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

Guns at town halls and meetings

by cactus

Megan McArdle has a series of posts (this appears to be the last of them) about the folks bringing guns to protests or the president’s appearances. Her view – its idiotic, folks who do it are acting like jerks, but there’s nothing wrong with it.

I have a few guns. I can’t see any particular reason to take them out and about, making a public display of carrying them around. The only reason to take them to some sort of a protest situation where there are two sides arguing with each other is to intimidate other people. As Megan herself points out, “other people aren’t going to pick fights with the guy with the gun. ” In fact, people are going to be less likely to even argue with him or make eye contact. After all, he just might be a lunatic.

Now, when you point something like this out, invariably someone responds that the Swiss and the Israelis are always walking around armed to the teeth, and those tend to be societies where you don’t see folks shooting each other in the streets. I can’t speak for the Swiss – I know nothing about them other than that they make pretty good chocolate. I do tend to have an impression that their neutrality policy amounts to a “I got mine, the rest of you can get beaten to a pulp for all I care” philosophy, but whether that’s accurate or not, I can’t say.

As to the Israelis, I do know something about them. The reason Israelis don’t think twice about their fellow citizens walking around with assault rifles is because the alternative is worse. The likelihood of getting blown to bits by a suicide bomber in Israel is higher than the likelihood of being shot by a deranged fellow Israeli. Furthermore, the more armed Israelis there are, the lower the probability that you will be the victim of a suicide-bomber.

Over here, it seems the dynamic is a bit different. The likelihood that some Joe Citizen walking down the street heavily armed is going to stop the next Timothy McVeigh is much lower than the odds that some Joe Citizen walking down the street heavily armed is on his way to lighting up a McDonalds or ventilating some nursing students. And let’s be realistic- if given a chance, that Joe Citizen walking down the street heavily armed is more likely to be the kind of guy who would sympathize with or help the next Timothy McVeigh if given a chance rather than shoot him.

Now, I’d hate for someone to think that I’m a Timothy McVeigh sympathizer. I’ll be leaving my guns at home.

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Consumer confidence: fluff or thrill

by Rebecca Wilder

Thrill. The Conference Board reported that the August consumer confidence index (CCI) jumped 14% in August to 54.06. In contrast, the August University of Michigan Consumer Sentiment index (CSI) fell; but the two generally trend together, and the CSI is subject to revisions reported tomorrow.

Confidence can be swayed by current political agenda or asset prices, but nevertheless, it is a coincident measure of the business cycle. And broken down into its two components – the present economic situation index and expectations index – the August report was quite positive (as positive as can be coming off of record lows).

The expectations index surged almost 16% in August to 73.48, its highest level since December 2007 and 2.7% over its previous high in May 2009. The current conditions index grew around 7%, but is hovering at low levels with no strong sign of improvement.

Clearly, the expectations index is making much more headway than the present situation index. And this is why that information is important: historically, the expectations index, rather than the current conditions index, is a good indicator of consumer spending growth.

The chart illustrates annual personal consumer spending growth and the two components of the CCI, with associated simple correlation coefficients. The correlation between the overall CCI and annual PCE spending growth spanning June 1977- June 2009 is 0.63. However, the biggest weight is coming off of the expectations component of the CCI, correlation = 0.69, rather than the present situation component of the CCI, correlation = 0.45.

On the other hand, the present-situation component of the CCI is a decent indicator of current labor market conditions.

The chart illustrates annual employment growth (measured by the nonfarm payroll), and the two components of the CCI. The simple correlation between the overall CCI and employment growth is 0.59 (noticeably smaller than the PCE correlation), which according to its correlation, is more heavily weighted by the present situation component of the CCI.

Based on this simple analysis, the CCI reading is consistent with an oncoming surge in spending growth over the next six months. Even in the recovery after the 1991 recession, when the expectations index improved quickly while spending growth was sluggish to rise, spending growth jumped from essentially 0% annual growth to almost 3.6% in just four months – after the surge in expectations index and before the bottom in the current conditions index.

