Well, to Fox News the “O” admitted that we might see an economic dip (W shaped recession.) he then went on to admit they were looking at other means to stimulate jobs growth. Ya’no those ole Republican tax cuts and incentives for business who create jobs and hire.
What does this tell us about the structure of the current jobs creating stimulus?
Here is a quote from a short appreciation of Adam Smith by Prof. Berry, an expert on the man:
If Smith of popular repute is the ‘father of capitalism’, the advocate of ‘market forces’, the enemy of government regulation and believer in something called the ‘invisible hand’ to produce optimum economic outcomes then he would be a disappointed parent. All his work is deeply steeped in moral philosophy. Indeed the simple fact that the final edition of the Moral Sentiments containing extensive revisions appeared in 1790, the year of his death, tells us is that Smith’s commitment to the moral point of view endured alongside and beyond the publication of the Wealth of Nations.
The Moral Sentiments is a leading example of a particular approach to moral philosophy – one that regards it not as sets of rationally or Divine ordained prescriptions but as the interaction of human feelings, emotions or sentiments in the real settings of human life. In many ways it is a book of social and moral psychology. What we can call economic behaviour is necessarily situated in a moral context. But more than that the key theme of the book is an opposition to the view that all morality or virtue is reducible to self-interest. Indeed his opening sentence declares that everyday human experience proves that false, he writes: “How selfish soever a man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derive nothing from it except the pleasure of seeing it”.
I don’t think Smith ever imagined the extent of possible selfishness of contemporary US rightwingnuts. They pretend to adore Smith, but I don’t think they know much about him.
Here’s Obama and Israel. Israel depends upon the US for its very existence. but gives us the finger whenever we ask it to do anything, however reasonable. Israel knows the US is helpless to control it in any way, that it runs US foreign policy in the Middle East, and can tell us to “shove it” whenever it feels like it. Completely arrogant. And NOT GOOD for America, long run. Too bad most Americans don’t understand this.
“What does this tell us about the structure of the current jobs creating stimulus?”
What does this tell us about GOP opposition to ARRA on the grounds that it swelled the deficit too much? If they thought a stimulus package that had fiscal multlipliers ~1.5 added too much to the deficit, then why would they support a further increase in the deficit for a set of proposals that have a fiscal multiplier < 1.0? Makes no sense...which isn't to say that Boehner and Cantor and Pence wouldn't think it was a great idea.
In an interview in the Chinese capital with Major Garrett of Fox News, Obama said he was “not disappointed” that the Guantanamo deadline had slipped, saying he “knew this was going to be hard.”
“People, I think understandably, are fearful after a lot of years where they were told that Guantanamo was critical to keep terrorists out,” Obama said. Closing the facility, he added, is “also just technically hard.”
Well GITMO will stay open, at least Obama didn’t announce another deadline he could miss.
So lets recap. Hope $ Change hit the WH running with teh smooothest tranistion of power since Reagan-Bush. So how are we doing 10 months later?
1) Gitmo stays open past the deadline with no end in site (My bet it will now fall off teh radar along with Bahgram AB)
2) 120K US troops still in Iraq qith Obama now openly stating that we will keep a residual force or 50K (the high side of my prediction)
3) INcrease combat activities and more troops into Afghanistan. Cross-border raids into Pakistan still going strong with Predators.
4) All those evil Bush survellance policy’s still in place.
Did Bush really leave office or the R’s still in charge? I thought the Dems totally own the WH and Congress. Did I miss something? This was all suppossed to be over by now?????
And best of all, now that a Dems in the WH, dissent is no longer the highest form of patriotism and support for the war must be high since the only people in the mall are protesting the huge Obama-deficits!
And don’t forget unemployment at 10.2% and climbing.
So when do I get my 5% GDP growth? Heck I’ll just take Clinton’s GDP growth, or even Bush’s.
Oh and my pony still hasn’t been delivered, what’s up with that!
2slugs, what it might mean is that the multipliers calculations/theory were wrong.
I think it’s more likely that Administration critics don’t understand the math and couldn’t describe what a multiplier is or how it is calculated or why a cut in the tax rate will always have a lower multiplier.
