Huckabee Believes Aliens Caused Market Crash

October 13, 2008

Actually, he doesn’t.  But what he does suggest is almost as crazy. 

In an interview with Chuck Norris on his new Fox News show, Huckabee says that a friend of his in the financial business told him that the pattern of trading suggests that the crash may be the result of “economic terrorism.”  The Huckster emphasizes that his friend is not just some guy on the internet and that the theory is a “plausible argument.”  Norris then adds that the Chinese may have received some secret deal in exchange for our trade deficit with them that allows the Chinese to drill for oil off of the Florida coast without our knowing it. 

I’m not sure my summary could capture the full craziness of it, so David Kinkade at that great new blog, The Arkansas Project, has found a video of the exchange.

I hope stuff like this drives a stake through the vampire heart of Huck in ’12 talk. 

Why would Huck suspect the market dive to be caused by economic terrorists rather than the more obvious popping of the housing bubble and a credit-quality panic among banks?  Why is he asking Chuck Norris for his opinion?  Why does Norris offer an additional conspiracy involving the Chinese and drilling off of the Florida coast?  Why was this man ever considered a serious presidential candidate?

I have to add that it is especially scary when people who ought to be responsible start spinning conspiracy theories on TV.  The popularity of conspiracy-obsessed web sites, like Daily Kos, and Andrew Sullivan’s promotion of conspiracies about Palin show that “elites” are increasingly comfortable with conspiratorial thinking. 

Unfortunately, when elites peddle conspiracies, it lends credibility to all of the run-of-the-mill wacko-conspiracy theorists out there who feel legitimized.  In just the last month I’ve had two people freely offer their conspiracy theories to me about the Trilateral Commission, the neo-cons, etc… 

When will people learn that we have a hard enough time pulling off normal, openly-stated goals, like winning a war or regulating banks, to pull-off elaborate secret missions?  Human beings can barely walk upright let alone control global events.

8 Comments | politics | Tagged: , , , , , , | Permalink
Posted by Jay P. Greene

David Warren Bails Out on the Bailout

October 13, 2008

(Guest post by Greg Forster)

On this page I’ve cited comments by Canadian columnist David Warren as providing potential support for backers of the bailout. I don’t think, however, Warren had explicitly taken a position. Well, now he has, and it turns out he’s against. I figured out of fairness I should take note of it. I think Jay will particularly like the way he puts this:

Were it not for the panic, very little would be lost. The things that we produce by our labour we may continue to produce, so far as they are needed; and the things we need may continue to be produced, in exchange. Money itself, so long as it is taken at face value, may continue to be the convenient mode of exchange. Neither now, nor in 1929, nor in any of the other times of stock plunge and bank failure, has anything much been lost, until, to use Franklin Delano Roosevelt’s phrase, “fear itself” became the enemy of the people.

For in practical terms, the stocks on Wall Street are not worth nothing. Formidable agencies of production lie behind each of them. When their heads have cooled, investors may sort out which are over-valued, which under-valued by comparison, and what needs writing off. The more I try to think it through, the clearer it seems to me that every “rescue plan” is counter-productive. The sorting-out process is seriously confused when the government blunders in.

Indeed, the consensus of the economists I have read is that the Great Depression was largely an artifact of government intervention, reacting to a meltdown by freezing it into place. For politicians and bureaucracies characteristically mistake money for goods, words for things, pictures for reality.

Warren has actually been on fire for the past couple weeks; Mark Steyn has recirculated this thoughtful column on the “two solitudes” in U.S. politics, and with Canada having its own election underway, Warren’s relentless attacks on Conservative PM Stephen Harper (“Twice I have tried to unload the contents of a column over the head of Stephen Harper, whose betrayal of conservative causes I have been inclined to take personally. The other candidates do not annoy me nearly as much, since I have never been tempted to like, admire, or support any one of them.”) culminated in this paean to the (now apparently defunct) “returned ballot” rule, which once allowed a Canadian to show up at the polling place and formally register that there was no candidate for whom he would care to vote.

