Archive

  • ARE WE ALL...

    ARE WE ALL LABOR-LIBERALS NOW? For all the talk of divides between the left and the center-left on economics, it's becoming harder and harder to pinpoint the rifts. It's obvious, to be sure, where the players think the divides lie, but these imagined arguments appear increasingly unmoored from any debate I've recently heard. Over the weekend, Hamilton Project head and prominent neoliberal Peter Orszag stepped forward to caution against interfering in the direct workings of the market and instead institute a system of robust safety net programs, increased investment in education, and enhanced incentives for saving. Which is, so far as I've seen, all anyone, anywhere, is calling for. So here's my question to readers: What are the poles in the progressive economic debate? And how far are they really? What does Peter Orszag and the Hamilton Project want that the Economic Policy Institute reviles, and vice versa? It's certainly true that both ends cling tight to historical enmity, but I'm...
  • BEST UN AMBASSADOR EVER.

    BEST UN AMBASSADOR EVER. You don't want to read me on the end of John Bolton 's tenure as United Nations ambassador, you want to read Fast Leon . But I had to chuckle when I saw this line in today's AP write-up : [White House spokeswoman Dana] Perino said that among Bolton's accomplishments, he assembled coalitions addressing North Korea's nuclear activity, Iran's uranium enrichment and reprocessing work and the horrific violence in Darfur. Yeah, how's all that going? Everything copastetic ? Moving in our direction? There's also the great Perino quote, "Despite the support of a strong bipartisan majority of senators, Ambassador Bolton's confirmation was blocked by a Democratic filibuster. . ." Now, you would think that the second clause would have made her rethink the first, but if rethinking were a White House specialty, Bolton would never have been nominated in the first place. --Spencer Ackerman
  • PLAN AVIATION.

    PLAN AVIATION. John points us to this report about a Chinese purchase of 2 Russian Su-33 carrier capable fighter attack aircraft. The Su-33 is a carrier based upgrade of the Su-27, and China reportedly may purchase another fifty or so aircraft. The People's Liberation Army Navy has played around with the possibility of carrier aviation for quite a while, purchasing a few older carriers, including the Australian Melbourne , the Russian Minsk , and the Ukranian Varyag . Minsk is currently a theme park, and indications are that the PLAN is tearing Varyag apart in preparation for the construction of a new carrier of between 65000 and 80000 tons. The IASC article indicates that China could have a couple or even three carriers operational in a decade, but that strikes me as remarkably optimistic given the difficulties of starting a carrier program from scratch. My guess is, assuming that there's no fundamental shift in PRC foreign policy, and that there's no economic meltdown, we'll...
  • WILL CARVILLE ABANDON THE BUBBAS?

    WILL CARVILLE ABANDON THE BUBBAS? James Carville 's post-election tirade against Howard Dean got me to thinking about Hillary Clinton 's 50-state presidential chances in 2008. As a Hillary person, Carville surely must be pondering ways she can amass 270 electoral votes. Presuming she starts with the same 252 electors John Kerry won, there are five routes for her to get the other 18: 1. Single-shot Florida. Less competitive in 2004 ( Bush by 5 points) than during the Year of the Recount, the 27 electors from this least southern of the southern states will be on any Democratic nominee's target list. But she's no lock to win the Sunshine State. 2. Single-shot Ohio. The 2006 midterms revealed Ohio to be trending blue, and with Secretary of State Ken Blackwell out of the way it will be easier to put Ohio's 20 electors into the Democratic column, with two electors to spare. This would be my recommended route. 3. Flip three of the four southwestern states. If John McCain 's on the ticket,...
  • TAPPED OUT.