“O” is starting to realize he has screwed the pooch with his stimulus
I have argued for 10 months that ARRA was too small. Last winter Republicans argued that it was too big. Now Republicans want to make the stimulus bigger in the least effective way imaginable. GOP arguments are all over the ballpark on this issue.
2slugs said: “I have argued for 10 months that ARRA was too small. Last winter Republicans argued that it was too big.” You and your cohorts have been wrong for much longer than 10 months, and eventually, the voters will show you how wrong.
He also said: “Now Republicans want to make the stimulus bigger in the least effective way imaginable.” What a surprise it will be to 2slugs and the other Romer believers when “O” adopts the conservative approach to employment stimulus. Oh, they’ll be even more surprised when it works better than anything tried to date by this administration.
ARRA was designed to create or save 3 million jobs thru 2010Q4. So far it looks like the recovery is going about as planned. The problem is that Romer predicted we would lose 5 million jobs and ARRA only covers 3 million.
The good news about a GOP stimulus plan is that it will have some positive effect. The bad news is that it will give us very little bang for the buck.
Here is a brilliant analysis of Afghanistan. I say brilliant because it echoes what I have been saying myself (LOL). What is missing is the point that the “right wing” he talks about as frightening Obama into digging us in deeper is mainly the Neocons. And of course Neocons=Israel Lobby, as we all know.
It has been pointed out by economists who know something that the reason unemployment is so high is that there has not been enough stimulus to bring it down further. But the dunces keep saying stimulus has failed. And keep on saying it. On the other hand in Afghanistan, if the Taliban are not defeated they won’t say it is because we sent troops there, but that we didn’t send in enough. They are basically addlebrained and inconsistent in their thinking.
The Congress is now raking over the question whether the “terrorists” held at Guantanamo should be tried by military or civilian courts. This is a sideline issue and quite pointless. The real issue that is never discussed is whether these trials (and undoubted convictions) will do us any good. I doubt it. Most of these “terrorists” want to be convicted and executed. So we are doing what they want. Further they will all become martyrs for the Muslim world that sees them as heroes who fought back vs. US imperialism. Thus creating more hatred of the US. Truth is Americans have no comprehension of the mentality of Muslims fighting for Islamic liberation. Their attitude is exactly the same as that of US revolutionaries vs. the Brits. “Give me liberty or give me death”. That is what the first Americans believed and that is what the Islamic “terrorists” believe. Strange, no?
I think one of the most telling points Krugman makes is that the reactionaries screaming about the deficit never seem to worry about the billions and billions spent on unwinnable wars. If the money is squandered on stupid wars they are pleased; if it is spent to put unemployed Americans to work they are outraged. Nice moral sense, no?
Let GDP (Y) equal Consumption (C) plus Investment (I) plus Government spending (G), so Y=C+I+G. Standard NIPA stuff. Now break consumption into to components: a fixed level of consumption (Co) and a variable level that depends upon a marginal propensity (m) to consume out of disposable after tax income (Y – T). So C = Co + (m*(Y-T)
So Y = Co + m*(Y-T) + I + G
Rearrange terms:
Y = (1/(1-m)*[C – m*T + I + G]
Then differentiate the change in Y with respect to G and you get:
1 / (1 – m)
To get the lump sum tax multiplier just differentiate the change in income with respect to the change in the lump sum tax:
(-m) / (1 – m)
Clearly this lump sum tax multiplier is smaller than the government spending multiplier.
Now what happens if we look at the change in the tax rate rather than a change in the lump sum level of taxes. First rewrite “T” so that it is made up of two components, a fixed level of taxes (To) and a percentage of income (t*Y). So now T = To + (t*Y).
Now GDP can be expressed as:
Y = [1/(1-m+(m*t))]*[Co-(m*To)+I+G]
Now differentiate to get the change in Y with respect to a change in G and you get:
1 / [1 – m + (m*t)]
Now differentiate to get the change in Y with respect to a change in the tax rate:
(-m) / [1 – m + (m*t)]
Again, a change in government spending has a bigger effect than a change in the tax rate.
