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

Gary Hart on The Daily Show

Hart runs off a laundry list of things that have gone south (employment, federal budget, slow economic growth, tax equity, national security, foreign relations,…), concluding that “This guy ought to be thrown out.” Stewart then quips, “If it goes like this, Sharpton may win.” Then they go into a discussion of whether substance or image and money will prevail in the 2004 election:

Hart: Now, you put your finger on part of the problem. He [Bush] will spend a quarter of a billion dollars to be reelected when he’s leading by 20% in the polls. There’s a lot of talk about scandal in American politics. If this isn’t a scandal, I don’t know what is. It’s an outrageous corruption of the American political system. It has to stop.

Stewart: Are you going to run?

Hart: Well I looked at it, and I …

Stewart: Not interested in joining an outrageous political scandal?

Hart: I did that once.

AB

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Tax Cuts in Action

This just in:

The White House is expected Tuesday to forecast record budget deficits in excess of $400 billion this fiscal year and next with little hope of a turnaround anytime soon.

The simultaneous operations in Afghanistan and Iraq are running around $60b per year, so we can forgive the administration that. On the other hand, income and GDP are actually rising, so it’s hard to blame the economy for the deficit. Sure, unemployment is up, but that’s a burden that falls disproportionately on the poor, who as Republicans love to remind us, pay little or no income taxes. (Of course they pay payroll taxes, which the Administration has busted out of the lockbox and comingled with general revenue).

What does this mean for you? Higher taxes and reduced services in the future, higher interest rates, and increases in the Federal Government’s cost of debt service.

But surely, as a percentage of GDP, this is not so bad? So says incoming OMB Director Josh Bolten”

“Furthermore, the current deficit — as a percentage of GDP — is not large by historical standards and manageable within the overall context of our economy.”

The CBO projects next year’s GDP at $11.7 trillion, meaning that a $450 billion dollar deficit would represent 3.85% of GDP. Bolten is right that 3.8% is not high by historical standards, as long as you use the right history: the Reagan and Bush I years. On the other hand, Clinton inherited a deficit at 4% and got it down to 3% within a year. So perhaps Bolten should say that the deficit is not large by Republican historical standards. Just to make things clear, I’ve bracketed the years under budgets written by Clinton (1994-2001) in blue:

AB

UPDATE: The projected deficits for 2003 and beyond in the graph are, of course, way too low now–they should look roughly like the Bush I deficits.

UPDATE: It doesn’t happen often, and I had to be awake at 4:30 in the morning to do it, but I beat Atrios on this subject by almost two hours. But he’s got a better graph.

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Not Quite Rootin’ Tootin’…

…but U.S. intelligence on Iraq was “darn good”, says President Bush.

And there’s more; Bush also said “When I gave the speech, the line was relevant.” Relevant! But was it acccurate?

And there’s that word again, the one rarely heard before the war, but now mandatory in every statement:

“And I [President Bush] am absolutely confident today, like I was when I gave the speeches, that Saddam Hussein developed a program of weapons of mass destruction.”

And on his final day, White House Spokesman Ari Fleischer was in top form, declaring that “the bottom line has been gotten to.” I think that after 2.5 year of making nothing but vacuous statements, Fleischer is simply incapable of speaking in the active voice.

AB

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Must See: Bush Writing the SOTU

Via Atrios, who got the story from Media Whores Online, who in turn got the story from the White House web page: action photos with captions of President Bush drafting, editing, and pondering the State of the Union speech. The photos are good, but I like the captions even more. For example, this one:

“President Bush gives his speechwriting team a few points [sic] after revising the State of the Union Address in the Oval Office Jan. 23, 2003.”

The typo admits two explanations. One is that Bush himself also wrote the photo captions, and he meant to write “pointers”. A second theory is that the speechwriters were in a contest in which Bush allocated “points” for each insertion of a specious yet technically true (1/2 point for an almost technically true phrase) allegation or insinuation of a nuclear armed Saddam Hussein.

AB

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Huh?

I know North Korea is in the Axis of Evil and all, but explain this:

Finnish officials were at a loss to explain an allegation made on Thursday by a U.S. official that North Korea has been caught trying to sell pornography in the small Nordic country…

…U.S. Ambassador to Australia Tom Schieffer made the comments earlier on Thursday to the National Press Club in Canberra, saying North Korea was using a “mafia-like” business model to make up a revenue shortfall when the Soviet Union collapsed in the early 1990s.

