Archive

  • The Financial Times on Lula (Guest blog)

    In an article today about President Lula Da Silva�s landslide (61-39) re-election victory, the Financial Times reports that the �the PT�s [Lula�s Workers Party] anti-liberal rhetoric during the second round has caused consternation among many economists, who see it as a sign that spending cuts, needed to release money for investment and growth, are less likely under a second Lula administration than the first.� This continues a major theme of the Financial Times� pre-election coverage . A bigger worry for economists concerned about Brazil�s sluggish growth (1.4 percent average annual per capita for Lula�s four years, about the same as for his predecessor Fernando Henrique Cardoso�s 1.6 percent for 8 years) would be Brazil�s interest rates. The Selic (central bank overnight rate, comparable to our Fed�s 5.25 percent federal funds rate) rate is currently at 13.75 percent. Brazil�s inflation is now less than ours; hence the country�s real interest rates are among the highest in the world...
  • A BRIEF LOOK BACK.

    A BRIEF LOOK BACK. I'll be writing about this at greater length in a piece for New York Times Select coming out tomorrow, but with Election 2006 just a week away and the narratives already emerging about its significance, I though we ought to pause to first clarify what happened two years ago, in 2004. First, the basic recap: Presidency. A 3-point national bump for Bush over 2000, the smallest gain for an re-elected president since McKinley 's 1900 re-election. Just three states switched, the fewest since George Washington ran the table the second time, in 1792, prior to popular voting. Because Bush's gain of New Mexico (five electors) was essentially negated by his loss of New Hampshire (four), the president picked up 3 points plus Iowa. Congress. Three net House seats for GOP, which were more than accounted for by the re-redistricting of Texas (four seats directly plus one party switch). Net of four senate seats for the GOP, arguably their biggest achievement, but one that, again,...
  • HERE WE GO AGAIN.

    HERE WE GO AGAIN. Well, this was a nice little present a week out from the election, wasn't it? Raise your hand if you've heard Ellen Tauscher 's name any time in the past six years. I thought as much. Why doesn't The New York Times just dig up Carl Albert and ask him what he thinks? He's been about as relevant to the politics of the day as la Tauscher is, and he's a damn sight better Democrat having been dead for six years than she is alive and yapping. Why, oh Lord, why do Democratic politicians cooperate with stories like this? Mind you, I'm not arguing for freezing out the NYT , or that the story isn't it a legitimate one, but how hard can it be for professional politicians and professional political activists to keep from tossing rocks at each other in public? The correct answer for everyone in this piece goes something like this: "The important thing for all of us is to strike the power from the hands of a corrupt, reckless, and criminally negligent Republican Party, which...
  • NM-1: DOWN TO THE WIRE.

    NM-1: DOWN TO THE WIRE. Democratic Attorney General Patricia Madrid is going into the last full week before elections in New Mexico's first district with a razor-thin lead over incumbent Republican Heather Wilson . Of course, the poll was run before the televised debate last week. Who won the debate largely depends on who you ask, though most observers found the incumbent to be more polished. Wilson, indeed, has jumped on a verbal stumble of Madrid's during the debate and turned it into an attack ad -- using a bit of creative editing to make it stick: The ad uses a portion of the debate where Wilson asks Madrid, "Can you cite something that would give the people of New Mexico some kind of reassurance that you will prevent a tax increase?" Madrid pauses before saying, "Your president and you have -- have voted for a tax relief." Here was Madrid's full answer from the debate: Madrid: "Your president and you have voted for tax relief for the top 1 percent of taxpayers in this country,...
  • THE MAJORITARIAN DIFFICULTY II.

    THE MAJORITARIAN DIFFICULTY II. Looks like it's Jonah Goldberg Monday here on Tapped . Kevin Drum finds him claiming that the last "100 years" of liberalism has been about "shoving things down people's throats." Drum identifies the most obvious problem: the core elements of the liberal accomplishments of the last century -- most importantly the New Deal/Great Society safety net and civil rights protections -- are very popular, which is why conservatives get power only when they don't oppose them. But what's particularly remarkable is Goldberg's list of examples: "bussing, racial quotas, gay marriage, Title IX." He can't even cherry pick four without destroying his underlying argument. Busing, I'll give him, was unpopular and in some cases ordered by courts (although I'd love to hear what he would have done as a federal judge facing school boards with long histories of transparent constitutional violations trying to nullify judicial opinions striking down school segregation). But the...
  • JONAH GOLDBERG, WHAT IS YOUR MAJOR MALFUNCTION?