What’s going on here? Basically it’s just what happens when you get a convergent series and the marginal propensity to consume is betwee 0 and 1. Since a change in the tax rate always results in a numerator being less than 1, the fiscal multiplier will always be smaller with a tax cut.
A lot of oversimplification here. No accounting for leakage of imports, but the basic mechanics still work. When doing a comparative analysis you just set up the basic equations and then differentiate the change in income with respect to a change in the variable of interest. Most of the other terms are constants, so they just go to zero when you differentiate. It’s really just “m” and the variable of interest that remains. And that’s what you want when you do a comparative analysis.
Someone as ignorant and low IQ as Palin would have been laughed out of public life by now in most European countries. But not in the USA where DUMB has a big constituency. That she should even be talked about is a national disgrace and shame. Nation with no self respect.
So what does “G” have to be spent on to improve our economy according you your model? If “G” was spent to pay 8 million people to dress up as chickens and seach for grain for a year would this be legitimate “G”. What if we bought a billion barrels of snake oil. What if we hired shovel ready people to move the Grand Canyon to Alabama.
My understanding of your analysis is what “G” is does not matter. This is not a confidence builder.
Taking Chrises point a bit futher. Many of those in the last administration were more Ann Rand followers than that Adam Smith. Economists had fallen for the myth of the rational Homo Economics who was not motivated by other than total rationality. Adam Smith saw people differently, but the economists need to make their math models work, so they simplified human behavior out of the equation. Humans will fall victim to the law of small numbers (a small sample dictates how things will go), the bandwagon effect, i.e. the train is leaving the station get on board, a preference of risk avoidance etc. This combined with a national trait, showing up in the London Company that founded Jamestown, the North Carolina, California, Colorado, Montana,Nevada,Alaska Gold and silver rushes of get rich quick, leads to where we are.
We waste billions on a stupid war while the Chinese move in an make perhaps billions in our wake. You have to hand it to the US for stupidity. Bush Stupidity now inherited by Obama. Will he continue it? Wait for further developments.
Sammy: Nice try, but not effective.I merely mentioned that others were doing almost all the talking about her. I don’t feed Fox News and their ilk. Indeed the chatter about her has spread far beyond Fox News. Stupidity sells in the US. You should certainly know THAT.
Some supporters camped out overnight to be among the first to get wristbands from the Barnes and Noble bookstore at Woodland Mall in Grand Rapids.
Those with the orange bands will get the opportunity to have the former 2008 Republican vice presidential candidate sign their copies of the book at the three-hour signing event on Wednesday evening
Death Panels!??!!??? As far as I can find the current recommendation to reduce the number of mammograms was made by a new panel. The ?secret? panel may have been implemented as part of one of those many UNREAD portions of the stimulus bill.
So, how many more deaths from breast cancer is cost effective?
Obama needs to take a leaf from Nixon’s book on how to get out of the Afghan mess. First you say you are going to turn over the fighting to your puppet regime (you don’t call it that, of course) and that will allow us to gradually remove our troops. Of course the puppet regime hasn’t any ability or will to fight the Taliban, so it will eventually collapse. By that time you hope you are out and can blame the disaster on your puppet that didn’t do its job. Vietnam holds many lessons that Obama needs to pay attention to.
Dan, did you not approve my earlier comment?
There are no previews…just comment section misbehaving.
Well, to Fox News the “O” admitted that we might see an economic dip (W shaped recession.) he then went on to admit they were looking at other means to stimulate jobs growth. Ya’no those ole Republican tax cuts and incentives for business who create jobs and hire.
What does this tell us about the structure of the current jobs creating stimulus?
Here is a quote from a short appreciation of Adam Smith by Prof. Berry, an expert on the man:
If Smith of popular repute is the ‘father of capitalism’, the advocate of ‘market forces’, the enemy of government regulation and believer in something called the ‘invisible hand’ to produce optimum economic outcomes then he would be a disappointed parent. All his work is deeply steeped in moral philosophy. Indeed the simple fact that the final edition of the Moral Sentiments containing extensive revisions appeared in 1790, the year of his death, tells us is that Smith’s commitment to the moral point of view endured alongside and beyond the publication of the Wealth of Nations.