Yes, there are plenty of credit-related issues why this might not happen. And there is an obvious economic link between employment, income, and spending. However, for those indicators that are critical to recovery, i.e., consumer spending (housing and inventories are important, too – see the second chart on this post), the expectations index is certainly a positive signal for spending events to come.

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Republicans: "We come not to praise Caesar, but to bury him"

by Bruce Webb

Yeah well Marc Antony was not quite telling the truth, either. You could see this particular re-write of history coming a mile away and it is time to stop this one in its tracks. Both Parties Mourn Loss of Kennedy in Health-Care Debate

Three GOP senators suggested in their remembrances of Kennedy that Democrats will need more than respectful conversation to gain bipartisan support for a health-care bill. Sens. John McCain (Ariz.), Orrin Hatch (Utah) and Judd Gregg (N.H.) lamented Kennedy’s absence in the negotiations.

“I think we may have made progress on this health-care issue if he had been there,” McCain told CNN. “He had this unique capability to sit people down at a table together — and I’ve been there on numerous occasions — and really negotiate, which means concessions. And so, he not only will be missed, but he has been missed.”

“I believe if he had been active the last few months, we would have some sort of consensus agreement,” said Gregg, a passionate advocate of Medicare reform who has sat out Senate deliberations on perhaps the most extensive revisions ever to that program.

“We would have worked it out. We would have worked it out on a bipartisan basis,” Hatch, who co-authored numerous health-care bills with Kennedy over the years, said on CNN. “I’ll be happy to work in a bipartisan basis any day, any time . . . but it’s got to be on something that’s good and not just some partisan hack job.”

This is complete and utter bullshit, and a blatant attempt to rewrite the history of the last eight weeks. To see why follow me under the fold.

Kennedy did his part on health care, his Committee, Senate Health, Education, Labor and Pensions or HELP, passed its bill out of Committee on July 1st. My blog post on this was here: Kennedy-Dodd HELP Bill w/CBO Scoring For convenience lets throw the CBO tables in here:

The response to the HELP bill was almost immediate. Max Baucus declared it DOA and announced that Senate Finance would re-write the ENTIRE bill including the parts not normally under the jurisdiction of his Committee. Moreover in doing so he formed what was originally a Gang of Seven that included four Republicans but froze out Kennedy ally Rockefeller who was actually was and is the Chairman of the Finance Sub-Committee on Health. The whole process was a big ol’ F-U to Kennedy and everybody knew it.

Now Republicans are trying to claim that if only Kennedy had been around he would have been able to work out a compromise, apparently in the form of throwing away ever principle it had ever held by making “concessions” which in the context of how Senate Finance has been handling things means complete and total surrender to the Republicans and the Insurance Companies.

It is Bullshit. Full Stop. Kennedy already made tremendous concessions in the course of issuing the HELP Bill. It cost were scored out at a third less than the preliminary version sent for scoring to CBO, a severe trimming that was accomplished by covering a much smaller proportion of the population than that of the House Tri-Committee Bill. Whereas the latter bill is projected to cover 97% of the total LEGAL NON-ELDERLY population, Kennedy’s HELP Bill only scored as covering 90% of that same population and leaving 34 million uninsured. If anything Kennedy-Dodd bent over backwards to accomodate the fiscal concerns of the Blue Dogs and Republicans and STILL got spat in the face by Baucus for their trouble.

Republicans are already, and predictably trying to re-write history to suggest that Kennedy ‘obviously’ would of given up even more than he did. Well too bad, that was never going to happen, and certainly shouldn’t happen now. The answer for Democrats is to take the HELP Bill off the table, replace it with the much stronger Tri-Committee Bill and tell these hypocritical, crocodile tear crying Republicans to piss up a rope while Dems pass a real Kennedy-Dingel Bill.
By the way you will see reporting that Kennedy’s bill covered 97% of the population while costing $350 billion less than the Tri-Committee. This is apples and oranges reporting. If you examine the table above the Kennedy bill leaves 10% of legal American residents uninsured and 34 million people total, about twice what the House bill does as seen below.

