Counting Government Jobs

1. A private sector employer expands and hires an additional employee at $100K.

2. The government expands and hires an additional employee at $100K.

Questions

1. What is the net growth in jobs? 0, 1, or 2

2. What is the net growth in the economy? $0, $100K, or $200K

My answers are 2 and $0 respectively.

the Help

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This is a very powerful movie about the black and white divide in America that existed for more than a century after the Civil War. It focuses on the role of black maids in the south during the time of "Jim Crow".

I think that it is time to replace the innocuous sounding "Jim Crow" with a more appropriate title for what America maintained in that century. I have come around to the view that the reality of that situation would more appropriately be called the American Apartheid.
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The public debate by a center-left friend

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Hello YA.

I found the following article interesting (even if flawed)

I find myself on the opposite side of the republicans about half the
time, and generally consider myself more of a democrat than a
republican. However, a lot of the supporters of each party seem to have
a penchant for wanting issues to be simplistic in whatever sense allows
them to appear the Masters of the correct point of view and the other
party to be completely and inexplicably out-of-touch.

I think there ought to be a University Studies course on the
construction of arguments against another point of view in which the
arguments look for the complexity in the other point of view which make
it possible for reasonable people to disagree. A student gets a "D" if
they are incapable of seeing beyond these ludicrous paintings of the
other side. A student is failed, who simplifies the other side beyond
even that student's own sensibilities just so that they can poke fun at
the other side. I think that 1/2 of the time these people know that
they are assigning to their opponents opinions that their opponents
don't have.

This does not mean that I think that many of the politicians are not
trying to sculpt statements that might allow them to be everything to
everyone. However, I think these two go hand-in-hand: there are so
many people willing to misinterpret what one says, and so many people
willing to buy into these idiotic arugments, that a politician finds
her/himself in a difficult spot.

Bachmann

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Michele Bachmann announced that, as President, she will reduce the price of gas to under 2$ per gallon.

I believe that that is a very creative way of saying: I am not a serious candidate.
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MLK I have a dream speech

August 28
I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident: that all men are created equal."
Martin Luther King - August 28, 1968 Hear highlights at I have a dream speech or read the full text.
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Model of modern US President.

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Try this

Model of modern US President.

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The Alabama immigration law

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The other night (8-24-11) on the PBS news I watched a discussion of the new Alabama law on immigration. Among other things the law provides for school systems to require public school students to verify that they have legal status. The opposition to the law was represented by Mary Bauer of the Southern Poverty Law Center. She seemed to not be aware of any distinction between legal and illegal immigrants. Her main points against the Alabama law was that it is “extreme” and “radical” and “very extreme” and “anti-immigrant” and “controversial” and “contains incredibly extreme radical provisions”.
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A position on torture

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Overheard:
I am opposed to torture. My position on this is absolute. I expect the government to protect me and support my freedom to take that position. They may feel that, in order to protect me, it is sometimes necessary to employ aggressive interrogation techniques. That is their job to decide whether, in any particular case, it is necessary or not. But if they go too far they should not expect me to support them because my position is clear and unequivocal. I am opposed to torture.
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Americans Elect 2

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The first post on this topic was 8-3-11.

There was a story on PBS news last night about Americans Elect.

As noted before some on the left see this as a conspiracy against Obama.

However, the Tea Party is the most enthusiastic group out there. I think that if the Republicans nominate anyone close to the center like Romney, then the Tea Party folks may turn to this vehicle. It seems to fit some of their objectives.

But there is also a possibility that we will really have a revolution here. If the election looks like Obama vs a Tea Party candidate what could a combo of Evan Bayh and Joe Scarborough or Brown of MA or Pataki of NY or NYC Mayor Blumberg do?

National Health Care 3

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Most of the time the advocates of national health care have taken an all or nothing approach. Medicare being the huge counter example. Have you ever wondered what would have happened if they had taken a gradual approach at other times?

After Medicare was done in the sixties what if the supporters of national health care had simply extended it to children under 18? There were several times in the seventies and nineties when the Democrats controlled the President, Senate and HR. Kids are not too expensive and an equal opportunity argument could have been made.