The Moral Sentiments is a leading example of a particular approach to moral philosophy – one that regards it not as sets of rationally or Divine ordained prescriptions but as the interaction of human feelings, emotions or sentiments in the real settings of human life. In many ways it is a book of social and moral psychology. What we can call economic behaviour is necessarily situated in a moral context. But more than that the key theme of the book is an opposition to the view that all morality or virtue is reducible to self-interest. Indeed his opening sentence declares that everyday human experience proves that false, he writes: “How selfish soever a man may be supposed, there are evidently some principles in his nature which interest him in the fortune of others, and render their happiness necessary to him, though he derive nothing from it except the pleasure of seeing it”.
I don’t think Smith ever imagined the extent of possible selfishness of contemporary US rightwingnuts. They pretend to adore Smith, but I don’t think they know much about him.
A test to see if this works…
BTW, The look is great. Good job Rdan!
Here’s Obama and Israel. Israel depends upon the US for its very existence. but gives us the finger whenever we ask it to do anything, however reasonable. Israel knows the US is helpless to control it in any way, that it runs US foreign policy in the Middle East, and can tell us to “shove it” whenever it feels like it. Completely arrogant. And NOT GOOD for America, long run. Too bad most Americans don’t understand this.
Sorry forgot the link:
http://us.lrd.yahoo.com/_ylc=X3oDMTI1cDdycjJpBF9TAzM5ODMwMTAzOARnc3RhdGUDMwRwb3MDNgRzZWMDbndfd29ybGQEc2xrA3RpdGxlBHRhcgNuZXdzLnlhaG9vLmNvbQ–/SIG=13smevg27/**http%3A//us.rd.yahoo.com/dailynews/rss/world/*http%3A//news.yahoo.com/s/ap/20091118/ap_on_re_mi_ea/ml_israel_palestinians
CoRev,
“What does this tell us about the structure of the current jobs creating stimulus?”
What does this tell us about GOP opposition to ARRA on the grounds that it swelled the deficit too much? If they thought a stimulus package that had fiscal multlipliers ~1.5 added too much to the deficit, then why would they support a further increase in the deficit for a set of proposals that have a fiscal multiplier < 1.0? Makes no sense...which isn't to say that Boehner and Cantor and Pence wouldn't think it was a great idea.
2slugs, what it might mean is that the multipliers calculations/theory were wrong.
At least “O” is starting to realize he has screwed the pooch with his stimulus. When will his blinded admirers also do so?
In an interview in the Chinese capital with Major Garrett of Fox News, Obama said he was “not disappointed” that the Guantanamo deadline had slipped, saying he “knew this was going to be hard.”
“People, I think understandably, are fearful after a lot of years where they were told that Guantanamo was critical to keep terrorists out,” Obama said. Closing the facility, he added, is “also just technically hard.”
Well GITMO will stay open, at least Obama didn’t announce another deadline he could miss.
So lets recap. Hope $ Change hit the WH running with teh smooothest tranistion of power since Reagan-Bush. So how are we doing 10 months later?
1) Gitmo stays open past the deadline with no end in site (My bet it will now fall off teh radar along with Bahgram AB)
2) 120K US troops still in Iraq qith Obama now openly stating that we will keep a residual force or 50K (the high side of my prediction)
3) INcrease combat activities and more troops into Afghanistan. Cross-border raids into Pakistan still going strong with Predators.
4) All those evil Bush survellance policy’s still in place.
Did Bush really leave office or the R’s still in charge? I thought the Dems totally own the WH and Congress. Did I miss something? This was all suppossed to be over by now?????
And best of all, now that a Dems in the WH, dissent is no longer the highest form of patriotism and support for the war must be high since the only people in the mall are protesting the huge Obama-deficits!
And don’t forget unemployment at 10.2% and climbing.
So when do I get my 5% GDP growth? Heck I’ll just take Clinton’s GDP growth, or even Bush’s.
Oh and my pony still hasn’t been delivered, what’s up with that!
Bwahahahaha!
Islam will change
CoRev,
2slugs, what it might mean is that the multipliers calculations/theory were wrong.
I think it’s more likely that Administration critics don’t understand the math and couldn’t describe what a multiplier is or how it is calculated or why a cut in the tax rate will always have a lower multiplier.