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Remarks by the Vice President


The Department of Energy
Washington, DC

THE VICE PRESIDENT: Well, Mr. Secretary, thank you and your staff for the privilege of being with you today on what, as I prepared last night, was to be a joyous occasion, announcing another step in the direction of energy independence. And you said the President made a wise choice. The wisest choice the President made was asking you to be — I mean that sincerely — to be the Secretary to the Department of Energy. You’ve assembled a first-rate staff, and you’ve taken on a role that is going to be a — is going to, in large part, determine the success of these next three-and-a-half years, whether or not we make a genuine dent, genuine progress in moving toward an energy policy that can help America lead the world in the 21st century as it did in the 20th century.

Some suggest we’re trying to do too much. But my response is, is there any possibility of America leading the world in the 21st century without a radically altered energy policy? It is not possible. And that charge has been given to one of the most remarkable men to serve in a President’s Cabinet, a Nobel laureate who is as articulate as he is obviously bright, and a man who has assembled a staff that can corral the bureaucracy — and we’re all — deal with bureaucracy, we’re all part of it — in a way that I haven’t seen in awhile.

And I had planned on speaking to the Clean Cities Program as one of the several initiatives we have to begin to reshape our energy policy. But as if Teddy were here, as we would say in the Senate, if you’d excuse a point of personal privilege, I quite frankly think it’s — would be inappropriate for me to dwell too much on the initiative that we’re announcing today and not speak to my friend.

My wife Jill, and my sons Beau and Hunter, and my daughter Ashley — and I don’t say that lightly, because they all knew Teddy, he did something personal and special for each one of them in their lives — truly, truly are distressed by his passing. And our hearts go out to Teddy Jr., and Patrick and Kara, and Vicki, with whom I spoke this morning, and the whole Kennedy family.

Teddy spent a lifetime working for a fair and more just America. And for 36 years, I had the privilege of going to work every day and literally, not figuratively sitting next to him, and being witness to history. Every single day the Senate was in session, I sat with him on the Senate floor in the same aisle. I sat with him on the Judiciary Committee next — physically next to him. And I sat with him in the caucuses. And it was in that process, every day I was with him — and this is going to sound strange — but he restored my sense of idealism and my faith in the possibilities of what this country could do.

He and I were talking after his diagnosis. And I said, I think you’re the only other person I’ve met, who like me, is more optimistic, more enthusiastic, more idealistic, sees greater possibilities after 36 years than when we were elected. He was 30 years-old when he was elected; I was 29 years-old. And you’d think that would be the peak of our idealism. But I genuinely feel more optimistic about the prospect for my country today than I did — I have been any time in my life.

And it was infectious when you were with him. You could see it, those of you who knew him and those of you who didn’t know him. You could just see it in the nature of his debate, in the nature of his embrace, in the nature of how he every single day attacked these problems. And, you know, he was never defeatist. He never was petty — never was petty. He was never small. And in the process of his doing, he made everybody he worked with bigger — both his adversaries as well as his allies.

Don’t you find it remarkable that one of the most partisan, liberal men in the last century serving in the Senate had so many of his — so many of his foes embracing him, because they know he made them bigger, he made them more graceful by the way in which he conducted himself.

You know, he changed the circumstances of tens of millions of Americans — in the literal sense, literally — literally changed the circumstances. He changed also another aspect of it as I observed about him — he changed not only the physical circumstance, he changed how they looked at themselves and how they looked at one another. That’s a remarkable, remarkable contribution for any man or woman to make. And for the hundreds, if not thousands, of us who got to know him personally, he actually — how can I say it — he altered our lives as well.

Through the grace of God and accident of history I was privileged to be one of those people and every important event in my adult life — as I look back this morning and talking to Vicki — every single one, he was there. He was there to encourage, to counsel, to be empathetic, to lift up. In 1972 I was a 29 year old kid with three weeks left to go in a campaign, him showing up at the Delaware Armory in the middle of what we called Little Italy — who had never voted nationally by a Democrat — I won by 3,100 votes and got 85 percent of the vote in that district, or something to that effect. I literally would not be standing here were it not for Teddy Kennedy — not figuratively, this is not hyperbole — literally.

