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

Still Busy

With the real job, so posting remains light. In the meantime, reading Mac Diva’s blog, I came across another new blog worth a look. While some may find it extreme or a little offensive, it is really funny: J.C. Christian’s blog. I’d call it a lefty’s attempt to blog like a Freeper would.

AB

The Daily Show

I’ve been meaning for some time to do a post about how sad it is that the most cutting analysis of politics, at least on TV, is on The Daily Show (Comedy Central), not Fox, MSNBC, or CNN. Alas, the Nation beat me to it. It’s worth watching, particularly the first ten minutes, and since Comedy Central plays it about 7 times per day, it should be easy to catch. Link to The Nation story via TBogg.

AB

State Governments Saving Money

Flush with tobacco settlement cash, going on eight years of a rapidly growing economy, and in many cases with newly elected Republican governors, many states slashed taxes around 2000. The crisis is probably worst in California (Democrat), but Texas (R) and New York (R) are not doing much better. Missouri has adopted an innovative new measure:

…the governor of Missouri has ordered every third light bulb unscrewed to save money.

And in Oklahoma,

teachers are doubling as janitors in Oklahoma.

And in Oregon,

[teachers are] working two weeks without pay.

And in Nebraska,

Nebraska has dismissed two of its three state diagnostic veterinarians.

These state deficits are in at least one way more problematic than the federal deficit: states cannot run budget deficits from year to year. This means that if they slash taxes when times are good (as opposed to saving), then when times are bad they have to cut back on spending or increase taxes, which exacerbates the crises.

Some might argue that the need to help the states is another argument against Bush’s tax cut, but it’s not so clear cut. As a general argument against irresponsible tax cuts (say, ones that turn surpluses into $300 billion plus deficits), the states serve as a cautionary example. But making the case that the federal government should bail out the states instead of cutting taxes is somewhat risky because it dramatically reduces voters’ incentives to demand fiscal responsibility from their state government.

If a state expects billions of dollars in federal aid whenever they cut taxes too much, then it is in that state’s economic interest to slash taxes (benefiting its residents) and then await a federal bailout (paid for by all citizens). This incentive towards irresponsibility is particularly strong in the less populous states (which were, coincidentally?, mostly red in 2000). Consider Montana, population 902,195. If bailing out Montana cost the federal government $1 billion dollars, then Montanans would pay roughly 0.3% of that cost, with the other states paying the balance. When every state reasons along these lines, fiscal affairs can go badly pretty quickly (if this sounds like a Prisoner’s Dilemma, it is). Even Californians only have to bear roughly 12% of the cost of any federal bailout of California, so the incentive is the same, but less strong than Montana’s.

AB

UPDATE: Why is this happening? Is it really fiscal irresponsibility and tax-cut euphoria, as I suggest above? No, Matt Yglesisa found the real answer: economic malaise is the price of freedom (as oppose to, say, the price of tax cuts that are targeted at the wealthy and have limited stimulative effects).

Note to State Governments

Flush with tobacco settlement cash, going on eight years of a rapidly growing economy, and in many cases with newly elected Republican governors, many states slashed taxes around 2000. The crisis is probably worst in California (Democrat), but Texas (R) and New York (R) are not doing much better. Missouri has adopted an innovative new measure:

…the governor of Missouri has ordered every third light bulb unscrewed to save money

. And in Oklahoma,

teachers are doubling as janitors in Oklahoma.

And in Oregon,

[teachers are] working two weeks without pay.

And in Nebraska,

Nebraska has dismissed two of its three state diagnostic veterinarians.

These state deficits are in at least one way more problematic than the federal deficit: states cannot run budget deficits from year to year. This means that if they slash taxes when times are good (as opposed to saving), then when times are bad they have to cut back on spending or increase taxes, which exacerbates the crises.