“O” is starting to realize he has screwed the pooch with his stimulus
I have argued for 10 months that ARRA was too small. Last winter Republicans argued that it was too big. Now Republicans want to make the stimulus bigger in the least effective way imaginable. GOP arguments are all over the ballpark on this issue.
2slugbaits said: “…couldn’t describe what a multiplier is or how it is calculated …”
Um … nor do I. I sort of get the concept but if you could provide an X x Y squared Coles notes to calculating multipliers I would be grateful.
Noni
2slugs said: “I have argued for 10 months that ARRA was too small. Last winter Republicans argued that it was too big.” You and your cohorts have been wrong for much longer than 10 months, and eventually, the voters will show you how wrong.
He also said: “Now Republicans want to make the stimulus bigger in the least effective way imaginable.” What a surprise it will be to 2slugs and the other Romer believers when “O” adopts the conservative approach to employment stimulus. Oh, they’ll be even more surprised when it works better than anything tried to date by this administration.
CoRev,
ARRA was designed to create or save 3 million jobs thru 2010Q4. So far it looks like the recovery is going about as planned. The problem is that Romer predicted we would lose 5 million jobs and ARRA only covers 3 million.
The good news about a GOP stimulus plan is that it will have some positive effect. The bad news is that it will give us very little bang for the buck.
Here is a brilliant analysis of Afghanistan. I say brilliant because it echoes what I have been saying myself (LOL). What is missing is the point that the “right wing” he talks about as frightening Obama into digging us in deeper is mainly the Neocons. And of course Neocons=Israel Lobby, as we all know.
http://host.madison.com/ct/news/opinion/column/article_c0a3da9b-16e7-5a44-b985-cf5dc7e0e193.html
It has been pointed out by economists who know something that the reason unemployment is so high is that there has not been enough stimulus to bring it down further. But the dunces keep saying stimulus has failed. And keep on saying it. On the other hand in Afghanistan, if the Taliban are not defeated they won’t say it is because we sent troops there, but that we didn’t send in enough. They are basically addlebrained and inconsistent in their thinking.
The Congress is now raking over the question whether the “terrorists” held at Guantanamo should be tried by military or civilian courts. This is a sideline issue and quite pointless. The real issue that is never discussed is whether these trials (and undoubted convictions) will do us any good. I doubt it. Most of these “terrorists” want to be convicted and executed. So we are doing what they want. Further they will all become martyrs for the Muslim world that sees them as heroes who fought back vs. US imperialism. Thus creating more hatred of the US. Truth is Americans have no comprehension of the mentality of Muslims fighting for Islamic liberation. Their attitude is exactly the same as that of US revolutionaries vs. the Brits. “Give me liberty or give me death”. That is what the first Americans believed and that is what the Islamic “terrorists” believe. Strange, no?
CoRev is pretty well refuted by Krugman, who is a Nobel winning economist which CoRev is NOT.
http://krugman.blogs.nytimes.com/2009/11/13/fiscal-perspective/
I think one of the most telling points Krugman makes is that the reactionaries screaming about the deficit never seem to worry about the billions and billions spent on unwinnable wars. If the money is squandered on stupid wars they are pleased; if it is spent to put unemployed Americans to work they are outraged. Nice moral sense, no?
Noni,
Let GDP (Y) equal Consumption (C) plus Investment (I) plus Government spending (G), so Y=C+I+G. Standard NIPA stuff. Now break consumption into to components: a fixed level of consumption (Co) and a variable level that depends upon a marginal propensity (m) to consume out of disposable after tax income (Y – T). So C = Co + (m*(Y-T)
So Y = Co + m*(Y-T) + I + G
Rearrange terms:
Y = (1/(1-m)*[C – m*T + I + G]
Then differentiate the change in Y with respect to G and you get:
1 / (1 – m)
To get the lump sum tax multiplier just differentiate the change in income with respect to the change in the lump sum tax:
(-m) / (1 – m)
Clearly this lump sum tax multiplier is smaller than the government spending multiplier.