He was there — he stood with me when my wife and daughter were killed in an accident. He was on the phone with me literally every day in the hospital, my two children were attempting, and, God willing, thankfully survived very serious injuries. I’d turn around and there would be some specialist from Massachusetts, a doc I never even asked for, literally sitting in the room with me.

You know, it’s not just me that he affected like that — it’s hundreds upon hundreds of people. I was talking to Vicki this morning and she said — she said, “He was ready to go, Joe, but we were not ready to let him go.”

He’s left a great void in our public life and a hole in the hearts of millions of Americans and hundreds of us who were affected by his personal touch throughout our lives. People like me, who came to rely on him. He was kind of like an anchor. And unlike many important people in my 38 years I’ve had the privilege of knowing, the unique thing about Teddy was it was never about him. It was always about you. It was never about him. It was people I admire, great women and men, at the end of the day gets down to being about them. With Teddy it was never about him.

Well, today we lost a truly remarkable man. To paraphrase Shakespeare: I don’t think we shall ever see his like again. I think the legacy he left is not just in the landmark legislation he passed, but in how he helped people look at themselves and look at one another.

I apologize for us not being able to go into more detail about the energy bill, but I just think for me, at least, it was inappropriate today. And I’m sure there will be much more that will be said about my friend and your friend, but — he changed the political landscape for almost half a century. I just hope — we say blithely, you know, we’ll remember what we did. I just hope we’ll remember how he treated other people and how he made other people look at themselves and look at one another. That will be the truly fundamental, unifying legacy of Teddy Kennedy’s life if that happens — and it will for a while, at least in the Senate.

Mr. Secretary, you and your staff are doing an incredible job. I look forward to coming back at a happier moment when you are announcing even more consequential progress toward putting us back in a position where once again can control our own economic destiny.

Thank you all very, very much. (Applause.)

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Advance Durable Goods Orders

By Spencer;

The new data that durable goods orders jumped 4.9% from June to July is a nice indicator that the economy is bottoming and it clearly beat expectations. Yes, a large part of the jump was civilian aircraft orders that tend to be lumpy, but even excluding civilian aircraft orders jumped
1.9% month to month.

On a smoothed basis non-defense capital goods orders — a good leading indicator of capital spending in the GDP accounts is also showing nice gains. The compound three month growth rate for the total is 41%, and excluding aircraft it is 15.5%.

With all the news on the deficit, health care, etc., etc., the normal sources seem to be overlooking this report.

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Project for a New American Century

Statement of Principles

June 3, 1997

American foreign and defense policy is adrift. Conservatives have criticized the incoherent policies of the Clinton Administration. They have also resisted isolationist impulses from within their own ranks. But conservatives have not confidently advanced a strategic vision of America’s role in the world. They have not set forth guiding principles for American foreign policy. They have allowed differences over tactics to obscure potential agreement on strategic objectives. And they have not fought for a defense budget that would maintain American security and advance American interests in the new century.

We aim to change this. We aim to make the case and rally support for American global leadership.

As the 20th century draws to a close, the United States stands as the world’s preeminent power. Having led the West to victory in the Cold War, America faces an opportunity and a challenge: Does the United States have the vision to build upon the achievements of past decades? Does the United States have the resolve to shape a new century favorable to American principles and interests?

We are in danger of squandering the opportunity and failing the challenge. We are living off the capital — both the military investments and the foreign policy achievements — built up by past administrations. Cuts in foreign affairs and defense spending, inattention to the tools of statecraft, and inconstant leadership are making it increasingly difficult to sustain American influence around the world. And the promise of short-term commercial benefits threatens to override strategic considerations. As a consequence, we are jeopardizing the nation’s ability to meet present threats and to deal with potentially greater challenges that lie ahead.