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Posted by Greg Forster

What Me Worry?

October 13, 2008

 

We’ve previously discussed how teachers are relatively well-paid and how the structure of their pay does not promote quality teaching.  To be sure, teachers aren’t paid like doctors, but they also aren’t paid like fast food workers.  If computed on a weekly basis, teachers are paid slightly above the average professional specialty and technical worker (the group in which they are classified by the Bureau of Labor Statistics).  But on an annual basis they are paid less.

During these times of economic turmoil and anxiety, it is worth emphasizing a non-monetary aspect of teacher compensation that also adds to the relative appeal of the profession — teachers are essentially guaranteed continued employment with a gradually increasing salary regardless of economic conditions.  That certainty of employment with an ever-increasing wage makes up for some of the perceived or real shortcomings of teacher salaries.  If you don’t believe me, just ask the bank employee, insurance agent, or restaurant manager who are about to find themselves out of a job how much salary they would forsake for the guarantee of continued employment.

Teachers are essentially guaranteed employment despite economic conditions because education spending is almost never cut and, even if it is, teachers are the last thing to be cut within the education budget.  In more than half the states the courts have intervened in education budgets, interpreting vague clauses in state constitutions about an “adequate” or “efficient” public education system as compelling certain levels of education spending.  In those states policymakers dare not cut education spending for fear of being slapped by the courts.  In Arkansas, the court has even compelled the state legislature to increase K-12 education spending by at least the level of inflation.  Colorado has a similar mandate.

No one else has this guaranteed claim on resources.  Even other essential state functions, like law enforcement or road construction can be cut if state revenue drops.  Not education.  They’ll get more almost no matter what.

And within the education budget tenured teachers are essentially guaranteed their jobs and ever-increasing pay.  In almost every school district the contract or state law mandate a step and lane pay schedule that pays teachers more every year they remain employed.  If teachers basically can’t lose their jobs and if the system pays them more each year, they enjoy a benefit that almost no other profession enjoys.  When thinking about whether more tax dollars should be devoted to increase teacher compensation further, we should remember these non-monetary benefits of guaranteed employment with ever-increasing salaries.

I should note that university professors are another occupation that enjoy essentially guaranteed employment, although not with a guarantee of annual salary increases.  And I admit that I benefit from this assured employment, even as I think it has negative effects on higher education.  But at the same time you won’t hear me arguing that university professors are woefully underpaid and are entitled to an ever-increasing amount of tax-payer dollars. 

Right now almost all tax-payers are suffering in their own economic circumstances.  It is just unseemly to see educators demanding more and more even as the pool of available resources becomes smaller and smaller.

2 Comments | teacher pay | Tagged: , , | Permalink
Posted by Jay P. Greene

Texas Ranked #1 in Both Polls

October 12, 2008

(Guest Post by Matthew Ladner)

Next up....raining frogs.

Next up....raining frogs.

Lots of tough games coming up…I’m going to enjoy every minute of it.

2 Comments | college sports | Permalink
Posted by matthewladner

Pass the Clicker: Shazam! and Isis

October 10, 2008

Since the summer movie blockbuster season has ended and Lost has not re-started, we need something to amuse us on Fridays.  I’d like to introduce Pass the Clicker, a journey to the classic TV shows of yesteryear.  By classic I mean it either in the Greg sense (really good) or in the Matt sense (so bad that it is good).

So, for today’s Pass the Clicker I’d like to feature the Shazam!/Isis Hour.  I’m pretty sure that this falls in the so bad that it is good category.

The set-up for Shazam! is that a young man, Billy Batson, travels around the country in an RV with an old guy called Mentor.  And when trouble strikes, Billy says Shazam! and invokes the powers of Solomon, Hercules, Atlas, Zeus, Achilles, and Mercury.  It’s a lot like the Super Best Friends on South Park, except not intended to be funny.  The council provides advice to Billy and transforms him into a super-hero played by a different actor, who’s got a square jaw, is about a foot taller, and has 50 extra pounds of muscle.  Mentor also provides Billy with advice and for some reason is always wearing the same 70s leisure suit.