Maybe next you could include all of those who had ever been in the military service for the country for 5 years. Then their families.

Now imagine the consequences. After they passed 18 all of those people would be accustomed to having had health care all of their life.

Surely they would be more inclined to support a full scale "medicare for all."

America's political parties +

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America's political parties currently offer the voter a choice
between Mr. Scrooge and Rumpelstiltskin. YA

Rationality is the third rail of American politics. - Stephen Colbert
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The Laffer Curve 4

The Conventional Laffer Curve argument says that if income tax rates are lowered then, paradoxically (because of increased economic activity), the amount of revenue will be increased. This is presented by anti tax people as absolute and independent of what the rates are. It is frequently accompanied by a reference to the Kennedy tax cuts of the mid sixties and the Reagan tax cuts of the early eighties. It is stated that both worked. For a certain class of people two examples are enough to draw a general conclusion. The conclusion is then drawn that a tax rate cut from any rate will also increase revenue. The corollary is that a return from the lower Bush rates to the higher Clinton rates would actually reduce revenue. To see that the general argument is not valid, consider the impact on revenues of reducing the rate from 1% to 0%. Does anyone really believe that that would increase revenue?

Therefore there is a problem with this argument. To see when it works and when it doesn't work, take a look at the "Laffer curve" which looks like the Gateway Arch of St Louis. You can see a larger version and discussion here . (rates below refer to the highest marginal rate)

The Valid Laffer Curve argument is this: At lower rates an increase in rates will produce an increase in revenues, but if you are on the high rate side of the maximum revenue point, then you can only increase revenue by (surprisingly) lowering the rate. After doing thought experiments considering extreme rates of 100% and 0% the basic idea is credible. (Imagine changes from 100% to 90% or from 0% to 10%.)

So when does it work? Well it depends on which side of the curve you are on. OK what is the “break point” - t* - the rate that will give you the high point (= maximum revenue) on the curve? A general answer for that question would be very hard to get. (Although the picture looks like it there is no reason to believe that it is 50%.) But we can say something about it. Let’s look at when the theory worked and when it didn’t. Kennedy’s rate drop was from 91% to 77%. Reagan’s rate drop was from 70% to 50%. Both of these produced increases in revenue, so clearly rates of 91% and 70% are on the high side of the curve. But Clinton raised taxes up to 39.5% and increased revenue. We actually had budget surpluses. Therefore 39.6% must be on the left side of the curve. This was reconfirmed when Bush lowered the rates back to 35% and revenue fell.

Therefore, the argument (lower rates produce higher revenues) works in our economy if the rates are at 70% and above and it doesn’t work if the rates are at 39.6% and below. In between we need more data.

The main conclusion is that it didn't work for Bush's tax cut.
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Food Stamp Stimulus

Tom Vilsack, Secretary of Agriculture, recently stated that Food Stamps are stimulus and each Food Stamp dollar generates $1.84 in economic activity.

I believe Mr. Vilsack is factually correct. I also believe the following:

1. If the Food Stamp dollar is funded by pulling a dollar out of the economy (taxes) the net economic activity is zero.

2. If the Food Stamp dollar is funded by borrowing the benefits of the additional economic activity should be measured against any negatives such as an increase in debt (cost/benefit analysis).

3. If the Food Stamp dollar is funded by “printing money” it is inflationary.

The bottom line is that stimulus is not always a good thing. Excuse me I while I pour my 7^th cup of coffee.

Hypocrisy 2

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The response to Warren Buffett's piece is interesting (see previous post). I think that there is a nice parallel with the reaction to government programs.

Michele Bachman stated that "There is nothing keeping Mr. Buffett from writing a check." If he wants to pay higher taxes.

That is true but it (in her mind) allows her to completely ignore his major point: That higher tax rates will not run off the "job creators". They will still be around just like they were when we had the 'higher than now' Clinton rates in the 90's.

However Ms. Bachman does not (as far as I know) call Mr. Buffett a hypocrite for holding that opinion without paying up.

Consider now a conservative M C who a) futilely votes against a liberal benefit program and b)after it passes this MC still arranges for their district to get its share.

