Relevant and even prescient commentary on news, politics and the economy.

Extras in Bush’s Budget

Not surprisingly, there’s some extra stuff in the Bush budget; Mark Schmitt has the details.

AB

P.S. This is about par for the course and very reminiscent of Bush’s 2001 letter to taxpayers announcing that, thanks to President Bush, they would be receiving a $300 rebate/advance against their next year’s taxes.

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Jobs in Missouri

My latest post at The American Street is up. This one is on the jobs picture in Missouri, where Bush/Buchanan combined to garner 50,000 more votes than Gore/Nader. Since Missouri has lost a lot more than 50,000 jobs (roughly twice as many, in fact), this swing state just might swing.

AB

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Joementum

Apparently Joementum is exactly like momentum, but without any forward progress:

South Carolina: Edwards 44, Kerry 30, Sharpton 10

Oklahoma: Edwards 31, Kerry 29, Clark 28

Missouri: Kerry 52, Edwards 23, Dean 10

Delaware: Kerry 47, Dean 14, Lieberman 11, Edwards 11

Arizona: Kerry 46, Clark 24, Dean 13

AB

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John Kerry Getting the Kid Gloves Treatment?

I’ve seen a few posts here and there claiming that John Kerry’s been treated with kid gloves the last few weeks, both by the press and by the rival democrats. One theory is that Dean and Gephardt were both badly damaged by their mutual fierce attacks in Iowa, and the contenders learned a lesson from that. That’s plausible as an explanation for the candidates’ circumspection, and good news if it’s true, but what about journalists?

The only explanation I’ve seen for the journalists’ light touch has been rather circuitous and loony: the media love Bush, know that Dean can beat Bush, and that Kerry can not. So they tore Dean down and pushed Kerry up. Crazy, I know. But I did read that in passing, somewhere that I can’t recall at the moment.

A third theory, my theory, is that the media haven’t been light on Kerry at all. First, there’s the botox stuff, which seems to lack traction. But there’s also this asinine and pathetic attempt by Washington Times’ editor in chief Wes Pruden. If this followed the script, Wes Pruden would pitch it in his Washington Times column, then The National Review, The Weekly Standard, and the WSJ editorial page would pick it up. Then the NYT and Washington Post would report on the reports for a few days, the wires might run a story on “reports that Kerry said …,” and eventually Pruden’s allegation would be accepted as conventional wisdom.

What broke the chain this time? Pruden baldly and badly doctored his quote, as Nick Confessore amusingly recounts (Pruden’s reply after being caught red-handed faking a quote was classic: “I did doctor the quote to attribute the statement directly to Kerry, but since Kerry didn’t refute the people he was quoting, faking the quote was the right thing to do.”)

AB

P.S. Note to Pruden: The fine folks at Liberty High School in Bethlehem, PA have conveniently placed their style guide on line. Here’s the part on eliding quotes. If you would like to bring your standards at least up to the high school level, you should write Liberty High School’s quotation mandate 100 times on the nearest blackboard:

IMPORTANT: In no way may any change in a quote alter the intent or meaning of the original writer! [Emphasis in original.]

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Costs and Benefits

Sound policy decisions require analysis of both the costs and benefits of a given proposal. Most proposals have some positive benefit, which allows supporters to make arguments along the lines of “Don’t you agree that achieving X is a good thing?” Then opponents have to make a slightly more complex counter-argument along the lines of “Yes, there are benefits to achieving X, but the costs are even greater. Therefore your proposal is unwise.”

This logical shortcoming is starkly illustrated by pro-war advocates who seek to refute criticism of the war, the pre-war intelligence, and the post-war execution by making this argument: “Don’t you think it’s a good thing that Saddam is out of power?” Or the more disingenuous framing, “You would prefer to see Saddam still in power?”

The reply to this is that there are, of course, many benefits to the removal of Saddam and his regime from power. However, that does not remotely begin to imply that removing Saddam from power was sound or wise. It simply means that there is a benefit, B>0, to removing Saddam from power. To come to a conclusion, the costs, C, must also be realistically assessed. Once this is done, the questions of interest are

  • Is B > C? If so, then removing Saddam was a good idea.
  • Is B 0 to justify the invasion is a clear sign of willful ignorance or calculated disingenuity.