This clip should provide you with a true taste of the total awfulness of the show.  In it Billy and Mentor are helping Curtis, a young black man with a giant Afro, in his efforts to try-out for the Inner-City Orchestra.  No racial stereotypes here!  But Curtis says he’s not “turned-on” about working and dreaming for something only to have it taken away from him.  But don’t let the Man keep you down, Curtis.

The set-up for Isis is that a school teacher discovers an amulet that gives her super-powers.  She uses her super-powers to give the young boys watching the show that tingly feeling that they don’t quite understand. 

And in this marvelously horrible clip Isis teaches a young girl the important lesson that people can be beautiful on the inside.  And Isis teaches this lesson in her mini-skirt outfit.  Yes, this show was on Saturday mornings for children and not on pay-per-view.

3 Comments | Pass the Clicker | Permalink
Posted by Jay P. Greene

Song for Today

October 10, 2008

(Guest Post by Matthew Ladner)

Stock portfolio taken a dive? Cheer up…you could be running a gin-joint in a third world country controlled by the Nazis and run into your long lost love, only to find that she is married to the leader of the resistance.

Leave a Comment » | economics | Tagged: , , | Permalink
Posted by matthewladner

Feeling Stabilized Yet?

October 10, 2008

Congress passed the Emergency Economic Stabilization Act (EESA), but the markets have hardly stabilized.  Don’t the markets know that it is against the law for things not to be stable now that Congress passed a stabilization act?

I think recent events demonstrate that the EESA was completely unhelpful if not counter-productive.  But others interpret events as showing that the EESA didn’t go far enough.  I’m sure that there are also Marxist academics out there still arguing that full communism has never really been tried because the Soviets didn’t go far enough.  And there are education interest groups saying that the doubling in real per pupil spending hasn’t yielded academic improvement because we haven’t spent enough yet.  Something didn’t work?  Just try more of it!

Well, I came across a very sensible op-ed in the WSJ yesterday that offers an explanation for why the crisis continues and what might be done to really bring about stability.  Manuel Hinds suggests that the problem at this point is that financial institutions are refusing to lend to each other.  The problem is that some of those institutions won’t repay money that is lent to them because they are truly insolvent, but no one knows for sure who those institutions are.  So the safe thing to do is not to lend to any other banks.  But this lack of inter-bank lending is having a negative spiral effect.  Hinds likens the problem to playing poker with ten people knowing that a few aren’t good for their chips.  No one will play until you figure out who can settle at the end of the game. 

The solution is to improve transparency so that we all more clearly know who is and who isn’t able to repay money that is lent to them.  One of the best ways to gain that transparency is to allow insolvent institutions to go bankrupt so that we know the ones still standing are healthy.  Efforts to prop up insolvent institutions just prolong the crisis by disguising who really can repay and who can’t.  It would also be essential for transparency to continue mark-to-market accounting, despite calls to do away with it.  Without mark-to-market we would have much less information about the value of securities held by financial institutions.  More information is the solution and ending mark-to-market subtracts information.  There may also be reasonable regulations that would improve the quality of information about financial institutions.

There are real problems in financial institutions but masking them just makes the problem worse.

(edited for typos)

4 Comments | economics | Tagged: , , | Permalink
Posted by Jay P. Greene

Talking ‘Bout a Revolution?

October 8, 2008

(Guest Post by Matthew Ladner)

I have an admittedly odd appreciation for left-wing protest songs. For my money (sorry baby-boomers) there is none finer than Tracy Chapman’s Talkin’ Bout a Revolution. Released in 1990, Chapman’s spare and urgent song delivers an ominous warning:

 

Don’t you know they’re talking about a revolution?

It sounds like a whisper

 

While they’re standing in the welfare lines

Crying at the doorsteps of those armies of salvation

Wasting time in unemployment lines

Sitting around waiting for a promotion

 

Don’t you know they’re talking about a revolution?

