (though not necessarily justice). Should this strategy be pursued, all signs point to the U.S. allying itself with the Shia in Iraq, since they are the dominant population, and also less involved in the anti-American insurgency. In today's Washington Post , however, Saudi national security advisor Nawaf Obaid throws a wrench into the works and makes clear, once again, the conundrum of our present position. If the U.S. picks a side, he warns, Saudi Arabia will have to pick one, too:
  • MUSICAL CHAIRS. ...

    MUSICAL CHAIRS. I'll have to disagree with the mighty Atrios on this one . Blogospheric talk about the Harman/Hastings contest wasn't premature or chump-like. Just because "there was never anything coming from Pelosi 's office suggesting that he was her designated man for the job," didn't mean there was no reason to believe he was her man for the job. Second in seniority, publicly supported by the Congressional Black Caucus, there was every reason to believe Pelosi would turn to Hastings. And for those who thought it a bad idea, every reason to oppose it publicly and prematurely. Unless I've misremembered my School House Rock, there's no public campaign for Select Committee Chair -- the Speaker simply chooses who her candidate, and then the deed is done. If you want to influence it, you have to do so before the appointment. As for whether this was really "a big fact-free fake controversy likely set up by Harman supporters," it's resulted in the elimination of both Hastings and Harman...
  • THE MAIN EVENT.

    THE MAIN EVENT. Today's meeting between President Bush and Iraqi PM Nouri al-Maliki in sunny, safe Amman is not likely to solve Iraq's problems. If the text of Stephen Hadley 's leaked memo is any guide, the purpose is to confirm that al-Maliki is still our guy despite his inability to control the sectarian violence that is often perpetrated by factions within his governing coalition. The Post says Bush is likely to press al-Maliki to take on the Mookster , whom Newsweek is now calling "the most dangerous man in Iraq." Pressure is not going to cut it, I'm afraid. Why does the Mahdi Army exist? Because several million Shi'a are desperate for services and protection from criminals and Sunni insurgents, while the government has proven unable to provide those things. The Hadley memo suggests that al-Maliki's government needs to do a better job providing services in Sunni areas, but it also needs to do a better job in Shi''ite areas in order to obviate the need for Sadr. The danger, though...
  • TIMING IS EVERYTHING....

    TIMING IS EVERYTHING. I'd dispute Mike Crowley 's assertion that Wes Clark' s primary problem in 2004 wasn't an excruciatingly late start. According to Crowley, Clark's real problems were "that he seemed unsure of his own position on the Iraq war, recited oddball canned answers about abortion which suggested unfamiliarity with the subject, and generally proved himself to be a terrible politician," all of which sound to me like saying his problem was a late start. There's no doubt that, right out of the gate, novice politician Wes Clark fumbled. He gave contradictory answers, seemed confused by certain issues, and generally gave the impression of...being a novice politican. Problem is, a couple weeks before the first primaries is neither the time nor the place for novice politicians. And given that he started too late to compete in Iowa, but the race was essentially decided there, he was out before he even began. Had he started a year out from the first primary, however, he could have...
  • Post Article on Auto Industry Relies Exclusively on Sources from the United Auto Workers

    Okay, you all knew that one wasn't true. Any reporter at a major newspaper who wrote an article on the prospects for the auto industry and only talked to representatives of the UAW would quickly be out of a job. The question then is why is it okay for reporters to write a story on the state of the real estate industry and only to talk to representatives of the National Association of Realtors (NAR), an organization whose members make their living by selling houses? I should also note that one of the two sources was David Lereah, the chief economist at the NAR and the author of the 2005 bestseller Why the Real Estate Boom Will Not Bust And How You can Profit From It . -- Dean Baker
  • NONE OF THE ABOVE.

    NONE OF THE ABOVE. Nancy Pelosi has, thankfully, chosen to reject both Hastings and Harman , the obviously correct option. The evidence against Hastings is pretty compelling , and taking a bribe as a federal judge isn't the typically vacuous "character" issue; it suggests a lack of ethics and judgment in ways that can affect policy. Moreover, the political hit would have been immense, and it's not as if Hastings was so great on the merits it would be worth paying the price. Meanwhile, Matt is right that Hastings's only virtue was not being Harman: "Hastings shook some dudes down for $150,000 and ruined three FBI investigations. Jane Harman, by contrast, supported an invasion of Iraq based on bogus intelligence that's costs hundreds of billions of dollars and killed hundreds of thousands of people. Who do I have more doubts about?" Avoiding both of them was clearly the right call, and kudos to Pelosi for bucking the various caucus pressures and doing it. Alas, it seems as if the oft-...
  • The Simple Economics of Trade

    Economists like to make very simple propositions seem very complex. (How else could they command large salaries?) Trade is one such case. Since there seems to be so much confusion, let me lay out the basic story here. The gains from trade stem from the possibility of getting goods or services cheaper from abroad than they can be produced here. This doesn't mean that everyone or even most people gain, it just means that the economy as a whole is richer (I'm ignoring a few qualifiers here). Suppose we find a country where people will build cars for 10 cents an hour (it doesn't matter whether these workers want the job or are slaves threatened with death). We will get cheaper cars by purchasing them from this country. Of course the wages of autoworkers in the United States will fall until they can compete with the 10 cent an hour labor, or they will lose their jobs. In other words, bad news for autoworkers, good news for all carbuyers. Suppose we find a country where people will work as...
  • ENOUGH! WE'RE ALL WRONG SOMETIMES.

    ENOUGH! WE'RE ALL WRONG SOMETIMES. Nothing more about Tom Edsall, I promise. The ratio of commentary to original text now rivals The Waste Land . However, a meta-point: In the comments on the various posts here and elsewhere on the Edsall column, and on other sites , the critique jumps without hesitation from "he got it wrong" to a categorical attack on the writer, usually going straight to motive: He's "drunk the Beltway Kool-Aid," he's a "courtier servant...a silly, silly man," one blogger says, and a commenter demands that we "ask what it profits Edsall to lie...He is not a political pundit, commentator, or writer--he is a paid hack and propagandist." About half the comments have a similar tone.
  • DID SYRIA DO IT?

    DID SYRIA DO IT? Never loath to leap to conclusions without evidence, the Wall Street Journal editorial page has already decided that Syria killed Pierre Gemayel, Jr. last week. The Journal is pushing back against the expected Baker-Hamilton proposal of talks between the United States and Syria, which seem to meet with widespread approval everywhere but the Bush administration . It's possible that Syria killed Gemayel, but given Lebanon's byzantine complexity, I don't think it's prudent to leap to any conclusions. See Josh Landis for more on that. I believe that talks with Syria are a good idea -- unless we come to a modus vivendi in the region, they will keep making trouble for us -- but only after Serge Brammertz , the UN investigator looking into the assassination of Rafiq al-Hariri , assembles more proof of Syrian complicity. His next report is due out in mid-December, around the same time the Iraqi Study Group will release its own findings. Syria is clearly uncomfortable about...

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