I have a liberal friend who thinks that that is rank hypocrisy.

It just seems like the other side of the coin from Buffett's comments to me.

There was a lot of discussion about a similar point last year on this blog. I have included most of it in the first 3 comments.

(Wayne in that discussion is YA.)
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Coddling the super rich

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It is well known that Warren Buffett thinks he should pay more taxes. There are certain arguments made against that based on a faith that the Laffer Curve applies at all levels of taxation.

Buffett himself offers an informative perspective and data on both of these points in this article.
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The Texas miracle

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You can get the Krugman's take on why Perry's record in Texasis an illusion here.

His first two points are: They drill a lot for oil and "Texas was spared the worst of the housing crisis, partly because it turns out to have surprisingly strict regulation of mortgage lending."

The "drill baby drill" folks will love the first one.

I find the second one delightful. Texas didn't follow the Frank-Dodd national insanity of turning Fannie and Freddie into a national backstop which promoted the making of mortgages to people who were very likely to not pay them back. Texas maintained strict regulations on mortgage lending.

From Krugman's point of view it wasn't a policy decision that Texas made contrary the conventional liberal wisdom. (Did Krugman ever oppose that national policy?) It is just an odd coincidence. Texas didn't make good policy they just got lucky - "it turns out" - "surprisingly."

The left may be short on gold, but they have plenty of brass.
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Raindrops keep fallin' on my head.

Texas Gov. Perry publicly prayed for rain.
For days there was no rain in Texas.
Then Gov. Perry announced his candidacy for president.
That same day there was rain in Texas.

Sounds to me like a deal was made down there.

Tea Party Terrorism

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I am not an enthusiastic supporter of the Tea Party beyond my agreement with them that we must deal with the debt.

While I give them credit for forcing the debt question onto the front burner, I don't agree with them on taxes and I think they are way too simplistic in their approach. But they have changed the conversation.

On the other hand I'm pretty tired of the nature of the attacks on them by the left which frequently amount to little more name calling. (revised 8-20-11)

The latest is "Tea Party Terrorists". This label is attached to them because they are -- well because they are sticking to their guns (so to speak) and using whatever is available to further their cause. Exhibit A is the debt ceiling.

This name calling comes from the same folks who gave us the video of someone who looks like Paul Ryan pushing Grandma in her wheelchair over a cliff.
What was Ryan's crime?
He got the House of Representatives to pass a (future) substantial cut in medicare.
You know entitlements.
You know the "third rail of politics." (The electric rail in the middle of the tracks)
They are called the third rail because if you touch them you die.

The left's unwillingness to touch entitlements in the face of national bankruptcy is not terrorism.

That is called sticking to your principles.
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Why No Democrats Will Challenge Obama

The link above and below is to a column by Eleanor Clift in which she quotes Charlie Cook as saying “Who wants to feel responsible for costing the first African-American president his reelection?” Now Eleanor is clear in stating that she is reporting and not necessarily expressing her own opinion. However, the lack of any remarks to the contrary would, to me, indicate that Eleanor might, at the very least, be flirting with tacit agreement with Mr. Cooks’ statement.

I am amazed! In what universe is Mr. Cooks' statement NOT calling (some) Democrats racist?

http://www.thedailybeast.com/articles/2011/08/12/obama-s-reelection-helped-by-the-left-s-primary-vacuum.html

Ames debates

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The Republicans had their debate in Ames, Iowa last night.

Recall that the Simpson-Bowles commission recommended closing the deficit gap by cutting spending and raising taxes in a ratio of three (3) to 1.

The 8 candidates were asked to imagine a proposal to deal with the debt problem by a combination of spending cuts and tax increases in which the ratio of spending cuts to tax increases was ten (10) to 1. They were asked to raise their hand if they would refuse to support such a plan.

Each and every one of them raised their hand.

I thought it was sad.
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Winston Churchill in '42

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Everyone knows how the French defense (based of the foolish Maginot Line) collapsed so quickly in 1940 and it is now the stuff of legend how the English valiantly fought on alone for over a year against Hitler’s Nazis before help came from America and the Soviet Union. In 1942 Winston Churchill made a speech to the Canadian Parliament about the war.