We seem to have forgotten the essential elements of the Reagan Administration’s success: a military that is strong and ready to meet both present and future challenges; a foreign policy that boldly and purposefully promotes American principles abroad; and national leadership that accepts the United States’ global responsibilities.

Of course, the United States must be prudent in how it exercises its power. But we cannot safely avoid the responsibilities of global leadership or the costs that are associated with its exercise. America has a vital role in maintaining peace and security in Europe, Asia, and the Middle East. If we shirk our responsibilities, we invite challenges to our fundamental interests. The history of the 20th century should have taught us that it is important to shape circumstances before crises emerge, and to meet threats before they become dire. The history of this century should have taught us to embrace the cause of American leadership.

Our aim is to remind Americans of these lessons and to draw their consequences for today. Here are four consequences:

• we need to increase defense spending significantly if we are to carry out our global
responsibilities today and modernize our armed forces for the future;

• we need to strengthen our ties to democratic allies and to challenge regimes hostile to our interests and values;

• we need to promote the cause of political and economic freedom abroad;

• we need to accept responsibility for America’s unique role in preserving and extending an international order friendly to our security, our prosperity, and our principles.

Such a Reaganite policy of military strength and moral clarity may not be fashionable today. But it is necessary if the United States is to build on the successes of this past century and to ensure our security and our greatness in the next.

This is your Bush foreign policy program in a nutshell. As developed and endorsed by the following team already in place back in 1997. Lots of familiar names, in fact you have pretty much the whole Bush national security team. Less Condi and Powell, which is instructive in itself.

Elliott Abrams Gary Bauer William J. Bennett Jeb Bush

Dick Cheney Eliot A. Cohen Midge Decter Paula Dobriansky Steve Forbes

Aaron Friedberg Francis Fukuyama Frank Gaffney Fred C. Ikle

Donald Kagan Zalmay Khalilzad I. Lewis Libby Norman Podhoretz

Dan Quayle Peter W. Rodman Stephen P. Rosen Henry S. Rowen

Donald Rumsfeld Vin Weber George Weigel Paul Wolfowitz

Never heard of the Kagans before the drumbeat to war picked up? Think Zalmay Khalilzad just happened to be available when the time came? The events of 2001 on just didn’t happen, they were shaped. By people with a program. This one.

Step one in the program below the fold.

Letter to President Clinton on Iraq Jan 26, 1998

Dear Mr. President:

We are writing you because we are convinced that current American policy toward Iraq is not succeeding, and that we may soon face a threat in the Middle East more serious than any we have known since the end of the Cold War. In your upcoming State of the Union Address, you have an opportunity to chart a clear and determined course for meeting this threat. We urge you to seize that opportunity, and to enunciate a new strategy that would secure the interests of the U.S. and our friends and allies around the world. That strategy should aim, above all, at the removal of Saddam Hussein’s regime from power. We stand ready to offer our full support in this difficult but necessary endeavor.

The policy of “containment” of Saddam Hussein has been steadily eroding over the past several months. As recent events have demonstrated, we can no longer depend on our partners in the Gulf War coalition to continue to uphold the sanctions or to punish Saddam when he blocks or evades UN inspections. Our ability to ensure that Saddam Hussein is not producing weapons of mass destruction, therefore, has substantially diminished. Even if full inspections were eventually to resume, which now seems highly unlikely, experience has shown that it is difficult if not impossible to monitor Iraq’s chemical and biological weapons production. The lengthy period during which the inspectors will have been unable to enter many Iraqi facilities has made it even less likely that they will be able to uncover all of Saddam’s secrets. As a result, in the not-too-distant future we will be unable to determine with any reasonable level of confidence whether Iraq does or does not possess such weapons.

Such uncertainty will, by itself, have a seriously destabilizing effect on the entire Middle East. It hardly needs to be added that if Saddam does acquire the capability to deliver weapons of mass destruction, as he is almost certain to do if we continue along the present course, the safety of American troops in the region, of our friends and allies like Israel and the moderate Arab states, and a significant portion of the world’s supply of oil will all be put at hazard. As you have rightly declared, Mr. President, the security of the world in the first part of the 21st century will be determined largely by how we handle this threat.