In this setting, inaccurate intelligence implies that our pre-war estimates of B were too high. Manipulated and exaggerated intelligence means that over-estimate was intentional. Similarly the “shining beacon of democracy in the Mideast” benefit is also now somewhat questionable. If the US really withdraws in the summer, anything could happen, including a fundamentalist Islamist regime.

What are the costs, C? The direct monetary costs were at least $87 billion last year, and now the administration is seeking another $50 billion. (Which the administration says won’t count against its promise to cut the deficit in half in five years.) Some of that $50b is for Afghanistan, so this is an upper estimate. On the other hand, the White House’s estimates of the costs of things are frequently biased downward — reliably unreliable, if you will — so $50 billion for Iraq is probably about right. Then there are the costs of over 525 dead U.S. soldiers and 92 dead allied soldiers, plus the costs of at least 8,000 Iraqi dead. Then add the intangible cost of lost good will abroad (which is costly since we need their cooperation in the War on Terror.) At last, you have a pretty good idea of what the costs of the war are.

I think reasonable people can disagree about the magnitude of the costs and benefits, though as the costs continue to wax while the benefits wane, it becomes ever more difficult to make the case that the benefits exceed the costs. And the adminstration’s claims about the costs and benefits were systematically and perhaps intentionally biased toward understating the cost and overstating the benefits.

What reasonable people cannot honestly disagree over is the claim that any policy with positive benefits is justified, regardless of the costs. A shiny new $15,000 car for every adult in the U.S. certainly has some benefits. If I make this proposal and encounter some opposition then I can easily reply, “You would prefer that citizens of this great nation not have new cars?” Case closed. Bring on the new cars.

Wait. It would cost about $3 trillion to implement this proposal. Are the benefits of the Angry Bear New Car Plan at least $3 trillion? Probably not. (It would work about as well as Hoover’s Chicken in Every Pot plan.)

Finally, how does this analysis apply to Afghanistan? I think it works rather well. First, the costs were much lower in that instance. Second, the benefits were surely higher. While hard to quantify, the benefits of sending a message along the lines of “Any government that attacks or directly supports an attack on the United States will be eliminated and the perpetrators will be tried and convicted” are extremely high. Certainly they are much higher than the benefits of a message like, “if you annoy us and it strikes our fancy, then you will be eliminated.”

AB

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Personal Income Growing, Barely

This morning the BEA released its estimate of personal income and spending in December. Income was up by 0.2% in December, while spending grew by 0.4%, in nominal terms. In real (inflation-adjusted) terms, income showed virtually no growth, while spending grew a little. This has continued a trend over the past few months of spending growing faster than income. What does that mean? A falling saving rate:

The falling savings rate (which is now lower than it was back in 2000, at the peak of the stock market boom) means that there’s very little scope for consumers to spend more unless their income starts rising. And unfortunately, consumer income is not growing very fast – over the last quarter of 2003, it grew at a 2.9% annual rate. In real terms, growth was even lower. That’s not fast enough to sustain more than a rather tepid expansion.

Kash

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Statement and Refutation

In Dana Milbank’s latest Washington Post piece, Mr. Milbank actually presents White House statements about Iraqi WMD, and then follows them up with direct refutations. This is a very welcome departure from the more typical but less informative style in which a journalist first writes “Democrats allege X” and then adds “Republicans deny allegation X,” followed by no reporting on which side is correct:

On Wednesday, for example, Bush suggested that war came because Saddam Hussein did not let inspectors into Iraq, when in fact it was the United States that called for inspections to end. “It was his choice to make, and he did not let us in,” Bush said.

That same day, Bush press secretary Scott McClellan said the White House never said Iraq was an “imminent” threat. But when McClellan’s predecessor, Ari Fleischer, was asked whether Iraq was an imminent threat, he replied: “Absolutely.” And when White House communications director Dan Bartlett was asked whether Hussein was an imminent threat to U.S. interests, he replied: “Well, of course he is.”

In addition, Bush aides have regularly said that they were following the advice of intelligence experts. On Thursday, national security adviser Condoleezza Rice said the weapons conclusion “was the judgment of our intelligence community, the judgment of intelligence communities around the world.” Yet the White House, at various times, went beyond what the CIA advised.

AB

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