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

.
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.)
.

Coddling the super rich

.
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.
.

The Texas miracle

.
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.
.

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

.
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.
.

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

.
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.
.

Winston Churchill in '42

.
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.”
.

Supermajorities and debt

.
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.
.

Nobody admits failure

.
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.
.

Nixon, Rodino, and Jordan

.
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.
.

US credit rating downgraded!!!

.
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.
.

My Tenure Biennium a memoir

.
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.
.

media's treatment of Tea Party

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

The Clinton tax rates

.
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?
.

Americans Elect

.
If I haven't already done so (and even if I have) I commend to you the following interesting idea.

Americans Elect

Added August 7: Some on the left see this as a conspiracy against Obama.

.

2012 Candidates - August - 2011

.
Here are some possible candidates for the major party nominations for president in 2012.
The sequences in parentheses are my wild guesses about the percentage chance that each of them had monthly, Jan-current month, of getting the nomination. My principal reaction to each is listed afterword. If you will point out stuff to me I can improve this description over time.
The YAMSLT test can be found here.

Remember I am not a professional at this, just an interested citizen.

DEMOCRATIC
Barack Obama (99) I will consider him again, but he is worrying me.

REPUBLICAN
Mitt Romney (25-25-26-24-25-30-30) I would consider him. Some say he has a problem in that the Romney health plan in MA is similar to Obama’s national plan. Some say that it is therefore a contradiction for Romney to oppose Obamacare. I think not and I now think he can make the case.
Rick Perry (x-x-x-x-x-x-06-22)Seems more and more like a candidate. Would be a strong one. But is America ready for another brash Texas Governor? Is his jobs record that good? If he enters, it will quickly become a two person race: Romney-Perry.
Tim Pawlenty (05-07-08-16-14-20-25-15) - I would consider him. A serious person. Apparently did not pick up Daniels's support.
Michelle Bachman (x-x-x-01-01-10-20-13) A lightweight. Fails YAMSLT

Jon Huntsman (x-x-1-1-01-05-06-04) As I know him more, I like him more. I would consider him. Seems like serious people take him seriously. I don't see how he wins the nomination though.
Sarah Palin (20-20-21-16-16-19-3) - She is playjng games. Fails the YAMSLT.
Ron Paul (x-x-x-x-01-02-03-03)

Herman Cain (x-x-x-x-x-x-01-01) Has a long way to go to be a serious cand.
Newt Gingrich (4-4-4-4-03-03-01-01) - I would have considered him but he abandoned the 1st amendment. ……… his position on Park 51 not only that they should not, but that Muslims do NOT even have the right to, build there.
Rick Santorum (x-x-x-01-02-01-01-01) - Too far right for me. Fails the YAMSLT.
Gary Johnson (x-x-x-x-01-01-01-01) Will highlight the drug prohibition issue.

.

caterwauling

.
If you want to read a Nobel prize winner's hysterical reaction to the budget deal try this.

His position is that we shouldn't be cutting any spending right now because we are in a weak economy. Mindful of that, the deal calls for only 30 billion in cuts this year (of the total of 900 billion over 10 years). That is less than 1% (one %) of the federal expenditures this year.

Nevertheless he includes much of the language that we normally associate with the far right types: abject surrender, raw extortion, banana republic, medieval doctors, blackmail on the part of right-wing extremists, a catastrophe on multiple levels.
.

A revolutionary's view

.
If ye love wealth better than liberty, the tranquility of servitude better than the animating contest of freedom, go home from us in peace. We ask not your counsels or arms. Crouch down and lick the hands which feed you. May your chains set lightly upon you, and may posterity forget that ye were our countrymen.
Samuel Adams, in a speech at the Philadelphia State House (1 August 1776)