Given the magnitude of the threat, the current policy, which depends for its success upon the steadfastness of our coalition partners and upon the cooperation of Saddam Hussein, is dangerously inadequate. The only acceptable strategy is one that eliminates the possibility that Iraq will be able to use or threaten to use weapons of mass destruction. In the near term, this means a willingness to undertake military action as diplomacy is clearly failing. In the long term, it means removing Saddam Hussein and his regime from power. That now needs to become the aim of American foreign policy.

We urge you to articulate this aim, and to turn your Administration’s attention to implementing a strategy for removing Saddam’s regime from power. This will require a full complement of diplomatic, political and military efforts. Although we are fully aware of the dangers and difficulties in implementing this policy, we believe the dangers of failing to do so are far greater. We believe the U.S. has the authority under existing UN resolutions to take the necessary steps, including military steps, to protect our vital interests in the Gulf. In any case, American policy cannot continue to be crippled by a misguided insistence on unanimity in the UN Security Council.

We urge you to act decisively. If you act now to end the threat of weapons of mass destruction against the U.S. or its allies, you will be acting in the most fundamental national security interests of the country. If we accept a course of weakness and drift, we put our interests and our future at risk.


. Still imagine that we went to war with Iraq based on 9/11? That the decision to go to war was really made by the Decider sometime in February 2003? That if Saddam had just been a little more cooperative this unpleasantness would have been avoided? Sorry, no way. This decision was made by the people who signed this letter along with those who signed the Statement of Principles above. And note the one name that is glaringly absent, though his brother made the cut. Looks like they had to settle for the second choice when it came time for a figurehead.

Elliott Abrams Richard L. Armitage William J. Bennett

Jeffrey Bergner John Bolton Paula Dobriansky

Francis Fukuyama Robert Kagan Zalmay Khalilzad

William Kristol Richard Perle Peter W. Rodman

Donald Rumsfeld William Schneider, Jr. Vin Weber

Paul Wolfowitz R. James Woolsey Robert B. Zoellick

(In reading the Statement did you get the odd feeling like something was missing, that a couple of future team members weren’t there? Say like Bolton, Perle and the other Kagan? Well have no fear, they were on board all along.)

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Echo comments


Lots of comments did not “stick” yesterday, although there has been a problem intermittently in the last two weeks especially. Please wait for all “reply” “delete” links to appear at the bottom of your comment to confirm the servers keep it. I believe that a delay in processing is part of the problem.

When the issue appears resolved I will delete this post.

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Fiscally Conservative Districts ?

Robert Waldmann

Via Ezra Klein I read

Collender thinks this is wrong for two reasons. First, the Democrats with the most difficult reelection battles are the freshmen elected in Republican-leaning, fiscally conservative districts. They’ll need something to show for their time in Washington, and along with the Blue Dogs, they may well be able to get it.

Is there any evidence for this claim ? Is there any evidence that people in Republican leaning districts care more about the deficit than people in Democratic leaning districts ? The past decade didn’t provide much evidence that Republicans are, in fact, fiscally conservative.

Note that the Blue Dogs addition to health care reform — increasing the power of the medicare advisory panel — has become a favorite topic for opponents of health care reform.

I think that Collender is mislead by the absurd theory that the political actions of blue dogs have something to do with the wishes of their constituents. I think it has been conclusively proven that this hypothesis is false.

On economics (hey we are supposed to be economists) Collander and, it seems, Klein also worries that deficits will reduce GNP “Second, and arguably more importantly, the markets are increasingly nervous about the size of our long-term deficits, and without credible action to reduce them, interest rates could rise, choking off the recovery.” Guys we are in a liquidity trap. If interest rates increase, the FED can drive them down. Deficits cause lower GNP when the FED refuses to do that, because they are fighting inflation and or punishing congress. It’s not relevant to next year. You might want to look at a blog by this guy named Paul Krugman.

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