Some might argue that the need to help the states is another argument against Bush’s tax cut, but it’s not so clear cut. As a general argument against irresponsible tax cuts (say, ones that turn surpluses into $300 billion plus deficits), the states serve as a cautionary example. But making the case that the federal government should bail out the states instead of cutting taxes is somewhat risky because it dramatically reduces voters’ incentives to demand fiscal responsibility from their state government. If a state expects billions of dollars in federal aid whenever they cut taxes too much, then it is in that state’s economic interest to slash taxes (benefiting its residents) and then await a federal bailout (paid for by all citizens). This incentive towards irresponsibility is particularly strong in the less populous states (which were, coincidentally?, mostly red in 2000). Consider Montana, population 902,195. If bailing out Montana cost the federal government $1 billion dollars, then Montanans would pay roughly 0.3% of that cost, with the other states paying the balance. When every state reasons along these lines, fiscal affairs can go badly pretty quickly (if this sounds like a Prisoner’s Dilemma, it is). Even Californians only have to bear roughly 12% of the cost of any federal bailout of California, so the incentive is the same, but less strong than for Montana.

AB

Just because he’s cranky and once had a tree fall on him doesn’t mean he’s wrong

It’s Friday afternoon, which means it’s the time the weekly What’s New updates from Professor Robert Park, of the University of Maryland and the American Physical Society (you can subscribe to his free and entertaining weekly newsletter at the previous link) go out. This week, he reports on the conclusions of the National Academy of Sciences report on the reliability of lie detectors. Remember Wen Ho Lee? His case led DOE to implement widespread lie detector testing. The problem is that lie detectors generate a lot of false positives, and are apparently fairly easy to thwart. As Park reports

DOE carefully reevaluated its policies [in light of the NAS report] and reissued them without change, arguing that a high rate of false positives must mean the threshold for detecting lies is very low. Therefore, the test must also nab a lot of true positives. Since that’s the goal, the DOE position seems to be that the polygraph tests are working fine and false positives are just unavoidable collateral damage.

But surely there must be a better way? Park has the answer:

WN therefore recommends replacing the polygraph with a coin toss. If a little collateral damage is not a problem, coins will catch fully half of all spies, a vast improvement over the polygraph, which has never caught even one. Moreover, coins are notoriously difficult to train, making them impervious to countermeasures.

AB

While I’m in a Linking Mood

Read this CalPundit piece, where he talks about the lack of WMD discoveries in Iraq. Reasonable people might be tempted to say that it’s a big country and these things take time. Kevin sagely points out that pre-war we said we knew they had WMD, which should imply that we have some idea where they are. In a postscript, he adds

And if anybody says that it used to be around but since September it’s all been moved to Syria, I’m going to scream.

Warm up your voice and get some lozenges. For that matter, I think it’s already been said.

AB

UPDATE: For a list of times and places Bush said that we knew Saddam had WMD, see Uggabugga here (link via Atrios).

See Digby

He’s got a great post on the merits of General Clark on either position in the 2004 Democratic presidential ticket. Here’s an excerpt, but read the whole thing:

I believe that the best person to make the argument that Democrats are Americans too is someone who defies the phony liberal stereotype manufactured by GOP Inc. I think that many Americans could have their eyes opened to the true patriotism of the Democratic Party if that case were made by someone who spent more than 35 years maintaining American security. If that someone was so excellent that he began this career by graduating first in his class at West Point and ended it as the Supreme Allied Commander of NATO, the Democrats would have the perfect symbol of patriotic leadership as well as someone who has the demonstrated ability to maneuver the political shoals of the Pentagon and Washington without the taint of partisan politics.

I think Digby is roughly 100% correct here.

AB

Bechtel

So the NYT has a story on Bechtel winning the first major contract for construction in Iraq. Here’s one paragraph, in it’s entirety:

Administration officials said it was important to give contracts to American corporations, essentially leapfrogging over international groups, as a way to demonstrate to the Iraqi people that the United States is a liberator bringing economic prosperity and democratic institutions to their nation.

I hope, but somehow doubt, that this was a poorly executed paraphrase. In Bechtel’s defense, this wasn’t a no bid contract like the now nixed Haliburton deal, but the bidding was open only to US companies.

AB

If you look to your left

You’ll see that Instapundit is out now (his role and handling of the latest Lott affair knocked significant points off my impression of him as smart and witty if somewhat misguided), while Mac Diva is in.

AB

Permalinks FUBAR

The permalinks seem to go down a lot, so that if you follow a link here from another site, you don’t go to the right place. The solution seems to be to republish the archives after every post, but that’s a hassle. Anyone have any tips?

AB