It sounds like a whisper

 

Poor people are gonna rise up

And get their share

Poor people are gonna rise up

And take what’s theirs

 

Although stirring, the underlying assumptions of this song are dead wrong. Income redistributing revolutions obviously have a romantic appeal to some, but rather sordid history in practice. Ask the Russians.

 

Anti-poverty strategies fall into two broad categories: redistribution plans and growth oriented plans. One can either try to take wealth from one group and give it to another, or else focus on creating more wealth for everyone.

 

Today, the growth strategy stands triumphant.

 

A recent World Bank report, for example, finds that we are living in a golden age of global poverty reduction. The World Bank notes that economic growth is producing a “spectacular” decline in Asian poverty. In 1990, there were over 470 million people in the East Asia and Pacific region surviving on less than $1 a day. By 2001, there were 271 million living in extreme poverty- a 42.5% decline.

 

The World Bank projects that by 2015 there only 19 million people will be living under such squalid conditions- a 96% decline in twenty-five years. A complete elimination of extreme poverty in this region seems entirely possible well within our lifetimes, thanks to high rates of economic growth and job creation. Free market policies are lifting millions out of poverty, in stark contrast to the catastrophic consequences of income redistribution policies of socialist and communist regimes.

 

Other parts of the world, notably Africa, have not been doing nearly as well. A broad consensus now exists in explaining the reason. The work of Hernando de Soto on development economics, for instance, has convinced observers from Bill Clinton and Kofi Annan on the left to Ronald Reagan and George W. Bush on the right that a system of property rights is absolutely critical to allowing economic growth and thus eliminating poverty.  Why do some countries remain mired in poverty? People cannot own property such as land, they cannot reliably contract with each other. Rotating cliques of kleptocrats often take turns using government as an instrument of theft, corruption, and oppression. Poverty will not decline without addressing these fundamental flaws, regardless western aid.

 

One does not need to look abroad for examples of growth reducing poverty. In 2006, the Goldwater Institute released a study comparing the relative success of states in reducing poverty during the 1990s. The study found that during the 1990s, on average high tax states had increases in poverty rates during the booming economy of the 1990s, while low tax states on average saw larger than average declines.

 

Economic growth (or lack thereof) can quickly make a big difference in poverty statistics. Mississippi began with the highest poverty rate in the country in 1990, twice as high as California’s poverty rate (25% compared to 12.5%). Enjoying the benefits of economic growth, Mississippi’s poverty rate dropped by 20% in the 1990s, while poverty increased by 13.6% in California. If such rates were to be sustained (by no means a given) then California would overtake Mississippi in poverty rates by 2010.

 

As we struggle through the current financial crisis, we must take care to remember the radical success of free trade and free market polices have produced in reducing poverty. Those who promoted free trade, property rates and lower taxes weren’t just talking about a revolution: they delivered one.

8 Comments | economics | Tagged: , , | Permalink
Posted by matthewladner

Small Children Suffer So Billionaire Lawyers Can Profit

October 8, 2008

(Guest post by Greg Forster)

I am an angry man this morning.

My daughter, who just turned three, can’t talk much yet. (For the record, that’s not her picture at the top of the post.) Of all the difficulties she goes through because of her very limited ability to speak, one of the worst is that when she’s scared or in pain, she can’t tell us what’s wrong. She’s accustomed to communicating with us (through sign language, by pointing, by pulling us over to something, and through the limited set of words she can use), so when she desperately needs to communicate that her throat hurts or her head hurts and she doesn’t know how, she panics. Ordinary illnesses are terrifying to her. And of course that makes them doubly painful for us.

We thank God for the medicine companies that have produced the pain relievers and other medicines that get our daughter, and us, through these ordeals. I can only imagine what my daughter’s life would be like if she couldn’t take medicine to relieve her pain, and her terror.

On page B8 of your Wall Street Journal this morning, you will find a story about how the medicine companies that make children’s cold and cough remedies are “voluntarily” relabeling their products at the “request” of the FDA. These medicines will now be (mis)labeled with the warning that they shouldn’t be given to children under four.