“(North Korea has) been caught trying to sell pornography in Finland and prohibited animal products, like rhinoceros horn, in Africa, counterfeiting in Kuwait and trafficking heroin in Australia,” Schieffer said.

Wondering how a nutjob like this could become an ambassador, I went to Schieffer’s State Department Bio. There, I learned that his brother is Bob Schieffer, host of CBS’s Face the Nation. That must explain it–Bob used his media power and influence to get Tom the ambassadorship. Or maybe not; there is another nugget in the bio:

In 1989, he [Tom Schieffer] was an investor in the partnership led by George W. Bush and Edward W. (Rusty) Rose that bought the Texas Rangers Baseball Club.

Now it all makes sense.

AB

P.S. I was tempted to title this either “Porn of Mass Destruction” or “Weapons of Mass Porn”, but I couldn’t decide, so I went with my gut reaction when I read the story: “Huh?”.

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On the Lighter Side

I came across googlism.com, a site that uses google search results to capture the essense of a person, place, or thing. I must say that I like the Googlism’s for “Angry Bear”:

angry bear is a dangerous bear

angry bear is the last thing they want to run into

angry bear is something even worse

angry bear is in control

angry bear is een site voor leerlingen met oa verwijzingen naar vakkensites [angry bear is a site for pupils, with references to websites].

angry bear is to educate yourself

angry bear is a rich moment

angry bear is a useful response; it helps prepare you to do what needs to be done

angry bear is een site met relevante links [angry bear is a site with relevant links]

angry bear is running in a straight line toward his car at a speed of 4 m/s

angry bear is best given a very wide berth

angry bear is the internet and it’s on a path straight for you

angry bear is the garrett 310

angry bear is running in a straight line toward his car at a speed of 4

angry bear is close behind us

angry bear is martin campbell

angry bear is hopping mad at the outrageous p/e for ebay

But who is Martin Campell?

AB

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Two Thoughts

1. When a president reads in a speech that he’s about to given that a hostile state is actively seeking to a acquire uranium, wouldn’t he normally ask questions like “Is this information reliable? Was Saddam successful? How worried should we be?”, and so forth. Since the Office of the Vice President, the CIA, the State Department, and the National Security Council all knew the information was bogus, it’s hard to see how top presidential advisors and the president himself could not also know. I suppose that if instead of asking about the reliability of the frightening allegation, the president simply said “Uranium from Africa? Neat,” then the president’s staff might not have asked the right people the right questions—and that’s also scary.

2. By what magical (or for that matter, constitutional) power is the CIA able to force the president to alter the State of the Union speech? The CIA has no domestic powers, other than the ability to give information and advice, not orders. The CIA told the speechwriters that there was no real basis to say that “Iraq tried to buy uranium from Niger”; the speechwriters came back and said, “but the British said that they tried to do so.” The CIA apparently relented and said “it’s true that the British said that, but they were wrong”. Speechwriters: “But they said it.” Am I making this up? It’s hard to read the last paragraph of Tenet’s statement any other way:

Portions of the State of the Union speech draft came to the CIA for comment shortly before the speech was given. Various parts were shared with cognizant elements of the Agency for review. Although the documents related to the alleged Niger-Iraqi uranium deal had not yet been determined to be forgeries, [CIA] officials who were reviewing the draft remarks on uranium raised several concerns about the fragmentary nature of the intelligence with National Security Council colleagues. Some of the language was changed. From what we know now, Agency officials in the end concurred that the text in the speech was factually correct – i.e. that the British government report said that Iraq sought uranium from Africa. This should not have been the test for clearing a presidential address

The NSC, headed by Condoleeza Rice, is the agency with direct responsibility to the president for intelligence and security issues. It’s right there on their web page, which is a subpage of the the White House web page, www.whitehouse.gov/nsc:

The National Security Council is chaired by the President. Its regular attendees (both statutory and non-statutory) are the Vice President, the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, and the Assistant to the President for National Security Affairs. The Chairman of the Joint Chiefs of Staff is the statutory military advisor to the Council, and the Director of Central Intelligence is the intelligence advisor…The National Security Council is the President’s principal forum for considering national security and foreign policy matters with his senior national security advisors and cabinet officials.