Now what happens if we look at the change in the tax rate rather than a change in the lump sum level of taxes. First rewrite “T” so that it is made up of two components, a fixed level of taxes (To) and a percentage of income (t*Y). So now T = To + (t*Y).
Now GDP can be expressed as:
Y = [1/(1-m+(m*t))]*[Co-(m*To)+I+G]
Now differentiate to get the change in Y with respect to a change in G and you get:
1 / [1 – m + (m*t)]
Now differentiate to get the change in Y with respect to a change in the tax rate:
(-m) / [1 – m + (m*t)]
Again, a change in government spending has a bigger effect than a change in the tax rate.
What’s going on here? Basically it’s just what happens when you get a convergent series and the marginal propensity to consume is betwee 0 and 1. Since a change in the tax rate always results in a numerator being less than 1, the fiscal multiplier will always be smaller with a tax cut.
A lot of oversimplification here. No accounting for leakage of imports, but the basic mechanics still work. When doing a comparative analysis you just set up the basic equations and then differentiate the change in income with respect to a change in the variable of interest. Most of the other terms are constants, so they just go to zero when you differentiate. It’s really just “m” and the variable of interest that remains. And that’s what you want when you do a comparative analysis.
Someone as ignorant and low IQ as Palin would have been laughed out of public life by now in most European countries. But not in the USA where DUMB has a big constituency. That she should even be talked about is a national disgrace and shame. Nation with no self respect.
http://apnews.myway.com/article/20091119/D9C28MC00.html
Chris,
That she should even be talked about is a national disgrace and shame. Nation with no self respect.
You are the one talking about her.
Test
Slugs,
So what does “G” have to be spent on to improve our economy according you your model? If “G” was spent to pay 8 million people to dress up as chickens and seach for grain for a year would this be legitimate “G”. What if we bought a billion barrels of snake oil. What if we hired shovel ready people to move the Grand Canyon to Alabama.
My understanding of your analysis is what “G” is does not matter. This is not a confidence builder.
Taking Chrises point a bit futher. Many of those in the last administration were more Ann Rand followers than that Adam Smith. Economists had fallen for the myth of the rational Homo Economics who was not motivated by other than total rationality. Adam Smith saw people differently, but the economists need to make their math models work, so they simplified human behavior out of the equation.
Humans will fall victim to the law of small numbers (a small sample dictates how things will go), the bandwagon effect, i.e. the train is leaving the station get on board, a preference of risk avoidance etc. This combined with a national trait, showing up in the London Company that founded Jamestown, the North Carolina, California, Colorado, Montana,Nevada,Alaska Gold and silver rushes of get rich quick, leads to where we are.
http://www.timesonline.co.uk/tol/news/world/Afghanistan/article6922395.ece
We waste billions on a stupid war while the Chinese move in an make perhaps billions in our wake. You have to hand it to the US for stupidity. Bush Stupidity now inherited by Obama. Will he continue it? Wait for further developments.
Sammy: Nice try, but not effective.I merely mentioned that others were doing almost all the talking about her. I don’t feed Fox News and their ilk. Indeed the chatter about her has spread far beyond Fox News. Stupidity sells in the US. You should certainly know THAT.
Better get in line Sammy:
Some supporters camped out overnight to be among the first to get wristbands from the Barnes and Noble bookstore at Woodland Mall in Grand Rapids.
Those with the orange bands will get the opportunity to have the former 2008 Republican vice presidential candidate sign their copies of the book at the three-hour signing event on Wednesday evening
LOL
Death Panels!??!!??? As far as I can find the current recommendation to reduce the number of mammograms was made by a new panel. The ?secret? panel may have been implemented as part of one of those many UNREAD portions of the stimulus bill.
So, how many more deaths from breast cancer is cost effective?
C’mon spin Drs. Spin, spin, spin this one!
Obama needs to take a leaf from Nixon’s book on how to get out of the Afghan mess. First you say you are going to turn over the fighting to your puppet regime (you don’t call it that, of course) and that will allow us to gradually remove our troops. Of course the puppet regime hasn’t any ability or will to fight the Taliban, so it will eventually collapse. By that time you hope you are out and can blame the disaster on your puppet that didn’t do its job. Vietnam holds many lessons that Obama needs to pay attention to.