These medicines are known to be safe for small children when used as directed. The FDA doesn’t dispute this. If the FDA had a legitimate reason to act, it wouldn’t make a request, it would make a rule, and enforce it.

These medicines were even marketed for children under age two until last October, and that change was also made “voluntarily” at the “request” of the FDA.

When the FDA requests that medicine companies voluntarily do something, it’s like when Vito Corleone summons the undertaker to the morgue and asks if he’s prepared to do him a favor.

So what justification was given for this request? Well, it seems that two-thirds of ER visits associated with these medicines come from children under four accidentally ingesting them. Different sources are saying either 6,000 or 7,000 ER visits are associated with these medicines, meaning that we’re talking about roughly 4,000 visits. [UPDATE: It appears to be 6,000 visits by children under 6, 7,000 visits total. It’s not surprising that most of the visits are by children under 6 given that these are medicines specifically marketed to young children. But that only makes it worse. The FDA is alarmed because, out of all ER visits by children under 6, two-thirds are by children under 4. Think about that. It’s like the old Dilbert cartoon where the boss is enraged that 40% of all sick days are taken on Monday or Friday.]

Most of the ER visits presumably don’t result in death or even long-term health impacts. If these medicines killed 4,000 children a year, the FDA would have acted against them openly rather than by subterfuge, and it would have done so a long time ago.

Who gets to speak for the millions of children who will suffer, over and over again, suffer every moment of pain that an untreated illness causes, because a relatively tiny number of parents can’t be bothered to store their medicines properly and as a result they have to endure one lousy ER visit? No one.

I am an angry man this morning.

Why would the FDA do such a moronic thing? We all know the answer. I don’t even have to say it. (Check the title of the post if you’ve forgotten it.)

Now, I know that in reality, many parents will keep on using these medicines. But some won’t. Lots of parents trust the FDA, more fool they. And what about future parents, who aren’t paying attention to what the FDA does today because they’re not parents yet? No dobut some will hear the truth, but others won’t. And what if the drug companies decide that now that these medicines are labeled for kids over four only, they can up the dose? We can watch for that, of course, but it’s one more obstacle between children and pain relief.

By tomorrow I will have resigned myself to this latest injustice. By now I ought to know better than to get this mad. I’ve spent my career fighting a government school monopoly that systematically destroys children’s lives so that the unions can make the gravy trains run on time. I can write about that without getting mad; if I got mad every time I contemplated the injustice of the system, I couldn’t do what I do. Why am I mad when it’s my daughter and not somebody else’s?

Because I’m human, I guess.

5 Comments | economics | Tagged: | Permalink
Posted by Greg Forster

Bloggers Shouldn’t Have Rapper Names

October 8, 2008

In my last post I described Jennifer Jennings as the blogger formerly known as Eduwonkette.  I had thought we only had to call her Eduwonkette when we didn’t know who she was.  But I guess she continues to go by her rapper name, Eduwonkette.  And Aaron Pallas, an otherwise respectable scholar, continues to call himself Skoolboy — with a k!  And I guess they are both cribbing (in the non-rapper meaning) from Eduwonk, who we’ve always known to be Andy Rotherham.

I find the use of rapper names by bloggers to be downright silly.  It’s especially silly when accompanied by self-aggrandizing cartoons and graphics.  Here at Jay P. Greene’s Blog we’ve gone for a minimalist approach, both out of laziness and an aesthetic vision that tried to put the focus on content.

But if a bunch of other folks are going to continue to call themselves rapper names and have cartoon graphics to represent themselves, maybe I should do the same.  Perhaps I should go by my rapper name — DJ Super-Awesome.  And maybe we should use Thundarr the Barbarian graphics to represent ourselves.  I call the image of Ookla and I’ll let Greg and Matt fight over who gets to be Ariel.

11 Comments | blogging | Tagged: , , , , , | Permalink
Posted by Jay P. Greene

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