The CIA advises the NSC, which is the President’s national security forum. Shifting the blame to the CIA, when the CIA told the NSC that the information was questionable, should not work. Now, if Rice issued a statement similar to Tenet’s, then she might make a legitimate scapegoat. Although she wouldn’t really be a scapegoat because, she has the direct responsibility for ensuring the accuracy of the president’s intelligence.

AB

UPDATE: RonK at Kos has some other good reasons why the Blame-Tenet gambit shouldn’t work. See also CalPundit here.

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Recession Redefinition

Amidst all the Niger Uranium furor I almost missed some interesting economic news. Fortunately, commenter Stirling Newberry alerted me to a story in the Friday Washington Post: Number Crunchers vs. Recession. Said number crunchers are members of the National Bureau of Economic Research (NBER) which, among many other things, is the most widely used source for dating the start and end of recessions. You’ve probably heard that the latest recession started in March of 2001 (notwithstanding Bush’s simultaneous attempts to say that 9/11 caused the recession and that it started under Clinton–on this topic, this Slate story is a must-read). But when, if ever, did the recession end? Well, there are two conceivable ways to get to the end zone in football. Normally a team scores by moving the ball past the goal line. On the other hand, they could keep the ball stationary and simply move the goal line. It looks like the NBER is doing the latter:

“If the committee were to rely on the same indicator to date the end of the slump, the recession would already have lasted for two years and three months, making it the longest since the vastly more serious downturn that began in 1929 and became the Great Depression…

Chances are, by giving far more weight to the GDP than it has in the past, the committee will decide before long to call an end to the 2001 recession, which many economists believe ended late that year…

This is the dating committee’s [new] official definition of a recession:

A recession is a significant decline in activity spread across the economy, lasting more than a few months, visible in industrial production, employment, real income and wholesale-retail sales. A recession begins just after the economy reaches a peak of activity and ends as the economy reaches its trough

…But that language was sharply revised when the next update was posted last month on the National Bureau of Economic Research’s Web site:

The committee views real GDP as the single best measure of aggregate economic activity. In determining whether a recession has occurred and in identifying the approximate dates of the peak and the trough, the committee therefore places considerable weight on the estimate of real GDP issued by the Bureau of Economic Analysis of the U.S. Department of Commerce.”

My first thought upon reading this was “Hey, the NBER has the top economists in the country and is largely apolitical, so there’s not much of a story here.” My second thought was “On the other hand, the current President of the NBER is Marty Feldstein, who was Chairman of Reagan’s Council of Economic Advisers from 1982-1984. It sure would be nice for Republicans if the Recession is formally announced to be over before November, 2004.”

So I checked into who is on the NBER’s Business Cycle Dating Committee:

Robert Hall (Chair), Martin Feldstein (President, NBER), Jeffrey Frankel, Robert Gordon, Christina Romer, David Romer, and Victor Zarnowitz.

All members are top-notch economists, but I don’t know most of their political affiliations. Fortunately, many economists on both the Left and Right recently decided to reveal their political leanings by signing one of two letters (I blogged about the letters here). Besides Feldstein, no members of the NBER dating committee signed the Republican Letter (scroll down). Frankel, Gordon, and both Romers signed the Anti-Tax Cut Letter. So I think it’s pretty tough to argue that the committee was stacked with Republican economists. Also, Prof. Frankel chaired Clinton’s CEA in the late 1990s.

Instead, the change most likely reflects genuine confusion induced by the historically unusual confluence of positive GDP and income growth accompanied by rising unemployment.

Still, while probably not politically motivated the focus on real GDP as the single best measure of aggregate economic activity” is troubling because it implies a focus only on the total income in the economy, not the distribution of that income. Under this logic a recession would not be in progress even at 20% unemployment, as long as the other 80% of the labor force had more-than-offsetting increases in income. But at least one in five people in this scenario would disagree with this conclusion.

AB

P.S. In the 1970s, economists thought recessions and inflation would not happen at the same time, so they had to come up with a new name for the new phenomenon: “stagflation”. The only phrase I’ve heard for the current situation is “jobless recovery”, but while acccurate, it’s not very catchy. Ideas?

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