    JONAH GOLDBERG, WHAT IS YOUR MAJOR MALFUNCTION? Brad's Battlestar Galactica article reminded me of this gem (discovered by Scott ) from Jonah Goldberg, written in response to episode 2-17: In a society scientifically so much more advanced, it seems to me that the issue would no longer be controversial one way or the other. Either contraceptive technology would have "solved" the problem. Or moral dogma about abortion's acceptable parameters would have been long established. I'm left to wonder exactly what Jonah is thinking about when he's imagining a technological fix for the abortion problem, but that's not really the funny part. Ron Moore has left us some subtle hints indicating that he's not optimistic about the ability of technology to solve basic societal problems. These hints include the low level of much Colonial technology, the vulnerability of high tech equipment to Cylon attack, the emphasis on religion as an enduring element of the human experience, and, last but not least,...
  • Combatting Global Warming: What's Wrong With Pay by the Mile Insurance?

    The NYT had a mostly good piece on efforts to deal with global warming today. The one big item missing is any discussion of pay-by-the-mile auto insurance. The logic on this one is simple. Currently auto insurance is pretty much a fixed price, drivers pay an average of close to $1,000 a year whether they drive 100 miles or 100,000 miles (low mileage discounts alter this slightly). Obviously the risk of accident for any given driver is roughly proportionate to the amount they drive. Pay by the mile policies would have drivers pay for their insurance based on the number of miles they drive. The numbers are dramatic. The average car is driven about 10,000 miles a year, which translates into 10 cents a mile for a $1,000 a year policy. For a car that gets 20 miles a gallon, this would provide the same disincentive to drive as a $2 per gallon gas tax. Unlike a gas tax, pay-by-the-mile insurance does not raise the average cost of insurance at all. For some reason, pay-by-the-mile insurance...
  • Can You Tell the Difference Between "Senior Democrats" and the Congressional Budget Office?

    Apparently NYT reporters can't. An article in Monday's NYT on a new Medicare guidebook that seems to promote private plans reports that "senior Democrats" complain that these plans raise the cost of the program. Well, senior Democrats might complain about the higher costs of the HMOs, PPOs and other private plans that have been incorporated into the Medicare program, but the evidence comes from independent assessments from the Congressional Budget Office and elsewhere. In other words, the allegation that private sector plans raise costs for Medicare is not a partisan charge, it is a well-established fact based on independent analyses. There may still be reasons to support these private plans, but the Times should inform readers that they do in fact raise the cost of the program. --Dean Baker
  • Another Uncompetitive Industry Seeks Government Protection

    We all know the story, an old-line U.S. industry, burdened by high wages and outmoded business practices, starts to lose out to foreign competition. Instead of bringing their pay more in line with world standards, they go running to the government for help. Yep, that's the best way to describe the financial industry's efforts to roll back Sarbanes-Oxley and change other rules of corporate governance. Rather than cutting back the multi-hundred million dollar compensation packages paid to people like current Treasury Secretary Henry Paulsen and former Treasury Secretary Robert Rubin, they want to scale back the protections that make it more difficult for corporate management to rip off shareholders. Since management decides which capital markets to use, this is one way to gain a competitive edge. Given who holds the positions of power in the U.S. government, there is a good chance they will succeed. The conflicts of interest in this story are glaring and should be highlighted in the...
  • The Lights Are on, But There's Nobody Home

    No, I'm not talking about economics reporters or the brilliant economists who somehow failed to see the housing bubble (and the stock bubble), I'm talking about the Census Bureau's release of data on vacancy rate for thethird quarter. The data show that vacancy rates have climbed to yet another record high. The big story is on the side of vacant ownership units. The vacancy rate for rental units has hovered near its record high for the last three years. However, the vacancy rate for ownership units is up nearly 50 percent from its level as of two years ago. While the actual rate (2.5 percent) might still seem low, not many people can afford to pay the mortgage on a home that they are not using, nor are renting out. This suggests further downward pressure on prices in the months ahead. As best I can tell, this Census Bureau release was not mentioned in any of today's economic reporting. I agree that the weak 3rd quarter GDP growth was the big story, but if you want to know where the...

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