He talked about the Fall of France and how, in response to his prediction that England would fight on, the French generals told their leaders that,

“In three weeks, England will have her neck wrung like a chicken.”

There was a pause and then he said: “Some chicken.”

After wild applause and another pause he continued: “Some neck.”
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Supermajorities and debt

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For some things we require supermajorities to pass. Congressional proposal of Constitutional Amendments, State approval of amendments (three fourths), treaties, overriding presidential vetoes, removal of members of the government (impeachment by the House is by majority vote but conviction by the Senate requires two-thirds.)

The areas where we require these larger votes for approval seem to meet one or more the following characteristics.
1. The subject is of overriding importance,
2. The consequences of the action extend well beyond the present situation, or
3. The action involves a power that is particularly subject to being abused.

For example taxes do not require more than a majority vote because they only apply until some later legislature changes them.

So my question is: Doesn’t the borrowing of money meet all three of those criteria?

1. Our current crises makes it clear that borrowing meets the first criteria.
2. It will be on our grandchildren (who have no vote in the matter) which means that it meets the second criterion.
3. The widespread use of the habit of promising future benefits to government employees or beneficiaries of entitlement programs makes it clear that it is very subject abuse.
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Nobody admits failure

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One of the sad things about the harder times that are apparently coming is that no one will be admitting that they were wrong. Lets look at an example from each side.

It is well known that the Clinton era produced surpluses and actually reduced the debt (not just the deficit but the debt itself). However, the Republicans will certainly not acknowledge that their unwillingness to go back to the Clinton tax rates has contributed to the rise in the debt.

On the other hand the government engaged in a huge interference in the economy in 2008-09, then pumped an 800+ billion dollars of stimulus into the system, then overhauled the health care system in a way that promises that the government will spend trillions of dollars more on our health care. Meanwhile the Fed has pumped over a trillion into the money supply. All this government activity has not led us to the promised land. You might expect someone on the left to acknowledge that their program had some problems. Maybe some will. But I expect most will say that the government should have done even more.
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Nixon, Rodino, and Jordan

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In the summer of 1974 the country was in the midst of the agony of realizing that Richard M. Nixon had committed acts that qualified as the "high crimes and misdeameanors" that were required for the impeachment and removal of a President of the United States.

The House Juciciary Committee hearings were televised and were opened by Chairman Peter Rodino who went all of the way back to Runnymede in the year 1215. If memory serves, he began with , "It is now more than seven centuries since the barons of England forced King John at the point of a sword " ... to agree to the Magna Carta and accept the fact that the King was not above the law.

The principal argument being made by Nixon's supporters was that the things that were done were not sufficiently grave to warrant impeachment. One thing that made the case difficult was that a lot of the documents that would have been evidence were destroyed in paper shredders.

Barbara Jordon was a first term MC (member of Congress) from Texas. She had been placed on the House Judiciary Committee which would determine whether the constitutional requirement would "reach these offenses". She made a spellbinding speech in support of impeachment which ended with:

"If the impeachment provision in the Constitution of the United States will not reach the offenses charged here, then perhaps that 18th-century Constitution should be abandoned to a 20th-century paper shredder."

You can read the speech here, but I would recommend that you listen to it here.

The judiciary committee eventually recommended to the House of Representatives three articles of impeachment against Nixon.

I was confident that Nixon was doomed. I even made a bet on it. Another example of how it pays to say exactly what you mean. I bet Franz $10 that "Nixon will be impeached." I lost because:

On August 8, 1974, Nixon announced his resignation effective the next day, before the House could vote to impeach him.
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US credit rating downgraded!!!

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Standard and Poor downgrades America's credit rating.

YA has been among those saying for some time that the fiscal situation is more serious than our leaders indicate. (Click on the fiscal policy label at the bottom of this post.)

In particular those who believe that China "needs us as much as we need them" are invited to read China blasts US over credit rating downgrade

To those who say that we can't cut spending or raise taxes in a recession I will say, "OK. Suppose that that is true." It is not rocket science to reconcile that with a long term solution. Make the serious changes take effect in 2013 or have them take effect gradually.