    TAPPED OUT. You may have noticed -- hopefully you noticed! -- that neither Tapped nor Beat the Press nor The Horse's Mouth had any new content on Thursday and Friday. Just to be clear, contributors didn't all take off on a road trip together -- we've been having some serious technical problems with Movable Type. We're still figuring out the issues and I don't think it's safe to say the problems have yet been surmounted, but as of now we are able to post content again, so for now I'm tentatively saying that all three blogs are in fact back on regularly scheduled programming. Apologies for the radio silence. --Sam Rosenfeld
  • The Housing Crash Recession is Coming

    Had this website been working, I would have been saying a lot about the economic news on Friday. The Commerce Department reported that non-residential construction fell by 0.7 percent in October following a downwardly revised fall of 0.6 percent in September. This should put to an end silly claims that growth in the non-residential sector would offset plumetting residential construction. The residential sector is twice as large as the non-residential sector, which by itself made such an offset unlikely. Furthermore, there was no basis for any sustained boom in the non-residential sector. There is still plenty of vacant office space, retail stores are cutting back, the manufacturing sector is stagnant or declining -- what would support a boom? Friday's data also included a release from the Institute of Supply Management that showed the manufacturing sector declining in November and weaker than expectd car sales. In addition, on Thursday we had a sharp jump in weekly unemployment claims...
  • The Chinese Central Bank is Not Run by Morons

    Would the Chinese central bank be concerned about the fall in the dollar against the euro and other free floating currencies? Absolutely, the bank is targetting the price of its currency in order to sustain demand Chinese exports. If the dollar falls against other currencies, this means that the yuan is falling against other currencies. Other things equal, this increases demand for China's exports from other countries, which could mean that they would opt to raise the value of the yuan against the dollar to offset this increase. (The Chinese government has been worried about its economy growing too fast.) Is the Chinese bank worried that this reduces the value of its dollar holdings as the NYT claims ? Not unless they are morons, which is not plausible. Virtually every economist in the world believes that the dollar will be falling at some point in the future. The logic is simple. The trade deficit is unsustainable. The only way (other than a prolonged and severe recession) to bring...
  • More Plans to Default on the Social Security Trust Fund

    BTP is back after being silenced by evil doers inside the Internet. The involuntary break gave me the opportunity to calm down after seeing an NYT personal finance column that told people to assume that they will collect little or none of their Social Security benefits (" Plan to Retire But Leave Social Security Out of the Equation "). The columnist bought the scare stories hook line and sinker. Just to remind everyone, the porjections from the non-partisan Congressional Budget Office show that the program can pay all scheduled benefits through the year 2046, with no changes whatsoever. Even after this date, the program could continue to pay 80 percent of scheduled benefits indefinitely, again assuming that no changes are ever made. Of course, Congress would almost certainly vote to raise taxes enough to sustain benefits, as it did in the decades of the 60s, 70s, and 80s. I base this assessment on the fact that the elderly will be more than twice as large a share of the electorate in...
  • Why the Protectionism?

    The NYT had a very interesting piece about a new laptop computer, designed for the developing world, which is supposed to sell for $150 a piece, with the price projected to drop to $100 in a couple of years. (The computer uses a Linux operating system.) While this sounds like it could potentially be a great advance for people, and especially school children, in the developing world, the article reports that the innovator behind the project insists that people in rich countries should pay $450 for Dell computers. The reporter should have pressed this one a bit. According to the article, the manufactuer will be making a profit selling the computer at $100-$150. What's wrong with letting people in rich countries also benefit from this technology? It won't take away the benefits for the poor. A good reporter would ask this question. Fortunately, markets being what they are, the computers will find their way into rich countries regardless of the innovator's intentions, but it would seem to...
  • Chris Farrell: When it Comes to Social Security Most People Are Nobody

    Chris Farrell demonstrated the incredible contempt with which the elites view the American public in his comments on MarketPlace this morning. He assured us that "everyone" agrees on what a solution to the Social Security solvency problem looks like. At the top of his list was raising the retirement age. All the polls that I have seen show that large majorities of the public (more than 60 percent) strongly oppose raising the retirement age beyond 67 (the age reached in 2022 in current law). This leaves one wondering who is the "everyone" in Mr. Farrell's world. I assume that he is referring to some group of policy types who he talks to. Of course, all the policy people I talk to know that the non-partisan Congressional Budget Office projects Social Security to be fully solvent until 2046 with no changes whatsoever. Even after that date it will always be able to pay much higher benefits than current retirees receive, even if no changes are ever made. Given the distant and relatively...

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