In particular Obama needs to find the courage of Paul Ryan and advocate something.

Breakdown of when we spent it and who we owe.

added Aug. 8 Niall Ferguson's view can be found here.
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My Tenure Biennium a memoir

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The book is about an extremely unusual tenure case.
It can be obtained at the MSU Book Store in the Curris Center in Murray KY or ordered from donna.witherspoon@murraystate.edu or 1-800-749-8580. The price is $12 (plus postage if applicable).

Murray, KY, 1981 In the midst of a campus-wide political crisis in which a board of regents is unable to oust a transformational president, a failed department chairman makes his third application for tenure, withholds evidence from another applicant’s tenure file, and begins a whispering campaign. A politically secure dean, who had sided with the board, cooperates with the chairman’s misconduct and presents the upper administration with an interesting opportunity. What will they do?

Readers’ Comments about My Tenure Biennium

From readers who were there:

Your recollections, most capably presented in your Tenure Biennium, were, for the most part, similar to my own.
Constantine W. Curris, Murray State University President, 1973-83

“I got it in the mail yesterday and I read it last night.
Couldn’t put it down. Very interesting reading.”
Vaughn Vandegrift - Chair of MSU Dept of Chemistry, (1982-88)
Chancellor, SIU – Edwardsville - present

“ remarkably detailed … exceptional documentation … certainly intrigue and politics appear to have played a role.”
James L. Booth - VPAP– Acting President – Provost, MSU (1982-1998)

"Wayne's story is told with more evidence, greater honesty, a higher level of thoughtful, self-reflective analysis, and, a keener sense of humor than I would have ever thought possible from any Ph.D., especially one who survived such an academic nightmare!”
Ken Wolf – MSU Associate Professor of History during the biennium

“I took my guidance from the chapters' epigraphs that provide an eclectic soundtrack -- from Bob Dylan to the Psalms to Willie Nelson -- …”
Terry Foreman - Chair of Philosophy and Religious Studies 1978 – 96, Senate VP in the biennium

“… amazing detail …” Dr. Frank Julian –VP for Student Development, 1974-1989

"This is a fascinating, intriguing story with a remarkable depth of specifics, accuracy, analysis, humor, and quality. I had difficulty putting MY TENURE BIENNIUM down."
Jules Harcourt Chairman, Office Systems and Business Education, 1976-1991

"… some of my experiences within the College of Environmental Sciences … were similar to yours."
Oliver Muscio MSU Chemistry Professor 1976-2008

From readers who were not there.
"A powerful narrative that offers valuable lessons for administrators at every level."
Ted Brown Dean, MSU College of Humanities and Fine Arts 2006 - present

"Dr. Bell’s tenure case is fascinating. How could a university promote a faculty member early and then turn around and deny that faculty member tenure the very next year? Red flags should have been going off everywhere. The system clearly wasn't working."
John Mateja – Dean, College of Science, Engineering and Technology, MSU (1998 – 2001)

(from the foreword) “The episode of Wayne's tenure biennium was, I think many of you will soon agree, a watershed moment in the history of the math department and a sanguinary contest for its heart and soul.”Rob Donnelly - Prof of Mathematics, Murray State Univ., (1997 – present)

added 9/22/11 The introduction to the book is listed below.
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media's treatment of Tea Party

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Senator Kerry believes that the media has the responsibility to not give equal time or credence to the Tea Party's views.
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The Clinton tax rates

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The Rs are willing to advocate a major reduction in medicare (Paul Ryan's proposal) and take the heat.

Why don't the Democrats argue for a "return to the Clinton tax rates"?

What they do argue for is ending the Bush Tax cuts for the "rich". That won't get enough (70 billion/yr = 5% of the current deficit). To argue for ending all of the Bush tax cuts has a negative flavor. You know - "We don't need any job killing tax increases." But obviously the Clinton tax rates weren't "job-killin'" because we had lots of new jobs and a budget surplus.

Perhaps the Dems are not willing to take the heat.

Ryan was told that his proposal might beat him and he said, "Some things are worth losing an election over."

Do the Dems have any thing that they are willing to lose an election over? Perhaps their plan for avoiding insolvency?
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